Documenti di Didattica
Documenti di Professioni
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LABOR STANDARDS
CASE DIGESTS (S. Y. 2014-2015)
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TABLE OF CONTENTS
Basic Principles
1. Singer Sewing Machine vs. NLRC, 193 SCRA 271
2. Manila Golf Club vs. IAC, 237 SCRA 207
3. Encyclopedia Britanica vs. NLRC, 264 SCRA 4 [96]
4. Carungcong vs. Sunlife, 283 SCRA 319
5. Ramos vs. CA, 380 SCRA 467
6. Sonza vs. ABS-CBN, G.R. No. 138051, June 10, 2004
7. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004]
8. Phil. Global Communication vs. De Vera, 459 SCRA 260 [2005]
9. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006
10. Francisco vs. NLRC, 500 SCRA 690 [06]
11. Nogales et al., vs. Capitol Medical Center et al., G.R. No. 142625, December 19, 2006
12. Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No. 146881, February 15, 2007
13. Calamba Medical Center vs. NLRC et al., G.R. No. 176484, Nov. 25, 2008
14. Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009
15. Tongko vs. Manufacturer Life Insurance Co. (Phils), Inc., et al., G.R. No. 167622, January 25, 2011
16. Caong, Jr. vs. Begualos, GR No. 179428, Jan. 26, 2011
17. Atok Big Wedge Company vs. Gison, G.R. No. 169510, August 8, 2011
18. Semblante et al., vs. Court of Appeals, et al., G.R. No. 196426, August 15, 2011
19. Bernarte vs. Phil. Basketball Association et al., G.R. No. 192084, September 14, 2011
20. Lirio vs. Genovia, G.r. No. 169757, November 23, 2011
21. Jao vs. BCC Products Sales Inc. G.R. No. 163700, April 18, 2012
22. Legend Hotel (Manila) vs. Realuyo G.R. No. 153511, July 18, 2012
23. The New Philippine Skylanders, Inc., vs. Dakila, G.r. No. 199547, Sept. 24, 2012
24. Tesoro et al., vs. Metro Manila Retreaders Inc., et al., GR No. 171482, March 12, 2014
HIRING OF EMPLOYEE
25. Ollendorf vs. Abrahanson, 38 Phil 585
26. Del Castillo vs. Richmond, 45 Phil. 679
27. PT&T vs. NLRC, 272 SCRA 596 [1997]
28. Duncan Asso. Of Detailman-PTGWO vs. Glaxo Wellcome Phils., G.R. No. 162994, Sept. 17, 2004
29. City of Manila vs. Laguio, G.R. No. 118127, April 12, 2005
30. Star Paper Corp., vs. Simbol, G.R. No. 164774, April 12, 2006
31. Del Monte Phils vs. Velasco, G.R. No. 153477, March 6, 2007
32. Yrasuegui vs. Phil Air Lines, G.R. No. 168081, October 17, 2008
WAGE & THE WAGE RATIONALITAZION ACT
33. Ilaw at Buklod ng Manggagawa vs. NLRC, 198 SCRA 586 [1991]
34. Employers Confederation of the Phils., vs. NWPC, 201 SCRA 759 [1991]
35. Mabeza vs. NLRC, 271 SCRA 670
36. Joy Brothers Inc., vs. NWPC, 273 SCRA 622 [1997]
37. Prubankers Asso. Vs. Prudential Bank, 302 SCRA 74 [1999]
38. Millare vs. NLRC, 305 SCRA 501
39. International School Alliance of Educators vs. Quisumbing, 333 SCRA 13 [2000]
40. Bankard Employees Union vs. NLRC, G.R. No. 140689, Feb. 17, 2004
41. Odango vs. NLRC, G.R. No. 147420, June 10, 2004
42. C. Planas Commercial vs. NLRC, G.R. No. 144619, Nov. 11, 2005
43. EJR Crafts Corp., vs. CA, G.R. No. 154101, March 10, 2006
44. Pag Asa Steel Works vs. CA, G.R. No. 166647, March 31, 2006
45. Metropolitan Bank vs. NWPC, G.R. No. 144322, Feb. 6, 2007
46. Equitable Bank vs. Sadac, G.R. No. 164772, June 8, 2006, citing Songco vs. NLRC, 183 SCRA 618
47. S.I.P. Food House et al., vs. Batolina, GR No. 192473, Oct 11, 2010
48. SLL International Cables Specialist vs. NLRC, GR No. 172161, March 2, 2011
49. Vergara, Jr. vs. Coca-Cola Bottlers Phils Inc. G.R. No. 176985, April 1, 2013
50. Royal Plant Workers Union vs. Coca-Cola Bottlers Phils Inc. -Cebu Plant, G.R. No. 198783, April 15,
2013
51. The National Wages & Productivity Commission et al., vs. The Alliance of Progressive Labor et al.,
GR No. 150326, March 12, 2014
WAGE ENFORCEMENT AND RECOVERY
52. Rajah Humabon Hotel vs. Trajano, 226 SCRA 332
53. Guico vs. Sec of Labor, G.R. No. 131750, November 16, 1998
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54. Ex-Bataan Vetrerans Security Agency vs.. Sec. Of Labor, et al., G.R. No. 152396, November 20,
2007, citing Cireneo Bowling Plaza vs. Sensing, G.R. No. 146572, Jan. 14, 2005
55. Sapio vs. Undaloc Construction et al., G.R. No. 155034, May 22, 2008
56. Hon. Secretary of Labor vs. Panay Veterans Security and Investigation Agency, G.R. No. 167708,
August 22, 2008
57. National Mines and Allied Workers Union vs. Marcopper Mining Corp., G.R. No. 174641, Nov. 11,
2008
58. Jethro Intelligence & Security Corp., vs. SOLE, et al., GR No. 172537, Aug. 14, 2009
59. Phil Hoteliers Inc., et al., vs. National Union of Workers in Hotel, Restaurant and Allied IndustriesDusit Hotel Nikko Chpater, GR No. 181972, Aug. 25, 2009
60. Tiger Construction and Development Corp vs. Abay et al., GR No. 164141, Feb. 26, 2010
61. Peoples Broadcasting (Bombo Radyo Phils) vs. Sec. of DOLE et al., GR No. 179652, March 6, 2012
Resolution on the main Decision of May 8, 2009
62. Superior Packaging Corp., vs. Balagsay et al., G.R. No. 178909, October 10, 2012
WAGE PROTECTION PROVISION & PROHIBITIONS REGARDING WAGES
63. GAA vs. CA, 140 SCRA 304
64. Nestle Phils., vs. NLRC, 193 SCRA 504
65. Five J Taxi vs. NLRC, 235 SCRA 556
66. Phil. Veterans Bank vs. NLRC, G.R. No. 130439, Oct. 26, 1999
67. Phil Appliances Corp., vs. CA, G.R. No. 149434, June 3, 2004
68. Agabon vs. NLRC, G.R. No. 158693, Nov. 17, 2004
69. American Wire & Cable Daily Rated Employees vs. American Wire, G.R. No. 155059, April 29, 2005
70. Honda Phils., vs. Samahang Malayang Manggagawa sa Honda, G.R. No. 145561, June 15, 2005
71. Producers Bank vs. NLRC, 355 SCRA 506
72. Jardin vs. NLRC, G.R. No. 119268, February 23,2000
73. Manila Jockeys Club Employees Labor Union vs. Manila Jockey Club, G.R. No. 167601, March 7,
2007
74. San Miguel Corp et al., vs. Layoc, Jr., et al., G.R. No. 149640, October 19, 2007
75. San Miguel Corp., vs. Pontillas, G.R. No. 155178, May 7, 2008
76. Arco Metal Products Co., Inc., et al., vs. Samahan ng Mga Manggagawa sa Arco Metal-NAFLU, G.R.
No. 170734, May 14, 2008, citing Davao Fruits vs. Asso. Labor Union, 225 SCRA 562 and Sevilla
Trading vs. AVA Tomas Services, G.R. No. 152456, April 28, 2004
77. Aguanza vs. Asian Terminal Inc., et al., GR No. 163505, Aug. 14, 2009
78. Genesis Transport Service Inc et al., vs. Unyon ng Malayang Manggagawa ng Genesis Transport et
al., GR No. 182114, April 5, 2010
79. Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU, GR No. 188949, July
26, 2010
80. SHS Perforated Materials, Inc. et al., vs. Diaz, GR No. 185814, Oct. 13, 2010
81. Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo, G.R. No. 188169, November 28, 2011
82. Locsin II vs. Mekeni Food Corp., GR No. 192105, December 9, 2013
83. TH Shopfitters Corp., et al., vs. T&H Shopfitters Corp., Union, GR No. 191714, Feb 26, 2014
84. Wesleyan University-Phils., vs. Wesleyan University-Phils., Faculty & Staff Asso., GR No. 181806,
March 12, 2014
85. Bluer Than Blue Joint Ventures Co., vs. Esteban, GR No. 192582, April 7, 2014, citing2011 Nina
Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo
PAYMENT OF WAGES
86. Congson vs. NLRC, 243 SCRA 260 [1995]
87. North Davao Mining vs. NLRC, 254 SCRA 721 [1996]
88. National Federation of Labor vs. CA, G.R. No. 149464, Oct. 19, 2004
89. Heirs of Sara Lee vs. Rey, G.R. No. 149013, Aug. 31, 2006
CONDITIONS OF EMPLOYMENT
90. San Juan De Dios Hospital vs. NLRC, 282 SCRA 316 [1997]
91. Simedarby vs. NLRC, 289 SCRA 86 [1998]
92. Phil. Airlines vs. NLRC, 302 SCRA 582 [1999]
93. Linton Commercial Co., Inc., vs. Hellera et al., G.R. No. 163147, October 10, 2007
94. Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, Oct. 15, 2008
MINIMUM LABOR STANDARD BENEFITS
95. Union of Filipro Employees vs. Vicar, 205 SCRA 203 [1992]
96. National Sugar Refinery Corp., vs. NLRC, 220 SCRA 452 [1993]
97. Salazar vs. NLRC, 256 SCRA 273 [1996]
98. Labor Congress of the Phils., vs. NLRC, G.R. No. 1239381, May 21, 1998
99. Mercidar Fishing Corp., vs. NLRC, G.R. No. 112574, October 8, 1998
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100.San Miguel Corp., vs. CA, G.R. No. 146775, Jan. 30, 2002
101.Tan vs. Lagrama, G.R. No. 151228, August 15, 2002
102.Lambo vs. NLRC, 317 SCRA 420
103.R&E Transport vs. Latag, G.R. No. 155214, Feb. 13, 2004
104.Asian Transmission vs. CA, 425 SCRA 478 [2004]
105.Autobus Transport System vs. Bautista, G.R. No. 156364, May 16, 2005
106.San Miguel Corp., vs. Del Rosario, G.R. No. 168194, Dec. 13, 2005
107.Penaranda vs. Baganga Plywood Corp., G.R. No. 159577, May 3, 2006
108.Leyte IV Electric Cooperative Inc vs. LEYECO IV Employees Union-ALU, G.R. No. 1577745, October
19, 2007, citing Wellington Investment vs. Trajano, 245 SCRA 561 [1995], and Odango vs. NLRC,
G.R. No. 147420, June 10, 2004
109.Bahia Shipping Services vs. Chua, G.R. No. 162195, April 8, 2008, citing Cagampan vs. NLRC, 195
SCRA 533 [1998]
110.PNCC Skyway Traffic Management and Security Division Workers Organization, GR No. 171231, Feb.
17, 2010
111.Radio Mindanao Network Inc. et al., vs. Ybarola, Jr. G.R. No. 198662, Sept. 12, 2012
112.Villuga vs. NLRC, 225 SCRA 537 [1993]
113.CJC Trading vs. NLRC, 246 SCRA 724 [1995]
114.Pantranco North Express vs. NLRC, 259 SCRA 161 [1996]
115.R&E Transport vs. Latag, G.R. No. 155214, Feb. 13, 2004
116.Rufina Patis vs. Alusitain, G.R. No. 146202, July 14, 2004
117.Sta Catalina College vs. NLRC, 416 SCRA 243
118.Honda Phils., vs. Samahan ng mga Manggagawa sa Honda, G.R. No. 145561, June 15, 2005
119.Jaculbe vs. Silliman University, G.R. No. 156934, March 16, 2007
120.Intercontinental Broadcasting Corp., vs. Amarilla, G.R. No. 162775, October 27, 2006
121.Letran Calamba Faculty & Employees Association vs. NLRC et al., G.R. No. 156225, January 29,
2008
122.Reyes vs. NLRC et al., G.R. No. 160233, August 8, 2007, citing Boie Takeda Chemicals vs. Dela
Serna, 228 SCRA 329 [1993] & Phil. Duplicators vs. NLRC, 241 SCRA 380 [1995]
123.Arco Metal Products Co., Inc., et al., vs. Samahan ng Mga Manggagawa sa Arco Metal-NAFLU, G.R.
No. 170734, May 14, 2008
124.Universal Robina Sugar Milling Corp. vs. Caballeda, G.R. No. 156644, July 28, 2008
125.Cercado vs. Uniprom, Inc. G.R. No. 188154, October 13, 2010
126.Radio Mindanao Network Inc, et al., vs. Ybarola, Jr. et al., G.R. No. 198662, September 12, 2012
127.Padillo vs. Rural bank of Nabunturan Inc. G.r. No. 199338, Jan. 21, 2013
128.T/SGP Larkins vs. NLRC, G.R. No. 92432, February 23, 1995
129.UERM Memorial Medical Center vs. NLRC, G.R. No. 110419, March 3, 1997
130.Phil Tranco Services vs. NLRC, G.R. No. 124100, April 1, 1998
131.St. Martin Funeral Homes vs. NLRC, G.R. No. 130866, September 16, 1998
132.Ludo & Luym Corp., vs. Saornido, G.R. No. 140960, January 20, 2003
133.Hansin Engineering & Construction vs. CA, G.R. No. 165910, April 10, 2006
134.Phil. Journalist Inc. vs. NLRC, G.R. No. 166421, Sept. 5, 2006
135.Balagtas Multi-purpose Coop. Vs. CA, G.R. No. 159268, Oct. 27, 2006
136.St. Martin Funeral Homes vs. NLRC, G.R. No. 142351, Nov. 22, 2006
137.DOLE Phils. Vs. Esteva, G.R. No. 161115, Nov. 30, 2006
138.Intercontinental Broadcasting Corp., vs. Panganiban, G.R. No. 151407, February 6, 2007
139.Far East Agricutural Supply vs. Lebatique, G.R. No. 162813, February 12, 2007
140.Letran Calamba Faculty & Employees Association vs. NLRC, G.R. No. 156225, January 29, 2008
141.Metro Transit Organization vs. Piglas NFWU-KMU et al., G.R. No. 175460, April 14, 2008
142.J.K. Mercado & Sons Agricultural Enterprises, Inc., vs Sto. Tomas, G.R.No. 158084, August 29, 2008
143.J. Phil. Marine Inc., vs. NLRC, G.R. No. 1753661, August 11, 2008; but see Ilagan vs. Court of
Appeals, G.R. No. 162089, July 9, 2008
144.Sy vs. ALC Industries, G.R. No. 168339, October 10, 2008
145.PCI Travel Corp., vs. NLRC, G.R. No. 154379, October 31, 2008
146.Lopez vs. Q. C. Sports Club, G.R. No. 164032, January 19, 2009
147.Lockheed Detective & Watchman Agency, G.R. No. 185918, April 18, 2012
148.Portillo vs. Rudolf Lietz, Inc. et al., G.R. No. 196539, October 10, 2012
149.Building Care Corp. vs. Macaraeg, G.R. No. 198357, December 10, 2012
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BASIC PRINCIPLES
Singer Sewing Machine vs. NLRC
January 24, 1991, 193 SCRA 271
Facts: Singer Machine Collectors Union-Baguio (SIMACUB), private respondent, filed a
petition for direct certification as the sole and exclusive bargaining agent of all
collectors of the Singer Sewing Machine Company (Singer). Singer opposed the
petition claiming that the collectors are not employees but are independent
contractors as evidenced by the Collection Agency Agreement (Agreement) between
them. The Med-Arbiter granted the petition. Aggrieved, Singer appealed to the
Secretary of Labor. The Secretary of Labor affirmed the Med-Arbiters Decision and
denied Singers motion for reconsideration, hence, this petition for certiorari to
review the order and resolution of the Secretary of Labor and Employment.
Singer alleges that the collectors are not employees but independent contractors. It
supported its allegation by stating the following stipulations in the Agreement: (a) a
collector is designated as a collecting agent who is to be considered at all times as
an independent contractor and not employee of Singer, (b) collection are to be made
monthly or oftener, (c) an agent is paid a commission of 6% of all collections plus a
bonus, xxx , (g) his services shall be terminated in case of failure to satisfy the
required performance required.
Private respondent, on the other hand, relied on other features of the same
Agreement. Among which are that an agent shall utilize only receipt forms authorized
and issued by Singer; an agent has to submit and deliver at least once a week or as
often as required a report of all collections made using report forms furnished by
Singer; and the monthly collection quota, which quota they deemed as a control
measure over the means by which an agent is to perform his services. They also relied
on Article 280 of the Labor Code and on Section 8 Rule 8, Book III of the Omnibus
Rules defining job-contracting.
Issue: Whether or not collectors of Singer are employees and therefore are
constitutionally granted the right to join or form labor organization for purposes of
collective bargaining.
Ruing: No, collectors of Singer are not employees. Hence, they are not entitled to the
constitutional right to join or form labor organization for purposes of collective
bargaining. The Supreme Court mainly applied the control test where the existence of
employer-employee relationship is determined by the following elements: (a)
selection and engagement of the employee, (b) payment of wages, (c) power of
dismissal and (d) power to control the employees conduct although the latter is the
most important element.
In that regard, it was ruled that the element on the power to control the employees
conduct the most important element was absent. The forms, schedule of delivery
and quota were controls used only for the result of the job, if they were really
controls. There were also other circumstances uncontroverted in the pleadings that
made the Supreme Court rule that they are independent contractors like: (1)
collectors are not required to observe office hours nor report everyday; (2) they do
not have to devote their time exclusively for Singer; (3) the manner and method of
effecting collections are left to their discretion xxx (5) they are paid strictly on
commission basis. These circumstances negate that Singer had any control as to the
manner by which collectors perform collections.
Art. 280 is not instructive because it only deals with casual and regular employees
while the provision in the Omnibus Rules is only relevant in ascertaining whether the
employer is solidarily liable with the contractor or subcontractor.
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The power to terminate the parties relationship was mutually vested on both. Either
may terminate the arrangement at will, with or without cause. Remarkably absent is
the element of control whereby the employer has reserved the right to control the
employee not only as to the result of the work done but also as to the means and
methods by which the same is to be accomplished.
Petitioner had no control over the means and methods by which respondent went
about performing his work at the company premises. In fine, the parties themselves
practically agreed on every terms and conditions of the engagement, which thereby
negates the element of control in their relationship.
Principle of Law: Any agreement may provide that one party shall render services for
and in behalf of another, no matter how necessary for the latters business, even
without being hired as an employee. There was no employee-employer relationship
in a case where element of control of the employer over the employee is absent.
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perform several different duties under the control and direction of ABS-CBN
executives and supervisors.
There are two kinds of regular employees under the law: (1) those engaged to
perform activities which arenecessary or desirablein the usual business or trade of
the employer; and (2) those casual employees who haverendered at least one year
of service, whether continuousor broken, with respect to the activities in which they
are employed.
What determines whether a certain employment is regular or otherwise is the
character of the activities performed in relation to the particular tradeor business
taking into account all the circumstances, and in some cases the length of time of its
performance and its continued existence.
The employer-employee relationship between petitioner and respondents has been
proven by the ff:
First. In the selection and engagement of respondents, no peculiar or unique skill,
talent or celebrity status was required from them because they were merely hired
through petitioners personnel department just like any ordinary employee.
Second. The so-called talent fees of respondents correspond to wages given as a
result of an employer-employee relationship. Respondents did not have the power to
bargain for huge talent fees, a circumstance negating independent contractual
relationship.
Third. Petitioner could always discharge respondents should it find their work
unsatisfactory, and respondents are highly dependent on the petitioner for continued
work.
Fourth. The degree of control and supervision exercised by petitioner over
respondents through its supervisors negates the allegation that respondents are
independent contractors.
The presumption is that when the work done is an integral part of the regular
business of the employer and when the worker, relative to the employer, does not
furnish an independent business or professional service, such work is a regular
employment of such employee and not an independent contractor.
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4. Lastly, the agreement reveal that Coca-cola control over the conduct of
respondent in the latters performance of his duties sas a doctor for the
company.
Hence, this petition filed by Coca-cola company
Issue: Whether or not there exist an employer-employee relationship between the
parties.
Ruling: The Court agrees with the finding of the Labor Arbiter and the NLRC.
The Court held that the Labor Arbiter and the NLRC correctly found that petitioner
company lacked the power of control over the performance by respondent of his
duties.
The Court citing the case of Neri vs. NLRC said, petitioner company, through the
Comprehensive Medical Plan, provided guidelines merely to ensure that the end
result was achieved. In other words, what was sought to be controlled by the
petitioner company was actually the end result of the task. The guidelines or the
Comprehensive Medical Plan were laid down merely to ensure that the desired
end result was achievedbut did not control the means and methods by which
respondent performed his assigned tasks.
The Supreme Court further held that, an employee is required to stay in the
employers workplace or proximately close thereto that he cannot utilize his time
effectively and gainfully for his own purpose. Such is not the prevailing situation
here. The respondent does not dispute that fact that outside of the two (2) hours that
he is required to be at petitioner companys premises, he is not at all further required
to just sit around in the premises and wait for an emergency to occur so as to enable
him from using such hours for his own benefit and advantage. In fact, respondent
maintains his own private clinic attending his private practice in the city, where he
services his patients and bills them accordingly.
The Court finds that the requirement to be on call for emergency cases do not amount
to such control, but are necessary incidents to the Retainership Agreement.
The Supreme Court also notes that the Agreement granted to both parties the power
to terminate their relationship upon giving a 30-day notice. Hence, petitioner
company did not wield the sole power of dismissal or termination.
Therefore, the petition was GRANTED.
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Tongko vs. The Manufacturers Life Insurance Co., Inc. November 7, 2008
Facts: Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic
corporation engaged in life insurance business. Renato A. Vergel De Dios was, during
the period material, its President and Chief Executive Officer. Gregorio V. Tongko
started his professional relationship with Manulife on July 1, 1977 by virtue of a
Career Agent's Agreement(Agreement) he executed with Manulife.
In the Agreement, it is provided that:
It is understood and agreed that the Agent is an independent contractor and nothing
contained herein shall be construed or interpreted as creating an employer-employee
relationship between the Company and the Agent.
The Company may terminate this Agreement for any breach or violation of any of the
provisions hereof by the Agent by giving written notice to the Agent within fifteen
(15) days from the time of the discovery of the breach. No waiver, extinguishment,
abandonment, withdrawal or cancellation of the right to terminate this Agreement by
the Company shall be construed for any previous failure to exercise its right under any
provision of this Agreement.
Either of the parties hereto may likewise terminate his Agreement at any time
without cause, by giving to the other party fifteen (15) days notice in writing.
In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization.
In 1990, he became a Branch Manager. As the CA found, Tongko's gross earnings from
his work at Manulife, consisting of commissions, persistency income, and management
overrides. The problem started sometime in 2001, when Manulife instituted
manpower development programs in the regional sales management level. Relative
thereto, De Dios addressed a letter dated November 6, 2001 to Tongko regarding an
October 18, 2001 Metro North Sales Managers Meeting. Stating that Tongkos Region
was the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and,
as of today, continues to remain one of the laggards in this area. Other issues
were:"Some Managers are unhappy with their earnings and would want to revert to
the position of agents." And "Sales Managers are doing what the company asks them to
do but, in the process, they earn less." Tongko was then terminated.
Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against
Manulife for illegal dismissalIn the Complaint. In a Decision dated April 15, 2004,
Labor Arbiter dismissed the complaint for lack of an employer-employee relationship.
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The Agent hereby agrees to comply with all regulations and requirements of the
Company as herein provided as well as maintain a standard of knowledge and
competency in the sale of the Company's products which satisfies those set by the
Company and sufficiently meets the volume of new business required of Production
Club membership.Under this provision, an agent of Manulife must comply with three
(3) requirements: (1) compliance with the regulations and requirements of the
company; (2) maintenance of a level of knowledge of the company's products that is
satisfactory to the company; and (3) compliance with a quota of new businesses.
Among the company regulations of Manulife are the different codes of. The fact that
Tongko was obliged to obey and comply with the codes of conduct was not disowned
by respondents.
Thus, with the company regulations and requirements alone, the fact that Tongko was
an employee of Manulife may already be established. Certainly, these requirements
controlled the means and methods by which Tongko was to achieve the company's
goals.
More importantly, Manulife's evidence establishes the fact that Tongko was tasked to
perform administrative duties that establishes his employment with Manulife.
Additionally, it must be pointed out that the fact that Tongko was tasked with
recruiting a certain number of agents, in addition to his other administrative
functions, leads to no other conclusion that he was an employee of Manulife.
Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that
the burden of proving the validity of the termination of employment rests on the
employer. Failure to discharge this evidential burden would necessarily mean that the
dismissal was not justified, and, therefore, illegal.
The Labor Code provides that an employer may terminate the services of an employee
for just cause and this must be supported by substantial evidence. The settled rule in
administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is
not required in determining the legality of an employer's dismissal of an employee,
and not even a preponderance of evidence is necessary as substantial evidence is
considered sufficient. Substantial evidence is more than a mere scintilla of evidence
or relevant evidence as a reasonable mind might accept as adequate to support a
conclusion, even if other minds, equally reasonable, might conceivably opine
otherwise.
Here, Manulife failed to overcome such burden of proof. It must be reiterated that
Manulife even failed to identify the specific acts by which Tongko's employment was
terminated much less support the same with substantial evidence. To repeat, mere
conjectures cannot work to deprive employees of their means of livelihood. Thus, it
must be concluded that Tongko was illegally dismissed.
Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that
Tongko not being its employee is not entitled to such notices. Since we have ruled
that Tongko is its employee, however, Manulife clearly failed to afford Tongko said
notices. Thus, on this ground too, Manulife is guilty of illegal dismissal.
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As found by both the NLRC and the CA, respondents had no part in petitioners
selection and management; petitioners compensation was paid out of the arriba
(which is a percentage deducted from the total bets), not by petitioners; and
petitioners performed their functions as masiador and sentenciador free from the
direction and control of respondents. In the conduct of their work, petitioners relied
mainly on their expertise that is characteristic of the cockfight gambling, and were
never given by respondents any tool needed for the performance of their work.
Respondents, not being petitioners employers, could never have dismissed, legally or
illegally, petitioners, since respondents were without power or prerogative to do so in
the first place.
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While the NLRC agreed that the PBA has no control over the referees acts of blowing
the whistle and making calls during basketball games, it, nevertheless, theorized that
the said acts refer to the means and methods employed by the referees in officiating
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basketball games for the illogical reason that said acts refer only to the referees
skills. How could a skilled referee perform his job without blowing a whistle and
making calls? Worse, how can the PBA control the performance of work of a referee
without controlling his acts of blowing the whistle and making calls?
Issues: Whether petitioner is an employee of respondents, which in turn determines
whether petitioner was illegally dismissed
Ruling: At any rate, the NLRC declared the issue on the finality of the Labor Arbiters
decision moot as respondents appeal was considered in the interest of substantial
justice. We agree with the NLRC. The ends of justice will be better served if we
resolve the instant case on the merits rather than allowing the substantial issue of
whether petitioner is an independent contractor or an employee linger and remain
unsettled due to procedural technicalities.
The existence of an employer-employee relationship is ultimately a question of fact.
As a general rule, factual issues are beyond the province of this Court. However, this
rule admits of exceptions, one of which is where there are conflicting findings of fact
between the Court of Appeals, on one hand, and the NLRC and Labor Arbiter, on the
other, such as in the present case.
To determine the existence of an employer-employee relationship, case law has
consistently applied the four-fold test, to wit: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employers power to control the employee on the means and methods by which the
work is accomplished. The so-called control test is the most important indicator of
the presence or absence of an employer-employee relationship.
We agree with respondents that once in the playing court, the referees exercise their
own independent judgment, based on the rules of the game, as to when and how a
call or decision is to be made. The referees decide whether an infraction was
committed, and the PBA cannot overrule them once the decision is made on the
playing court. The referees are the only, absolute, and final authority on the playing
court. Respondents or any of the PBA officers cannot and do not determine which calls
to make or not to make and cannot control the referee when he blows the whistle
because such authority exclusively belongs to the referees. The very nature of
petitioners job of officiating a professional basketball game undoubtedly calls for
freedom of control by respondents.
Moreover, the following circumstances indicate that petitioner is an independent
contractor: (1) the referees are required to report for work only when PBA games are
scheduled, which is three times a week spread over an average of only 105 playing
days a year, and they officiate games at an average of two hours per game; and (2)
the only deductions from the fees received by the referees are withholding taxes.
In other words, unlike regular employees who ordinarily report for work eight hours
per day for five days a week, petitioner is required to report for work only when PBA
games are scheduled or three times a week at two hours per game. In addition, there
are no deductions for contributions to the Social Security System, Philhealth or PagIbig, which are the usual deductions from employees salaries. These undisputed
circumstances buttress the fact that petitioner is an independent contractor, and not
an employee of respondents.
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Lirio vs Genovia
G.R. No. 169757, NOVEMBER 23, 2011
In his Position Paper, respondent Genovia alleged, among others, that on August 15,
2001, he was hired as studio manager by petitioner Lirio, owner of Celkor Ad Sonicmix
Recording Studio (Celkor). He was employed to manage and operate Celkor and to
promote and sell the recording studio's services to music enthusiasts and other
prospective clients. He received a monthly salary ofP7,000.00. They also agreed that
he was entitled to an additional commission of P100.00 per hour as recording
technician whenever a client uses the studio for recording, editing or any related
work. He was made to report for work from Monday to Friday from 9:00 a.m. to 6
p.m. On Saturdays, he was required to work half-day only, but most of the time, he
still rendered eight hours of work or more. All the employees of petitioner, including
respondent, rendered overtime work almost every day, but petitioner never kept a
daily time record to avoid paying the employees overtime pay.
Respondent stated that a few days after he started working as a studio manager,
petitioner approached him and told him about his project to produce an album for his
15-year-old daughter, Celine Mei Lirio, a former talent of ABS-CBN Star Records.
Petitioner asked respondent to compose and arrange songs for Celine and promised
that he (Lirio) would draft a contract to assure respondent of his compensation for
such services. As agreed upon, the additional services that respondent would render
included composing and arranging musical scores only, while the technical aspect in
producing the album, such as digital editing, mixing and sound engineering would be
performed by respondent in his capacity as studio manager for which he was paid on a
monthly basis. Petitioner instructed respondent that his work on the album as
composer and arranger would only be done during his spare time, since his other work
as studio manager was the priority. Respondent then started working on the album.
Respondent alleged that before the end of September 2001, he reminded petitioner
about his compensation as composer and arranger of the album. Petitioner verbally
assured him that he would be duly compensated. By mid-November 2001, respondent
finally finished the compositions and musical arrangements of the songs to be
included in the album. Before the month ended, the lead and back-up vocals in the
ten (10) songs were finally recorded and completed. From December 2001 to January
2002, respondent, in his capacity as studio manager, worked on digital editing, mixing
and sound engineering of the vocal and instrumental audio files.
On February 26, 2002, respondent again reminded petitioner about the contract on his
compensation as composer and arranger of the album. Petitioner told respondent that
since he was practically a nobody and had proven nothing yet in the music industry,
respondent did not deserve a high compensation, and he should be thankful that he
was given a job to feed his family. Petitioner informed respondent that he was
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entitled only to 20% of the net profit, and not of the gross sales of the album, and
that the salaries he received and would continue to receive as studio manager of
Celkor would be deducted from the said 20% net profit share. Respondent objected
and insisted that he be properly compensated. On March 14, 2002, petitioner verbally
terminated respondents services, and he was instructed not to report for work.
