LABOR LAW

(J. Bersamin)

JAO VS. BCC PRODUCT SALES

670 SCRA 38, 18 April 2012
Employer Employee Relationship

Facts: Petitioner Jao contends that the respondent employed him as a comptroller and
was assigned to handle the financial aspect of the respondents business. However, on
one working day, the petitioner was barred from entering the premises of the
respondent due to the reason that there were no employer employee relationship and
the petitioner was not their employee but the employee of one of its creditors assigned
to the respondents corporation to oversee its financial and business operations. Hence,
the petitioner filed a complaint for illegal dismissal.

Held: The existence of an employer-employee relationship is a question of fact.

Generally, a re-examination of factual findings cannot be done by the Court acting on a
petition for review on certiorari because the Court is not a trier of facts but reviews only
questions of law. Nor may the Court be bound to analyze and weigh again the evidence
adduced and considered in the proceedings below. This rule is not absolute, however,
and admits of exceptions. For one, the Court may look into factual issues in labor cases
when the factual findings of the Labor Arbiter, the NLRC, and the CA are conflicting.
Moreover, in determining the presence or absence of an employer-employee
relationship, the Court has consistently looked for the following incidents, 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 last element, the so-called control test,
is the most important element.

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MASING AND SONS DEVELOPMENT CORPORATION VS. ROGELIO

654 SCRA 490, 27 July 2011
Employer Employee Relationship; Evidence

Facts: Respondent Rogelio was first employed by Pan Phil. Copra Dealer, the
petitioners predecessor which was owned by a person named Masing Chan. Later on,
Masing Chan changed the name of the corporation and adopted a business name of
Masing and Sons Development Corporation with a different branch manager. In all that
time, respondent worked as a laborer and applied for Social Security System. After
paying contributions to the SSS for more than 10 years, he is now qualified for such
retirement benefits. On March 1997, the respondent was paid his last salary and being a
67-year old worker, he already reached the compulsory retirement age. Unfortunately,
he did not receive any benefits even retirement benefit from the petitioners company
on the reason that the respondent was their former employee, hired on January 1977 to
June 1989 and that the respondent was hired by Lim starting from July 1989 until the
filing of the complaint. Hence, no employer employee relationship existed between
the respondent and the petitioner upon the employment of the respondent to Lim.

Held: The issue of whether or not an employer-employee relationship existed between

the petitioners and the respondent in that period was essentially a question of fact. In
dealing with such question, substantial evidence that amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion is sufficient.
Although no particular form of evidence is required to prove the existence of the
relationship, and any competent and relevant evidence to prove the relationship may be
admitted, a finding that the relationship exists must nonetheless rest on substantial
evidence.

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ALUMAMAY JAMIAS ET AL. VS. NLRC

G.R. NO. 159350, 9 March 2016
Fixed Term Agreement; Project employee and regular employee

Facts: Respondent Innodata Philippines, Inc. (Innodata), a domestic corporation

engaged in the business of data processing and conversion for foreign clients. After the
respective contracts of the employees expired, they filed a complaint for illegal
dismissal claiming that Innodata had made it appear that they had been hired as project
employees in order to prevent them from becoming regular employees.

Held: A fixed period in a contract of employment does not by itself signify an intention
to circumvent Article 280 of the Labor Code. The provision contemplates three kinds of
employees, namely: (a) regular employees; (b) project employees; and (c) casuals who
are neither regular nor project employees. The nature of employment of a worker is
determined by the factors provided in Article 280 of the Labor Code, regardless of any
stipulation in the contract to the contrary.

