LABOR LAW

CASE DIGESTS
ARELLANO UNIVERSITY EMPLOYEES AND WORKERS UNION, et al. v.
COURT OF APPEALS, et al. 50 SCRA !" #00$%, T&IRD DIVISION
#Ca'()* M*'ale+, ,.%
An ordinary striking worker may not be declared to have lost his employment
status by mere participation in an illegal strike.
The Arellano University Employees and Workers Union (the Union), the exclusive
bargaining representative of about !" rank#and#$le employees of Arellano
University, %nc& (the University), $led 'ith the (ational )onciliation and *ediation
+oard (()*+) a (otice of ,trike charging the University 'ith Unfair -abor
.ractice (U-.)& After several controversies and petitions, a strike 'as staged&
Upon the lifting of the strike, the University $led a .etition to /eclare the ,trike
%llegal before the (ational -abor 0elations )ommission ((-0))& The (-0) issued
a 0esolution holding that the University 'as not guilty of U-.& )onse1uently, the
strike 'as declared illegal& All the employees 'ho participated in the illegal strike
'ere thereafter declared to have lost their employment status&
ISSUE-
Whether or not an employee is deemed to have lost his employment by mere
participation in an illegal strike
&ELD2
Under Article 345 of the -abor )ode, an ordinary striking 'orker may not be
declared to have lost his employment status by mere participation in an illegal
strike& There must be proof that he kno'ingly participated in the commission of
illegal acts during the strike& While the University adduced photographs sho'ing
strikers picketing outside the university premises, it failed to identify 'ho they
'ere& %t thus failed to meet the 6substantiality of evidence test7 applicable in
dismissal cases&
With respect to the union o8icers, as already discussed, their mere participation in
the illegal strike 'arrants their dismissal&
ASIA PACIFIC C&ARTERING #P&ILS.% INC. v. MARIA LINDA R. FAROLAN
.". SCRA /5/ #00%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
The termination of a managerial employee on the ground of loss of confdence
should have a basis and the determination of the same cannot be left entirely to
the employer.
.etitioner Asia .aci$c )hartering (.hils&) %nc& (Asia) is tasked 'ith the selling of
passenger and cargo spaces for ,candinavian Airlines ,ystem& .etitioner Asia,
through its 9ice .resident )atalino +ondoc (+ondoc), o8ered 0espondent *aria
-inda 0& :arolan (:arolan) the sales manager position to 'hich :arolan accepted&
Upon 9ice .resident +ondoc;s re1uest, :arolan submitted a detailed report
attributing the drop of sales revenue to market forces beyond her control&
)onse1uently, Asia directed 0oberto <o=obrado (<o=obrado) to implement
solutions& <o=obrado informally took over :arolan;s marketing and sales
1
responsibilities but she continued to receive her salary& Asia claims that the
increase in sales revenue 'as due to <o=obrado;s management&
Asia then sent a letter of termination to :arolan on the ground of 6loss of
con$dence7, forcing :arolan to $le a complaint for illegal dismissal& The -abor
Arbiter found that the dismissal 'as illegal for lack of >ust cause, ho'ever, such
decision 'as reversed by the (ational -abor 0elations )ommission ((-0)) stating
that the termination of employment due to loss of con$dence is 'ithin
management prerogative& ?n appeal, the )ourt of Appeals upheld the labor
arbiter;s decision& @ence, the $ling of this petition&
ISSUE-
Whether or not 0espondent :arolan;s dismissal 'as illegal
&ELD-
A statement of the re1uisites for a valid dismissal of an employee is thus in order,
to 'it2 (a) the employee must be a8orded due process, i&e&, he must be given
opportunity to be heard and to defend himselfA and (b) dismissal must be for a
valid cause& The manner by 'hich 0espondent :arolan 'as dismissed violated the
basic precepts of fairness and due process # 0espondent :arolan 'as dismissed,
'ithout being a8orded the opportunity to be heard and to present evidence in her
defense& ,he 'as never given a 'ritten notice stating the particular acts or
omission constituting the grounds for her dismissal as re1uired by la'&
With respect to rank and $le personnel, loss of trust and con$dence as ground for
valid dismissal re1uires proof of involvement in the alleged events in 1uestion and
that mere uncorroborated assertions and accusations by the employer 'ill not be
su8icient& +ut as regards a managerial employee, mere existence of a basis for
believing that such employee has breached the trust of his employer 'ould su8ice
for his dismissal& -oss of trust and con$dence to be a valid ground for an
employee;s dismissal must be based on a 0)ll12l breach a34 1*234e4 on clearly
established facts& A breach is 'illful if it is done intentionally, kno'ingly and
purposely, 'ithout >usti$able excuse&
%t is not disputed that :arolan;s >ob description, and the terms and conditions of
her employment, 'ith the exception of her salary and allo'ances, 'ere never
reduced to 'riting& Even assuming, ho'ever, that :arolan 'as a managerial
employee, the stated ground (in the letter of termination) for her dismissal, 6loss
of con$dence,7 should have a basis and determination thereof cannot be left
entirely to the employer&
BACOLOD5TALISAY REALTY AND DEVELOPMENT CORPORATION, et al. v.
ROMEO DELA CRU6 578 SCRA .0/ #00"%, SECOND DIVISION #Ca'()*
M*'ale+, ,.%
The twin notice requirement provided by law should be observed in order for a
dismissal to be valid.
0omeo dela )ru= (respondent) is an employee of +acolod#Talisay 0ealty
/evelopment )orporation (+acolod#Talisay) as an overseer& @e 'as suspended for
" days for payroll paddling, selling canepoints 'ithout the kno'ledge and
consent of management and misappropriating the proceeds thereof, and renting
2
out tractor for use in another farm& After " days, he received a letter informing
him that he 'as dismissed from his 'ork&
0espondent dela )ru= and +acolod#Talisay had a confrontation before the
barangay council but they did not reach any settlement& A case for illegal dismissal
'as $led by dela )ru=, and it 'as dismissed by the -abor Arbiter as 'ell as the
(-0)& ?n the other hand, the )ourt of Appeals reversed the decision of the (-0)
$nding that the +acolor#/alisay did not comply 'ith the guidelines for the
dismissal of an employee&
ISSUE-
Whether or not petitioner, +acolod#Talisay observed due process in dismissing
0omeo dela )ru=
&ELD-
The )ourt of Appeals correctly held though that +acolod#Talisay did not comply
'ith the proper procedure in dismissing respondent& %n other 'ords, +acolod#
Talisay failed to a8ord dela )ru= due process by failing to comply 'ith the t'in
notice re1uirement in dismissing him, viz B) a $rst notice to apprise him of his
fault, and 3) a second notice to him that his employment is being terminated&
The letter dated Cune , BDDE sent to dela )ru= 'as a letter of suspension& %t did
not comply 'ith the re1uired $rst notice, the purpose of 'hich is to apprise the
employee of the cause for termination and to give him reasonable opportunity to
explain his side&
%n $ne, 'hile the dismissal of dela )ru= 'as for a >ust cause, the procedure in
e8ecting the same 'as not observed&
3
BILFLE9 P&IL. INC. LABOR UNION et al. v. FILFLE9 INDUSTRIAL AND
MANUFACTURING CORPORATION AND BILFLE9 #P&ILS.%, INC.
5!! SCRA /8 #00$%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
Any union o!icer who knowingly participates in an illegal strike and any worker or
union who knowingly participates in the commission of illegal acts during a strike
may be declared to have lost his employment status.
+iFex .hilippines %nc& -abor Union and :ilFex %ndustrial and *anufacturing -abor
Union are the respective collective bargaining agents of the employees of the
sister companies +iFex and :ilFex 'hich are engaged in the garment business&
They are situated in one big compound and they have a common entrance&
?n ?ctober 35, BDD", the labor sector staged a welga ng bayan to protest against
oil price hikeA the unions staged a 'ork stoppage 'hich lasted for several days,
prompting the companies to $le a petition to declare the 'ork stoppage illegal for
failure to comply 'ith procedural re1uirements&
The -abor Arbiter held that the strike is illegal and declared the o8icers of the
union to have lost their employment status&
ISSUE-
Whether or not the staged strike is illegal and a ground for the lost of employment
status of the union o8icers
&ELD-
Article 345 (a) of the -abor )ode states that any union o8icer 'ho :3*0)3;l<
participates in an illegal strike and any 'orker or union 'ho :3*0)3;l<
participates in the commission of illegal acts during a strike may be declared to
have lost his employment status&
Thus, a union o8icer may be declared to have lost his employment status if he
kno'ingly participates in an illegal strike and in this case, the strike is declared
illegal by the court because the means employed by the union are illegal&
@ere, the unions blocked the egress and ingress of the company premises thus, a
violation of Article 345 (e) of the -abor )ode 'hich 'ould a8ect the strike as
illegal even if assuming arguendo that the unions had complied 'ith legal
formalities and thus, the termination of the employees 'as valid&
The court said that the legality of a strike is determined not only by compliance
'ith its legal formalities but also by means by 'hich it is carried out&
CABALEN MANAGEMENT CO., INC., et al. v. ,ESUS P. =UIAMBAO, et al.
57 SCRA !5. #008%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
"t is a well#established rule that the employer has the burden of proving a valid
dismissal of an employee$ for which it must be for a %ust or authorized cause and
with due process.
Cesus Guiambao, et al& 'ere charged of tip pocketing and s'apping of dining order
slips 'ith bar order slips, among others& They 'ere dismissed from employment
due to said acts& They $led a case against )abalen *anagement )o&, %nc&
()abalen) for illegal dismissal but the decision of the -abor Arbiter and the
(ational -abor 0elations )ommission 'as in favor of )abalen& Guiambao, et al.
4
elevated the case to the )ourt of Appeals and the )A ruled other'ise& )abalen
sought to set aside the decision of the )A 'hich reversed the earlier rulings
provided for by the -abor Arbiter and the (-0)& They also 1uestioned the
0esolution given by )A 'hich denied their *otion for 0econsideration&
The assailed )A decision held that except for respondents 9i=ier %nocencio and
9incent Ed'ard *apa 'hose petitions 'ere dismissed pursuant to ,ection H, 0ule
E of the 0ules of the 0ules of )ourt and ,ection 5 (a) of the 0ules of .rocedure of
the (-0), herein Guiambao, et al. 'ere illegally dismissed from their
employment& The ,upreme )ourt a8irmed the )A decision, hence, )abalen;s
*otion for 0econsideration became sub>ect of this 0esolution& To the *otion,
Guiambao, et al. $led their ?pposition&
ISSUES-
Whether or not Guiambao, et al. 'ere illegally dismissed
&ELD-
%t is a 'ell#established rule that the employer has the burden of proving a valid
dismissal of an employee, for 'hich t'o re1uisites must concur2 (a) the dismissal
must be for any of the causes expressed in the -abor )odeA and (b) the employee
must be accorded due process, basic of 'hich is the opportunity to be heard and
to defend himself&
To establish a >ust or authori=ed cause for dismissal, substantial evidence or Isuch
amount of relevant evidence 'hich a reasonable mind might accept as ade1uate to
>ustify a conclusionI is re1uired& :urther re1uired is that an employee sought to be
dismissed must be served t'o 'ritten notices before the termination of his
employment& The $rst notice must appraise him of the particular acts or omissions
upon 'hich his dismissal is groundedA the second, to inform him of the employer;s
decision to terminate his employment& While the failure of the employer to comply
'ith these notice re1uirements does not make the dismissal illegal as long as a
>ust or authori=ed cause has been proved, it renders the employer liable for
payment of damages because of the violation of the 'orker;s right to statutory due
process&
%n the instant case, only photocopies of the statements of +alen and *alana form
part of the records despite )abalen;s reliance thereon to prove respondents;
purported transgressions& Carcia *achine ,hop and Auto ,upply, %nc& v& (-0) held
that the unsigned photocopies of daily time records (/T0s), 'hich 'ere presented
by the therein employer to sho' that its employee 'as neglectful of his duties,
'ere of Idoubtful or dubious probative value&I
)abalen, et al. did not even heed their o'n procedures on disciplinary actions& The
only facts extant in the records are that respondents 'ere issued above#said
)orrective Action 0eport ()A0E) :orms asking them to explain their alleged
infractions 'ithin 5! hoursA and they subse1uently received notices of dismissal
after they submitted their 'ritten explanations& There is, ho'ever, nothing to sho'
that before their dismissal, Guimbao, et al. 'ere informed of their immediate
supervisors; decision to terminate their services, or that they 'ere thereafter
invited to an administrative investigation before the @0/ manager or o8icer 'ho
is tasked to conduct the investigation in the presence of the employees; immediate
supervisorJs and the 'itnesses, if necessary, as provided under ,ection %9 of the
company;s )ode of )onduct&
(o record of any administrative investigation proceeding, 'hich under the
company;s rules 'as to be Iminuted,I had also been presented& @ence, only
)abalen;s allegation that the statements of the 'itnesses 'ere taken as part of the
5
administrative investigation is before this )ourt& Allegations 'ithout proof do not
deserve consideration&
:inally, on the dismissal of Guiambao allegedly on the ground of business losses, it
'as incumbent upon )abe to len, et al. to prove it by substantial evidence& %t did
not, ho'ever& %n fact, Guiambao presented documents to disprove the validity of
his retrenchment on that ground& :or petitioners; failure to discharge its burden
then, this )ourt is constrained to hold that Guiambao;s dismissal 'as not valid&
CAPITOL WIRELESS, INC. v. CARLOS ANTONIO BALAGOT
5!. SCRA $8 #008%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
&ouble %ob per se is not illegal according to 'abor (ode.
)apitol Wireless, %nc& ()ap'ire) hired )arlos Antonio +alagot (+alagot) as
collector on ,eptember B4, BD!E& )arlos is re1uired to 'ork outside the o8ice and
)ap'ire assigned to him a motorcycle as a service vehicle, for 'hich it shouldered
expenses for gasoline and maintenance&
+alagot 'as discovered to have been rendering services to )hina +ank and that
since BDD3, )arlos had been concurrently employed 'ith )ontractual )oncepts,
%nc& ())%), a local manpo'er company, 'hich assigned him to render messengerial
services to )hina +ank in the same year&
)ap'ire terminated his services on the ground of grave misconduct and 'illful
breach of trust and con$dence& )ap'ire contends that the time of 'ork of +alagot
to other companies overlaps 'ith his 'ork at )ap'ire& +alagot admitted the
charge but he $led a complaint for illegal dismissal against )ap'ire and its
.resident Epifanio *ar1ue=&
ISSUE-
Whether or not +alagot 'as illegally dismissed
&ELD-
9erily, >urisprudence recogni=es as a valid ground for dismissal of an employee;s
unauthori=ed use of company time& And from the evidence presented, +alagot used
the company vehicle in pursuing his o'n interests, on company time and deviating
from his authori=ed route 'ithout permission&
)ap'ire has all the right and reason to cry foul as this is a clear case of
moonlighting and using the company;s time, money, and e1uipment to render
service to another company&
The court said that there is no denying that taking on double >ob per se is not
illegal according to the -abor )ode, as extra income 'ould go a long 'ay for an
ordinary 'orker like +alagot& The only limitation is 'here one >ob overlaps 'ith
the other in terms of time andJor poses a clear case of conFict of interest as to the
nature of business of complainant;s t'o employers&
The contention of +alagot that he is 'orking for )hina +ank after H2"" pm is
untenable because he 'as sighted by the @0 director 'ithin the premises of the
bank at 2H pm and as general kno'ledge, the banking industry follo's the
ordinary 'orking hours from !2"" am to H2"" pm and a bank has no use for an
employee 'ho can only be of service to it after H2"" pm&
6
C&UAYUCO STEEL MANUFACTURING CORPORATION AND>OR EDWIN
C&UA v. BUKLOD NG MANGGAGAWA SA C&UAYUCO STEEL
MANUFACTURING CORPORATION
5!. SCRA $! #008%, SECOND DIVISION, #Ca'()* M*'ale+, ,.%
A union o!icer who knowingly participates in an illegal strike and a worker who
knowingly participates in the commission of an illegal strike are deemed to have
lost their employment status.
+uklod ng *anggaga'a sa )huayuco ,teel *anufacturing )orporation (the
union), a legitimate labor organi=ation, is the recogni=ed bargaining agent of
)huayuco ,teel *anufacturing )orporation (the corporation) of 'hich its co#
petitioner Ed'in )hua is the .resident&
%n the election of the union o8icers, )amilo -eni=o (-eni=o) emerged as .resident&
The corporation ho'ever refused to recogni=e the ne'ly elected o8icers for the
reason that there is an intra#union conFict bet'een the factions of -eni=o and
0omeo %bane=, the former acting union president&
The union staged a strike 'hich causes illegal acts that intimidated and harassed
the corporation and non#striking employees& The strikers use physical violence and
harass those employees 'ho are not on their side by shouting and threatening
them not to go to 'ork anymore& The -abor Arbiter declared the strike illegal and
thus, some of the members 'ho participated in the mass action lost their
employment status&
ISSUE-
Whether or not some of the employees 'ho participated in the strike should be
reinstated 'ithout loss of seniority rights
&ELD-
Article 345 (a) of the -abor )ode states that any union o8icer 'ho :3*0)3;l<
participates in an illegal strike and any 'orker or union 'ho :3*0)3;l<
participates in the commission of illegal acts during a strike may be declared to
have lost his employment status&
Thus, a union o8icer may be declared to have lost his employment status if he
kno'ingly participates in an illegal strike and in this case, the strike is declared
illegal by the court because the means employed by the union are illegal&
CITIBANK N.A. v. NATIONAL LABOR RELATIONS COMMISSION a34
ROSITA TAN PARAGAS 5$. SCRA 78 #007%, SECOND DIVISION, #Ca'()*
M*'ale+, ,.%
The general prayer of other reliefs is applicable only to such other reliefs
warranted by law and facts.
0osita Tan .aragas (.aragas) 'orked as a $ling clerk of )itibank, (&A& ()itibank)
for eighteen (B!) years& ,he 'as terminated by )itibank for serious misconduct,
'illful disobedience, gross and habitual neglect of duties and gross ine8iciency&
.aragas $led a complaint for illegal dismissal 'hich 'as dismissed for lack of
merit, $nding that the dismissal on the ground of 'ork ine8iciency 'as valid& The
(ational -abor 0elations )ommission ((-0)) a8irmed the decision of the -abor
Arbiter 'ith the modi$cation that .aragas should be paid separation pay as a form
of e1uitable relief in vie' of her length of service 'ith )itibank&
7
.aragas $led a *otion for .artial 0econsideration of the (-0) 0esolution& ,he no
longer challenged her dismissal on the ground of 'ork ine8iciency, but prayed that
)itibank be ordered to pay her the .rovident :und bene$ts under its retirement
plan for 'hich she claimed to be 1uali$ed pursuant to )itibank;s Working
Together *anual& The said manual provides that an employee discharged for
reasons other the misconduct 'ill be paid a percentage of her share in the :und&
:inding that .aragas; dismissal 'as for causes other than misconduct, the (-0)
granted .aragas; *otion& ?n appeal, the )ourt of Appeals dismissed the petition
for lack of merit and a8irmed in toto the challenged (-0) 0esolution&
ISSUE-
Whether or not the )A erred in a8irming the (-0);s decision despite the latter;s
lack of authority to pass upon and resolve issues and grant claims not pleaded and
proved before the -abor Arbiter
&ELD-
.aragas indeed prayed for Iother >ust and e1uitable relief,I but the same may not
be interpreted so broadly as to include even those 'hich are not 'arranted by the
factual premises alleged by a party& Thus the Canuary 35, 3"" /ecision of the
)ourt of Appeals correctly stated2 I%t has been ruled in this >urisdiction that the
general prayer for Kother reliefsK is applicable to such other reliefs 'hich are
'arranted by the la' and facts alleged by the respondent in her basic pleadings
and not on a ne'ly created issue&I
.aragas; assertion that she mentioned the matter regarding the .rovident :und
even prior to her *otion for .artial 0econsideration L on page B5 of her position
paper and again on pages 3 and E of her I(otice of Appeal and Appeal
*emorandumI L is unavailing&
@er I(otice of Appeal and Appeal *emorandumI 'as $led after she had already
submitted her position paper& Thus, any mention of the .rovident :und therein
'ould fail to adhere to the above#ruling in *aMebo, the thrust of 'hich 'as
precisely that all facts, evidence, and causes of action should already be pro8ered
in the position papers and the supporting documents thereto, not in any later
pleading&
As to .aragas; position paper, there 'as only the mere mention of I.rovident A N
),I 'ith the corresponding amount of .B,"!4,H&5, among the actual damages
that she 'as allegedly su8ering from her continued severance from employment&
.aragas made no attempt to de$ne 'hat this I.rovident A N )I 'as, nor o8er any
substantiation for including it to be among her actual damages& ,he did not even
hint ho' I.rovident A N )I had a bearing on retirement bene$ts& Thus, 'hile
.aragas did refer to the .rovident :und in her position paper, such reference 'as
too vague to be a basis for any court or administrative body to grant her
retirement bene$ts&
.aragas >usti$es her failure to claim for retirement bene$ts before the labor
arbiter by alleging that it 'ould be inconsistent 'ith her prayer for reinstatement&
.aragas, ho'ever, could have easily claimed such bene$ts as an alternative relief&
%n any event, .aragas is not entitled to retirement bene$ts as this )ourt $nds that
she 'as validly dismissed for serious misconduct and not merely for 'ork
ine8iciency&
8
DYNO NOBEL P&ILIPPINES, INC. v. DWPI SUPERVISORY UNION
5.5 SCRA /$$ #008%, SECOND DIVISION #CARPIO MORALES, ,.%
)hen a (ollective *argaining Agreement provides for a mandated increase in
salary$ which was voluntarily agreed upon by the parties$ the same shall be
complied with.
Edgar Ause>o (Ause>o) 'as hired by /yno (oble .hilippines, %nc& (/O(?#(?+E-)
as a ,tore )lerk& @aving >oined the /W.% Union (/W.%U) of the rank and $le, his
salary 'as increased by .H"" per month e8ective Canuary B, BDD4& Ause>o 'as
then promoted to the position of Peneral ,tores ,upervisor& As per company and
union regulations Ause>o ceased to be a member of the rank and $le union and
>oined the /W.% ,upervisory Union (/W.,U)& At the same time, /O(?#(?+E-
started its ,alary ,caling .rogram 'hich 'as intended to structure and align the
salary scales of its employees& Ause>o 'as evaluated to have no increase as per
union regulations&
Ause>o and his former union $led a re1uest for increase in salary to /O(?#(?+E-&
Ause>o and /W.%U invoked the provisions of the )ollective +argaining Agreement
()+A), contending that he is entitled to a mandated increase of .B,BH"& %n its reply,
/O(?#(?+E- denied the motion contending that Ause>o is not anymore a member
of the rank and $le union& /O(?#(?+E- also contended that the increase in
salary of Ause>o 'as reFected in his higher salary as a Peneral ,tores ,upervisor&
ISSUES-
Whether or not the mandated increase of .B,BH" under the )+A forged by /W.%U
'as already integrated into the salary of Ause>o 'hen he assumed the position of
Peneral ,tores ,upervisor
&ELD-
An examination of Ause>o;s .osition .aper sho's that he, >ust like the t'o other
supervisors, received the same monthly salary for the year BDDE and BDD!&
-ogically, in accordance 'ith the BDD4 )+A, for the year BDDE, an increase of
.B,"H" 'as added to the salary of each of the three, to thereby amount to a total
salary&
)learly, the ,alary ,caling .rogram implemented by /O(?#(?+E- 'as primarily
intended Ito restructure and align the salary scales of the employees on the basis
of fairness and reasonable classi$cation of >obs&
%t is hard to believe that, considering the closeness in the time bet'een the
implementation of the ,alary ,caling .rogram and the execution of the )+A L a
di8erence of eighteen days L the negotiating panel of the Union 'ould not have
kno'n the rather substantial bene$ts and advantages accruing to the ,upervisors
under the ,alary ,caling .rogram& The purpose of the ,alary ,caling .rogram 'as
intended to structure the salary scales of the employees on the basis of fairness
and reasonable classi$cation of >obs& There is every reason to uphold the .rogram,
and, to uphold the claim of Ause>o that he is entitled to the Q.RB,BH"&"" mandated
increase for BDD4 upon his appointment&
EAGLE STAR SECURITY SERVICES, INC. v. BONOFACIO L. MIRANDO
5"/ SCRA /50 #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
+or o!#detail to be valid$ the employer must show and prove that there was lack
of available posts.
9
+onifacio *irando 'as hired by Eagle ,tar ,ecurity ,ervices, %nc& (Eagle ,tar) as
a security guard& When he reported for 'ork, he 'as told by the detachment
commander not to report for duty as instructed by the head o8ice& *irando called
the head o8ice and 'as told that he 'as removed from duty by Eagle ,tar;s
operations manager Ernesto Agodilla& As *irando 'as thereafter no longer asked
to report for duty, he $led a complaint for illegal dismissal against Eagle ,tar
before the (ational -abor 0elations )ommission ((-0))&
Eagle ,tar alleged that *irando 'ent on absence 'ithout o8icial leave (AW?-)
and had not thereafter reported for 'ork dra'ing it to send him a notice to explain
his absence but *irando failed to respond& %t further alleged that in a
*emorandum sent to Agodilla, the detachment commander reported that *irando
pulled out his uniform and that according to him, he 6'ould render voluntary
resignation&7
The labor arbiter found that *irando 'as illegally dismissed& ?n appeal, the (-0)
a8irmed the labor arbiter;s decision& ?n appeals, the )A a8irmed the >udgment of
the (-0)&
ISSUES-
Whether or not the )ourt of Appeals erred in holding the dismissal illegal
&ELD-
The persistence of *irando to resume his duties, not to mention his immediate
$ling of the illegal dismissal complaint, should dissipate any doubt that he did not
abandon his >ob&
)lutching at stra's, Eagle ,tar argues that *irando 'as on temporary 6o8#
detail,7 the period of time a security guard is made to 'ait until he is transferred
or assigned to a ne' post or clientA and since Eagle ,tar;s business is primarily
dependent on contracts entered into 'ith third parties, the temporary 6o8#detail7
of *irando does not amount to dismissal as long as the period does not exceed 4
months, follo'ing Art& 3!4 of the -abor )ode&
Eagle ,tar;s citation of Article 3!4 of the -abor )ode is misplaced& %n the present
case, there is no sho'ing that there 'as lack of available posts at Eagle ,tar;s
clients or that there 'as a re1uest from the client#bank, 'here *irando 'as last
posted and 'hich continued to hire Eagle ,tar;s services, to replace *irando 'ith
another& Eagle ,tar suddenly prevented him from reporting on his tour of duty at
the bank on /ecember BH, 3""B and had not thereafter asked him to report for
duty&
ABELARDO P. ABEL v. P&ILE9 MINING CORPORATION
5"/ SCRA $7. #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
'oss of trust and confdence$ to be a valid ground for dismissal$ must be based on
willful breach of trust and must be founded on clearly established facts.