Respondent asserts that he was illegally dismissed as he was terminated without any
valid grounds, and no hearing was conducted before he was terminated, in violation
of his constitutional right to due process. Having worked for more than six months, he
was already a regular employee. Although he was a so called studio manager, he
had no managerial powers, but was merely an ordinary employee.
Respondent prayed for his reinstatement without loss of seniority rights, or, in the
alternative, that he be paid separation pay, back wages and overtime pay; and that
he be awarded unpaid commission in the amount of P2,000.00 for services rendered
as a studio technician as well as moral and exemplary damages.
Respondents evidence consisted of the Payroll dated July 31, 2001 to March 15, 2002,
which was certified correct by petitioner,[2] and Petty Cash Vouchers[3] evidencing
receipt of payroll payments by respondent from Celkor.
In defense, petitioner stated in his Position Paper[4]that respondent was not hired as
studio manager, composer, technician or as an employee in any other capacity of
Celkor. Respondent could not have been hired as a studio manager, since the
recording studio has no personnel except petitioner. Petitioner further claimed that
his daughter Celine Mei Lirio, a former contract artist of ABS-CBN Star Records, failed
to come up with an album as the latter aborted its project to produce one.Thus, he
decided to produce an album for his daughter and established a recording studio,
which he named Celkor Ad Sonicmix Recording Studio. He looked for a composer/
arranger who would compose the songs for the said album. In July 2001, Bob Santiago,
his son-in-law, introduced him to respondent, who claimed to be an amateur
composer, an arranger with limited experience and musician without any formal
musical training. According to petitioner, respondent had no track record as a
composer, and he was not known in the field of music. Nevertheless, after some
discussion, respondent verbally agreed with petitioner to co-produce the album based
on the following terms and conditions: (1) petitioner shall provide all the financing,
equipment and recording studio; (2) Celine Mei Lirio shall sing all the songs; (3)
respondent shall act as composer and arranger of all the lyrics and the music of the
five songs he already composed and the revival songs; (4) petitioner shall have
exclusive right to market the album; (5) petitioner was entitled to 60% of the net
profit, while respondent and Celine Mei Lirio were each entitled to 20% of the net
profit; and (6) respondent shall be entitled to draw advances ofP7,000.00 a month,
which shall be deductible from his share of the net profits and only until such time
that the album has been produced.
According to petitioner, they arrived at the foregoing sharing of profits based on the
mutual understanding that respondent was just an amateur composer with no track
record whatsoever in the music industry, had no definite source of income, had
limited experience as an arranger, had no knowledge of the use of sound mixers or
digital arranger and that petitionerwouldhelp and teach him how to use the studio
equipment; that petitioner would shoulder all the expenses of production and provide
the studio and equipment as well as his knowledge in the use thereof; and Celine Mei
Lirio would sing the songs. They embarked on the production of the album on or about
the third week of August 2002.
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Petitioner asserted that from the aforesaid terms and conditions, his relationship with
respondent is one of an informal partnership under Article 1767of the New Civil Code,
since they agreed to contribute money, property or industry to a common fund with
the intention of dividing the profits among themselves. Petitioner had no control over
the time and manner by which respondent composed or arranged the songs, except on
the result thereof. Respondent reported to the recording studio between 10:00 a.m.
and 12:00 noon. Hence, petitioner contended that no employer-employee relationship
existed between him and the respondent, and there was no illegal dismissal to speak
of.
In this case, the documentary evidence presented by respondent to prove that he was
an employee of petitioner are as follows: (a) a document denominated as
"payroll" (dated July 31, 2001 to March 15, 2002) certified correct by petitioner,
[31]which showed that respondent received a monthly salary ofP7,000.00 (P3,500.00
every 15th of the month and another P3,500.00 every 30th of the month) with the
corresponding deductions due to absences incurred by respondent; and (2) copies of
petty cash vouchers,[32] showing the amounts he received and signed for in the
payrolls.
The said documents showed that petitioner hired respondent as an employee and he
was paid monthly wages of P7, 000.00. Petitioner wielded the power to dismiss as
respondent stated that he was verbally dismissed by petitioner, and respondent,
thereafter, filed an action for illegal dismissal against petitioner. The power of
control refers merely to the existence of the power. It is not essential for the
employer to actually supervise the performance of duties of the employee, as it is
sufficient that the former has a right to wield the power. Nevertheless, petitioner
stated in his Position Paper that it was agreed that he would help and teach
respondent how to use the studio equipment. In such case, petitioner certainly had
the power to check on the progress and work of respondent.
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Petitioner's admission that he did not receive his salary for the three months of his
employment by BCC, as his complaint for illegal dismissal and non-payment of wages
and the criminal case for estafa he later filed against the respondents for nonpayment of wages indicated, further raised grave doubts about his assertion of
employment by BCC. If the assertion was true, we are puzzled how he could have
remained in BCC's employ in that period of time despite not being paid the first salary
of P20,000.00/month. Moreover, his name did not appear in the payroll of BCC despite
him having approved the payroll as comptroller.
Lastly, the confusion about the date of his alleged illegal dismissal provides another
indicium of the insincerity of petitioner's assertion of employment by BCC. In the
petition for review on certiorari, he averred that he had been barred from entering
the premises of BCC on October 19, 1995, 27 and thus was illegally dismissed. Yet, his
complaint for illegal dismissal stated that he had been illegally dismissed on
December 12, 1995 when respondents' security guards barred him from entering the
premises of BCC, 28 causing him to bring his complaint only on December 29, 1995,
and after BCC had already filed the criminal complaint against him. The wide gap
between October 19, 1995 and December 12, 1995 cannot be dismissed as a trivial
inconsistency considering that the several incidents affecting the veracity of his
assertion of employment by BCC earlier noted herein transpired in that interval.
With all the grave doubts thus raised against petitioner's claim, we need not dwell at
length on the other proofs he presented, like the affidavits of some of the employees
of BCC, the ID, and the signed checks, bills and receipts. Suffice it to be stated that
such other proofs were easily explainable by respondents and by the aforestated
circumstances showing him to be the employee of SFC, not of BCC.
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and skill and the quality of the music he played during the hours of performance each
night, taking into account the prevailing rate for similar talents in the entertainment
industry
Respondents remuneration, albeit denominated as talent fees, was still considered as
included in the term wage in the sense and context of the Labor Code, regardless of
how petitioner chose to designate the remuneration.
Thirdly, the power of the employer to control the work of the employee is considered
the most significant determinant of the existence of an employer-employee
relationship. This is the so-called control test, and is premised on whether the person
for whom the services are performed reserves the right to control both the end
achieved and the manner and means used to achieve that end.
A review of the records shows, however, shows that respondent performed his work as
a Pianist under petitioners supervision and control. Specifically, petitioners control
of both the end achieved and the manner and means used to achieve that end was
demonstrated by the following, to wit:
a) He could not choose the time of his performance, which petitioners had fixed
from 7:00 pm to 10:00 pm, three to six times a week;
b) He could not choose the place of his performance;
c) The restaurants manager required him at certain times to perform only
Tagalog songs or music, or to wear barong Tagalog to conform to the Filipiniana
motif; and
d) He was subjected to the rules on employees representation check and chits, a
privilege granted to other employees.
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rates of products and services; (b) imposed minimum processed tire requirement
(MPR); (c) reviewed and regulated credit applications; and (d) retained the power to
suspend petitioners services for failure to meet service standards. But uniformity in
prices, quality of services, and good business practices are the essence of all
franchises. A franchisee will damage the franchisors business if he sells at different
prices, renders different or inferior services, or engages in bad business practices.
These business constraints are needed to maintain collective responsibility for
faultless and reliable service to the same class of customers for the same prices.
This is not the control contemplated in employeremployee relationships. Control in
such relationships addresses the details of day to day work like assigning the
particular task that has to be done, monitoring the way tasks are done and their
results, and determining the time during which the employee must report for work or
accomplish his assigned task.
Petitioners cannot use the revolving funds feature of the SFAs as evidence of their
employeremployee relationship with Bandag. These funds do not represent wages.
They are more in the nature of capital advances for operations that Bandag
conceptualized to attract prospective franchisees. Petitioners incomes depended on
the profits they make, controlled by their individual abilities to increase sales and
reduce operating costs.
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In the case, the CA ratiocinatedthat since the performance of his tasks is subject to
company rules, regulations, code of ethics, and periodic evaluation, the element
of control is present.
The court disagrees. Not every form of control is indicative of employer-employee
relationship.A person who performs work for another and is subjected to its rules,
regulations, and code of ethics does not necessarily become an employee. As long as
the level of control does not interfere with the means and methods of accomplishing
the assigned tasks, the rules imposed by the hiring party on the hired party do not
amount to the labor law concept of control that is indicative of employer-employee
relationship
In this case, the rules, regulations, code of ethics, and periodic evaluation alluded
to by Alcantara do not involve control over the means and methods by which he
was to perform his job. In Tongko Case, this Court held that guidelines or rules and
regulations that do not pertain to the means or methods to be employed in attaining
the result are not indicative of control as understood in labor law
Neither does the repeated hiring of Alcantara prove the existence of employeremployee relationship. The continuous rehiring of Alcantara simply signifies the
renewal of his contract with Royale Homes, and highlights his satisfactory services
warranting the renewal of such contract
Payment of Wages
The element of payment of wages is also absent in this case. Alcantara's
remunerations consist only of commission override of 0.5%, budget allocation, sales
incentive and other forms of company support. There is no proof that he received
fixed monthly salary. No payslip or payroll was ever presented and there is no proof
that Royale Homes deducted from his supposed salary withholding tax or that it
registered him with the Social Security System, Philippine Health Insurance
Corporation, or Pag-Ibig Fund
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There is no hard and fast rule designed to establish the aforesaid elements.
Any competent and relevant evidenceto prove the relationship may be
admitted. Identification cards, cash vouchers, social security registration,
appointment letters or employment contracts, payrolls, organization charts,
and personnel lists, serve as evidence of employee status.
Arlene claims to be a regular employee. However Fuji insists that she was an
independent employee. The burden of proving that she was an independent
contractor lies with Fuji. In labor cases, the quantum of proof required is substantial
evidence.
Under Article 280, the provision classifies employees into regular, project, seasonal,
and casual. It further classifies regular employees into two kinds:
1. Those"engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer" (regular employees)
2. Casual employees who have "rendered at least one year of service, whether
such service is continuous or broken."
The Court defines independent contractor as:
. . . one who carries on a distinct and independent business and undertakes to
perform the job, work, or service on its own account and under one's own
responsibility according to one's own manner and method, free from the
control and direction of the principal in all matters connected with the
performance of the work except as to the results thereof.
Moreover, noemployer-employee relationship exists between independent contractors
and their principals who engage the contractor's services, but there is an employeremployee relationship between the contractor and workers hired to accomplish the
work for the principal.Thus, their contracts are governed by theCivil Code provisions
on contracts and other applicable laws.
In the facts of the case and using the four-fold test, Arlene was hired by Fuji as a
news producer, but there wasnoshowing that she was hired because of unique skills
that would distinguish her from ordinary employees. Neither was there any showing
that she had a celebrity status. Her monthly salary amounting to US$1,900.00 appears
to be a substantial sum. Fuji had the power to dismiss Arlene, as provided for in her
professional employment contract. Even the mode of transportation in carrying out
her functions was controlled by Fuji. Therefore, Arlene is a regular employee and not
an independent contractor.
There is also a test for determining regular employment where there is a reasonable
connection between the employee's activities and the usual business of the employer.
Article 280 provides that the nature of work must be "necessary or desirable in the
usual business or trade of the employer" ! the test for determining regular
employment. However, there may also be a situation where an employee's work is
necessary but is not always desirable in the usual course of business of the employer.
In this situation, there isnoregular employment.
Fuji is engaged in the business of broadcasting, including news programming. It is
based in Japan and has overseas offices to cover international news. Based on the
record, Fuji's Manila Bureau Office is a small unit and has a few employees. Arlene
had to do all activities related to news gathering.
Arlene's tasks included "monitoring and getting news stories, reporting and
interviewing subjects in front of a video camera, timely submission of news and
current events reports pertaining to the Philippines and going to Fuji's regional office
in Thailand."She also had to report for work in Fuji's office in Manila from Mondays to
Fridays, eight (8) hours per day. She hadnoequipment and had to use the facilities
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1. ABS-CBN Regional Network Group in Naga City employed Amalia Villafuerte as a manager.
2. 1996: ABS-CBN employed then petitioners Begino and Del Valle as cameramen/Editors for TV
broadcasting, ABS-CBN also employed Sumayao and Monina
3. Petitioners engaged their services thru Talent Contracts which are regularly renewed over three
months to 1 year.
4. Petitioners were also given Project Assignment forms which determined the duration of a
particular project as well as the budget and the technical requirements thereof. Petitioners were
then tasked to work on subsequent daily airings in respondents TV Patrol Bicol Program
5. The Talent contracts specifically provided that there is no employee-employer (ER-EE)
relationship between petitioners and respondents, but it additionally provided for:
a. Creation and performance of work according to ABS-CBNs standards, policies and
guidelines
b. The petitioners should not work for ABS-CBNs competing companies or any of the same
that had an adverse interest to that of ABS-CBN
c. The work they are doing is results oriented, which does not require them to have fixed or
normal hours of work
6. Petitioners remunerations were denominated as talent fees
7. Petitioners, claiming that they are employees of the respondent, filed a complaint against ABSCBN in the NLRC Sub-Regional Arbitration Brannch for regularization, underpayment of overtime
pay, holiday pay, 13th month pay, Service incentive leave pay, damages and attys fees,
contending that:
a. They performed functions necessary and desirable in ABS-CBN business
b. They are mandated to wear company IDs
c. They are provided all the equipment needed
d. They worked under the direct control and supervision of respondent Villafuerte
e. They were also bound on ABS-CBNs policy on attendance and punctuality
f. That ABS-CBN due to the Contracts, they earn less than what respondents usually pay
their regular rank-and-file employees
8. Respondents refuted the petitioners claim saying that:
a. The petitioners are independent contractors, they employed them due to lack of
manpower to man the business
b. They are known as talents and required to inform ABS-CBN of their availability through
Talent Information Forms to facilitate their appearance on designated project days
c. They cannot afford employing regular workers due to unpredictable viewer preferences
d. That through the talent contracts, petitioners were engaged because of their skills,
knowledge and expertise
e. That the policies were general guidelines only and does not subject petitioners to control
f. They were never subjected to control over the means and methods by which they do their
tasks
9. During the pendency of their case, petitioners were dismissed and they filed a second complaint,
adding illegal dismissal and unfair labor practice to their previous claims
10. 2nd claim of petitioners were dismissed for violation of rules against non-forum shopping because
the issues in the 1st complaint must be resolved first before resolving the 2nd complaint
11. Labor Arbiter resolved the first complaint in favor of petitioners, ordering ABS-CBN to pay a total
of P2,440,908.36 representing salaries/wage differentials, holiday pay, SIL, 13th month pay and
attys fees. LA also ordered respondents to admit back complainants under the same terms
prevailing prior to their separation. LA said that they are employees because:
a. Petitioners have worked for more than a year
b. Petitioners are bound by exclusivity clause in the talent contracts
c. There was substantial control over them
12. Resp appealed to the NLRC which affirmed the LAs decision
13. Resp then appealed to the CA, CA reversed
14. Petitioners then appealed to SC
15. SC finds the petition impressed with merit
a. SC applied the four-fold test and the control test and found that there is a presence of an
EE-ER relationship
b. Based on article 280 of the Labor Code, petitioners are regular employees of ABS-CBN
due to the reasonable connection between the activity performed by the petitioners and
the business or trade of ABS-CBN
c. Also petitioners were continuously rehired over the years for its long running news
program which indicates that petitioners are regular employees
d. Even if the performance is not continuous or merely intermittent, the law deems the
repeated or continuing performance as sufficient evidence of the necessity, if not
indispensability of that activity in the business. Indeed, an employment stops being coterminous with specific projects where the employee is continuously re-hired due to the
demands of the employers business
e. Exclusivity clause and the provision on equipments essential for their functions shows
that petitioners were subject to control of the respondents
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f.
Even if the performance is not continuous or merely intermittent, the law deems
repeated or continuing performance as sufficient evidence of the necessity, if
indispensability of that activity in the business.29 Indeed, an employment stops being
terminous with specific projects where the employee is continuously re-hired due to
demands of the employers business
16. SC Reversed the CA decision and reinstated NLRC decision
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the
not
cothe
HIRING OF EMPLOYEE
Ollendor vs Abrahanson 38 Phil 585
Facts: An agreement was entered into by Ollendorff and Abrahamson whereby
theformer agreed to employ Abrahamson and the latter bound himself to work for him
for a period of 2yrs with a salary of P50 per week. Included in the agreement is a
prohibition of Abrahamson from engaging in a similar or competitive business
to anywhere within the Philippine Islands for a period of five years. The duties
performed by the defendant were such to make it necessary for him to be generally
knowledgeable of Ollendorffs business, moreover, he had been engaged in similar
work for several years even before his employment of the plaintiffs embroidery
business.
After some months from his departure for the US, Abrahamson returned to Manila and
is now a manager of the Philippine Underwear Co. This corporation, unlike
Ollendorffs, does not maintain a factory in Phil. Islands but send material and
embroidery designs from New York to its local representative here who employs
Filipino needle workers to embroider the designs and make up the garments in their
homes. The only difference between plaintiff's business and that of the firm by which
the defendant is employed, is the method of doing the finishing work -- the
manufacture of the embroidered material into finished garments. Plaintiff
commenced an action to prevent by injunction, any further breach of that part of
defendant's contract of employment by which he agreed that he would not "enter into
or engage himself directly or indirectly . . . in a similar or competitive business to
that of (plaintiff) anywhere within the Philippine Islands for a period of five
years . . ." from the date of the agreement.
Issue: WON the part of the agreement restraining the defendant from engaging into
similar business of the plaintiff is void?
Ruling: The contract was not void as constituting an unreasonable restraint of trade.
The rule in this jurisdiction is that the obligations created by contracts have theforce
of lawbetween the contracting parties and must be enforce in accordance with their
tenor. (Civil Code, art 1091.) The only limitation upon the freedom of contractual
agreement is that the pacts established shall not be contrary to "law, morals or public
order." (Civil Code, Art. 1255.)
Following the rule in Mitchel vs. Reynolds, Court adopt the modern rule that the
validity of restraints upon trade or employment is to be determined by the intrinsinc
reasonableness of restriction in each case, rather than by any fixed rule, and that
such restrictions may be upheld when not contrary to afford a fair and reasonable
protection to the party in whose favor it is imposed.
Examining the contract here in question from this stand point, it does not seem so
with respect to an employee whose duties are such as of necessity to give him an
insight into the general scope and details of his employers business. A business
enterprise may and often does depend for its success upon the owner's relations with
other dealers, his skill in establishing favorable connections, his methods of buying
and selling -- a multitude of details, none vital if considered alone, but which in the
aggregate constitute the sum total of the advantages which the result of the
experience or individual aptitude and ability of the man or men by whom the business
has been built up. Failure or success may depend upon the possession of these
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intangible but all important assets, and it is natural that their possessor should seek
to keep them from falling into the hands of his competitors. It is with this object in
view that such restrictions as that now under consideration are written into contracts
of employment. Their purpose is the protection of the employer, and if they do not go
beyond what is reasonably necessary to effectuate this purpose they should be
upheld.
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against the possibility that a competitor company will gain access to its secrets and
procedures.
That Glaxo possesses the right to protect its economic interests cannot be denied. No
less than the Constitution recognizes the right of enterprises to adopt and enforce
such a policy to protect its right to reasonable returns on investments and to
expansion and growth.
The challenged company policy does not violate the equal protection clause of the
Constitution as petitioners erroneously suggest. It is a settled principle that the
commands of the equal protection clause are addressed only to the state or those
acting under color of its authority.
From the wordings of the contractual provision and the policy in its employee
handbook, it is clear that Glaxo does not impose an absolute prohibition against
relationships between its employees and those of competitor companies.
Its
employees are free to cultivate relationships with and marry persons of their own
choosing. What the company merely seeks to avoid is a conflict of interest between
the employee and the company that may arise out of such relationships.
There was no merit in Tecsons contention that he was constructively dismissed when
he was transferred from the Camarines Norte-Camarines Sur sales area to the Butuan
City-Surigao City-Agusan del Sur sales area, and when he was excluded from attending
the companys seminar on new products which were directly competing with similar
products manufactured by Astra. Constructive dismissal is defined as a quitting, an
involuntary resignation resorted to when continued employment becomes impossible,
unreasonable, or unlikely; when there is a demotion in rank or diminution in pay; or
when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to the employee. The record does not show that Tecson was demoted or
unduly discriminated upon by reason of such transfer.
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Ruling: It is undoubtedly one of the fundamental duties of the City of Manila to make
all reasonable regulations looking to the promotion of the moral and social values of
the community. However, the worthy aim of fostering public morals and the
eradication of the communitys social ills can be achieved through means less
restrictive of private rights; it can be attained by reasonable restrictions rather than
by an absolute prohibition. The closing down and transfer of businesses or their
conversion into businesses allowed under theOrdinancehave no reasonable relation
to the accomplishment of its purposes. Otherwise stated, the prohibition of the
enumerated establishments will notper seprotect and promote the social and moral
welfare of the community; it will not in itself eradicate the alluded social ills of
prostitution, adultery, fornication nor will it arrest the spread of sexual disease in
Manila.
It is readily apparent that the means employed by theOrdinancefor the achievement
of its purposes, the governmental interference itself, infringes on the constitutional
guarantees of a persons fundamental right to liberty and property.
Persons desirous to own, operate and patronize the enumerated establishments under
Section 1 of theOrdinancemay seek autonomy for these purposes.
Motel patrons who are single and unmarried may invoke this right to autonomy to
consummate their bonds in intimate sexual conduct within the motels premisesbe it
stressed that their consensual sexual behavior does not contravene any fundamental
state policy as contained in the Constitution.[72] Adults have a right to choose to forge
such relationships with others in the confines of their own private lives and still retain
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their dignity as free persons. The liberty protected by the Constitution allows persons
the right to make this choice.[73] Their right to liberty under the due process clause
gives them the full right to engage in their conduct without intervention of the
government, as long as they do not run afoul of the law. Liberty should be the rule
and restraint the exception.
Liberty in the constitutional sense not only means freedom from unlawful government
restraint; it must include privacy as well, if it is to be a repository of freedom. The
right to be let alone is the beginning of all freedomit is the most comprehensive of
rights and the right most valued by civilized men
All considered, the Ordinance invades fundamental personal and property rights and
impairs personal privileges. It is constitutionally infirm. The Ordinance contravenes
statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently
detailed and explicit that abuses may attend the enforcement of its sanctions. And
not to be forgotten, the City Council under the Code had no power to enact
theOrdinanceand is thereforeultra vires, null and void.
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or
to
be
or
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Facts: The union known as Ilaw at Buklod Ng Manggagawa (IBM) said to represent
4,500 employees of San Miguel Corporation, more or less, working at the various
plants, offices, and warehouses located at the National Capital Region presented to
the company a "demand" for correction of the significant distortion in the workers'
wages. In that demand, the Union explicitly invoked Section 4 (d) of RA 6727 which
reads as follows: Where the application of the increases in the wage rates under this
Section results in distortions as defined under existing laws in the wage structure
within an establishment and gives rise to a dispute therein, such dispute shall first be
settled voluntarily between the parties and in the event of a deadlock, the same shall
be finally resolved through compulsory arbitration by the regional branches of the
National Labor Relations Commission having jurisdiction over the workplace. It shall
be mandatory for the NLRC to conduct continuous hearings and decide any dispute
arising under this Section within twenty (20) calendar days from the time said dispute
is formally submitted to it for arbitration. The pendency of a dispute arising from a
wage distortion shall not in any way delay the applicability of the increase in the
wage rates prescribed under this Section.
Issue: WON the strike is legal in the resolution of wage distortion.
Ruling: Strike is not legal as a means of resolving wage distortion. The strike
involving the issue of wage distortion is illegal as a means of resolving it. The legality
of these activities is usually dependent on the legality of the purposes sought to be
attained and the means employed therefore. It goes without saying that these joint or
coordinated activities may be forbidden or restricted by law or contract. In the
instance of "distortions of the wage structure within an establishment" resulting from
"the application of any prescribed wage increase by virtue of a law or wage order,"
Section 3 of Republic Act No. 6727 prescribes a specific, detailed and comprehensive
procedure for the correction thereof, thereby implicitly excluding strikes or lockouts
or other concerted activities as modes of settlement of the issue.
The provision states that the employer and the union shall negotiate to correct the
distortions. Any dispute arising from wage distortions shall be resolved through the
grievance procedure under their collective bargaining agreement and, if it remains
unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in
writing, such dispute shall be decided by the voluntary arbitrator or panel of
voluntary arbitrators within ten (10) calendar days from the time said dispute was
referred to voluntary arbitration. In cases where there are no collective agreements
or recognized labor unions, the employers and workers shall endeavor to correct such
distortions. Any dispute arising there from shall be settled through the National
Conciliation and Mediation Board and, if it remains unresolved after ten (10) calendar
days of conciliation, shall be referred to the appropriate branch of the National Labor
Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct
continuous hearings and decide the dispute within twenty (20) calendar days from the
time said dispute is submitted for compulsory arbitration. The pendency of a dispute
arising from a wage distortion shall not in any way delay the applicability of any
increase in prescribed wage rates pursuant to the provisions of law or Wage Order.
The legislative intent that solution of the problem of wage distortions shall be sought
by voluntary negotiation or arbitration, and not by strikes, lockouts, or other
concerted activities of the employees or management, is made clear in the rules
implementing RA 6727 issued by the Secretary of Labor and Employment pursuant to
the authority granted by Section 13 of the Act. Section 16, Chapter I of these
implementing rules, after reiterating the policy that wage distortions be first settled
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the hierarchy of positions and the disparity of their corresponding wages and other
emoluments that are sought to be preserved by the concept of wage distortion.
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not represent such fair and reasonable value as determined by the proper authority
simply because the Staff/Manager's allowance and transportation allowance were
amounts given by respondent company in lieu of actual provisions for housing and
transportation needs whereas the Bislig allowance was given in consideration of
being assigned to the hostile environment then prevailing in Bislig.
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EJR CRAFTS CO. VS. CA ,G.R. No. 154101; March 10, 2006
Facts: On August 22, 1997, an inspection was conducted on the premises of
petitoners offices wherein it was found that certain violations of labor standards laws
were committed. On the same day, the Notice of Inspection Result was received by
and explained to, the manager, with the corresponding directive that necessary
restitution be effected within five days from said receipt.
As no restitution was made, the Regional Office conducted summary investigations.
Despite due notice, petitioner failed to appear for two consecutive scheduled
hearings.
Furthermore, petitioner failed to question the findings of the Labor
Inspector received by and explained to the manager.
The inspection was prompted by the filing of respondents sometime in 1997 against
petitioner a complaint for underpayment of wages, regular holiday pay, and other
benefits.
On November 6, 1997, the Regional Director issued a ruling against petitioner, which
was appealed, but later on denied.
On the petition, petitioner argued that the Regional Director has no jurisdiction over
the case since respondents have ceased to be connected with petitioner at the time
of the filing of the complaint as well as when the inspection/investigation was
conducted. Thus, there being no ER-EE relationship, the claims of payment of
monetary benefits fall within the exclusive and original jurisdiction of the Labor
Arbiter.
Issue: Whether or not the Regional Director had jurisdiction to hear the case.
Ruling: Yes, it does.
Aside from photocopies of documents entitled Release and Quitclaim, no other
evidence was adduced by the petitioner to substantiate this claim. These documents,
being mere photocopies are unreliable and incompetent without the original and
deserves little credence or weight.
As is well-settled, if doubts exist between the evidence presented by the employer
and the employee, the scales of justice must be tilted in favor of the employee.
Since it is a time-honored rule that in controversies between a laborer and his master,
doubts reasonably arising from the evidence, or in the interpretation of agreements
and writings should be resolved in the formers favor.
Considering thus that there still exists an employer-employee relationship between
petitioner and private respondents and that the case involves violations of labor
standard provisions of the Labor Code, the Regional Director has jurisdiction to hear
and decide the instant case in conformity with Article 128(b) of the Labor Code.
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Facts: Petitioner is a corporation duly organized and existing under Philippine laws
and is engaged in the manufacture of steel bars and wire rods. Pag-Asa Steel Workers
Union is the duly authorized bargaining agent of the rank-and-file employees of
petitioner. On Jan. 8, 1998, the Regional Tripartite Wages and Productivity Board
(Wage Board) of the NCR issued Wage Order No. NCR-06. It provided for an increase of
P13.00 per day in the salaries of employees receiving the minimum wage, and a
consequent increase in the minimum wage rate to P198.00 per day. Petitioner and the
Union negotiated on how to go about the wage adjustments. Petitioner forwarded a
letter to the Union with the list of the salary adjustments of the rank-and-file
employees after the implementation of Wage Order No. NCR-06. On Sept. 23, 1999,
petitioner and the Union entered into a CBA, effective July 1, 1999 until July 1, 2004.
On Nov. 1, 2000, W age Order No. NCR-08 9 took effect. Section 1 thereof provides:
Upon the effectivity of this Wage Order, private sector workers and employees in the
National Capital Region receiving the prescribed daily minimum wage rate of P223.50
shall receive an increase of P26.50 per day, thereby setting the new minimum wage
rate in the National Capital Region at P250.00 per day.
Then Union president requested petitioner to implement the increase under Wage
Order No. NCR-08 in favor of the company's rank-and-file employees. Petitioner
rejected the request, claiming that since none of the employees were receiving a
daily salary rate lower than P250.00 and there was no wage distortion, it was not
obliged to grant the wage increase.The Union elevated the matter to the NCMB. When
the parties failed to settle, they agreed to refer the case to voluntary arbitration.
The Union alleged that it has been the company's practice to grant a wage increase
under a government-issued wage order, aside from the yearly wage increases in the
CBA. It averred that petitioner paid the salary increases provided under the previous
wage orders in full (aside from the yearly CBA increases), regardless of whether there
was a resulting wage distortion, or whether Union members' salaries were above the
minimum wage rate. Wage Order No. NCR-06, where rank-and-file employees were
given different wage increases ranging from P10.00 to P13.00, was an exception since
the adjustments were the result of the formula agreed upon by the Union and the
employer after negotiations. The Union averred that all of their CBAs with petitioner
had a "collateral agreement" where petitioner was mandated to pay the equivalent of
the wage orders across-the-board, or at least to negotiate how much will be paid. It
pointed out that an established practice cannot be discontinued without running afoul
of Article 100 of the Labor Code on non-diminution of benefits.
For its part, petitioner alleged that there is no such company practice and that it
complied with the previous wage orders (Wage Order Nos. NCR-01-05) because some
of its employees were receiving wages below the minimum prescribed under said
orders. As for Wage Order No. NCR-07, petitioner alleged that its compliance was in
accordance with its verbal commitment to the Union during the CBA negotiations that
it would implement any wage order issued in 1999. Petitioner further averred that it
applied the wage distortion formula prescribed under Wage Order Nos. NCR-06 and
NCR-07 because an actual distortion occurred as a result of their implementation. It
asserted that at present, all its employees enjoy regular status and that none receives
a daily wage lower than the P250.00 minimum wage rate prescribed under Wage
Order No. NCR-08.
Issue: Whether or not the petitioner is obliged to grant an increase to its employees
as a matter of practice.
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Ruling: The petition is meritorious. We rule that petitioner is not obliged to grant the
wage increase under Wage Order No. NCR-08 either by virtue of the CBA, or as a
matter of company practice. We agree with petitioner's contention that the issue on
the ambiguity of the CBA and its failure to express the true intention of the parties
has not been expressly raised before the voluntary arbitration proceedings.
It is submitted that employers (unless exempt) in Metro Manila (including the
[petitioner]) are mandated to implement the said wage order but limited to those
entitled thereto. There is no legal basis to implement the same across-the-board. A
perusal of the record shows that the lowest paid employee before the implementation
of Wage Order #8 is P250.00/day and none was receiving below P223.50 minimum.