A fixed term agreement, to be valid, must strictly conform with the requirements and
conditions provided in Article 280 of the Labor Code. The test to determine whether a
particular employee is engaged as a project or regular employee is whether or not the
employee is assigned to carry out a specific project or undertaking, the duration or
scope of which was specified at the time of his engagement. There must be a
determination of, or a clear agreement on, the completion or termination of the project
at the time the employee is engaged. Otherwise put, the fixed period of employment
must be knowingly and voluntarily agreed upon by the parties, without any force,
duress or improper pressure being brought to bear upon the employee and absent any
other circumstances vitiating his consent, or it must satisfactorily appear that the
employer and employee dealt with each other on more or less equal terms with no
moral dominance whatsoever being exercised by the former on the latter. For one, it
would be unusual for a company like Innodata to undertake a project that had no
relationship to its usual business. Also, the necessity and desirability of the work
performed by the employees are not the determinants in term employment, but rather
the day certain voluntarily agreed upon by the parties.
In fine, the employment of the petitioners who were engaged as project employees for a
fixed term legally ended upon the expiration of their contract. Their complaint for
illegal dismissal was plainly lacking in merit.

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NETLINK COMPUTER INCORPORATED VS. DELMO

726 SCRA 531, 18 June 2014
Non-diminution of Benefits

Facts: Netlink Computer, Inc. Products and Services hired Eric S. Delmo as account
manager. He was able to generate sales from which he earned commissions amounting
to P993,558.89 and US$7,588.30. He then requested payment of his commissions, but
Netlink refused and only gave him partial cash advances chargeable to his
commissions. Later on, Netlink began to nitpick and fault find, like stressing his
supposed absences and tardiness. In order to force him to resign, Netlink issued several
memoranda detailing his supposed infractions of the companys attendance policy.
Despite the memoranda, Delmo continued to generate huge sales for Netlink. On
November 28, 1996, Delmo was shocked when he was refused entry into the company
premises by the security guard pursuant to a memorandum to that effect. This incident
prompted Delmo to file a complaint for illegal dismissal. The Labor Arbiter ruled
against Netlink and in favor of Delmo. On appeal, the National Labor Relations
Commission modified the decision of the Labor Arbiter by setting aside the backwages
and reinstatement decreed by the Labor Arbiter due to the existence of valid and just
causes for the termination of Delmos employment. On May 9, 2003, the CA
promulgated its assailed decision upholding the NLRCs ruling subject to
modifications. Hence, this appeal. Netlink submits that the CA committed a palpable
and reversible error of law in not holding that the applicable exchange rate for
computing the US dollar commissions of Delmo should be the rates prevailing at the
time when the sales were actually generated, not the rates prevailing at the time of the
payment; and in awarding attorneys fees.

Held: In the absence of a written agreement between the employer and the employee
that sales commissions shall be paid in a foreign currency, the latter has the right to be
paid in such foreign currency once the same has become an established practice of the
former. The rate of exchange at the time of payment, not the rate of exchange at the time
of the sales, controls.

There was no written contract between Netlink and Delmo stipulating that the latters
commissions would be paid in US dollars. The absence of the contractual stipulation
notwithstanding, Netlink was still liable to pay Delmo in US dollars because the
practice of paying its sales agents in US dollars for their US dollar denominated sales
had become a company policy. This was impliedly admitted by Netlink when it did not
refute the allegation that the commissions earned by Delmo and its other sales agents
had been paid in US dollars. Instead of denying the allegation, Netlink only sought a
declaration that the US dollar commissions be paid using the exchange rate at the time
of sale. The principle of non-diminution of benefits, which has been incorporated in
Article 100 of the Labor Code, forbade Netlink from unilaterally reducing, diminishing,
discontinuing or eliminating the practice. Verily, the phrase supplements, or other
employee benefits in Article 100 is construed to mean the compensation and privileges
received by an employee aside from regular salaries or wages.

With regard to the length of time the company practice should have been observed to
constitute a voluntary employer practice that cannot be unilaterally reduced,
diminished, discontinued or eliminated by the employer, jurisprudence has not laid
down any rule requiring a specific mmimum number of years.

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PHILIPPINE JOURNALISTS INC. VS. JOURNAL EMPLOYEES UNION

G.R. No. 192601, 3 June 2013
Company policy; Funeral or bereavement benefit

Facts: Petitioner granted claims for funeral and bereavement aid as early as 1999, then
issued a memorandum in 2000 to correct its erroneous interpretation of legal dependent
under Section 4, Article XIII of the CBA. This notwithstanding, the 2001-2004 CBA still
contained the same provision granting funeral or bereavement aid in case of the death
of a legal dependent of a regular employee without differentiating the legal dependents
according to the employee's civil status as married or single.