Abelardo .& Abel, an employee of the .hilex *ining )orporation, 'as implicated in
an irregularity occurring in the subsidence area of .hilex;s mine site& An
investigation 'as promptly launched by the corporation;s o8icers by conducting
several fact#$nding meetings& .hilex found Abel guilty of (B) fraud resulting in loss
of trust and con$dence and (3) gross neglect of duty, and 'as meted out the
penalty of dismissal from employment& Abel thus $led a complaint for illegal
10
dismissal 'ith the (ational -abor 0elations )ommission ((-0)) 'ith claims for
annual vacation leave pay&
The -abor Arbiter ruled that Abel 'as dismissed illegally& @e found that .hilex
failed to prove by substantial evidence the alleged fraud committed by Abel,
explaining that the suggestively incriminating telephone conversations 'ould not
su8ice to lay the basis for .hilex;s loss of trust and con$dence& ?n the charge of
gross negligence, the -abor Arbiter held that no negligence 'as present as .hilex
itself admitted that Abel reported the underloading to Tabogader, 'ho 'as then in
charge of the subsidence area 'here the alleged anomaly 'as happening&
The (-0) reversed the decision of the -abor Arbiter $nding that Abel 'as guilty
of gross and habitual neglect of duty as he approved the operations even 'ith the
gross underloadingA and that he did not act on -upega;s report concerning certain
irregularities& Abel;s failure to perform his duty of inspecting A(,E)A;s operations
and vacillation on certain matters during the company investigation, among other
things, constituted su8icient basis for .hilex;s loss of trust and con$dence& Abel
appealed to the )ourt of Appeals via certiorari 'hich dismissed the motion&
@ence, this petition&
ISSUE-
Whether or not the dismissal of Abel is valid
&ELD-
The la' mandates that the burden of proving the validity of the termination of
employment rests 'ith the employer& :ailure to discharge this evidentiary burden
'ould necessarily mean that the dismissal 'as not >usti$ed and, therefore, illegal&
Unsubstantiated suspicions, accusations, and conclusions of employers do not
provide legal >usti$cation for dismissing employees& %n case of doubt, such cases
should be resolved in favor of labor pursuant to the social >ustice policy of labor
la's and the )onstitution&
The $rst re1uisite for dismissal on the ground of loss of trust and con$dence is
that the employee concerned must be holding a position of trust and con$dence&
9erily, the )ourt must $rst determine if Abel holds such a position&
The second re1uisite is that there must be an act that 'ould >ustify the loss of
trust and con$dence& -oss of trust and con$dence, to be a valid cause for
dismissal, must be based on a 'illful breach of trust and founded on clearly
established facts& The basis for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is not necessary& .hilex *ining
)orporation;s evidence against Abel fails to meet this standard& The -abor Arbiter
correctly found that the alleged telephone conversations bet'een Abel and /idith
)aballero of A(,E)A 'ould not su8ice to lay the basis for .hilex *ining
)orporation;s loss of trust and con$dence in Abel&
ALABANG COUNTRY CLUB, et al. v. NATIONAL LABOR
RELATIONS COMMISSION, et al. /$$ SCRA ." #005%, T&IRD DIVISION,
#Ca'()* M*'ale+, ,.%

The court cannot interfere with management,s prerogative to close or cease its
business operation %ust because the business is not su!ering from any loss or
because of the desire to provide the workers continued employment.
11
.etitioner Alabang )ountry )lub, %nc& (A))%) re1uested its %nternal Auditor %rene
)ampos#Ugalde to conduct a study on the pro$tability of its :ood and +everage
/epartment (: N + /epartment)& %rene found out that the business had been
incurring substantial losses& )onse1uently, the management decided to transfer
the operation of the department to -a Tasca 0estaurant %nc& (-a Tasca)& A))% then
sent its : N + /epartment employees individual letters informing them that their
services 'ere being terminated and that they 'ould receive separation pay&
The private respondent Alabang )ountry )lub %ndependent Employees Union
(Union) $led before the (ational -abor 0elations )ommission ((-0)) a complaint
for illegal dismissal, unfair labor practice, regulari=ation and damages 'ith prayer
for the issuance of a 'rit of preliminary in>unction against A))%&
The -abor Arbiter (-A) dismissed the complaint for illegal dismissal 'hich 'as
upheld by the (-0)& The )ourt of Appeals ()A) reversed the decisions of the -A
and (-0)&
ISSUE-
Whether or not the A))% can terminate its business operation
&ELD-
?ne of the prerogatives of management is the decision to close the entire
establishment or to close or abolish a department or section thereof for economic
reasons, such as to minimi=e expenses and reduce capitali=ation& While the -abor
)ode provides for the payment of separation package in case of retrenchment to
prevent losses, it does not obligate the employer for the payment thereof if there is
closure of business due to serious losses&
As in the case of retrenchment, ho'ever, for the closure of a business or a
department due to serious business losses to be regarded as an authori=ed cause
for terminating employees, it must be proven that the losses incurred are
substantial and actual or reasonably imminentA that the same increased through a
period of timeA and that the condition of the company is not likely to improve in
the near future&
The closure of operation of an establishment or undertaking not due to serious
business losses or $nancial reverses includes both the complete cessation of
operations and the cessation of only part of a company;s activities&
:or any bona $de reason, an employer can la'fully close shop anytime& Cust as no
la' forces anyone to go into business, no la' can compel anybody to continue the
same& %t 'ould be stretching the intent and spirit of the la' if a court interferes
'ith management;s prerogative to close or cease its business operations >ust
because the business is not su8ering from any loss or because of the desire to
provide the 'orkers continued employment&
,ERRY E. ACEDERA, et al. v. INTERNATIONAL
CONTAINER TERMINAL SERVICES INC.
."5 SCRA !0. #00.%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
-rdinarily$ a person whose interests are already represented will not be permitted
to do the same e.cept when there is a suggestion of fraud or collusion or that the
representative will not act in good faith.
Cerry Acedera, et al. are employees of %nternational )ontainer Terminal ,ervices,
%nc& (%)T,%) and are members of Associated .ort )heckers N Workers Union#
12
%nternational )ontainer Terminal ,ervices, %nc& (A.)WU#%)T,%), a duly registered
labor organi=ation& %)T,% entered into a $ve#year )ollective +argaining Agreement
()+A) 'ith A.)WU 'hich reduced the employees; 'ork days from "5 to 3H" days
a year&
The Wage +oard decreed 'age increases in ()0 'hich a8ected %)T,%& Upon the
re1uest of A.)WU to compute the actual monthly increase in the employee;s
salary by multiplying the mandated increase by 4H days and dividing by B3
months, %)T,% stopped using "5 days as divisor and started using 4H days to
determine the daily 'age&
-ater on, %)T,% entered into a retrenchment program 'hich prompted A.)WU to
$le a complaint before the -abor Arbiter (-A) for %)T,%;s use of 4H days, instead
of 3H" days, as divisor in the computation of 'ages& Acedera et al. $led a *otion
to %ntervene 'hich 'as denied by the -A& ?n appeal, (ational -abor 0elations
)ommission ((-0)) a8irmed -A;s decision& Acedera et al. $led a petition for
certiorari to the )ourt of Appeals ()A) 'hich 'as dismissed&
ISSUE-
Whether or not Acedera et al. have no legal right to intervene in the case as their
intervention 'as a superFuity
&ELD-
Acedera et al. stress that they have complied 'ith the re1uisites for intervention
because (B) they are the ones 'ho stand to gain or lose by the direct legal
operation and e8ect of any >udgment that may be rendered in this case, (3) no
undue delay or pre>udice 'ould result from their intervention since their
)omplaint#in#%ntervention 'ith *otion for %ntervention 'as $led 'hile the -abor
Arbiter 'as still hearing the case and before any decision thereon 'as rendered,
and () it 'as not possible for them to $le a separate case as they 'ould be guilty
of forum shopping because the only forum available for them 'as the -abor
Arbiter&
Acedera et al., ho'ever, failed to consider, in addition to the rule on intervention,
the rule on representation& A labor union is one such party authori=ed to represent
its members under Article 353(a) of the -abor )ode 'hich provides that a union
may act as the representative of its members for the purpose of collective
bargaining& This authority includes the po'er to represent its members for the
purpose of enforcing the provisions of the )+A& That A.)WU acted in a
representative capacity Ifor and in behalf of its Union members and other
employees similarly situated, the title of the case $led by it at the -abor Arbiter;s
?8ice so expressly states&
While a party acting in a representative capacity, such as a union, may be
permitted to intervene in a case, ordinarily, a person 'hose interests are already
represented 'ill not be permitted to do the same except 'hen there is a
suggestion of fraud or collusion or that the representative 'ill not act in good faith
for the protection of all interests represented by him&
Acedera et al. cite the dismissal of the case $led by %)T,%, $rst by the -abor
Arbiter, and later by the )ourt of Appeals& The dismissal of the case does not,
ho'ever, by itself sho' the existence of fraud or collusion or a lack of good faith
on the part of A.)WU& There must be clear and convincing evidence of fraud or
collusion or lack of good faith independently of the dismissal& This, Acedera et al.
failed to pro8er&
13
Acedera et al. like'ise express their fear that A.)WU 'ould not prosecute the
case diligently because of its Is'eetheart relationshipI 'ith %)T,%& There is
nothing on record, ho'ever, to support this alleged relationship 'hich allegation
surfaces as a mere afterthought because it 'as never raised early on& %t 'as raised
only in petitioners#appellants; reply to %)T,%;s comment in the petition at bar, the
last pleading submitted to this )ourt, 'hich 'as $led on Cune 3", 3""B or more
than 53 months after petitioners#appellants $led their )omplaint#in#%ntervention
'ith *otion to %ntervene 'ith the -abor Arbiter&
To reiterate, for a member of a class to be permitted to intervene in a
representative action, fraud or collusion or lack of good faith on the part of the
representative must be proven& %t must be based on facts borne on record& *ere
assertions, as 'hat petitioners#appellants pro8er, do not su8ice&
ALDEGUER ? CO., INC. >LOALDE BOUTI=UE v. &ONEYLINE TOMBOC
5$0 SCRA /" #007%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
+raud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative is a %ust cause for his dismissal from
employment.
.etitioner Aldeguer and )o&, %nc&J-oalde +outi1ue promoted respondent @oneyline
Tomboc (Tomboc) as ?8icer#in#)harge (?%)) of its -oalde Ayala +outi1ue (-oalde
Ayala) in the Ayala )enter, )ebu )ity& After conducting an audit of sales, -oalde
+outi1ue concluded that Tomboc misappropriated certain amount 'hich is a >ust
cause for termination& )onse1uently, Tombo 'as noti$ed of the termination of her
services&
Tomboc subse1uently $led a complaint in the (ational -abor 0elations
)ommission ((-0)) for illegal dismissal, illegal salary deductions, underpayment
of 'ages, non#payment of Bth month pay and damages& The -abor Arbiter
dismissed the complaint 'hich 'as upheld by the (-0)& ?n appeal, the )ourt of
Appeals reversed the (-0) decision and ordered her reinstatement 'ith full
payment of back 'ages and 'ithout loss of seniority rights& The )A held Tomboc
'as illegally dismissed and 'as denied of due process as she 'as not a8orded a
chance to refute the charge of misappropriation against her&
ISSUES-
Whether or not the termination of Tomboc 'as for >ust cause
&ELD-
Aldeguer and )o&, %nc&J-oalde +outi1ue has sho'n >ust cause for the termination
of Tomboc;s employment under Art& 3!3 of the -abor )ode on the ground of
6fraud or 'illful breach by the employee of the trust reposed in him by his
employer or duly authori=ed representative&7
The claim of Cinky, a cashier, in her a8idavit that it 'as Tomboc 'ho turned over
the deposits to the bank representative on *ay B, BDDE 'as corroborated by Say,
the branch head of the ,olidbank#Porordo +ranch 'ho personally picked up the
deposits from -oalde Ayala on *ay B and B5, BDDE& Aldeguer and )o&, %nc&J-oalde
+outi1ue in fact presented deposit slips sho'ing that, contrary to its policy, cash
sales for the
day 'ere on several occasions not deposited on the next banking day&
Tomboc;s contention that the -abor Arbiter and the (-0) ignored the
*emorandum issued by Aldeguer and )o&, %nc&J-oalde +outi1ue on :ebruary 3D,
BDDE indicating her duties and responsibilities 'hich do not include handling cash
14
collection of sales and making deposits 'ith the bank does not lie& %t has been
established that 'hile a bouti1ue#in#charge is ordinarily not allo'ed to handle
cashiering, she may do so, ho'ever, if the need arises& At any rate, Cinky and some
of the a8iants stated in their a8idavits that Tomboc interfered 'ith cashiering
tasks, in violation of company policy
CORA6ON ALMIRE6 v. INFINITE LOOP TEC&NOLOGY CORPORATION, et
al.
/7! SCRA .$/ #00$%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
/nder the control test$ an employer#employee relationship e.ists where the
person for whom the services are performed reserves the right to control not only
the end achieved$ but also the manner and means to be used in reaching that end.
.etitioner )ora=on Almire= 'as hired by respondent %n$nite -oop Technology
)orporation (%n$nite -oop) to be a 0e$nery ,enior .rocess /esign Engineer for a
speci$c pro>ect starting ?ctober B!, BDDD 'ith a guaranty of B3 continuous
months of service or until a mutually agreed date& @o'ever, Almire= 'as later on
suspended& @ence, she $led an action before the (ational -abor 0elations
)ommission ((-0)) against %n$nite -oop and its Peneral *anagerJ.residentJco#
petitioner Ed'in 0& 0abino on the ground of breach of contract of employment&
+oth the -abor Arbiter and the (-0) ruled that there is an existing employer#
employee relationship bet'een Almire= and %n$nite -oop since the latter exercises
control over the means and methods used by Almire= in the performance of her
duties&
The )ourt of Appeals ruled that there 'as no existing employer#employee
relationship bet'een the parties since Almire= 'as hired to render her
professional service only for a speci$c pro>ect&
ISSUE2
Whether or not there is employee#employer relationship bet'een Almire= and
%n$nite -oop
&ELD2
To ascertain the existence of an employer#employee relationship, >urisprudence
has invariably applied the four#fold test, to 'it2 (B) the manner of selection and
engagementA (3) the payment of 'agesA () the presence or absence of the po'er
of dismissalA and (5) the presence or absence of the po'er of control& ?f these
four, the last one, the so called Icontrol testI is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an employer#
employee relationship&
Under the control test, an employer#employee relationship exists 'here the person
for 'hom the services are performed reserves the right to control not only the end
achieved, but also the manner and means to be used in reaching that end&
:rom the earlier#1uoted scope of Almire=; professional services, there is no
sho'ing of a po'er of control over petitioner& The services to be performed by her
speci$ed 'hat she needed to achieve but not on ho' she 'as to go about it&
)ontrary to the $nding of the -abor Arbiter, as a8irmed by the (-0), paragraph
(o& 4 of the I,cope of QAlmire=;R .rofessional ,ervicesI re1uiring her to IQmRake
reports and recommendations to the company management team regarding 'ork
progress, revisions and improvement of process design on a regular basis as
15
re1uired by company management teamI does not Isho' that the company;s
management team exercises control over the means and methods in the
performance of her duties as 0e$nery .rocess /esign Engineer&I @aving hired
Almire=; professional services on account of her Iexpertise and 1uali$cationsI as
Almire= herself pro8ers in her .osition .aper, the company naturally expected to
be updated regularly of her I'ork progress,I if any, on the pro>ect for 'hich she
'as speci$cally hired&
The deduction from Almire=; remuneration of amounts representing ,,,
premiums, .hilhealth contributions and 'ithholding tax, 'as made in the only pay
slip issued to Almire=, that for the period of Canuary B4#B, 3""", the other
amounts of remuneration having been documented by cash vouchers& ,uch pay
slip cannot prove the existence of an employer#employee relationship bet'een the
parties&
As for the designation of the payments to Almire= as Isalaries,I it is not
determinative of the existence of an employer#employee relationship& I,alaryI is a
general term de$ned as Ia remuneration for services given&I %t is the above#1uoted
contract of engagement of services#letter dated ,eptember ", BDDD, together
'ith its attachments, 'hich is the la' bet'een the parties& Even Almire= concedes
rendering service Ibased on the contract,I 'hich, as reFected earlier, is bereft of a
sho'ing of po'er of control, the most crucial and determinative indicator of the
presence of an employer#employee relationship&
SPOUSES PONCIANO AYA5AY, SR. a34 CLEMENCIA AYA5AY v. ARPAP&IL
S&IPPING CORP., a34 MAGNA MARINE INC.
/7! SCRA 7 #00$%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
&eath benefts shall be awarded only when the cause of death of the employee was
proved by substantial evidence to be reasonably connected with his work or his
working conditions.
.onciano Aya#ay Cr& is a seaman engaged by Arpaphil ,hipping )orporation to 'ork
under an BB#month contract of employment for co#respondent *agna *arine %nc&
?n board the vessel and 'hile performing his 'ork, Aya#ay met an eye in>ury
thereby re1uiring him to undergo a corneal transplant& Upon mutual consent of
*agna *arine and Aya#ay, Aya#ay 'as repatriated to *anila& While 'aiting for an
eye donor, Aya#ay died& The death certi$cate indicates that the immediate cause of
his death is cerebro#vascular accident ()9A) commonly kno'n as stroke&
.etitioners .onciano Aya#ay ,r& and )lemencia Aya#ay, parents of Aya#ay, no'
claims for death compensation bene$ts from Arpaphil and *agna *arine, 'hich
the latter re>ected&
+oth the (ational -abor 0elations )ommission ((-0)) and the )ourt of Appeals
()A) denied their claims& @ence, this appeal&
ISSUE2
Whether or not the heirs of Aya#ay are entitled to claim death bene$ts under .?EA
,tandard Employment )ontract
&ELD2
.art %%, ,ection ), (os& B and of the .?EA ,tandard Employment )ontract
Poverning the Employment of All :ilipino ,eamen on +oard ?cean#Poing 9essels
provide, among other things that compensation and bene$ts may be availed of by
16
the 'orker provided heJshe dies during the term of the contract or heJshe has died
as a result of in>ury or illness during the term of the employment&
Upon mutual consent of Aya#ay and Arpaphil and *agna *arine, he 'as on Culy H,
BDDH repatriated on account of his eye in>ury& Thus his employment had been
e8ectively terminated on that particular date& At all events, under the ?ctober BH,
BDD5 )ontract of Employment, Aya#ay ceased to be an employee on ,eptember 34,
BDDH, hence, he 'as no longer an employee 'hen he died on /ecember B, BDDH&
%t is, therefore, crucial to determine 'hether Aya#ay died as a result of, or in
relation to, the eye in>ury he su8ered during the term of his employment& %f the
in>ury is the proximate cause, or at least increased the risk, of his death for 'hich
compensation is sought, recovery may be had for said death&
Unless there is substantial evidence sho'ing that2 (a) the cause of Aya#ay;s death
'as reasonably connected 'ith his 'orkA or (b) the sicknessJailment for 'hich he
died is an accepted occupational diseaseA or (c) his 'orking conditions increased
the risk of contracting the disease for 'hich he died, death compensation bene$ts
cannot be a'arded&
ARLYN D. BAGO v. NATIONAL LABOR RELATIONS COMMISSION a34
STANDARD INSURANCE CO. INC. AND>OR ERNESTO EC&AUS
50 SCRA $// #008%, SECOND DIVISION #Ca'()*5M*'ale+, ,.%
As a general rule$ employers are given a wide latitude of discretion in terminating
the employment of managerial personnel or those who$ while not of similar rank$
perform functions which by their nature require the employer,s full trust and
confdence.
Arlyn +ago (+ago) and $ve other employees 'ere dismissed by )elia .& Abordo
(Abordo), head of the Tuguegarao +ranch of ,tandard %nsurance )ompany
%ncorporated (,%)%) for manipulating the company funds and spreading damaging
rumors& +ago, the auditor of the company, and the $ve other employees apologi=ed
for spreading the rumors& Abordo issued a memo to the employees re1uiring an
explanation for the charges& Thinking that Abordo had already forgiven them, the
employees did not respond to the memo&
(ot receiving any reply, the @uman 0esource /epartment of ,%)% proceeded 'ith
their investigation and found all the employees guilty and dismissed them for loss
of con$dence and serious misconduct& +ago $led a complaint for illegal dismissal&
,he contended that there 'as no due process in the investigation and that
dismissal is a severe penalty for the o8enses charged&
The -abor Arbiter found that +ago 'as illegally dismissed but the (ational -abor
0elations )ommission ((-0)), reversed the -abor ArbiterKs decision and declared
valid the termination of Arlyn;s services on the grounds of loss of trust and
con$dence and dishonesty&
ISSUE-
Whether or not +ago 'as illegally dismissed by ,tandard %nsurance )ompany
%ncorporated
&ELD-
As a general rule, employers are allo'ed a 'ide latitude of discretion in
terminating the employment of managerial personnel or those 'ho, 'hile not of
17
similar rank, perform functions 'hich by their nature re1uire the employer;s full
trust and con$dence& .roof beyond reasonable doubt is not re1uired& %t is
su8icient that there is some basis for loss of con$dence, such as 'hen the
employer has reasonable ground to believe that the employee concerned is
responsible for the purported misconduct, and the nature of his participation
therein renders him un'orthy of the trust and con$dence demanded by his
position&
This must be distinguished from the case of ordinary rank#and#$le employees,
'hose termination on the basis of these same grounds re1uires a higher proof of
involvement in the events in 1uestionA mere uncorroborated assertions and
accusations by the employer 'ill not su8ice&
Even assuming that Arlyn may be considered a rank and $le employee, su8icient
evidence of her involvement in the dishonest scheme of ,%)%;s accountant and
cashier 'ho 'ere also charged and found guilty exists& (ot only 'as her
participation established by the internal audit conductedA the cashier identi$ed
her as part of the scheme, and she herself admitted her involvement&
CALAMBA MEDICAL CENTER v. NATIONAL LABOR RELATIONS
COMMISSION,et al.
58! SCRA 575 #007%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
An employment relationship e.ists between a physician and a hospital if the
hospital controls both the means and the details of the process by which the
physician is to accomplish his task.
.etitioner )alamba *edical )enter ()*)), engaged the services of medical
doctors#spouses 0onaldo -an=anas (/r& 0onaldo) and *erceditha -an=anas (/r&
*erceditha) as part of its team of resident physicians& They 'ere given, among
others, identi$cation cards and 'ork schedulesA and 'ere paid a monthly retainer&
They 'ere like'ise enrolled in the ,ocial ,ecurity ,ystem (,,,)& ,ubse1uently,
)*);s medical director issued a *emorandum to /r& 0onaldo after a resident
physician overheard /r& 0onaldo and a fello' employee discussing the lo'
admission in the hospital& After the incident involving her husband, /r& *erceditha
'as no longer given any 'ork assignments&
After'ards, the rank and $le employees union of )alamba *edical )enter 'ent on
a strike& /r& 0onaldo and /r& *erceditha mean'hile $led a complaint for illegal
suspension and illegal dismissal, respectively before the (ational -abor 0elations
)ommission 0egional Arbitration +oard ((-0)#0A+)& )onse1uently, the
/epartment of -abor and Employment (/?-E) issued a return to 'ork order& /r&
0onaldo, on the other hand, received a notice of termination indicating his failure
to return for 'ork& /r& 0onaldo thus amended his complaint to illegal dismissal&
The )*) contends that the doctors#spouses are not employees of the same, so
that they cannot be illegally dismissed&
ISSUES-
Whether or not an employee#employer relationship does not exist bet'een
)alamba *edical )enter and the doctors#spouses -an=anas
&ELD-
Under the 6control test,7 an employment relationship exists bet'een a physician
and a hospital if the hospital controls both the means and the details of the
process by 'hich the physician is to accomplish his task&
18
Where a person 'ho 'orks for another does so more or less at his o'n pleasure
and is not sub>ect to de$nite hours or conditions of 'ork, and is compensated
according to the result of his e8orts and not the amount thereof, the element of
control is absent&
As priorly stated, the spouses#doctors maintained speci$c 'ork#schedules, as
determined by petitioner through its medical director, 'hich consisted of 35#hour
shifts totaling forty#eight hours each 'eek and 'hich 'ere strictly to be observed
under pain of administrative sanctions&
That )*) exercised control over spouses#doctors gains light from the undisputed
fact that in the emergency room, the operating room, or any department or 'ard
for that matter, spouses#doctors; 'ork is monitored through its nursing
supervisors, charge nurses and orderlies& Without the approval or consent of )*)
or its medical director, no operations can be undertaken in those areas& :or
control test to apply, it is not essential for the employer to actually supervise the
performance of duties of the employee, it being enough that it has the right to
'ield the po'er& With respect to spouses#doctors sharing in some hospital fees,
this scheme does not sever the employment tie bet'een them and )*) as this
merely mirrors additional form or another form of compensation or incentive
similar to 'hat commission#based employees receive as contemplated in Article DE
(f) of the -abor )ode&
The spouses#doctors 'ere in fact made sub>ect to petitioner#hospital;s )ode of
Ethics, the provisions of 'hich cover administrative and disciplinary measures on
negligence of duties, personnel conduct and behavior, and o8enses against
persons, property and the hospital;s interest&
*ore importantly, the )*) itself provided incontrovertible proof of the
employment status of respondents, namely, the identi$cation cards it issued them,
the payslips and +%0 W#3 (no' 3B4) :orms 'hich reFect their status as
employees, and the classi$cation as 6salary7 of their remuneration& *oreover, it
enrolled respondents in the ,,, and *edicare (.hilhealth) program& %t bears
noting at this >uncture that mandatory coverage under the ,,, -a' is premised on
the existence of an employer#employee relationship,QHR except in cases of
compulsory coverage of the self#employed& %t 'ould be preposterous for an
employer to report certain persons as employees and pay their ,,, premiums as
'ell as their 'ages if they are not its employees&
And if the spouses#doctors 'ere not )*);s employees, ho' does it account for its
issuance of the earlier#1uoted *arch E, BDD! memorandum explicitly stating that
respondent is 6employed7 in it and of the subse1uent termination letter indicating
/r& 0onaldo;s employment status&
:inally, under ,ection BH, 0ule T of +ook %%% of the %mplementing 0ules of the
-abor )ode, an employer#employee relationship exists bet'een the resident
physicians and the training hospitals, unless there is a training agreement
bet'een them, and the training program is duly accredited or approved by the
appropriate government agency& %n the spouses#doctors; case, they 'ere not
undergoing any speciali=ation training& They 'ere considered non#training general
practitioners, assigned at the emergency rooms and 'ard sections&
CLARION PRINTING &OUSE, INC. et al. v. NATIONAL LABOR RELATIONS
COMMISSION et al.
