Labor Law 1

LAPANDAY AGRICULTURAL DEVELOPMENT

CORPORATION V CA (and COMMANDO SECURITY
SERVICE AGENCY, INC.)
GONZAGA-REYES; January 31, 2000
NATURE
Petition for Review on Certiorari of the decision of the CA which affirmed the decision of
the RTC.
FACTS
- In June 1986 private respondent and plaintiff entered into a Guard Service Contract.
Respondent provided security guards in defendant's banana plantation. The contract
called for the payment to a guard of P754.28 on a daily 8-hour basis and an additional
P565.72 for a four hour overtime while the shift-in-charge was to be paid P811.40 on a
daily 8-hour basis and P808.60 for the 4-hour overtime.
- Wage Orders increasing the minimum wage in 1983 were complied with by the
defendant. On June 16, 1984, Wage Order No. 5 was promulgated directing an increase
of P3.00 per day on the minimum wage of workers in the private sector and a P5.00
increase on the ECOLA. This was followed on November 1, 1984 by Wage Order No. 6
which further increased said minimum wage by P3.00 on the ECOLA. Both Wage Orders
contain the following provision:
"In the case of contract for construction projects and for security, janitorial and similar
services, the increase in the minimum wage and allowances rates of the workers shall
be borne by the principal or client of the construction/service contractor and the
contracts shall be deemed amended accordingly, subject to the provisions of Sec. 3 (b)
of this order" (Sec. 6 and Sec. 9, Wage Orders No. 5 and 6, respectively).
- Respondent demanded that its Guard Service Contract with defendant be upgraded in
compliance with Wage Order Nos. 5 and 6. Plaintiff refused. Their Contract expired on
June 6, 1986 without the rate adjustment called for Wage Order Nos. 5 and 6 being
implemented. By the time of the filing of respondent's Complaint, the rate adjustment
payable by defendant amounted to P462,346.25. Plaintiff opposed the Complaint.
- The trial court decided in favor of the respondent. Plaintiffs MOR was denied, hence this
petition.
ISSUES
1. WON RTC has jurisdiction over the case
2. WON petitioner is liable to the private respondent for the wage adjustments provided
under Wage Order Nos. 5 and 6 and for attorney's fees
HELD
1. YES
- The enforcement of the written contract does not fall under the jurisdiction of the NLRC
because the money claims involved therein did not arise from employer-employee
relations between the parties and is intrinsically a civil dispute. Thus, jurisdiction lies with
the regular courts. The RTC has jurisdiction over the subject matter of the present case. It
is well settled in law and jurisprudence that where no employer-employee relationship
exists between the parties and no issue is involved which may be resolved by reference to
the Labor Code, other labor statutes or any collective bargaining agreement, it is the
Regional Trial Court that has jurisdiction. In its complaint, private respondent is not
seeking any relief under the Labor Code but seeks payment of a sum of money and
damages on account of petitioner's alleged breach of its obligation under their Guard
Service Contract. The action is within the realm of civil law hence jurisdiction over the case
belongs to the regular courts. While the resolution of the issue involves the application of
labor laws, reference to the labor code was only for the determination of the solidary
liability of the petitioner to the respondent where no employer-employee relation exists.
Article 217 of the Labor Code as amended vests upon the labor arbiters exclusive original
jurisdiction only over the following:
1.
Unfair labor practices;
2.
Termination disputes;
3.
If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
4.
Claims for actual, moral exemplary and other form of damages arising
from employer-employee relations;
5.
Cases arising from any violation of Article 264 of this Code, including
questions involving legality of strikes and lockouts; and
6.
Except claims for Employees Compensation, Social Security, Medicare
and maternity benefits, all other claims, arising from employer-employee
relations, including those of persons in domestic or household service, involving
an amount exceeding five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.

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- In all these cases, an employer-employee relationship is an indispensable jurisdictional

requisite; and there is none in this case.
2. Private respondent admits that there is no employer-employee relationship between it
and the petitioner. The private respondent is an independent/job contractor 1 who assigned
security guards at the petitioner's premises for a stipulated amount per guard per month.
The Contract of Security Services expressly stipulated that the security guards are
employees of the Agency and not of the petitioner. Articles 106 and 107 of the Labor Code
provides the rule governing the payment of wages of employees in the event that the
contractor fails to pay such wages1.
- It will be seen from the above provisions that the principal (petitioner) and the contractor
(respondent) are jointly and severally liable to the employees for their wages. This Court
held in Eagle Security, Inc. vs. NLRC and Spartan Security and Detective Agency, Inc. vs.
NLRC that the joint and several liability of the contractor and the principal is mandated by
the Labor Code to assure compliance with the provisions therein including the minimum
wage. The contractor is made liable by virtue of his status as direct employer. The
principal, on the other hand, is made the indirect employer of the contractor's employees
to secure payment of their wages should the contractor be unable to pay them. Even in
the absence of an employer-employee relationship, the law itself establishes one between
the principal and the employees of the agency for a limited purpose i.e. in order to ensure
that the employees are paid the wages due them. In the above-mentioned cases, the
solidary liability of the principal and contractor was held to apply to the aforementioned
Wage Order Nos. 5 and 6. In ruling that under the Wage Orders, existing security guard
services contracts are amended to allow adjustment of the consideration in order to cover
payment of mandated increases, and that the principal is ultimately liable for the said
increases.
- It is clear that it is only when contractor pays the increases mandated that it can claim an
adjustment from the principal to cover the increases payable to the security guards. The
conclusion that the right of the contractor (as principal debtor) to recover from the principal
as solidary co-debtor) arises only if he has paid the amounts for which both of them are
jointly and severally liable is in line with Article 12172 of the Civil Code.
- The right of reimbursement from a co-debtor is recognized in favor of the one who paid.
The liability of the petitioner to reimburse the respondent only arises if and when
respondent actually pays its employees the increases granted by Wage Order Nos. 5 and
6. Payment, which means not only the delivery of money but also the performance, in any
other manner, of the obligation,is the operative fact which will entitle either of the solidary
debtors to seek reimbursement for the share which corresponds to each of the debtors.
- It is not disputed that the private respondent has not actually paid the security guards the
wage increases granted under the Wage Orders in question. Neither is it alleged that there
is an extant claim for such wage adjustments from the security guards concerned, whose
services have already been terminated by the contractor. Accordingly, private respondent
has no cause of action against petitioner to recover the wage increases. Needless to
stress, the increases in wages are intended for the benefit of the laborers and the
contractor may not assert a claim against the principal for salary wage adjustments that it
has not actually paid. Otherwise, as correctly put by the respondent, the contractor would
be unduly enriching itself by recovering wage increases, for its own benefit.
- Finally, considering that the private respondent has no cause of action against the
petitioner, private respondent is not entitled to attorney's fees.
Disposition Petition GRANTED. The decision of the CA REVERSED and SET ASIDE.
The complaint of private respondent COMMANDO SECURITY SERVICE AGENCY, INC.
is hereby DISMISSED.

ANINO V NLRC
PANGANIBAN; May 21, 1998
NATURE
Special Civil Action in the Supreme Court. Certiorari.
FACTS
1

Art. 106. Contractor or sub contractor. Whenever an employer enters into a contract with another person for the
performance of the former's work, the employees of the contractor and of the latter's subcontractor, if any, shall be
paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this
Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent that he is liable to employees
directly employed by him.
Art. 107. Indirect employer. The provisions of the immediately preceding Article shall likewise apply to any person,
partnership, association or corporation which, not being an employer, contracts with an independent contractor for
the performance of any work, task, job or project.

Art. 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary
debtors offer to pay, the creditor may choose which offer to accept.
He who made payment may claim from his codebtors only the share which corresponds to each, with interest for
the payment already made. If the payment is made before the debt is due, no interest for the intervening period
may be demanded. . . .