Held: The continuity in the grant of the funeral and bereavement aid to regular
employees for the death of their legal dependents has undoubtedly ripened into a
company policy. With that, the denial of Alfante's qualified claim for such benefit
pursuant to Section 4, Article XIII of the CBA violated the law prohibiting the
diminution of benefits. Pursuant to Article 100 of the Labor Code, petitioner as the
employer could not reduce, diminish, discontinue or eliminate any benefit and
supplement being enjoyed by or granted to its employees.

The coverage of the term legal dependent as used in a stipulation in a collective

bargaining agreement (CBA) granting funeral or bereavement benefit to a regular
employee for the death of a legal dependent, if the CBA is silent about it, is to be
construed as similar to the meaning that contemporaneous social legislations have set.
This is because the terms of such social legislations are deemed incorporated in or
adopted by the CBA. In this regard, the differentiation among the legal dependents is
significant only in the event the CBA has prescribed a hierarchy among them for the
granting of a benefit; hence, the use of the terms primary beneficiaries and secondary
beneficiaries for that purpose. But considering that Section 4, Article XIII of the CBA has
not included that differentiation, petitioner had no basis to deny the claim for funeral
and bereavement aid of Alfante for the death of his parent whose death and fact of legal
dependency on him could be substantially proved.

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MEGA MAGAZINE PUBLICATIONS, INC. VS. MARGARET A. DEFENSOR

G.R. No. 162021, 16 June 2014
Payment of Bonus
Facts: Respondent proposed year-end commissions for herself and special incentive
plan. At the end of the year, however, she resigned and filed complaint for payment of
bonus and incentive compensation as proposed.

Held: The Court ruled that she was entitled to the bonus or special incentive. By its very
definition, bonus is a gratuity or act of liberality of the giver and thus, is not
demandable. However, in this case, petitioners had already exercised the management
prerogative to grant the bonus or special incentive since there was no refusal of her
proposal and the management even bargained with the respondent.

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HERITAGE HOTEL MANILA VS. SECRETARY OF LABOR AND EMPLOYMENT

730 SCRA 400, 23 July 2014
Labor Unions; Certification Election

Facts: The respondent filed a petition for certification election to represent all the
supervisory employees of petitioner. However, the petitioner filed an opposition and
was later denied. Petitioner also filed a petition for the cancellation of the respondent
unions registration as the labor union for failing to submit its annual financial reports
and updated list of members as required by the Labor Code but later denied by the
Department of Labor. The certification election proceeded and the respondent union
obtained the majority vote of the bargaining unit. The petitioner filed a protest insisting
on the illegitimacy of the respondent union.

Held: Basic in the realm of labor union rights is that the certification election is the sole
concern of the workers, and the employer is deemed an intruder as far as the
certification election is concerned. Thus, the petitioner lacked the legal personality to
assail the proceedings for the certification election, and should stand aside as a mere
bystander who could not oppose the petition, or even appeal the Med-Arbiters orders
relative to the conduct of the certification election.

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LEPANTO CONSOLIDATED MINING COMPANY VS. THE LEPANTO CAPATAZ

UNION
G.R. No. 157086, 18 February 2013
Labor Unions

Facts: Respondent Lepanto Capataz Union, a labor organization duly registered with
DOLE, filed a petition for consent election with the Industrial Relations Division of the
Cordillera Regional Office (CAR) of DOLE, thereby proposing to represent 139
capatazes of Lepanto. Lepanto opposed the petition, contending that the Union was in
reality seeking a certification election, not a consent election, and would be thereby
competing with the Lepanto Employees Union (LEU), the current collective bargaining
agent. Lepanto pointed out that the capatazes were already members of LEU, the
exclusive representative of all rank-and-file employees of its Mine Division. Med-
Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect that the
capatazes could form a separate bargaining unit due to their not being rank-and-file
employees. DOLE Undersecretary Rosalinda DimapilisBaldoz (Baldoz), acting by
authority of the DOLE Secretary, affirmed the ruling of Med- Arbiter Lontoc. In the
ensuing certification election, the Union garnered 109 of the 111 total valid votes cast.
On the day of the certification election, however, Lepanto presented an
opposition/protest. Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered
a decision certifying the Union as the sole and exclusive bargaining agent of all
capatazes of Lepanto.