/$! SCRA 8 #005%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
19
0etrenchment is a valid ground for the dismissal of an employee.
)larion .rinting @ouse ()larion), a company o'ned by EO)? Proup of )ompanies
(EO)?) hired *ichelle *iclat (*iclat) as marketing assistant on a probationary
basis& /uring that time, she 'as not informed of the standards that she should
meet to 1ualify as a regular employee&
EO)? subse1uently $led a petition for petition for suspension of payment as 'ell
as an appointment of a rehabilitation receivership committee before ,E) on the
ground that they are su8ering $nancial di8iculty& .ursuant to this, a retrenchment
occurred, thus terminating *iclat&
)onversely, *iclat $led a complaint for illegal dismissal before the (-0)& *iclat
contends that assuming her termination is necessary, it 'as not done in a proper
mannerA there 'as no notice that 'as given to her& ?n the other hand, )larion
contends that they are not liable for retrenching some employees because EO)? is
being placed under receivership, and a memorandum 'as given to employees,
hence they substantially complied 'ith the notice re1uirement& (-0) rendered its
decision in favor of *iclat and found that she 'as illegally dismissed& ?n appeal,
the )ourt of Appeals held that )larion failed to prove its ground for retrenchment
as 'ell as compliance 'ith the mandated procedure& %t further ruled that *iclat
should be reinstated and paid back'ages& @ence, this petition&
I++2e-
Whether or not *iclat 'as illegally dismissed
&el4-
%t is like'ise 'ell#settled that for retrenchment to be >usti$ed, any claim of actual
or potential business losses must satisfy the follo'ing standards2 (B) the losses are
substantial and not de minimisA (3) the losses are actual or reasonably imminentA
() the retrenchment is reasonably necessary and is likely to be e8ective in
preventing expected lossesA and (5) the alleged losses, if already incurred, or the
expected imminent losses sought to be forestalled, are proven by su8icient and
convincing evidence&
:rom the provisions of .&/& (o& D"3#A, as amended, the appointment of a receiver
or management committee by the ,E) presupposes a $nding that, inter alia, a
company possesses su8icient property to cover all its debts but Iforesees the
impossibility of meeting them 'hen they respectively fall dueI and Ithere is
imminent danger of dissipation, loss, 'astage or destruction of assets of other
properties or parali=ation of business operations&I
That the ,E), mandated by la' to have regulatory functions over corporations,
partnerships or associations, appointed an interim receiver for the EO)? Proup of
)ompanies on its petition in light of, as 1uoted above, the therein enumerated
Ifactors beyond the control and anticipation of the managementI rendering it
unable to meet its obligation as they fall due, and thus resulting to Icomplications
and problems & & & to arise that 'ould impair and a8ect QitsR operations & & &I sho's
that )-A0%?(, together 'ith the other member#companies of the EO)? Proup of
)ompanies, 'as su8ering business reverses >ustifying, among other things, the
retrenchment of its employees&
ERIC DELA CRU6 et al. v. COCA5COLA BOTTLERS P&ILS. INC.
20
5"/ SCRA 8$! #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
Acts by employees which are inimical to the employer,s interest are deemed
willful breach of the trust and confdence reposed in them.
0aymund ,ales, a salesman of )oca#)ola +ottlers .hils& %nc ()oca#)ola), $gured
an accident 'hile driving a vehicle he 'as not authori=ed to use& ,ales 'as
hospitali=ed and 'as observed that he 'as under the inFuence of li1uor at the
time of the accident and 'as included in the police blotter&
0espondent )oca#)ola discovered that ,ales; co#employees secured a police report
and medical certi$cate 'hich omitted the fact that ,ales 'as under the inFuence
of alcohol& )oca#)ola re1uired ,ales; ,upervisors Cohn Espina, 0aul *& -acuata
(-acuata), and Eric dela )ru= (dela )ru=), to explain 'hy no disciplinary action be
taken against them& Espina denied the fact that he altered the documents&
.etitioner /ela )ru= said that he >ust asked for a copy of the police report one
*elvin Asuncion& And lastly, .etitioner -acuata said that he has no participation in
the alleged alteration because he only picked#up the medical certi$cate from the
@ospital& :urther investigation sho's that they conspired to alter the medical
certi$cate and the police report& After such $nding they 'ere dismissed from
employment& Espina, -acuata and dela )ru= $led separate complaints for illegal
dismissal 'ith the contention that the alleged altering of documents is 'ork
related and is a 'illful breach of con$dence&
The -abor Arbiter dismissed Espina;s complaint for lack of merit& /ela )ru= 'as
found to be illegally dismissed& -acuata 'as found to be at fault for doing nothing
to stop Espina from obtaining false police and medical reports& The respondent
)oca#)ola 'as ordered to reinstate dela )ru= and pay both petitioners dela )ru=
and -acuata their respective back 'ages, Bth month pay and separation pay& ?n
appeal, the (ational -abor 0elations )ommission ((-0)) a8irmed the -abor
Arbiter;s decision but deleted the a'ard of moral damages in favor of dela )ru=&
%ts motion for reconsideration having been denied, respondent $led a .etition for
)ertiorari before the )ourt of Appeals ()A)& The )A set aside the (-0) decision
and held that petitioners -acuata and dela )ru= 'ere validly dismissed&
ISSUE-
Whether or not -acuata and dela )ru= 'ere validly dismissed on the grounds of
altering the medical certi$cate and police report of ,ales
&ELD-
/ela )ru= et al. contend, ho'ever, that for loss of trust and con$dence to be a
ground for termination of employment, it must be 'illful and must be connected
'ith the employee;s 'ork&
+y obtaining an altered police report and medical certi$cate, /ela )ru= et al.
deliberately attempted to cover up the fact that ,ales 'as under the inFuence of
li1uor at the time the accident took place& %n so doing, they committed acts
inimical to respondent;s interests& They thus committed a 'ork#related 'illful
breach of the trust and con$dence reposed in them&
P&ILIPPINE DIAMOND &OTEL AND RESORT, INC. #MANILA DIAMOND
&OTEL% v. MANILA DIAMOND &OTEL EMPLOYEES UNION
/"/ SCRA !"5 #00$%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
21
An ordinary striking worker cannot be dismissed for mere participation in an
illegal strike unless there be a proof that he committed illegal acts during a strike.
The /iamond @otel EmployeeKs Union (the union) $led a petition for )erti$cation
Election before the /?-E#(ational )apital 0egion (()0) seeking certi$cation as
the exclusive bargaining representative of its members& The /?-E#()0 denied
said petition as it failed to comply 'ith the legal re1uirements&
The Union later noti$ed petitioner hotel of its intention to negotiate for collective
bargaining agreement ()+A)& The @uman 0esource /epartment of /iamond @otel
re>ected the notice and advised the union since it 'as not certi$ed by the /?-E as
the exclusive bargaining agent, it could not be recogni=ed as such& ,ince there
'as a failure to settle the dispute regarding the bargaining capability of the union,
the union 'ent on to $le a notice of strike due to unfair labor pracritce (U-.) in
that the hotel refused to bargain 'ith it and the rank#and#$le employees 'ere
being harassed and prevented from >oining it& %n the meantime, Simpo $led a
complaint for U-. against petitioner hotel&
After several conferences, the union suddenly 'ent on strike& The follo'ing day,
the (ational Union of Workers in the @otel, 0estaurant and Allied %ndustries
((UW@0A%() >oined the strike and openly extended its support to the union& The
some of the entrances 'ere blocked by the striking employees& The (ational
-abour 0elations )ommission ((-0)) representative 'ho conducted an ocular
inspection of the @otel premises con$rmed in his 0eport that the strikers
obstructed the free ingress to and egress from the @otel& The (-0) thus issued a
Temporary 0estraining ?rder (T0?) directing the strikers to immediately Icease
and desist from obstructing the free ingress and egress from the @otel premises&
/uring the implementation of the order, the striking employees resisted and some
of the guards tasked to remove the barricades 'ere in>ured& The (-0) declared
that the strike 'as illegal and that the union o8icers and members 'ho
participated 'ere terminated on the grounds of participating in an illegal strike&
The union contended that the strike 'as premised on valid ground and that it had
the capacity to negotiate the )+A as the representatives of the employees of
/iamond @otel& The union contended that their dismissal is tantamount to an
unfair labour practice and union busting&
?n appeal, the )ourt of Appeals a8irmed the (-0) 0esolution dismissing the
complaints of *ary Prace, Agustin and 0o'ena and of the union& %t modi$ed the
(-0) 0esolution, ho'ever, by ordering the reinstatement 'ith back 'ages of
union members&
ISSUE-
Whether or not the dismissal of the union members is valid on the grounds of
participating in an illegal strike
&ELD-
Even if the purpose of a strike is valid, the strike may still be held illegal 'here the
means employed are illegal& Thus, the employment of violence, intimidation,
restraint or coercion in carrying out concerted activities 'hich are in>urious to the
rights to property renders a strike illegal& And so is picketing or the obstruction to
the free use of property or the comfortable en>oyment of life or property, 'hen
accompanied by intimidation, threats, violence, and coercion as to constitute
nuisance&
As the appellate court correctly held, the union o8icers should be dismissed for
staging and participating in the illegal strike, follo'ing paragraph , Article 345(a)
22
of the -abor )ode 'hich provides that I& & &any union o8icer 'ho kno'ingly
participates in an illegal strike and any 'orker or union o8icer 'ho kno'ingly
participates in the commission of illegal acts during strike may be declared to
have lost his employment status & & &I
An ordinary striking 'orker cannot, thus be dismissed for mere participation in an
illegal strike& There must
be proof that he committed illegal acts during a strike, unlike a union o8icer 'ho
may be dismissed by mere kno'ingly participating in an illegal strike andJor
committing an illegal act during a strike&
DIGITEL TELECOMMUNICATIONS P&ILIPPINES, INC.,
et al. v. MARI=UIT SORIANO
/" SCRA 80/ #00$%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
+orced resignation must be su!iciently established by substantial$ concrete and
credible evidence.
*ari1uit ,oriano (,oriano) 'as hired as /irector of *arketing by /igitel
Telecommunications .hilippines, %nc& (/igitel)& ,oriano 'orked under 9ice
.resident for +usiness /ivision Eric C& ,everino (,everino) and ,enior Executive
9ice .resident Cohnson 0obert -& Po (Po)& :ollo'ing a professional dispute against
,everino and Po, ,oriano $led a resignation letter 'hich 'as accepted by her
superiors&
After her resignation, ,oriano $led a suit for illegal termination alleging that she
'as forced to resign due to professional and sexual harassment& ,he alleged that
her superiors are preventing her former colleagues in testifying to the sexual
harassment& ,he produced an a8idavit by one of the persons involved 'ith /igitel
stating that the employees of the company 'ere being forced not to testify against
Po and ,everino& %n defense, Po and ,everino provided 'itnesses that testi$ed
that the acts alleged by ,oriano din not happen&
The -abor Arbiter held that *ari1uit voluntarily resigned, thus dismissing the
complaint& ?n appeal, the (-0) a8irmed the $ndings of the -abor Arbiter& The
)ourt of Appeals reversed the decision of (-0)& @ence,this petition&
ISSUE-
Whether or not the ,oriano 'as forced to resign, due to professional and sexual
harassment, thus amounting to constructive dismissal&
&ELD-
,orianoKs o'n allegation, although they are so detailed, appear incredible if not
do'nright puny& An analysis of her statements sho's that her o'n conclusion that
she 'as being sexually and professionally harassed 'as on the basis of her o'n
suppositions, con>ectures, and surmises&
,he could not satisfactorily explain her allegation that she 'as consistently
professionally harassed by respondent ,everino& The latterKs alleged 'ords2 I@o'
come you claim you kno' so much yet nothing ever gets done in your
departmentUI do not >urisprudentially constitute nor clearly establish Iprofessional
harassment&I Aside from these 'ords, the complainant could only venture to allege
instances in general and vague terms& As to the facts allegedly constituting Isexual
harassmentI advanced by Po and ,everino, after an ob>ective analysis over their
assertions as stated in their respective counter#a8idavits and further considering
23
the other supporting documents attached to the respondentsK pleadings, it is found
that these far out 'eigh the ,orianoKs o'n evidence
A reading of the a8idavit of the 'itness, 'ho 'as never an employee nor present
at the party of /igitel, reveals, ho'ever, that she merely IconcludedI that the
employees of /igitel 'ere instructed or harassed not to testify in favor of ,oriano
'hen they failed to meet one *atet 0ui=, a /igitel employee I'ho kept avoiding to
meet
With such tendency to threaten resignation everytime higher management 'ould
refuse her demand to transfer subordinates 'ho had administrative di8erences
'ith her, 'e therefore have no doubt that complainant voluntarily resigned 'hen
respondent ,everino refused to heed her demand that *s& Arnedo and *s&
%nductivo, her subordinates, be transferred to other departments& We also have no
doubt that such resignation does not constitute constructive dismissal, much less
an illegal one&
DE LA SALLE UNIVERSITY a34 DR. CARMELITA I. =UEBENGCO v. DE LA
SALLE UNIVERSITY EMPLOYEES ASSOCIATION #DLSU5NAFTEU%
57/ SCRA 5" #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
"t is a.iomatic in labor relations that a (ollective *argaining Agreement entered
into by a legitimate labor organization and an employer becomes the law between
the parties$ compliance with which is mandated by e.press policy of the law.
%n 3""B, a splinter group of the /e -a ,alle University Employees Association
(/-,U#(A:TEU) led by one +elen Alia=as (Alia=as group) $led a petition for
conduct of elections 'ith the /epartment of -abor and Employment (/?-E),
alleging that the then incumbent o8icers of /-,U#(A:TEU had failed to call for a
regular election since BD!H& /?-E#()0 held that the holdover authority of /-,U#
(A:TEU;s incumbent set of o8icers had been extinguished by virtue of the
execution of the )+A& %t accordingly ordered the conduct of elections to be placed
under the control and supervision of its -abor 0elations /ivision and sub>ect to
pre#election conferences& Even 'ith the conditions for the conduct of election
imposed by the /?-E#()0, /-,U#(A:TEU called for a regular election 'ithout
prior notice to the /?-E and 'ithout the conduct of pre#election conference& The
incident prompted the Alia=as group to $le an Urgent *otion for %ntervention 'ith
the +ureau of -abor 0elations (+-0) of the /?-E& The +-0 granted the Alia=as
group;s motion for intervention three days before the intended date of election&
The Alia=as group re1uested the University 6to escro' all union duesJagency fees
and 'hatever money considerations deducted from salaries of concerned co#
academic personnel until such time that an election of union o8icials has been
scheduled and subse1uent elections has been held&7 /-,U and Guebengco;s move
prompted /-,U#(A:TEU to $le a complaint for Unfair -abor .ractice (U-.
complaint), claiming that they unduly interfered 'ith its internal a8airs and
discriminated against its members&
The -abor Arbiter dismissed /-,U#(A:TEU;s U-. complaint& The )ourt of
Appeals reversed the said ?rder of the (-0) 'ith respect to the 6subsuming7 of
U-.;s complaint under the certi$ed case, the U-. complaint having been, at the
time the (-0) Third /ivision ?rder 'as issued, 6already disposed of7 by the
Arbiter and 'as in fact pending appeal before the (-0) ,econd /ivision&
ISSUE-
24
Whether or not /-,U and Guebengco is guilty of unfair labor practice
&ELD-
?n the other matter raised by /-,U and Guebengco V that their acts of
'ithholding union and agency dues and suspension of normal relations 'ith
respondent;s incumbent set of o8icers pending the intra#union dispute did not
constitute interference, the )ourt $nds for /-,U#(A:TEU&
.ending the $nal resolution of the intra#union dispute, /-,U#(A:TEU;s o8icers
remained duly authori=ed to conduct union a8airs& %t bears noting that at the time
/-,U and Guebengco;s 1uestioned moves 'ere adopted, a valid and existing )+A
had been entered bet'een the parties& %t thus behooved /-,U to observe the
terms and conditions thereof bearing on union dues and representation& %t is
axiomatic in labor relations that a )+A entered into by a legitimate labor
organi=ation and an employer becomes the la' bet'een the parties, compliance
'ith 'hich is mandated by express policy of the la'& 0especting the issue of
damages, /-,U#(A:TEU, in its .osition .aper before the -abor Arbiter, prayed for
the a'ard of exemplary damages, nominal damages, and attorney;s fees&
Exemplary or corrective damages are imposed by 'ay of example or correction for
the public good in addition to the moral, temperate, li1uidated or compensatory
damages& While the amount of exemplary damages need not be proved,
respondent must sho' proof of entitlement to moral, temperate or compensatory
damages before the )ourt may consider a'arding exemplary damages& (o such
damages 'ere prayed for, ho'ever, hence, the )ourt $nds no basis to grant the
prayer for exemplary damages&
CARMEN B. DY5DUMALASA v. DOMINGO SABADO S. FERNANDE6, et al.
5". SCRA $5$, #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
1rocedural rules governing service of summons$ in quasi#%udicial proceedings$ are
not strictly construed.
/omingo :ernande=, et al., former employees of @elios *anufacturing
)orporation (@E-%?,), $led a complaint for illegal dismissal or illegal closure of
business, non#payment of salaries and other money claims against @E-%?,& The
-abor Arbiter found that the closure of the *untinlupa o8iceJplant 'as a sham, as
@E-%?, simply relocated its operations to a ne' plant in )armona, )avite under
the ne' name of 6.at N ,u=ara,7 in response to the ne'ly#established local union&
@E-%?, and it +oard of /irectors and stockholders 'ere held liable&
The (-0) modi$ed the -abor Arbiter;s ?rder, holding that /umalasa is not >ointly
and severally liable 'ith @E-%?, for :ernande=, et al.;s claim, there being no
sho'ing that she acted in bad faith nor that @E-%?, cannot pay its obligations&
/umalasa moved for reconsideration, but this 'as denied, hence, she appealed to
the )ourt of Appeals&
The appellate court reversed and set aside the (-0) 0esolution, holding that
'hat the (-0), in e8ect, modi$ed 'as not the ?rder denying the *otion to Guash
the Writ of Execution, but the -abor Arbiter;s /ecision itself& This is an
impermissible act since the /ecision has become $nal and executorA hence, it
could no longer be reversed or modi$ed&
0especting (-0);s pronouncement that /umalasa 'as not >ointly and severally
liable, the appellate court held that the same is a superFuity since there 'as no
25
statement, either in the main case or in the Writ, that the liability is solidary&
Therefore, /umalasa is merely >ointly liable for the >udgment a'ard& /umalasa
moved for reconsideration of the appellate court;s /ecision, 'hich 'as denied&
@ence, this petition&
ISSUES-
B&) Whether or not the -abor Arbiter ac1uired >urisdiction over /umalasa
3&) Whether or not /umalasa is solidarily liable 'ith @E-%?, for the >udgment
a'ard
&ELD-
)ontrary to /umalasa;s contention, the -abor Arbiter ac1uired >urisdiction over
her person regardless of the fact that there 'as allegedly no valid service of
summons& %t bears noting that, in 1uasi#>udicial proceedings, procedural rules
governing service of summons are not strictly construed& ,ubstantial compliance
there'ith is su8icient& %n the cases at bar, /umalasa, her husband and three other
relatives, 'ere all individually impleaded in the complaint& The -abor Arbiter
furnished her 'ith notices of the scheduled hearings and other processes& %t is
undisputed that @E-%?,, of 'hich she and her therein co#respondents in the
sub>ect cases 'ere the stockholders and managers, 'as in fact heard, proof of
'hich is the attendance of her husband, .resident#Peneral *anager of @E-%?,,
together 'ith counsel in one such scheduled hearing and the -abor Arbiter;s
consideration of their position paper in arriving at the /ecision, albeit the same
position paper 'as belatedly $led&
)learly, /umalasa 'as ade1uately represented in the proceedings conducted by
the -abor Arbiter by the la'yer retained by @E-%?,&
Taking into account the peculiar circumstances of the cases, @E-%?,; kno'ledge
of the pendency thereof and its e8orts to resist them are deemed to be kno'ledge
and action of petitioner& That /umalasa and her fello' members of the +oard
refused to heed the summons and avail of the opportunity to defend themselves as
they instead opted to hide behind the corporate veil does not shield them from the
application of labor la's&
/umalasa cannot no' thus 1uestion the implementation of the Writ of Execution
on her on the pretext that >urisdiction 'as not validly ac1uired over her person or
that @E-%?, has a separate and distinct personality as a corporate entity& To apply
the normal precepts on corporate $ction and the technical rules on service of
summons 'ould be to overturn the bias of the )onstitution and the la's in favor of
labor&
O3 Ca'@e3A+ l)aB)l)t<
A perusal of the -abor Arbiter;s /ecision readily sho's that, not'ithstanding the
$nding of bad faith on the part of the management, the dispositive portion did not
expressly mention the solidary liability of the o8icers and +oard members,
including /umalasa&
%neluctably, absent a clear and convincing sho'ing of the bad faith in e8ecting the
closure of @E-%?, that can be individually attributed to petitioner as an o8icer
thereof, and 'ithout the pronouncement in the /ecision that she is being held
solidarily liable, petitioner is only >ointly liable&
The )ourt in fact $nds that the present action is actually a last#ditch attempt on
the part of /umalasa to 'riggle its 'ay out of her share in the >udgment obligation
26
and to discuss the defenses 'hich she failed to interpose 'hen given the
opportunity& Even as /umalasa avers that she is not 1uestioning the $nal and
executory /ecision of the -abor Arbiter and admits liability, albeit only >oint, still,
she proceeds to interpose the defenses that >urisdiction 'as not ac1uired over her
person and that @E-%?, has a separate >uridical personality&
As for /umalasa;s 1uestioning the levy upon her house and lot, she conveniently
omits to mention that the same are actually con>ugal property belonging to her
and her husband& Whether petitioner is >ointly or solidarily liable for the >udgment
obligation, the levied property is not fully absolved from any lien except if it be
sho'n that it is exempt from execution&
DYNAMIC SIGNMAKER OUTDOOR ADVERTISING SERVICES, INC., et al. v.
FRANCISCO POTONGAN
/$! SCRA .7 #005%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
"f e.ercised in good faith for the purpose of advancing business interests$ not of
defeating or circumventing the rights of employees$ the managerial prerogative to
transfer personnel from one area of operation to another is %ustifed.
0espondent :rancisco .otongan (.otongan) 'orked for /ynamic ,ignmaker
?utdoor Advertising ,ervices ()orporation) as a .roduction ,upervisor& The union
of rank#and#$le employees of corporation declared a strike on the ground that the
corporation replaced all its supervisors& ,ubse1uently .otongan did not receive his
salary and he 'as advised to take an inde$nite leave of absence& Then .otongan
'as being charge by the company for the alleged burning of corporation;s main
building and for the disruption of 'ork& @o'ever, .otangan denied all allegations&
.otongan then $led a complaint for illegal dismissal 'ith (-0) against
corporation&
The -abor Arbiter dismissed the case on the ground that the action 'as barred by
prior >udgment regarding the strike of union& .otongan then appealed, contending
that the -abor Arbiter did not ac1uire >urisdiction over him because he 'as not
even a member of the union& The (-0) set aside the -abor Arbiter;s decision and
directed respondent .otongan to go back to 'ork&
The -abor Arbiter eventually dismissed .otongan;s complaint for lack of merit,
holding that, inter alia, .otongan should have reported back to 'ork andJor
in1uired into the results of the investigation of the charges against himA and that
the belated $ling of his complaint partakes of a I$shing expedition&I
?n appeal, the (-0) a8irmed the decision of the -abor Arbiter& The )ourt of
Appeals ()A) ho'ever, reversed the decision of (-0) holding that .otongan 'as
denied due process and 'as dismissed 'ithout cause&
ISSUE-
Whether or not the dismissal of .otongan 'as a valid exercise of management
prerogatives
&ELD-
The ,upreme )ourt recogni=es that management has 'ide latitude to regulate,
according to its o'n discretion and >udgment, all aspects of employment, including
the freedom to transfer and reassign employees according to the re1uirements of
its business& The scope and limits of the exercise of management prerogatives,
must, ho'ever, be balanced against the security of tenure given to labor&
27
%f exercised in good faith for the purpose of advancing business interests, not of
defeating or circumventing the rights of employees, the managerial prerogative to
transfer personnel from one area of operation to another is >usti$ed&
The ,upreme )ourt $nds it di8icult, ho'ever, to attribute good faith on the part of
/ynamic& .otongan 'as instructed to go on inde$nite leave& @e 'as asked to
return to 'ork only after more than three years from the time he 'as instructed to
go on inde$nite leave during 'hich period his salaries 'ere 'ithheld, and only
after the (-0) promulgated its decision of *ay 3B, BDD! reversing the labor
arbiter;s dismissal of his complaint&
ARNULFO O. ENDICO v. =UANTUM DISTRIBUTION CENTER
588 SCRA "" #00"%, FIRST DIVISION #Ca'()* M*'ale+, ,.%
The right of employees to security of tenure does not give them vested rights to
their positions to the e.tent of depriving management of its prerogative to change
their assignments or to transfer them.