Labor Law 1
- Complainants are supervisors of Hinatuan Mining Corporation (HMC) who planned the
formation of a supervisors union. The HINATUAN MINING SUPERVISORY UNION was
formally organized and registered with the DOLE. Complainants Anino, Navarro, Daugdaug and Filoteo were elected officers, while complainants Baladja and Ceredon were
active members of the union.
- On 3 November 1993, HIMSU formally notified the company of its legal existence
through a letter addressed to HMC President Zamora. It informed the company of its
desire for a collective bargaining agreement and submitted its proposals under letter dated
16 November 1993, which again was addressed to Zamora, VP-Operation Ganigan and
VP-Finance Nacorda. However, the company ignored these proposals.
- Union filed an unfair labor practice case against HMC on 13 May 1994.
- HMC dismissed the complainants under letter dated 16 June 1994.
- Labor Arbiter Legaspi held that the services of petitioners were illegally terminated,
ordered their reinstatement and the grant of back wages and attorneys fees equivalent to
10% of monetary award; that there was no positive showing that petitioners were
retrenched purposely to weaken or destroy their union; hence, claim of unfair labor
practice was dismissed. Likewise, claim for damages was denied since no fraud or bad
faith was committed by private respondents in dismissing them.
- NLRC reversed Legaspis ruling, rejected all petitioners claims and questioned
complainants actuations considering that they only challenged 2 months after dismissal
and after receiving separation pay. It also took judicial notice of the economic difficulties
suffered by the mining industry.
Petitioners Claim
- Dismissal was done with malicious intent to cause them and the union damage for their
exercise of the right to self-organization, in defiance of Labor Code Art. 248. Complainants
pray that respondents be: (a) declared guilty of unfair labor practices; (b) ordered to
reinstate complainants to their former positions with backwages and to pay complainants
jointly and severally the amount of P150k, as moral damages and litigation and attorney's
fees, respectively.
Respondents Comments
- Retrenchment was a management prerogative implemented in order to prevent further
losses. It affected rank-and-file, supervisors and managerial staffs and was done with due
notice to take effect 30 days from receipt thereof.
- Complainants had accepted separation pay equivalent to 1 month pay for every year of
service plus other monetary benefits, and complainants executed a waiver and quitclaim
for value received.
- Complaint was an afterthought in order to give semblance of credence to their
position/opposition to conduct a certification election, as manifested by complainants
counsel declaration in open court that they were still filing a new complaint for unfair labor
practice (this case)
ISSUES
1. WON the NLRC committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it absolved respondents from their duty to prove losses as a just ground
for retrenchment
2. WON the NLRC exceeded its jurisdiction in recognizing the waivers/quitclaims executed
by petitioners as an effective bar to this complaint
3. WON the NLRC abused its discretion when it ordered the dismissal of the instant
complaint and totally disregarded the labor arbiters findings of facts and petitioners
motion for execution
HELD
1. YES
Ratio To justify retrenchment, the following requisites must be complied with: (a) the
losses expected should be substantial and not merely de minimis in extent; (b) the
substantial losses apprehended must be reasonably imminent; (c) the retrenchment must
be reasonably necessary and likely to effectively prevent the expected losses; and (d) the
alleged losses, if already incurred, and the expected imminent losses sought to be
forestalled must be proved by sufficient and convincing evidence.
Reasoning
- In termination cases, the burden of proving that the dismissal was for a valid or
authorized cause rests upon the employer.
- HMC merely claimed that retrenchment was undertaken to prevent losses due to the
continuing decline of nickel prices and export volume in the mining industry. Additionally, it
alleged that the reduction of excise taxes on mining from 5% to 1% on a graduated basis,
as provided under RA. 7729, was a clear recognition by the government itself of the
industry's worsening economic difficulties. These bare statements miserably fall short of
the requirements to show the validity of a retrenchment
- Even if, arguendo, the contentions of HMC are accepted at face value, they still fail to
satisfy the jurisprudential requirements that further or expected losses must be substantial
and reasonably imminent; and the dismissal of employees, reasonably necessary and
likely to be effective in preventing the expected losses.
2. YES
Ratio The acceptance of termination pay does not divest a laborer of the right to
prosecute his employer for unfair labor practice acts.

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Reasoning
- Quitclaims and/or complete releases are against public policy and, therefore, null and
void.
- Employer and employee do not stand on the same footing. The employer drove the
employee to the wall. The latter must have to get hold of money. Because, out of job, he
had to face the harsh necessities of life. He thus found himself in no position to resist
money proffered. His, then, is a case of adherence, not of choice.
3. YES
Ratio A decision should faithfully comply with Sec. 14, Art. VIII of the Constitution. (No
decision shall be rendered by any court [or quasi-judicial body] without expressing therein
clearly and distinctly the facts of the case and the law on which it is based.)
Reasoning
- The NLRC was definitely wanting in the observance of the constitutional requirement. It
merely raised a doubt on the motive of the complaining employees and took "judicial
notice that in one area of Mindanao, the mining industry suffered economic difficulties."
- The factual and legal bases of public respondent's conclusions were bereft of substantial
evidence the quantum of proof in labor cases its disposition is manifestly a violation
of the constitutional mandate and an exercise of grave abuse of discretion. Such decision
is a nullity.
Disposition Petition granted; challenged NLRC Decision set aside. Decision of Legaspi
is reinstated except that Ganigan is not liable for petitioners monetary claims. HMC
ordered to pay separation benefits.
NOTES
- On reinstatement: If reinstatement to former position, or one substantially equivalent
thereto, is not feasible anymore, the employees are entitled to the grant of separation pay
and full back wages. Separation pay shall be equivalent to at least 1 month salary or 1
month salary for every year of service, whichever is higher, a fraction of 6 months being
considered as 1 whole year. It shall be computed from the date the petitioners were
employed by private respondent until this Decision becomes final and executory.
- On liability of Vice President: While the president of the erring company may be held
jointly and severally liable for the obligations of the latter to its dismissed employees, such
solidary liability does not extend to the vice president of the company. Absent any proof of
the extent of the participation of the VP in the formulation and the implementation of
management policies and programs, he cannot be held financially liable for the illegal
dismissal of employees.

GUSTILO V WYETH PHILIPPINES INC.

SANDOVAL-GUTIERREZ; October 4, 2004
FACTS
- Gustilo was employed by Wyeth Phils Inc. as a pharmaceutical territory manager.
- He was in-charge of the various branches in Metro Bacolod City and Negros Occidental.
- Among his tasks were visiting hospitals, pharmacies, drugstores and physicians;
preparing and submitting his pre-dated itinerary; and submitting periodic reports of his
daily call visits, monthly itinerary and weekly locator and incurred expenses.
- His employment records show that on various dates, Wyeth reprimanded and suspended
him for habitually neglecting to submit his periodic reports.
> Nov. 28, 1994- W sent a notice reprimanding G for the late submission of weekly
expense report
> July 5, 1995- late submission of same report so W suspended him for 5 days
> Oct 16 to 20, 23-27, Nov 6-10, 13-17, (all 1995)- late submission of his daily call
reports
> Nov 20-24, 1995- didnt submit his daily call reports so W suspended him for 15 days.
- Wyeth put Gustilo in charge of promoting 4 Lederle (Ws sister company)
pharmaceutical products. G then submitted to W a plan of action where G committed to
make an ave of 18 daily calls to physicians; submit promptly all periodic reports; and
ensure 95% territory program performance for every cycle.
- Gustilo failed to achieve his objectives so W sent him 2 notices charging him with willful
violation of company rules and regulations and directed him to submit a written
explanation.
- G explained that he was overworked and an object of reprisal by his immediate
supervisor, Filemon Verzano Jr.
- Wyeth, upon the recommendation of a review panel, terminated Gustilos services.
- G then filed with the Regional Arbiter Br. No. 6 in Bacolod City a complaint against W for
illegal suspension, illegal dismissal and payment for allowances, other monetary benefits,
damages and attys fees.
- The Labor Arbiter found that G was illegally dismissed from employment and ordered W
and Verzano to pay G jointly and severally Php 991,157.90 representing backwages,
separation pay, car reimbursement, damages and attys fees.
- W appealed to the NLRC in Cebu City
- NLRC- affirmed but modified the Labor Arbiters decision- ordered reinstatement of G, or
in lieu of reinstatement, pay his separation benefits.