Held: The DOLE Secretarys subordinates in the DOLE fairly and objectively resolved
whether the Union could lawfully seek to be the exclusive representative of the
bargaining unit of capatazes in the company. Their factual findings, being supported by
substantial evidence, are hereby accorded great respect and finality.

Meanwhile, the Supreme Court ruled that capatazes or foremen are not rank-and-file
employees because they are an extension of the management, and as such they may
influence the rank-and-file workers under them to engage in slowdowns or similar
activities detrimental to the policies, interests or business objectives of the employers.

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PENTAGON INTERNATIONAL SHIPPING SERVICES VS. COURT OF APPEALS

G.R. No. 169158, 1 July 2015
Seafarers

Facts: Pentagon hired respondents as chief officer and second engineer, respectively.
When their 10-month contract expired, they were repatriated to the Philippines.
Alleging non-payment and underpayment of wages, and claiming damages and
attorney's fees, they separately brought claims against Pentagon and the owners and
managers of Baleen Marine. The Labor Arbiter ruled in favor of Pentagon, declaring
JDA Inter--Phil jointly and solidarily liable with Baleen Marine. However, the NLRC
reversed the decision of the Labor Arbiter. Upon Pentagon's motion for reconsideration,
the NLRC reversed itself and ruled in favor of Pentagon. The CA reversed the decision
of the NLRC.

Held: Before a transfer of accreditation can be effected, the transferee agency should
likewise have to comply with the requirements for accreditation. The POEA can act on
the transfer of accreditation only after all the requirements shall have been submitted.
In light of the foregoing, there was no effective transfer of agency from Pentagon to JDA
Inter-Phil. Even assuming arguendo that JDA Inter--Phil did not withdraw its
application for accreditation with the POEA, there was still no valid transfer of agency
to speak of in the first place because JDA Inter-Phil did not submit the required
authenticated special power of attorney and manning agreement.

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WALLEM MARITIME SERVICES INC. VS TANAWAN
G.R. No. 160444, 29 August 2012
Seafarers; POEA Standard Employment Contracts

Facts: Tanawan filed in the Arbitration Branch of the NLRC a complaint for disability
benefits for the foot and eye injuries, sickness allowance, damages and attorneys fees
against the petitioner and its foreign principal. The petitioner denied Tanawans claim
for disability benefits for his foot injury, averring that he was already fit to work; that he
did not sustain the alleged eye injury while on board the vessel because no such injury
was reported. The Labor Arbiter found sufficient evidence to support Tanawans claim
for disability benefits. NLRC reversed the Labor Arbiters decision. CA rendered its
assailed decision in favor of Tanawan.

Held: While the seafarers and their employers are governed by their mutual
agreements, the POEA rules and regulations require that the POEA SEC, which
contains the standard terms and conditions of the seafarers employment in foreign
ocean-going vessels, be integrated in every seafarers contract. Under the 1996 POEA
SEC, it was enough to show that the injury or illness was sustained during the term of
the contract. The Court has declared that the unqualified phrase during the term
covered all injuries or illnesses occurring during the lifetime of the contract. As such,
Tanawan must present concrete proof showing that he acquired or contracted the injury
or illness that resulted to his disability during the term of his employment contract.

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DONGON VS RAPID MOVERS

G.R. No. 163431, 28 August 2013
Management Prerogative; Termination of Employment

Facts: Petitioner was dismissed from the Company after he misrepresented to Tanduay
by lending his company ID to his driver in order to get clearance for the release of
goods to be delivered to the Companys clients. Petitioner then filed a Complaint for
Illegal Dismissal. The Labor Arbiter dismissed the complaint, and ruled that respondent
rightly exercised its prerogative to dismiss petitioner. On appeal, however, the NLRC
reversed the Labor Arbiter.