Guantum :oods )enter hired Arnulfo ?& Endico (Endico) as :ield ,upervisor of
/avao )ity& @e 'as later on transferred in )ebu& /ue to Endico;s achievements
and contributions to Guantum :oods, he 'as promoted as Area *anager of )ebu&
@o'ever, after fruitful years of employment, Guantum :oods 'as adversely
a8ected by economic slo'do'n, 'hich compelled it to streamline its operations
through the reduction of the company;s contractual merchandisers to save on
operation cost& Thereafter, for some misfortunate events, Endico 'as immediately
relieved from service& Endico thereafter $led a complaint for constructive illegal
dismissal&
The -abor Arbiter rendered a decision in Endico;s favor& Guantum :oods appealed
to the (ational -abor 0elations )ommission ((-0)) 'hich a8irmed the -abor
Arbiter;s decision 'ith modi$cation& Guantum :oods then $led a .etition for
(ertiorari before the )ourt of Appeals ()A) 'ho ruled in favor of Guantum :oods&
The )ourt of Appeals ruled that Guantum :oods had yet to decide on the
administrative case 'hen Endico immediately $led the complaint for constructive
dismissal& The )A concluded that Endico $led the complaint in anticipation of 'hat
he perceived to be the $nal outcome of the administrative investigation& @ence,
this petition&
ISSUE-
Whether or not Endico 'as constructively dismissed
&ELD-
Curisprudence recogni=es the exercise of management prerogatives& -abor la's
also discourage interference 'ith an employer;s >udgment in the conduct of its
business& :or this reason, the )ourt often declines to interfere in legitimate
business decisions of employers& The la' must protect not only the 'elfare of
employees, but also the right of employers&
%n the pursuit of its legitimate business interests, especially during adverse
business conditions, management has the prerogative to transfer or assign
employees from one o8ice or area of operation to another V provided there is no
demotion in rank or diminution of salary, bene$ts and other privileges and the
action is not motivated by discrimination, bad faith, or e8ected as a form of
punishment or demotion 'ithout su8icient cause& This privilege is inherent in the
right of employers to control and manage their enterprises e8ectively& The right of
28
employees to security of tenure does not give them vested rights to their positions
to the extent of depriving management of its prerogative to change their
assignments or to transfer them&
*anagerial prerogatives, ho'ever, are sub>ect to limitations provided by la',
collective bargaining agreements, and general principles of fair play and >ustice&
%n this case, the )ourt $nds no reason to disturb the conclusion of the )A that
there 'as no constructive dismissal& 0eassignments made by management
pending investigation of violations of company policies and procedures allegedly
committed by an employee fall 'ithin the ambit of management prerogative& The
decision of Guantum :oods to transfer Endico pending investigation 'as a valid
exercise of management prerogative to discipline its employees& The transfer,
'hile incidental to the charges against Endico, 'as not meant as a penalty, but
rather as a preventive measure to avoid further loss of sales and the destruction of
Guantum :oods; image and good'ill& %t 'as not designed to be the culmination of
the then on#going administrative investigation against Endico&
(either 'as there any demotion in rank or any diminution of Endico;s salary,
privileges and other bene$ts& Endico 'as being transferred to the head o8ice as
area sales manager, the same position
Endico held in )ebu& There 'as also no proof that the transfer involved a
diminution of Endico;s salary, privileges and other bene$ts&
?n the alleged inconvenience on Endico and his family because of the transfer
from )ebu to the head o8ice in .araMa1ue, the )ourt rules that the transfer is
valid, there being no sho'ing that there 'as bad faith on the part of Guantum
:oods& *oreover, the )ourt $nds that Guantum :oods, considering the declining
sales and the loss of a ma>or account in )ebu, 'as acting in the legitimate pursuit
of 'hat it considered its best interest in deciding to transfer Endico to the head
o8ice&
FE LA ROSA, et al. v. AMBASSADOR &OTEL
57! SCRA ./0 #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
(ase law holds that constructive dismissal occurs when there is cessation of work
because continued employment is rendered impossible$ unreasonable or unlikely2
when there is a demotion in rank or diminution in pay or both2 or when a clear
discrimination$ insensibility$ or disdain by an employer becomes unbearable to the
employee.
.etitioners :e -a 0osa, ?felia 9ele=, )ely /omingo, Cona (atividad and Edgar /e
-eon (-a 0osa, et al&), 'ere employees of respondent Ambassador @otel& -a 0osa,
et al& $led before the (ational -abor 0elations )ommission ((-0)) several
complaints for illegal dismissal, illegal suspension, and illegal deductions against
the hotel and its manager& -a 0osa, et al. alleged that after $ling their complaints
'ith the /epartment of -abor, the latter inspected the hotel;s premises& The hotel
'as thereafter found to have been violating labor standards la's& )onse1uently,
after such incident, the management of the hotel retaliated by suspending andJor
constructively dismissing them by drastically reducing their 'ork days through the
adoption of a 'ork reductionJrotation scheme& The hotel ho'ever countered that
such reductionJrotation scheme 'as an exercise of its management prerogative
due to business losses&
The labor arbiter found the hotel and its manager guilty of illegal dismissal& The
hotel appealed to the (-0) but the latter a8irmed the labor arbiter;s ruling 'ith
29
modi$cation& The hotel appealed and prayed for the issuance of an in>unctive 'rit
before the )ourt of Appeals& The appellate court reversed the (-0) decision and
dismissed the petitioners; complaints, stating that there 'as no constructive
dismissal&
ISSUES-
Whether or not -a 0osa et al. 'ere constructively dismissed
&ELD-
The records fail, ho'ever, to sho' any documentary proof that the 'ork reduction
scheme 'as adopted due to Ambassador;s business reverses& The hotel;s
memorandum dated April H, 3""" (sic, should be 3""3) informing -a 0osa et al. of
the adoption of a t'o#day 'ork scheme e8ective April H, 3""3 made no mention
'hy such scheme 'as being adopted& (either do the records sho' any
documentary proof that the hotel su8ered $nancial losses to >ustify its adoption of
the said scheme to stabili=e its operations&
What is undisputed, as found by both the labor arbiter and the (-0) and admitted
by respondent itself, is that the complaints for violation of labor standards la's
'ere $led by -a 0osa et al. against Ambassador @otel at the /?-E#()0, some of
'hich complaints 'ere partially settledA and that almost immediately after the
partial settlement of the said complaints, the 'ork reductionJrotation scheme 'as
implemented&
)ase la' holds that constructive dismissal occurs 'hen there is cessation of 'ork
because continued employment is rendered impossible, unreasonable or unlikelyA
'hen there is a demotion in rank or diminution in pay or bothA or 'hen a clear
discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee& The hotel;s sudden, arbitrary and unfounded adoption of the t'o#day
'ork scheme 'hich greatly reduced -a 0osa, et al.;s salaries renders it liable for
constructive dismissal& Upon the other hand, -a 0osa et al.;s immediate $ling of
complaints for illegal suspension and illegal dismissal after the implementation of
the 1uestioned 'ork scheme, 'hich scheme 'as adopted soon after petitioners;
complaints against respondent for violation of labor standards la's 'ere found
meritorious, negates respondent;s claim of abandonment& An employee 'ho takes
steps to protest his dismissal cannot by logic be said to have abandoned his 'ork&
ADELINO FELI9 v. NATIONAL LABOR RELATIONS COMMISSION a34
REPUBLIC ASA&I GLASS CORPORATION
// SCRA /$5 #00/%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
3ubstantial evidence must support the dismissal of an employee on the ground of
loss of trust and confdence.
.etitioner Adelino :elix 'as hired by the 0epublic Asahi Plass )orporation as a
)adet Engineer& ,ometime in BDD3, :elix 'as o8ered a chance to train and 1ualify
for the position of Assistant *anager but he declined and 'aived the opportunity
to the one 'ho 'as next#in#line& +y :elixKs claim, he 'as asked by certain o8icers
of the company to resign and accept a separation package, failing 'hich he 'ould
be terminated for loss of con$dence&
:elix, ho'ever, refused to resign and accept separation bene$ts, dra'ing the
o8icers of the company to, by his claim, start harassing him& Thus, he 'as not
given 'ork and another employee, *r& Elmer Tacata, 'as assigned to take over his
post and function& Unable to 'ithstand the manner by 'hich he 'as being treated
30
by the company, :elix, through his la'yer, 'arned the 0epublic Asahi Plass
)orporation about the illegality of its actions& :elix attributed the companyKs
harassment against him to his being a member of the supervisory union then being
formed& The 0epublic Asahi Plass )orporation subse1uently terminated :elix;x
services for loss of trust and con$dence&
:elix thus lodged a complaint for illegal dismissal& The -abor Arbiter dismissed
:elixKs complaint& ?n appeal, the (ational -abor 0elations )ommission ((-0))
dismissed :elixKs complaint for lack of merit& The )ourt of Appeals like'ise
dismissed the complaint&
ISSUE-
Whether or not the company;s loss of trust and con$dence is founded on facts
established by substantial and competent evidence
&ELD-
The rule is that high respect is accorded to the $ndings of fact of 1uasi#>udicial
agencies, more so in the case at bar 'here both the -abor Arbiter and the (-0)
share the same $ndings& The rule is not ho'ever, 'ithout exceptions one of 'hich
is 'hen the $ndings of fact of the labor o8icials on 'hich the conclusion 'as
based are not supported by substantial evidence& The same is true 'hen it is
perceived that far too much is concluded, inferred or deducted from bare facts
adduced in evidence&
The employer;s evidence, although not re1uired to be of such degree as that
re1uired in criminal cases i&e& proof beyond reasonable doubt, must be substantial
V it must clearly and convincingly establish the facts upon 'hich loss of con$dence
in the employee may be made to rest& %n the case at bar, the company failed to
discharge this burden&
:elix 'as hastily dismissed by A,A@% as the former 'as not given ade1uate time
to prepare for his defense but 'as preemptorily dismissed even 'ithout any formal
investigation or hearing& %t is settled that 'here the employee denies the charges
against him, a hearing is necessary to thresh out any doubt& The failure of the
company to give petitioner, 'ho denied the charges against him, the bene$t of a
hearing and an investigation before his termination constitutes an infringement of
his constitutional right to due process&
%t bears emphasis that the matter of determining 'hether the cause for dismissal
is >usti$ed on the ground of loss of con$dence cannot be left entirely to the
employer& %mpartial tribunals do not only rely on the statement made by the
employer that there is 6loss of con$dence7 unless duly proved or su8iciently
substantiated& At all events, even if all the allegations are true, they are not of
such nature to merit the penalty of dismissal given the B5 years in service of :elix&
/ismissal is unduly harsh and grossly disproportionate to the charges& This rule on
proportionality V that the penalty imposed should commensurate to the gravity of
the o8ense V has been observed in a number of cases&
There being no basis in la' or in fact >ustifying :elix;s dismissal on the basis of
loss of trust and con$dence, his dismissal 'as illegal&
G ? M #P&IL.%, INC., v. WILLIE BATOMALA=UE
/$! SCRA !!! #005%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
The burden of proving payment of monetary claims rests on the employer.
31
Abdul A=i= Abdullah Al *uhaimid (a>ad )ar *aintenance Association (Abdul A=i=)
hired Willie +atomala1ue as car painter through a recruiter and agent petitioner P
N * .hil&, %nc& (PN*)& Their contract is for 3 years&
+atomala1ue started 'orking on *arch B", BDD3, but on Cune E, BDD5, he 'as
repatriated& @e then $led a complaint against PN*, Abdul A=i= and )ountry
Empire %nsurance )ompany for non#payment and underpayment of salaries and
damages 'ith the .hilippine ?verseas Employment Administration (.?EA)& The
-abor Arbiter (-A) credited +atomala1ue;s complaint for underpayment of salaries
during the $rst year of his contract but denied his other claims, and ordered PN*
and other defendants to pay +atomala1ue& ?n appeal, the (ational -abor
0elations )ommission a8irmed the decision of the -A&
ISSUE-
Whether or not PN* has the obligation to prove that +atomala1ue 'as paid his
salaries in full
&ELD-
,peci$cally 'ith respect to labor cases, the burden of proving payment of
monetary claims rests on the employer, the rationale being that the pertinent
personnel $les, payrolls, records, remittances and other similar documents L
'hich 'ill sho' that overtime, di8erentials, service incentive leave and other
claims of 'orkers have been paid L are not in the possession of the 'orker but in
the custody and absolute control of the employer&
Aside, ho'ever, from its bare allegation that its principal Abdul A=i= had fully paid
+atomala1ue;s salaries, PN* did not present any evidence, e&g&, payroll or
payslips, to support its defense of payment& PN* thus failed to discharge the onus
probandi& PN*, as the recruiter and agent of Abdul A=i=, is thus solidarily liable
'ith the latter for the unpaid 'ages of +atomala1ue&
?n repeated occasions, the )ourt ruled that the debtor has the burden of sho'ing
'ith legal certainty that the obligation has been discharged by payment& To
discharge means to extinguish an obligation, and in contract la' discharge occurs
either 'hen the parties have performed their obligations in the contract, or 'hen
an event the conduct of the parties, or the operation of la' releases the parties
from performing& Thus, a party 'ho alleges that an obligation has been
extinguished must prove facts or acts giving rise to the extinction&
The fact of underpayment does not shift the burden of evidence to +atomala1ue
because partial payment does not extinguish the obligation& ?nly 'hen the debtor
introduces evidence that the obligation has been extinguished does the burden of
evidence shift to the creditor 'ho is then under a duty of producing evidence to
sho' 'hy payment does not extinguish the obligation&
LUNESA O. LANSANGAN AND ROCITA CENDACA v. AMKOR TEC&NOLOGY
P&ILIPPINES
588 SCRA /". #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
1ayment of backwages and other benefts is %ustifed only if the employee was
un%ustly dismissed.
An email 'as sent to Amkor Technology .hilippines (Amkor) through their Peneral
*anager alleging that the -unesa -ansangan (-ansangan) and 0ocita )endana
()endana) stole company time& -ansangan and )endana admitted to the
32
'rongdoing and 'ere terminated for 6extremely serious o8enses7& The t'o then
$led a case of illegal dismissal against Amkor& The -abor Arbiter (-A) ordered for
their reinstatement to their former positions 'ithout back'ages, but dismissed the
complaint on basis of -ansangan and )endana;s guilt& The t'o did not appeal the
$nding that they 'ere guilty, and moved for the 'rit of execution& Amkor appealed
the decision to the (ational -abor 0elations )ommissions ((-0)) and 'as
subse1uently granted& The (-0) deleted the grant for reinstatement of the -A&
The )ourt of Appeals a8irmed the decision of the (-0) that -ansangan and
)endana are guilty and should not be reinstated but modi$ed in so far as
back'ages are concerned that it must be paid in full&
ISSUE-
Whether or not -ansangan and )endana are entitled to back'ages and
reinstatement
&ELD-
The Arbiter found -ansangan and )endana;s dismissal to be valid& ,uch $nding
had, as stated earlier, become $nal, they not having appealed it& -ansangan and
)endana;s are not entitled to full back'ages as their dismissal 'as not found to be
illegal& Agabon v. 4'0( so states VV payment of back'ages and other bene$ts is
>usti$ed only if the employee 'as un>ustly dismissed&
PANFILO MACASERO v. SOUT&ERN INDUSTRIAL GASES P&ILIPPINES
a34>*' NEIL LINDSAY
588 SCRA 500 #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
An illegally dismissed employee is entitled to two reliefs backwages and
reinstatement. "n instances where reinstatement is no longer feasible$ separation
pay is granted. "n e!ect$ an illegally dismissed employee is entitled to either
reinstatement$ if viable$ or if not$ separation pay and backwages.
.an$lo *acasero 'orks as )arbon /ioxide +ulk Tank Escort for ,outhern
%ndustrial Pases, .hilippines (,%P.)& @e 'as severed from his >ob for the reason
that his services 'ere no longer needed& *acasero $led a case of illegal dismissal
against ,%P. before the -abor Arbiter (-A) 'ho ruled that he is considered a
regular employee but 'as not illegally dismissed and that he is entitled to
separation pay e1uivalent to B month for every year of service plus Bth month
pay&
The (ational -abor 0elations )ommission ((-0)) a8irmed the decision of the -A
but modi$ed the computation for the separation pay& The )ourt of Appeals ()A)
also a8irmed the decision of the (-0)&
ISSUE-
Whether or not *acasero is illegally dismissed and is entitled to separation pay
&ELD-
While both labor tribunals and the appellate court held that *acasero failed to
prove the fact of his dismissal, they oddly ordered the a'ard of separation pay in
lieu of reinstatement in light of ,%P. company;s I$rm stance that *acasero 'as
not its employee vis a vis the unFinching assertion of *acasero that he 'as 'hich
does not create a fertile ground for reinstatement&I %t goes 'ithout saying that the
a'ard of separation pay is inconsistent 'ith a $nding that there 'as no illegal
dismissal, for under Article 3ED of the -abor )ode and as held in a catena of cases,
an employee 'ho is dismissed 'ithout >ust cause and 'ithout due process is
33
entitled to back'ages and reinstatement or payment of separation pay in lieu
thereof&
Thus, an illegally dismissed employee is entitled to t'o reliefs2 back'ages and
reinstatement& The t'o reliefs provided are separate and distinct& %n instances
'here reinstatement is no longer feasible because of strained relations bet'een
the employee and the employer, separation pay is granted& %n e8ect, an illegally
dismissed employee is entitled to either reinstatement, if viable, or separation pay
if reinstatement is no longer viable, and back'ages&
The accepted doctrine is that separation pay may avail in lieu of reinstatement if
reinstatement is no longer practical or in the best interest of the parties&
,eparation pay in lieu of reinstatement may like'ise be a'arded if the employee
decides not to be reinstated&
34
Re<3al4* Ma4');aleD*+ v. Ge@)3)l*2 T'2E:)3; Se'v)Ee L)Be't< Gal*te'a et
al.
G. R. N*. !8"!8/, / DeEe@Be' 007, SECOND DIVISION #Ca'()*5M*'ale+,
,.%
The test of constructive dismissal is whether a reasonable person in the
employee5s position would have felt compelled to give up his %ob under the
circumstances.
0eynaldo *adrigale>os 'as hired by Peminilou Trucking ,ervice -iberty Palotera
as a truck driver to haul and deliver products of ,an *iguel .ure :oods )ompany,
%nc& *adrigale>os claimed that he 'as re1uested by Peminilou Trucking ,ervice
-iberty Palotera et al. to sign a contract entitled 6asunduan 3a 1ag#/pa ng
3erbisyo 'hich he refused as he found it to alter his status as a regular employee
to merely contractual, and it contained a 'aiver of bene$ts that had accrued since
he started 'orking for respondents&
)laiming that he 'as terminated by not signing the 6asunduan, *adrigale>os $led
'ith the (ational -abor 0elations )ommission ((0-)) a complaint for
constructive dismissal against Peminilou Trucking ,ervice -iberty Palotera et al&
Peminilou Trucking ,ervice -iberty Palotera et al. denied dismissing *adrigale>os
from his employment, explaining that he unilaterally decided to stop reporting for
'ork, follo'ing the $ling by a fello' driver of a complaint against him for
allegedly attacking his fello' driver 'ith a knife&
The -abor Arbiter declared that *adrigale>os had been illegally dismissed& The
(-0) reversed the /ecision ruling that there 'as no termination of employment&
The appellate court denied petitioner;s appeal $nding that even assuming that
*adrigale>os 'as re1uired but refused to sign the 6asunduan$ his refusal does not
per se ade1uately support the charge of dismissal& The appellate court added that
'hile technical rules on evidence are not strictly follo'ed in the (-0), a charge of
dismissal must still be supported by substantial evidence at the very least, or such
relevant evidence as a reasonable mind might accept as ade1uate to support a
conclusion&
ISSUE-
Whether or not the employer bears the burden of proof to sho' that there 'as
un>usti$ed refusal to report for 'ork
&ELD-
The )ourtKs examination of the records reveals that the factual $ndings of the
(-0), as a8irmed by the appellate court, are supported by substantial evidence,
hence, there is no cogent reason for the )ourt to modify or reverse the same&
)onstructive dismissal is a cessation of 'ork because continued employment is
rendered impossible, unreasonable or unlikelyA 'hen there is a demotion in rank
or diminution in pay or bothA or 'hen a clear discrimination, insensibility, or
disdain by an employer becomes unbearable to the employee& The test of
constructive dismissal is 'hether a reasonable person in the employeeKs position
'ould have felt compelled to give up his >ob under the circumstances&
%n the present case, the records on hand sho' that the lone piece of evidence
submitted by petitioner to substantiate his claim of constructive dismissal is an
unsigned copy of the 6asunduan. This falls 'ay short of the re1uired 1uantum of
proof 'hich, as the appellate court pointed out, is substantial evidence, or such
35
relevant evidence as a reasonable mind might accept as ade1uate to support a
conclusion&
Under the circumstances, the )ourt $nds that the appellate court did not err in
sustaining Peminilou Trucking ,ervice -iberty Palotera et al;s claim that
*adrigale>os 'as not dismissed, but that he simply failed to report for 'ork after
an altercation 'ith a fello' driver, 'hich incident 'as the sub>ect of conciliation
proceedings before the 3angguniang *arangay&
36
MA,URINE L. MAURICIO v. NATIONAL LABOR RELATIONS COMMISSION,
et al.
/85 SCRA .. #005%, T&IRD DIVISION #Ca'()* M*'ale+ ,.%
-ne of the inherent powers of courts which should apply in equal force to quasi#
%udicial bodies is to amend and control its processes so as to make them
conformable to law and %ustice. This includes the right to reverse itself$ especially
when in its opinion it has committed an error or mistake in %udgment and
adherence to its decision would cause in%ustice.
*a>urine -& *auricio (*a>urine) started 'orking as an Administrative Assistant in
the -egal /epartment of the *anila +anking )orporation as a probationary
employee& As a pre#employment re1uirement, the bank directed the submission by
*auricio of some re1uired documents& @o'ever, she failed to do so& ,he 'as
advised that the processing of her regulari=ation as employee 'ould be held in
abeyance& The bank gave her extension dates t'ice 'ith information that her
failure to do so 'ould cause the termination of her employment& /espite the
deadline given her, she still failed to comply 'ith the re1uirements&
*auricio, informed the bank that she could not secure a clearance from her
previous employer, the *anila +ankers -ife %nsurance )orporation (*+-%)), a
sister company of the bank, as she had a pending case 'ith it& ,he re1uested that
any action relative to her employment be held in abeyance as she 'as still
follo'ing up the early resolution of the case& %n response, the bank denied her
re1uest& Thus, she $led a complaint for illegal dismissal, unpaid salary, and moral
and exemplary damages against the bank before the -abor Arbiter, but such 'as
dismissed&
?n *auricio;s appeal, the (ational -abor 0elations )ommission ((-0)), reversed
the decision of the -abor Arbiter (-A)& ?n the bank;s *otion for 0econsideration,
ho'ever, the (-0), reinstated in toto the /ecision of the -A& *auricio thereupon
challenged via (ertiorari under 0ule 4H before the )ourt of Appeals ()A)& The )A
a8irmed the (-0) decision&
ISSUE
Whether or not (-0) committed grave abuse of discretion 'hen it reversed its
original /ecision and reinstated in toto /ecision of the -abor Arbiter
&ELD
There is nothing 6radical and highly 1uestionable7 'ith the (-0) reversing its
original decision if supported 'ith substantial evidence& 0especting *auricio;s
contention that in its earlier /ecision, the (-0) already passed upon the
arguments raised by respondents in their *otion for 0econsideration before it,
*auricio herself provides the ans'er 'hen she 1uotes in her present petition
'hat she terms as 6the trenchant observation of the @igh )ourt7&
%n her petition, 'hile *auricio 1uotes at length the ,eptember 35, 3""B original
decision of the (-0), she fails to explain 'hy the (-0) should not have reversed
it and 'hy the )ourt of Appeals should not have sustained the reversal& And 'hat
error of la' should be revie'ed by this )ourt, *auricio like'ise fails to point out&
?ne of the inherent po'ers of courts 'hich should apply in e1ual force to 1uasi#
>udicial bodies is to amend and control its processes so as to make them
conformable to la' and >ustice& This )3El24e+ tFe ');Ft t* 'eve'+e )t+el1,
especially 'hen in its opinion it has committed an error or mistake in >udgment
and adherence to its decision 'ould cause in>ustice& This, the (-0) exercised
37
'hich bore the imprimatur of the )A& *auricio has, ho'ever, failed to advance any
meritorious ground 'hy the )ourt should disturb such exercise&
MCDONALDAS #KATIPUNAN BRANC&%, et al. v. MA. DULCE ALBA
58/ SCRA /8 #007%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
7iolation of established rules and policies$ to be considered serious misconduct$
should be performed with wrongful intent.
