BENJAMIN C. JUCO, petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION and NATIONAL

HOUSING CORPORATION, respondents.
G.R. No. 98107. August 18, 1997
Facts: Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing Corporation
(NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he was separated from the service for having been
implicated in a crime of theft and/or malversation of public funds.
On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the Department of Labor.
On September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the ground that the NLRC
had no jurisdiction over the case. Petitioner then elevated the case to the NLRC which rendered a decision on
December 28, 1982, reversing the decision of the Labor Arbiter.
Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court and on January 17, 1985, the
Court rendered a decision granting the petition and set aside the decision of NLRC. The decision of the Labor Arbiter
dismissing the case before it for lack of jurisdiction is REINSTATED.
On January 6, 1989, petitioner filed with the Civil Service Commission a complaint for illegal dismissal, with
preliminary mandatory injunction. On February 6, 1989, respondent NHC moved for the dismissal of the complaint
on the ground that the Civil Service Commission has no jurisdiction over the case. On April 11, 1989, the Civil Service
Commission issued an order dismissing the complaint for lack of jurisdiction. It ratiocinated that the Board finds the
comment and/or motion to dismiss meritorious. It was not disputed that NHC is a government corporation without
an original charter but organized/created under the Corporate Code. For lack of jurisdiction, the instant complaint is
dismissed.
On April 28, 1989, petitioner filed with respondent NLRC a complaint for illegal dismissal with preliminary
mandatory injunction against respondent NHC. On May 21, 1990, respondent NLRC thru Labor Arbiter Manuel R.
Caday ruled that petitioner was illegally dismissed from his employment by respondent as there was evidence in the
record that the criminal case against him was purely fabricated, prompting the trial court to dismiss the charges
against him. Hence, he concluded that the dismissal was illegal as it was devoid of basis, legal or factual.
Thereafter, the Labor Arbiter rendered a decision, declaring the dismissal of the complainant as illegal and ordered
the respondent to immediately reinstate him to his former position without loss of seniority rights with full back
wages inclusive of allowance and to his other benefits or equivalent computed from the time it is withheld from him
when he was dismissed on March 27, 1977, until actually reinstated.
On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1991, the NLRC promulgated a
decision which reversed the decision of Labor Arbiter Manuel R. Caday on the ground of lack of jurisdiction.
Issue: Whether or not public respondent committed grave abuse of discretion in holding that petitioner is not
governed by the Labor Code.

Held: The NLRC erred in dismissing petitioners complaint for lack of jurisdiction because the rule now is that the
Civil Service now covers only government-owned or controlled corporations with original charters. Having been
incorporated under the Corporation Law, its relations with its personnel are governed by the Labor Code and come
under the jurisdiction of the National Labor Relations Commission.
In the case at bench, the National Housing Corporation is a government owned corporation organized in 1959 in
accordance with the Uniform Charter of Government Corporation, dated January 1, 1959. Its shares of stock are and
have been one hundred percent (100%) owned by the Government from its incorporation under Act 1459, the former
corporation law. The government entities that own its shares of stock are the Government Service Insurance System,
the Social Security System, the Development Bank of the Philippines, the National Investment and Development
Corporation and the Peoples Homesite and Housing Corporation. Considering the fact that the NHA had been
incorporated under act 1459, the former corporation law, it is but correct to say that it is a government-owned or
controlled corporation whose employees are subject to the provisions of the Labor Code. This observation is reiterated
in recent case of Trade Union of the Philippines and Allied Services (TUPAS) v. National Housing Corporation, where
we held that the NHA is now within the jurisdiction of the Department of Labor and Employment, it being a
government-owned and/or controlled corporation without an original charter. Furthermore, we also held that the
workers or employees of the NHC (now NHA) undoubtedly have the right to form unions or employees organization
and that there is no impediment to the holding of a certification election among them as they are covered by the Labor
Code.