Held: It is true that an employer is given a wide latitude of discretion in managing its
own affairs. The broad discretion includes the implementation of company rules and
regulations and the imposition of disciplinary measures on its employees. But the
exercise of a management prerogative like this is not limitless, but hemmed in by good
faith and a due consideration of the rights of the worker. The management prerogative
will be upheld for as long as it is not wielded as an implement to circumvent the laws
and oppress labor. Dismissal should only be a last resort, a penalty to be meted only
after all the relevant circumstances have been appreciated and evaluated with the goal
of ensuring that the ground for dismissal was not only serious but true.
Considering that petitioners motive in lending his company ID to his driver was to
benefit the Company as their employer by facilitating the loading of goods for
distribution to the Companys clients, his dismissal was plainly unwarranted.

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THE HONGKONG SHANGHAI BANKING CORPORATION EMPLOYEES UNION

VS. NLRC
G.R. No. 156635, 11 January 2016
Union; Strike; Unlawful termination

Facts: The Union demanded the suspension of the JEP (Job Evaluation Program) which
it labeled as unfair labor practice. Due to the actions of the petitioners, HSBC filed a
complaint for ULP in the Arbitration Branch of the NLRC. The Union conducted a strike
vote on December 19, 1993 after HSBC accorded regular status to Patrick King, the first
person hired under the JEP. The majority of the members of the Union voted in favor of
a strike. Union's officers and members walked out and gathered outside the premises of
HSBC's offices. Union members blocked the entry and exit points of the bank premises,
preventing the bank officers. HSBC filed its complaint to declare the strike illegal. HSBC
issued return-to-work notices to the striking employees. Only 25 employees complied
and returned to work. Due to the continuing concerted actions, HSBC terminated the
individual petitioners.

Held: A strike staged without compliance with the requirements of Article 263 1 of the
Labor Code is illegal, and may cause the termination of the employment of the
participating union officers and members. However, the liability for the illegal strike is
individual, not collective. To warrant the termination of an officer of the labor
organization on that basis, the employer must show that the officer knowingly
participated in the illegal strike. An ordinary striking employee cannot be terminated
based solely on his participation in the illegal strike, for the employer must further
show that the employee committed illegal acts during the strike.

Meanwhile, the rule for employees unlawfully terminated without substantive and
procedural due process is to entitle them to the reliefs provided under Article 279 of the
Labor Code, that is, reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and other benefits or their monetary
equivalent computed from the time the compensation was withheld up to the time of
actual reinstatement. However, the award of backwages is subject to the settled policy
that when employees voluntarily go on strike, no backwages during the strike shall be
awarded. As regards reinstatement, the lapse of 22 years since the strike now warrants
the award of separation pay in lieu of reinstatement, the same to be equivalent of one
(1) month for every year of service.

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D.M. CONSUNJI CORP. VS. BELLO

G.R. No. 159371, 29 July 2013
Termination of Employment
Facts: Bello brought a complaint for illegal dismissal and damages against DMCI.
Respondent had been diagnosed to be suffering from pulmonary tuberculosis, thereby
necessitating his leave of absence; that upon his recovery DMCI had refused to accept
him and had instead handed to him a termination paper; that he had been terminated
due to RSD. DMCI contended that Bello had only been a project employee. DMCI
likewise claimed that Bello voluntarily resigned from work.

Held: It is settled that the extension of the employment of a project employee long after
the supposed project has been completed removes the employee from the scope of a
project employee and makes him a regular employee.

Furthermore, it is axiomatic in labor law that the employer who interposes the defense
of voluntary resignation of the employee in an illegal dismissal case must prove by
clear, positive and convincing evidence that the resignation was voluntary; and that the
employer cannot rely on the weakness of the defense of the employee. The requirement
rests on the need to resolve any doubt in favor of the working man.

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LEGEND HOTEL VS REALUYO

G.R. No. 153511, 18 July 2012
Termination of Employment

Facts: Respondent averred that he had worked as a pianist at the Legend Hotels
restaurant and that the management had notified him that as a cost-cutting measure his
services as a pianist would no longer be required. Respondent filed a complaint for
alleged unfair labor practice, constructive illegal dismissal, and the
underpayment/nonpayment of his premium pay for holidays, separation pay, service
incentive leave pay, and 13th month pay. The Labor Arbiter dismissed the complaint for
lack of merit upon finding that the parties had no employer- employee relationship.
NLRC affirmed the decision of the LA. The CA set aside the decision of the NLRC.