*a& /ulce Alba (Alba) 'as hired as part of the service cre' of *c/onald;s
Satipunan +ranch& /uring the orientation of ne'ly hired employees, *c/onald;s
provided Alba 'ith a copy of the )re' Employee @andbook on rules and
regulations including its meal policies, 'hich state that an employee 'as not
permitted to eat inside the cre' room 'hile on duty, and that doing so 'ould
result in summary dismissal&
0i==a ,antiago (,antiago), another cre' member, reported to the store manager
Sit Alvare= (Alvare=) that she 'itnessed Alba eating inside the cre' room during
her duty& *c/onald;s thus suspended Alba for $ve days because of the incident&
When asked about it, Alba explained that she did indeed ate inside the cre' room
but that it 'as only because she 'as had a stomach ache due to hunger&
(evertheless, *c/onald;s found Alba guilty of Fouting company regulations and
immediately terminated her services& Alba thus lodged a complaint against
*c/onald;s before the (ational -abor 0elations )ommission ((-0)) 'hich
dismissed it 'ithout pre>udice&
Alba re#$led her complaint, and after submission of the parties; respective position
papers and responsive pleadings, -abor Arbiter .ablo Espiritu Cr& found in favor of
Alba, holding that 'hile she violated the meal policy of *c/onald;s, dismissal 'as
too harsh a penalty, and suspension 'ithout pay 'ould have su8iced& *c/onald;s
appealed the $nding of the -abor Arbiter to the (-0), 'hich denied the same&
ISSUE-
Whether or not the violation of the meal policy amounts to serious or 'illful
misconduct 'hich 'ould >ustify dismissal
&ELD-
There is no dispute that Alba violated *c/onald;s meal policy& The only issue is
'hether such violation amounts to or borders on Iserious or 'illfulI misconduct or
'illful disobedience, as petitioners posit, to call for respondent;s dismissal& +y any
measure, the ,upreme )ourt holds not&
With respect to serious misconduct, it is not su8icient that the act or the conduct
complained of must have violated some established rules or policies& %t must have
been performed 'ith 'rongful intent&
*c/onald;s, on 'hich the onus of proving la'ful cause in sustaining the dismissal
of Alba lies, failed to prove that her misconduct 'as induced by a perverse and
'rongful intent, they having merely anchored their claim that she 'as on her
kno'ledge of the meal policy&
While *c/onald;s 'ields a 'ide latitude of discretion in the promulgation of
policies, rules and regulations on 'ork#related activities of its employees, these
must, ho'ever, be fair and reasonable at all times, and the corresponding
sanctions for violations thereof, 'hen prescribed, must be commensurate thereto
as 'ell as to the degree of the infraction& Piven Alba;s claim that she 'as having
stomach pains due to hunger, 'hich is not implausible, the same should have been
38
properly taken into account in the imposition of the appropriate penalty for
violation of the meal policy& *c/onald;s suspension for $ve days su8iced& With
that penalty, the necessity of cautioning other employees 'ho may be 'ont to
violate the same policy 'as not compromised&
*oreover, *c/onald;s like'ise failed to prove any resultant material damage or
pre>udice on their part as a conse1uence of respondentKs 1uestioned act& Their
claim that the act 'ould cause Iirremediable harm to the company;s businessI is
too vague to merit consideration&
MILAGROS PANUNCILLO v. CAP P&ILIPPINES, INC.
5!5 SCRA .. #008%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
The protection of the rights of the laborers does not authorize the oppression or
self#destruction of the employer.
*ilagros .anuncillo 'as hired as ?8ice ,enior )lerk by )A. .hilippines %nc& %n
order to secure the education of her son, .anuncillo procured an educational plan
'hich she had fully paid but 'hich she later sold to Cose$na .ernes for .E,"""&
+efore the actual transfer of the plan could be e8ected, ho'ever, .anuncillo
pledged it for .H",""" to Cohn )hua 'ho, ho'ever, sold it to +enito +onghanoy&
+onghanoy in turn sold the plan to Paudioso 0& Uy for .4","""&
@aving gotten 'ind of the transactions subse1uent to her purchase of the plan,
Cose$na informed )A. .hilippines %nc& that .anuncillo had Is'indledI her but that
she 'as 'illing to settle the case amicably as long as .anuncillo 'ill pay the
amount involved and the interest&
)A. .hilippines %nc& terminated the services of .anuncillo& .anuncillo sought
reconsideration of her dismissal& Acting on .anuncillo;s motion for
reconsideration, )A. .hilippines %nc& denied the same& .anuncillo thus $led a
complaint for illegal dismissal, Bth month pay, service incentive leave pay,
damages and attorney;s fees against )A. .hilippines %nc&
The -abor Arbiter, 'hile $nding that the dismissal 'as for a valid cause, found the
same too harsh& @e thus ordered the reinstatement of .anuncillo to a position one
rank lo'er than her previous position& ?n appeal, the (ational -abor 0elations
)ommission ((-0)) reversed the decision of the -abor Arbiter& %t held that
.anuncillo;s dismissal 'as illegal and accordingly ordered her reinstatement to
her former position&
)A. .hilippines %nc& challenged the (-0) /ecision before the appellate court via
.etition for (ertiorari& The appellate court reversed the (-0) /ecision and held
that the dismissal 'as valid and that )A. .hilippines %nc& complied 'ith the
procedural re1uirements of due process& @ence, the present petition&
ISSUE-
Whether or not *ilagros has been illegally dismissed
&ELD-
.anuncillo;s repeated violation of ,ection !&5 of )A. .hilippines %nc;s )ode of
/iscipline, she violated the trust and con$dence of )A. .hilippines %nc& and its
customers& To allo' her to continue 'ith her employment puts )A. .hilippines
%nc& under the risk of being embroiled in unnecessary la'suits from customers
similarly situated as Cose$na, et al. )learly, )A. .hilippines %nc& exercised its
management prerogative 'hen it dismissed .anuncillo&
39
Under the -abor )ode, the employer may terminate an employment on the ground
of serious misconduct or 'illful disobedience by the employee of the la'ful orders
of his employer or representative in connection 'ith his 'ork& %nfractions of
company rules and regulations have been declared to belong to this category and
thus are valid causes for termination of employment by the employer&
The employer cannot be compelled to continue the employment of a person 'ho
'as found guilty of maliciously committing acts 'hich are detrimental to his
interests& %t 'ill be highly pre>udicial to the interests of the employer to impose on
him the charges that 'arranted his dismissal from employment& %ndeed, it 'ill
demorali=e the rank and $le if the undeserving, if not undesirable, remain in the
service& %t may encourage him to do even 'orse and 'ill render a mockery of the
rules of discipline that employees are re1uired to observe& This )ourt 'as more
emphatic in holding that in protecting the rights of the laborer, it cannot authori=e
the oppression or self#destruction of the employer&
There can thus be no doubt that .anuncillo 'as given ample opportunity to explain
her side& .arenthetically, 'hen an employee admits the acts complained of, as in
.anuncillo;s case, no formal hearing is even necessary&
NOEL E. MORA v. AVESCO MARKETING CORPORATION
58! SCRA $ #007%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
7oluntary resignations being unconditional in nature$ both the intent and the overt
act of relinquishment should concur.
(oel E& *ora (*ora) 'as hired as a sales engineer at herein respondent, Avesco
*arketing )orporation (Avesco)& @e tendered a letter of resignation after being
confronted for selling competitors; products to the pre>udice and detriment of
Avesco and 'as given the option of either immediately resigning or face
administrative charges& @e conse1uently changed his mind and 'ithdre' his letter
of resignation on the same day& The follo'ing day, Avesco;s personnel manager
issued a notice of disciplinary action& *ora has not heard anything from the
Avesco and thereafter learned from third party sources that his employment had
been terminated&
*ora $led a complaint for illegal dismissal before the (ational -abor 0elations
)ommission ((-0)) but 'as dismissed for lack of >urisdiction since the dispute
falls 'ithin the province of the grievance procedure provided for by the )ollective
+argaining Agreement bet'een Avesco and the 'orkers; union& The case 'as thus
referred to (ational )onciliation and *ediation +oard for voluntary arbitration
'hich dismissed *oraKs complaint upon the ground that he had voluntarily
resigned prompting him to $le a petition for certiorari before the )ourt of Appeals
'hich denied the same, it similarly $nding him to have voluntarily resigned from
his >ob&
ISSUE-
Whether or not *ora 'as voluntarily resigned from his >ob
&ELD-
9oluntary resignations being unconditional in nature, both the intent and the overt
act of relin1uishment should concur& %f the employer introduces evidence
purportedly executed by an employee as proof of voluntary resignation yet the
employee speci$cally denies such evidence, as in *oraKs case, the employer is
40
burdened to prove the due execution and genuineness of such evidence& Avesco in
this case failed to discharge such burden&
:or a resignation tendered by an employee to take e8ect, it should $rst be
accepted or approved by the employer& *ora;s receipt by Avesco;s personnel
department of his resignation letter is not e1uivalent to approval& ,ince *ora
re1uested that his resignation 'as to be e8ective a month later or on April 3H,
3"", Avesco;s approval 'as a fortiori necessary& That Avesco issued the 6sho'
cause7 letter a day after *ora $led the controversial letter of resignation could
only mean that it did not accept the same&
While selling of Avesco;s competitors; products is a valid ground for termination of
employment, an employer cannot >ust hurl generali=ed accusations but should at
least cite speci$c instances and proof in support thereof& Avesco relied on a
6report by Q*ora;sR superiors7 in faulting *ora& What this alleged 6report7 'as
and 'hat it contained, no testimonial or documentary proof thereof 'as pro8ered&
And 'hile Avesco gave the impression that it conducted or 'as going to conduct
an investigation on the basis of the 6report,7 there is no sho'ing that one such
'as conducted and, if there 'as, 'hat the result 'as&
ANICETO W. NAGUIT ,R. v. NATIONAL LABOR
RELATIONS COMMISSION, et al.
/07 SCRA $!8 #00.%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
"n order for a!idavits to be admissible as evidence$ the 'abor (ode provides that
the adverse party should be given opportunity to cross#e.amine the a!iants.
.etitioner Aniceto (aguit 'as employed as an administrative o8icer of the *anila
Electric )ompany (*E0A-)?)& (aguit rendered overtime 'ork !am to B3pm&
Upon the preparation of his timesheet, it 'as reFected that he 'orked until Hpm
instead of B3pm& (aguit did not inform the timekeeper of this fact& :urthermore,
(aguit being the custodian of petty cash, released to :idel )abuhat the amount
representing meal allo'ance and rental for a >eep covering his alleged overtime
'ork& T'o years later, he 'as charged 'ith violating company policy because of
said incident& %n the administrative hearing, *E0A-)?;s evidence consisted
primarily of the s'orn statements of )abuhat alleging that he 'as induced by
(aguit to falsify the time cards& (aguit 'as dismissed after 3 years of service&
(aguit appealed his dismissal& The -abor Arbiter rendered decision in favor of
(aguit& ?n appeal, the (ational -abor 0elations )ommission ((-0)) reversed the
decision of the -abor Arbiter& The )ourt of Appeals a8irmed the (-0);s decision&
I++2e-
Whether or not the (-0) erred in giving full credence to the a8idavit of )abuhat
&el4-
%n $ne, the )ourt credits that (aguit 'as in good faith 'hen he did not correct the
entry in the (otice of ?vertime and Timesheet reFecting that he 'orked up to
H2"" p&m& on Cune 4, BD!E& The charge of falsi$cation against him does not thus lie&
%n labor cases, the )ourt has consistently held that 'here the adverse party is
deprived of opportunity to cross#examine the a8iants, a8idavits are generally
re>ected for being hearsay, unless the a8iant themselves are placed on the 'itness
stand to testify thereon& Thusly, such a8idavits of )abuhat are inadmissible as
evidence against (aguit&
41
(aguit contends that the (-0) committed grave abuse of discretion in giving full
credence to the a8idavits
of )abuhat claiming that he 'as induced by (aguit to claim overtime pay despite
)abuhatKs failure to a8irm them during the arbitral proceedings, he having failed
to sho' up, thus making them inadmissible under the hearsay rule&
NEW SUNRISE METAL CONSTRUCTION, et al. v. VICTOR PIA, et al.
58 SCRA 7" #008%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
/nsatisfactory performance$ under the 'abor (ode$ must be gross and habitual to
constitute %ust cause for dismissal.
9ictor .ia, et al. 'ere hired by (e' ,unrise under separate 4#month contracts but
their services 'ere subse1uently terminated even before the expiration of said
contract due to alleged poor performance& .ia, et al. $led a complainant for illegal
dismissal and underpayment of 'ages as 'ell as non#payment of other bene$ts
before the -abor Arbiter& The -abor Arbiter ruled in favor of .ia, et al (e' ,unrise
'as ordered to pay .ia, et al. their proportionate Bth month pay and
corresponding salaries for the unexpired portion&
(e' sunrise appealed to the (ational -abor and 0elations )ommission ((-0))
but (-0) dismissed the appeal& A motion for reconsideration 'as $led& The (-0)
reversed its resolution $nding the dismissal to be based on >ust cause& ?n appeal,
the )ourt of Appeals a8irmed the -abor Arbiter;s decision& @ence, this petition&
ISSUE-
Whether or not incompetence or poor performance, not amounting to gross and
habitual neglect of duties, can be a valid cause for termination of employment
&ELD-
The ,upreme )ourt upheld the decision of the -abor Arbiter positing that 6at all
events, unsatisfactory performance cannot be considered a >ust cause for dismissal
under the -abor )ode if it does not amount to gross and habitual neglect of duties&
?n this score, (e' ,unrise failed to prove that the alleged ine8iciency of the B3
respondents amounted to gross and habitual neglect of duties&7
There is no denying that the unsatisfactory performance of the employees 'ere
proven in the report provided by (e' ,unrise but sad to say, it is not enough proof
that it amounted to gross and habitual neglect of duties&
:urther, (e' ,unrise failed to establish that they 'ere informed, at the time of
hiring, of the standards they 'ere expected to meet, i.e., that they 'ere supposed
to reach certain 1uotas& This is not to mention that (e' ,unrise failed to present
proof that respondents 'ere apprised of their poor or belo' average performance
after each evaluation period to at least give them the opportunity to improve their
performance&
RONALDO NICOL et al. v. FOOT ,OY INDUSTRIAL CORP. et al.
57 SCRA .00 #008%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
The 4ew 0ules of 1rocedure of the 4'0($ as amended$ allows the reduction of the
appeal bond.
(e's of a temporary shutdo'n of respondent :oot Coy %ndustrial )orp& came about
on :ebruary 3, 3""B& T'o days after, a $re ra=ed the company and its premises&
,ubse1uently, the employees $led 'ith the (ational -abor 0elations )ommission
42
((-0)) t'o separate complaints for illegal closure resulting to illegal dismissal
and nonpayment of 'age increase& The company declared the total closure and
cessation of its business operations allegedly because of severe losses and noti$ed
the employees that they shall be terminated from employment& The -abor Arbiter
(-A) found 0onaldo (icol, et al. 'ere constructively dismissed and a'arded them
separation pay&
:oot Coy $led a *otion to 0educe +ond 'ith their appeal to the (-0) but the
*otion 'as denied& As :oot Coy failed to post the additional bond the (-0)
dismissed :oot Coy;s appeal for non#perfection thereof&
?n appeal, the )ourt of Appeals ()A) reversed the (-0)&
ISSUE-
Whether or not a motion to reduce the appeal bond can be given due course even
if it is not accompanied by a bond in a reasonable amount
&ELD-
%t is provided in Article 33 of the -abor )ode that in case of a >udgment involving
a monetary a'ard, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the )ommission in the amount e1uivalent to the monetary a'ard in
the >udgment appealed from&
Also, ,ections 5(a) of 0ule 9% of the (e' 0ules of .rocedure of the (-0) the
states that one of the re1uisites for perfection of appeal is that it shall be $led 'ith
proof of payment of the re1uired appeal fee and surety bond as provided in
,ection 4 of the 0ule& ,ection 4 provides that %n case the decision of the -abor
Arbiter or the 0egional /irector involves a monetary a'ard, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond& The
appeal bond shall either be in cash or surety in an amount e1uivalent to the
monetary a'ard, exclusive of damages and attorney;s fees&
The necessary import of the foregoing provisions is that in the case of an employer
appealing the labor arbiter;s decision to the (-0), the posting of a cash or surety
bond to perfect an appeal of a monetary >udgment is not only mandatory but also
>urisdictional, non#compliance 'ith 'hich has the e8ect of rendering the >udgment
$nal and executory&
As stressed in -ng v. (ourt of Appeals$ it is the intention of the la'makers to make
the bond an indispensable re1uisite for the perfection of an appeal by the
employer&
+e that as it may, ,ection 4 of 0ule 9% of the (e' 0ules of .rocedure of the (-0),
as amended, allo's the reduction of the appeal bond& This practice#evolved rule
has been made explicit by 0esolution "B#"3, series of 3""3, sub>ect to the
conditions that (B) the motion to reduce the bond shall be based on meritorious
groundsA and (3) a reasonable amount in relation to the monetary a'ard is posted
by the appellant, other'ise the $ling of the motion to reduce bond shall not stop
the running of the period to perfect an appeal& There is no dispute that
respondents $led a (otice of Appeal and complied 'ith the other re1uirements for
perfecting an appeal, save for the posting of the full amount of the bond, on
/ecember 3", 3""B or nine days after receipt of the labor arbiter;s decision& And
admittedly, respondents; *otion to 0educe +ond 'as accompanied by an actual
tender of a .B" million surety bond executed by the ,ecurity .aci$c Assurance
)orporation&
43
P&ILIPPINE AIRLINES, INC. v. ENRI=UE LIGAN, et al.
G.R. N*. !/$/07, .0 A(')l 00", SPECIAL SECOND DIVISION #Ca'()*
M*'ale+, ,.%
"t must be stressed that respondents$ having been declared to be regular
employees$ had acquired security of tenure. As such$ they could only be dismissed
by the real employer$ on the basis of %ust or authorized cause$ and with observance
of procedural due process.
Enri1ue -igan, et al. and the other respondents 'ere employees of ,ynergy
,ervices )orporation (,ynergy) 'hich provides manpo'er for .hilippine Airlines&
%t 'as later discovered that ,ynergy is a labor#only contractor& They 'ere
dismissed by .hilippine Airlines on several grounds, one of 'hich is in the guise of
retrenchment& The legality of the dismissal of the -igan, et al. has been pending
before the )ourt of Appeals&
.hilippine Airlines paid the 'ages of the -igan, et al. but contested the
employment status of 0o1ue .ilapil for he is already terminated and +enedicto
Auxtero 'ho signed the 60elease and Guitclaim and Waiver7& .hilippine Airlines
therefore pleads to the court to reconsider its $rst /ecision on the payment of
'ages and bene$ts&
ISSUE-
Whether or not the ,upreme )ourt shall overrule its $rst decision regarding the
grant of 'ages and bene$ts to -igan, et al.
&ELD-
%n light of these recent manifestations#informations of the parties, the )ourt $nds
that a modi$cation of the /ecision is in order, the claims 'ith respect to .ilapil
and Auxtero having been deemed extinguished even before the promulgation of
the /ecision& That .ilapil 'as a regular employee yields to the $nal $nding of a
valid dismissal in the supervening case involving his o'n misconduct, 'hile
Auxtero;s attempt at forum#shopping should not be countenanced&
%( A-- ?T@E0 0E,.E)T,, the )ourt $nds no su8icient reason to deviate from its
/ecision, but proceeds, nonetheless, to clarify a fe' points& While this )ourt;s
/ecision ruled on the regular status of -igan, et al.$ it must be deemed to be
'ithout pre>udice to the resolution of the issue of illegal dismissal in the proper
case&
(otably, sub>ect of the /ecision 'as -igan, et al.;s complaints for regulari=ation
and under#Jnon#payment of bene$ts& The )ourt did not and could not take
cogni=ance of the validity of the eventual dismissal of -igan, et al. because the
matter of >ust or authori=ed cause is beyond the issues of the case& That is 'hy the
)ourt did not order reinstatement for such relief presupposes a $nding of illegal
dismissal in the proper case 'hich, as the parties no' manifest, pends before the
appellate court&
All told, the pending illegal dismissal case in )A#P&0& ,. (o& ""D33 may no' take
its course& The )ourt;s $nding that -igan, et al. are regular employees of .A-
neither frustrates nor preempts the appellate court;s proceedings in resolving the
issue of retrenchment as an authori=ed cause for termination& %f an authori=ed
cause for dismissal is later found to exist, .A- 'ould still have to pay -igan, et al.
their corresponding bene$ts and salary di8erential up to Cune ", BDD!&
?ther'ise, if there is a $nding of illegal dismissal, an order for reinstatement 'ith
44
full back'ages does not conFict 'ith the )ourt;s declaration of the regular
employee status of -igan, et al&
LORNA DISING PUN6AL v. ETSI TEC&NOLOGIES, INC., et al.
5!7 SCRA $$ #008%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
4o matter how much the employee dislikes the employer professionally$ he cannot
a!ord to be disrespectful.
.etitioner -orna /ising .un=al (.un=al) had been 'orking for respondent ET,%
Technologies, %nc& (ET,%) as /epartment ,ecretary& .un=al sent an e#mail message
to her o8icemates announcing the holding of a @allo'een .arty that 'as to be
held in the o8ice& @er immediate superior, respondent )armelo 0emudaro advised
her to $rst secure the approval of the ,9., respondent Werner Peisert& When
Peisert did not approve of the plan, .un=al then sent a second e#mail to her
o8icemates that states 6Peisert 'as so unfair & & . para bang palagi siyang
iniisahan sa trabaho. & & Any'ay, solohin na lang niya bukas ang o8ice&I
.un=al;s superiors re1uired her to explain her actions 'hich found such as
unacceptable& ,he 'as then dismissed from employment due to improper conduct
or act of discourtesy or disrespect and making malicious statements concerning
company o8icer& .un=al $led before the (ational -abor 0elations )ommission
((-0)) a complaint for illegal dismissal against ET,%, Peisert, and 0emudaro&
The complaint 'as dismissed by the -abor Arbiter& ?n appeal, the (-0) found
that 'hile she 'as indeed guilty of misconduct, the penalty of dismissal 'as
disproportionate to her infraction& The )ourt of Appeals held that .un=al;s
dismissal 'as in order&
ISSUE-
Whether or not there 'as a valid cause to dismiss .un=al
&ELD-
A cordial or, at the very least, civil attitude, according due deference to one;s
superiors, is still observed, especially among high#ranking management o8icers&
The )ourt takes >udicial notice of the :ilipino values of pakikisama and paggalang
'hich are not only prevalent among members of a family and community but
'ithin organi=ations as 'ell, including 'ork sites& An employee is expected to
extend due respect to management, the employer being the Iproverbial hen that
lays the golden egg,I so to speak& An aggrieved employee 'ho 'ants to unburden
himself of his disappointments and frustrations in his >ob or relations 'ith his
immediate superior 'ould normally approach said superior directly or other'ise
ask some other o8icer possibly to mediate and discuss the problem 'ith the end in
vie' of settling their di8erences 'ithout causing ferocious conFicts& (o matter
ho' much the employee dislikes the employer professionally, and even if he is in a
confrontational disposition, he cannot a8ord to be disrespectful and dare to talk
'ith an unguarded tongue andJor 'ith a bileful pen&
.un=al sent the e#mail message in reaction to Peisert;s decision 'hich he had all
the right to make& That it has been a tradition in ET,% to celebrate occasions such
as )hristmas, birthdays, @allo'een, and others does not remove Peisert;s
prerogative to approve or disapprove plans to hold such celebrations in o8ice
premises and during company time& Piven the reasonableness of Peisert;s decision
that provoked .un=al to send the second e#mail message, the observations of the
)ourt of Appeals that Ithe message x x x resounds of subversion and undermines
45
the authority and credibility of managementI and that petitioner Idisplayed a
tendency to act 'ithout management;s approval, and even against management;s
'illI are 'ell taken&
RFM CORPORATION5FLOUR DIVISION a34 SFI FEEDS DIVISION v.
KASAPIAN NG MANGGA5GAWANG PINAGKAISA5RFM #KAMPI5NAFLU5
KMU% a34 SANDIGAN AT UGNAYAN NG MANGGAGAWANG PINAGKAISA5
SFI #SUMAPI5NAFLU5KMU% 587 SCRA ./ #00"%, SECOND DIVISION
#Ca'()* M*'ale+, ,.%
"f the terms of the (ollective *argaining Agreement are clear and leave no doubt
upon the intention of the contracting parties$ its literal meaning shall prevail.
.etitioner 0:* )orporation, a domestic corporation entered into collective
bargaining agreements ()+As) 'ith the Sasapian ng *anggaga'ang .inagkaisa#
0:* (SA*.%#(A:-U#S*U) and ,andigan at Ugnayan ng *anggaga'ang
.inagkaisa#,:% (,U*A.%#(A:-U#S*U)&
Under the )+A, 0:* agreed to make payment to all daily paid employees on +lack
,aturday, (ovember B and /ecember B if declared as special holidays by the
national government&
/uring the $rst year of the e8ectivity of the )+As in 3""", /ecember B 'hich fell
on a ,unday 'as declared by the national government as a special holiday&
0espondent unions thus claimed payment of their members; salaries, invoking the
)+A provision& 0:* refused the claims for payment, averring that /ecember B,
3""" 'as not compensable as it 'as a rest day& The controversy resulted in a
deadlock, dra'ing the parties to submit the same for voluntary arbitration&
The 9oluntary Arbitrator (9A) declared that the provision of the )+A is clear,
ruling in favor of SA*.%# (A:-U#S*U and ,U*A.%#(A:-U#S*U and ordered
0:* to pay their salaries& The )ourt of Appeals ()A) a8irmed the decision&
ISSUE-
Whether or not the employees are entitled to the 1uestioned salary according to
the provision of the )+A
&ELD-
%f the terms of a )+A are clear and have no doubt upon the intention of the
contracting parties, as in the herein 1uestioned provision, the literal meaning
thereof shall prevail& That is settled& As such, the daily#paid employees must be
paid their regular salaries on the holidays 'hich are so declared by the national
government, regardless of 'hether they fall on rest days&
@oliday pay is a legislated bene$t enacted as part of the )onstitutional imperative
that the ,tate shall a8ord protection to labor& %ts purpose is not merely Ito prevent
diminution of the monthly income of the 'orkers on account of 'ork interruptions&
%n other 'ords, although the 'orker is forced to take a rest, he earns 'hat he
should earn, that is, his holiday pay&I
The )+A is the la' bet'een the parties, hence, they are obliged to comply 'ith its
provisions& %ndeed, if petitioner and respondents intended the provision in
1uestion to cover payment only during holidays falling on 'ork or 'eekdays, it
should have been so incorporated therein&
0:* maintains, ho'ever, that the parties failed to foresee a situation 'here the
special holiday 'ould fall on a rest day& The )ourt is not persuaded& The -abor
46
)ode speci$cally en>oins that in case of doubt in the interpretation of any la' or
provision a8ecting labor, it should be interpreted in favor of labor&
ROSA C. RODOLFO v. PEOPLE OF T&E P&ILIPPINES
/"7 SCRA .88 #00$%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
1romises or o!ers for a fee employment is su!icient to warrant conviction for
illegal recruitment.