This could only mean that the union can no longer demand for any wage distortion
adjustment. Neither could they insist for an adjustment of P26.50 increase under
Wage Order #8. The provision of wage order #8 and its implementing rules are very
clear as to who are entitled to the P26.50/day increase, i.e., "private sector workers
and employees in the National Capital Region receiving the prescribed daily minimum
wage rate of P223.50 shall receive an increase of P26.50 per day," and since the
lowest paid is P250.00/day the company is not obliged to adjust the wages of the
workers.
We find no evidence to prove that the grant of a wage-order-mandated increase to all
the employees regardless of their salary rates on an agreement collateral to the CBA
had ripened into company practice before the effectivity of Wage Order No. NCR-08.
Respondent Union failed to adduce proof on the salaries of the employees prior to the
issuance of each wage order to establish its allegation that, even if the employees
were receiving salaries above the minimum wage and there was no wage distortion,
they were still granted salary increase. Only the following lists of salaries of
respondent Union's members were presented in evidence: (1) before Wage Order No.
NCR-06 was issued; (2) after Wage Order No. NCR-06 was implemented; (3) after the
grant of the first year increase under the CBA; (4) after Wage Order No. NCR-07 was
implemented; and (5) after the second year increase in the CBA was implemented.
Moreover, to ripen into a company practice that is demandable as a matter of right,
the giving of the increase should not be by reason of a strict legal or contractual
obligation, but by reason of an act of liberality on the part of the employer. In this
case, petitioner granted the increase under Wage Order No. NCR-07 on its belief that
it was obliged to do so under the CBA.
WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court
of Appeals in CA-G.R. SP No. 65171 and Resolution dated January 11, 2005 are
REVERSED and SET ASIDE. The Decision of the Voluntary Arbitrator is REINSTATED. No
costs.
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There is no vested right to salary increases. Sadac may have received salary
increases in the past only proves fact of receipt but does not establish a degree of
assuredness that is inherent in backwages. The conclusion is that Sadacs
computation of his full backwages which includes his prospective salary increases
cannot be permitted.
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reasonable value of such facilities. In such cases, the employer may deduct from the
wages of the employees not more than 70% of the value of the meals and snacks
enjoyed by the latter, provided that such deduction is with the written authorization
of the employees concerned.
Moreover, before the value of facilities can be deducted from the employees' wages,
the following requisites must all be attendant: first, proof must be shown that such
facilities are customarily furnished by the trade; second, the provision of deductible
facilities must be voluntarily accepted in writing by the employee; and finally,
facilities must be charged at reasonable value.[20] Mere availment is not sufficient to
allow deductions from employees' wages.[21]
These requirements, however, have not been met in this case. SLL failed to present
any company policy or guideline showing that provisions for meals and lodging were
part of the employee's salaries. It also failed to provide proof of the employees'
written authorization, much less show how they arrived at their valuations. At any
rate, it is not even clear whether private respondents actually enjoyed said facilities.
In short, the benefit or privilege given to the employee which constitutes an extra
remuneration above and over his basic or ordinary earning or wage is supplement; and
when said benefit or privilege is part of the laborers' basic wages, it is a facility. The
distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick
leave) given, but in the purpose for which it is given. In the case at bench, the items
provided were given freely by SLL for the purpose of maintaining the efficiency and
health of its workers while they were working at their respective projects.
For said reason, the cases of Agabon and Glaxo are inapplicable in this case. At any
rate, these were cases of dismissal with just and authorized causes. The present case
involves the matter of the failure of the petitioners to comply with the payment of
the prescribed minimum wage.
The Court sustains the deletion of the award of differentials with respect to
respondent Roldan Lopez. As correctly pointed out by the CA, he did not work for the
project in Antipolo.
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and-a-half (1 ) hour rotation period; and b) an increase of the break period from 15
to 30 minutes between rotations.
Apparently, the decision to remove the chairs was done with good intentions as CCBPI
wanted to avoid instances of operators sleeping on the job while in the performance
of their duties and responsibilities and because of the fact that the chairs were not
necessary considering that the operators constantly move about while working. In
short, the removal of the chairs was designed to increase work efficiency. Hence,
CCBPIs exercise of its management prerogative was made in good faith without doing
any harm to the workers rights.
The rights of the Union under any labor law were not violated. There is no law that
requires employers to provide chairs for bottling operators. There was no violation
either of the Health, Safety and Social Welfare Benefit provisions under Book IV of the
Labor Code of the Philippines. As shown in the foregoing, the removal of the chairs
was compensated by the reduction of the working hours and increase in the rest
period. The directive did not expose the bottling operators to safety and health
hazards.
The Union should not complain too much about standing and moving about for one
and one-half (1 ) hours because studies show that sitting in workplaces for a long
time is hazardous to ones health. The CBA between the Union and CCBPI contains no
provision whatsoever requiring the management to provide chairs for the operators in
the production/manufacturing line while performing their duties and responsibilities.
The Court completely agrees with the CA ruling that the removal of the chairs did not
violate the general principles of justice and fair play because the bottling operators
working time was considerably reduced from two and a half (2 ) hours to just one
and a half (1 ) hours and the break period, when they could sit down, was increased
to 30 minutes between rotations. The bottling operators new work schedule is
certainly advantageous to them because it greatly increases their rest period and
significantly decreases their working time. A break time of thirty (30) minutes after
working for only one and a half (1 ) hours is a just and fair work schedule.
The operators chairs cannot be considered as one of the employee benefits covered
in Article 10016 of the Labor Code. In the Courts view, the term "benefits" mentioned
in the non-diminution rule refers to monetary benefits or privileges given to the
employee with monetary equivalents.
Such benefits or privileges form part of the employees wage, salary or compensation
making them enforceable obligations.
This Court has already decided several cases regarding the non-diminution rule where
the benefits or privileges involved in those cases mainly concern monetary
considerations or privileges with monetary equivalents. Without a doubt, equating the
provision of chairs to the bottling operators is something within the ambit of
"benefits'' in the context of Article 100 of the Labor Code is unduly stretching the
coverage of the law. The interpretations of Article 100 of the Labor Code do not show
even with the slightest hint that such provision of chairs for the bottling operators
may be sheltered under its mantle.
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P 1
2.0
0
Nonplantation
P 1
8.5
0
P 1
6.0
0
P 1
2.0
0
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P 1
2.0
0
P 1
9.0
0
x x x x
Section 9. Upon application with and as determined by the Board, based
on documentation and other requirements in accordance with applicable
rules and regulations issued by the Commission, the following may be
exempt from the applicability of this Order:
1. Distressed establishments as defined in the NPWC Guidelines No. 01,
series of 1996;
2. Exporters including indirect exporters with at least 50% export sales and
with forward contracts with their foreign buyers/principals entered into
on or twelve (12) months before the date of publication of this Order
may be exempt during the lifetime of said contract but not to exceed
twelve (12) months from the effectivity of this Order.
Feeling aggrieved by their noncoverage by the wage adjustment, the Alliance of
Progressive Labor (APL) and the Tunay na Nagkakaisang Manggagawa sa Royal (TNMR)
filed an appeal with the NWPC assailing Section 2(A) and Section 9(2) of Wage Order
No. NCR07. They contended that neither the NWPC nor the RTWPBNCR had the
authority to expand the noncoverage and exemptible categories under the wage
order; hence, the assailed sections of the wage order should be voided.
The NWPC upheld the validity of Section 2(A) and Section 9(2) of Wage Order No. NCR
07. It observed that the RTWPBs power to determine exemptible categories was
adjunct to its wage fixing function conferred by Article 122(e) of theLabor Code,
as amended by Republic Act No. 6727; that such authority of the RTWPB was also
recognized in NWPC Guidelines No. 01, Series of 1996.
The APL and TNMR assailed the decisions of the NWPC on certiorari in the CA,
contending that the power of the RTWPBNCR to determine exemptible categories
was not an adjunct to its wage fixing function. CA favored the respondents and
granted the petition forcertiorari.
Hence, this appeal by petition for review oncertiorariby the NWPC and RTWPBNCR.
Issue: Whether or not the RTWPBNCR had
Ruling: the RTWPBNCR had the authority to provide additional exemptions from the
minimum wage adjustments embodied in Wage Order No. NCR07
The NWPC promulgated NWPC Guidelines No. 00195 (Revised Rules of Procedure on
Minimum Wage Fixing) to govern the proceedings in the NWPC and the RTWPBs in the
fixing of minimum wage rates by region, province and industry. Section 1 of Rule VIII
of NWPC Guidelines No. 00195 recognized the power of the RTWPBs to issue
exemptions from the application of the wage orders subject to the guidelines issued
by the NWPC
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Distressed establishments
New business enterprises (NBEs)
Retail/Service establishments employing not more than ten (10) workers
Establishments adversely affected by natural calamities
Under the guidelines, the RTWPBs could issue exemptions from the application of the
wage orders as long as the exemptions complied with the rules of the NWPC. In its
rules, the NWPC enumerated four exemptible establishments, but the list was not
exclusive. The RTWPBs had the authority to include in the wage orders
establishments that belonged to, or to exclude from the four enumerated exemptible
categories.
If the exemption was outside of the four exemptible categories, like here, the
exemptible category should be: (1) in accord with the rationale for exemption; (2)
reviewed/approved by the NWPC; and (3) upon review, the RTWPB issuing the wage
order must submit a strong and justifiable reason or reasons for the inclusion of such
category. It is the compliance with the second requisite that is at issue here.
The NWPC, in arriving at its decision, weighed the arguments of the parties and ruled
that the RTWPBNCR had substantial and justifiable reasons in exempting the sectors
and establishments enumerated in Section 2(A) and Section 9(2) based on the public
hearings and consultations, meetings, socialeconomic data and informations gathered
prior to the issuance of Wage Order No. NCR07. The very fact that the validity of
the assailed sections of Wage Order No. NCR07 had been already passed upon and
upheld by the NWPC meant that the NWPC had already given the wage order its
necessary legal imprimatur. Accordingly, the requisite approval or review was
complied with.
The RTWPBs are the thinking group of men and women guided by statutory standards
and bound by the rules and guidelines prescribed by the NWPC. In the nature of their
functions, the RTWPBs investigate and study all the pertinent facts to ascertain the
conditions in their respective regions. Hence, they are logically vested with the
competence to determine the applicable minimum wages to be imposed as well as the
industries and sectors to exempt from the coverage of their wage orders.
Lastly, Wage Order No. NCR07 is presumed to be regularly issued in the absence of
any strong showing of grave abuse of discretion on the part of RTWPBNCR. The
presumption of validity is made stronger by the fact that its validity was upheld by
the NWPC upon review.
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EX-BATAAN VETERANS SECURITY AGENCYVS. SOLE, G.R. No. 152396; November 20,
2007
Facts Petitioner is in the business of providing security services while respondents are
employees assigned to the National Power Corporation. On February 20, 1996,
respondents instituted a complaint for underpayment of wages against petitioner
before the Regional Office of the DOLE. On March 7, 1996, the Regional Office
conducted a complaint inspection of the Plant, and violations of labor standards laws
were found. On the same date, the Regional Office issued a notice of hearing,
requiring petitioner and respondents to attend.
On August 19, 1996, the Director of the Regional Office issued an order in favor of
respondents.
Petitioner filed a motion for reconsideration, questioning the
jurisdiction of the Regional Director, which was denied. Petitioner appealed to the
SOLE, which affirmed the Regional Directors orders. Petitioner appealed to the CA,
which dismissed the petition. In the petition, the petitioners argue that 1) The
Regional Director did not acquire jurisdiction over petitioner because he failed to
comply with section 11, Rule 14 of the 1997 Rules of Civil Procedure. The notice of
hearing was served at the Plant, not at petitioners main office, and addressed to its
VP. 2) Under articles 129 and 217(b) of the Labor Code, the Labor Arbiter, not the
Regional Director, has exclusive and original jurisdiction over the case because the
individual monetary claim of respondents exceeds P5000. 3) The case falls under the
exception clause in article 128(b) of the Labor Code. The Regional Director should
have certified the case to the arbitration branch of the NLRC.
Issue: (1.) Whether or not the SOLE or his duly authorized representatives acquired
jurisdiction over petitioner. (2.) Whether or not the SOE or his duly authorized
representatives have jurisdiction over the money claims which exceed P5000.
Ruling:
1. YES, THEY HAVE.
The Rules on the Disposition of Labor Standards Cases in the Regional Offices (rules)
specifically state that notices and copies of orders shall be served on the parties or
their duly authorized representatives at their last known address or, if they are
represented by counsel, through the latter. The rules shall be liberally construedand
only in the absence of any applicable provision will the Rules of Court apply in a
suppletory character.
In this case, EBVSAI does not deny having received the notices of hearing. In fact, on
29 March and 13 June 1996, Danilo Burgos and Edwina Manao, detachment
commander and bookkeeper of EBVSAI, respectively, appeared before the Regional
Director. They claimed that the 22 March 1996 notice of hearing was received late
and manifested that the notices should be sent to the Manila office. Thereafter, the
notices of hearing were sent to the Manila office. They were also informed of
EBVSAIs violations and were asked to present the employment records of the private
respondents for verification. They were, moreover, asked to submit, within 10 days,
proof of compliance or their position paper. The Regional Director validly acquired
jurisdiction over EBVSAI. EBVSAI can no longer question the jurisdiction of the
Regional Director after receiving the notices of hearing and after appearing before
the Regional Director.
2. YES, THEY DO.
While it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter
has jurisdiction to hear and decide cases where the aggregate money claims of each
employee exceeds P5,000.00, said provisions of law do not contemplate nor cover the
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visitorial and enforcement powers of the Secretary of Labor or his duly authorized
representatives.
Rather, said powers are defined and set forth in Article 128 of the Labor Code (as
amended by R.A. No. 7730) thus:
Art. 128 Visitorial and enforcement power. --- (b) Notwithstanding the provisions of
Article[s] 129 and 217 of this Code to the contrary, and in cases where the
relationship of employer-employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have the power to issue
compliance orders to give effect to [the labor standards provisions of this Code and
other] labor legislation based on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course of inspection. The Secretary
or his duly authorized representatives shall issue writs of execution to the appropriate
authority for the enforcement of their orders, except in cases where the employer
contests the findings of the labor employment and enforcement officer and raises
issues supported by documentary proofs which were not considered in the course of
inspection.
The aforequoted provision explicitly excludes from its coverage Articles 129 and 217
of the Labor Code by the phrase (N)otwithstanding the provisions of Articles 129 and
217of this Code to the contrary x x x thereby retaining and further strengthening the
power of the Secretary of Labor or his duly authorized representatives to issue
compliance orders to give effect to the labor standards provisions of said Code and
other labor legislation based on the findings of labor employment and enforcement
officer or industrial safety engineer made in the course of inspection.
The visitorial and enforcement powers of the DOLE Regional Director to order and
enforce compliance with labor standard laws can be exercised even where the
individual claim exceeds P5,000.
However, if the labor standards case is covered by the exception clause in Article
128(b) of the Labor Code, then the Regional Director will have to endorse the case to
the appropriate Arbitration Branch of the NLRC. In order to divest the Regional
Director or his representatives of jurisdiction, the following elements must be
present: (a) that the employer contests the findings of the labor regulations officer
and raises issues thereon; (b) that in order to resolve such issues, there is a need to
examine evidentiary matters; and (c) that such matters are not verifiable in the
normal course of inspection. The rules also provide that the employer shall raise such
objections during the hearing of the case or at any time after receipt of the notice of
inspection results.
In this case, the Regional Director validly assumed jurisdiction over the money claims
of private respondents even if the claims exceeded P5,000 because such jurisdiction
was exercised in accordance with Article 128(b) of the Labor Code and the case does
not fall under the exception clause.
The Court notes that EBVSAI did not contest the findings of the labor regulations
officer during the hearing or after receipt of the notice of inspection results. It was
only in its supplemental motion for reconsideration before the Regional Director that
EBVSAI questioned the findings of the labor regulations officer and presented
documentary evidence to controvert the claims of private respondents. But even if
this was the case, the Regional Director and the Secretary of Labor still looked into
and considered EBVSAIs documentary evidence and found that such did not warrant
the reversal of the Regional Directors order. The Secretary of Labor also doubted the
veracity and authenticity of EBVSAIs documentary evidence. Moreover, the pieces of
evidence presented by EBVSAI were verifiable in the normal course of inspection
because all employment records of the employees should be kept and maintained in
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or about the premises of the workplace, which in this case is in Ambuklao Plant, the
establishment where private respondents were regularly assigned.
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Hon. Secretary of Labor vs. Panay Veterans Security and Investigation Agency,
G.R. No. 167708, August 22, 2008
Facts: Petitioners Edgardo M. Agapay and Samillano A. Alonso, Jr. were hired by
respondent Panay Veterans Security and Investigation Agency, Inc. as security guards
sometime in 1988. They were stationed at the plant site of Food Industries, Inc. (FII)
in Sta. Rosa, Laguna until FII terminated its contract with respondent security agency
on July 6, 2000. They were not given new assignments and their benefits (including
13th month pay, overtime pay and holiday pay as well as wage differentials due to
underpayment of wages) were withheld by respondent security agency. This prompted
them to file a complaint for violation of labor standards in the regional office of the
Department of Labor and Employment in the National Capital Region (DOLE-NCR).
A labor inspector acted on the complaint, Manuel M. Cayabyab. He conducted an
inspection on October 3, 2000. His assessment is that the respondents should comply
with the labor standards through payment or question in it to the DOLE-NCR within 5
days.
Respondents neither paid the claims of petitioners Agapay and Alonso, Jr. nor
questioned the labor employment officers findings. Thus, in his May 10, 2001 order,
the Regional Director of the DOLE-NCR adopted the findings and computation of
Cayabyab as to the unpaid benefits due to petitioners Agapay and Alonso, Jr.
Respondents moved for reconsideration but the DOLE-NCR Regional Director denied it.
Undeterred, respondents filed an appeal (with motion to reduce cash or surety bond)
to the Secretary of Labor and Employment. In his July 9, 2002 order, the Secretary of
Labor and Employment found that respondents failed to perfect their appeal since
they did not post a cash or surety bond equivalent to the monetary award. Thus, the
appeal was dismissed and the DOLE-NCR Regional Directors May 10, 2001 order was
declared final and executory. The Secretary of Labor and Employment denied
reconsideration.
Respondents elevated the case to the CA, at first the CA dismissed their appeal and
upheld the DOLEs decision. But the CA granted their reconsideration and modified
DOLEs decision, Invoking the case of Star Angel Handicraft v. National Labor Relations
Commission.
Thus, the case was appealed by the petitioner in supreme court.
Issue: whether or not the CA was right in granting the appeal.
Ruling: No, the employers motion to reduce the appeal the bond was no in
accordance with the art. 128 of Labor code, the last paragraph of the said provision
provides:an order issued by the duly authorized representative of the Secretary of
Labor and Employment under this Article may be appealed to the latter. In case said
order involves a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company
duly accredited by the Secretary of Labor and Employment in the amount
equivalent to the monetary award in the order appealed from
Clearly the respondents did not post bail, when they appealed the case at the DOLENCR.
The CAs amended decision also contradicted the spirit that animates all labor laws,
the promotion of social justice and the protection of workers. The posting of a cash or
surety bond to perfect an appeal of an order involving a monetary award has a twofold purpose: (1) to assure the employee that, if he finally prevails in the case, the
monetary award will be given to him upon dismissal of the employers appeal and (2)
to discourage the employer from using the appeal to delay or evade payment of his
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National Mines and Allied Workers Union vs. Marcopper Mining Corp.,
G.R. No. 174641, Nov. 11, 2008
Facts: DENR ordered the indefinite suspension of MARCOPPER's operations for causing
damage to the environment of the Province of Marinduque by spilling the company's
mine waste or tailings from an old underground impounding area into the Boac River,
in violation of its ECC. NAMAWU was the exclusive bargaining representative of the
rank-and-file workers of MARCOPPER. It filed a complaint with the NLRC against
MARCOPPER for nonpayment of wages, separation pay, damages, and attorney's fees.
NAMAWU claimed that due to the indefinite suspension of MARCOPPER's operations, its
members were not paid the wages due them for six months. It further claimed that its
members are also entitled to be paid their separation pay pursuant to their collective
bargaining agreement with MARCOPPER and under existing implementing rules of the
Labor Code. There had been an illegal strike which occurred.
Issue: Whether or not it is necessary that MARCOPPER file an appeal bond
RULING: In the context of the NLRC appeal bond that is directly at issue, MARCOPPER
had every reason to claim in its April 10, 2000 appeal to the NLRC that it should be
excused from filing an appeal bond with respect to the NAMAWU members who were
no longer company employees. The CA decision decreeing the termination of
employment of those involved in the illegal strike case had already been issued at
that time. We subsequently ruled on the same issue during the time the
environmental incident case was pending before the NLRC. Thus, when the NLRC
dismissed MARCOPPER's appeal for failure to file the requisite appeal bond
corresponding to the 615 NAMAWU members, the termination of employment of these
NAMAWU members was already a settled matter that the NLRC was in no position to
disregard. In this light, the CA was correct in reversing the dismissal of MARCOPPER's
appeal for failure to file an appeal bond. Pursued to its logical end, the CA
conclusions should lead to the dismissal of NAMAWU's complaint with respect to its
615 previously dismissed members.
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Phil Hoteliers Inc., vs National Union of Workers in Hotel Restaurant & Allied
Industries Dusit Hotel Nikko Chapter (2009) G.R. 181972
Facts: Wage Order No. 9, approved by the Regional Tripartite Wages and Productivity
Board (RTWPB) of the National Capital Region (NCR), took effect on 5 November 2001.
It grants P30.00 ECOLA to particular employees and workers of all private sectors,
identified as follows in Section 1 thereof:
Section 1.
Upon the effectivity of this Wage Order, all private sector workers
and employees in the National Capital Region receiving daily wage rates of
TWO HUNDRED FIFTY PESOS (P250.00) up to TWO HUNDRED NINETY PESOS
(P290.00) shall receive an emergency cost of living allowance in the amount of
THIRTY PESOS (P30.00) per day payable in two tranches as follows:
Amount of ECOLA Effectivity
P15.00
5 November 2001
P15.00
1 February 2002
On 20 March 2002, respondent National Union of Workers in Hotel, Restaurant and
Allied Industries-Dusit Hotel Nikko Chapter (Union), through its President, Reynaldo C.
Rasing (Rasing), sent a letter 4 to Director Alex Maraan (Dir. Maraan) of the
Department of Labor and Employment-National Capital Region (DOLE-NCR), reporting
the non-compliance of Dusit Hotel with WO No. 9, while there was an on-going
compulsory arbitration before the National Labor Relations Commission (NLRC) due to
a bargaining deadlock between the Union and Dusit Hotel; and requesting immediate
assistance on this matter. On 24 May 2002, Rasing sent Dir. Maraan another letter
following-up his previous request for assistance.
Acting on Rasing's letters, the DOLE-NCR sent Labor Standards Officer Estrellita
Natividad (LSO Natividad) to conduct an inspection of Dusit Hotel premises on 24 April
2002. In the first Inspection, the report showed that Dusit Hotel is exempt from
complying with WO no. 9. Due to the Second request for inspection, DOLE
representative conducted another round of inspection and the Labor Standards Officer
noted the following in her inspection report:
* Non-presentation of records/payrolls
* Based on submitted payrolls & list of union members by NUWHRAIN-DUSIT HOTEL
NIKKO Chapter, there are one hundred forty-four (144) affected in the implementation
of Wage Order No. NCR-09-> ECOLA covering the periods from Nov. 5/01 to present.
Accordingly, the DOLE-NCR issued a Notice of Inspection Result directing Dusit Hotel
to effect restitution and/or correction of the noted violations within five days from
receipt of the Notice, and to submit any question on the findings of the labor
inspector within the same period, otherwise, an order of compliance would be issued.
The Notice of Inspection Result was duly received by Dusit Hotel Assistant Personnel
Manager Rogelio Santos.
In the meantime, the NLRC rendered a Decision 9 dated 9 October 2002 in NLRC-NCRCC No. 000215-02 the compulsory arbitration involving the Collective Bargaining
Agreement (CBA) deadlock between Dusit Hotel and the Union granting the hotel
employees the following wage increases, in accord with the CBA:
Effective January 1, 2001 - P500.00/month
Effective January 1, 2002 - P550.00/month
Effective January 1, 2003 - P600.00/month
On 22 October 2002, based on the results of the second inspection of Dusit Hotel
premises, DOLE-NCR, through Dir. Maraan, issued the Order 10 directing Dusit Hotel to
pay 144 of its employees the total amount of P1,218,240.00, corresponding to their
unpaid ECOLA under WO No. 9; plus, the penalty of double indemnity, pursuant to
Section 12 of Republic Act No. 6727, 11 as amended by Republic Act No. 8188.
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Dusit Hotel filed a Motion for Reconsideration 13 of the DOLE-NCR Order dated 22
October 2002, arguing that the NLRC Decision dated 9 October 2002, resolving the
bargaining deadlock between Dusit Hotel and the Union, and awarding salary
increases under the CBA to hotel employees retroactive to 1 January 2001, already
rendered the DOLE-NCR Order moot and academic. With the increase in the salaries of
the hotel employees ordered by the NLRC Decision of 9 October 2002, along with the
hotel employees' share in the service charges, the 144 hotel employees, covered by
the DOLE-NCR Order of 22 October 2002, would already be receiving salaries beyond
the coverage of WO No.
Acting on the Motion for Reconsideration of Dusit Hotel, DOLE-NCR issued a Resolution
14 on 27 December 2002, setting aside its earlier Order dated 22 October 2002 for
being moot and academic, in consideration of the NLRC Decision dated 9 October
2002; and dismissing the complaint of the Union against Dusit Hotel, for noncompliance with WO No. 9, for lack of merit.
Issues: Whether the 144 hotel employees were still entitled to ECOLA granted by WO
No. 9 despite the increases in their salaries, retroactive to 1 January 2001, ordered by
NLRC in the latter's Decision dated 9 October 2002. Whether Dusit Hotel is liable for
the double indemnity for violation of the wage order.
Ruling: The Court rules in the negative. It must be noted that the hotel employees
have a right to their share in the service charges collected by Dusit Hotel, pursuant to
Article 96 of the Labor Code of 1991, to wit:
Article 96.Service charges. All service charges collected by hotels, restaurants and
similar establishments shall be distributed at the rate of eighty-five percent (85%) for
all covered employees and fifteen percent (15%) for management. The share of
employees shall be equally distributed among them. In case the service charge is
abolished, the share of the covered employees shall be considered integrated in their
wages.
Since Dusit Hotel is explicitly mandated by the afore-quoted statutory provision to pay
its employees and management their respective shares in the service charges
collected, the hotel cannot claim that payment thereof to its 82 employees constitute
substantial compliance with the payment of ECOLA under WO No. 9. Undoubtedly, the
hotel employees' right to their shares in the service charges collected by Dusit Hotel is
distinct and separate from their right to ECOLA; gratification by the hotel of one does
not result in the satisfaction of the other.
The Court, however, finds no basis to hold Dusit Hotel liable for double indemnity.
Under Section 2 (m) of DOLE Department Order No. 10, Series of 1998, 30 the Notice
of Inspection Result "shall specify the violations discovered, if any, together with the
officer's recommendation and computation of the unpaid benefits due each worker
with an advice that the employer shall be liable for double indemnity in case of
refusal or failure to correct the violation within five calendar days from receipt of
notice". A careful review of the Notice of Inspection Result dated 29 May 2002, issued
herein by the DOLE-NCR to Dusit Hotel, reveals that the said Notice did not contain
such an advice. Although the Notice directed Dusit Hotel to correct its noted
violations within five days from receipt thereof, it was not sufficiently apprised that
failure to do so within the given period would already result in its liability for double
indemnity. The lack of advice deprived Dusit Hotel of the opportunity to decide and
act accordingly within the five-day period, as to avoid the penalty of double
indemnity. By 22 October 2002, the DOLE-NCR, through Dir. Maraan, already issued its
Order directing Dusit Hotel to pay 144 of its employees the total amount of
P1,218,240.00, corresponding to their unpaid ECOLA under WO No. 9; plus the penalty
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another agency, the NLRC, on the mistaken belief that jurisdiction was lodged with
the latter. It cannot preclude the regional director from subsequently deciding the
case after the mistake was rectified and the case was returned to her by the DOLE
Secretary, particularly since it was a labor case where procedural lapses may be
disregarded in the interest of substantial justice.
In view of our ruling above that the January 29, 2003 Order was rendered with
jurisdiction and can no longer be questioned (as it is final and executory), we can no
longer entertain petitioners half-hearted and unsubstantiated arguments that the
said Order was allegedly based on erroneous computation and included nonemployees. Likewise, we find no more need to address petitioners contention that
the CA erred in dismissing its petition on the ground of its belated compliance with
the requirement of certification against forum-shopping.
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It must also be remembered that the power of the DOLE to determine the existence
of an employer-employee relationship need not necessarily result in an affirmative
finding. The DOLE may well make the determination that no employer-employee
relationship exists, thus divesting itself of jurisdiction over the case. It must not be
precluded from being able to reach its own conclusions, not by the parties, and
certainly not by this Court.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement power, subject to judicial
review, not review by the NLRC.
To recapitulate, if a complaint is brought before the DOLE to give effect to the labor
standards provisions of the Labor Code or other labor legislation, and there is a
finding by the DOLE that there is an existing employer-employee relationship, the
DOLE exercises jurisdiction to the exclusion of the NLRC.If the DOLE finds that there
is no employer-employee relationship, the jurisdiction is properly with the NLRC.If a
complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement,
the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor
Code, which provides that the Labor Arbiter has original and exclusive jurisdiction
over those cases involving wages, rates of pay, hours of work, and other terms and
conditions of employment, if accompanied by a claim for reinstatement. If a
complaint is filed with the NLRC, and there is still an existing employer-employee
relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE,
however, may still be questioned through a petition for certiorari under Rule 65 of the
Rules of Court.
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With regard to the contention that there is no evidence to support the finding that
the respondents rendered overtime work and that they worked on their rest day, the
resolution of this argument requires a review of the factual findings and the evidence
presented, Court said that it is not a trier of facts and it applies with greater force in
labor cases. Hence, where the factual findings of the labor tribunals or agencies
conform to, and are affirmed by, the CA, the same are accorded respect and finality,
and are binding to Supreme Court.
It was the consistent conclusion of the DOLE and the CA that Lancer was not an
independent contractor but was engaged in "labor-only contracting"; hence, the
petitioner was considered an indirect employer of respondents and liable to the latter
for their unpaid money claims.
At the time of the respondents employment in 1998, the applicable regulation was
DOLE Department Order No. 10, Series of 1997. Under said Department Order, laboronly contracting was defined as follows:
Sec. 9.Labor-only contracting.(a) Any person who undertakes to supply workers to
an employer shall be deemed to be engaged in labor-only contracting where such
person:
(1) Does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises and other materials; and
(2) The workers recruited and placed by such persons are performing activities
which are directly related to the principal business or operations of the employer
in which workers are habitually employed.
Labor-only contracting is prohibited and the person acting as contractor shall be
considered merely as an agent or intermediary of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were
directly employed by him.
According to the CA, the totality of the facts and surrounding circumstances of this
case point to such conclusion that Lancer was, indeed, a labor-only contractor. Aside
from these is the undisputed fact that the petitioner failed to produce any written
service contract that might serve as proof of its alleged agreement with Lancer.
Finally, a finding that a contractor is a "labor-only" contractor is equivalent to
declaring that there is an employer-employee relationship between the principal and
the employees of the supposed contractor, and the "labor only" contractor is
considered as a mere agent of the principal, the real employer. The former becomes
solidarily liable for all the rightful claims of the employees.
Petitioner therefore, being the principal employer and Lancer, being the labor-only
contractor, are solidarily liable for respondents unpaid money claims.
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income, the 13th month pay is included in the definition of wage under Article 97(f) of
the Labor Code.
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American Wire & Cable Daily Rated Employees vs American Wire (2005) G.R.
155059
Facts: American Wire and Cable Co., Inc., is a corporation engaged in the
manufacture of wires and cables. There are two unions in this company, the American
Wire and Cable Monthly-Rated Employees Union and the American Wire and Cable
Daily-Rated Employees Union.