PASTOR DIONISIO V. AUSTRIA, petitioner, vs. HON. NATIONAL LABOR RELATIONS COMMISSION
(Fourth Division), CEBU CITY, CENTRAL PHILIPPINE UNION MISSION CORPORATION OF THE
SEVENTH-DAY ADVENTIST, ELDER HECTOR V. GAYARES, PASTORS REUBEN MORALDE, OSCAR
L. ALOLOR, WILLIAM U. DONATO, JOEL WALES, ELY SACAY, GIDEON BUHAT, ISACHAR
GARSULA, ELISEO DOBLE, PROFIRIO BALACY, DAVID RODRIGO, LORETO MAYPA, MR. RUFO
GASAPO, MR. EUFRONIO IBESATE, MRS. TESSIE BALACY, MR. ZOSIMO KARA-AN, and MR.
ELEUTERIO LOBITANA, respondents.
[G.R. No. 124382. August 16, 1999]
Facts: Petitioner had worked with the private respondent Seventh Day Adventists (SDA) for 28 years before he was
terminated. Prior to said termination, petitioner was asked to admit accountability for the church offerings collected
by his wife in the amount of P15,078.10. Petitioner refused since it was private respondents Pastor Buhat and
Eufronio Ibesate who authorized his wife to collect. Thereafter petitioner requested Pastor Buhat to convene the
Executive Committee to settle the dispute between him and Pastor Rodrigo, but the latter denied the same, and
heated arguments between the two ensued until petitioner banged the attache case of Pastor Buhat on the table,
scattered the books and threw the phone. Later, an Executive Committee meeting was held where the non-remittance
of church collections and the events that transpired were discussed. Subsequently, petitioner received a letter of
dismissal citing therein grounds for the termination of his services.
Petitioner then filed a complaint before the Labor Arbiter for illegal dismissal against the SDA and its officers and
prayed for reinstatement with backwages and benefits, moral and exemplary damages and other labor law benefits
and a decision was rendered in favor of petitioner.
The SDA, through its officers, appealed the decision of the Labor Arbiter to the National Labor Relations Commission.
In a decision the NLRC vacated the findings of the Labor Arbiter for want of merit.
Petitioner filed a motion for reconsideration of the above-named decision. On 18 July 1995, the NLRC issued a
Resolution reversing its original decision.
In view of the reversal of the original decision of the NLRC, the SDA filed a motion for reconsideration of the above
resolution. Notable in the motion for reconsideration filed by private respondents is their invocation, for the first time
on appeal, that the Labor Arbiter has no jurisdiction over the complaint filed by petitioner due to the constitutional
provision on the separation of church and state since the case allegedly involved and ecclesiastical affair to which the
State cannot interfere.
The NLRC, without ruling on the merits of the case, reversed itself once again, sustained the argument posed by
private respondents and, accordingly, dismissed the complaint of petitioner for lack of jurisdiction.
After the filing of the petition, the Court ordered the Office of the Solicitor General (the OSG) to file its comment on
behalf of public respondent NLRC. Interestingly, the OSG filed a manifestation and motion in lieu of comment setting
forth its stand that it cannot sustain the resolution of the NLRC. In its manifestation, the OSG submits that the

termination of petitioner of his employment may be questioned before the NLRC as the same is secular in nature, not
ecclesiastical.
Issues: 1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by
petitioner against the SDA;
2) Whether or not the termination of the services of petitioner is an ecclesiastical affair, and, as such, involves
the separation of church and state; and
3) Whether or not such termination is valid.
Held: 1. Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to
include religious corporations, such as the SDA, in its coverage. Article 278 of the Labor Code on post-employment
states that the provisions of this Title shall apply to all establishments or undertakings, whether for profit or
not. Obviously, the cited article does not make any exception in favor of a religious corporation. This is made more
evident by the fact that the Rules Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the
Termination of Employment and Retirement, categorically includes religious institutions in the coverage of the law.
Hence, the SDA cannot hide behind the mantle of protection of the doctrine of separation of church and state to avoid
its responsibilities as an employer under the Labor Code.
Private respondents are estopped from raising the issue of lack of jurisdiction for the first time on appeal. It is already
too late in the day for private respondents to question the jurisdiction of the NLRC and the Labor Arbiter since the
SDA had fully participated in the trials and hearings of the case from start to finish. The Court has already ruled that
the active participation of a party against whom the action was brought, coupled with his failure to object to the
jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to an invocation of that
jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning
the court or bodys jurisdiction. Thus, the active participation of private respondents in the proceedings before the
Labor Arbiter and the NLRC mooted the question on jurisdiction.
2. The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from taking
cognizance of the same. While the matter at hand relates to the church and its religious minister it does not ipso
facto give the case a religious significance. Simply stated, what is involved here is the relationship of the church as an
employer and the minister as an employee. It is purely secular and has no relation whatsoever with the practice of
faith, worship or doctrines of the church. In this case, petitioner was not ex-communicated or expelled from the
membership of the SDA but was terminated from employment. Indeed, the matter of terminating an employee, which
is purely secular in nature, is different from the ecclesiastical act of expelling a member from the religious
congregation.
3. In termination cases, the settled rule is that the burden of proving that the termination was for a valid or authorized
cause rests on the employer. Thus, private respondents must not merely rely on the weaknesses of petitioners
evidence but must stand on the merits of their own defense. The issue being the legality of petitioners dismissal, the
same must be measured against the requisites for a valid dismissal, namely: (a) the employee must be afforded due
process, i.e., he must be given an opportunity to be heard and to defend himself, and; (b) the dismissal must be for a