.etitioner 0osa )& 0odolfo approached private complainants (ecitas :erre and
(arciso )orpus individually and invited them to apply for overseas employment in
/ubai& 0odolfo, being their neighbor, :erre and )orpus agreed and 'ent to the
former;s o8ice& The o8ice bore the business name 6+ayside *anpo'er Export
,pecialist7& %n that o8ice, :erre gave .B,"""&"" as processing fee and another
.5,"""&""& -ike'ise, )orpus gave 0odolfo .E,"""&""& 0odolfo then told :erre and
)orpus that they 'ere scheduled to leave for /ubai& @o'ever, private
complainants and all the other applicants 'ere not able to depart on the scheduled
date as their employer allegedly did not arrive& Thus, their departure 'as
rescheduled, but the result 'as the same& ,uspecting that they 'ere being
hood'inked, :erre and )orpus demanded of 0odolfo to return their money& Except
for the refund of .B,"""&"" to :erre, 0odolfo 'as not able to return :erre;s and
)orpus; money& :erre, )orpus and three others then $led a case for illegal
recruitment in large scale 'ith the 0egional Trial )ourt (0T)) against 0odolfo&
The 0T) rendered >udgement against 0odolfo but in imposing the penalty, the 0T)
took note of the fact that 'hile the information reFected the commission of illegal
recruitment in large scale, only the complaint of t'o (:erre and )orpus) of the $ve
complainants 'as proven& 0odolfo appealed to the )ourt of Appeals ()A)& The )A
dismissed the petition but modi$ed the penalty imposed by the trial court& The )A
also dismissed 0odolfo;s *otion for 0econsideration&
ISSUE-
Whether or not 0odolfo is guilty of illegal recruitment in large scale
&ELD-
The elements of the o8ense of illegal recruitment, 'hich must concur, are2 (B) that
the o8ender has no valid license or authority re1uired by la' to la'fully engage in
recruitment and placement of 'orkersA and (3) that the o8ender undertakes any
activity 'ithin the meaning of recruitment and placement under Article B(b), or
any prohibited practices enumerated under Article 5 of the -abor )ode& %f
another element is present that the accused commits the act against three or more
persons, individually or as a group, it becomes an illegal recruitment in a large
scale&
Article B (b) of the -abor )ode de$nes 6recruitment and placement7 as 6QaRny
act of canvassing, enlisting, contracting, transporting, utili=ing, hiring or
procuring 'orkers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, 'hether for pro$t or not&7
That the $rst element is present in the case at bar, there is no doubt& Cose
9aleriano, ,enior ?verseas Employment ?8icer of the .hilippine ?verseas
Employment Administration, testi$ed that the records of the .?EA do not sho'
that 0odolfo is authori=ed to recruit 'orkers for overseas employment& A
)erti$cation to that e8ect 'as in fact issued by @ermogenes )& *ateo, )hief of
the -icensing /ivision of .?EA&
47
The second element is doubtless also present& The act of referral, 'hich is
included in recruitment, is 6the act of passing along or for'arding of an applicant
for employment after an initial intervie' of a selected applicant for employment to
a selected employer, placement o8icer or bureau&7 0odolfo;s admission that she
brought private complainants to the agency 'hose o'ner she kno's and her
acceptance of fees including those for processing betrays her guilt&
0odolfo issued provisional receipts indicating that the amounts she received from
the private complainants 'ere turned over to -u=viminda *arcos and :lorante
@inahon does not free her from liability& :or the act of recruitment may be 6for
pro$t or not&7 %t is su8icient that the accused 6promises or o8ers for a fee
employment7 to 'arrant conviction for illegal recruitment& .arenthetically, 'hy
0odolfo accepted the payment of fees from the private complainants 'hen, in light
of her claim that she merely brought them to the agency, she could have advised
them to directly pay the same to the agency, she proferred no explanation&
?n 0odolfo;s reliance on 3e8oron, true, the )ourt held that issuance of receipts for
placement fees does not make a case for illegal recruitment& +ut it 'ent on to
state that it is 6rather the undertaking of recruitment activities 'ithout the
necessary license or authority7 that makes a case for illegal recruitment&
SAN MIGUEL CORPORATION v. PROSPERO A. ABALLA et al.
/$! SCRA ." #005%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
The language of a contract disavowing the e.istence of an employer#employee
relationship is not determinative of the parties, relationship. "t is the totality of the
facts and surrounding circumstances of the case.
.etitioner ,an *iguel )orporation (,*)) and ,unFo'er *ulti#.urpose
)ooperative (,unFo'er) entered into a one#year )ontract of ,ervice and such
contract is rene'ed on a monthly basis until terminated& .ursuant to this,
respondent .rospero Aballa et al. rendered services to ,*)&
After one year of rendering service, Aballa et al., $led a complaint before (ational
-abor 0elations )ommission ((-0)) praying that they be declared as regular
employees of ,*)& ?n the other hand, ,*) $led before the /epartment of -abor
and Employment (/?-E) a (otice of )losure due to serious business losses&
@ence, the labor arbiter dismissed the complaint and ruled in favor of ,*)& Aballa
et al. then appealed before the (-0)& The (-0) dismissed the appeal $nding that
,unFo'er is an independent contractor&
?n appeal, the )ourt of Appeals reversed (-0);s decision on the ground that the
agreement bet'een ,*) and ,unFo'er sho'ed a clear intent to abstain from
establishing an employer#employee relationship&
ISSUE-
Whether or not Aballa et al. are employees of ,*)
&ELD-
The test to determine the existence of independent contractorship is 'hether one
claiming to be an independent contractor has contracted to do the 'ork according
to his o'n methods and 'ithout being sub>ect to the control of the employer,
except only as to the results of the 'ork&
%n legitimate labor contracting, the la' creates an employer#employee relationship
for a limited purpose, i.e.$ to ensure that the employees are paid their 'ages& The
48
principal employer becomes >ointly and severally liable 'ith the >ob contractor,
only for the payment of the employees; 'ages 'henever the contractor fails to pay
the same& ?ther than that, the principal employer is not responsible for any claim
made by the employees&
%n labor#only contracting, the statute creates an employer#employee relationship
for a comprehensive purpose2 to prevent a circumvention of labor la's& The
contractor is considered merely an agent of the principal employer and the latter
is responsible to the employees of the labor#only contractor as if such employees
had been directly employed by the principal employer&
The )ontract of ,ervices bet'een ,*) and ,unFo'er sho's that the parties
clearly disavo'ed the existence of an employer#employee relationship bet'een
,*) and private respondents& The language of a contract is not, ho'ever,
determinative of the parties; relationshipA rather it is the totality of the facts and
surrounding circumstances of the case& A party cannot dictate, by the mere
expedient of a unilateral declaration in a contract, the character of its business,
i.e.$ 'hether as labor#only contractor or >ob contractor, it being crucial that its
character be measured in terms of and determined by the criteria set by statute&
What appears is that ,unFo'er does not have substantial capitali=ation or
investment in the form of tools, e1uipment, machineries, 'ork premises and other
materials to 1ualify it as an independent contractor& ?n the other hand, it is
gathered that the lot, building, machineries and all other 'orking tools utili=ed by
Aballa et al. in carrying out their tasks 'ere o'ned and provided by ,*)&
And from the >ob description provided by ,*) itself, the 'ork assigned to Aballa
et al. 'as directly related to the a1uaculture operations of ,*)& As for >anitorial
and messengerial services, that they are considered directly related to the
principal business of the employer has been >urisprudentially recogni=ed&
:urthermore, ,unFo'er did not carry on an independent business or undertake
the performance of its service contract according to its o'n manner and method,
free from the control and supervision of its principal, ,*), its apparent role
having been merely to recruit persons to 'ork for ,*)&
All the foregoing considerations a8irm by more than substantial evidence the
existence of an employer#employee relationship bet'een ,*) and Aballa et al.
,ince Aballa et al. 'ho 'ere engaged in shrimp processing performed tasks
usually necessary or desirable in the a1uaculture business of ,*), they should be
deemed regular employees of the latter and as such are entitled to all the bene$ts
and rights appurtenant to regular employment& They should thus be a'arded
di8erential pay corresponding to the di8erence bet'een the 'ages and bene$ts
given them and those accorded ,*);s other regular employees&
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NATIONAL
LABOR RELATIONS COMMISSION et al.
/70 SCRA !/$ #00$%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
There is an implied revocation of an agency relationship when after the
termination of the original employment contract$ the foreign principal directly
negotiated with the employee and entered into a new and separate employment
contract.
0espondent /ivina *ontehermo=o is a domestic helper deployed to Tai'an by
,unace %nternational *anagement ,ervices (,unace) under a B3#month contract&
,uch employment 'as made 'ith the assistance of Tai'anese broker Edmund
49
Wang& After the expiration of the contract, *ontehermo=o continued her
employment 'ith her Tai'anese employer for another 3 years&
When *ontehermo=o returned to the .hilippines, she $led a complaint against
,unace, Wang, and her Tai'anese employer before the (ational -abor 0elations
)ommission ((-0))& ,he alleges that she 'as underpaid and 'as >ailed for three
months in Tai'an& ,he further alleges that the 3#year extension of her employment
contract 'as 'ith the consent and kno'ledge of ,unace& ,unace, on the other
hand, denied all the allegations&
The -abor Arbiter ruled in favor of *ontehermo=o and found ,unace liable
thereof& The (ational -abor 0elations )ommission and )ourt of Appeals a8irmed
the labor arbiter;s decision& @ence, the $ling of this appeal&
ISSUE-
Whether or not the 3#year extension of *ontehermo=o;s employment 'as made
'ith the kno'ledge and consent of ,unace
&ELD2
)ontrary to the )ourt of Appeals $nding, the alleged continuous communication
'as 'ith the Tai'anese broker Wang, not 'ith the foreign employer&
The $nding of the )ourt of Appeals +*lel< on the basis of the telefax message
'ritten by Wang to ,unace, that ,unace continually communicated 'ith the
foreign IprincipalI (sic) and therefore 'as a'are of and had consented to the
execution of the extension of the contract is misplaced& The message does not
provide evidence that ,unace 'as privy to the ne' contract executed after the
expiration on :ebruary B, BDD! of the original contract& That ,unace and the
Tai'anese broker communicated regarding *ontehermo=o;s allegedly 'ithheld
savings does not necessarily mean that ,unace rati$ed the extension of the
contract&
As can be seen from that letter communication, it 'as >ust an information given to
,unace that *ontehermo=o had taken already her savings from her foreign
employer and that no deduction 'as made on her salary& %t contains nothing about
the extension or ,unace;s consent thereto&
.arenthetically, since the telefax message is dated :ebruary 3B, 3""", it is safe to
assume that it 'as sent to enlighten ,unace 'ho had been directed, by ,ummons
issued on :ebruary BH, 3""", to appear on :ebruary 3!, 3""" for a mandatory
conference follo'ing *ontehermo=o;s $ling of the complaint on :ebruary B5,
3"""&
0especting the decision of )ourt of Appeals follo'ing as agent of its foreign
principal, Q,unaceR cannot profess ignorance of such an extension as obviously, the
act of its principal extending Q*ontehermo=o;sR employment contract necessarily
bound it, it too is a misapplication, a misapplication of the theory of imputed
kno'ledge&
The theory of imputed kno'ledge ascribes the kno'ledge of the agent, ,unace, to
the principal, employer, 3*t tFe *tFe' 0a< a'*234& The kno'ledge of the
principal#foreign employer cannot, therefore, be imputed to its agent ,unace&
There being no substantial proof that ,unace kne' of and consented to be bound
under the 3#year employment contract extension, it cannot be said to be privy
thereto& As such, it and its Io'nerI cannot be held solidarily liable for any of
50
*ontehermo=o;s claims arising from the 3#year employment extension& As the (e'
)ivil )ode provides, )ontracts take e8ect only bet'een the parties, their assigns,
and heirs, except in case 'here the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by provision of
la'& :urthermore, as ,unace correctly points out, there 'as an implied revocation
of its agency relationship 'ith its foreign principal 'hen, after the termination of
the original employment contract, the foreign principal directly negotiated 'ith
*ontehermo=o and entered into a ne' and separate employment contract in
Tai'an& Article BD35 of the (e' )ivil )ode states that the agency is revoked if the
principal directly manages the business entrusted to the agent, dealing directly
'ith third persons&
TAGAYTAY &IG&LANDS INTERNATIONAL GOLF CLUB INCORPORATED v.
TAGAYTAY &IG&LANDS EMPLOYEES UNION5PGTWO
."5 SCRA $.7 #00.%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
After a certifcate of registration is issued to a union$ its legal personality cannot
be sub%ect to collateral attack and may be questioned only in an independent
petition for cancellation.
0espondent Tagaytay @ighlands Employees Union (T@EU)#.hilippine Transport
and Peneral Workers ?rgani=ation (.TPW?), a legitimate labor organi=ation
representing ma>ority of the rank#and#$le employees of petitioner Tagaytay
@ighlands %nternational Polf )lub %nc& (T@%P)%), $led a petition for certi$cation
election before the /?-E *ediation#Arbitration Unit&
T@%P)% opposed the petition of T@EU on the ground that out of BD3 signatories to
the petition, only EB 'ere actual rank#and#$le employees of T@%P)%& The others
'ere supervisors, resigned, terminated, AW?- and employees, 'hile some others
are employees from a di8erent corporation&
The /?-E *ed#Arbiter issued an order to the hold the certi$cation election among
the rank#and#$le employees of T@%P)%& ?n appeal, /epartment of -abor and
Employment (/?-E) Undersecretary and the )ourt of Appeals ()A) a8irmed *ed
Arbiter;s decision and ordered that supervisory employees and non#employees
could simply be removed from the roster of rank#and#$le membership&
ISSUE-
Whether or not the )A erred in holding that supervisory employees and non#
employees could simply be removed from T@EU;s roster of rank#and#$le
membership instead of resolving the legitimacy of union;s status
&ELD-
After a certi$cate of registration is issued to a union, its legal personality cannot
be sub>ect to collateral attack& %t may be 1uestioned only in an independent
petition for cancellation&
The grounds for cancellation of union registration are provided for under Article
3D of the -abor )ode, t'o of the grounds are B&) M)+'e('e+e3tat)*3, 1al+e
+tate@e3t *' 1'a24 in connection 'ith the adoption or rati$cation of the
constitution and by#la's or amendments thereto, the minutes of rati$cation, and
the list of members 'ho took part in the rati$cationA 3&) M)+'e('e+e3tat)*3,
1al+e +tate@e3t+ *' 1'a24 in connection 'ith the election of o8icers, minutes of
the election of o8icers, the list of voters, or failure to sub>ect these documents
51
together 'ith the list of the ne'ly electedJappointed o8icers and their postal
addresses 'ithin thirty (") days from electionA
The inclusion in a union of dis1uali$ed employees is not among the grounds for
cancellation, unless such inclusion is due to misrepresentation, false statement or
fraud 234e' tFe E)'E2@+ta3Ee+ e32@e'ate4 )3 SeEt)*3+ #a% a34 #E% *1
A't)Ele ." *1 aB*ve5G2*te4 A't)Ele ." *1 tFe LaB*' C*4e&
T@EU, having been validly issued a certi$cate of registration, should be
considered to have already ac1uired >uridical personality 'hich may not be
assailed collaterally&
U5BI9 CORPORATION a34 EDILBERTO B. BRAVO v. VALERIE ANNE &.
&OLLERO
580 SCRA .8. #007%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
An employer who seeks to dismiss an employee must a!ord the latter ample
opportunity to be heard and to defend himself with the assistance of his
representative if he so desires&
9alerie Anne @& @ollero 'as hired as a management trainee and 'as eventually
promoted to facilities manager by U#+ix )orporation (U#+ix)& @ollero and three
other employees 'ere later sent to the United ,tates for t'o months of training
for a ne'ly ac1uired franchise& +efore she left, she signed a contract 'ith U#+ix
'hich reads that 69A-E0%E A((E @& @?--E0? shall remain in the employ of U#
+%T )?0.?0AT%?( for a period of $ve (H) years from completion of her U&,&
Training otherwise she shall reimburse U#+%T )?0.?0AT%?( for all costs
(prorated) and expenses 'hich U#+%T )?0.?0AT%?( incurred for her (@olleroKs)
training in the U&,7
U#+ix, citing @ollero;s supposed 6pattern of tardiness, absences, neglect of duties
and lack of interest,7 terminated her employment for loss of trust and con$dence&
U#+ix then $led against @ollero before the -abor Arbiter for the reimbursement of
training expenses and damages& ,ubse1uently, @ollero also $led a complaint
against U#+ix for illegal dismissal&
The -abor Arbiter (-A) rendered a decision declaring that the dismissal of @ollero
is valid and legal and ordered her to pay U#+ix the reimbursement of her training&
%t dismissed @ollero;s complaint for lack of merit& ?n appeal before the (ational
-abor 0elations )ommission ((-0)), the (-0) reversed the -A;s decision& A
*otion for 0econsideration 'as $led but subse1uently denied by (-0)& The )ourt
of Appeals a8irmed the lo'er court;s decision&
ISSUES-
Whether or not @ollero 'as illegally dismissed by U#+ix
&ELD-
U5B)H 1a)le4 t* 4)+EFa';e tFe B2'4e3 *1 ('**1 tFat &*lle'*A+ 4)+@)++al )+ 1*'
a val)4 a34 D2+t Ea2+e
%n termination cases, the employer has the burden of proving that the dismissal is
for a valid and >ust cause& While an employer en>oys a 'ider latitude of discretion
in terminating the employment of managerial employees, managerial employees
are also entitled to security of tenure and cannot be arbitrarily dismissed at any
time and 'ithout cause as reasonably established in an appropriate investigation&
%n the case at bar, U#+ix failed to substantiate their allegations of @ollero;s
habitual absenteeism, habitual tardiness, neglect of duties, and lack of interest&
52
/aily time records, attendance records, or other documentary evidence attesting
to these grounds could have readily been presented to support the allegations but
none 'as&
The merits of a complaint for illegal dismissal do not depend on its prayer but on
'hether the employer discharges its burden of proving that the dismissal is valid&
U5B)H 1a)le4 t* E*@(l< 0)tF tFe ('*Ee42'al 42e ('*Ee++ *1 4)+@)++)3; a3
e@(l*<ee %n another vein, the )ourt $nds that U#+ix and +ravo failed to comply
'ith the procedural re1uirements for a valid dismissal& @ollero being a manager
did not excuse them from observing such procedural re1uirements&
The notice does not inform outright the employee that an investigation 'ill be
conducted on the charges particulari=ed therein 'hich, if proven, 'ill result to her
dismissal& %t does not contain a plain statement of the charges of malfeasance or
misfeasance nor categorically state the e8ect on her employment if the charges
are proven to be true& %t does not apprise @ollero of possible dismissal should her
explanation prove unsatisfactory& +esides, the U#+ix and +ravo did not even
establish that @ollero received the memorandum&
(either did U#+ix and +ravo sho' that they conducted a hearing or conference
during 'hich @ollero, 'ith the assistance of counsel if she so desired, had
opportunity to respond to the charge, present her evidence, or rebut the evidence
presented against her& The meeting 'ith @ollero on /ecember 3, BDD4 did not
satisfy the hearing re1uirement, for @ollero 'as not given the opportunity to avail
herself of counsel&
Article 3EE(b) of the -abor )ode mandates that an employer 'ho seeks to dismiss
an employee must 6a8ord the latter ample opportunity to be heard and to defend
himself 'ith the assistance of his representative if he so desires&7 Expounding on
this provision, the )ourt held that 6KQaRmple opportunityK connotes every kind of
assistance that management must accord the employee to enable him to prepare
ade1uately for his defense including legal representation7&
UNIVERSITY OF SAN AGUSTIN, INC. v. UNIVERSITY OF SAN AGUSTIN
EMPLOYEES UNION5FFW
5". SCRA $$. #00"%, Ca'()* M*'ale+, ,.
A collective bargaining agreement$ when voluntarily entered into by the parties$
becomes the law between them.
%n the )ollective +argaining Agreement ()+A) bet'een University of ,an Agustin
and its Employees Union, the parties agreed to include a provision on salary
increases based on the incremental tuition fee increases or tuition incremental
proceeds (T%.)& @o'ever, the parties disagreed 'hether or not the term 6salary
increases7 includes other increases in bene$ts received by the employee&
The 9oluntary Arbiter held that the salary increase shall be paid out of !"W of the
T%., should it be higher than .B,H""& *oreover, scholarship grants and tuition fee
discounts given by the university should not be deducted from the T%.& The
appellate court sustained the interpretation of the )+A but revised T%.
computation& The present petition 1uestions only the interpretation of the )+A
provision by the appellate court&
ISSUES-
Whether or not the provisions of the )+A should be applied
53
&ELD-
%t is a familiar and fundamental doctrine in labor la' that the )+A is the la'
bet'een the parties and they are obliged to comply 'ith its provisions& %f the
terms of a contract, in this case the )+A, are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of their stipulations shall
control&
A reading of the provisions of the )+A sho's that the parties agreed that !"W of
the T%. or at the least the amount of .B,H"" is to be allocated for individual salary
increases&
The )+A does not speak of any other bene$ts or increases 'hich 'ould be covered
by the employees; share in the T%., except salary increases& The )+A reFects the
incorporation of di8erent provisions to cover other bene$ts such as )hristmas
bonus (Art& 9%%%, ,ec& B), service a'ard (Art& 9%%%, ,ec&H), leaves (Article %T),
educational bene$ts (,ec&3, Art& T), medical and hospitali=ation bene$ts (,ecs& , 5
and H, Art& B"), bereavement assistance (,ec& 4, Art& T), and signing bonus (,ec& !,
Art& 9%%%), 'ithout mentioning that these 'ill like'ise be sourced from the T%.&
Thus, the university;s belated claim that the !"W T%. should be taken to mean as
covering A-- increases and not merely the salary increases as categorically stated
in ,ec& , Art& 9%%% of the )+A does not lie&
%n the present case, the university could have, during the )+A negotiations,
opposed the inclusion of or renegotiated the provision allotting !"W of the T%. to
salary increases alone, as it 'as and is not under any obligation to accept
respondent;s demands hook, line and sinker& Art& 3H3 of the -abor )ode is clear on
the matter&
The records are thus bereft of any sho'ing that the university had made it clear
during the )+A negotiations that it intended to source not only the salary
increases but also the increases in other employee bene$ts from the !"W of the
T%.& Absent any proof that the university;s consent 'as vitiated by fraud, mistake
or duress, it is presumed that it entered into the )+A voluntarily, had full
kno'ledge of the contents thereof, and 'as a'are of its commitments under the
contract&
%t is axiomatic that labor la's setting employee bene$ts only mandate the
minimum that an employer must comply 'ith, but the latter is not proscribed from
granting higher or additional bene$ts if it so desires, 'hether as an act of
generosity or by virtue of company policy or a )+A, as it 'ould appear in this case&
While, in follo'ing to the letter the sub>ect )+A provision the petitioner 'ill, in
e8ect, be giving more than !"W of the T%. as its personnel;s share in the tuition
fee increase, the university;s remedy lies not in the )ourt;s invalidating the
provision, but in the parties; clarifying the same in their subse1uent )+A
negotiations&
PLACIDO O. URBANES, ,R. v. SECRETARY OF LABOR AND EMPLOYMENT
."8 SCRA 5.! #00.%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
)hen the relief sought is not under the 'abor (ode but for payment of a sum of
money and damages on a breach of contract$ it is within the realm of civil law and
%urisdiction belongs to the regular courts.