On 16 February 2001, an original action was filed before the NCMB of the Department
of Labor and Employment by the two unions for voluntary arbitration. They alleged
that the private respondent, without valid cause, suddenly and unilaterally withdrew
and denied certain benefits and entitlements which they have long enjoyed. These
are Service Award, 35% premium pay of an employees basic pay for the work
rendered during Holy Monday, Holy Tuesday, Holy Wednesday, December 23, 26, 27, 28
and 29, Christmas Party and Promotional Increase.
Issue: WON the respondent company violated Article 100 of the Labor Code.
Ruling: The company is not guilty of violating Art. 100 of the Labor Code.
Article 100 of the Labor Code provides:
PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. Nothing
in this Book shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of
promulgation of this Code.
The certain benefits and entitlements are considered bonuses. A bonus can only be
enforceable and demandable if it has ripened into a company practice. It must also be
expressly agreed by the employer and employee or it must be on a fixed amount.
The assailed benefits were never subjects of any agreement between the union and
the company. It was never incorporated in the CBA. Since all these benefits are in the
form of bonuses, it is neither enforceable nor demandable.
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operation. Now, the fact that the drivers do not receive fixed wages but get only that
in excess of the so-called "boundary" they pay to the owner/operator is not sufficient
to withdraw the relationship between them from that of employer and employee.
We have applied by analogy the abovestated doctrine to the relationships between
bus owner/operator and bus conductor, auto-calesa owner/operator and driver, and
recently between taxi owners/operators and taxi drivers in the case of Martinez vs.
NLRC, 272 SCRA 793, 800 (1997) Hence, petitioners are undoubtedly employees of
private respondent because as taxi drivers they perform activities which are usually
necessary or desirable in the usual business or trade of their employer.
The deduction of Php 30.00 that is supposedly for the washing of taxi units is not
illegal in the context of the law. After a tour of duty, it is incumbent upon the driver
to restore the unit he has driven to the same clean condition when he took it. Car
washing after tour of duty is indeed a practice in the taxi industry and is in fact
dictated by fair play. --- Hence, Jardin et.al (drivers) are not entitled to
reimbursement of washing charges.
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Manila Jockeys Club Employees Labor Union vs. Manila Jockey Club, G.R. No.
167601, March 7, 2007
Facts: Manila Jockey Club, Inc., a corporation with a legislative franchise to conduct,
operate and maintain horse races, entered into a Collective Bargaining Agreement
(CBA) with Manila Jockey Club Employees Labor Union-PTGWO. Under Section 1
Article IV of their CBA, the parties agreed to a 7-hour work schedule from 9:00 a.m.
to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday.
All work performed in excess of seven (7) hours work schedule and on days not
included within the work week shall be considered overtime and paid as such with
exception to those monthly compensation which includes work performed during
Saturday, Sunday, and Holiday when races are held at the Club. The CBA likewise
reserved in management prerogatives including the determination of the work
schedule. An inter-office memorandum was later issued declaring that the hours of
work of regular monthly-paid employees shall be from 1:00 p.m. to 8:00 p.m. when
horse races are held, that is, every Tuesday and Thursday. The memorandum,
however, sustained the 9:00 a.m. to 5:00 p.m. schedule for non-race days.
Before the voluntary arbitrators of the National Conciliation and Mediation Board,
petitioners questioned the memorandum as violative of the prohibition against nondiminution of wages and benefits guaranteed the CBA which specified the work
schedule of respondent's employees to be from 9:00 a.m. to 5:00 p.m. They claimed
that as a result of the memorandum, the employees are precluded from rendering
their usual overtime work from 5:00 p.m. to 9:00 p.m.
Issue: Whether or not the change in the work schedule violated Article 100 of the
Labor Code on the non-diminution of wages and benefits guaranteed under the
parties CBA.
Ruling: No. It was evident that the change in work schedule was justified, it being a
management prerogative. Respondent, as employer, cited the change in the program
of horse races as reason for the adjustment of the employees work schedule. It
rationalized that when the CBA was signed, the horse races started at 10:00 a.m.
When the races were moved to 2:00 p.m., there was no other choice for management
but to change the employees' work schedule as there was no work to be done in the
morning. It is true that Section 1, Article IV of the CBA provides for a 7-hour work
schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. from Mondays
to Saturdays. However, Section 2, Article XI expressly reserves on respondent the
prerogative to change existing methods or facilities to change the schedules of work.
Moreover, Manila Jockey Club was not obliged to allow all its employees to render
overtime work every day for the whole year, but only those employees whose services
were needed after their regular working hours and only upon the instructions of
management. The overtime pay was not given to each employee consistently,
deliberately and unconditionally, but as a compensation for additional services
rendered. Thus, overtime pay does not fall within the definition of benefits under
Article 100 of the Labor Code on prohibition against elimination or diminution of
benefits.
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Arco Metal Products Co., Inc., et al., vs. Samahan ng Mga Manggagawa sa Arco
Metal-NAFLU, G.R. No. 170734, May 14, 2008, citing Davao Fruits vs. Asso. Labor
Union, 225 SCRA 562 and Sevilla Trading vs. AVA Tomas Services, G.R. No. 152456,
April 28, 2004
Facts: Petitioner is a company engaged in the manufacture of metal products,
whereas respondent is the labor union of petitioner's rank and file employees.
Sometime in December 2003, petitioner paid the 13th month pay, bonus, and leave
encashment of three union members in amounts proportional to the service they
actually rendered in a year, which is less than a full twelve (12) months. Respondent
protested the prorated scheme, claiming that on several occasions petitioner did not
prorate the payment of the same benefits to seven (7) employees who had not served
for the full 12 months. According to respondent, the prorated payment violates the
rule against diminution of benefits under Article 100 of the Labor Code. Thus, they
filed a complaint before the National Conciliation and Mediation Board (NCMB). The
parties submitted the case for voluntary arbitration.
The voluntary arbitrator, Apron M. Mangabat, ruled in favor of petitioner and found
that the giving of the contested benefits in full, irrespective of the actual service
rendered within one year has not ripened into a practice. He also interpreted the
phrase "for each year of service" found in the pertinent CBA provisions to mean that
an employee must have rendered one year of service in order to be entitled to the
full benefits provided in the CBA.
Respondent filed a Petition for Review before the Court of Appeals. The appellate
court found that petitioner had an existing voluntary practice of paying the aforesaid
benefits in full to its employees; thereby rejecting the claim that petitioner erred in
paying full benefits to its seven employees. The appellate court noted that aside from
the affidavit of petitioner's officer, it has not presented any evidence in support of its
position that it has no voluntary practice of granting the contested benefits in full and
without regard to the service actually rendered within the year.
Issues: 1. Whether or not the petitioners should grant 13th month pay, bonus and
leave encashment in full regardless of actual service rendered.
2. Whether or not the prorated payment of the said benefits constitutes
diminution of benefits under Article 100 of the Labor Code.
Ruling: On the first issue, according to petitioner, there is a one-year cutoff in the
entitlement to the benefits provided in the CBA, which is evident from the wording of
its pertinent provisions as well as of the existing law. There is no doubt that in order
to be entitled to the full monetization of sixteen (16) days of vacation and sick leave,
one must have rendered at least one year of service. The clear wording of the
provisions does not allow any other interpretation. Anent the 13th month pay and
bonus, the CBA provisions did not give any meaning different from that given by the
law, thus it should be computed at 1/12 of the total compensation, which an
employee receives for the whole calendar year. The bonus is also equivalent to the
amount of the 13th month pay given, or in proportion to the actual service rendered
by an employee within the year.
On the second issue, it is a settled rule that any benefit and supplement being
enjoyed by employees cannot be reduced, diminished, discontinued or eliminated by
the employer. The principle of non-diminution of benefits is founded on the
Constitutional mandate to "protect the rights of workers and promote their welfare,"
and "to afford labor full protection." Said mandate in turn is the basis of Article 4 of
the Labor Code which states that "all doubts in the implementation and interpretation
of this Code, including its implementing rules and regulations shall be rendered in
favor of labor."
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In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy
of freely, voluntarily and consistently granting full benefits to its employees
regardless of the length of service rendered.
Petitioner claims that its full payment of benefits regardless of the length of service
to the company does not constitute voluntary employer practice. It points out that
the payments had been erroneously made and they occurred in isolated cases in the
years 1992, 1993, 1994, 1999, 2002 and 2003. According to petitioner, it was only in
2003 that the accounting department discovered the error. Petitioner further argues
that for a grant of a benefit to be considered a practice, it should have been
practiced over a long period of time and must be shown to be consistent, deliberate
and intentional, which is not what happened in this case.
True, there were only a total of seven employees who benefited from such a practice,
but it was an established practice nonetheless. Jurisprudence has not laid down any
rule specifying a minimum number of years within which a company practice must be
exercised in order to constitute voluntary company practice. Petitioner cannot shirk
away from its responsibility by merely claiming that it was a mistake or an error,
supported only by an affidavit of its manufacturing group.
Petition denied.
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Aguanza vs. Asian Terminal Inc., et al., GR No. 163505, Aug. 14, 2009
Facts: Petitioner GualbertoAguanza was employed with respondent company Asian
Terminal, Inc. from April 15, 1989 to October 1997. He was initially employed as
Derickman or Crane Operator and was assigned as such aboard Bismark IV, a floating
crane barge owned by Asian Terminals, Inc. based at the port of Manila. Aside from his
basic pay, he received meal allowance, fixed overtime pay and out-of port allowance
[when the barge is assigned outside Metro Manila].
Sometime in September 1997, the Bismark IV, together with its crew, was temporarily
assigned at the Mariveles Grains Terminal in Mariveles, Bataan. Then, on October 20,
1997, respondent James Keith issued a memo to the crew of Bismark IV stating that
the barge had been permanently transferred to the Mariveles Grains terminal
beginning October 1, 1997 and because of that, its crew would no longer be entitled
to out of port benefits of 16 hours overtime and P200 a day out-of port allowance.
Due to the said development, Aguanza questioned the diminution of his benefits.
Aguanza insisted on reporting to work in Manila although his barge, Bismark IV, and its
other crew were already permanently based in Mariveles, Bataan. Aguanza was not
allowed to time in in Manila because his work was in Mariveles, Bataan. He therefore
was not able to render his services, and was accordingly not paid for doing nothing.
Because of private respondents refusal to give him any work assignment and pay his
salary, Aguanza filed a complaint for illegal dismissal against respondents.
Issue: Was Aguanza constructively dismissed?
Ruling: No. The transfer of operations is a valid exercise of management prerogative.
Aguanza asserts that his transfer constituted constructive dismissal, while ATI asserts
that Aguanzas transfer was a valid exercise of management prerogative.
ATIs transfer of Bismark IVs base from Manila to Bataan was, contrary to Aguanzas
assertions, a valid exercise of management prerogative. The transfer of employees
has been traditionally among the acts identified as a management prerogative subject
only to limitations found in law, collective bargaining agreement, and general
principles of fair play and justice. Even as the law is solicitous of the welfare of
employees, it must also protect the right of an employer to exercise what are clearly
management prerogatives. The free will of management to conduct its own business
affairs to achieve its purpose cannot be denied. On the other hand, the transfer of an
employee may constitute constructive dismissal "when continued employment is
rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/
or a diminution in pay; or when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to the employee." Aguanzas situation is not within the
purview of this discussion.
When ATI transferred Bismark IVs operations to Bataan, ATI offered Aguanza similar
terms: basic pay for 40 hours of work from Monday to Friday, overtime pay for work
done in excess of eight hours per day, overtime pay for work done on Saturdays and
Sundays, no additional allowance and no transportation for working in Bataan. The
circumstances of the case made no mention of the salary structure in case Bismark IV
being assigned work outside of Bataan; however, we surmise that it would not be any
different from the salary structure applied for work done out-of-port. We, thus,
agree with the NLRC and the appellate court when they stated that the fixed
overtime of 16 hours, out-of-port allowance and meal allowance previously granted to
Aguanza were merely supplements or employment benefits given on condition that
Aguanzas assignment was out-of-port. The fixed overtime and allowances were not
part of Aguanzas basic salary. Aguanzas basic salary was not reduced; hence, there
was no violation of the rule against diminution of pay.
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The facts of this case are not in dispute. In compliance with Presidential Decree (P.D.)
No. 851, petitioner granted its employees the mandatory thirteenth (13th) - month
pay since 1975. The formula used by petitioner in computing the 13th-month pay was:
Total Basic Annual Salary divided by twelve (12). Included in petitioners computation
of the Total Basic Annual Salary were the following: basic monthly salary; first eight
(8) hours overtime pay on Sunday and legal/special holiday; night premium pay; and
vacation and sick leaves for each year. Throughout the years, petitioner used this
computation until 2006.
On November 6, 2004, respondent staged a strike. During the pendency of the strike,
petitioner declared a temporary cessation of operations.
The suspension of operation was lifted on June 2006, but the rank-and-file employees
were allowed to report for work on a fifteen (15) day-per-month rotation basis that
lasted until September 2006. In December 2006, petitioner gave the employees their
13th-month pay based on the employees total earnings during the year divided by 12.
Respondent objected to this computation. It averred that petitioner did not adhere to
the usual computation of the 13th-month pay. NLRC ruled in favor of the respondent
and CA reversed itd ruling and ruled in favor of the Unyon. Hence the petition.
Issue: Whether or not Azucarera did not adhere to the proper computation of the
13th-month pay.
Ruling: The 13th-month pay mandated by Presidential Decree (P.D.) No. 851 represents
an additional income based on wage but not part of the wage.It is equivalent toonetwelfth (1/12) of the total basic salary earned by an employee within a calendar year.
All rank-and-file employees, regardless of their designation or employment status and
irrespective of the method by which their wages are paid, are entitled to this benefit,
provided that they have worked for at least one month during the calendar year. If
the employee worked for only a portion of the year, the13th-month pay is computed
pro rata.
On November 16, 1987, the Revised Guidelines on the Implementation of the 13thMonth Pay Law was issued. Significantly, under this Revised Guidelines, it was
specifically stated that theminimum 13th-month pay required by law shall not be less
than one-twelfth (1/12) of the total basic salary earned by an employee within a
calendar year.
Furthermore, the term basic salary of an employee for the purpose of computing
the 13th-month pay was interpreted to include all remuneration or earnings paid by
the employer for services rendered, but does not include allowances and monetary
benefits which are not integrated as part of the regular or basic salary, such as the
cash equivalent of unused vacation and sick leave credits, overtime, premium, night
differential and holiday pay, and cost-of-living allowances. However, these salaryrelated benefits should be included as part of the basic salary in the computation of
the 13th-month pay if, by individual or collective agreement, company practice or
policy, the same are treated as part of the basic salary of the employees.
Based on the foregoing, it is clear that there could have no erroneousinterpretation
or application of what is included in the term basic salary for purposes of
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computing the 13th-month pay of employees. From the inception of P.D. No. 851 on
December 16, 1975, clear-cut administrative guidelines have been issued to insure
uniformity in the interpretation, application, and enforcement of the provisions
ofP.D. No. 851and itsimplementing regulations.
Article 100 of the Labor Code, otherwise known as the Non-Diminution Rule, mandates
that benefits given to employees cannot be taken back or reduced unilaterally by the
employer because the benefit has become part of the employment contract, written
or unwritten. The rule against diminution of benefits applies if it is shown that the
grant of the benefit is based on an express policy or has ripened into a practice over a
long period of time and that the practice is consistent and deliberate. Nevertheless,
the rule will not apply if the practice is due to error in the construction or application
of a doubtful or difficult question of law. But even in cases of error, it should be
shown that the correction is done soon after discovery of the error.
This act of petitioner in changing the formula at this time cannot be sanctioned, as it
indicates a badge of bad faith.
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SHS Perforated Materials, Inc. et al., vs. Diaz, GR No. 185814, Oct. 13, 2010
Facts: Petitioner SHS Perforated Materials, Inc. (SHS) is a start-up corporation
organized and existing under the laws of the Republic of the Philippines and
registered with the Philippine Economic Zone Authority. Petitioner Winfried
Hartmannshenn (Hartmannshenn), a German national, is its president. Thus, the
wages of SHS employees are paid out by ECCP, through its Accounting Services
Department headed by Juliet Taguiang (Taguiang). Manuel F. Diaz (respondent) was
hired by petitioner SHS as Manager for Business Development on probationary status
During respondents employment, Hartmannshenn was often abroad and, because of
business exigencies, his instructions to respondent were either sent by electronic mail
or relayed through telephone or mobile phone. During meetings with the respondent,
Hartmannshenn expressed his dissatisfaction over respondents poor performance.
respondent acknowledged his poor performance and offered to resign from the
company.
On November 18, 2005, Hartmannshenn arrived in the Philippines from Germany, and
on November 22 and 24, 2005, notified respondent of his arrival through electronic
mail messages and advised him to get in touch with him. Respondent claimed that he
never received the messages. Hartmannshenn instructed Taguiang not to release
respondents salary.
Respondent served on SHS a demand letter and a resignation letter. It is precisely
because of illegal and unfair labor practices such as these that I offer my resignation
with neither regret nor remorse.
Appealing for the release of his salary respondent filed a Complaint against the
petitioners for illegal dismissal; non-payment of salaries/wages and 13th month pay
with prayer for reinstatement and full backwages; exemplary damages, and attorneys
fees, costs of suit, and legal interest.
Issues: Whether or not the temporary withholding of respondents salary/wages by
petitioners was a valid exercise of management prerogative.
Ruling: Withholding respondents salary was not a valid exercise of management
prerogative.
Management prerogative refers to the right of an employer to regulate all aspects of
employment, such as the freedom to prescribe work assignments, working methods,
processes to be followed, regulation regarding transfer of employees, supervision of
their work, lay-off and discipline, and dismissal and recall of work. Although
management prerogative refers to the right to regulate all aspects of employment,
it cannot be understood to include the right to temporarily withhold salary/wages
without the consent of the employee.
Any withholding of an employees wages by an employer may only be allowed in the
form of wage deductions under the circumstances provided in Article 113 of the Labor
Code, as set forth below:
ART. 113. Wage Deduction. No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and
the deduction is to recompense the employer for the amount paid by him as
premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in writing by the
individual worker concerned; and
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The petitioners should first establish that the making of deductions from the salaries
is authorized by law, or regulations issued by the Secretary of Labor. The petitioners
failed to prove that their imposition of the new policy upon the goldsmiths under Nia
Jewelry's employ falls under the exceptions specified in Articles 113 and 114 of the
Labor Code.
2) There is NO constructive dismissal. Constructive dismissal occurs when there is
cessation of work because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or diminution in pay or
both; or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee.
The petitioners did not whimsically or arbitrarily impose the policy to post cash bonds
or make deductions from the workers' salaries. As attested to by the respondents'
fellow goldsmiths in their Joint Affidavit, the workers were convened and informed of
the reason behind the implementation of the new policy. Instead of airing their
concerns, the respondents just promptly stopped reporting for work.
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asset that belonged to Mekeni. Just as Mekeni is unjustly enriched by failing to refund
petitioner's payments, so should petitioner not be awarded the value of Mekeni's
counterpart contribution to the car plan, as this would unjustly enrich him at Mekeni's
expense.
Thus, Mekeni Food Corporation should refund petitioner Antonio Locsin II's payments
under the car plan agreement amounting only to the extent of the contribution Locsin
made, totalling to the amount of P112,500.00.
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TH Shopfitters Corp., et al., vs. T&H Shopfitters Corp., Union, GR No. 191714, Feb
26, 2014
Facts: On September 7, 2004, the T&H Shopfitters Corporation/ Gin Queen
Corporation workers union (THS-GQ Union) filed their Complaint for Unfair Labor
Practice (ULP) by way of union busting, and Illegal Lockout, with moral and exemplary
damages and attorneys fees, against T&H Shopfitters Corporation (T&H Shopfitters)
and Gin Queen Corporation before the Labor Arbiter (LA).
1st CAUSE:
In their desire to improve their working conditions, respondents and other employees
of held their first formal meeting on November 23, 2003 to discuss the formation of a
union. The following day, seventeen (17) employees were barred from entering
petitioners factory premises located in Castillejos, Zambales, and ordered to transfer
to T&H Shopfitters warehouse at Subic Bay Freeport Zone (SBFZ) purportedly because
of its expansion. Afterwards, the said seventeen (17) employees were repeatedly
ordered to go on forced leave due to the unavailability of work.
Respondents contended that the affected employees were not given regular work
assignments, while subcontractors were continuously hired to perform their functions.
Respondents sought the assistance of the National Conciliation and Mediation Board.
Subsequently, an agreement between petitioners and THS-GQ Union was reached.
Petitioners agreed to give priority to regular employees in the distribution of work
assignments. Respondents averred, however, that petitioners never complied with its
commitment but instead hired contractual workers. Instead, Respondents claimed
that the work weeks of those employees in the SBFZ plant were drastically reduced to
only three (3) days in a month.
2nd CAUSE:
On March 24, 2004, THS-GQ Union filed a petition for certification election and an
order was issued to hold the certification election in both T&H Shopfitters and Gin
Queen.
On October 10, 2004, petitioners sponsored a field trip to Iba, Zambales, for its
employees. The officers and members of the THS-GQ Union were purportedly
excluded from the field trip. On the evening of the field trip, a certain Angel
Madriaga, a sales officer of petitioners, campaigned against the union in the
forthcoming certification election.
When the certification election was scheduled on October 11, 2004, the employees
were escorted from the field trip to the polling center in Zambales to cast their votes.
The remaining employees situated at the SBFZ plant cast their votes as well. Due to
the heavy pressure exerted by petitioners, the votes for "no union" prevailed.
3rd CAUSE:
A memorandum was issued by petitioner Ben Huang (Huang), Director for Gin Queen,
informed its employees of the expiration of the lease contract between Gin Queen
and its lessor in Castillejos, Zambales and announced the relocation of its office and
workers to Cabangan, Zambales.
When the respondents, visited the site in Cabangan, discovered that it was a
"talahiban" or grassland. The said union officers and members were made to work as
grass cutters in Cabangan, under the supervision of a certain Barangay Captain Greg
Pangan. Due to these circumstances, the employees assigned in Cabangan did not
report for work. The other employees who likewise failed to report in Cabangan were
meted out with suspension.
PETITIONERS DEFENSE:
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In its defense, Petitioners also stress that they cannot be held liable for ULP for the
reason that there is no employer-employee relationship between the former and
respondents. Further, Gin Queen avers that its decision to implement an enforced
rotation of work assignments for respondents was a management prerogative
permitted by law, justified due to the decrease in orders from its customers, they had
to resort to cost cutting measures to avoid anticipated financial losses. Thus, it
assigned work on a rotational basis. It explains that its failure to present concrete
proof of its decreasing orders was due to the impossibility of proving a negative
assertion. It also asserts that the transfer from Castillejos to Cabangan was made in
good faith and solely because of the expiration of its lease contract in Castillejos. It
was of the impression that the employees, who opposed its economic measures, were
merely motivated by spite in filing the complaint for ULP against it.
Issues: Whether ULP acts were committed by petitioners against respondents.
Ruling: ULP were committed by petitioners against respondents.
Petitioners are being accused of violations of paragraphs (a), (c), and (e) of Article
257 (formerly Article 248) of the Labor Code,13 to wit:
Article 257. Unfair labor practices of employers.It shall be unlawful for an
employer to commit any of the following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their
right to self-organization;
xxxx
(c) To contract out services or functions being performed by union members
when such will interfere with, restrain, or coerce employees in the exercise of
their right to self-organization;
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and
conditions of employment in order to encourage or discourage membership in
any labor organization. x x x
The questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for
its employees, to the exclusion of union members, before the scheduled certification
election; 2) the active campaign by the sales officer of petitioners against the union
prevailing as a bargaining agent during the field trip; 3) escorting its employees after
the field trip to the polling center; 4) the continuous hiring of subcontractors
performing respondents functions; 5) assigning union members to the Cabangan site
to work as grass cutters; and 6) the enforcement of work on a rotational basis for
union members, taken together, reasonably support an inference that, indeed, such
were all orchestrated to restrict respondents free exercise of their right to selforganization.
The Court is of the considered view those petitioners undisputed actions prior and
immediately before the scheduled certification election, while seemingly innocuous,
unduly meddled in the affairs of its employees in selecting their exclusive bargaining
representative.
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other hand, failed to present any evidence to refute the veracity of these affidavits.
Petitioner's assertion that there is only one retirement plan as the CBA Retirement
Plan and the PERAA Plan are one and the same is not supported by any evidence.
The Memorandum dated August 16, 2005 is contrary to the existing CBA. It limits the
available leave credits of an employee at the start of the school year. The
Memorandum dated imposes a limitation not agreed upon by the parties nor stated in
the CBA, so it must be struck down.
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Bluer Than Blue Joint Ventures Co., vs. Esteban, GR No. 192582, April 7, 2014,
Citing 2011 Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo
Facts: The respondent was employed as a sales clerk and assigned at the petitioners
boutique. Her primary tasks were attending to all customer needs, ensuring efficient
inventory, coordinating orders from clients, cashiering and reporting to the accounting
department. The petitioner learned that some of their employees had access to their
POS system with the use of a universal password given to them by a certain Elmer
Flores, who in turn learned of the password from the respondent. The petitioner then
conducted an investigation and asked the petitioner to explain why she should not be
disciplinarily dealt with. During the investigation the respondent was placed under
preventive suspension. After investigation the petitioner terminated the respondent
on the grounds of loss of trust or confidence. This respondent was given her final
wage and benefits less the inventory variance incurred by the store. This urged the
respondent to file a complaint for illegal dismissal, illegal suspension, holiday pay,
rest day and separation pay. The labor arbiter ruled in her favour awarding her
backwages. The petitioner appealed the decision in the NLRC and the decision was
reversed. However, upon the respondents petition for certiorari in the court of
appeals the decision was reinstated. Hence, this petition.
Issue: Whether the negative sales variance could be validly deducted from the
respondents wage?
Ruling: No, it cannot be deducted in this case.
Article 113 of the Labor Code provides that no employer, in his own behalf or in behalf
of any person, shall make any deduction from the wages of his employees, except in
cases where the employer is authorized by law or regulations issued by the Secretary
of Labor and Employment, among others. The Omnibus Rules Implementing the Labor
Code, meanwhile, provides:
SECTION 14. Deduction for loss or damage. Where the employer is engaged in
a trade, occupation or business where the practice of making deductions or
requiring deposits is recognized to answer for the reimbursement of loss or
damage to tools, materials, or equipment supplied by the employer to the
employee, the employer may make wage deductions or require the employees
to make deposits from which deductions shall be made, subject to the
following conditions:
a) That the employee concerned is clearly shown to be responsible for the
loss or damage;
b) That the employee is given reasonable opportunity to show cause why
deduction should not be made;
c) That the amount of such deduction is fair and reasonable and shall not
exceed the actual loss or damage; and
d) That the deduction from the wages of the employee does not exceed 20
percent of the employee's wages in a week.
In this case, the petitioner failed to sufficiently establish that Esteban was
responsible for the negative variance it had in its sales for the year 2005 to 2006 and
that Esteban was given the opportunity to show cause the deduction from her last
salary should not be made.
Furthermore, the court ruled, in Nina Jewelry Marketing of Metal Arts, Inc. v.
Montecillo, that:
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[T]he petitioners should first establish that the making of deductions from the
salaries is authorized by law, or regulations issued by the Secretary of Labor.
Further, the posting of cash bonds should be proven as a recognized practice in
the jewelry manufacturing business, or alternatively, the petitioners should
seek for the determination by the Secretary of Labor through the issuance of
appropriate rules and regulations that the policy the former seeks to
implement is necessary or desirable in the conduct of business. The petitioners
failed in this respect. It bears stressing that without proofs that requiring
deposits and effecting deductions are recognized practices, or without securing
the Secretary of Labor's determination of the necessity or desirability of the
same, the imposition of new policies relative to deductions and deposits can be
made subject to abuse by the employers. This is not what the law intends.
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PAYMENT OF WAGES
Congson vs. NLRC
G.R. No. 114250; April 5, 1995
Facts: Dominico C. Congson is the registered owner of Southern Fishing Industry.
Respondents were hired as piece-rate employees uniformly paid at a rate of P1.00 per
tuna weighing thirty (30) to eighty (80) kilos per movement. They work for 7 days a
week. Due to alleged scarcity of tuna, Congson notified his proposal to reduce the
rate-per-tuna movement. When they reported the following day, they found out that
they were already replaced with new set of workers. They wanted to have a dialogue
with the management, but they waited in vain. Thus, they filed a case before NLRC
for underpayment of wages (violation of the minimum wage law) and non-payment of
overtime pay, 13th month pay, holiday pay, rest day pay, and five (5)-day service
incentive leave pay; and for constructive dismissal.
Petitioner conceded that his payment of wages falls below the minimum wage law. He
averred that NLRC should have considered as forming a substantial part of private
respondents' total wages the cash value of the tuna liver and intestines private
respondents were entitled to retrieve. He argued that the combined value of the cash
wage and monetary value of the tuna liver and intestines clearly exceeded the
minimum wage fixed by law.
Both the Labor Arbiter and the NLRC ruled in favor of the respondents.
Issue: Whether or not the form of payment by Congson is valid pursuant to Article 102
of the Labor Code.
Ruling: Petitioner's practice of paying the private respondents the minimum wage by
means of legal tender combined with tuna liver and intestines runs counter to the
above cited provision of the Labor Code. The fact that said method of paying the
minimum wage was not only agreed upon by both parties in the employment
agreement but even expressly requested by private respondents, does not shield
petitioner. Article 102 of the Labor Code is clear. Wages shall be paid only by means of
legal tender. The only instance when an employer is permitted to pay wages informs
other than legal tender, that is, by checks or money order, is when the circumstances
prescribed in the second paragraph of Article 102 are present.
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National Federation of Labor vs. CA, G.R. No. 149464, Oct. 19, 2004
Facts: American Rubber Company, Inc. (ARCI) entered into a Farm Management
Agreement (FMA) with Sime Darby Pilipinas, Inc. (SDPI) to manage, administer,
develop, cultivate and improve the rubber plantation in Latuan, Isabela, Basilan.
However, SDPI decided to terminate the FMA with ARCI and cease operation of the
rubber plantation in Latuan, Isabela, Basilan effective January 17, 1998. Thus on
December 17, 1997, SDPI served formal notices of termination to all employees of the
plantation effective January 17, 1997. In complaince with the collective bargaining
agreement of the National Federation of Labor (NFL), which was the duly registered
bargaining agent of SDPI, and SDPI, the separation pay of the employees was
computed in accordance with the provisions of the Labor Code. On January 17, 1998,
each of the herein petitioners received their separation pay which was equivalent to
one-half pay for every year of service, and other benefits which were all lumped in
one check. However, the petitioners filed a complaint for deficiency in separation pay
raising the issue of non-payment of the exact computation of separation pay. They
contended that the private respondents is bound by its policy of granting separation
pay equivalent to one-month pay for every year of service to its retrenched
employees.
Issue: Whether or not the petitioners are entitled to separation pay equivalent to one
month pay for every year of employment with private respondents.
Ruling: According to the Supreme Court, Article 283 of the Labor Code provides that
employees who are dismissed due to closures that are not due to business insolvency
should be paid separation pay equivalent to one-month pay or at least one-half month
pay for every year of service, whichever is higher. In the case at bar, the petitioners
had served the respondent SDPI for a period longer than six months. Hence, their
separation pay computed at one-half month pay per year of service is more than the
minimum one month pay. Also, the court emphasized that the collective bargaining
agreement should prevail as a contract governing the employer and the employees
respecting the terms of employment, which in this case, they agreed on the terms of
termination pay should be in accordance with the provisions of the Labor Code.
Consequently, Artcle 283 of the Labor Code, which grants separation pay equivalent to
one-month pay or one-half month pay for every year of service, whichever is higher,
to the employees retrenched due to business closures, should apply.