Labor Law 1
- Ws MR was denied so they filed with the CA a petition for Certiorari and TRO and a writ
of preliminary injunction.
- CA- reversed NLRCs decision and dismissed Gs complaint for illegal dismissal (as G
was terminated based on A282 of the LC-gross and habitual neglect by the employee of
his duties) but awarded him separation pay considering the mitigating factors of length of
service, loyalty awards G received and Verzanos grudge against G.
- G filed an MR but was denied.
ISSUE
WON GUSTILO is entitled to his separation pay
HELD
NO, Gustilo isnt entitled to his SP OR to reinstatement as there was a just cause for
dismissal.
Reasoning
- Phil Journalists Inc v Mosqueda- SC ruled that the findings of the CA are conclusive
on the parties and not reviewable by this Court
- Family Planning Org of the Phils Inc v NLRC SC held that it is the employers
prerogative to prescribe reasonable rules and regulations necessary or proper for the
conduct of its business or concern to provide certain disciplinary measures to implement
said rules and to assure that the same be complied with. At the same time, it is one of the
fundamental duties of the employee to yield obedience to all reasonable rules, orders, and
instructions of the employer, and willful or intentional disobedience thereof, as a general
rule, justifies rescission of the contract of service and the preemptory dismissal of the
employee."
- Piedad v Lanao del Norte Electric Cooperative, Inc.- a series of irregularities when
put together may constitute serious misconduct, which under A282 of the LC, as
amended, is a just cause for dismissal.
- The rule embodied in the Omnibus Rules Implementing the Labor Code is that a person
dismissed for cause as defined therein is not entitled to separation pay.
- PLDT v NLRC and Abucay, "x x x henceforth, separation pay shall be allowed as a measure of social justice only
in those instances where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character. Where the reason for
the valid dismissal is, x x x an offense involving moral turpitude x x x, the employer may
not be required to give the dismissed employee separation pay, or financial assistance, or
whatever other name it is called, on the ground of social justice."
- Telefunken Semiconductors Employees Union-FFW v Court of AppealsWe are of course aware that financial assistance may be allowed as a measure of
social justice in exceptional circumstances and as an equitable concession. We are
likewise mindful that financial assistance is allowed only in those instances where
the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character (Zenco Sales, Inc. vs. National Labor Relations
Commission, 234 SCRA 689). x x x."
- In the case at bar, there is NO exceptional circumstances to warrant the grant of
financial assistance or separation pay to petitioner.
G did not only violate company disciplinary rules and regulations. He falsified his
employment application form by not stating therein that he is the nephew of Mr.
Danao, respondent Wyeths Nutritional Territory Manager.
- G manifested his slack of moral principle through his infractions. In simple term,
he is dishonest.
- Philippine Long Distance Telephone vs. NLRC and Abucay- [T]hose who invoke
social justice may do so only if their hands are clean and their motives blameless x x x."
Here, petitioner failed to measure up to such requirement.
Disposition Petition is DENIED
***Wyeth did not interpose an appeal to this Court. Hence, no affirmative relief can be
extended to it. So it has to comply with the CAs decision to grant G his SP.

VALIAO V CA
QUISUMBING; July 30, 2004
NATURE
Petition for review on certiorari of the decision and resolution of the Court of Appeals
FACTS
- Petitioner Valiao was appointed by private respondent West Negros College (WNC) as
Student Affairs Office (SAO) Director, with a starting salary of P2,800 per month.
Subsequently, he was assigned as Acting Director, Alumni Affairs Offfice. He was
transferred to staff position and designated as Records Chief at the Registrars Office but
was again re-assigned as a typist. The latest reassignment was due to his tardiness and
absences, as reflected in the summary of tardiness and absences report, which showed
him to have been absent or late for work from a minimum of seven to maximum of 75

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minutes for the period March to October 31, 1991 and to have reported late almost every
day for the period November to December 1991.
- Copies of his tardiness/absences reports were furnished petitioner, along with
memoranda requiring him to explain but his explanations were either unacceptable or
unsatisfactory. Subsequently, reports also showed that he did not change his habits
resulting in tardiness and absences. He was even caught one time manipulating the bundy
clock, thus necessitating another memorandum to him asking him to explain his dishonest
actuations in accomplishing the daily attendance logbook and in using the bundy clock. He
received a suspension order without pay for fifteen days because of dishonesty in
reporting his actual attendance. He reported back to office after serving the suspension
but was another adverse report on tardiness and absences was made against the
petitioner, prompting WNC to send him another memorandum with an attached tardiness
and absences report. Petitioner sent a letter of appeal and explained his side to the new
college president who gave petitioner another chance. The petitioner was appointed as
Information Assistant effective immediately. However, petitioner did not promptly assume
his post, prompting the president to call his attention.
- Subsequently, WNC won a case against the official of the union before the NLRC.
Petitioner was ordered to prepare a media blitz of this victory but the petitioner did not
comply with the order on the ground that such a press release would only worsen the
aggravated situation and strained relations between WNC management and the union
officials. When petitioner reported for work on the first day of January 1993, he was
relieved from his post and transferred to the College of Liberal Arts as Records Evaluator.
Not for long, the Dean of the Liberal Arts sent a letter to the Human Resources Manager
complaining about the petitioners poor performance and habitual absenteeism as shown
in the daily absence reports.
- On January 18, 1993, petitioner was again absent from work without permission or notice
to his immediate superior. It turned out that he went to Bacolod City and on January 28,
1993, the petitioner was one of those arrested during a raid in the house of Toto Ruiz, a
suspected drug pusher and was brought to the Bacolod Police Station along with four
other suspects. The petitioner and other suspects were then charged with violation of the
Dangerous Drugs Act of 1972.
- Petitioner was asked to explain within 24 hours why he should not be terminated as a
result of the raid and charged against him for violation of RA No. 6425 as amended.
Petitioner was dismissed for failure to answer said memorandum. Subsequently, he wrote
to the president of WNC explaining his side and asking for due process. The petitioner
was notified through a memorandum about the grant of his request and that a hearing
would be conducted. He was then placed under preventive suspension and an
investigation committee was organized to conduct the probe. A notice of
hearing/investigation was sent to the petitioner.
- After the investigation attended by the petitioner and his counsel, with proceedings duly
recorded, the investigation committee recommended the dismissal of petitioner. A notice of
termination was then sent to petitioner informing him of his termination from the service for
serious misconduct and gross and habitual neglect of duty. The petitioner received the
notice but did not file a grievance concerning the notice of termination.
- Petitioner filed a complaint against WNC for illegal suspension, illegal dismissal
backwages, salary differential for salary increases and other benefits granted after his
dismissal as well as for moral and exemplary damages and attorneys fees. After due
proceedings, the Labor Arbiter found no justifiable reason to place the petitioner under
preventive suspension as there was no serious or imminent threat to the life or property of
his coworkers. However, the Labor Arbiter found the dismissal of the petitioner to be valid
due to absenteeism and tardiness and after he was accorded the procedural due process
aspect of the law as reflected in the records showing that petitioner was formally
investigated and given the opportunity to refute the alleged findings by the management of
WNC. The Labor Arbiter held that frequent absenteeism and tardiness of the petitioner
constituted not only willful disobedience but also gross and habitual neglect of duties,
which are valid grounds for termination of employment. He stressed that petitioners
frequent absences without proper leave of absence was not only unfair to WNC and the
petitioners co-employees but also set an undesirable example to the employees under his
supervision, considering that the petitioner was not a mere rank-and-file employee but one
who owed more than the usual fealty to the organization.
- On appeal to the NLRC, the latter affirmed the decision of the Labor Arbiter, sustained
the latters findings of facts, and made its own findings of the apprehension of the
petitioner for possession of prohibited drugs. Petitioner then filed a Petition for Certiorari
under Rule 65 before the CA but this was dismissed for lack of merit. Petitioner duly filed a
Motion for Reconsideration, which was denied by the CA.
ISSUE
WON petitioner was validly dismissed from employment on the ground of serious
misconduct and gross habitual neglect of duties, including habitual tardiness and
absenteeism
HELD
YES

Labor Law 1
- So irresponsible an employee like petitioner does not deserve a place in the workplace,
and it is within the managements prerogative of WNC to terminate his employment. Even
as the law is solicitous of the welfare of employees, it must also protect the rights of an
employer to exercise what are clearly management prerogatives. As long as the
companys exercise of those rights and prerogatives is in good faith to advance its interest
and not for the purpose of defeating or circumventing the rights of employees under the
laws or valid agreements, such exercise will be upheld.
Disposition Assailed decision and resolution affirmed with modification.