.etitioner .lacido ?& Urbanes agreed to provide security services to ,ocial
,ecurity ,ystems (,,,)& /uring the pendency of their agreement, Urbanes
re1uested ,,, for an up'ard ad>ustment of their contract rate in compliance 'ith
the mandated 'age increases&
54
,,, ignored the re1uest 'hich led Urbanes to pull out his agency;s services and to
subse1uently $le a complaint against ,,, for the implementation of the 'age
increase& The 0egional /irector of the /?-E#()0 issued an order in favor of
Urbanes& ,,, $led an appeal to the ,ecretary of -abor 'ho later on set aside the
order of the 0egional /irector&
Urbanes $led an appeal by certiorari to the ,upreme )ourt stating that the
,ecretary of -abor does not have >urisdiction to revie' appeals from decisions of
the 0egional /irector over complaints for recovery of 'ages 'hen it should have
been appealed to the (ational -abor 0elations )ommission& ,,,, on the other
hand, contends that Art& B3!, not Art& B3D of the -abor )ode should be applied&
ISSUE-
Whether or not the /?-E ,ecretary can exercise >urisdiction over decisions of
0egional /irectors involving complaints for recovery of 'ages
&ELD-
(either the Ubanes; contention nor the ,,,; is impressed 'ith merit& 'apanday
Agricultural &evelopment (orporation v. (ourt of Appeals instructs so& %n that
case, the security agency $led a complaint before the 0egional Trial )ourt (0T))
against the principal or client -apanday for the up'ard ad>ustment of the contract
rate in accordance 'ith Wage ?rder (os& H and 4& -apanday argued that it is the
(ational -abor 0elations )ommission, not the civil courts, 'hich has >urisdiction
to resolve the issue in the case, it involving the enforcement of 'age ad>ustment
and other bene$ts due the agency;s security guards as mandated by several 'age
orders&
The )ourt ruled in 'apanday that the 0T) has >urisdiction over the sub>ect matter
of the present case& %t is 'ell settled in la' and >urisprudence that 'here no
employer#employee relationship exists bet'een the parties and no issue is
involved 'hich may be resolved by reference to the -abor )ode, other labor
statutes or any collective bargaining agreement, it is the 0egional Trial )ourt that
has >urisdiction& %n its complaint, private respondent is not seeking any relief
under the -abor )ode but seeks payment of a sum of money and damages on
account of petitionerKs alleged breach of its obligation under their Puard ,ervice
)ontract& The action is 'ithin the realm of civil la' hence >urisdiction over the
case belongs to the regular courts& While the resolution of the issue involves the
application of labor la's, reference to the labor code 'as only for the
determination of the solidary liability of the petitioner to the respondent 'here no
employer#employee relation exists&
%n the case at bar, even if Urbanes $led the complaint on his and also on behalf of
the security guards, the relief sought has to do 'ith the enforcement of the
contract bet'een him and the ,,, 'hich 'as deemed amended by virtue of Wage
?rder (o& ()0#"& The controversy sub>ect of the case at bar is thus a civil
dispute, the proper forum for the resolution of 'hich is the civil courts&
+ut even assuming arguendo that Urbanes; complaint 'ere $led 'ith the proper
forum, for lack of cause of action it must be dismissed& %n $ne, the liability of the
,,, to reimburse Urbanes; arises only if and 'hen Urbanes pays his employee#
security guards 6the increases7 mandated by Wage ?rder (o& ()0#"& The )ourt
in 'apanday Agricultural &evelopment (orporation v. (ourt of Appeals held that2
6%t is only 'hen the contractor pays the increases mandated that it can claim an
ad>ustment from the principal to cover the increases payable to the security
guards&7
55
The records do not sho' that Urbanes; has paid the mandated increases to the
security guards& The security guards in fact have $led a complaint 'ith the (-0)
against Urbanes; relative to, among other things, underpayment of 'ages&
GALA9IE STEEL WORKERS UNION #GSWU5NAFLU5KMU%, et al. v.
NATIONAL LABOR RELATIONS COMMISSION, GALA9IE STEEL
CORPORATION a34 RICARDO C&ENG 50/ SCRA $" #00$%, T&IRD
DIVISION, #Ca'()* M*'ale+, ,.%
The requirement of the 'abor (ode that notice shall be served on the workers is
not complied with by the mere posting of the notice on the bulletin board.
?n account of serious business losses 'hich occurred in BDDE up to mid#BDDD
totaling around .B3E,""","""&"", Palaxie ,teel Workers Union decided to close
do'n its business operations& %t thereafter $led a 'ritten notice 'ith the
/epartment of -abor and Employment (/?-E) informing the latter of its intended
closure and the conse1uent termination of its employees e8ective August B,
BDDD& %t posted the notice of closure on the corporate bulletin board&
?n ,eptember !, BDDD, Palaxie ,teel Workers Union and Palaxie employees $led a
complaint for illegal dismissal, unfair labor practice, and money claims against
Palaxie& The -abor Arbiter, (-0) and the )ourt of Appeals 'ere unanimous in
ruling that Palaxie;s closure or cessation of business operations 'as due to serious
business losses or $nancial reverses, and not because of any alleged anti#union
position&
The 'orkers; union and employees contend that Palaxie did not serve 'ritten
notices of the closure of business operations upon them, it having merely posted a
notice on the company bulletin board&
ISSUE-
Whether or not the 'ritten notice posted by QPalaxieR on the company bulletin
board su8iciently complies 'ith the notice re1uirement under Article 3! of the
-abor )ode&
&ELD-
The mere posting on the company bulletin board does not meet the re1uirement
under Article 3! of 6serving a 'ritten notice on the 'orkers&7 The purpose of the
'ritten notice is to inform the employees of the speci$c date of termination or
closure of business operations, and must be served upon them at least one month
before the date of e8ectivity to give them su8icient time to make the necessary
arrangements& %n order to meet the foregoing purpose, service of the 'ritten
notice must be made individually upon each and every employee of the company&
RAMY GALLEGO v. BAYER P&ILIPPINES INC., et al.
5"/ SCRA 8.0 #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
"n distinguishing between permissible %ob contracting and prohibited labor#only
contracting$ the totality of the facts and the surrounding circumstances of the
case are to be considered$ each case to be determined by its own facts$ and all the
features of the relationship assessed.
.etitioner 0amy Pallego 'as contracted by +ayer .hilippines %nc& (+AOE0) as crop
protection technician& When Pallego;s employment came to a halt, +AOE0
reemployed Pallego through .roduct %mage and *arketing ,ervices, %nc&
56
(.0?/U)T %*APE) performing the same tasks as that of a crop protection
technician&
After a fe' years, Pallego claims that he 'as directed to submit a resignation
latter, but he refused& @e 'as later on transferred to -u=onA moreover, his co#
'orkers allegedly spread rumors there that he 'as not anymore connected 'ith
+AOE0& +elieving himself to be illegally dismissed, he $led 'ith the (ational -abor
0elations )ommission ((-0)) claiming he is entitled for reinstatement,
back'ages, and etc& +AOE0 denied that existence of an employer#employee
relationship bet'een +AOE0 and Pallego since Pallego 'as actually under the
control and supervision of .0?/U)T %*APE, an independent contractor&
The -abor Arbiter found +AOE0, et al. guilty of illegal dismissal and ordered the
reinstatement of Pallego& The (-0) reversed the decision of the -abor Arbiter&
Pallego then appealed to the )ourt of Appeals via (ertiorari, 'hich 'as dismissed&
@ence, this petition&
ISSUES-
Whether or not .0?/U)T %*APE is a labor#only contractor and +AOE0 should be
deemed Pallego;s principal employer
&ELD-
.ermissible >ob contracting or subcontracting refers to an arrangement 'hereby a
principal agrees to farm out 'ith a contractor or subcontractor the performance of
a speci$c >ob, 'ork, or service 'ithin a de$nite or predetermined period,
regardless of 'hether such >ob, 'ork or, service is to be performed or completed
'ithin or outside the premises of the principal& Under this arrangement, the
follo'ing conditions must be met2 (a) the contractor carries on a distinct and
independent business and undertakes the contract 'ork on his account under his
o'n responsibility according to his o'n manner and method, free from the control
and direction of his employer or principal in all matters connected 'ith the
performance of his 'ork except as to the results thereofA (b) the contractor has
substantial capital or investmentA and (c) the agreement bet'een the principal and
contractor or subcontractor assures the contractual employees; entitlement to all
labor and occupational safety and health standards, free exercise of the right to
self#organi=ation, security of tenure, and social 'elfare bene$ts&
%n distinguishing bet'een permissible >ob contracting and prohibited labor#only
contracting, the totality of the facts and the surrounding circumstances of the case
are to be considered, each case to be determined by its o'n facts, and all the
features of the relationship assessed&
%n the case at bar, the )ourt $nds substantial evidence to support the $nding of
the (-0) that .0?/U)T %*APE is a legitimate >ob contractor&
The )ourt notes that .0?/U)T %*APE 'as issued by the /epartment of -abor
and Employment (/?-E) )erti$cate of 0egistration (umbered ()0#!#"4"3#BE4&
The /?-E certi$cate having been issued by a public o8icer, it carries 'ith it the
presumption that it 'as issued in the regular performance of o8icial duty&Pallego;s
bare assertions fail to rebut this presumption& :urther, since the /?-E is the
agency primarily responsible for regulating the business of independent >ob
contractors, the )ourt can presume, in the absence of evidence to the contrary,
that it had thoroughly evaluated the re1uirements submitted by .0?/U)T %*APE
before issuing the )erti$cate of 0egistration&
57
%ndependently of the /?-E;s )erti$cation, among the circumstances that establish
the status of .0?/U)T %*APE as a legitimate >ob contractor are2 (B) .0?/U)T
%*APE had, during the period in 1uestion, a contract 'ith +AOE0 for the
promotion and marketing of +AOE0 productsA (3) .0?/U)T %*APE has an
independent business and provides services nation'ide to big companies such as
A>inomoto .hilippines and .rocter and Pamble )orporationA and () .0?/U)T
%*APE;s total assets from BDD! to 3""" amounted to .5"H,4D, .HHD,!DE, and
.455,E3!, respectively& .0?/U)T %*APE also posted a bond in the amount of
.B"",""" to ans'er for any claim of its employees for unpaid 'ages and other
bene$ts that may arise out of the implementation of its contract 'ith +AOE0&
.0?/U)T %*APE cannot thus be considered a labor#only contractor&
GLORIA ARTIAGA v. SILIMAN UNIVERSITY MEDICAL CENTER> SILIMAN
UNIVERSITY MEDICAL CENTER FOUNDATION, INC.
575 SCRA 55 #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
(onstructive dismissal does not e.ist when an employee furnished the employer a
letter signifying his resignation.
.etitioner Ploria Artiaga 'as hired by respondent ,iliman University *edical
)enter (,U*)) as )redit and )ollection o8icer& Artiaga sent a letter to ,U*)
stating her 'ish to resign from said post& ,ubse1uently, three years after she sent
such letter, Artiaga $led a )omplaint for constructive dismissal against ,U, ,U*)
and the :oundation&
,U*) alleged that there 'as no constructive dismissal& %t found that there 'ere
discrepancies in the transactions under Artiaga;s control and supervision& %t 'as
sho'n that ,U*) 'rote Artiaga re1uiring her to explain in 'riting 'hy no
disciplinary action should be taken against her, she 'as also preventively
suspended for " days and re1uested to turn over all monies, $les, and records
'ithin her control& Artiaga complied 'ith ,U*);s re1uest by giving such letter of
explanation and at the same time tendered her resignation, in 'hich ,U*)
accepted&
The -abor Arbiter dismissed the complaint for lack of legal and factual basis& ?n
appeal, the (ational -abor 0elations )ommission ((-0)) set aside the -abor
Arbiter;s /ecision, $nding that Artiaga 'as constructively dismissed& ,U*) then
$led a .etition before the )ourt of Appeals& The )A reversed the (-0) decision
and reinstated the -abor Arbiter;s decision&
ISSUES-
Whether or not Artiaga 'as constructively dismissed
&ELD-
%n reversing the -abor Arbiter;s decision, the (-0) upheld Artiaga;s version and
found her to have been constructively dismissed& Artiaga presented no evidence to
substantiate her claim, ho'ever&
?n the other hand, ,U*);s evidence of Artiaga;s irregular acts is documented&
And it sent Artiaga a (otice re1uiring her to explain her side and placing her
under preventive suspension& Artiaga;s letter#explanation cum resignation is self#
explanatory&
Against the documentary evidence of ,U*), Artiaga;s claim thus fails&
Artiaga;s claim that ,*U);s pieces of evidence 'ere fabricated does not
persuade& Artiaga;s explanation#resignation letter un1uestionably sho's that she
58
received the notices referred to, other'ise, to 'hat matters she 'as explaining
thereinU
,5P&IL MARINE, INC. a34>*' ,ESUS CANDAVA a34 NORMAN S&IPPING
SERVICES v.
NATIONAL LABOR COMMISSION a34 WARLITO E. DUMALAOG
5$! SCRA $85 #007%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
A compromise agreement is valid as long as the consideration is reasonable and
the employee signed the waiver voluntarily$ with a full understanding of what he
was entering into.
Worked as a cook on aboard vessels plying overseas, Warlito E& /umalaog 'as
employed as a cook on board vessels plying overseas& @e $led a pro#forma
complaint on *arch 5,3""3 before the (ational -abor 0elations )ommission
((-0)) against C#.hil *arine, %nc&, its then president Cesus )andava, and its
foreign principal (orman ,hipping ,ervices&
The -abor Arbiter dismissed the complaint for lack of merit& ?n appeal, the (-0)
reversed the decision of the -abor Arbiter& The )ourt of Appeals a8irmed the
dismissal for failure to attach to the petition all material documents and for
defective veri$cation and certi$cation& )onse1uently, a petition 'as $led before
the )ourt of Appeals&
While the case 'as pending in the ,upreme )ourt, the respondent entered into a
compromise agreement and signed Guitclaims and 0elease& The same has been
subscribed and s'orn to before the -abor Arbiter& Accordingly, the case 'as
dismissed&
ISSUES-
Whether or not the compromise agreement entered into by the respondent,
'ithout his counsel, is valid
&ELD-
A compromise agreement is valid as long as the consideration is reasonable and
the employee signed the 'aiver voluntarily, 'ith a full understanding of 'hat he
'as entering into& All that is re1uired for the compromise to be deemed voluntarily
entered into is personal and speci$c individual consent& Thus, contrary to
/umalaoagKs contention, the employeeKs counsel need not be present at the time of
the signing of the compromise agreement&
The relation of attorney and client is in many respects one of agency, and the
general rules of agency apply to such relation& The acts of an agent are deemed
the acts of the principal only if the agent acts 'ithin the scope of his authority& The
circumstances of this case indicate that /umalaoagKs counsel is acting beyond the
scope of his authority in 1uestioning the compromise agreement&
,EROMIE D. ESCASINAS a34 EVAN RIGOR SINGCO v. S&ANGRI5LAAS
MACTAN ISLAND RESORT a34 DR. ,ESSICA ,.R. PEPITO
570 SCRA $0/ #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
The requirements for the e.istence of an employer#employee relationship are
di!erent from the requisites for the e.istence of an independent and permissible
contractor relationship.
59
Ceromie /& Escasinas and Evan 0igor ,ingco 'ere registered nurses, engaged by
respondent /r& Cessica Coyce 0& .epito to 'ork in her clinic at respondent ,hangri#
-a;s *actan %sland 0esort (,hangri#-a)& Escasinas and ,ingco $led 'ith the
(ational -abor 0elations )ommission ((-0)) a complaint for regulari=ation,
underpayment of 'ages, non#payment of holiday pay, night shift di8erential and
Bth month pay against ,hangrila et al., claiming that they are regular employees
of ,hangri#-a&
,hangri#la claimed that Escasinas and ,ingco 'ere not its employees but of /r&
.epito, 'hom it retained via *emorandum of Agreement (*?A) pursuant to
Article BHE of the -abor )ode& /r& .epito for her part claimed that Escasinas and
,ingco 'ere already 'orking for the previous retained physicians of ,hangri#la
before she 'as retained& Escasinas and ,ingco, ho'ever, insist that under Article
BHE of the -abor )ode, ,hangri#la is re1uired to hire full#time registered nurse,
hence their engagement should be deemed as regular employment& They maintain
that /r& .epito is a labor#only contractor for she has no license or business permit
and no business name registration as mandated by ,ec& BD and 3" of the
%mplementing 0ules and 0egulations of the -abor )ode&
The labor arbiter declared Escasinas and ,ingco to be regular employees of
,hangri#la& The (ational -abor 0elations )ommission, on the other hand, granted
,hangri#la;s and /r& .epito;s appeal and dismissed Escasinas and ,ingco complaint
for lack of merit, $nding that no employer#employee relationship exists bet'een
,hangri#la and petitioners&
ISSUES-
Whether or not Escasinas and ,ingco are regular employees of ,hangri#la and /r&
.epito
&ELD-
The existence of an independent and permissible contractor relationship is
generally established by considering the follo'ing determinants2 'hether the
contractor is carrying on an independent businessA the nature and extent of the
'orkA the skill re1uiredA the term and duration of the relationshipA the right to
assign the performance of a speci$ed piece of 'orkA the control and supervision of
the 'ork to anotherA the employerKs po'er 'ith respect to the hiring, $ring and
payment of the contractorKs 'orkersA the control of the premisesA the duty to
supply the premises, tools, appliances, materials and laborA and the mode, manner
and terms of payment&
?n the other hand, existence of an employer# employee relationship is established
by the presence of the follo'ing determinants2 (B) the selection and engagement
of the 'orkersA (3) po'er of dismissalA () the payment of 'ages by 'hatever
meansA and (5) the po'er to control the 'orkerKs conduct, 'ith the latter
assuming primacy in the overall consideration&
Against the above#listed determinants, the )ourt holds that /r& .epito is a
legitimate independent contractor& That ,hangri#la provides the clinic premises
and medical supplies for use of its employees and guests do not necessarily prove
that respondent doctor lacks substantial capital and investment& +esides, the
maintenance of a clinic and provision of medical services to its employees is
re1uired under Art& BHE, 'hich are not directly related to ,hangri#la;s principal
business V operation of hotels and restaurants&
As to payment of 'ages, /r& .epito is the one 'ho under'rites the follo'ing2
salaries, ,,, contributions and other bene$ts of the sta8A group life, group
60
personal accident insurance and lifeJdeath insurance for the sta8 'ith minimum
bene$t payable at B3 times the employee;s last dra'n salary, as 'ell as value
added taxes and 'ithholding taxes, sourced from her .4","""&"" monthly retainer
fee and E"W share of the service charges from ,hangri#la;s guests 'ho avail of the
clinic services& %t is unlikely that /r& .epito 'ould report Escasinas and ,ingco as
'orkers, pay their ,,, premium as 'ell as their 'ages if they 'ere not indeed her
employees&
With respect to the supervision and control of the nurses and clinic sta8, it is not
disputed that a document, 6)linic .olicies and Employee *anual7 claimed to have
been prepared by /r& .epito exists, to 'hich Escasinas and ,ingco gave their
conformity and in 'hich they ackno'ledged their co#terminus employment status&
%t is thus presumed that said document, and not the employee manual being
follo'ed by ,hangri#la;s regular 'orkers, governs ho' they perform their
respective tasks and responsibilities&
)ontrary to Escasinas and ,ingco contention, the various o8ice directives issued
by ,hangri#la;s o8icers do not imply that it is ,hangri#la;s management and not /r&
.epito 'ho exercises control over them or that ,hangri#la has control over ho' the
doctor and the nurses perform their 'ork&
%n $ne, as ,hangri#la does not control ho' the 'ork should be performed by
Escasinas and ,ingco, it is not Escasinas and ,ingco;s employer&
LILIA P. LABADAN v. FOREST &ILLS ACADEMY et al.
585 SCRA $ #007%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
)hile in cases of illegal dismissal$ the employer bears the burden of proving that
the dismissal is for a valid or authorized cause$ the employee must frst establish
by substantial evidence the fact of dismissal.
-ilian -& -abadan (-abadan) 'as hired by :orest @ills *ission Academy (:orest
@ills) as an elementary school teacher in BD!D& After one year of employment, she
'as made registrar and secondary school teacher& %n 3"", -abadan $led a
complaint against :orest @ills for illegal dismissal, non#payment of overtime pay,
holiday pay, allo'ances, Bth month pay, service incentive leave, illegal
deductions, and damages& ,he alleged that she 'as allo'ed to go on leave, and
albeit she had exceeded her approved leave period, its extension 'as impliedly
approved by the school principal because -abadan received no 'arning or
reprimand, and 'as in fact retained in the payroll& -abadan further alleged that
since BDD", tithes to the ,eventh /ay Adventist church, of 'hich she 'as a
member, have been illegally deducted from her salaryA and she 'as not paid
overtime pay for overtime service, Bth month pay, $ve days service incentive
leave pay, and holiday payA and that her ,,, contributions have not been remitted&
:orest @ills claims that -abadan 'as permitted to go on leave for t'o 'eeks but
did not return for 'ork after the expiration of the period granted& +ecause of
-abadan;s failure to report to 'ork despite promises to do so, :orest @ills hired a
temporary employee to accomplish the needed reports& When -abadan did return
for 'ork, classes for the school year 'ere already under'ay& With regard to the
charge for illegal deduction, :orest @ills claimed that the ,eventh /ay Adventist
church re1uires its members to pay tithes e1uivalent to B"W of their salaries, and
that -abadan never 1uestioned the deduction of the tithe from her salary& As
regards the non#payment of overtime pay, holiday pay, and allo'ances, :orest @ills
noted that petitioner pro8ered no evidence to support the same&
61
The -abor Arbiter decided in favor of -abadan, and found that she 'as illegally
dismissed, and dismissed her claims for overtime pay, holiday pay, allo'ances,
Bth month pay, service incentive leave& The (ational -abor 0elations )ommission
((-0)) reversed and set aside the -abor Arbiter;s decision 'ith regard to the
$nding of illegal dismissal& -abadan then $led a .etition for (ertiorari 'ith the
)ourt of Appeals, 'hich 'as dismissed by the same& @ence, this .etition for
0evie' on (ertiorari.
ISSUES-
Whether or not -abadan 'as illegally dismissed by :orest @ills
&ELD-
While in cases of illegal dismissal, the employer bears the burden of proving that
the dismissal is for a valid or authori=ed cause, the employee must $rst establish
by substantial evidence the fact of dismissal&
The records do not sho' that petitioner 'as dismissed from the service& They in
fact sho' that despite petitioner;s absence from Culy 3""B to *arch 3""3 'hich,
by her o'n admission, exceeded her approved leave, she 'as still considered a
member of the :orest @ills faculty 'hich retained her in its payroll&
-abadan argues, ho'ever, that she 'as constructively dismissed 'hen :orest @ills
merged her class 'ith another Iso much that 'hen she reported back to 'ork, she
has no more claims to hold and no more 'ork to do&I -abadan, ho'ever, failed to
refute :orest @ills; claim that 'hen she expressed her intention to resume
teaching, classes 'ere already ongoing for ,chool Oear 3""3#3""& %t bears noting
that petitioner simultaneously held the positions of secondary school teacher and
registrar and, as the (-0) noted, she could have resumed her 'ork as registrar
had she really 'anted to continue 'orking 'ith :orest @ills&
-abadan;s a8idavit and those of her former colleagues, 'hich she attached to her
.osition .aper, merely attested that she 'as dismissed from her >ob 'ithout valid
cause, but gave no particulars on 'hen and ho' she 'as dismissed&
BERNARDINO S. MANIOSO v. GOVERNMENT SERVICE INSURANCE
SYSTEM
/58 SCRA $08 #005%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
*enefts due an employee due to work#related sickness shall be provided until he
becomes gainfully employed$ or until his recovery or death.
+ernardino *anioso is an Accounting )lerk % 'ho started 'orking at the +udget
)ommission on Culy B, BDHD& @e 'as transferred to the +ureau of :orestry 'ith
the same position on August B", BDHD& @e 'as promoted to the position of ,enior
+ookkepeer of the /epartment of Environment and (atural 0esources, 0egion %9,
*anila& %t 'as in BDE! 'hen *anioso 'as found to be su8ering from @ypertensive
9ascular /isease& ,ince then, *anioso 'as already in and out the hospital for the
purpose of having tests conducted on him and to be hospitali=ed on several
instances& :rom Canuary BB, BDDH up to *ay BH,BDDH 'hen *anioso compulsory
retired from the government service on reaching 4H years of age and after serving
almost 4 years, he no longer reported for 'ork& @is sick leave covering the said
period 'as duly approved&
*anioso $led 'ith the P,%, for additional bene$ts claiming that the ailments for
'hich he 'as hospitali=ed several times in BDDE developed from his 'ork related
62
illnesses&The P,%, disapproved petitioner;s re1uest upon the ground that he 'as
already paid the maximum monthly income bene$t for eight (!) months covering
the period from *ay BH, BDDH to Canuary B5, BDD4 commensuarate to the degree
of his disability at the time of his retirement& ?n appeal, the P,%,;s ruling 'as also
a8irmed& @ence, this petition&
ISSUE-
Whether or not the *anioso is entitled to .ermanent Total /isability +ene$ts
&ELD-
Under Article BD3 (a) of the -abor )ode, any employee 'ho contacts sickness or
sustains an in>ury resulting in .T/ shall, for each month until his death, be paid by
the QP,%,R during such disability, an amount e1uivalent to the monthly income
bene$t, plus ten percent thereof for each dependent child, but not exceeding $ve&
And under Article BD3 (b) of the same )ode, the only time the income bene$ts,
'hich are guaranteed for $ve years, shall be suspended is if the employee
becomes gainfully employed, or recovers from his .T/ or fails to be present for
examination at least once a year upon notice by the P,%,&
As *aniosoKs medical records sho' that the ailments that he su8ered in BDDE are
complications that resulted from his 'ork#related ailments, Kthe right to
compensation extends to disability due to disease supervening upon and
proximately and naturally resulting from compensable in>ury&
*aniosoKs retirement from the service does not prevent him from availing of the
.T/ bene$ts to 'hich he is entitled& :or as stated earlier, bene$ts due an
employee due to 'ork#related sickness shall be provided until he becomes
gainfully employed, or until his recovery or death& (one of these is present in
*aniosoKs case&
%t 'ould be an a8ront to >ustice if *anioso, a government employee 'ho had
served for thirty six (4) years, is deprived of the bene$ts due him for 'ork#related
ailments that resulted in his .ermanent Total /isability&
MOTOROLA P&ILIPPINES, INC., et al. v. IMELDA B. AMBROCIO, et al.
57 SCRA 50 #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
)hen a company provides a 0edundancy 1rogram in favor of the dismissed
employees$ the latter already received what was due them under the law.
,ometime in BDDE, *otorola .hilippines, %nc& (*.%) decided to close its .araMa1ue
plant in order to consolidate its operations& %t thus o8ered to its a8ected
employees a redundancyJseparation package consisting of separation pay
e1uivalent to t'o months; salary per year of service, insurance policies, etc& After
availing the separation package, 34 employees $led complaints against *.% for
payment of retirement pay e1uivalent to one#month salary per year of service&
*.%, on the other hand, insisted that Ambrocio, et al. had already received such
one#month pay, the same having been included in the cash component of the
separationJredundancy package paid to them&
The -abor Arbiter found *.% liable to Ambrocio et al. for the payment of
Iretirement pay service bene$tsI since retirement pay is separate and distinct
from separation pay& The (-0), ho'ever, granted *.%;s appeal and dismissed the
complaint of Ambrocio, et al. holding that the bene$ts received by Ambrocio, et al.
for involuntary separation under *.%;s retirement plan included the service pay
bene$ts, 'hich both grant one month;s pay for every year of service& Ambrocio, et
al. appealed to the )ourt of Appeals ()A) 'hich ruled %n favor of Ambrocio et al.