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Heirs of Sara Lee vs. Rey, G.R. No. 149013, Aug. 31, 2006
Facts: The Heir of Sara Lee is engaged in the direct selling of a variety of product
lines for men and women, including cosmetics, intimate apparels, perfumes, ready to
wear clothes and other novelty items, through its various outlets nationwide. In the
pursuit of its business, the petitioner engages and contracts with dealers to sell the
aforementioned merchandise. These dealers, known either as Independent Business
Managers (IBMs) or Independent Group Supervisors (IGSs), depending on whether
they sell individually or through their own group, would obtain at discounted rates the
merchandise from the petitioner on credit or then sell the same products to their own
customers at fixed prices also determined by the petitioner.
In turn, the dealers are paid Services Fees, or sales commissions, the amount of
which depends on the volume and value of their sales. Under existing company
policy, the dealers must remit to the petitioner the proceeds of their sales within a
designated credit period, which would either be 38 days for IGSs or 52 days for IBMs,
counted from the day the said dealers acquired the merchandise from the petitioner.
To discourage late remittances, the petitioner imposes a Credit Administration
Charge, or simply, a penalty charge, on the value of the unremitted payment.
The dealers under this system earn income through a profit margin between the
discounted purchase price they pay on credit to the petitioner and the fixed selling
price their customers will have to pay. On top of this margin, the dealer is given the
Service Fee, a sales commission, based on the volume of sales generated by him or
her. Due to the sheer volume of sales generated by all of its outlets, the petitioner
has found the need to strictly monitor the 38- or 52-day rolling due date of each of
its IBMs and IGSs through the employment of Credit Administration
Supervisors (CAS) for each branch. The primary duty of the CAS is to strictly monitor
each of these deadlines, to supervise the credit and collection of payments and
outstanding accounts due to the petitioner from its independent dealers and various
customers, and to screen prospective IBMs. To discharge these responsibilities, the
CAS is provided with a computer equipped with control systems through which data is
readily generated. Under this organizational setup, the CAS is under the direct and
immediate supervision of the Branch Operations Manager (BOM).
Cynthia Rey at the time of her dismissal from employment, held the position of Credit
Administration Supervisor or CAS at the Cagayan de Oro City branch of the petitioner.
She was first employed by the petitioner as an Accounts Receivable Clerk at its
Caloocan City branch. In November 1993, respondent was transferred to the Cagayan
de Oro City branch retaining the same position. In January 1994, respondent was
elevated to the position of CAS. At that time, the Branch Operations Manager or BOM
of the Cagayan de Oro City branch was a certain Mr. Jeremiah Villagracia. In March
1995, respondent was temporarily assigned to the Butuan City branch.
Sometime in June 1995, while respondent was still working in Butuan City, she
allegedly instructed the Accounts Receivable Clerk of the Cagayan de Oro outlet to
change the credit term of one of the IBMs of the petitioner who happens to be
respondents sister-in-law, from the 52-day limit to an unauthorized term of 60
days. The respondent made the instruction just before the computer data for the
computation of the Service Fee accruing to Ms. Rey-Petilla was about to be generated.
Ms. Mendoza then reported this allegedly unauthorized act of respondent to her
Branch Operations Manager, Mr. Villagracia. Acting on the report, as the petitioner
alleges, BOM Villagracia discreetly verified the records and discovered that it was not
only the 52-day credit term of IBM Rey-Petilla that had been extended by the
respondent, but there were several other IBMs whose credit terms had been similarly
extended beyond the periods allowed by company policy. BOM Villagracia then
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summoned the respondent and required her to explain the unauthorized credit
extensions.
Issue: WON the respondent is entitled to 13th month pay.
Ruling: The award of 13th month pay must be deleted. Respondent is not a rank-andfile employee and is, therefore, not entitled to thirteenth-month pay. However, the
NLRC and the CA are correct in refusing to award 14th and 15th month pay as well as
the monthly salary increase of 10 percent per year for two years based on her latest
salary rate. The respondent must show that these benefits are due to her as a
matter of right. Mere allegations by the respondent do not suffice in the absence of
proof supporting the same.
With respect to salary increases in particular, the
respondent must likewise show that she has a vested right to the same, such that her
salary increases can be made a component in the computation of back wages. What is
evident is that salary increases are a mere expectancy. They are by nature volatile
and dependent on numerous variables, including the companys fiscal situation, the
employees future performance on the job, or the employees continued stay in a
position. In short, absent any proof, there is no vested right to salary increases.
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CONDITIONS OF EMPLOYMENT
San Juan De Dios Hospital vs. NLRC, 282 SCRA 316 [1997]
Facts: Petitioners, the rank-and-file employee-union officers and members of San
Juan De Dios Hospital Employees Association, sent a letter requesting for the
expeditious implementation and payment by respondent, San Juan De Dios Hospital,
of the '40-hours/5-day workweek' with compensable weekly two (2) days off provided
for by Policy Instruction No. 54 issued by the Secretary of Labor. Said policy
instruction purports to implement R.A. No. 5901, otherwise known as An Act
Prescribing Forty Hours A Week of Labor For Government and Private Hospitals Or
Clinic Personnel. Respondent hospital failed to give a favorable response; thus,
petitioners filed a complaint regarding their claims for statutory benefits under the
above-cited law and policy issuance. However, the Labor Arbiter and, subsequently,
NLRC dismissed the complaint. Hence, this petition ascribing grave abuse of discretion
on the part of NLRC in concluding that Policy Instructions No. 54 proceeds from a
wrong interpretation of R.A. 5901 and Article 83 of the Labor Code.
Issue: Whether or not Policy Instruction No. 54, entitling a full weekly wage of 7 days
upon completion of 40-hour/5-day workweek, is valid based on existing labor laws.
Ruling: Policy Instruction No. 54 is void, it being inconsistent with and repugnant to
the provision of Article 83 of the Labor Code, as well as to R.A. No. 5901.
A perusal of R. A. No. 5901 reveals nothing therein that gives two days off with pay for
health personnel who complete a 40-hour work or 5-day workweek. In fact, the
Explanatory Note of House Bill No. 16630 (later passed into law as Republic Act No.
5901) explicitly states that the bill's sole purpose is to shorten the working hours of
health personnel and not to dole out a two days off with pay. Petitioners' position is
also negated by the very rules and regulations promulgated by the Bureau of Labor
Standards which implement Republic Act No. 5901. Section 15 of aforementioned
implementing rules grants specific rate of additional compensation for work
performed on Sunday or for work performed in excess of forty hours a week. Policy
Instruction No. 54 unduly extended the statute.
Article 83 merely provides: (1) the regular office hour of eight hours a day, five days
per week for health personnel, and (2) where the exigencies of service require that
health personnel work for six days or forty-eight hours then such health personnel
shall be entitled to an additional compensation of at least thirty percent of their
regular wage for work on the sixth day. There is nothing in the law that supports then
Secretary of Labor and petitioners assertion. The Secretary of Labor exceeded his
authority by including a two days off with pay in contravention of the clear mandate
of the statute. Administrative interpretation of the law is at best merely advisory, and
the Court will not hesitate to strike down an administrative interpretation that
deviates from the provision of the statute.
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Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further
states:
Sec. 7. Meal and Rest Periods.Every employer shall give his employees,
regardless of sex, not less than one (1) hour time-off for regular meals, except
in the following cases when a meal period of not less than twenty (20) minutes
may be given by the employer provided that such shorter meal period is
credited as compensable hours worked of the employee;
(a) Where the work is non-manual work in nature or does not involve strenuous
physical exertion;
(b) Where the establishment regularly operates not less than sixteen hours a
day;
(c) In cases of actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss
which the employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall
be considered as compensable working time.
Thus, the eight-hour work period does not include the meal break. Nowhere in the
law may it be inferred that employees must take their meals within the company
premises. Employees are not prohibited from going out of the premises as long as
they return to their posts on time. Private respondents act, therefore, of going home
to take his dinner does not constitute abandonment.
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Linton Commercial Co., Inc., vs. Hellera et al., G.R. No. 163147, October 10, 2007
Facts: On 17 December 1997, Linton issued a memorandum addressed to its
employees informing them of the company's decision to suspend its operations from
December 18, 1997 to January 5, 1998 due to the currency crisis that affected its
business operations. Linton submitted an establishment termination report to the
Department of Labor and Employment (DOLE) regarding the temporary closure of the
establishment covering the said period. The company's operation was to resume on
January 6, 1998. On January 7, 1997, Linton issued another memorandum informing
them that effective
January 12, 1998, it would implement a new compressed
workweek of three (3) days on a rotation basis. In other words, each worker would be
working on a rotation basis for three working days only instead for six days a week. On
the same day, Linton submitted an establishment termination report concerning the
rotation of its workers. Linton proceeded with the implementation of the new policy
without waiting for its approval by DOLE. Aggrieved, sixty-eight (68) workers
(workers) filed a Complaint for illegal reduction of workdays.
Issue: WON there was an illegal reduction of work when Linton implemented a
compressed workweek by reducing from six to three the number of working days with
the employees working on a rotation basis.
Ruling: The compressed workweek arrangement was unjustified and illegal.
The Bureau of Working Conditions of the DOLE, moreover, released a bulletin
providing for in determining when an employer can validly reduce the regular number
of working days. The said bulletin states that a reduction of the number of regular
working days is valid where the arrangement is resorted to by the employer to
prevent serious losses due to causes beyond his control, such as when there is a
substantial slump in the demand for his goods or services or when there is lack of raw
materials. Although the bulletin stands more as a set of directory guidelines than a
binding set of implementing rules, it has one main consideration, consistent with the
ruling in Philippine Graphic Arts Inc., in determining the validity of reduction of
working hours that the company was suffering from losses.
Certainly, management has the prerogative to come up with measures to ensure
profitability or loss minimization. However, such privilege is not absolute.
Management prerogative must be exercised in good faith and with due regard to the
rights of labor. As previously stated, financial losses must be shown before a company
can validly opt to reduce the work hours of its employees. However, to date, no
definite guidelines have yet been set to determine whether the alleged losses are
sufficient to justify the reduction of work hours. If the standards set in determining
the justifiability of financial losses under Article 283 (i.e., retrenchment) or Article
286 (i.e., suspension of work) of the Labor Code were to be considered, petitioners
would end up failing to meet the standards. On the one hand, Article 286 applies only
when there is a bona fide suspension of the employer's operation of a business or
undertaking for a period not exceeding six (6) months.
Records show that Linton continued its business operations during the effectivity of
the compressed workweek, which spanned more than the maximum period. On the
other hand, for retrenchment to be justified, any claim of actual or potential business
losses must satisfy the following standards: (1) the losses incurred are substantial and
not de minimis; (2) the losses are actual or reasonably imminent; (3) the
retrenchment is reasonably necessary and is likely to be effective in preventing the
expected losses; and (4) the alleged losses, if already incurred, or the expected
imminent losses sought to be forestalled, are proven by sufficient and convincing
evidence. Linton failed to comply with these standards.
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Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, Oct. 15, 2008
Facts: Tryco Pharma Corporation (Tryco) is a manufacturer of veterinary medicines
and its principal office is located in Caloocan City. Petitioners are its regular
employees, occupying the positions of helper, shipment helper and factory workers,
assigned to the Production Department. They are members of Bisig Manggagawa sa
Tryco (BMT), the exclusive bargaining representative of the rank-and-file employees.
Tryco and the petitioners signed a Memorandum of Agreement (MOA), providing for a
compressed workweek schedule to be implemented in the company effective May 20,
1996. As provided, 8:00 a.m. to 6:12 p.m., from Monday to Friday, shall be considered
as the regular working hours, and no overtime pay shall be due and payable to the
employee for work rendered during those hours. The MOA specifically stated that the
employee waives the right to claim overtime pay for work rendered after 5:00 p.m.
until 6:12 p.m. from Monday to Friday considering that the compressed workweek
schedule is adopted in lieu of the regular workweek schedule which also consists of 46
hours. However, should an employee be permitted or required to work beyond 6:12
p.m., such employee shall be entitled to overtime pay.
On a letter dated March 26, 1997, the Bureau of Animal Industry of the Department of
Agriculture reminded Tryco that its production should be conducted in San Rafael,
Bulacan, not in Caloocan City.
Accordingly, Tryco issued a Memorandum dated April 7, 1997 which directed petitioner
Aya-ay to report to the companys plant site in Bulacan. When petitioner Aya-ay
refused to obey, Tryco reiterated the order on April 18, 1997. Subsequently, through a
Memorandum dated May 9, 1997, Tryco also directed the other petitioners Egera,
Lario and Barte to report to the companys plant site in Bulacan.
BMT opposed the transfer of its members to San Rafael, Bulacan, contending that it
constitutes unfair labor practice. In protest, BMT declared a strike on May 26, 1997.
In August 1997, petitioners filed their separate complaints for illegal dismissal,
underpayment of wages, nonpayment of overtime pay and service incentive leave,
and refusal to bargain against Tryco and its President, Wilfredo C. Rivera. Petitioners
alleged that the company acted in bad faith during the CBA negotiations because it
sent representatives without authority to bind the company, and this was the reason
why the negotiations failed. Also, the management transferred petitioners from
Caloocan to San Rafael, Bulacan to paralyze the union. They prayed for the company
to pay them their salaries from May 26 to 31, 1997, service incentive leave, and
overtime pay, and to implement Wage Order No. 4.
Issue: Whether or not the company committed Unfair Labor Practices
Ruling: NO. Petitioners mainly contend that the transfer orders amount to a
constructive dismissal. They maintain that the letter of the Bureau of Animal Industry
is not credible because it is not authenticated; it is only a ploy, solicited by
respondents to give them an excuse to effect a massive transfer of employees. There
is not proof to support this claim. Absent any evidence, the allegation is not only
highly irresponsible but is grossly unfair to the government agency concerned.
Also, Trycos decision to transfer its production activities to San Rafael, Bulacan,
regardless of whether it was made pursuant to the letter of the Bureau of Animal
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Industry, was within the scope of its inherent right to control and manage its
enterprise effectively.
When the transfer is not unreasonable, or inconvenient, or prejudicial to the
employee, and it does not involve a demotion in rank or diminution of salaries,
benefits, and other privileges, the employee may not complain that it amounts to a
constructive dismissal. In this case, the transfer orders do not entail a demotion in
rank or diminution of salaries, benefits and other privileges of the petitioners.
Petitioners, therefore, anchor their objection solely on the ground that it would cause
them great inconvenience since they are all residents of Metro Manila and they would
incur additional expenses to travel daily from Manila to Bulacan. Such contention is
untenable because the Court has previously declared that mere incidental
inconvenience is not sufficient to warrant a claim of constructive dismissal. The
distance from Caloocan to San Rafael, Bulacan is not considerably great so as to
compel petitioners to seek living accommodations in the area and prevent them from
commuting to Metro Manila daily to be with their families.
Finally, MOA is enforceable and binding against the petitioners. 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. In addition, D.O.
No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the
employees will derive from the adoption of a compressed workweek scheme.
Moreover, the adoption of a compressed workweek scheme in the company will help
temper any inconvenience that will be caused the petitioners by their transfer to a
farther workplace. Notably, the MOA complied with the following conditions set by the
DOLE, under D.O. No. 21, to protect the interest of the employees in the
implementation of a compressed workweek scheme
Considering that the MOA clearly states that the employee waives the payment of
overtime pay in exchange of a five-day workweek, there is no room for interpretation
and its terms should be implemented as they are written.
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incentive leave pay provided under Art. 87, 93, 94 and 95 of the Labor Code and the
exemptions thereto. As previously determined, petitioner falls under the exemptions
and therefore has no legal claim to the said benefits. It is well and good that
petitioner was compensated for his overtime services. However, this does not
translate into a right on the part of petitioner to demand additional payment when,
under the law, petitioner is clearly exempted therefrom.
2. NO, HE IS NOT.
The applicable provision is Article 280 of the Labor Code which defines the term
"project employee," thus:
Art. 280. Regular and Casual Employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
period or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
In the case at bench, it was duly established that private respondent hired petitioner
as project or construction engineer specifically for its Monte de Piedad building
project.
Accordingly, as project employee, petitioner's services are deemed coterminous with
the project, that is, petitioner's services may be terminated as soon as the project for
which he was hired is completed.
Petitioner, thus, has no legal right to demand separation pay. Policy Instruction No. 20
entitled "Stabilizing Employer-Employee Relations in the Construction Industry"
explicitly mandates that:
xxx xxx xxx
Project employees are not entitled to termination pay if they are terminated as a
result of the completion of the project or any phase thereof in which they are
employed, regardless of the number of projects in which they have been employed by
a particular construction company. Moreover, the company is not required to obtain a
clearance from the Secretary of Labor in connection with such termination. What is
required of the company is a report to the nearest Public Employment Office for
statistical purposes.
xxx xxx xxx
Department Order No. 19 of the Department of Labor and Employment (DOLE)
entitled "Guidelines Governing the Employment of Workers in the Construction
Industry" promulgated on 1 April 1993, reiterates the same rule.
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Labor Congress of the Phils., vs. NLRC, G.R. No. 1239381, May 21, 1998
Facts: The 99 petitioners in this proceeding were rank-and-file employees of
respondent Empire Food Products, which hired them on various dates. Petitioners
filed against private respondents a complaint for payment of money claims and for
violation of labor standards laws
Issue: Whether or not petitioners are entitled back wages.
Ruling: Petitioners are therefore entitled to reinstatement with full back wages
pursuant to Article 279 of the Labor Code, as amended by R.A. No. 6715.
Nevertheless, the records disclose that taking into account the number of employees
involved, the length of time that has lapsed since their dismissal, and the perceptible
resentment and enmity between petitioners and private respondents which
necessarily strained their relationship, reinstatement would be impractical and hardly
promotive of the best interests of the parties. In lieu of reinstatement then,
separation pay at the rate of one month for every year of service, with a fraction of
at least six (6) months of service considered as one (1) year, is in order.
That being said, the amount of backwages to which each petitioner is entitled,
however, cannot be fully settled at this time. Petitioners, as piece-rate workers, have
been paid by the piece. There is need to determine the varying degrees of production
and days worked by each worker.
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Mercidar Fishing Corp., vs. NLRC, G.R. No. 112574, October 8, 1998
Facts: This case originated from a complaint filed on September 20, 1990 by private
respondent Fermin Agao, Jr. against petitioner for illegal dismissal, violation of P.D.
No. 851, and non-payment of five days service incentive leave for 1990. Private
respondent had been employed as a "bodegero" or ship's quartermaster on February
12, 1998. He complained that he had been constructively dismissed by the petitioner
when the latter refused him assignments aboard its after he had reported to work on
May 28, 1990.
Private respondent alleged that he had been sick and thus allowed to go on leave
without pay for one month from April 28, 1990 but that when he reported to work at
the end of such period with a health clearance, he was told to come back another
time as he could not be reinstated immediately. Thereafter, petitioner refused to give
him work. For this reason, private respondent asked for a certificate of employment
from petitioner on September 6, 1990. However, when he came back for the
certification September 10, petitioner refused to issue the certificate unless he
submitted his resignation. Since private respondent refused to submit such letter
unless he was given separation pay, petitioner prevented him from entering the
premises.
Petitioner, on the other hand, alleged that it was private respondent who actually
abandoned his work.
Issue: Whether or not the fishing crew members are considered field personnel as
classified in Art. 82 of the Labor Code.
Ruling: Art. 82 of the Labor Code provide:
"The provisions of this title [Working Conditions and Rest Periods] shall apply
to all employees in all establishments and undertakings whether to profit or
not, but not to government employees, field personnel, members of the family
of the employer who are dependent on him for support, domestic helpers,
persons in personal service of another, and workers who are paid by results as
determined by the Secretary of Labor in appropriate regulations."
"Field personnel" Shall refer to non-agricultural employees who regularly perform
their duties away from the principal place of business or branch office of the
employer and whose actual hours of workin the field cannot be determined with
reasonable certainty.
In contrast, in the case at bar, during the entire course of their fishing voyage,
fishermen employed by petitioner have no choice but to remain on board its vessel.
Although they perform non-agricultural work away from petitioners business offices,
the fact remains that throughout the duration of their work they are under the
effective control and supervision of petitioner through the vessel's patron or master.
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San Miguel Corp., vs. CA, G.R. No. 146775, Jan. 30, 2002
Facts: On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan
District Office, conducted a routine inspection in the premises of San Miguel
Corporation (SMC) in Sta. Filomena, Iligan City. It was discovered that there was
underpayment by SMC of regular Muslim holiday pay to its employees. DOLE sent a
copy of the inspection result to SMC and it was received by and explained to its
personnel officer Elena dela Puerta. SMC contested the findings and DOLE conducted
summary hearings on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Still,
SMC failed to submit proof that it was paying regular Muslim holiday pay to its
employees. Hence, Alan M. Macaraya, Director IV of DOLE Iligan District Office issued
a compliance order, dated 17 December 1993, directing SMC to consider Muslim
holidays as regular holidays and to pay both its Muslim and non-Muslim employees
holiday pay within thirty (30) days from the receipt of the order.
SMC appealed to the DOLE main office in Manila. However, the appeal was dismissed
for lack of merit and the order of Director Macaraya was affirmed. SMC went to SC for
relief via a petition for certiorari, which the Court referred to the Court of Appeals.
The appellate court modified the order with regards the payment of Muslim holiday
pay from 200% to 150% of the employee's basic salary. Its motion for reconsideration
having been denied for lack of merit, SMC filed a petition for certiorari before the SC
Issues:
(a) Whether or not public respondents seriously erred and committed grave abuse
of discretion when they granted Muslim Holiday Pay to non-Muslim employees
of SMC.
(b) Whether or not SMC was not accorded with due process of law in the issuance
of the compliance order.
(c) Whether or not regional director Macaraya, undersecretary Trajano and
undersecretary Espanol have jurisdiction in issuing the assailed compliance
orders.
Ruling: The court ruled the issues in negative.
Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of
Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws,
which states:
Art. 169. Official Muslim holidays. - The following are hereby recognized as
legal Muslim holidays:
(a) Amun Jadd (New Year), which falls on the first day of the first lunar month
of Muharram;
(b) Maulid-un-Nab (Birthday of the Prophet Muhammad), which falls on the
twelfth day of the third lunar month of Rabi-ul-Awwal;
(c) Lailatul Isr Wal Mirj (Nocturnal Journey and Ascension of the Prophet
Muhammad), which falls on the twenty-seventh day of the seventh lunar
month of Rajab;
(d) d-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar
month of Shawwal, commemorating the end of the fasting season; and
(e) d-l-Adh (Hari Raya Haji),which falls on the tenth day of the twelfth
lunar month of Dhl-Hijja.
Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays
shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao
del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and
Zamboanga and in such other Muslim provinces and cities as may hereafter be
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This is of course in addition to the payment of bac kwages which, in accordance with
the ruling in Bustamante v. NLRC should be computed from the time of Lagrama's
dismissal up to the time of the finality of this decision, without any deduction or
qualification.
The Bureau of Working Conditions 32 classifies workers paid by results into two
groups, namely; (1) those whose time and performance is supervised by the employer,
and (2) those whose time and performance is unsupervised by the employer. The first
involves an element of control and supervision over the manner the work is to be
performed, while the second does not. If a piece worker is supervised, there is an
employer-employee relationship, as in this case. However, such an employee is not
entitled to service incentive leave pay since, as pointed out in Makati Haberdashery v.
NLRC 33 and Mark Roche International v. NLRC, 34 he is paid a fixed amount for work
done, regardless of the time he spent in accomplishing such work.
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As petitioners were illegally dismissed, they are entitled to reinstatement with back
wages. The Arbiter applied the rule in the Mercury Drug case, according to which the
recovery of back wages should be limited to three years without qualifications or
deductions. Any award in excess of three years is null and void as to the excess. The
Labor Arbiter correctly ordered private respondents to give separation pay.
Considerable time has elapsed since petitioners dismissal, so that reinstatement
would now be impractical and hardly in the best interest of the parties. In lieu of
reinstatement, separation pay should be awarded to petitioners at the rate of one
month salary for every year of service, with a fraction of at least six (6) months of
service being considered as one (1) year. The awards for overtime pay, holiday pay
and 13th month pay are in accordance with our finding that petitioners are regular
employees, although paid on a piece-rate basis.
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R&E Transport vs. Latag, G.R. No. 155214, Feb. 13, 2004
Facts: Pedro Latag was a regular employee of La Mallorca Taxi since March 1, 1961.
However, he was transferred to the petitioner R & E Transport, Inc. upon cessation of
La Mallorcas business operations. In January 1995, he got sick and was forced to
apply for partial disability with the SSS, which was then granted. Upon recovery, he
reported back to work in September 1998 but was no longer allowed on account of his
old age. Latag asked the petitioner, through its administrative officer for his
retirement pay pursuant to Republic Act 7641 but he was ignored. Latag filed a case
for payment of his retirement pay before the NLRC.
Upon Pedro Latags death on April 30, 1999, he was substituted by his wife, the
respondent Avelina Latag. Labor Arbiter rendered a decision in favour of Latag.
Petitioner filed the quitclaim and motion to dismiss where the Labor Arbiter issued an
order for Writ of Execution. Petitioners interposed an appeal before NLRC. Appeal was
dismissed for failure to post a cash or surety bond, as mandated by law.
Issue: Whether or not Latag is entitled to retirement benefits considering she signed a
waiver of quitclaim.
Ruling: The Supreme Court ruled that the respondent is entitled to retirement
benefits despite of the waiver of quitclaims.
As to the Quitclaim and Waiver signed by Respondent Latag, the CA committed no
error when it ruled that the document was invalid and could not bar her from
demanding the benefits legally due her husband. This is not say that all quitclaims are
invalid per se. Courts, however, are wary of schemes that frustrate workers' rights and
benefits, and look with disfavor upon quitclaims and waivers that bargain these away.
Undisputably, Pedro M. Latag was credited with 14 years of service with R & E
Transport, Inc. Article 287 of the Labor Code, as amended by Republic Act No. 7641,
30 provides: Retirement. In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the establishment, an employee
upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years
which is hereby declared the compulsory retirement age, who has served at least five
(5) years in said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of service, a fraction
of at least six (6) months being considered as one whole year. Unless the parties
provide for broader inclusions, the term one half-month salary shall mean fifteen (15)
days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not
more than five (5) days of service incentive leaves.
The rules implementing the New Retirement Law similarly provide the abovementioned formula for computing the one-half month salary. Since Pedro was paid
according to the "boundary" system, he is not entitled to the 13th month 32 and the
service incentive pay; hence, his retirement pay should be computed on the sole basis
of his salary.
It is accepted that taxi drivers do not receive fixed wages, but retain only those sums
in excess of the "boundary" or fee they pay to the owners or operators of their
vehicles. Thus, the basis for computing their benefits should be the average daily
income. In this case, the CA found that Pedro was earning an average of five hundred
pesos (P500) per day. We thus compute his retirement pay as follows: P500 x 15 days x
14 years of service equals P105,000. Hence, it is clear that the late Pedro M. Latag is
entitled to retirement benefits.
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Autobus Transport System vs. Bautista, G.R. No. 156364, May 16, 2005
Facts: Respondent Antonio Bautista has been employed by petitioner Auto Bus
Transport Systems, Inc., since May 1995, as driver-conductor with travel routes
Manila-Tuguegarao via Baguio, Baguio-Tuguegarao via Manila and Manila-Tabuk via
Baguio. Respondent was paid on commission basis, seven percent (7%) of the total
gross income per travel, on a twice a month basis.
On January 2000, while respondent was driving Autobus No. 114 along Sta. Fe, Nueva
Vizcaya, the bus he was driving accidentally bumped the rear portion of Autobus No.
124, as the latter vehicle suddenly stopped at a sharp curve without giving any
warning. Respondent averred that the accident happened because he was compelled
by the management to go back to Roxas, Isabela, although he had not slept for almost
twenty-four (24) hours, as he had just arrived in Manila from Roxas, Isabela.
Respondent further alleged that he was not allowed to work until he fully paid the
amount of P75,551.50, representing thirty percent (30%) of the cost of repair of the
damaged buses and that despite respondent's pleas for reconsideration, the same was
ignored by management. After a month, management sent him a letter of
termination. Thus, on 02 February 2000, respondent instituted a Complaint for Illegal
Dismissal with Money Claims for nonpayment of 13th month pay and service incentive
leave pay against Autobus.
On 29 September 2000, based on the pleadings and supporting evidence presented by
the parties, Labor Arbiter decided that the complaint be dismissed where the
respondent must pay to the complainant
Issue: Whether or not respondent is entitled to service incentive leave.
Ruling: The respondent is entitled to service incentive leave.
The disposition of the issue revolves around the proper interpretation of Article 95 of
the Labor Code vis--vis Section 1(D), Rule V, Book III of the Implementing Rules and
Regulations of the Labor Code which provides: RIGHT TO SERVICE INCENTIVE LEAVE,
(a) Every employee who has rendered at least one year of service shall be entitled to
a yearly service incentive leave of five days with pay.
Moreover, Book III, Rule V: SERVICE INCENTIVE LEAVE also states that this rule shall
apply to all employees except: (d) Field personnel and other employees whose
performance is unsupervised by the employer including those who are engaged on task
or contract basis, purely commission basis, or those who are paid in a fixed amount
for performing work irrespective of the time consumed in the performance thereof;
A careful examination of said provisions of law will result in the conclusion that the
grant of service incentive leave has been delimited by the Implementing Rules and
Regulations of the Labor Code to apply only to those employees not explicitly
excluded by Section 1 of Rule V. According to the Implementing Rules, Service
Incentive Leave shall not apply to employees classified as "field personnel."
The phrase "other employees whose performance is unsupervised by the employer"
must not be understood as a separate classification of employees to which service
incentive leave shall not be granted. Rather, it serves as an amplification of the
interpretation of the definition of field personnel under the Labor Code as those
"whose actual hours of work in the field cannot be determined with reasonable
certainty."
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The same is true with respect to the phrase "those who are engaged on task or
contract basis, purely commission basis." Said phrase should be related with "field
personnel," applying the rule on ejusdem generis that the general and unlimited terms
are restrained and limited by the particular terms that they follow. Hence, employees
engaged on task or contract basis or paid on purely commission basis are not
automatically exempted from the grant of service incentive leave, unless, they fall
under the classification of field personnel.
What must be ascertained in order to resolve the issue of propriety of the grant of
service incentive leave to respondent is whether or not he is field personnel?
According to Article 82 of the Labor Code, "field personnel" shall refer to nonagricultural employees who regularly perform their duties away from the principal
place of business or branch office of the employer and whose actual hours of work in
the field cannot be determined with reasonable certainty. This definition is further
elaborated in the Bureau of Working Conditions (BWC), Advisory Opinion to Philippine
Technical-Clerical Commercial Employees Association 10 which states that:
As a general rule, field personnel are those whose performance of their job/
service is not supervised by the employer or his representative, the workplace
being away from the principal office and whose hours and days of work cannot
be determined with reasonable certainty; hence, they are paid specific amount
for rendering specific service or performing specific work. If required to be at
specific places at specific times, employees including drivers cannot be said to
be field personnel despite the fact that they are performing work away from
the principal office of the employee.
At this point, it is necessary to stress that the definition of a "field personnel" is not
merely concerned with the location where the employee regularly performs his duties
but also with the fact that the employee's performance is unsupervised by the
employer. As discussed above, field personnel are those who regularly perform their
duties away from the principal place of business of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty. Thus, in
order to conclude whether an employee is a field employee, it is also necessary to
ascertain if actual hours of work in the field can be determined with reasonable
certainty by the employer. In so doing, an inquiry must be made as to whether or not
the employee's time and performance are constantly supervised by the employer.
Respondent is not a field personnel but a regular employee who performs tasks usually
necessary and desirable to the usual trade of petitioner's business. Accordingly,
respondent is entitled to the grant of service incentive leave.
The clear policy of the Labor Code is to grant service incentive leave pay to workers
in all establishments, subject to a few exceptions. Section 2, Rule V, Book III of the
Implementing Rules and Regulations provides that "every employee who has rendered
at least one year of service shall be entitled to a yearly service incentive leave of five
days with pay."
Service incentive leave is a right which accrues to every employee who has served
"within 12 months, whether continuous or broken reckoned from the date the
employee started working, including authorized absences and paid regular holidays
unless the working days in the establishment as a matter of practice or policy, or that
provided in the employment contracts, is less than 12 months, in which case said
period shall be considered as one year." It is also "commutable to its money equivalent
if not used or exhausted at the end of the year." In other words, an employee who has
served for one year is entitled to it. He may use it as leave days or he may collect its
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monetary value. To limit the award to three years, as the solicitor general
recommends, is to unduly restrict such right.