Held: Retrenchment is one of the authorized causes for the dismissal of employees
recognized by the Labor Code. It is a management prerogative resorted to by employers
to avoid or to minimize business losses. In termination cases, the burden of proving that
the dismissal was for a valid or authorized cause rests upon the employer. Here,
petitioner did not submit evidence of the losses to its business operations and the
economic havoc it would thereby imminently sustain. It only claimed that respondents
termination was due to its present business/financial condition.

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LAGAHIT VS. PACIFIC CONCORD CONTAINER LINES

780 SCRA 427, 13 January 2016
Termination of Employment
Facts: Respondent hired petitioner as a sales manager and provided her with a brand
new car. One day, the petitioner received a text messages stating that she is no longer
connected with the respondents company. Later, petitioner learned that respondent
had disseminated notices and memos informing all of their clients that petitioner was
no longer connected with them. Despite of her claims of for all the benefits due to her,
respondent company refused to deal with her. Petitioner filed for constructive dismissal
in the NLRC.

Held: In cases of unlawful dismissal, the employer bears the burden of proving that the
termination was for a valid or authorized cause, but before the employer is expected to
discharge its burden of proving that the dismissal was legal, the employee must first
establish by substantial evidence the fact of her dismissal from employment. In this
case, the petitioner proved the overt acts committed by the respondents in abruptly
terminating her employment through the text messages sent by Cuenca to the petitioner
and her husband, as well as the notices distributed to the clients and published in
the Sun Star.

CONCEPCION VS. MINEX IMPORT CORPORATION/ MINERAMA

CORPORATION
663 SCRA 497, 24 January 2012
Termination of Employment

Facts: Petitioner is one of the supervisors of the respondent corporation and was
assigned to a branch with the instruction to hold the keys and supervised two other
salesladies. One Sunday morning, they conducted a cash-count of their sales proceeds
and found out that a large amount of companys earnings were missing. The
petitioners supervisors arrived with a policeman who immediately placed the
petitioner under arrest and brought her to Precinct 9 of the Malate Police Station. Later,
respondent Minex Corporation through one of its supervisors charged the petitioner
with qualified theft and terminated her due to loss of trust and confidence.

Held: To dismiss an employee, the law requires the existence of a just and valid cause
provided under Article 282 of the Labor Code. Thus, the employer may validly dismiss
for loss of trust and confidence an employee who commits an act of fraud prejudicial to
the interest of the employer. Neither a criminal prosecution nor a conviction beyond
reasonable doubt for the crime is a requisite for the validity of the dismissal.
Nonetheless, the dismissal for a just or lawful cause must still be made upon
compliance with the requirements of due process under the Labor Code; otherwise, the
employer is liable to pay nominal damages as indemnity to the dismissed employee.

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SAMAR-MED DISTRIBUTION VS. NLRC

G.R. No. 162385, 15 July 2013
Termination of Employment

Facts: Samar-Med Distribution, a sole proprietorship registered in the name of Danilo

V. Roleda, engaged in the sale and distribution of intravenous fluids (IVs) in Region
VIII (comprised by the several Samar and Leyte provinces). Gutang was hired for a
basic salary of P7,000.00/month and an allowance of P2,000.00/month, and had the task
of supervising the companys sales personnel and sales agents, and of representing
Samar-Med in transactions with the government in Region VIII. Gutang filed a
complaint for money claims against Roleda/Samar-Med in the NLRC, and claimed,
among others, that: (a) he had no knowledge of any infraction that had caused his
dismissal; (b) he did not receive any notice informing him of the cessation of Samar-
Meds business operations; and (c) he had been compelled to look for other sources of
income beginning on March 26, 1996 in order to survive. Roleda/Samar-Med denied
liability for Gutangs monetary claims, contending, among others, that: (a) Gutang
stopped selling and no longer returned to Manila after he was tasked to conduct an
investigation of the shortage in sales collections; (b) there was no dismissal of Gutang,
to speak of, but abandonment on his part; and (c) the complaint was a harassment suit
to retaliate for the criminal case he (Roleda) had meanwhile filed against Gutang for
misappropriating Samar-Meds funds totaling P3,302,000.71, as reflected in the demand
letter dated May 15, 1996.