PERIQUET V NLRC
CRUZ; June 22, 1990
NATURE
Petition to review the decision of the NLRC
FACTS
- The petitioner, Corazon Periquet, was dismissed as toll collector by the Construction
Development Corporation of the Philippines (CDCP), private respondent herein, for willful
breach of trust and unauthorized possession of accountable toll tickets allegedly found in
her purse during a surprise inspection.
- She filed a complaint for illegal dismissal claiming that she was framed
- Said complaint was sustained by the labor arbiter, who ordered her reinstatement within
ten days "without loss of seniority rights and other privileges and with full back wages to
be computed from the date of her actual dismissal up to date of her actual reinstatement.
- On appeal, the order was affirmed by the NLRC on August 29, 1980.
- On March 11, 1989, almost nine years later, the petitioner filed a motion for the
issuance of a writ of execution of the decision, which was granted by the executive labor
arbiter in an order dated June 26, 1989, requiring payment to the petitioner of the sum of
P205,207.42 "by way of implementing the balance of the judgment amount" due from the
private respondent.
- Said amount was garnished by the NLRC sheriff.
- On September 11, 1989, however, the NLRC sustained the appeal of the CDCP and set
aside the order dated June 20, 1989, the corresponding writ of execution of June 26,
1989, and the notice of garnishment.
- In its decision, the public respondent held that the motion for execution was time-barred,
having been filed beyond the five-year period prescribed by both the Rules of Court and
the Labor Code.
- It also rejected the petitioner's claim that she had not been reinstated on time and ruled
as valid the two quitclaims she had signed waiving her right to reinstatement and
acknowledging settlement in full of her back wages and other benefits. (Facts
relating to quitclaims italicized in reasoning)
- The petitioner contends that this decision is tainted with grave abuse of discretion and
asks for its reversal.
ISSUE
WON the NLRC committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it held that the motion for execution was time-barred, and ruled as valid
the two quitclaims petitioner had signed
HELD
NO
On prescription
- Sec. 6, Rule 39 of the Revised Rules of Court, provides: A judgment may be executed on
motion within five (5) years from the date of its entry or from the date it becomes final and
executory. After the lapse of such time, and before it is barred by the statute of limitations,
a judgment may be enforced by action.
- A similar provision is found in Art. 224 of the Labor Code, as amended by RA 6715, viz.
ART. 224. Execution of decision, orders, awards. (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter or MedArbiter, or the Voluntary Arbitrator may, motu propio, or on motion of any interested party,
issue a writ of execution on a judgment within five (5) years from the date it becomes final
and executory, requiring a sheriff or a duly deputized officer to execute or enforce a final
decision, order or award.
- Periquet insists it was the private respondent that delayed and prevented the execution
of the judgment in her favor, but that is not the way the SC sees it.
- The original decision called for her reinstatement within ten days from receipt thereof
following its affirmance by the NLRC on August 29, 1980, but there is no evidence that she
demanded her reinstatement or that she complained when her demand was rejected.
What appears is that she entered into a compromise agreement with CDCP where
she waived her right to reinstatement and received from the CDCP the sum of
P14,000.00 representing her back wages from the date of her dismissal to the date
of the agreement

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On validity of quitclaims
- After accepting the sum of P14,000.00 from the private respondent and waiving her right
to reinstatement in the compromise agreement, she applied for re-employment with the
CDCP and was on March 16,1987, given the position of xerox machine operator.
- On June 27, 1988; she wrote the new management of the CDCP and asked that the
rights granted her by the decision dated August 29, 1980, be recognized because the
waiver she had signed was invalid
- On September 19, 1988, the Corporate Legal Counsel of the private respondent
recommended the payment to the petitioner of the additional sum of P9,544.00,
representing the balance of her back pay for three years at P654. 00 per month
- On November 10, 1988, the petitioner accepted this additional amount and signed
another Quitclaim and Release
- In her petition she is now disowning both acknowledgments
- Not all waivers and quitclaims are invalid as against public policy. If the agreement
was voluntarily entered into and represents a reasonable settlement, it is binding on
the parties and may not later be disowned simply because of a change of mind. It is
only where there is clear proof that the waiver was wangled from an unsuspecting
or gullible person, or the terms of settlement are unconscionable on its face, that
the law will step in to annul the questionable transaction. But where it is shown that
the person making the waiver did so voluntarily, with full understanding of what he
was doing, and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as a valid and binding undertaking.
Disposition Petition denied

SAROCAM V INTERORIENT MARITIME ENT. INC. AND

DEMACO UNITED LTD.
CALLEJO, SR.; June 27 2006
NATURE
Petition for Review on certiorari under Rule 45 of the ROC of the CA Decision in CA-G.R.
SP No. 84883, which affirmed the February 19, 2004 and April 27, 2004 Resolutions of the
NLRC.
FACTS
- On June 27, 2000 petitioner Benjamin L. Sarocam was hired by Interorient Maritime Ent.,
Inc. and Demaco United Ltd., for a twelve-month contract as bosun on board M/V
Despina.
- While the vessel was navigating to China, petitioner suffered lumbar sprain when he
accidentally fell from a ladder. On Nov.15, 2000, he was examined and found to have
neuromyositis with the waist and diabetes. The examining physician prescribed medicine
and recommended the signing off and hospitalization of petitioner. His employers agreed
to repatriate him on Nov. 30, 2000.
- On Dec. 5, 2000, petitioner was referred to the company-designated physician, Dr.
Pidlaoan. Petitioner was given Alaxan tablet for his back pain and Euglocon for his
elevated blood sugar. He was also advised to return for follow-up evaluation. On Dec. 13,
2000, he returned to the clinic with no more complaints of back pains and his sugar
examination revealed normal results. Petitioner was then declared fit for duty effective on
that
day.
- On March 20, 2001, petitioner executed a release and quitclaim in favor of his employers
where he acknowledged the receipt of US$405.00 as his sickwages and freed his
employers
from
further
liability.
- However, on Nov. 27, 2001, petitioner filed a complaint with the NLRC for disability
benefit, illness allowance/reimbursement of medical expenses, damages and attorneys
fees. To support his claim, he presented medical certificates issued by his 3 personal
doctors, recommending a Grade VIII disability under the POEA schedule of disability
grading.
- On July 11, 2003, Labor Arbiter Macam dismissed the complaint, holding that petitioner
was not entitled to disability benefits because he was declared fit for duty and had
previously executed a release and quitclaim in favor of his employers and already
received his sickness allowance. Petitioners claim for moral damages and attorneys fees
were, likewise, not awarded on the Labor Arbiters ruling that there was no evidence of
bad faith and malice on the part of the employers.
- Upon petitioners appeal, the NLRC issued a Resolution affirming the decision of the
Labor Arbiter, with the modification that petitioner was entitled to US$1,350.00 or its peso
equivalent, representing his salary for three (3) months. The petitioners motion for
reconsideration was denied by the NLRC. The Petition for Certiorari filed with the CA was
dismissed. Petitioners MFR was denied by the CA.
- Petitioner avers that the quitclaim he executed is invalid, as the amount he received as
consideration therefor was much lower than what he should have received under the
POEA Standard Employment Contract. He went on to argue that quitclaims are frowned
upon by this Court as they are contrary to public policy.
ISSUES