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San Miguel Corp., vs. Del Rosario, G.R. No. 168194, Dec. 13, 2005
Facts: On April 17, 2000, respondent was employed by petitioner as key account
specialist. On March 9, 2001, petitioner informed respondent that her probationary
employment will be severed at the close of the business hours of March 12, 2001. On
March 13, 2001, respondent was refused entry to petitioners premises. On June 24,
2002, respondent filed a complaint against petitioner for illegal dismissal and
underpayment/non-payment of monetary benefits.
Issue: Whether or not respondent is a regular employee of petitioner.
Ruling: Affirmative. In termination cases, like the present controversy, the burden of
proving the circumstances that would justify the employees dismissal rests with the
employer. The best proof that petitioner should have presented to prove the
probationary status of respondent is her employment contract. None, having been
presented, the continuous employment of respondent as an account specialist for
almost 11 months, from April 17, 2000 to March 12, 2001, means that she was a
regular employee and not a temporary reliever or a probationary employee.
And while it is true that by way of exception, the period of probationary employment
may exceed six months when the parties so agree, such as when the same is
established by company policy, or when it is required by the nature of the work, none
of these exceptional circumstance were proven in the present case.
Hence,
respondent whose employment exceeded six months is undoubtedly a regular
employee of petitioner.
Moreover, even assuming that the employment of respondent from April 7, 2000 to
September 3, 2000, is only temporary, and that the reckoning period of her
probationary employment is September 4, 2000, she should still be declared a regular
employee because by the time she was dismissed on March 12, 2001, her alleged
probationary employment already exceeded six months, i.e., six months and eight
days to be precise.
A worker was found to be a regular employee notwithstanding
the presentation by the employer of a Payroll Authority indicating that said employee
was hired on probation, since it was shown that he was terminated four days after
the 6th month of his purported probationary employment.
Neither will petitioners belated claim that respondent became a probationary
employee starting October 1, 2000 work against respondent. As earlier stated, the
payroll authorities indicating that respondents probationary status became effective
as of such date are of scant evidentiary value since it does not show the conformity of
respondent. At any rate, in the interpretation of employment contracts, whether oral
or written, all doubts must be resolved in favor of labor.
Hence, the contract of employment in the instant case, which appears to be an oral
agreement since no written form was presented by petitioner, should be construed as
one vesting respondent with a regular status and security of tenure.
Regarding the argument of redundancy, Redundancy, for purposes of the Labor Code,
exists where the services of an employee are in excess of what is reasonably
demanded by the actual requirements of the enterprise. Succinctly put, a position is
redundant where it is superfluous, and superfluity of a position or positions may be
the outcome of a number of factors, such as overhiring of workers, decreased volume
of business, or dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.
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The determination that the employees services are no longer necessary or sustainable
and, therefore, properly terminable is an exercise of business judgment of the
employer. The wisdom or soundness of this judgment is not subject to discretionary
review of the Labor Arbiter and the NLRC, provided there is no violation of law and no
showing that it was prompted by an arbitrary or malicious act. In other words, it is
not enough for a company to merely declare that it has become overmanned. It must
produce adequate proof of such redundancy to justify the dismissal of the affected
employees.
The following evidence may be proffered to substantiate redundancy: the new
staffing pattern, feasibility studies/proposal, on the viability of the newly created
positions, job description and the approval by the management of the restructuring.
In the case at bar, petitioner presented an affidavit of its Sales Manager and a
memorandum of the company both to the effect that there is a need to redeploy its
regular employees and terminate the employment of temporary employees, in view of
an excess in manpower. These documents, however, do not satisfy the requirement of
substantial evidence that a reasonable mind might accept as adequate to support a
conclusion.
Moreover, the lingering doubt as to the existence of redundancy or of petitioners so
called restructuring, realignment or reorganization which resulted in the dismissal
of not only probationary employees but also of regular employees, is highlighted by
the non-presentation by petitioner of the required notice to the DOLE and to the
separated employees. If there was indeed a valid redundancy effected by petitioner,
these notices and the proof of payment of separation pay to the dismissed regular
employees should have been offered to establish that there was excess manpower in
petitioners GMA-KAG caused by a decline in the sales volume.
In balancing the interest between labor and capital, the prudent recourse in
termination cases is to safeguard the prized security of tenure of employees and to
require employers to present the best evidence obtainable, especially so because in
most cases, the documents or proof needed to resolve the validity of the termination,
are in the possession of employers. A contrary ruling would encourage employers to
prevent the regularization of an employee by simply invoking a feigned or
unsubstantiated redundancy program.
Granting that petitioner was able to substantiate the validity of its reorganization or
restructuring, it nevertheless, failed to effect a fair and reasonable criterion in
dismissing respondent. The criteria in implementing a redundancy are: (a) less
preferred status, e.g. temporary employee; (b) efficiency; and (c) seniority.
It is evident from the foregoing that the criterion allegedly used by petitioner in
reorganizing its sales unit was the employment status of the employee. However, in
the implementation thereof, petitioner erroneously classified respondent as a
probationary employee, resulting in the dismissal of the latter. Verily, the absence of
criteria and the erroneous implementation of the criterion selected, both render
invalid the redundancy because both have the ultimate effect of illegally dismissing
an employee.
Considering that respondent was illegally dismissed, she is entitled not only to
reinstatement but also to payment of full back wages, computed from the time her
compensation was actually withheld from her on March 13, 2001, up to her actual
reinstatement. As a regular employee of petitioner from the date of her employment
on April 17, 2000, she is likewise entitled to other benefits, i.e., service incentive
leave pay and 13th month pay computed from such date also up to her actual
reinstatement.
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Respondent is not, however, entitled to holiday pay because the records reveal that
she is a monthly paid regular employee. Under Section 2, Rule IV, Book III of the
Omnibus Rules Implementing the Labor Code, employees who are uniformly paid by
the month, irrespective of the number of working days therein, shall be presumed to
be paid for all the days in the month whether worked or not.
Anent attorneys fees, in actions for recovery of wages or where an employee was
forced to litigate and thus incurred expenses to protect his rights and interests, a
maximum of 10% of the total monetary award by way of attorneys fees is justifiable
under Article 111 of the Labor Code, Section 8, Rule VIII, Book III of its Implementing
Rules, and paragraph 7, Article 2208 of the Civil Code. The award of attorneys fees is
proper and there need not be any showing that the employer acted maliciously or in
bad faith when it withheld the wages. There need only be a showing that the lawful
wages were not paid accordingly, as in the instant controversy.
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Penaranda vs. Baganga Plywood Corp., G.R. No. 159577, May 3, 2006
Facts: Sometime in June 1999, Petitioner Charlito Pearanda was hired as an
employee of Baganga Plywood Corporation (BPC) to take charge of the operations and
maintenance of its steam plant boiler. In May 2001, Pearanda filed a Complaint for
illegal dismissal with money claims against BPC and its general manager, Hudson Chua,
before the NLRC.
After the parties failed to settle amicably, the labor arbiter directed the parties to
file their position papers and submit supporting documents.
Pearanda alleges that he was employed by respondent Banganga on March 15, 1999
with a monthly salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he
was illegally terminated on December 19, 2000. he alleges that his services were
terminated without the benefit of due process and valid grounds in accordance with
law. Furthermore, he was not paid his overtime pay, premium pay for working during
holidays/rest days, night shift differentials and finally claimed for payment of
damages and attorney's fees having been forced to litigate the present complaint.
Respondent BPC is a domestic corporation duly organized and existing under
Philippine laws and is represented herein by its General Manager HUDSON CHUA, the
individual respondent. Respondents allege that complainant's separation from service
was done pursuant to Art. 283 of the Labor Code. The respondent BPC was on
temporary closure due to repair and general maintenance and it applied for clearance
with the Department of Labor and Employment, Regional Office No. XI, to shut down
and to dismiss employees. And due to the insistence of herein complainant he was
paid his separation benefits.
Consequently, when respondent BPC partially reopened in January 2001, Pearanda
failed to reapply.
The labor arbiter ruled that there was no illegal dismissal and that petitioner's
Complaint was premature because he was still employed by BPC. Petitioners money
claims for illegal dismissal was also weakened by his quitclaim and admission during
the clarificatory conference that he accepted separation benefits, sick and vacation
leave conversions and thirteenth month pay.
Issue: Whether or not Pearanda is a regular, common employee entitled to monetary
benefits under Art. 82 of the Labor Code and is entitled to the payment of overtime
pay and other monetary benefits.
Ruling: The petitioner is not entitled to overtime pay and other monetary benefits.
The Court disagrees with the NLRC's finding that petitioner was a managerial
employee. However, petitioner was a member of the managerial staff, which also
takes him out of the coverage of labor standards. Like managerial employees, officers
and member of the managerial staff are not entitled to the provisions of law on labor
standards.
The Implementing Rules of the Labor Code define members of a managerial staff as
those with the following duties and responsibilities:
The primary duty consists of the performance of work directly related to
(1)
management policies of the employer;
Customarily and regularly exercise discretion and independent
(2)
judgment;
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(3)
(4)
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Leyte IV Electric Cooperative Inc vs. LEYECO IV Employees Union-ALU, G.R. No.
1577745, October 19, 2007, citing Wellington Investment vs. Trajano, 245 SCRA 561
[1995], and Odango vs. NLRC, G.R. No. 147420, June 10, 2004
Facts: On April 6, 1998, Leyte IV Electric Cooperative, Inc. (petitioner) and Leyeco IV
Employees Union-ALU (respondent) entered into a Collective Bargaining Agreement
(CBA) covering petitioner rank-and-file employees, for a period of five (5) years
effective January 1, 1998. On June 7, 2000, respondent, through its Regional VicePresident, Vicente P. Casilan, sent a letter to petitioner demanding holiday pay for all
employees, as provided for in the CBA. Petitioner, on the other hand, in its Position
Paper, insisted payment of the holiday pay in compliance with the CBA provisions,
stating that payment was presumed since the formula used in determining the daily
rate of pay of the covered employees is Basic Monthly Salary divided by 30 days or
Basic Monthly Salary multiplied by 12 divided by 360 days, thus with said formula, the
employees are already paid their regular and special days, the days when no work is
done, the 51 un-worked Sundays and the 51 un-worked Saturdays.
Issue: Whether or not Leyte IV Electric Cooperative is liable for underpayment of
holiday pay.
Held: Leyte IV Electric Cooperative is not liable for underpayment of holiday pay. The
Voluntary Arbitrator gravely abused its discretion in giving a strict or literal
interpretation of the CBA provisions that the holiday pay be reflected in the payroll
slips. Such literal interpretation ignores the admission of respondent in its Position
Paper that the employees were paid all the days of the month even if not worked. In
light of such admission, petitioner's submission of its 360 divisor in the computation of
employees' salaries gains significance.
This ruling was applied in Wellington Investment and Manufacturing Corporation v.
Trajano, 43 Producers Bank of the Philippines v. National Labor Relations Commission.
In this case, the monthly salary was fixed by Wellington to provide for compensation
for every working day of the year including the holidays specified by law and
excluding only Sundays. In fixing the salary, Wellington used what it called the "314
factor"; that is, it simply deducted 51 Sundays from the 365 days normally comprising
a year and used the difference, 314, as basis for determining the monthly salary. The
monthly salary thus fixed actually covered payment for 314 days of the year, including
regular and special holidays, as well as days when no work was done by reason of
fortuitous cause, such as transportation strike, riot, or typhoon or other natural
calamity, or cause not attributable to the employees.
It was also applied in Odango v. National Labor Relations Commission, where Court
ruled that the use of a divisor that was less than 365 days cannot make the employer
automatically liable for underpayment of holiday pay. In said case, the employees
were required to work only from Monday to Friday and half of Saturday. Thus, the
minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and
less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days meant that the
employees were deprived of their holiday pay for some or all of the ten legal
holidays. The 304-day divisor used by the employer was clearly above the minimum of
287 days.
In this case, the employees are required to work only from Monday to Friday. Thus,
the minimum allowable divisor is 263, which is arrived at by deducting 51 un-worked
Sundays and 51 un-worked Saturdays from 365 days. Considering that petitioner used
the 360-day divisor, which is clearly above the minimum, indubitably, petitioner's
employees are being given their holiday pay. Thus, the Voluntary Arbitrator should not
have simply brushed aside petitioner's divisor formula. In granting respondent's claim
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Issue:Whether or not the release/quitclaim affidavits are invalid for being against
public policy.
Ruling: Release/Quitclaim; Separation pay. The release/quitclaim affidavits are
invalid for being against public policy for two reasons: (1) the terms of the settlement
are unconscionable; the separation pay for termination due to reorganization/
restructuring was deficient by Php400,000.00 for each employee; they were given
only half of the amount they were legally entitled to; and (2) the absence of
voluntariness when the employees signed the document, it was their dire
circumstances and inability to support their families that finally drove them to accept
the amount offered. Without jobs and with families to support, they dallied in
executing the quitclaim instrument, but were eventually forced to sign given their
circumstances. To be sure, a settlement under these terms is not and cannot be a
reasonable one, given especially the respondents length of service 25 years for
Ybarola and 19 years for Rivera. Radio Mindanao Network, Inc. and Eric S. Canoy vs.
Domingo Z. Ybarola, et al. G.R. No. 198662. September 12, 2012.
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show any retirement plan or collective bargaining agreement providing for retirement
benefits to petitioner's employees, the applicable retirement benefits to petitioner's
employees, the applicable retirement age is the optional retirement age of sixty (60)
years according to Article 287, which would qualify the retiree to retirement benefits
equivalent to one-half (1/2) month's salary for every year of service. Unfortunately, at
the time private respondent stopped working for petitioner, they had not yet reached
the age of sixty (60) years. The Court stresses that there is nothing to prevent
petitioners from voluntarily giving private respondents some financial assistance on an
ex gratia basis.
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Pantranco North Express, Inc., vs. National Labor Relations Commission And
Urbano Suiga
Facts: Urbano Suiga was hired by Pantranco North Express Inc. in 1964 as a bus
conductor. He eventually joined the Pantranco Employees Association-PTGWO. He
continued in petitioner's employ until August 12, 1989, when he was retired at the age
of fifty-two (52) after having rendered twenty five years' service. The basis of his
retirement was the compulsory retirement provision of the collective bargaining
agreement between the petitioner and the aforenamed union. Private respondent
received P49,300.00 as retirement pay.
On February 15, 1990, private respondent filed a complaint for illegal dismissal
against petitioner with the Sub-Regional Arbitration Branch of the respondent
Commission in Dagupan City. The complaint was consolidated with two other cases of
illegal dismissal having similar facts and issues, filed by other employees, non-union
members.
Collective Bargaining Agreement between petitioner company and the union states:
"Upon reaching the age of sixty (60) years or upon
completing twenty-five (25) years of service to the
COMPANY, whichever comes first, and the employee shall
be compulsory retired and paid the retirement benefits
herein provided.
After hearings were held and position papers submitted, on March 26, 1990, Labor
Arbiter Olairez rendered his decision that the three complainants illegally and
unjustly dismissed and ordered the respondent to reinstate them to their former or
substantially equivalent positions without loss of seniority rights with full backwages
and other benefits with a total of P31,618.12 plus additional backwages and other
benefits but not to exceed 3 years and the corresponding attorney's fees. The
amounts already received by complainants shall be considered as advanced payment
of their retirement pay which shall be deducted when they shall actually retire or
(be) separated from the service. The order of reinstatement is immediately executory
even pending appeal. Petitioner appealed to public respondent, which issued the
questioned Resolution affirming the labor arbiter's decision in toto. Hence, this
petition.
Issues:
(1)
(2)
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Regional Directors of the Department of Labor and Employment shall not entertain
disputes, grievances or matters under the exclusive and original jurisdiction of the
Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose
and refer the same to the Grievance Machinery or Voluntary Arbitration provided in
the Collective Bargaining Agreement."
The complaint of illegal dismissal of which original and exclusive jurisdiction under
Article 217 has been conferred to the Labor Arbiters. The interpretation of the CBA or
enforcement of the company policy is only corollary to the complaint of illegal
dismissal. Otherwise, an employee who was on AWOL, or who committed offenses
contrary to the personnel polices can no longer file a case of illegal dismissal because
the discharge is premised on the interpretation or enforcement of the company
polices.
Respondent voluntarily submitted the case to the jurisdiction of this labor tribunal. It
adduced arguments to the legality of its act, whether such act may be retirement
and/or dismissal, and prayed for reliefs on the merits of the case. A litigant cannot
pray for reliefs on the merits and at the same time attacks the jurisdiction of the
tribunal.
The Court agrees with the public respondent's affirmance of the arbiter's decision in
respect of the question of jurisdiction.
In Sanyo Philippines Workers Union PSSLU vs. Caizares, the petitioner, the court
ruled:
Only disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators.In the instant case, both the
union and the company are united or have come to an agreement regarding the
dismissal of private respondents. No grievance between them exists which
could be brought to a grievance machinery. The dispute has to be settled
before an impartial body. The grievance machinery with members designated
by the union and the company cannot be expected to be impartial against the
dismissed employees.
Due process demands that the dismissed workers
grievances be ventilated before an impartial body. Since there has already
been an actual termination, the matter falls within the jurisdiction of the
Labor Arbiter."
Applying the same rationale to the case at bar, it cannot be said that the "dispute" is
between the union and petitioner company because both have previously agreed upon
the provision on "compulsory retirement" as embodied in the CBA. Also, it was only
private respondent on his own who questioned the compulsory retirement. Thus, the
case is properly denominated as a "termination dispute" which comes under the
jurisdiction of labor arbiters.
Therefore, public respondent did not commit a grave abuse of discretion in upholding
the jurisdiction of the labor arbiter over this case.
Private Respondent's Compulsory Retirement Is Not Illegal Dismissal
"Retirement. -- In the absence of any collective bargaining agreement or other
applicable agreement concerning terms and condition of employment which provides
for retirement at an older age, an employee may be retired upon reaching the age of
sixty (60) years."
Art. 287 of the Labor Code as worded permits employers and employees to fix
the applicable retirement age at below 60 years. Moreover, providing for early
retirement does not constitute diminution of benefits. In almost all countries today,
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early retirement, i.e., before age 60, is considered a reward for services rendered
since it enables an employee to reap the fruits of his labor particularly retirement
benefits, whether lump-sum or otherwise at an earlier age, when said employee, in
presumably better physical and mental condition, can enjoy them better and longer.
As a matter of fact, one of the advantages of early retirement is that the
corresponding retirement benefits, usually consisting of a substantial cash windfall,
can early on be put to productive and profitable uses by way of income-generating
investments, thereby affording a more significant measure of financial security and
independence for the retiree who, up till then, had to contend with life's vicissitudes
within the parameters of his fortnightly or weekly wages. Thus we are now seeing
many CBAs with such early retirement provisions. And the same cannot be considered
a diminution of employment benefits.
A CBA incorporates the agreement reached after negotiations between employer and
bargaining agent with respect to terms and conditions of employment. A CBA is not an
ordinary contract. It is a labor contract within the contemplation of Article 1700 of
the Civil Code of the Philippines which governs the relations between labor and
capital, it is not merely contractual in nature but impressed with public interest, thus
it must yield to the common good. As such, it must be construed liberally rather than
narrowly and technically, and the courts must place a practical and realistic
construction upon it, giving due consideration to the context in which it is negotiated
and purpose which it is intended to serve.
Being a product of negotiation, the CBA between the petitioner and the union
intended the provision on compulsory retirement to be beneficial to the employeesunion members, including herein private respondent.
When private respondent
ratified the CBA with the union, he not only agreed to the CBA but also agreed to
conform to and abide by its provisions. Thus, it cannot be said that he was illegally
dismissed when the CBA provision on compulsory retirement was applied to his case.
Incidentally, The Retirement Pay Law," said statute sheds light on the present
discussion when it amended Art. 287 of the Labor Code worded that "Any employee
may be retired upon reaching the retirement age establish in the collective bargaining
agreement or other applicable employment contract."
In the absence of a retirement plan or agreement providing for retirement benefits of
employees in the establishment, an employee upon reaching the age of sixty (60)
years or more, but not beyond sixty-five (65) years which is hereby declared the
compulsory retirement age, who has served at least five (5) years in the said
establishment may retire."
The provision makes clear the intention and spirit of the law to give employers and
employees a free hand to determine and agree upon the terms and conditions of
retirement. Providing in a CBA for compulsory retirement of employees after twentyfive (25) years of service is legal and enforceable so long as the parties agree to be
governed by such CBA. Public respondent committed a grave abuse of discretion in
affirming the decision of the labor arbiter. The compulsory retirement of private
respondent effected in accordance with the CBA is legal and binding.
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R&E Transport , Inc., And Honorio Enriquez, vs. Avelina Latag (February 13, 2004)
G.R. 155214
Facts: Pedro Latag was a regular employee of La Mallorca Taxi since March 1, 1961.
When La Mallorca ceased from business operations, Latag transferred to R & E
Transport, Inc. He was receiving an average daily salary of five hundred pesos
(P500.00) as a taxi driver. Latag got sick in January 1995 and was forced to apply for
partial disability with the SSS, which was granted. When he recovered, he reported
for work in September 1998 but was no longer allowed to continue working on account
of his old age. Latag thus asked Felix Fabros, the administrative officer of
[petitioners], for his retirement pay pursuant to Republic Act 7641 but he was
ignored.
On December 21, 1998, Latag filed a case for payment of his retirement pay before
the NLRC. Latag however died on April 30, 1999. Subsequently, his wife, Avelina
Latag, substituted him. On January 10, 2000, the Labor Arbiter rendered a decision in
favor of Latag.
Issue: WON Latag is entitled to retirement benefits considering she signed a waiver of
quitclaim.
Ruling: YES, the respondent is entitled to retirement benefits despite of the waiver of
quitclaims.
The Supreme Court upheld that the CA committed no error when it ruled that the
Quitclaim and Waiver was invalid and could not bar respondent Latag from demanding
the benefits legally due her husband despite the former having signed the document.
This is not to say that all quitclaims are invalid per se. Courts, however, are wary of
schemes that frustrate workers' rights and benefits, and look with disfavor upon
quitclaims and waivers that bargain these away.
Undisputably, Pedro M. Latag was credited with 14 years of service with R & E
Transport, Inc. Article 287 of the Labor Code, as amended by Republic Act No. 7641,
30 provides:
Art. 287. Retirement. xxx xxx xxx In the absence of a retirement
plan or agreement providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of sixty (60) years or
more, but not beyond sixty-five (65) years which is hereby declared the
compulsory retirement age, who has served at least five (5) years in said
establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months being considered as one
whole year. Unless the parties provide for broader inclusions, the term
one half-month salary shall mean fifteen (15) days plus one-twelfth
(1/12) of the 13th month pay and the cash equivalent of not more than
five (5) days of service incentive leaves. xxx xxx xxx
The rules implementing the New Retirement Law similarly provide the abovementioned formula for computing the one-half month salary. Since Pedro was paid
according to the "boundary" system, he is not entitled to the 13th month 32 and the
service incentive pay; hence, his retirement pay should be computed on the sole basis
of his salary.
It is accepted that taxi drivers do not receive fixed wages, but retain only those sums
in excess of the "boundary" or fee they pay to the owners or operators of their
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vehicles. Thus, the basis for computing their benefits should be the average daily
income.
Rufina Patis Factory v. Alusitain
Facts: In March 1948, respondent Alusitain was hired as a laborer at the Rufina Patis
Factory owned and operated by petitioner Lucas. On February 19, 1991, respondent,
then 63 years of age, tendered his letter of resignation, and also executed a duly
notarized affidavit of separation from employment and submitted the same to the
Pensions Department of the SSS. Meanwhile, R.A. 7641 took effect in January 1993
providing, among others, that In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the establishment, an employee
upon reaching the age of sixty (60) years or more, but not beyond sixty five (65) years
which is hereby declared the compulsory retirement age, who has served at least five
(5) years in the said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one half (1/2) month salary for every year of service, a fraction
of at least six (6) months being considered as one whole year.
In 1995, respondent, claiming that he retired from the company on January 31, 1995,
having reached the age of 65 and due to poor health, demanded from petitioner the
payment of his retirement benefits in the amount of P86,710.00, which petitioner
refused to pay. Respondent filed a complaint before the NLRC against petitioners for
non-payment of retirement benefits. Petitioners maintained that respondent resigned
from the company in 1991. On the other hand, respondent maintained that he
continued working for petitioners until January 1995, the date of actual retirement,
due to illness and old age, and that he merely accomplished the documents in
compliance with the requirements of the SSS in order to avail of his retirement
benefits. The Labor Arbiter upheld respondents position. The Court of Appeals upheld
the NLRC decision. Petitioners assert that the appellate court erred in applying
retroactively R.A. 7641 as said law does not expressly provide for such retroactive
application and to do so would defeat the clear intent of Congress. Hence, this
petition.
Issue: Whether or not respondent is entitled to his claim for retirement benefits.
Ruling: No. R.A. 7641 is a social legislation and may be given retroactive effect where
(1) the claimant for retirement benefits was still the employee of the employer at the
time the statute took effect; and (2) the claimant had complied with the
requirements for eligibility under the statute for such retirement benefits. It is thus
clear that in order for respondent to claim retirement benefits from petitioner, he has
to prove that he was its employee at the time R.A. 7641 took effect. In the case at
bar, it was incumbent on respondent to prove that he retired on January 31, 1995 and
not on February 20, 1991 as indicated on his letter of resignation. Respondent failed
to prove that he was an employee of petitioner at the time R.A. 7641 took effect.
Thus, his claim for retirement benefits must be disallowed.
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Sta. Catalina College v. NLRC; G.R. No. 144483; November 19, 2003
Facts: Hilaria was hired as an elementary school teacher at the Sta. Catalina College
(petitioner school) in San Antonio, Bian, Laguna. In 1970, she applied for and was
granted a one year leave of absence without pay on account of the illness of her
mother. After the expiration in 1971 of her leave of absence, she had not been heard
from by petitioner school.
In the meantime, she was employed as a teacher at the San Pedro Parochial School
during school year 1980-1981 and at the Liceo de San Pedro, Bian, Laguna during
school year 1981-1982.
In 1982, she applied anew at petitioner school which hired her with a monthly salary
of Php 6,567.95.
On March 22, 1997, during the 51st Commencement Exercises of petitioner school,
Hilaria was awarded a Plaque of Appreciation for thirty years of service and Php
12,000.00 as gratuity pay.
On May 31, 1997, Hilaria reached the compulsory retirement age of 65. Retiring
pursuant to Article 287 of the Labor Code, as amended by Republic Act 7641,
petitioner school pegged her retirement benefits at Php 59,038.35, computed on the
basis of fifteen years of service from 1982 to 1997. Her service from 1955 to 1970 was
excluded in the computation, petitioner school having asserted that she had, in 1971,
abandoned her employment.
From the Php 59,038.35 retirement benefits was deducted the amount of Php
28,853.09 representing reimbursement of the employers contribution to her
retirement benefits under the Private Education Retirement Annuity Association
(PERAA) which Hilaria had already received.
Issue: Whether or not the separation pay should be computed based on the length of
continuous service or merely years of service not being continuous.
Ruling: Hilaria was considered a new employee when she rejoined petitioner school
upon re-applying in 1982, her retirement benefits should thus be computed only on
the basis of her years of service from 1982 to 1997. The Court is not unmindful of
Hilarias rendition of a total of thirty years of teaching in petitioner school and should
be accorded ample support in her twilight years.
Petitioner school in fact
acknowledges her dedicated service to its students. She can, however, only be
awarded with what she is rightfully entitled to under the law.
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As the voluntary arbitrator has correctly observed, there is ambiguity in the assailed
CBA provisions because they did not categorically state whether the computation of
the 13th and 14th month pay would be based on a one full months basic salary of the
employees, or pro-rated based on the compensation actually received.
(2) NO. The ambiguity in the CBA provisions was correctly resolved by the arbitrator
by relying on Article 1702 of the Civil Code, which provides that in case of doubt, all
labor legislation and all labor contracts shall be construed in favor of the safety and
decent living of the laborer. CA is also correct in ruling that thecomputationof the
13th month pay should be based on the length of service and not on the actual wage
earned by the worker.
PD 851 or the 13th Month Pay Law was issued to protect the level of wages
of workers from worldwide inflation. Under the IRR of said law, the minimum 13th
month pay shall not be less than 1/12 of the total basic salary earned by an employee
within a calendar year.The Court has interpreted basic salary to mean, NOT the
amount actually received by an employee, but 1/12 of their standard monthly wage
multiplied by their length of service within a given calendar year.
The IRR also provide for a pro-ration of this benefit ONLY in cases of resignation or
separation from work. In the present case, there being no resignation/separation,
thecomputationof the 13th month pay should not be pro-rated but should be given in
full.
Moreover, it has not been proven that Honda has been implementing pro-rating of the
13th month paybefore thepresent case. It is not a company practice. In fact, there
was an implicit acceptance that prior to the strike, a full month basic
paycomputationwas the present practice intended in the CBA. It was the second
strike that prompted the company to adopt the pro-ratacomputation.
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The Plan is contributory. The University shall set aside an amount equivalent to 3%
of the basic salaries of the faculty and staff. To this shall be added a 5% deduction
from the basic salaries of the faculty and staff.
A member on leave with the University approval shall continue paying, based on his
pay while on leave, his leave without pay should pay his contributions to the Plan.
However, a member, who has been on leave without pay should pay his contributions
based on his salary plus the Universitys contributions while on leave or the full
amount within one month immediately after the date of his reinstatement. Provided,
further that if a member has no sufficient source of income while on leave may pay
within six months after his reinstatement.
It was through no voluntary act of her own that petitioner became a member of the
plan. In fact, the only way she could have ceased to be a member thereof was if she
stopped working for respondent altogether. Furthermore, in the rule on contributions,
the repeated use of the word shall ineluctably pointed to the conclusion that
employees had no choice but to contribute to the plan (even when they were on
leave).
Retirement is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a certain
age agrees to sever his or her employment with the former. The truth was that
petitioner had no choice but to participate in the plan, given that the only way she
could refrain from doing so was to resign or lose her job. It is axiomatic that employer
and employee do not stand on equal footing, a situation which often causes an
employee to act out of need instead of any genuine acquiescence to the employer.
This was clearly just such an instance.
An employer is free to impose a retirement age less than 65 for as long as it has the
employees consent. Stated conversely, employees are free to accept the employers
offer to lower the retirement age if they feel they can get a better deal with the
retirement plan presented by the employer. Thus, having terminated petitioner solely
on the basis of a provision of a retirement plan which was not freely assented to by
her, respondent was guilty of illegal dismissal.
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Letran Calamba Faculty & Employees Association vs NLRC (2008) G.R. 156225
Facts: Three cases were consolidated involving petitioner Letran Calamba Faculty and
Employees Association and Colegio de San Juan de Letran, Calamba, for money claims
and a petition to declare the subject strike illegal filed by respondent.
On July 28, 1999, the NLRC promulgated its Decision dismissing both appeals.
Petitioner filed a Motion for Reconsideration but the same was denied by the NLRC in
its Resolution dated June 21, 2000.Petitioner then filed a special civil action for
certiorari with the CA assailing the above-mentioned NLRC Decision and Resolution.
On May 14, 2002, the CA rendered the presently assailed judgment dismissing the
petition. Petitioner filed a Motion for Reconsideration but the CA denied it in its
Resolution promulgated on November 28, 2002. Citing Agustilo v. Court of Appeals,
petitioner contends that in a special civil action for certiorari brought before the CA,
the appellate court can review the factual findings and the legal conclusions of the
NLRC.
Petitioner avers that the CA, in concluding that the NLRC Decision was supported by
substantial evidence, failed to specify what constituted said evidence. Thus,
petitioner asserts that the CA acted arbitrarily in affirming the Decision of the NLRC.
Issue: WON the Court of Appeals erred in holding that the factual findings of the NLRC
cannot be reviewed in certiorari proceedings.