valid cause as provided in Article 282 of the Labor Code. Without the concurrence of this twin requirements, the
termination would, in the eyes of the law, be illegal.
Before the services of an employee can be validly terminated, Article 277 (b) of the Labor Code and Section 2, Rule
XXIII, Book V of the Rules Implementing the Labor Code further require the employer to furnish the employee with
two (2) written notices, to wit: (a) a written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain his side; and, (b) a written
notice of termination served on the employee indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination. The first notice, which may be considered as the proper
charge, serves to apprise the employee of the particular acts or omissions for which his dismissal is sought. The
second notice on the other hand seeks to inform the employee of the employers decision to dismiss him. This
decision, however, must come only after the employee is given a reasonable period from receipt of the first notice
within which to answer the charge and ample opportunity to be heard and defend himself with the assistance of a
representative, if he so desires. This is in consonance with the express provision of law on the protection of labor and
the broader dictates of procedural due process. Non-compliance therewith is fatal because these requirements are
conditions sine qua non before dismissal may be validly effected.
We cannot sustain the validity of dismissal based on the ground of breach of trust. Private respondents allege that
they have lost their confidence in petitioner for his failure, despite demands, to remit the tithes and offerings
amounting to P15,078.10, which were collected in his district. A careful study of the voluminous records of the case
reveals that there is simply no basis for the alleged loss of confidence and breach of trust. Settled is the rule that under
Article 282 (c) of the Labor Code, the breach of trust must be willful. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly,
heedlessly or inadvertently.
With respect to the grounds of serious misconduct and commission of an offense against the person of the employers
duly authorized representative, we find the same unmeritorious and, as such, do not warrant petitioners dismissal
from the service. Misconduct has been defined as improper or wrong conduct. It is the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful
intent and not mere error in judgment. For misconduct to be considered serious it must be of such grave and
aggravated character and not merely trivial or unimportant.
The final ground alleged by private respondents in terminating petitioner, gross and habitual neglect of duties, does
not require an exhaustive discussion. Suffice it to say that all private respondents had were allegations but not proof.
In view of the foregoing, we sustain the finding of the Labor Arbiter that petitioner was terminated from service
without just or lawful cause. Having been illegally dismissed, petitioner is entitled to reinstatement to his former
position without loss of seniority rights and the payment of full backwages without any deduction corresponding to
the period from his illegal dismissal up to actual reinstatement.

ALIPIO R. RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME BARBIN,
NICANOR FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING ENTERPRISES and/or
ARSENIO DE GUZMAN, respondents.
G.R. No. L-72654-61 January 22, 1990
Facts: Petitioners were the fishermen-crew members of one of several fishing vessels owned and operated by private
respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port and office at
Camarines Sur. Petitioners rendered service aboard said fishing vessel in various capacities, as follows: Alipio Ruga
and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second engineer; Jaime Barbin,
master fisherman; Nicanor Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin, fishermen.
For services rendered in the conduct of private respondent's regular business of "trawl" fishing, petitioners were paid
on percentage commission basis in cash by one Mrs. Pilar de Guzman, cashier of private respondent. As agreed upon,
they received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the total proceeds exceeded the cost
of crude oil consumed during the fishing trip, otherwise, they received ten percent (10%) of the total proceeds of the
sale. The patron/pilot, chief engineer and master fisherman received a minimum income of P350.00 per week while
the assistant engineer, second fisherman, and fisherman-winchman received a minimum income of P260.00 per
week.
On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzman, president of private
respondent, to proceed to the police station at Camaligan, Camarines Sur, for investigation on the report that they
sold some of their fish-catch at midsea to the prejudice of private respondent. Petitioners denied the charge claiming
that the same was a countermove to their having formed a labor union and becoming members of Defender of
Industrial Agricultural Labor Organizations and General Workers Union (DIALOGWU).
On September 22, 1983, petitioners individually filed their complaints for illegal dismissal and non-payment of 13th
month pay, emergency cost of living allowance and service incentive pay, with the then Ministry (now Department) of
Labor and Employment.
Private respondent, thru its operations manager, Conrado S. de Guzman, submitted its position paper denying the
employer-employee relationship between private respondent and petitioners on the theory that private respondent
and petitioners were engaged in a joint venture.
After the parties failed to reach an amicable settlement, the Labor Arbiter scheduled the case for joint hearing
furnishing the parties with notice and summons. After two (2) previously scheduled joint hearings were postponed
due to the absence of private respondent, one of the petitioners herein, Alipio Ruga, the pilot/captain of the 7/B
Sandyman II, testified, among others, on the manner the fishing operations were conducted, mode of payment of
compensation for services rendered by the fishermen-crew members, and the circumstances leading to their
dismissal.