Labor Law 1
1. WON the respondents company-designated doctor be considered competent and
reliable enough to declare petitioner as fit to work contrary to the declarations of three (3)
independent physicians similarly finding him otherwise
2. WON the execution by petitioner of a release and quitclaim estop him from claiming
disability benefits under the POEA standard employment contract
HELD
1. YES
- Petitioner did not question the findings of Dr. Pidlaoan and his recommendation. He
questioned the doctors competency and the correctness of his findings only when he filed
the complaint against respondents before the Labor Arbiter, roughly 11 months after
petitioner was examined by the doctor. Petitioner consulted his personal doctors only in
July and August 2001, long after he had been examined by the company-designated
physician.
- Dr. Pidlaoan examined and treated petitioner from the time he was repatriated up to his
recovery and subsequent assessment as fit for duty on December 13, 2000. As in the
German Marine case, the extensive medical attention extended by Dr. Pidlaoan enabled
the latter to acquire familiarity, if not detailed knowledge, of petitioners medical condition.
No doubt such specialized knowledge enabled Dr. Pidlaoan to arrive at a much more
accurate appraisal of petitioners condition, as compared to another physician not privy to
petitioners case from the very beginning. Indeed, the assessment of the three other
personal doctors of petitioner could not have been that reliable considering that they
based their conclusions on the prior findings of Dr. Pidlaoan; moreover, they examined
petitioner 7 or 8 months after he was assessed as fit to work and treated him for only one
day.
- Furthermore and most importantly, petitioner did not question the competency of Dr.
Pidlaoan and his assessment when the latter declared him as fit for duty or fit to work.
- Additionally, petitioner, instead of questioning the assessment of the companydesignated doctor, executed a release and quitclaim in favor of respondents, around three
months after the assessment. In executing the said document, petitioner thus impliedly
admitted the correctness of the assessment of the company-designated physician, and
acknowledged that he could no longer claim for disability benefits.
2. YES
- While petitioner may be correct in stating that quitclaims are frowned upon for being
contrary to public policy, the Court has, likewise, recognized legitimate waivers that
represent a voluntary and reasonable settlement of a workers claim which should be
respected as the law between the parties. Where the person making the waiver has done
so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as being a valid and binding
undertaking.
- In the instant case, petitioner wrote the release and quitclaim with his own hand. From
the document itself, the element of voluntariness in its execution is evident. Petitioner also
appears to have fully understood the contents of the document he was signing, as the
important provision thereof had been relayed to him in Filipino.
- Not all waivers and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding on the parties
and may not later be disowned simply because of a change of mind. It is only where there
is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the
terms of settlement are unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the consideration for the
quitclaim is credible and reasonable, the transaction must be recognized as a valid and
binding undertaking.
- As a final note, let it be emphasized that the constitutional policy to provide full protection
to labor is not meant to be a sword to oppress employers. The commitment of this Court
to the cause of labor does not prevent us from sustaining the employer when it is in the
right.
Disposition Petition is DENIED for lack of merit. The Decision and Resolution of the CA
are AFFIRMED.

PHILIPPINE AIRLINES, INC. V SANTOS

REGALADO; February 4, 1993
NATURE
Petition for certiorari assailng the NLRC decision in favor of the private respondents
(holding that there was illegal suspension, that the respondents be paid their salaries
corresponding to the suspension period, and that disciplinary action from the respondents
service records be deleted)
FACTS
- The private respondents are all Port Stewards in the Catering Sub-Department of the
Passenger Services Department of PAL whose jobs were to prepare meal orders and
checklists, set up standard equipment in accordance with the requirements of the type of

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service for each flight; to ski, bin and make an inventory of Commissary supplies and
equipment.
- On several occasions, deductions were made from their salaries allegedly representing
losses of inventoried items charged to them for mishandling of company properties.
- August 21, 1984: The respondents, through the union, made a formal notice of the
deductions to PAL through the Manager for Catering, Mr. Reynaldo Abad. However, no
action was taken by PAL.
- November 4, 1984: Pursuant to the grievance machinery Step 1 of the CBA between PAL
and the union, respondents filed a formal grievance.
- November 21: The said grievance was submitted to the office of Mr. Abad who was on
leave.
- December 5: Mr. Abad was still on leave, and since in the CBA, Mr. Abad (PAL) was
supposed to resolve the grievance within 5 days, the respondents thru the shop steward
wrote a letter addressed to Mr. Abads office expressing their belief that the grievance was
deemed resolved in their favor
- December 7: Mr. Abad (finally) returned and scheduled a meeting on December 12
- the respondents refused to conduct their inventory works thereafter
- December 12: Mr. Abad and the union had the meeting where the former denied the
petition of the respondents, adopting the position that it was the inventory of goods was
the respondents duty and that the deductions in their salaries were due to the losses in
the mishandling of goods
- Due to the respondents refusal to conduct inventory works in early December, Mr. Abad
issued an inter-office memo asking them to explain why no disciplinary action should be
taken against them. The respondents argued that since their grievance in accordance with
the grievance machinery step 1 of their CBA was not resolved within the 5-day period,
they believed that the grievance was resolved in their favor. Mr. Abad found this reasoning
unsatisfactory, THUS suspending the said respondents.
- the union filed another grievance asking for the lifting of the suspension, but PAL denied
the said lifting, only reducing the suspension period for respondent Ramos.
- the union demanded for the reimbursement of the salaries of individual respondents
during the suspension but PAL denied their demand.
- the respondents filed a complaint for ILLEGAL SUSPENSION before the Arbitration
Branch of the NLRC. Complaint dismissed, rule in favor of PAL
- Respondents appealed to NLRC, NLRC ruled in favor of respondents
- PALs petition for reconsideration denied, hence this case
Petitioners claims (PAL)
- The CBA provision on grievance machinery was established both for the union and the
management (PAL), therefore, should NOT be narrowly interpreted; it is the employees
duty to observe status quo (therefore, cant preempt that the decision is resolved in their
favor); the management should be given chance to present their side since before the 5
day prescriptive period begins to run, there should first be the presentment of grievance
and its discussion
ISSUES
1. WON NLRC acted with grave abuse of discretion amounting to lack of jurisdiction in
setting aside the Arbitration Branchs decision in favor of PAL
2. WON Section 2, Article IV of the PAL-PALEA CBA3 should be narrowly interpreted,
THEREFORE favoring the respondents (the prescriptive period runs after the filing of the
grievance)
HELD
1. NO
- It has not been shown that respondent NLRC has unlawfully neglected the performance
of an act which the law specifically enjoins it to perform as a duty or has otherwise
unlawfully excluded petitioner from the exercise of a right to which it is entitled.
Ratio Judicial review by this Court in labor cases does not go so far as to evaluate the
sufficiency of the evidence upon which the labor officer or office based his or its
determination, but is limited to issues of jurisdiction and grave abuse of discretion
2. YES
- Even if Mr. Abad was on leave when the grievance was filed (and even if the union and
respondents knew that Mr. Abad was on leave), the CBA would still apply since it is hard to
believe that everything under Abad's authority would have to stand still during his absence
from office. To be sure, it is to be expected that someone has to be left to attend to Abad's
duties.

Sec. 2 Processing of Grievances

xxx xxx xxx
STEP 1 Any employee who believes that he has a justifiable grievance shall take the matter up with his shop steward.
If the shop steward feels there is justification for taking the matter up with the Company, he shall record the grievance on
the grievance form heretofore agreed upon by the parties. Two (2) copies of the grievance form properly filled, accepted,
and signed shall then be presented to and discussed by the shop steward with the division head. The division head shall
answer the grievance within five (5) days from the date of presentation by inserting his decision on the grievance form,
signing and dating same, and returning one copy to the shop steward. If the division head fails to act within the five (5)day regl(e)mentary period, the grievance must be resolved in favor of the aggrieved party. If the division head's decision
is not appealed to Step II, the grievance shall be considered settled on the basis of the decision made, and shall not be
eligible for further appeal.

Labor Law 1
Ratio The sympathy of the Court is on the side of the laboring classes, not only because
the Constitution imposes such sympathy, but because of the one-sided relation between
labor and capital. The constitutional mandate for the promotion of labor is as explicit as it is
demanding. The purpose is to place the workingman on an equal plane with management
with all its power and influence in negotiating for the advancement of his interests
and the defense of his rights. Under the policy of social justice, the law bends over
backward to accommodate the interests of the working class on the humane justification
that those with less privileges in life should have more privileges in law. (in short,
interpretation should be made in favor of the laborers)
Reasoning
- The grievance of employees is not a matter which requires the personal act of Mr. Abad
and thus could not be delegated. Petitioner could at least have assigned an officer-incharge to look into the grievance and possibly make his recommendation to Mr. Abad. It is
of no moment that Mr. Abad immediately looked into the grievance upon returning to work,
for it must be remembered that the grievants are workingmen who suffered salary
deductions and who rely so much on their meager income for their daily subsistence and
survival.
- when the respondents first presented their complaint on August 21, the petitioner
(through Mr. Abad) failed to act on it
- if the provision would be interpreted as to allow the management to act on their laborers
complaints after the acting officer returned from a leave then the causes of the
workingmen would be delayed, thus suffering a great injustice. That could not have been
the intendment of the pertinent provision of the CBA, much less the benevolent policy
underlying our labor laws.
Disposition petition is hereby DENIED and the assailed decision of respondent National
Labor Relations Commission is AFFIRMED. This judgment is immediately executory.