Ruling: Court finds no error in the ruling of the CA that since nowhere in the petition
is there any acceptable demonstration that the LA or the NLRC acted either with
grave abuse of discretion or without or in excess of its jurisdiction, the appellate
court has no reason to look into the correctness of the evaluation of evidence which
supports the labor tribunals' findings of fact.
Settled is the rule that the findings of the LA, when affirmed by the NLRC and the CA,
are binding on the Supreme Court, unless patently erroneous. It is not the function of
the Supreme Court to analyze or weigh all over again the evidence already considered
in the proceedings below. In a petition for review on certiorari, this Courts
jurisdiction is limited to reviewing errors of law in the absence of any showing that
the factual findings complained of are devoid of support in the records or are
glaringly erroneous. Firm is the doctrine that this Court is not a trier of facts, and this
applies with greater force in labor cases. Findings of fact of administrative agencies
and quasi-judicial bodies, which have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only great respect but even
finality. They are binding upon this Court unless there is a showing of grave abuse of
discretion or where it is clearly shown that they were arrived at arbitrarily or in utter
disregard of the evidence on record. We find none of these exceptions in the present
case.
In petitions for review on certiorari like the instant case, the Court invariably sustains
the unanimous factual findings of the LA, the NLRC and the CA, especially when such
findings are supported by substantial evidence and there is no cogent basis to reverse
the same, as in this case.
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voluntary act and had ripened into a company practice which cannot be peremptorily
withdrawn. Meanwhile in Davao Integrated Port Stevedoring Services v. Abarquez,
the Court ordered the payment of the cash equivalent of the unenjoyed sick leave
benefits to its intermittent workers after finding thatsaid workers had received these
benefits for almost four years until the grant was stopped due to a different
interpretation of the CBA provisions. We held that the employer
cannot
unilaterallywithdraw the existing privilege of commutation or conversion to cash
given to said workers, and as also noted that the employer had in fact granted and
paid said cash equivalent of the unenjoyed portion of the sick leave benefits to some
intermittent workers.
Universal Robina Sugar Milling Corp., vs Caballeda
[G.R. 156644. July 28, 2008]
Facts: Agripino Caballeda worked as welder for URSUMCO from March 1989 until June
23, 1997 while Alejandro Cadalin worked for URSUMCO as crane operation from 1976
up to June 15, 1997.
John Gokongwei, Jr. President of URSUMCO issued a memorandum establishing the
company policy on Compulsory Retirement. All employees corporate-wide who attain
60 years of age on or before April 30, 1991 shall be considered retired on May 31,
1991. Subsequently, on December 9, 1992, Republic Act No. 7641 was enacted into
law and it took effect on January 7, 1993, amending Article 287 of the Labor Code.
Agripino and Alejandro having reached the age of 60, were allegedly forced to retire
by URSUMCO. They both accepted their retirement benefits. Later on, Agripino filed a
complaint for illegal dismissal because his compulsory retirement was in violation of
the provisions of RA 7641 and, was in effect, a form of illegal dismissal.
Issues:
(1)
(2)
Ruling: The issue of retroactivity has long been settled in the case of Enriquez
Security Services, Inc. vs. Cabotaje.
RA 7641 is undoubtedly a social legislation. The law has been enacted as a labor
protection measure and as a curative statute that absent a retirement plan
devised by, an agreement with, or a voluntary grant from, an employer can
respond, in part at least, to the financial wellbeing of workers during their
twilight years soon following their life of labor. There should be little doubt
about the fact that the law can apply to labor contracts still existing at the
time the statute has taken effect, and that its benefits can be reckoned not
only from the date of the law's enactment but retroactively to the time said
employment contracts have started.
This doctrine has been repeatedly upheld and clarified in several cases. Pursuant
thereto, this Court imposed two (2) essential requisites in order that R.A. 7641 may
be given retroactive effect: (1) the claimant for retirement benefits was still in the
employ of the employer at the time the statute took effect; and (2) the claimant had
complied with the requirements for eligibility for such retirement benefits under the
statute.
When respondents were compulsorily retired from the service, RA 7641 was already in
full force and effect. The petitioners failed to prove that the respondents did not
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comply with the requirements for eligibility under the law for such retirement
benefits. In sum, the aforementioned requisites were adequately satisfied, thus,
warranting the retroactive application of R.A. 7641 in this case.
Retirement is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a certain
age, agrees to sever his or her employment with the former. The age of retirement is
primarily determined by the existing agreement between the employer and the
employees. However, in the absence of such agreement, the retirement age shall be
fixed by law. Under Art. 287 of the Labor Code as amended, the legally mandated age
for compulsory retirement is 65 years, while the set minimum age for optional
retirement is 60 years.
In this case, it may be stressed that the CBA does not per se specifically provide for
the compulsory retirement age nor does it provide for an optional retirement plan. It
merely provides that the retirement benefits accorded to an employee shall be in
accordance with law. Thus, we must apply Art. 287 of the Labor Code which provides
for two types of retirement: (a) compulsory and (b) optional. The first takes place at
age 65, while the second is primarily determined by the collective bargaining
agreement or other employment contract or employer's retirement plan. In the
absence of any provision on optional retirement in a collective bargaining agreement,
other employment contract, or employer's retirement plan, an employee may
optionally retire upon reaching the age of 60 years or more, but not beyond 65 years,
provided he has served at least five years in the establishment concerned. That
prerogative is exclusively lodged in the employee.
Indubitably, the voluntariness of the respondents' retirement is the meat of the
instant controversy. Generally, the law looks with disfavor on quitclaims and releases
by employees who have been inveigled or pressured into signing them by unscrupulous
employers seeking to evade their legal responsibilities and frustrate just claims of
employees. They are frowned upon as contrary to public policy. A quitclaim is
ineffective in barring recovery of the full measure of a worker's rights, and the
acceptance of benefits therefrom does not amount to estoppel.
In exceptional cases, the Court has accepted the validity of quitclaims executed by
employees if the employer is able to prove the following requisites: (1) the employee
executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of
any of the parties; (3) the consideration of the quitclaim is credible and reasonable;
and (4) the contract is not contrary to law, public order, public policy, morals or good
customs or prejudicial to a third person with a right recognized by law. In this case,
petitioners failed to establish all the foregoing requisites.
To be precise, only Alejandro was able to claim a partial amount of his retirement
benefit. Thus, it is clear from the decisions of the LA, NLRC and CA that petitioners
are still liable to pay Alejandro the differential on his retirement benefits. On the
other hand, Agripino was actually and totally deprived of his retirement benefit. In
Becton Dickinson Phils., Inc. v. National Labor Relations Commission, we held:
There is no nexus between intelligence, or even the position which the employee
held in the company when it concerns the pressure which the employer may exert
upon the free will of the employee who is asked to sign a release and quitclaim.
The employee is confronted with the same dilemma of whether signing a release
and quitclaim and accept what the company offers them, or refusing to sign and
walk out without receiving anything, may do succumb to the same pressure, being
very well aware that it is going to take quite a while before he can recover
whatever he is entitled to, because it is only after a protracted legal battle
starting from the labor arbiter level, all the way to this Court, can he receive
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anything at all. The Court understands that such a risk of not receiving anything
whatsoever, coupled with the probability of not immediately getting any gainful
employment or means of livelihood in the meantime, constitutes enough pressure
upon anyone who is asked to sign a release and quitclaim in exchange of some
amount of money which may be way below what he may be entitled to based on
company practice and policy or by law.
Absent any convincing proof of voluntariness in the submission of the documentary
requirements and the execution of the quitclaim, we cannot simply assume that
respondents were not subjected to the very same pressure. Respondents vigorously
pursued this case all the way up to the Supreme Court. Without doubt, this is a
manifestation that respondents had no intention of relinquishing their employment,
wholly incompatible to petitioners' assertion that respondents voluntarily retired.
Respondents did not voluntarily retire but were forced to retire, tantamount to illegal
dismissal.
Lourdes Cercado vs Uniprom Inc.
G.R. NO. 188154 October 13, 2010
Fact: Petitioner Lourdes cerdaco was an employee of UNIPROM Inc. for 22 years since
December 15, 1978. When respondent came up with a retirement plan, sometime in
1980 and then amended in 2001, which provides that any employee with a minimum
of 20 years of service, regardless of age, may be retired at the option of the
employer. In December 2000, UNIPROM implemented a company-wide retirement
program, including herein petitioner. She was offered an early retirement package
amounting to P171, 982.90 but Cercado rejected the offer. UNIPROM exercised its
option under the retirement plan and decided to retire petitioner effective February
15, 2001 so she was no longer given any work assignment after the said date. This
prompted the petitioner to file a complaint for illegal dismissal before the Labor
Arbiter, alleging that UNIPROM did not have abona fide retirement plan, and even if
there was, she didnt consent thereto. Respondent averred that Cercado was
automatically covered by the retirement plan when she agreed to the companys rules
and regulations, and that her retirement was an exercise of management prerogative.
Issues:
1. Whether or not UNIPROM has a bona fide retirement plan
2. Whether or not petitioner was validly retired pursuant thereto
Ruline: Petition is meritorious.
Retirement is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a certain
age, agrees to sever his or her employment with the former.
1. Yes, UNIPROM had a bona fide retirement plan. Article 287 of the Labor Code,
as amended by R.A 7641, pegs the age for compulsory retirement at 65 years
old, while the minimum age for optional retirement is set at 60 years.
However, an employer is free to impose a retirement age earlier than the
foregoing mandates. This has been upheld in numerous cases as a valid exercise
of management prerogative.
In this case, petitioner was retired by UNIPROM at the age of 47, after having
served the company for 22 years, pursuant to the companys retirement plan,
which provides that employees who have rendered at least 20 years of service
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can be retired at the option of the copany. Respondents retirement plan can
be expediently stamped with validity and justified under the all encompassing
phrase management prerogative.
2. No, petitioner was not validly retired. Jurisprudence has upheld that it is
axiomatic that a retirement plan giving the employer the option to retire its
employees below below the ages provided by law must be assented to and
accepted by the latter, otherwise its adhesive imposition will amount to a
deprivation of property without due process. In decided cases, the retirement
plans were either embodied in the CBA, or established after consultations and
negotiations with the emplyees bargaining representative. The cnsent of the
employees to be retired even before the statutory retirement age of 65 years
was thus clear and unequivocal. Acceptance by the employees of an early
retirement age must be explicit, voluntary, free and uncompelled.
WhHEREFORE, petition is granted.
Radio Mindanao Network, Inc. And Eric S. Canoy, vs. Domingo Z.
Ybarola, Jr. And Alfonso E. Rivera, Jr., [G.R. No. 198662. September
12, 2012.]
Facts: Respondents Domingo Z. Ybarola, Jr. and Alfonso E. Rivera, Jr. were hired on
June 15, 1977 and June 1, 1983, respectively, by Radio Mindanao Network (RMN).
They eventually became account managers, soliciting advertisements and servicing
various clients of RMN.
On September 15, 2002, the respondents' services were terminated as a result of
RMN's reorganization/restructuring; they were given their separation pay
P631,250.00 for Ybarola, and P481,250.00 for Rivera. Sometime in December 2002,
they executed release/quitclaim affidavits.
Dissatisfied with their separation pay, the respondents filed separate complaints
(which were later consolidated) against RMN and its President, Eric S. Canoy, for
illegal dismissal with several money claims, including attorney's fees. They indicated
that their monthly salary rates were P60,000.00 for Ybarola and P40,000.00 for
Rivera.
Issue: Whether the amounts the respondents received represented a fair and
reasonable settlement of their claims
Ruling: The petitioners insist that the respondents' commissions were not part of their
salaries, because they failed to present proof that they earned the commission due to
actual market transactions attributable to them. They submit that the commissions
are profit-sharing payments which do not form part of their salaries. We are not
convinced. If these commissions had been really profit-sharing bonuses to the
respondents, they should have received the same amounts, yet, as the NLRC itself
noted, Ybarola and Rivera received P372,173.11 and P586,998.50 commissions,
respectively, in 2002. The variance in amounts the respondents received as
commissions supports the CA's finding that the salary structure of the respondents was
such that they only received a minimal amount as guaranteed wage; a greater part of
their income was derived from the commissions they get from soliciting
advertisements; these advertisements are the "products" they sell. As the CA aptly
noted, this kind of salary structure does not detract from the character of the
commissions being part of the salary or wage paid to the employees for services
rendered to the company, as the Court held inPhilippine Duplicators, Inc. v. NLRC.
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Eleazar S. Padillo, Vs. Rural Bank Of Nabunturan, Inc. And Mark S. Oropeza
G.R. No. 199338. January 21, 2013
Facts: On October 1, 1977, petitioner, the late Eleazar Padillo (Padillo), was employed
by respondent Rural Bank of Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to
liquidity problems which arose sometime in 2003, the Bank took out retirement/
insurance plans with Philippine American Life and General Insurance Company (Philam
Life) for all its employees in anticipation of its possible closure and the concomitant
severance of its personnel. In this regard, the Bank procured Philam Plan Certificate
of Full Payment No. 88204, Plan Type 02FP10SC, Agreement No. PP98013771 (Philam
Life Plan) in favor of Padillo for a benefit amount of P100,000.00 and which was set to
mature on July 11, 2009. .During the latter part of 2007, Padillo suffered a mild
stroke due to hypertension which consequently impaired his ability to effectively
pursue his work. On September 10, 2007, he wrote a letter addressed to respondent
Oropeza, the president of the bank, expressing his intention to avail of an early
retirement package. Despite several follow-ups, his request remained unheeded. On
October 3, 2007, Padillo was separated from employment due to his poor and failing
health as reflected in a Certification dated December 4, 2007 issued by the Bank. Not
having received his claimed retirement benefits, Padillo filed with the NLRC a
complaint for the recovery of unpaid retirement benefits.
Ruling: The Labor Code provision on termination on the ground of disease under
Article 297 does not apply in this case, considering that it was the petitioner and not
the Bank who severed the employment relations. It was Padillo who voluntarily retired
and that he was not terminated by the Bank.
Under article 300 of the labor code, in the absence of any applicable agreement, an
employee must (1) retire when he is at least sixty (60) years of age and (2) serve at
least (5) years in the company to entitle him/her to a retirement benefit of at least
one-half (1/2) month salary for every year of service, with a fraction of at least six (6)
months being considered as one whole year. Notably, these age and tenure
requirements are cumulative and non-compliance with one negates the employee's
entitlement to the retirement benefits under Article 300 of the Labor Code.
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bargaining agreement or any other equivalent contract between the parties which set
out the terms and condition for the retirement of employees, with the sole exception
of the Philam Life Plan which premiums had already been paid by the Bank. In the
absence of any applicable contract or any evolved company policy, Padillo should have
met the age and tenure requirements set forth under Article 300 of the Labor Code to
be entitled to the retirement benefits provided therein. Unfortunately, while Padillo
was able to comply with the five (5) year tenure requirement as he served for
twenty-nine (29) years he, however, fell short with respect to the sixty (60) year
age requirement given that he was only fifty-five (55) years old when he retired.
Therefore, without prejudice to the proceeds due under the Philam Life Plan,
petitioners' claim for retirement benefits must be denied.
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server to make the necessary affidavit or declaration to prove such service as the case
may require.
Summonses and other processes issued by Philippine courts and administrative
agencies for United States Armed Forces personnel within any U.S. base in the
Philippines could be served therein only with the permission of the Base Commander.
If he withholds giving his permission, he should instead designate another person to
serve the process, and obtain the servers affidavit for filing with the appropriate
court.
Respondent Labor Arbiter did not follow said procedure. He instead, addressed the
summons to Lt. Col. Frankhauser and not the Base Commander (Rollo, p. 11).
Respondents do not dispute petitioners claim that no summons was ever issued and
served on her. They contend, however, that they sent notices of the hearings to her
(Rollo, pp. 12-13).
Notices of hearing are not summonses. The provisions and prevailing jurisprudence in
Civil Procedure may be applied by analogy to NLRC proceedings (Revised Rules of the
NLRC, Rule I, Sec. 3). It is basic that the Labor Arbiter cannot acquire jurisdiction over
the person of the respondent without the latter being served with summons (cf. Vda.
de Macoy v. Court of Appeals, 206 SCRA 244 [1992]; Filmerco Commercial Co., Inc. v.
Intermediate Appellate Court, 149 SCRA 193 [1987]). In the absence of service of
summons or a valid waiver thereof, the hearings and judgment rendered by the Labor
Arbiter are null and void (cf. Vda. de Macoy v. Court of Appeals, supra.)
Petitioner, in the case at bench, appealed to the NLRC and participated in the oral
argument before the said body. This, however, does not constitute a waiver of the
lack of summons and a voluntary submission of her person to the jurisdiction of the
Labor Arbiter. (De los Santos v. Montera, 221 SCRA 15 [1993]).
Be that as it may, on the assumption that petitioner validly waived service of
summons on her, still the case could not prosper. There is no allegation from the
pleadings filed that Lt. Col. Frankhauser and petitioner were being sued in their
personal capacities for tortious acts (United States of America v. Guinto, 182 SCRA 644
[1990]). However, private respondents named 3 AGS as one of the respondents in their
complaint (Rollo, p. 10).
Under the Agreement Between the Government of the Republic of the Philippines
and the Government of the United States of America Relating to the Employment of
Philippine Nationals in the United States Military Bases in the Philippines otherwise
known as the Base Labor Agreement of May 27, 1968, any dispute or disagreement
between the United States Armed Forces and Filipino employees should be settled
under grievance or labor relations procedures established therein (Art. II) or by the
arbitration process provided in the Romualdez-Bosworth Memorandum of Agreement
dated September 5, 1985. If no agreement was reached or if the grievance procedure
failed, the dispute was appealable by either party to a Joint Labor Committee
established in Article III of the Base Labor Agreement.
Unquestionably therefore, no jurisdiction was ever acquired by the Labor Arbiter over
the case and the person of petitioner and the judgment rendered is null and void
(Filmerco Commercial Co. v. Intermediate Appellate Court, supra.; Sy v. Navarro, 81
SCRA 458 [1978]).
The petition for certiorari is GRANTED.
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UERM Memorial Medical Center vs NLRC (G.R. No. 110419, March 3, 1997)
Facts: On December 14, 1987, RA 6640 took effect mandating a 10-peso increase on
the prevailing daily minimum wage (DMW) resulting to a 95-peso difference in the
salaries of rank-and-file employees (union members) and faculty members (nonunion). On July 1, 1989, RA 6727 took effect again increasing the DMW by 25 pesos
resulting in a difference of P237.42 between the salaries of the 2 employee groups. In
September 1987, petitioners increased the hiring rate to P188.00 per month. On 12
April 1988, Policy Instruction No. 54 was issued by the then Secretary of Labor
Franklin Drilon providing that the personnel in subject hospitals and clinics are
entitled to a full weekly wage of seven days if they have completed the 40-hour/5day workweek in any given workweek.
Consequently, a complaint was filed by the private respondents, represented by the
Federation of Free Workers (FFW), claiming salary differentials under Republic Act
Nos. 6640 and 6727, correction of the wage distortion and the payment of salaries for
Saturdays and Sundays under Policy Instruction No. 54.
Labor Arbiter Nieves de Castro sustained the private respondents except for their
claim of wage distortion and directed petitioner to pay P17,082,448.56 as salary
differentials and P2,000.00 each as exemplary damages. Within the reglementary
period for appeal, the petitioners filed their Notice and Memorandum of Appeal with
a Real Estate Bond consisting of land and various improvements therein worth
P102,345,650.
The private respondents moved to dismiss the appeal on the ground that Article 223 of
the Labor Code, as amended, requires the posting of a cash or surety bond. The NLRC
directed petitioners to post a cash or surety bond of P17,082,448.56 with a warning
that failure to do so would cause the dismissal of the appeal.
The petitioners filed a Motion for Reconsideration alleging it is not in a viable
financial condition to post a cash bond nor to pay the annual premium of P700,000.00
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for a surety bond. On 6 October 1992, the NLRC dismissed petitioners' appeal.
Petitioners' MR was also denied by the NLRC in a resolution dated 7 June 1993.
Issue: WON in perfecting an appeal to the National Labor Relations Commission
(NLRC) a property bond is excluded by the two forms of appeal bond cash or surety
as enumerated in Article 223 of the Labor Code.
Ruling: The applicable law is Article 223 of the Labor Code, as amended by Republic
Act No. 6715, which provides:
"In case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Commission in the amount
equivalent to the monetary award in the judgment appealed from."
We have given a liberal interpretation to this provision. In YBL (Your Bus Line) v. NLRC
we ruled:
"x x x that while Article 223 of the Labor Code, as amended by Republic Act No.
6715, requiring a cash or surety bond in the amount equivalent to the monetary
award in the judgment appealed from for the appeal to be perfected, may be
considered a jurisdictional requirement, nevertheless, adhering to the principle
that substantial justice is better served by allowing the appeal on the merits
threshed out by the NLRC, the Court finds and so holds that the foregoing
requirement of the law should be given a liberal interpretation."
Then too, in Oriental Mindoro Electric Cooperative, Inc. v. National Labor Relations
Commission we held:
"The intention of the lawmakers to make the bond an indispensable requisite
for the perfection of an appeal by the employer is underscored by the provision
that an appeal by the employer may be perfected "only upon the posting of a
cash or surety bond." The word "only" makes it perfectly clear, that the
lawmakers intended the posting of a cash or surety bond by the employer to be
the exclusive means by which an employer's appeal may be perfected. The
requirement is intended to discourage employers from using an appeal to delay,
or even evade, their obligation to satisfy their employees' just and lawful
claims.
Considering, however, that the current policy is not to strictly follow technical
rules but rather to take into account the spirit and intention of the Labor Code,
it would be prudent for us to look into the merits of the case, especially since
petitioner disputes the allegation that private respondent was illegally
dismissed."
We reiterate this policy which stresses the importance of deciding cases on the basis
of their substantive merit and not on strict technical rules. In the case at bar, the
judgment involved is more than P17 million and its precipitate execution can
adversely affect the existence of petitioner medical center. Likewise, the issues
involved are not insignificant and they deserve a full discourse by our quasi-judicial
and judicial authorities. We are also confident that the real property bond posted by
the petitioners sufficiently protects the interests of private respondents should they
finally prevail. It is not disputed that the real property offered by petitioners is worth
P102,345,650. The judgment in favor of private respondents is only a little more than
P17 million.
Case remanded to NLRC for continuation of proceedings.
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benefit. Furthermore, the aforesaid Section has been declared by this Court to be
merely permissive. Moreover, Nieva, as a driver of Philtranco, was assigned to the
Legazpi City-Pasay City route. Sulpicio Lines, Inc. vs. NLRC is exactly in point. In said
case, we held that: "Section 1, Rule IV of the 1990 NLRC Rules additionally provides
that, for purposes of venue, workplace shall be understood as the place or locality
where the employer is regularly assigned when the cause of action arose." From the
foregoing, it is obvious that the filing of the complaint with the National Capital
Region Arbitration Branch was proper, Manila being considered as part of Nieva's
workplace by reason of his plying the Legazpi City-Pasay City route.
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Facts: Respondent Aricayos filed a complaint for illegal dismissal to the labor arbiter.
There being no employer-employee relationship between the two, petition was
dismissed for lack of jurisdiction. Arcayos appealed to NLRC contending errors of the
labor arbiter.
Issue: Whether or not the Supreme Court has jurisdiction over NLRC appeals?
Ruling: First established in 1972, decisions of NLRC were declared to be appealable to
the Secretary of labor and, ultimately to the President. But under the present state
law, there is no provision for appeals from NLRC decisions. The court held that there
is an underlying power of the courts to scrutinize the acts of such agencies on
questions of law and jurisdiction even though not right of review is given by statute,
that the purpose of jurisdiction review is to keep the administrative agency within its
jurisdiction and protect the substantial rights of the parties; and that is part of the
checks and balances which restricts the separation of powers and forestalls arbitrary
and unjust jurisdictions.
Subsequently under RA 7902, effective March 1995, the mode for judicial review over
NLRC decisions in that of a petition for Certiorari under Rule 65. The same confuses
by declaring that the CA has no appellate jurisdiction over decisions falling within the
appellate jurisdiction of SC, including the NLRC decisions.
Therefore, all references in the amended Section 9 of BP 129 to supposed appeals
from NLRC to SC are interpreted and hereby declared to mean and refer to petitions
for certiorari under Rule 65. All such petitions should henceforth be initially filed in
the doctrine on the hierarchy of courts as appropriate forum for the relief desired.
Case remanded to CA.
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Moreover, it is required under Policy Instruction No. 20, Series of 1993, that in case of
project employees, the termination of their employment in the particular project or
undertaking must be reported to the Department of Labor and Employment (DOLE)
Regional Office having jurisdiction over the workplace within thirty (30) days
following the date of his separation from work.InOchoco v. National Labor Relations
Commission, the failure of the employer to report to the nearest employment office
the termination of employment of workers everytime it completed a project was
considered by this Court as proof that the dismissed employees were not project
employees but regular employees. On this requirement, petitioners were silent, until
the Decision of the NLRC reminded them. To prove that petitioners allegedly complied
with said requirement, they again belatedly submitted machine copies of reports
allegedly made to the DOLE of Bohol. To explain away their failure to produce
certified true copies of the same, petitioners allege that the NLRC should have given
evidentiary weight to the machine copies which are for all legal intents and purposes
already public records in the custody of the DOLE duly recorded in a public office. The
same argument can be taken against herein petitioners in that, for all the time it took
them to produce said machine copies, it would have been more prudent for them to
have it certified by the DOLE inBohol. Under the Rules of Evidence, and as stated by
petitioners, the original document need not be produced when the same is a public
record in the custody of a public office or is recorded in a public office. Thus, proof of
such documents may be made by a duly authenticated copy of the original document
or record. It is essential, furthermore, that the copies be made in the manner
provided by the rules and that all requirements in connection therewith be complied
with before such copy be properly admissible in evidence. Considering that the
documents submitted by petitioners are mere machine copies, the NLRC cannot be
compelled to give them evidentiary weight.
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The appellate court, the NLRC and the Labor Arbiter are thus one in finding that
respondents were not project employees, and in sustaining respondents claim of
illegal dismissal due to petitioners failure to adduce contrary evidence. Well-settled
is the rule that findings of fact of quasi-judicial agencies, like the NLRC, are accorded
not only respect but at times even finality if such findings are supported by
substantial evidence. Such findings of facts can only be set aside upon showing of
grave abuse of discretion, fraud or error of law,none of which have been shown in this
case.
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Ruling:
No. Petitioners argue that there are certain benefits and privileges expressly
(1)
granted to cooperative under the Cooperative Code. It invoked the provision on
Article 62 regarding the exemption from payment of an appeal bond, to wit:
(7)All cooperatives shall be exempt from putting up a bond for bringing an
appeal against the decision of an inferior court or for seeking to set aside any
third party claim: Provided, That a certification of the Authority showing that
the net assets of the cooperative are in excess of the amount of the bond
required by the court in similar cases shall be accepted by the court as a
sufficient bond.
However, it is only one among a number of such privileges which appear under the
article entitled Tax and Other Exemptions of the code. The provision cited by
petitioners cannot be taken in isolation and must be interpreted in relation to the
Cooperative Code in its entirety. Exceptions are to be strictly but reasonably
construed; they extend only so far as their language warrants, and all doubts should
be resolved in favor of the general provision rather than the exceptions.
(2)
No. Article 119 of the Cooperative Code itself expressly embodies the
legislative intention to extend the coverage of labor statutes to cooperatives.
For this reason, petitioners must comply with the requirement set forth in
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Article 223 of the Labor Code in order to perfect their appeal to the NLRC. It
must be pointed out that the right to appeal is not a constitutional, natural or
inherent right. It is a privilege of statutory origin and, therefore, available only
if granted or provided by statute. The law may validly provide limitations or
qualifications thereto or relief to the prevailing party in the event an appeal is
interposed by the losing party.
In this case, the obvious and logical purpose of an appeal bond is to insure, during the
period of appeal, against any occurrence that would defeat or diminish recovery by
the employee under the judgment if the latter is subsequently affirmed.
Therefore, no error can be ascribed to the CA for holding that the phrase inferior
courts appearing in Article 62 paragraph (7) of the Cooperative Code does not extend
to quasi-judicial agencies and that, petitioners are not exempt from posting the
appeal bond required under Article 223 of the Labor Code.
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DOLE Phils. vs. Esteva, G.R. No. 161115, November 30, 2006
Facts: Petitioner is a corporation duly recognized and existing in accordance with
Philippine laws, engaged principally in the production and processing of pineapple for
the export market. Its plantation is located in Polomolok, South Cotabato .
Respondents are members of the Cannery Multi-Purpose Cooperative (CAMPCO).
CAMPCO was organized in accordance with R.A. No. 6938, otherwise known as the
Cooperative Code of the Philippines , and duly registered with the Cooperative
Development Authority (CDA) on 6 January 1993. Members of CAMPCO live in
communities surrounding petitioners plantation and are relatives of petitioners
employees.
On 17 August 1993, petitioner and CAMPCO entered into a Service Contract. The
Service Contract referred to petitioner as the Company, while CAMPCO was the
Contractor. The said contract was good for six months.
Pursuant to the contract, CAMPCO members rendered services to petitioner. The
parties apparently extended or renewed the same for the succeeding years without
executing another written contract.
However, due to investigations and reliable information, the Regional Director of
DOLE exercised his visitorial and enforcement power and found out that CAMPCO is
engaged in labor-only contracting together with two other cooperatives.
The Law cited was Section 9, Rule VIII, Book III of the Omnibus Rules Implementing
the Labor Code. (pertaining to Labor-only contracting 1. no substantial capital; 2.
work is directly related to the principal business of the principal b. in such case, the
one who alleges as contractor is deemed an agent of the principal while the latter will
latter is considered the indirect employer for purposes of enforcement of the labor
rights.)
Before the NLRC, respondents contended that they have been working more than one
year too petitioner. While some of the respondents were still working for petitioner,
others were put on stay home status on varying dates in the years 1994, 1995, and
1996 and were no longer furnished with work thereafter. They, then, filed a case
before the NLRC for illegal dismissal, regularization, wage differentials, damages and
attorneys fees.
Respondents argued that they should be considered regular employees of petitioner
given that: 1. they were performing jobs that were usually necessary and desirable in
the usual business of petitioner; 2. petitioner exercised control over respondents, not
only as to the results, but also as to the manner by which they performed their
assigned tasks; and 3. CAMPCO, a labor-only contractor, was merely a conduit of
petitioner. As regular employees of petitioner, respondents asserted that they were
entitled to security of tenure and those placed on stay home status for more than
six months had been constructively and illegally dismissed. Respondents further
claimed entitlement to wage differential, moral damages, and attorneys fees.
NLRC affirmed the Labor Arbiters decision. CA also affirmed.
Issues: Whether the lower courts were correct in ruling that Petitioner is the
employer of respondents and that CAMPCO be considered merely as agent of the
company
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Ruling: In summary, this Court finds that CAMPCO was a labor-only contractor and,
thus, petitioner is the real employer of the respondents, with CAMPCO acting only as
the agent or intermediary of petitioner. Due to the nature of their work and length of
their service, respondents should be considered as regular employees of petitioner.
Petitioner constructively dismissed a number of the respondents by placing them on
"stay home status" for over six months, and was therefore guilty of illegal dismissal.
Petitioner must accord respondents the status of regular employees, and reinstate the
respondents who it constructively and illegally dismissed, to their previous positions,
without loss of seniority rights and other benefits, and pay these respondents
backwages from the date of filing of the Complaint with the NLRC on 19 December
1996 up to actual reinstatement.
CRITERIA TO ESTABLISH THE EXISTENCE OF AN INDEPENDENT AND PERMISSIBLE
CONTRACTOR RELATIONSHIP
generally established by the following criteria: whether or not the contractor is
carrying on an independent business; the nature and extent of the work; the skill
required; the term and duration of the relationship; the right to assign the
performance of a specified piece of work; the control and supervision of the work to
another; the employer's power with respect to the hiring, firing and payment of the
contractor's workers; the control of the premises; the duty to supply the premises
tools, appliances, materials and labor; and the mode, manner and terms of payment
SEVERAL FACTORS ARE PRESENT IN THE CASE TO ESTABLISH A LABOR- ONLY
CONTRACTING ARRANGEMENT BY BETWEEN THE MANAGEMENT AND CAMPCO
While there is present in the relationship of petitioner and CAMPCO some factors
suggestive of an independent contractor relationship (i.e., CAMPCO chose who among
its members should be sent to work for petitioner; petitioner paid CAMPCO the wages
of the members, plus a percentage thereof as administrative charge; CAMPCO paid
the wages of the members who rendered service to petitioner), many other factors
are present which would indicate a labor-only contracting arrangement between
petitioner and CAMPCO.