After the case was submitted for resolution, Labor Arbiter Asisclo S. Coralde rendered a joint decision dismissing all
the complaints of petitioners on a finding that a "joint fishing venture" and not one of employer-employee
relationship existed between private respondent and petitioners.
From the adverse decision against them, petitioners appealed to the National Labor Relations Commission. The
National Labor Relations Commission promulgated its resolution affirming the decision of the labor arbiter that a
"joint fishing venture" relationship existed between private respondent and petitioners.
Issue: Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are employees of its
owner-operator, De Guzman Fishing Enterprises, and if so, whether or not they were illegally dismissed from their
employment.
Held: Petition is granted.
We have consistently ruled that in determining the existence of an employer-employee relationship, the elements that
are generally considered are the following (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means
and methods by which the work is to be accomplished. The employment relation arises from contract of hire, express
or implied. In the absence of hiring, no actual employer-employee relation could exist.
From the four (4) elements mentioned, We have generally relied on the so-called right-of-control test where the
person for whom the services are performed reserves a right to control not only the end to be achieved but also the
means to be used in reaching such end. The test calls merely for the existence of the right to control the manner of
doing the work, not the actual exercise of the right.
The case of Pajarillo vs. SSS, supra, invoked by the public respondent as authority for the ruling that a "joint fishing
venture" existed between private respondent and petitioners is not applicable in the instant case. There is neither
light of control nor actual exercise of such right on the part of the boat-owners in the Pajarillo case, where the Court
found that the pilots therein are not under the order of the boat-owners as regards their employment; that they go out
to sea not upon directions of the boat-owners, but upon their own volition as to when, how long and where to go
fishing; that the boat-owners do not in any way control the crew-members with whom the former have no
relationship whatsoever; that they simply join every trip for which the pilots allow them, without any reference to the
owners of the vessel; and that they only share in their own catch produced by their own efforts.
The aforementioned circumstances obtaining in Pajarillo case do not exist in the instant case. The conduct of the
fishing operations was undisputably shown by the testimony of Alipio Ruga, the patron/pilot of 7/B Sandyman II, to
be under the control and supervision of private respondent's operations manager. Matters dealing on the fixing of the
schedule of the fishing trip and the time to return to the fishing port were shown to be the prerogative of private
respondent. While performing the fishing operations, petitioners received instructions via a single-side band radio
from private respondent's operations manager who called the patron/pilot in the morning. They are told to report
their activities, their position, and the number of tubes of fish-catch in one day. Clearly thus, the conduct of the
fishing operations was monitored by private respondent thru the patron/pilot of 7/B Sandyman II who is responsible
for disseminating the instructions to the crew members.

Private respondent is ordered to reinstate petitioners to their former positions or any equivalent positions with 3-year
backwages and other monetary benefits under the law. No pronouncement as to costs.

PERPETUAL HELP CREDIT COOPERATIVE, INC., petitioner, vs. BENEDICTO FABURADA, SISINITA
VILLAR, IMELDA TAMAYO, HAROLD CATIPAY, and the NATIONAL LABOR RELATIONS
COMMISSION, Fourth Division, Cebu City, respondents.
G.R. No. 121948. October 8, 2001
Facts: Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay, private respondents, filed a complaint
against the Perpetual Help Credit Cooperative, Inc. (PHCCI), petitioner, with the Arbitration Branch, Department of
Labor and Employment (DOLE) for illegal dismissal, premium pay on holidays and rest days, separation pay, wage
differential, moral damages, and attorneys fees.
Forthwith, petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no employeremployee relationship between them as private respondents are all members and co-owners of the
cooperative. Furthermore, private respondents have not exhausted the remedies provided in the cooperative by-laws.
Petitioner filed a supplemental motion to dismiss alleging that Article 121 of R.A. No. 6939, otherwise known as the
Cooperative Development Authority Law which took effect on March 26, 1990, requires conciliation or mediation
within the cooperative before a resort to judicial proceeding. The Labor Arbiter denied petitioner's motion to dismiss,
holding that the case is impressed with employer-employee relationship and that the law on cooperatives is
subservient to the Labor Code.
The Labor Arbiter rendered a decision declaring complainants were illegally dismissed, thus respondent is directed to
pay Complainants backwages computed from the time they were illegally dismissed up to the actual reinstatement but
subject to the three year backwages rule, separation pay for one month for every year of service since reinstatement is
evidently not feasible anymore, to pay complainants 13th month pay, wage differentials and Ten Percent (10%)
attorneys fees from the aggregate monetary award.
On appeal, the NLRC affirmed the Labor Arbiter's decision.
Hence, this petition by the PHCCI.
Issue: Whether or not respondent judge committed grave abuse of discretion in ruling that there is an employeremployee relationship between the parties and that private respondents were illegally dismissed.
Held: Petition is denied.
In determining the existence of an employer-employee relationship, the following elements are considered: (1) the
selection and engagement of the worker or the power to hire; (2) the power to dismiss; (3) the payment of wages by
whatever means; and (4) the power to control the workers conduct, with the latter assuming primacy in the overall
consideration. No particular form of proof is required to prove the existence of an employer-employee
relationship. Any competent and relevant evidence may show the relationship.