CALALANG V WILLIAMS
LAUREL; December 2, 1940
FACTS
- The Secretary of Public Works and Communications (PWC) approved with modification
the recommendation that originated from the National Traffic Commission (NTC), which
was favorably indorsed by the Director of Public Works (PW), that Rosario Street and
Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during
the hours from 7 a.m. to 11 p.m., for a period of one year from the date of the opening of
the Colgante Bridge to traffic; that the Mayor of Manila and the Acting Chief of Police of
Manila have enforced and caused to be enforced the rules and regulations thus adopted;
that as a consequence of such enforcement, all animal drawn vehicles are not allowed to
pass and pick up passengers in the places above-mentioned to the detriment not only of
their owners but of the riding public as well.
- Commonwealth Act No. 548 gives the Director of Public Works, with the approval of the
Secretary of the Public Works and Communications the authority to promulgate rules and
regulations to regulate and control the use of and traffic on national roads.
- Maximo Calang, in his capacity as private citizen and as a taxpayer of Manila, filed a
petition for a writ of prohibition against the Chairman of NTC, Director of PW, Acting
Secretary of PWC, Mayor of Manila and Acting Chielf of Police of Manila.
ISSUES
1. WON Commonwealth Act No. 548 is unconstitutional because it constitutes an undue
delegation of legislative power
2. WON the rules and regulations promulgated constitute an unlawful interference with
legitimate business or trade and abridge the right to personal liberty and freedom of
locomotion
3. WON the rules and regulations complained of infringe the upon the constitutional
precept regarding the promotion of social justice to insure the well-being of all the people
HELD
1. NO
- The Legislature cannot delegate power to make law; but it can make a law to delegate a
power to determine some fact or state of things upon which the law makes, or intends to
make, its own action depend.
Reasoning
- adherence to precedent
Rubi vs. Provincial Board of Mindoro, Wayman vs. Southard it was held here that
discretion may be delegated to executive departments or subordinate officials the
execution of certain acts, final on questions of fact.
- textual interpretation of Commonwealth Act No. 548
The provision that .the Director of Public Works, with the approval of the Secretary of
the Public Works and Communications, shall promulgate rules and regulations to
regulate and control the use of and traffic on national roads, is an administrative
function which cannot be directly discharged by the National Assembly.
- practicality

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The complexities of modern governments, the multiplication of the subjects of govtl

regulations, and the increased difficulty in administering the law give rise to the
adoption, within certain limits, the delegation of greater powers by the legislative and
vesting a larger amount of discretion in administrative and executive officials, not only
in the execution of the laws, but also in the promulgation of certain rules and
regulations.
2. NO
- The state may enact laws that may interfere with personal liberty, with property, and with
business and occupation if the said laws are intended to promote the welfare of the public.
(police power of the State)
Reasoning
- precedents (US vs. Gomez, Dobbins vs. Los Angeles & People vs. Pomar)
- Paradox - The apparent curtailment of liberty is precisely the very means of insuring its
preservation
- No. Social justice is promoted if the greatest good is brought about to the greatest
number.

PLDT V NLRC
ROMERO; July 23, 1997
NATURE
Petition for certiorari to revoke NLRCs Nov. 16, 1992 decision affirming the resolution of
Labor Arbiter Jose De Vera and denying petitioners motion for reconsideration
FACTS
- Private respondent Lettie Corpuz was employed as traffic operator at the Manila
International Traffic Division (MITD) by PLDT for 10 years 9 months from Sept. 19, 1978
until her dismissal on June 17, 1989. She was tasked with facilitating requests for
incoming and outgoing international calls using a digital switchboard.
- Sometime in Dec. 1987, PLDTs rank-and-file employees went on strike, prompting MITD
to discharge the formers duties to prevent a shutdown of its operations. In the course of
their assignments, 2 supervisors received 2 overseas calls bound for the Middle East, both
callers reporting the same calling number (98-68-16). It was shown that the number had
been permanently disconnected on Sept. 1987 but 439 overseas calls had been made
through it from May to Nov. 1987.
- It was further found that among the 235 telephone operators who handled those calls
(averaging 1.8% calls each), private respondent had handled 12.8% of the total calls.
Some calls, though registered as partly unavailable or busy, yielded unusually long
operator call durations. Private respondent also used said number to make several
personal calls. Based on these finding, MITD Manager Erlinda Kabigting directed
respondent to explain these allegations.
- instead of complying, respondent requested a formal investigation to confront and rebut
the witnesses allegations. On grounds of misconduct and breach of trust, respondent was
terminated.
- In a complaint for illegal dismissal filed by respondent, Labor Arbiter Jose De Vera
rendered a decision ordering the reinstatement of private respondent, later affirmed by
NLRC.
ISSUE
WON the NLRC erred in ordering the reinstatement of private respondent
HELD
NO. Although the power to dismiss is a normal prerogative of the employer, the right to
discharge employees is regulated by the States police power in line with its duty to
preserve its citizens rights.
- Petitioner insists that respondent was guilty of defrauding them by taking several calls
through the disconnected number. However, records show that these calls were neither
unusual nor made in connivance with certain subscribers as other operators shared similar
experiences. Although it is quite certain that there were certain PLDT personnel who
tampered with the line, the ultimate blame cannot be set solely on private respondent
based on mere suspicion, but only with concrete and substantial evidence.
- In the instant case, the petitioner failed to establish valid bases of the alleged
misconduct, thus denying private respondent her right to due process. The requirement of
notice and hearing affords the worker ample opportunity to be heard and defend himself.
- Art. 4 of the Labor Code states that all doubts in the implementation and interpretation of
the provisions of the Labor Code including its implementing rules and regulations shall be
resolved in favor of labor, that is, the workers welfare is of paramount importance. The
Constitution furthers that the State shall afford full protection to labor, promote full
employment opportunities for all and guarantee the right to security of tenure.
Disposition instant petition is DISMISSED and the decision dated Nov. 16, 1992 is
AFFIRMED.

Labor Law 1
DAYAN V BPI
VITUG; November 20, 2001
NATURE
Review seeking reversal of the decision and resolution of CA reversing the resolution of
the NLRC.
FACTS
- Petitioner Rogelio C. Dayan (Dayan) started his employment on 30 June 1956 with the
Commercial Bank and Trust Company (CBTC). CBTC was eventually absorbed by the
Bank of the Philippine Islands. (BPI) where Dayan was maintained as employee. In 1981,
Dayan was promoted Administrative Assistant by respondent bank in its centralized
accounting office. He held several positions thereafter - Assistant Manager of Internal
Operations in 1983, Assistant Manager of Correspondent Bank in 1988, Assistant
Manager of Branch Operations in 1990, Assistant Manager of the Supplies Inventory in
1991, and then Senior Assistant Manager of the Supplies Inventory in 1991-1992. In
addition to the series of promotions, Dayan was the recipient of various commendations.
- December 1991, the post of Purchasing Officer became vacant. The vacated position
was offered to Dayan which he initially declined but, due to the insistence of his
superiors, he later accepted on a temporary basis in February 1993.
- 10 June 1993, Asst VP Gerlanda E. De Castro of the bank, in a memorandum, placed
petitioner under suspension.
- Dayan is placed under suspension due to matters presented to him in a meeting on the
same morning of the suspension memo.
- It appears that BPI conducted earlier interviews regarding supposed malpractices
committed by Dayan during his term as Purchasing Officer. The report signed ad noted by
Rololfo Bernejo (Mgr) and Victor Guillermo (Sr Mgr) contained alleged misconduct such
as asking for 5% commission on purchase orders, donations totaling 5K for medical bills,
overpricing BPI Family Banks passbook, etc. The report also made negative findings and
observations about his work performance.
- 14 June 1993, petitioner wrote a memorandum to the bank narrating what had transpired
in his meeting with the bank on 10 June 1993 where he denied all the accusations
against him and contested his preventive suspension. His denials and plea for
compassion notwithstanding, petitioner was dismissed by respondent bank via a notice
of termination, dated 25 October 1993, signed by AVP Gerlanda de Castro. In a letter of
confession, dated 28 October 1993, petitioner ultimately admitted his infractions and
instead asked for financial assistance. He, at the same time, executed an undated
"Release Waiver and Quitclaim" acknowledging receipt of P400,000.00 financial
assistance from the bank and thereby releasing and discharging it from any action or claim
arising from his employment with the bank and membership in the retirement plan.
- Subsequently, however, petitioner claimed that the letter and the quitclaim were
signed by him under duress. On 14 February 1994, he filed a case for Illegal Dismissal
and Illegal Suspension, with a prayer for an award of retirement benefits, before the Labor
Arbiter.
- In his decision of 30 June 1995, the Labor Arbiter upheld the validity of the dismissal
of petitioner based on loss of trust and confidence and denied his claim for retirement
benefits and damages.
- On appeal, the NLRC reversed the decision of the labor arbiter and declared the
dismissal to be illegal on the ground that petitioner was denied due process ratiocinating
that a hearing should have been afforded petitioner for a chance to confront the witnesses
against him.
- BPI filed with SC, a petition for certiorari questioning the NLRC decision. The Court
referred the petition to CA. The appellate court reversed the judgment of the NLRC.
- In its petition for review before the SC, petitioner argues that the CA has wrongly relied
on unsworn statements taken by the bank from its contractual employees. Petitioner
believes that the factual conclusions of the NLRC which has acquired expertise on the
matters entrusted to it should have instead been respected by the appellate court.
ISSUES
1. WON CA committed an error in granting Dayans dismissal
2. WON there sufficient compliance of notice and hearing
3. WON he should be reinstated in BPI
4. WON the letter and quitclaim were obtained through deception and coercion