First, although petitioner touts the multi-million pesos assets of CAMPCO, it does well
to remember that such were amassed in the years following its establishment. In
1993, when CAMPCO was established and the Service Contract between petitioner and
CAMPCO was entered into, CAMPCO only had P6,600.00 paid-up capital, which could
hardly be considered substantial. It only managed to increase its capitalization and
assets in the succeeding years by continually and defiantly engaging in what had been
declared by authorized DOLE officials as labor-only contracting.
Second, CAMPCO did not carry out an independent business from petitioner. It was
precisely established to render services to petitioner to augment its workforce during
peak seasons. Petitioner was its only client. Even as CAMPCO had its own office and
office equipment, these were mainly used for administrative purposes; the tools,
machineries, and equipment actually used by CAMPCO members when rendering
services to the petitioner belonged to the latter.
Third, petitioner exercised control over the CAMPCO members, including respondents.
Petitioner attempts to refute control by alleging the presence of a CAMPCO supervisor
in the work premises. Yet, the mere presence within the premises of a supervisor from
the cooperative did not necessarily mean that CAMPCO had control over its members.
Section 8(1), Rule VIII, Book III of the implementing rules of the Labor Code, as
amended, required for permissible job contracting that the contractor undertakes the
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contract work on his account, under his own responsibility, according to his own
manner and method, free from the control and direction of his employer or principal
in all matters connected with the performance of the work except as to the results
thereof. As alleged by the respondents, and unrebutted by petitioner, CAMPCO
members, before working for the petitioner, had to undergo instructions and pass the
training provided by petitioners personnel. It was petitioner who determined and
prepared the work assignments of the CAMPCO members. CAMPCO members worked
within petitioners plantation and processing plants alongside regular employees
performing identical jobs, a circumstance recognized as an indicium of a labor-only
contractorship.
Fourth, CAMPCO was not engaged to perform a specific and special job or service. In
the Service Contract of 1993, CAMPCO agreed to assist petitioner in its daily
operations, and perform odd jobs as may be assigned. CAMPCO complied with this
venture by assigning members to petitioner. Apart from that, no other particular job,
work or service was required from CAMPCO, and it is apparent, with such an
arrangement, that CAMPCO merely acted as a recruitment agency for petitioner. Since
the undertaking of CAMPCO did not involve the performance of a specific job, but
rather the supply of manpower only, CAMPCO clearly conducted itself as a labor-only
contractor.
Lastly, CAMPCO members, including respondents, performed activities directly related
to the principal business of petitioner. They worked as can processing attendant,
feeder of canned pineapple and pineapple processing, nata de coco processing
attendant, fruit cocktail processing attendant, and etc., functions which were, not
only directly related, but were very vital to petitioners business of production and
processing of pineapple products for export.
The findings enumerated in the preceding paragraphs only support what DOLE
Regional Director Parel and DOLE Undersecretary Trajano had long before conclusively
established, that CAMPCO was a mere labor-only contractor
EMPLOYER- EMPLOYEE RELATIONSHIP EXIST BETWEEN THE PETITIONER AND THE
RESPONDENT WITH THE DECLARATION THAT CAMPCO WAS ENGAGED IN THE
PROHIBITED ACTS OF LABOR-ONLY CONTRACTING
The declaration that CAMPCO is indeed engaged in the prohibited activities of laboronly contracting, then consequently, an employer-employee relationship is deemed to
exist between petitioner and respondents, since CAMPCO shall be considered as a
mere agent or intermediary of petitioner
RESPONDENTS ARE CONSIDERED REGULAR EMPLOYEES FOR THEY PERFORMED
ACTIVITIES THAT ARE NECESSARY OR DESIRABLE TO THE USUAL BUSINESS OF THE
PETITIONER
Since respondents are now recognized as employees of petitioner, this Court is tasked
to determine the nature of their employment. In consideration of all the attendant
circumstances in this case, this Court concludes that respondents are regular
employees of petitioner.
In the instant Petition, petitioner is engaged in the manufacture and production of
pineapple products for export. Respondents rendered services as processing
attendant, feeder of canned pineapple and pineapple processing, nata de coco
processing attendant, fruit cocktail processing attendant, and etc., functions they
performed alongside regular employees of the petitioner. There is no doubt that the
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Far East Agricultural Supply, Inc. Vs. Jimmy Lebatique And The Honorable Court Of
Appeals
G.R. No. 162813 February 12, 2007
Facts: On March 4, 1996, Far East hired Jimmy Lebatique as truck driver to animal
feeds to the companys clients. He had a daily wage ofP223.50. On January 24, 2000,
Lebatique complained of nonpayment of overtime work particularly on January 22,
2000, when he was required to make a second delivery in Novaliches, Quezon City.
That same day Lebatique was suspended apparently for illegal use of company
vehicle. Even so, Lebatique reported for work the next day but he was prohibited
from entering the company premises.
On January 26, 2000, Lebatique sought the assistance of DOLE Public Assistance and
Complaints Unit concerning the nonpayment of his overtime pay. Lebatique explained
that he had never been paid for overtime work since he started working for the
company. He also told Alexander (general manager) that Manuel (Alexanders brother)
had fired him. After talking to Manuel, Alexander terminated Lebatique and told him
to look for another job.
On March 20, 2000, Lebatique filed a complaint for illegal dismissal and nonpayment
of overtime pay. The Labor Arbiter found that Lebatique was illegally dismissed, and
ordered his reinstatement and the payment of his full back wages, 13th month pay,
service incentive leave pay, and overtime pay.
On appeal, the NLRC reversed the Labor Arbiter and dismissed the complaint for lack
of merit. The NLRC held that there was no dismissal to speak of since Lebatique was
merely suspended. Further, it found that Lebatique was a field personnel, hence, not
entitled to overtime pay and service incentive leave pay. Lebatique sought
reconsideration but was denied.
The Court of Appeals, in reversing the NLRC decision, reasoned that Lebatique was
suspended on January 24, 2000 but was illegally dismissed on January 29, 2000 when
Alexander told him to look for another job. It also found that Lebatique was not a
field personnel and therefore entitled to payment of overtime pay, service incentive
leave pay, and 13th month pay.
Issues
1) WON Lebatique was illegally dismissed
2) WON Lebatique was a field personnel, not entitled to overtime pay
Ruling:
1) YES. It is well settled that in cases of illegal dismissal, the burden is on the
employer to prove that the termination was for a valid cause. In this case,
petitioners failed to discharge such burden. Petitioners aver that Lebatique was
merely suspended for one day but he abandoned his work thereafter. To constitute
abandonment as a just cause for dismissal, there must be: (a) absence without
justifiable reason; and (b) a clear intention, as manifested by some overt act, to
sever the employer-employee relationship.
When Lebatique was verbally told by Alexander Uy, the companys General
Manager, to look for another job, Lebatique was in effect dismissed. Even assuming
earlier he was merely suspended for illegal use of company vehicle, the records do
not show that he was afforded the opportunity to explain his side. It is clear also
from the sequence of the events leading to Lebatiques dismissal that it was
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Lebatiques complaint for nonpayment of his overtime pay that provoked the
management to dismiss him, on the erroneous premise that a truck driver is a field
personnel not entitled to overtime pay.
2) NO. Lebatique is not a field personnel. Article 82 of the Labor Code is decisive on
the question of who are referred to by the term "field personnel
"Field personnel" shall refer to non-agricultural employees who regularly perform
their duties away from the principal place of business or branch office of the
employer and whose actual hours of work in the field cannot be determined with
reasonable certainty.
The definition of a "field personnel" is not merely concerned with the location
where the employee regularly performs his duties but also with the fact that the
employees performance is unsupervised by the employer.
Lebatique is not a field personnel as defined above for the following reasons: (1)
company drivers, including Lebatique, are directed to deliver the goods at a
specified time and place; (2) they are not given the discretion to solicit, select
and contact prospective clients; and (3) Far East issued a directive that company
drivers should stay at the clients premises during truck-ban hours which is from
5:00 to 9:00 a.m. and 5:00 to 9:00 p.m. Lebatique, therefore, is a regular
employee whose tasks are usually necessary and desirable to the usual trade and
business of the company. Thus, he is entitled to the benefits accorded to regular
employees of Far East, including overtime pay and service incentive leave pay.
Note that all money claims arising from an employer-employee relationship shall
be filed within three years from the time the cause of action accrued; otherwise,
they shall be forever barred. Further, if it is established that the benefits being
claimed have been withheld from the employee for a period longer than three
years, the amount pertaining to the period beyond the three-year prescriptive
period is therefore barred by prescription. The amount that can only be demanded
by the aggrieved employee shall be limited to the amount of the benefits withheld
within three years before the filing of the complaint.
Lebatique timely filed his claim for service incentive leave pay, considering that in
this situation, the prescriptive period commences at the time he was
terminated. On the other hand, his claim regarding nonpayment of overtime pay
since he was hired in March 1996 is a different matter. In the case of overtime pay,
he can only demand for the overtime pay withheld for the period within three
years preceding the filing of the complaint on March 20, 2000. However, we find
insufficient the selected time records presented by petitioners to compute
properly his overtime pay. The Labor Arbiter should have required petitioners to
present the daily time records, payroll, or other documents in managements
control to determine the correct overtime pay due Lebatique.
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Letran Calamba Faculty & Employees Association vs NLRC (2008) G.R. 156225
Facts: Three cases were consolidated involving petitioner Letran Calamba Faculty and
Employees Association and Colegio de San Juan de Letran, Calamba, for money claims
and a petition to declare the subject strike illegal filed by respondent.
On July 28, 1999, the NLRC promulgated its Decision dismissing both appeals.
Petitioner filed a Motion for Reconsideration but the same was denied by the NLRC in
its Resolution dated June 21, 2000.Petitioner then filed a special civil action for
certiorari with the CA assailing the above-mentioned NLRC Decision and Resolution.
On May 14, 2002, the CA rendered the presently assailed judgment dismissing the
petition. Petitioner filed a Motion for Reconsideration but the CA denied it in its
Resolution promulgated on November 28, 2002. Citing Agustilo v. Court of Appeals,
petitioner contends that in a special civil action for certiorari brought before the CA,
the appellate court can review the factual findings and the legal conclusions of the
NLRC.
Petitioner avers that the CA, in concluding that the NLRC Decision was supported by
substantial evidence, failed to specify what constituted said evidence. Thus,
petitioner asserts that the CA acted arbitrarily in affirming the Decision of the NLRC.
Issue: WON the Court of Appeals erred in holding that the factual findings of the NLRC
cannot be reviewed in certiorari proceedings.
Ruling: Court finds no error in the ruling of the CA that since nowhere in the petition
is there any acceptable demonstration that the LA or the NLRC acted either with
grave abuse of discretion or without or in excess of its jurisdiction, the appellate
court has no reason to look into the correctness of the evaluation of evidence which
supports the labor tribunals' findings of fact.
Settled is the rule that the findings of the LA, when affirmed by the NLRC and the CA,
are binding on the Supreme Court, unless patently erroneous. It is not the function of
the Supreme Court to analyze or weigh all over again the evidence already considered
in the proceedings below. In a petition for review on certiorari, this Courts
jurisdiction is limited to reviewing errors of law in the absence of any showing that
the factual findings complained of are devoid of support in the records or are
glaringly erroneous. Firm is the doctrine that this Court is not a trier of facts, and this
applies with greater force in labor cases. Findings of fact of administrative agencies
and quasi-judicial bodies, which have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only great respect but even
finality. They are binding upon this Court unless there is a showing of grave abuse of
discretion or where it is clearly shown that they were arrived at arbitrarily or in utter
disregard of the evidence on record. We find none of these exceptions in the present
case.
In petitions for review on certiorari like the instant case, the Court invariably sustains
the unanimous factual findings of the LA, the NLRC and the CA, specially when such
findings are supported by substantial evidence and there is no cogent basis to reverse
the same, as in this case.
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We agree in the Court of Appeals' finding that petitioners' case does not fall under any
of the recognized exceptions to the filing of a motion for reconsideration, to wit: (1)
when the issue raised is purely of law; (2) when public interest is involved; (3) in case
of urgency; or when the questions raised are the same as those that have already
been squarely argued and exhaustively passed upon by the lower court. As the Court
of Appeals reasoned, the issue before the NLRC is both factual and legal at the same
time, involving as it does the requirements of the property bond for the perfection of
the appeal, as well as the finding that petitioners failed to perfect the same.
Evidently, the burden is on petitioners seeking exception to the rule to show sufficient
justification for dispensing with the requirement.
Certiorari cannot be resorted to as a shield from the adverse consequences of
petitioners' own omission of the filing of the required motion for reconsideration.
Nonetheless, even if we are to disregard the petitioners' procedural faux pas with the
Court of Appeals, and proceed to review the propriety of the 19 May 2006 NLRC
Resolution, we still arrive at the conclusion that the NLRC did not err in denying
petitioners' appeal for its failure to file a bond in accordance with the Rules of
Procedure of the NLRC.
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J.K. Mercado & Sons Agricultural Enterprises, Inc., vs. Sto. Tomas,
G.R. No. 158084, August 29, 2008
Facts: On December 3, 1993, the RTWPB of Region IX issued Wage Order No. 3
granting a Cost of Living Allowance to covered workers. J.K. Mercado & Sons
Agricultural Enterprises, Inc., petitioner, filed for an exemption from the coverage of
such order. Said application was denied by the regional wage board for lack of merit.
Despite denial of such application, private respondents were still not given benefits
due them from said wage order. Private respondents filed a Writ of Execution and
Writ of Garnishment seeking for its enforcement. Petitioner filed a motion to Quash
the Writ of Execution arguing that the rights of the respondents already prescribed as
per stated in Article 291 of the Labor Code regarding any issue concerning a wage
order.
Ruling of the Regional Director: The Motion to Quash was denied and held that unpaid
benefits have not prescribed and that the private respondents need not file a claim to
be entitled thereto. Petitioner filed a Notice of Appeal alleging that the Regional
Director abused his discretion in issuing the writ of execution in the absence of any
motion filed by private respondents. Appeal was then denied which prompted the
petiotioner to file a Motion for Reconsideration. Ruling of the Court of Appeals: The
Motion for Reconsideration was also denied due to lack of merit. Hence, present
petition.
Issues:
1. Whether or not the Honorable Court of Appeals committed an error in
holding that Article 291 of the Labor Code is not applicable to recovery
of benefits under the subject Wage Order No. RTWPB-XI-03, which
entitled respondents to a cost of living allowance (COLA).
2. Whether or not the Court of Appeals committed an error in holding that
the cost of living allowance (COLA) granted by Wage Order No. RTWPBXI-03 can be enforced without the appropriate case having been filed by
herein private respondents within the three (3) year prescriptive period.
3. Whether or not the claim of the private respondents for cost of living
allowance (COLA) pursuant to Wage Order No. RTWPB-XI-03 has already
prescribed because of the failure of the respondents to make the
appropriate claim within the three (3) year prescriptive period provided
by Article 291 of the Labor Code, as amended.
Ruling: The Court sees no error on the part of the Court of Appeals.Art. 291 of
the Labor Code applies to money claims in general and provides for a 3-year
prescriptive period to file them.
On the other hand, respondent employees money claims in this case had been
reduced to a judgment, in the form of a Wage Order, which has become final and
executory.The prescription applicable, therefore, is not the general one that applies
to money claims, but the specific one applying to judgments. Thus, the right to
enforce the judgment, having been exercised within five years, has not yet
prescribed.
Stated otherwise, a claimant has three years to press a money claim. Once judgment
is rendered in her favor, she has five years to ask for execution of the judgment,
counted from its finality. This is consistent with the rule on statutory construction
that a general provision should yield to a specific one and with the mandate of social
justice that doubts should be resolved in favor of labor.
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It bears noting that, as reflected earlier, the Quitclaim and Waiver was subscribed and
sworn to before the Labor Arbiter.
Petition DISMISSED
Sy vs. ALC Industries, G.R. No. 168339, October 10, 2008
Facts: Ma. Gregorietta Leila C. Sy (Sy) was hired by ALC Industries, Inc.(ALCII) as a
supervisor in its purchasing office. She was thereafter assigned to ALCII's construction
project in Davao City as business manager and supervisor of the Administrative
Division from May 1997 to April 15, 1999. Sy filed a complaint before the labor arbiter
alleging that ALCII refused to pay her salary beginning August 1998 and allowances
beginning June 1998. Despite several notices and warnings, ALCII did not file a
position paper to controvert Sy's claims.
The labor arbiter ordered ALCII and/or Dexter Ceriales to pay petitioner P282,560
representing her unpaid salary and allowance. ALCII filed an appeal with the NLRC
without posting any cash or surety bond. NLRC dismissed respondents' appeal.
Thereafter ALCII filed a motion for reconsideration which was also denied by NLRC.
ALCII questioned the NLRC's denial of their motion for clarification and
reconsideration in the CA via a petition forcertiorari. The CA set aside the resolutions
of the NLRC and the decision of the labor arbiter. Sy filed a Rule 45 petition in the
Supreme Court questioning the CA decision and resolution on the ground that the
decision of the labor arbiter had become final and executory.
Issues: (1) Can the employer file an appeal with the NLRC without posting a cash
bond? (2) Did the CA acquire jurisdiction over the labor case?
Rulings: (1) Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter
are final and executory unless appealed to the Commission by any or both parties
within ten calendar days from receipt of such decisions, awards, or orders In case of
a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company
duly accredited by the Commission in the amount equivalent to the monetary award
in the judgment appealed from.
As the right to appeal is merely a statutory privilege, it must be exercised only in the
manner and in accordance with the provisions of the law. Otherwise, the right to
appeal is lost.
Liberal construction of the NLRC rules is allowed only in meritorious cases, where
there is substantial compliance with the NLRC Rules of Procedure or where the party
involved demonstrates a willingness to abide by the rules by posting a partial bond.
Failure to post an appeal bond during the reglementary period was directly violative
of Article 223 of the Labor Code.
The payment of the appeal bond is a jurisdictional requisite for the perfection of an
appeal to the NLRC. The lawmakers intended to make the posting of a cash or surety
bond by the employer the exclusive means by which an employer's appeal may be
perfected. It is intended to assure the workers that if they prevail in the case, they
will receive the money judgment in their favor upon the dismissal of the employers'
appeal. It was intended to discourage employers from using an appeal to delay, or
even evade, their obligation to satisfy their employee's just and lawful claims.
(2) The filing of a joint undertaking/declaration, filed way beyond the ten-day
reglementary period for perfecting an appeal and as a substitute for the cash or
surety bond, did not operate to validate the lost appeal. The decision of the labor
arbiter therefore became final and executory for failure of respondents to perfect
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their appeal within the reglementary period. Clearly, the CA no longer had jurisdiction
to entertain respondents' appeal from the labor arbiter's decision.
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Petitioner manifested that while it was ready and willing to prove that said employees
were provided by independent legitimate contractors and that it was not engaged in
labor-only contracting in a position paper yet to be submitted, petitioner prayed that
the Labor Arbiter first resolve the issues raised in their motion to dismiss.
Labor Arbiter rendered a decision on the merits datedOctober 16, 1998, in favor of
the respondent.
Appeal, the NLRC affirmed with modification the decision of the Labor Arbiter
deleting the awards of damages for lack of sufficient basis.
Appeal, the CA issued the assailed Resolution dismissing the petition outright for
petitioners failure to attach copies of pleadings and documents relevant and
pertinent to the petition.More importantly, the verification and certification of nonforum shopping was signed by Elizabeth Legarda, President of the petitionercorporation, without submitting any proof that she was duly authorized to sign for,
and bind the petitioner-corporation in these proceedings.
Issue: Whether or not the president of the PCI Travel was not an authorized
representative of the petitioner to sign the verification and certification against
forum shopping, without need of a board resolution.
Ruling: It must be borne in mind that Sec. 23, in relation to Sec. 25, of the
Corporation Code, clearly enunciates that all corporate powers are exercised, all
business conducted, and all properties controlled by the board of directors. A
corporation has a separate and distinct personality from its directors and officers and
can only exercise its corporate powers through the board of directors. Thus, it is
clear that an individual corporate officer cannot solely exercise any corporate power
pertaining to the corporation without authority from the board of directors.This has
been our constant holding in cases instituted by a corporation.
With this issue settled, that the President of the corporation can sign the verification
and certification without need of a board resolution, there thus exists a compelling
reasonfor the reinstatement of thepetition before the Court of Appeals.
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Lopez vs. Q.C. Sports Club, G.R. No. 164032, January 19, 2009
Facts: Claiming that it is a registered independent labor organization and the
incumbent collective bargaining agent of Quezon City Sports Club (QCSC), the
Kasapiang Manggagawa sa Quezon City Sports Club (union) filed a complaint for unfair
labor practice against QCSC on 12 November 1997.
The Union averred that it was ordered to submit a new information sheet. It
immediately wrote a letter addressed to the general manager, Angel Sadang, to
inquire about the information sheet, only to be insulted by the latter. The members of
the union were not paid their salaries on 30 June 1997. A board member, Antonio
Chua allegedly harassed one of the employees and told him not to join the strike and
even promised a promotion. On 4 July 1997, the union wrote a letter to the
management for the release of the members salaries for the period 16-30 June 1997,
implementation of Wage Order No. 5, and granting of wage increases mandated by
the Collective Bargaining Agreement (CBA). When its letter went unanswered, the
union filed a notice of strike on 10 July 1997 for violation of Article 248 (a)(c)(e) of
the Labor Code, nonpayment of overtime pay, refusal to hear its grievances, and
malicious refusal to comply with the economic provisions of the CBA.
After
conducting a strike vote, it staged a strike on 12 August 1997. On 16 August 1997, the
QCSC placed some of its employees under temporary lay-off status due to redundancy.
It appears that on 22 December 1997, QCSC also filed a petition for cancellation of
registration against the union.
The Labor Arbiter (Lustria) found QCSC guilty of unfair labor practice. QCSC appealed
from the labor arbiters decision. It also filed a motion for reduction of the appeal
bond to P4,000,000.00. The NLRC ordered the posting of an additional P6,000,000.00)
.QCSC filed a supplement to its appeal, citing a decision (Dinopol decision) dated 9
October 1998 of Labor Arbiter Ernesto Dinopol declaring the strike of the union illegal.
The dispositive portion reads:
WHEREFORE, in view of the Unions having violated the no-strike-nolockout provision of the Collective Bargaining Agreement, the strike it
staged on August 12, 1998 is hereby declared illegal and consequently,
pursuant to Article 264 of the Labor Code, the individual respondents,
namely: RONILO C. LEE, EDUARDO V. SANTIA, CECILLE C. PANGAN,
ROMEO M. MORGA, GENARO C. BANDO AND ALEX J. SANTIAGO, who
admitted in paragraph 1 of their position paper that they are officers/
members of the complaining Union are hereby declared to have lost their
employment status.
Meanwhile, the National Labor Relations Commission (NLRC) rendered a decision
granting the appeal and reversing the Lustria decision. It ratiocinated:
Be that as it may, We are of the view that the Decision in NLRC CASE NO.
00-09-0663-97 must perforce prevail over the appealed Decision and the
latter to yield to it. It must remain undisturbed following the established
doctrine on primacy and finality of decision. It bears stressing at this
juncture, at the risk of being repetitious, that in NLRC Case No.
00-09-0663-97 the employment status of herein individual complainants
was already declared lost or forfeited as of August 12, 1998, the day the
illegal strike was staged. From then on, they ceased to be employees of
respondent Sports Club. The forfeiture of their employment status carries
with it the extinction of their right to demand for and be entitled to the
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economic benefits accorded them by law and the existing CBA. For, such
right is premised on the fact of employment.
The other complainants (petitioners) meanwhile filed a motion for reconsideration
which was denied by the NLRC. They filed a petition for certiorari under Rule 65
before the Court of Appeals but was denied.
Issues:
1. Do the simultaneous filing of the motion to reduce the appeal bond and posting of
the reduced amount of bond within the reglementary period for appeal constitute
substantial compliance with Article 223 of the Labor Code?
2. Whether the NLRC erred in declaring them to have lost their employment contrary
to the Dinopol decision which only affected a few of the employees who were union
members.
Ruling:
First issue:
Under the Rules, appeals involving monetary awards are perfected only upon
compliance with the following mandatory requisites, namely: (1) payment of the
appeal fees; (2) filing of the memorandum of appeal; and (3) payment of the required
cash or surety bond.
Thus, the posting of a bond is indispensable to the perfection of an appeal in cases
involving monetary awards from the decision of the labor arbiter. The filing of the
bond is not only mandatory but also a jurisdictional requirement that must be
complied with in order to confer jurisdiction upon the NLRC. Non-compliance with
the requirement renders the decision of the labor arbiter final and executory. This
requirement is intended to assure the workers that if they prevail in the case, they
will receive the money judgment in their favor upon the dismissal of the employers
appeal. It is intended to discourage employers from using an appeal to delay or evade
their obligation to satisfy their employees just and lawful claims.
However, Section 6 of the New Rules of Procedure of the NLRC also mandates, among
others, that no motion to reduce bond shall be entertained except on meritorious
grounds and upon the posting of a bond in a reasonable amount in relation to the
monetary award. Hence, the NLRC has the full discretion to grant or deny the motion
to reduce the amount of the appeal bond.
In the case of Nicol v. Footjoy Industrial Corporation ruled that the bond requirement
on appeals involving monetary awards had been and could be relaxed in meritorious
cases such as: (1) there was substantial compliance with the Rules; (2) the
surrounding facts and circumstances constitute meritorious grounds to reduce the
bond; (3) a liberal interpretation of the requirement of an appeal bond would serve
the desired objective of resolving controversies on the merits; or (4) the appellants,
at the very least, exhibited their willingness and/or good faith by posting a partial
bond during the reglementary period. Applying these jurisprudential guidelines, we
find and hold that the NLRC did not err in reducing the amount of the appeal bond
and considering the appeal as having been filed within the reglementary period.
The posting of the amount of P4,000,000.00 simultaneously with the filing of the
motion to reduce the bond to that amount, as well as the filing of the memorandum
of appeal, all within the reglementary period, altogether constitute substantial
compliance with the Rules.
Second issue:
We rule in favor of petitioners.
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The assailed Dinopol decision involves a complaint for illegal strike filed by QCSC on
the ground of a no-strike no lockout provision in the CBA. The challenged decision
was rendered in accordance with law and is supported by factual evidence on record.
In the notice of strike, the union did not state in particular the acts which allegedly
constitute unfair labor practice. Moreover, by virtue of the no-strike no lockout
provision in the CBA, the union was prohibited from staging an economic strike, i.e.,
to force wage or other concessions from the employer which he is not required by law
to grant. However, it should be noted that while the strike declared by the union was
held illegal, only the union officers were declared as having lost their employment
status. In effect, there was a ruling only with respect to some union members while
the status of all others had remained disputed.
There is no conflict between the Dinopol and the Lustria decisions. While both rulings
involve the same parties and same issues, there is a distinction between the remedies
sought by the parties in these two cases. In the Dinopol decision, it was QCSC which
filed a petition to declare the illegality of the 12 August 1997 strike by the union. The
consequence of the declaration of an illegal strike is termination from employment,
which the Labor Arbiter did so rule in said case. However, not all union members were
terminated. In fact, only a few union officers were validly dismissed in accordance
with Article 264 of the Labor Code. Corollarily, the other union members who had
merely participated in the strike but had not committed any illegal acts were not
dismissed from employment. Hence, the NLRC erred in declaring the employment
status of all employees as having been lost or forfeited by virtue of the Dinopol
decision.
On the other hand, the Lustria decision involved the unfair labor practices alleged by
the union with particularity. In said case, Labor Arbiter Lustria sided with the Union
and found QCSC guilty of such practices. As a consequence, the affected employees
were granted backwages and separation pay. The grant of backwages and separation
pay however was not premised on the declaration of the illegality of the strike but on
the finding that these affected employees were constructively dismissed from work,
as evidenced by the layoffs effected by the company.
Therefore, with respect to petitioners and union officers Alex J. Santiago, Ma. Cecilia
Pangan, Ronilo E. Lee, and Genaro Bando, who apparently had been substituted by
present petitioner Teresita Bando, the Dinopol decision declaring them as having lost
their employment status still stands.
To recapitulate, the NLRC erred in setting aside the Lustria decision, as well as in
deleting the award of backwages and separation pay, despite the finding that the
affected employees had been constructively dismissed.
Based on the foregoing, the Lustria decision should be upheld and therefore
reinstated except as regards the four petitioners.
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Lockheed Detective and Watchman Agency, Inc. vs. University Of The Philippines
G.R. No. 185918, April 18, 2012
Facts: The petition is for review on certiorari under Rule 45. Petitioner Lockheed
entered into a contract of security with the University of the Philippines. On 1998,
several of the guards assigned to UP filed a complaint for unpaid wages, 25% overtime
pay, premium pay for rest days and special holidays, holiday pay, service incentive
leave pay, night shift differentials, 13th month pay, refund of cash bond, refund of
deductions for the Mutual Benefits Aids System (MBAS), unpaid wages from December
16-31, 1998, and attorney's fees.
The Labor Arbiter declared UP solidarily liable. The decision was appealed but
sustained by the NLCR, albeit a few modifications. The parties motion to reconsider
were likewise denied. On July 25, 2005, a Notice of Garnishment 10 was issued to
Philippine National Bank (PNB) UP Diliman Branch for the satisfaction of the award of
P12,142,522.69 (inclusive of execution fee).
On August 16, 2005, UP filed an Urgent Motion to Quash Garnishment. UP contended
that the funds being subjected to garnishment at PNB are government/public funds.
However, the execution of the garnishment was carried out. UP elevated their case to
the court of appeals. On reconsideration, however, the CA issued the assailed
Amended Decision. It held that without departing from its findings that the funds
covered in the savings account sought to be garnished do not fall within the
classification of public funds, it reconsiders the dismissal of the petition in light of the
ruling in the case of National Electrification Administration v. Morales which mandates
that all money claims against the government must first be filed with the Commission
on Audit (COA).
Lockheed appealed this decision to the Supreme Court. Arguing mainly that the NEA
case should not apply and that UP could be both sued and held liable. And that the
quashal of garnishment sought was moot because it had already become fait
accompli.
Issues: Whether or not the NEA Case applies and the funds be garnished directly
bypassing the COA. Whether or not the previous garnishment and withdrawal of funds
was fait accompli.
Ruling: YES. This Court finds that the CA correctly applied the NEA case. Like NEA, UP
is a juridical personality separate and distinct from the government and has the
capacity to sue and be sued. Thus, also like NEA, it cannot evade execution, and its
funds may be subject to garnishment or levy. However, before execution may be had,
a claim for payment of the judgment award must first be filed with the COA.
(suability does not immediately mean liability).
NO. As to the fait accompli argument of Lockheed, contrary to its claim that there is
nothing that can be done since the funds of UP had already been garnished, since the
garnishment was erroneously carried out and did not go through the proper procedure
(the filing of a claim with the COA), UP is entitled to reimbursement of the garnished
funds plus interest of 6% per annum, to be computed from the time of judicial
demand to be reckoned from the time UP filed a petition for certiorari before the CA
which occurred right after the withdrawal of the garnished funds from PNB.
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lawyer's failure to abide by the rules for filing an appeal. Respondent merely insisted
that she had not been remiss in following up her case with said lawyer. It is a basic
rule that the negligence and mistakes of counsel bind the client.
It should also be borne in mind that the right of the winning party to enjoy the finality
of the resolution of the case is also an essential part of public policy and the orderly
administration of justice. Hence, such right is just as weighty or equally important as
the right of the losing party to appeal or seek reconsideration within the prescribed
period.25
When the Labor Arbiter's Decision became final, petitioners attained a vested right to
said judgment. They had the right to fully rely on the immutability of said Decision.
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