@ence, the $ling of this appeal&
63
ISSUES-
Whether or not Ambrocio;s, et al. 'ere entitled to additional retirement bene$ts
&ELD-
,eparation pay has been de$ned as the amount that an employee receives at the
time of his severance and is designed to provide the employee 'ith the
'here'ithal during the period he is looking for another employment, and is
recoverable only in the instances enumerated under Articles 3! and 3!5 of the
-abor )ode, as amended, or in illegal dismissal cases 'hen reinstatement is no
longer possible&
0etirement pay, on the other hand, presupposes that the employee entitled to it
has reached the compulsory retirement age or has rendered the re1uired number
of years as provided for in the collective bargaining agreement ()+A), the
employment contract or company policy, or in the absence thereof, in 0epublic Act
(o& E45B or the 0etirement -a'&
%t is admitted that Ambrocio 'ere terminated pursuant to a redundancy, and not
due to retirement program, hence, they 'ere entitled to a separation pay of one#
month salary per year of service&
As correctly ruled by the (-0), by 'hatever version of *.%;s 0etirement .lan
'ould be made applicable, of Ambrocio, et al. are entitled to a separation pay of
one#month salary per year of service& Under ,ec& %%%#+ of the .lan on 'hich of
Ambrocio, et al. rely, IQiRn case of involuntary separation 'ith the company due to
retrenchmentJredundancy, the employee shall be given a service bene$t e1uivalent
to one month per year of service&I ?n the other hand, based on .olicy B3BH on
'hich *.% relies, under the same circumstances, the company shall provide its
employee a separation pay e1uivalent to one (B) month;s pay per year of service,
inclusive of any service bene$t eligibility under the 0etirement .lan&
Thus, 'hen of Ambrocio, et al. 'ere paid a separation pay of t'o months; salary
for every year of service under the 0edundancy .ackage, they already received
'hat 'as due them under the la' and in accordance 'ith *.%;s plan&
IBARRA P. ORTEGA v. SOCIAL SECURITY COMMISSION a34 SOCIAL
SECURITY SYSTEM
555 SCRA 5. #007%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
(laims under the 'abor (ode for compensation and under the 3ocial 3ecurity 'aw
for benefts are not the same as to their nature and purpose.
.etitioner %barra ?rtega, member of respondent ,ocial ,ecurity ,ystem (,,,) $led
claims for partial permanent disability bene$ts on account of his illness 'ith ,,,,
'hich the latter granted for total of 3 months& After the expiration of his pension,
?rtega then applied for total permanent disability bene$ts but such application
'as denied by ,,,& ,,, observed that %barra 'as already granted bene$ts under
the same illness and his physical examination sho'ed no progression of his illness&
Accordingly, ?rtega $led before ,ocial ,ecurity )ommission (,,)) a petition
alleging that ,,, ignored the fact that his attending physician diagnosed him of
progressed illness& After exhausting administrative remedies, ,,) took cogni=ance
of the petition and after hearing on the merits, it denied ?rtega;s claim for
entitlement to total permanent disability&
?n appeal, the )ourt of Appeals a8irmed in toto the ,,) order&
64
ISSUE-
Whether or not %barra can claim under ,ocial ,ecurity -a' for 'ork connected
disability claims insofar as it relates to a demonstration of disability to perform his
trade and profession
&ELD-
The conclusion that %barra is not entitled to total permanent disability bene$ts
under the ,ocial ,ecurity -a' 'as reached after petitioner 'as examined not >ust
by one but four ,,, physicians, namely, /r& Cuanillo /escal=o %%%, /r& )arlota A&
)ru=#Tutaan, /r& Cesus ,& Tan and /r& 0ebecca ,ison&
The initial physical examination and intervie' revealed that %barra had slight
limitation of grasping movement for both hands& According to /r& /escal=o, this
$nding 'as not enough to grant an extension of bene$t since %barra had already
received bene$ts e1uivalent to "W of the body& 0esponding to the allegation that
the April 3""" physical examination 'as performed in a short period of time, the
doctor credibly explained that petitionerKs movements 'ere already being
monitored and evaluated from a distance as part of the examination of his
extremities in order to minimi=e malingering and overacting& 5H
%ndeed, the evidence indicates that petitionerKs condition at the time material to
the case does not fall under the enumeration in the above#1uoted provisions of the
,ocial ,ecurity -a'& *oreover, as correctly held by the appellate court, the
proviso of such provisions on the percentage degree of disability applies 'hen
there is a related deterioration of the illness previously considered as partial
permanent disability& %n this case, there is dearth of evidence on the proposition
that petitionerKs array of illnesses is related to Penerali=ed Arthritis and .artial
Ankylosis of the speci$c body parts&
%barraKs reliance on >urisprudence on 'ork#connected disability claims insofar as it
relates to a demonstration of disability to perform his trade and profession is
misplaced&
)laims under the -abor )ode for compensation and under the ,ocial ,ecurity -a'
for bene$ts are not the same as to their nature and purpose& ?n the one hand, the
pertinent provisions of the -abor )ode govern compensability of 'ork#related
disabilities or 'hen there is loss of income due to 'ork#connected or 'ork#
aggravated in>ury or illness& ?n the other hand, the bene$ts under the ,ocial
,ecurity -a' are intended to provide insurance or protection against the ha=ards
or risks of disability, sickness, old age or death, inter alia, irrespective of 'hether
they arose from or in the course of the employment& And unlike under the ,ocial
,ecurity -a', a disability is total and permanent under the -abor )ode if as a
result of the in>ury or sickness the employee is unable to perform any gainful
occupation for a continuous period exceeding B3" days regardless of 'hether he
loses the use of any of his body parts&
SAN MIGUEL FOODS INC. v. SAN MIGUEL CORPORATION EMPLOYEES
UNION5PTWGO
5.5 SCRA !.. #008%, SECOND DIVISION, #Ca'()* M*'ale+, ,%
65
9ross or :agrant violation of the seniority rule under the (*A is an unfair labor
practice which the 'abor Arbiter has %urisdiction.
,ome employees of ,an *iguel :oods %nc& (,*:%) brought grievance against
:inance *anager Pideo *ontesa for discrimination, favouritism, unfair labor
practice and harassment& ,*:% failed to act on the complaint 'hich prompted ,an
*iguel )orporation Employees Union .TWP? (the Union) to $lea case 'ith the
(ational -abor 0elations )ommission against ,*:%, its .resident Amadeo 9eloso
and *ontesa& %t prayed that ,*:% et al. be ordered to promote the therein named
employees 'ith the corresponding pay increases or ad>ustment including payment
of salary di8erentials plus attorneyK s feesQ,R and to cease and desist from
committing the same un>ust discrimination in matters of promotion&
,*:% $led a motion to dismiss on the alleged ground that the grievance issue
should be resolved in the grievance machinery provided in the collective
bargaining& The Union opposed the motion to dismiss& The (-0) dismissed the
complaint& ?n appeal, the )ourt of Appeals a8irmed the (-0);s decision& @ence,
this petition&
ISSUE-
Whether or not complaints for violation of seniority rule under the )+A falls 'ithin
the -abor Arbiter;s >urisdiction
&ELD-
As for the alleged U-. committed under Article 35! (i), for violation of a )+A, this
Article is 1uali$ed by Article 34B of the -abor )ode, provides that violations of a
)ollective +argaining Agreement, except those 'hich are gross in character, shall
no longer be treated as unfair labor practice and shall be resolved as grievances
under the )ollective +argaining Agreement&
As reFected in the above#1uoted allegations of the Union in its .osition .aper, the
Union charges ,*:% to have violated the grievance machinery provision in the
)+A& The grievance machinery provision in the )+A is not an economic provision,
ho'ever, hence, the second re1uirement for a -abor Arbiter to exercise
>urisdiction of a U-. is not present&
The Union like'ise charges ,*:%, ho'ever, to have violated the Cob ,ecurity
provision in the )+A, speci$cally the seniority rule, in that ,*:% Iappointed less
senior employees to positions at its :inance /epartment, conse1uently
intentionally by#passing more senior employees 'ho are deserving of said
appointment&
As above#stated, the Union charges ,*:% to have promoted less senior employees,
thus bypassing others 'ho 'ere more senior and e1ually or more 1uali$ed& %t may
not be seriously disputed that this charge is a gross or Fagrant violation of the
seniority rule under the )+A, a U-. over 'hich the -abor Arbiter has >urisdiction&
,*:%, at all events, 1uestions 'hy the )ourt of Appeals came out 'ith a $nding
that it (,*:%) disregarded the seniority rule under the )+A 'hen its petition
before said court merely raised a 1uestion of >urisdiction& The )ourt of Appeals
having a8irmed the (-0) decision $nding that the -abor Arbiter has >urisdiction
over the Union complaint and thus remanding it to the -abor Arbiter for
continuation of proceedings thereon, the appellate court said $nding may be taken
to have been made only for the purpose of determining >urisdiction&
66
STA. CATALINA COLLEGE, et al. v. NATIONAL LABOR RELATIONS
COMMISION, et al.
/!$ SCRA .. #00.%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
+or a valid fnding of abandonment$ two factors must be present ;<= the failure to
report for work$ or absence without valid or %ustifable reason2 and ;>= a clear
intention to sever employer#employee relationship$ with the second element as the
more determinative factor$ being manifested by some overt acts.
@ilaria Tercero (Tercero) 'as hired as an elementary school teacher at the ,ta&
)atalina )ollege (,ta& )atalina) in Cune BDHH& :ifteen years thereafter, on account
of the illness of her mother, she applied for and 'as granted a one year leave of
absence 'ithout pay& After the expiration of her leave of absence, she had not been
heard from by petitioner school& %n BD!3, she applied ane' at petitioner school
'hich hired her& ?n *arch BDDE, @ilaria 'as a'arded a .la1ue of Appreciation for
thirty years of service and a gratuity pay& ?n *ay BDDE, she reached the
compulsory retirement age of 4H& Tercero;s retirement bene$ts 'ere computed on
the basis of $fteen years of service from BD!3 to BDDE and her service from BDHH
to BDE" 'as excluded in the computation& ,ta& )atalina asserted that she had, in
BDEB, abandoned her employment& :rom the retirement bene$ts 'as deducted the
amount representing reimbursement of the employer;s contribution to her
retirement bene$ts under the .rivate Education 0etirement Annuity Association
(.E0AA) 'hich Tercero had already received& /educted too 'as the gratuity pay
'hich 'as given to her&
Tercero $led a complaint before the (-0) 0egional Arbitration, against ,ta&
)atalina for non#payment of retirement bene$ts& +y /ecision of ?ctober ", BDD! ,
-abor Arbiter .edro )& 0amos ruled in favor of the petitioner school& ?n appeal,
ho'ever, the (-0), set aside the -abor Arbiter;s decision&
,ta& )atalina then brought the case on certiorari to the )A& The appellate court
ho'ever, dismissed the petition, holding that ,ta& )atalina failed to prove that
Tercero had abandoned her position in BDE", as ,ta& )atalina even gave her a
.la1ue of Appreciation for thirty years of service 6precisely because of her thirty
year continuous service,7 and that ,ta& )atalina never sent notice to her
dismissing her, hence, the employer#employee relationship 'as not severed and,
therefore, her services for ,ta& )atalina during the period from BDHH#BDE" should
be credited in the computation of her retirement bene$ts
ISSUE-
Whether or not Tercero is entitled to the retirement bene$ts di8erential computed
by the (-0) based on her 3D years of service 'hen she merely rendered BH
continuous years of service prior to her retirement
&ELD-
The )ourt is not unmindful of Tercero;s rendition of a total of thirty years of
teaching in ,ta& )atalina )ollege and should be accorded ample support in her
t'ilight years& ,ta& )atalina in fact ackno'ledges her dedicated service to its
students& ,he can, ho'ever, only be a'arded 'ith 'hat she is rightfully entitled to
under the la'&
67
As a general rule, the factual $ndings and conclusion of 1uasi#>udicial agencies
such as the (-0) are, on appeal, accorded great 'eight and respect and even
$nality as long as they are supported by substantial evidence or that amount of
relevant evidence 'hich a reasonable man might accept as ade1uate to >ustify a
conclusion& Where as in the present case, the $ndings of the (-0) contradict
those of the -abor Arbiter, the )ourt must of necessity examine the records and
the evidence presented to determine 'hich $nding should be preferred as more
conformable 'ith evidentiary facts&
:or a valid $nding of abandonment, t'o factors must be present2 (B) the failure to
report for 'ork, or absence 'ithout valid or >usti$able reasonA and (3) a clear
intention to sever employer#employee relationship, 'ith the second element as the
more determinative factor, being manifested by some overt acts&
To prove abandonment, the employer must sho' that the employee deliberately
and un>usti$ably refused to resume his employment 'ithout any intention of
returning&
Abandonment of 'ork being a >ust cause for terminating the services of @ilaria,
petitioner school 'as under no obligation to serve a 'ritten notice to her&
ROSALINA TAGLE v. COURT OF APPEALS, et al.
/$$ SCRA 5! #005%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
)hen the provisions of the employment contract are clear and unambiguous$ its
literal meaning controls.
Wilfredo Tagle (Wilfredo), husband of petitioner 0osalina Tagle (0osalina), 'as
recruited by respondent :ast %nternational )orporation (:%)) to 'ork as $sherman
at Tai'an for its principal, respondent Suo Tung Ou @uang (@uang)& They then
executed an employment contract for one year, extendible for another year upon
mutual agreement of the parties&
/uring the duration of the contract, the $shing vessel boarded by Wilfredo in
Tai'an collided 'ith another and thereafter sank& /espite e8orts to look for
Wilfredo;s corpus$ the same proved futile& @e 'as therefore presumed dead&
0osalina thus $led a claim for death bene$ts 'ith :%)& The claim 'as approved
and .hilippine .rudential -ife %nsurance )o&, %nc&, (..-%)%) issued a check in the
amount of .4H","""&""& Upon receipt by 0osalina of the check, she accomplished
a 0elease, Waiver and Guitclaim stating that such 'ould be an absolute bar to any
suit that either is no' pending or may be henceforth prosecuted concerning
claims, demands, causes of action, etc& 0osalina, ho'ever, subse1uently $led
before the (ational 0elations )ommission ((-0)), a complaint for additional
6labor insurance7 in the amount of (TX"","""&""& ?n motion of :%), the -abor
Arbiter dismissed the complaint of 0osalina on the ground that by her prior
execution of the 0elease, Waiver and Guitclaim she is barred from $ling any
subse1uent action against :%)&
0osalina appealed to the (-0) 'hich a8irmed the -abor Arbiter;s decision stating
that nothing on record 'ould indicate that the .4H","""&"" paid by ..-%)% is
separate and distinct from the obligation of the :%) and its principal @uang
arising from the employment contract and the release and 1uitclaim forever
barred the $ling of any subse1uent action against :%)& Upon .etition for (ertiorari
before the )ourt of Appeals ()A), it approved the (-0) resolution $nding 6no
shred of capriciousness or arbitrariness on the part of the (-0)7 in dismissing her
appeal&
68
ISSUE-
Whether or not the 0elease, Waiver and Guitclaim executed by 0osalina included
the additional labor insurance she is entitled to as provided for in ,ection B",
Article %% of her deceased husband;s employment contract
&ELD-
/eath could be a result of accident, but accident does not necessarily result to
death&
)ompensation bene$ts for illness, death, accident 'hich does not result to death,
and partial or total disability are treated separately and di8erently in the #
paragraph provision of Article %%, ,ection B" of the employment contract& The said
provision in the employment contract being clear and unambiguous, its literal
meaning controls&
To uphold Tagle;s claim for additional insurance for accident, assuming that one
for the purpose 'as secured, after receiving insurance bene$ts for death arising
from accident, 'ould violate the clear provision of Article %%, ,ection B" of the
employment contract, the la' bet'een the parties& And it 'ould triFe 'ith the
0elease, Waiver and Guitclaim, another contract bet'een the parties, barring
Tagle from claiming other or additional bene$ts arising from Tagle;s husband;s
death#basis of the release of the insurance proceeds to her&
PATRICIA I. TIONGSON, et al. v. NATIONAL &OUSING AUT&ORITY
557 SCRA 5$ #007%, SECOND DIVISION, #Ca'()* M*'ale+, ,.%
"n a situation where a government agency$ in this case the 4ational ?ousing
Authority$ took possession of properties belonging to private individuals for
purposes of e.propriation and the laws by virtue of which such government
agency e.propriated the sub%ect properties were subsequently declared to be
unconstitutional by the 3upreme (ourt$ the determination of %ust compensation
should be reckoned from the date of fling the complaint for e.propriation and not
from the time of actual taking of the properties.
0espondent (ational @ousing Authority ((@A) took possession in BDE!, for
purposes of expropriation, of properties belonging to petitioners .atricia -&
Tiongson, et al& pursuant to .&/& (os& B44D and B4E"& The t'o .&/&;s 'ere
thereafter declared unconstitutional by the ,upreme )ourt& ?n ,eptember B5,
BD!E, the (@A $led before the 0egional Trial )ourt (0T)) a complaint against
Tiongson, et al& for expropriation of parcels of land 'hich 'ere covered by .&/&
(os& B44D and B4E"&
The 0T) held that the determination of >ust compensation of the properties should
be reckoned from the date of $ling of (@A;s petition or on ,eptember B5, BD!E&
@o'ever, on appeal, the )ourt of Appeals reversed and set aside the trial court;s
orders and held that the >ust compensation should be based on the actual taking of
the property in BDE!& @ence, this petition&
ISSUE2
Whether or not >ust compensation should be reckoned from the time of the taking
of the property or on the $ling of the complaint
& ELD2
69
%n declaring, in its challenged /ecision, that the determination of >ust
compensation should be reckoned from (@A;s taking of the properties in BDE!, the
appellate court simply relied on Annex 6)7 of (@A;s petition before it, the ?rder
dated Cune BH, BD!! of the then .residing Cudge of the trial court, and thus
concluded that 6the parties admitted that Q(@AR took possession of the sub>ect
properties as early as BDE!&7 The appellate court reached that conclusion, despite
its recital of the antecedents of the case including Tiongson, sustained moves,
even before the trial court, in @a)3ta)3)3; that the reckoning of >ust
compensation should be from the date of $ling of the petition for expropriation on
,eptember B5, BD!E&
The earlier#1uoted allegations of the body and prayer in (@A;s .etition for
Expropriation $led before the 0T) constitute >udicial admissions of (@ALthat it
possessed the sub>ect properties until this )ourt;s declaration, in its above#stated
/ecision in P&0& (o& -#HHB44 promulgated on *ay 3B, BD!E, that .&/& (o& B44D
pursuant to 'hich (@A took possession of the properties of petitioners in BDE!
'as unconstitutional and, therefore, null and void& These admissions, the appellate
court either un'ittingly failed to consider or escaped its notice&
Tiongson, et al.$ even brought to the appellate court;s attention, in their *otion for
0econsideration of its /ecision of Cune B4, BDDD, the fact that they had called the
trial court;s attention to (@A;s allegation#admissions in the body and prayer of its
petition& +ut the appellate court, by resolution of ?ctober E, BDDD, denied
petitioners; motion upon the ground that it raised substantially the same issues
that 'ere already considered and passed upon in arriving at its decision& The
appellate court;s Cune B4, BDDD decision glaringly sho's, ho'ever, that the matter
of >udicial admissions of (@A in the body and prayer in its petition 'ere not
considered by it& 7is#a#vis the factual backdrop of the case, the >ust compensation
of Tiongson, et al.,s properties must be determined 6as of the date of & & & the $ling
of Q(@A;sR complaint7 on ,eptember B5, BD!E&7
UNITED P&ILIPPINE LINES, INC. a34>*' &OLLAND AMERICA LINE, INC.
v. FRANCISCO BESERIL
/78 SCRA /7 #00$%, T&IRD DIVISION #Ca'()* M*'ale+, ,.%
The law does not require that the illness should be incurable$ what is important is
that he was unable to perform his customary work for more than <>@ days which
constitutes permanent total disability$ thus$ an award of a total and permanent
disability beneft is in order.
:rancisco +eseril (:rancisco) 'as hired by United .hilippine -ine, %nc& (U.-) in
behalf of its principal, @olland America -ine (@A-)& @e is usually rehired by U.-
to serve as one of the seaman in @A-;s vessel as an assistant cook& %n the middle of
his service he started to feel chest pain and 'as brought ashore and under'ent
Triple @eart +y#.ass& When he 'as brought to *anila he under'ent several
rehabilitation and physical therapy& ?ne of :rancisco;s doctors found that he 'as
un$t to 'ork&
0elying on the $ndings of the doctor, :rancisco and his counsel demanded for
disability pay from his employer U.- andJor @A-& U.- directed :rancisco to
undergo an examination 'ith their company doctor& The company doctor found
that :rancisco is in fact $t to 'ork as a seaman& :rancisco agreed to 'ork again
for U.- but did not sho' up in their o8ice&
:rancisco $led a complaint in the (-0) against U-. and @A- claiming disability
bene$ts, loss of earning and capacity and damages& The -abor Arbiter a'arded
:rancisco full amount of the bene$ts and damages& The (-0) modi$ed the
70
decision of the -abor Arbiter and deleted the a'ard for disability bene$ts& U-.
and @A- contended that there should be no grant of /isability +ene$t because
their company physician certi$ed that he is $t to go back to 'ork& ?n appeal, the
)ourt of Appeals reversed the decision of the -abor Arbiter and ruled that the
disability bene$t should be a'arded
@ence, this petition&
ISSUE-
Whether or not /isability +ene$t should be a'arded to :rancisco +eseril
&ELD-
That :rancisco 'as found to be I$t to return to 'orkI by )linica *anila ('here he
under'ent regular cardiac rehabilitation program and physical therapy from
Canuary BH to *ay 3!, BDD! under U.-Ks account) on ,eptember 33, BDD!, or a
fe' months after his rehabilitation does not matter&
U.- tried to contest the above $ndings by sho'ing that respondent 'as able to
'ork again as a chief mate in *arch 3""B& (onetheless, this information does not
alter the fact that as a result of his illness, respondent 'as unable to 'ork as a
chief mate for almost three years& %t is of no conse1uence that respondent 'as
cured after a couple of years&
The la' does not re1uire hat the illness should be incurable& What is important is
that he 'as unable to perform his customary 'ork for more than B3" days 'hich
constitutes permanent total disability& An a'ard of a total and permanent disability
bene$t 'ould be germane to the purpose of the bene$t, 'hich is to help the
employee in making ends meet at the time 'hen he is unable to 'ork
VIRGEN S&IPPING CORPORATION, et al. v. ,ESUS B. BARRA=UIO
5"8 SCRA /!! #00"%, SECOND DIVISION #Ca'()* M*'ale+, ,.%
0esignation is defned as the voluntary act of an employee who fnds himself in a
situation where he believes that personal reasons cannot be sacrifced in favor of
the e.igency of the service and he has no other choice but to disassociate himself
from his employment.
?dyssey *aritime, .TE& -td, through 9irgen ,hipping )orporation, hired Cesus
+arra1uio (+arra1uio ) as chief cook on board a vessel for a period of ten (B")
months& While the vessel 'as docked in Sorea, +arra1uio re1uested medical
assistance and 'as diagnosed 'ith suspected ischemic heart disease and
hypertension& +arra1uios 'rote a letter to the captain informing them that he has
decided to 1uit his >ob and 'ill be >oining the next disembarkation cre'& @e signed
a ,tatement of Account ackno'ledging set#o8 of his vacation leave pay from the
cost of $nding his replacement and the cost of repatriation&
A year later, respondent $led a complaint for non#payment of B3" days sickness
allo'ance under ,ection 3" (+) paragraph 3 of the ,tandard Employment )ontract
for ,eafarers, disability bene$ts, legal interest, reimbursement of medical
expenses, and damages& +arra1uio alleged that due to constant verbal abuse from
the ship master, he su8ered di==iness, chest pains, headaches and irregular sleep
leading to hypertension& +arra1uio alleged that he 'as forced to execute the
re1uest for disembarkation for fear that his health 'ould 'orsenA and that medical
$ndings that he 'as $t to sail is proof that his condition developed 'hile on board&
The -abor Arbiter rendered >udgment in favor of +arra1uio $nding the foreign
principal and manning agency liable to pay to complainant his money claims& ?n
71
appeal, the (ational -abor 0elations )ommission ((-0)) reversed the ruling of
the -abor Arbiter and dismissed the complaint, $nding +arra1uio;s resignation
voluntaryA The )ourt of Appeals reversed the (-0) /ecision in light of the
observation that +arra1uio;s hypertension probably developed 'hile on board the
vessel
ISSUES-
Whether or not +arra1uio voluntarily resigned
&ELD-
:rom a considered revie', the )ourt $nds that respondent;s resignation 'as
voluntary&
0esignation is de$ned as the voluntary act of an employee 'ho $nds himself in a
situation 'here he believes that personal reasons cannot be sacri$ced in favor of
the exigency of the service and he has no other choice but to disassociate himself
from his employment&
+arra1uio;s resignation can be gleaned from the 23a@B);2*2+ terms of his letter
to )aptain )ristino& +arra1uio;s bare claim that he 'as forced to execute his
resignation letter deserves no merit& +are allegations of threat or force do not
constitute substantial evidence to support a $nding of forced resignation& That
such claim 'as proferred a year later all the more renders his contention bereft of
merit&
%schemic heart disease cannot develop in a short span of time that +arra1uio
served as chief cook for petitioners& %n fact, as indicated above, the Pleneagles
*aritime *edical )entre doctor 'ho treated respondent in *ay 3""" for abscess
in his left hand had noted +arra1uio;s 6QhRistory of hypertension for years&7
*oreover, the Sorean physician did not make any recommendation as to
+arra1uio;s bill of health for petitioners to assume that he 'as $t for repatriation&
72