HELD
1. NO

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Ratio The CA was convinced that Dayans guilty of malfeasance and that the petitioner's
dismissal had been justified under Article 282 of the Labor Code.4
Reasoning
- CA did not commit error in holding to be justifiable the dismissal of Dayan from BPI as
evidence of malpactice is too numerous to be ignored. Contrary to Dayans claim, the
suppliers who complained executed affidavits as part of the records of the case. An
employee under his supervision even narrated other incidents of malpractices. These
charges were even backed up by the audit report of the banks audit team.
- Dayan is not a rank and file employee. His job involves much exercise of independent
judgment and discretion. A bank, being essentially imbued with public interest, cannot be
compelled to continue in its employ a person whom it has lost trust and confidence.
Obiter
- The policy of preventively suspending an employee under investigation for charges
involving dishonesty is an acceptable precautionary measure in order to preserve the
integrity of vital papers and documents that may be material and relevant to the case and
to which he, otherwise, would have access by virtue of his position. It was only after an
exhaustive investigation that respondent bank finally decided to terminate the services of
petitioner on 25 October 1993.
2. NO
Ratio The law requires the employer with 2 written notices before termination can be
legally affected as well as a hearing where the employee can explain his side.
A consultation or conference with the employee is not a substitute for the actual
observance of notice and hearing.
Reasoning
- The first notice apprises the employee of the particular acts or omissions for which the
dismissal is sought. The second notice informs the employee of the employers decision to
dismiss him.
- In the case at bench, Dayan was called to a meeting June 10 where he denied all
charges against him. After which, he was issued a notice of preventive suspension. After
investigation, he was given notice of dismissal. There was failure on the part of BPI to
conform to the notice and hearing requirement. The preliminary meeting is not sufficient
compliance rather it was merely exploratory. Where the employee denies charges against
him, a hearing is necessary to thresh out any doubt.
3. NO
Ratio The 2 notice and hearing rule is indispensable for a dismissal to be validly effected,
but if it is for a just and valid cause, the failure to observe procedural requirements
does not invalidate the dismissal of the employee. Instead, he must be granted
separation pay. Whether reinstated or given separation pay, he should be paid
backwages if he has been laid off without written notice 30 days in advance. For
the omission, an appropriate sanction should be imposed depending on the fact
and gravity of the situation.
Reasoning
- In the case at hand, the purpose of the notice and hearing requirement is not to
comply with due process.
- Art 283 originated from the Spanish Code of Commerece of 1882, which gave either
party to the employer-employee relationship the right to terminate their relationship by
giving notice to the other a month in advance. This was repealed by Art. 2270 of the Civil
Code, then by RA 1052 or Termination Pay Law, and finally by RA1787 providing for the
advance notice or payment of compensation at the rate of month for every year of
service.
- The Termination Pay Law is a regulatory measure to give opportunity for the employer to
look for a replacement or substitute and for the employee to look for another job. The
notice was not required if the dismissal is for just cause. The notice requirement is only
implemented by BP130 amending the Labor Code.
- The employer cannot be expected to be an entirely impartial judge of his own cause.
4. NO
Ratio Quitclaims executed by employees are commonly frowned upon as contrary to
public policy and ineffective to bar claims for the full measure of a workers legal
rights. However, if the agreement was voluntarily entered into and represents a
reasonable settlement, it is binding on the parties and may not be disowned unless
there is clear proof that the waiver was wangled from an unsuspecting gullible
person, or the terms are unconscionable on its face.
Reasoning
- Dayan is a managerial employee with vast experience. He cannot be willing to
compromise his future by agreeing to execute a document highly prejudicial to his interest.
Complainant was well aware of the consequences of his acts.
Disposition decision of the Court of Appeals reinstating the decision of the Labor Arbiter
and setting aside the NLRC's decision is AFFIRMED.

"`(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative.'

Labor Law 1
EXECUTIVE SECRETARY V CA
CALLEJO, SR.; May 25, 2004
NATURE
Appeal from a decision of the Court of Appeals
FACTS
- The Asian Recruitment Council Philippine Chapter, Inc. (ARCO-Phil) filed on July 17,
1995 a petition for declaratory relief under Rule 63 0f the Rules of Court with the RTC of
Quezon City to declare as unconstitutional portions of RA 8042, otherwise known as the
Migrant Workers and Overseas Filipinos Act of 1995 with a plea for the issuance of a
temporary restraining order and/or a writ of preliminary injunction enjoining the
government from enforcing the said portions of the law. The questioned portions of the
said RA deal with illegal recruitment, penalties for illegal recruitment, and on the venue of
criminal action for illegal recruitment.
- On August 1, 1995, the trial court issued a temporary restraining order on the
implementation or effectivity of the questioned provisions based on the allegations of the
private respondents that they will suffer grave or irreparable damage or injury if the law is
implemented.
- ARCO-Phil was joined in the petition by eleven other corporations which were allegedly
members of the organization when it filed an amended petition. The amended petition also
questioned other sections of the law which dealt with the overseas deployment only of
skilled Filipino workers alleging discrimination against unskilled workers.
- The trial court issued a writ of preliminary injunction on August 21, 1995 upon a bond of
Pesos 50,000.
- Petitioners filed a petition with the court of Appeals assailing the order and the writ with
the court of Appeals on the grounds that respondent, ARCO-Phil, is not the real party-ininterest and that it has not shown any convincing proof that in fact damage or injury would
result in the implementation of the questioned statute. The Court however dismissed the
petition. It subsequently dismissed petitioners motion for reconsideration.
- Hence, the petition for review on certiorari to the Supreme Court.
ISSUES
1. WON private respondents have standing to file suit
2. WON the trial court committed grave abuse of discretion amounting to excess or lack of
jurisdiction in issuing the assailed order and the writ of preliminary injunction on a bond of
only Pesos 50,000
3. WON the appellate court erred in affirming the trial courts order and the writ it issued
HELD
1. The SC ruled that the respondents have locus standi citing it earlier ruling in
Telecommunications and Broadcast Attorneys of the Philippines vs Commission of
Elections. It was held in that case that standing jus tertii would be recognized if it can be
shown that the party suing has some substantial relation to the third party, or that the right
of the third party would be diluted unless the party in court is allowed to espouse the third
partys constitutional rights. With regard the portion relating to discrimination against
unskilled workers, the SC ruled that respondents have no standing as they failed to
implead any unskilled worker in their petition.
2. The order and the writ of preliminary injunction issued by the trial court is a grave abuse
of its discretion amounting to excess or lack of jurisdiction. The SC citing jurisprudence
ruled that a law is presumed constitutional until the same is declared unconstitutional by
judicial interpretation. This is so because suspension of the operation of the law is an
interference with the official acts of the duly elected representatives of the people and also
of the highest magistrate of the land. The possible unconstitutionality of a statue, on its
face, does not of itself justify an injunction against good faith attempts to enforce it, unless
there is showing of bad faith, harassment, or any other unusual circumstances that would
call for equitable relief. To be entitled to a preliminary injunction to enjoin the enforcement
of a law assailed to be unconstitutional, the party must establish that it will suffer
irreparable harm in the absence of injunctive relief and must demonstrate that it is likely to
succeed on the merits, or that there are sufficiently serious questions going to the merits
and the balance of hardships tips decidedly in its favor. This higher standard reflects
judicial deference towards legislation or regulations developed through presumptively
reasoned democratic process. In this case, none were shown.
3. The SC also held that the assailed order and writ of preliminary injunction is mooted by
case law. The SC cited various cases it had earlier decided on apply RA 8042. By these
rulings, the SC, in effect, affirmed the validity of the assailed provisions. Hence the
enforcement of the provisions cannot be enjoined unless the SC, by final judgment
declares the provisions to be unconstitutional.