The above elements are present here. Petitioner PHCCI, through Mr. Edilberto Lantaca, Jr., its Manager, hired
private respondents to work for it. They worked regularly on regular working hours, were assigned specific duties,
were paid regular wages and made to accomplish daily time records just like any other regular employee. They worked
under the supervision of the cooperative manager. Necessarily, this leads us to the issue of whether or not private
respondents are regular employees. Article 280 of the Labor Code provides for three kinds of employees: (1) regular
employees or those who have been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; (2) project employees or those whose employment has been fixed for a specific
project or undertaking, the completion or termination of which has been determined at the time of the engagement of
the employee or where the work or service to be performed is seasonal in nature and the employment is for the
duration of the season; and (3) casual employees or those who are neither regular nor project employees. The
employees who are deemed regular are: (a) those who have been engaged to perform activities which are usually
necessary or desirable in the usual trade or business of the employer; and (b) those casual employees who have
rendered at least one (1) year of service, whether such service is continuous or broken, with respect to the activity in
which they are employed. Undeniably, private respondents were rendering services necessary to the day-to-day
operations of petitioner PHCCI. This fact alone qualified them as regular employees.
All of them, except Harold D. Catipay, worked with petitioner for more than one (1) year. That Benedicto Faburada
worked only on a part-time basis, does not mean that he is not a regular employee. Ones regularity of employment is
not determined by the number of hours one works but by the nature and by the length of time one has been in that
particular job. As regular employees or workers, private respondents are entitled to security of tenure. Thus, their
services may be terminated only for a valid cause, with observance of due process.
The valid causes are categorized into two groups: the just causes under Articles 282 of the Labor Code and the
authorized causes under Articles 283 and 284 of the same Code. The just causes are: (1) serious misconduct or willful
disobedience of lawful orders in connection with the employees work; (2) gross or habitual neglect of duties; (3) fraud
or willful breach of trust; (4) commission of a crime or an offense against the person of the employer or his immediate
family member or representative; and, analogous cases. The authorized causes are: (1) the installation of labor-saving
devices; (2) redundancy; (3) retrenchment to prevent losses; and (4) closing or cessation of operations of the
establishment or undertaking, unless the closing is for the purpose of circumventing the provisions of law. Article 284
provides that an employer would be authorized to terminate the services of an employee found to be suffering from
any disease if the employees continued employment is prohibited by law or is prejudicial to his health or to the health
of his fellow employees. Private respondents were dismissed not for any of the above causes. They were dismissed
because petitioner considered them to be mere voluntary workers, being its members, and as such work at its
pleasure.
Procedural due process requires that the employer serve the employees to be dismissed two (2) written notices
before the termination of their employment is effected: (a) the first, to apprise them of the particular acts or
omissions for which their dismissal is sought and (b) the second, to inform them of the decision of the employer that
they are being dismissed. In this case, only one notice was served upon private respondents by petitioner. It was in
the form of a Memorandum signed by the Manager of the Cooperative dated January 2, 1990 terminating their
services effective December 29, 1989. Clearly, petitioner failed to comply with the twin requisites of a valid notice.

Petitioner contends that the labor arbiter has no jurisdiction to take cognizance of the complaint of private
respondents considering that they failed to submit their dispute to the grievance machinery as required by P.D 175
(strengthening the Cooperative Movement). As aptly stated by the Solicitor General in his comment, P.D. 175 does not
provide for a grievance machinery where a dispute or claim may first be submitted.
There is no evidence that private respondents are members of petitioner PHCCI and even if they are, the dispute
is about payment of wages, overtime pay, rest day and termination of employment. Under Art. 217 of the Labor Code,
these disputes are within the original and exclusive jurisdiction of the Labor Arbiter.