A2010

-8-

Disini

ANG TIBAY, AND NATIONAL WORKERS

BROTHERHOOD V CIR, AND NATIONAL LABOR
UNION, INC.
LAUREL; February 27, 1940
NATURE
The respondent National Labor Union, Inc., prays for the vacation of the judgment
rendered by the majority of this Court and the remanding of the case to the Court of the
Industrial Relations for a new trial.
The petitioner, Ang Tibay, has filed an opposition to the motion for reconsideration of the
respondent National Labor Union, Inc.
FACTS
- CIR created by Commonwealth Act No. 103. Its functions are specifically stated therein
- Nature of the CIR:
> more administrative than part of judicial system
> not a mere receptive organ of Govt, not passive
> active: not just judicial/quasi-judicial in disputes, but also has jurisdiction over the
entire Philippines to consider, investigate, decide, settle any question, matter,
controversy or dispute arising between, and/or affecting employers and employees
or laborers, and regulate the relations between them.
> mingling of executive and judicial functions (a departure from the rigid doctrine of
the separation of governmental powers)
> not narrowly constrained by technical rules of procedure: its required to act
according to justice and equity and substantial merits of the case, without regard to
technicalities or legal forms (Section 20, Commonwealth Act No. 103)
> The fact that the CIR may be said to be free from certain procedural requirements
doe not mean that it can entirely ignore or disregard the fundamental requirements
of due process in trials.
- Primary rights which must be respected even in proceedings of this character:
(1) the right to a hearing, which includes the right of the party interested or affected to
present his own case and submit evidence in support thereof. Morgan v. U.S "the liberty
and property of the citizen shall be protected by the rudimentary requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to adduce
evidence tending to establish the rights which he asserts but the tribunal must consider
the evidence presented. Edwards vs. McCoy, "the right to adduce evidence, without the
corresponding duty on the part of the board to consider it, is vain. Such right is
conspicuously futile if the person or persons to whom the evidence is presented can thrust
it aside without notice or consideration."
(3) "While the duty to deliberate does not impose the obligation to decide right, it does
imply a necessity which cannot be disregarded, namely, that of having something to
support it is a nullity, a place when directly attached." (Edwards vs. McCoy, supra.) Law is
both a grant and a limitation upon power.
(4) Not only must there be some evidence to support a finding but the evidence must be
"substantial." -such relevant evidence as a reasonable mind accept as adequate to
support a conclusion." The statute provides that "the rules of evidence prevailing in courts
of law and equity shall not be controlling.' The obvious purpose of this and similar
provisions is to free administrative boards from the compulsion of technical rules so that
the mere admission of matter which would be deemed incompetent inn judicial
proceedings would not invalidate the administrative order. But this assurance of a
desirable flexibility in administrative procedure does not go far as to justify orders without a
basis in evidence having rational probative force.
(5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected. -Protect parties in their right
to know and meet the case against them. It should not, however, detract from their duty
actively to see that the law is enforced, and for that purpose, to use the authorized legal
methods of securing evidence and informing itself of facts material and relevant to the
controversy. Boards of inquiry may be appointed for the purpose of investigating and
determining the facts in any given case, but their report and decision are only advisory.
(Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any
industrial or agricultural dispute or any matter under its consideration or advisement to a
local board of inquiry, a provincial fiscal. a justice of the peace or any public official in any
part of the Philippines for investigation, report and recommendation, and may delegate to
such board or public official such powers and functions as the said Court of Industrial
Relations may deem necessary, but such delegation shall not affect the exercise of the
Court itself of any of its powers.
(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his
own independent consideration of the law and facts of the controversy, and not simply
accept the views of a subordinate in arriving at a decision. It may be that the volume of
work is such that it is literally Relations personally to decide all controversies coming
before them. In the United States the difficulty is solved with the enactment of statutory
authority authorizing examiners or other subordinates to render final decision, with the
right to appeal to board or commission, but in our case there is no such statutory authority.

Labor Law 1
(7) The Court of Industrial Relations should, in all controversial questions, render its
decision in such a manner that the parties to the proceeding can know the various issues
involved, and the reasons for the decision rendered. The performance of this duty is
inseparable from the authority conferred upon it.
- The record of the proceedings had before the CIR in this particular case had no
substantial evidence that the exclusion of the 89 laborers was due to their union affiliation.
- The whole transcript of the hearing is just a record of contradictory statements of
opposing counsel, with sporadic conclusion drawn to suit their own views
- these statements have no evidentiary value
Respondents' Comments
1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather
soles in ANG TIBAY making it necessary for him to temporarily lay off the members of the
National Labor Union Inc., is entirely false and unsupported by the records of the Bureau
of Customs and the Books of Accounts of native dealers in leather.
2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a
scheme to systematically prevent the forfeiture of this bond despite the breach of his
CONTRACT with the Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re
supposed delay of leather soles from the States) was but a scheme to systematically
prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine
Army.
4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union
dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U.S.,
548, petitioner's printed memorandum, p. 25.)
5. That in the exercise by the laborers of their rights to collective bargaining, majority rule
and elective representation are highly essential and indispensable. (Sections 2 and 5,
Commonwealth Act No. 213.)
6. That the century provisions of the Civil Code which had been (the) principal source of
dissensions and continuous civil war in Spain cannot and should not be made applicable
in interpreting and applying the salutary provisions of a modern labor legislation of
American origin where the industrial peace has always been the rule.
7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating
against the National Labor Union, Inc., and unjustly favoring the National Workers'
Brotherhood.
8. That the exhibits hereto attached are so inaccessible to the respondents that even with
the exercise of due diligence they could not be expected to have obtained them and
offered as evidence in the Court of Industrial Relations.
9. That the attached documents and exhibits are of such far-reaching importance and
effect that their admission would necessarily mean the modification and reversal of the
judgment rendered herein.
ISSUE
WON a new trial in the CIR should be granted
HELD
YES
Ratio When a hearing before the CIR is conducted and a ruling is arrived at without any
substantial evidence, and there may be more evidence to be heard, a new trial shall be
granted.
Reasoning
- The SC found no substantial evidence that the exclusion of the 89 laborers here was due
to their union affiliation or activity. Although the CIR is a court with special nature- in that it
may be said to be free from technical rules of procedure- it must still respect certain
primary rights, one of which is that its decision must be based on substantial evidence.
The interest of justice would be better served if the movant is given opportunity to present
at the hearing the documents referred to in his motion and such other evidence as may be
relevant to the main issue involved. The legislation which created the Court of Industrial
Relations and under which it acts is new. The failure to grasp the fundamental issue
involved is not entirely attributable to the parties adversely affected by the result.
Disposition The motion for a new trial should be and the same is hereby granted, and
the entire record of this case shall be remanded to the Court of Industrial Relations, with
instruction that it reopen the case, receive all such evidence as may be relevant and
otherwise proceed in accordance with the requirements set forth hereinabove. So ordered.

A2010

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Disini