Held: An employer may terminate an employees employment on the ground of the

latters fraud or wilful breach of the trust and confidence reposed in him. For loss of
trust and confidence to constitute a sufficient ground for termination, the employer
must have a reasonable ground to believe, if not to entertain the moral conviction, that
the employee was responsible for the misconduct, and that the nature of his
participation therein rendered him absolutely unworthy of the trust and confidence
demanded by his position. Those requirements were undeniably met in Gutangs case.
The finding of a just cause to dismiss Gutang notwithstanding, he was not accorded due
process. Roleda as the employer had the obligation to send to him two written notices
before finally dismissing him. Article 277 of the Labor Code, as amended, enunciated
this requirement of two written notices. Gutangs receipt of the demand letter from
Samar-Med to return the amount of P3,302,000.71 was certainly not even a substantial
compliance with the twin-notice requirement, because the purpose of the demand letter
was different from those defined for the sending of the required notices. Nor was he
thereby allowed a meaningful opportunity to be heard or to be notified of his
impending termination. The lack of statutory due process would not nullify the
dismissal or render it illegal or ineffectual when the dismissal was for just cause. But the
violation of Gutangs right to statutory due process clearly warranted the payment of
indemnity in the form of nominal damages.

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NORTHWEST AIRLINES, INC. VS. MA. CONCEPCION M. DEL ROSARIO

G.R. No. 157633, 10 September 2014
Termination of Employment; Illegal Dismissal

Facts: Northwest Airlines, Inc. employed respondent Del Rosario on as one of its
Manila-based flight attendants. During the boarding preparations, Gamboa, another
flight attendant assigned at the First Class Section of Flight NW 26, needed to borrow a
wine bottle opener from her fellow attendants, Vivien Francisco, Gamboas runner,
went to the Business Class Section to borrow a wine bottle opener from Del Rosario, but
the latter remarked that any flight attendant who could not bring a wine bottle opener
had no business working in the First Class Section. Apparently, Gamboa overheard Del
Rosarios remarks, and later on verbally confronted her. Their confrontation escalated
into a heated argument. Escao intervened but the two ignored her, prompting her to
rush outside the aircraft to get Maria Rosario D. Morales, the Assistant Base Manager, to
pacify them. Northwest dismissed Del Rosario on the grounds of serious misconduct
and wilful disobedience.

Held: Misconduct or improper behavior, to be a just cause for termination of

employment, must: (a) be serious; (b) relate to the performance of the employees
duties; and (c) show that the employee has become unfit to continue working for the
employer. In this case, even assuming arguendo that the incident was the kind of fight
between Del Rosario and Gamboa is prohibited by Northwest's Rules of Conduct, the
same could not be considered as of such seriousness as to warrant Del Rosario's
dismissal from the service. The gravity of the fight, which was not more than a verbal
argument between them, was not enough to tarnish or diminish Northwest's public
image.

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CRISANTO F. CASTRO, JR. vs. ATENEO DE NAGA UNIVERSITY

G.R. No. 175293, 23 July 2014
Termination of Employment; Illegal Dismissal; Relief for Improper Dismissal

Facts: The petitioner started his employment with respondent Ateneo de Naga
University (University) in the first semester of school year 1960-1961. At the time of his
dismissal, he was a regular and full-time faculty member of the Universitys
Accountancy Department in the College of Commerce. Allegedly, he received a letter
from the University President, informing him that his contract (which was set to expire
on May 31, 2000) would no longer be renewed. After several attempts to discuss the
matter with Fr. Tabora in person, and not having been given any teaching load or other
assignments, he brought his complaint for illegal dismissal. Labor Arbiter Quiones
ruled in favor of the petitioner. In his order dated October 10, 2002, LA Quiones
directed respondents to exercise their option of whether complainant is to be actually
reinstated, or be reinstated in the payroll within ten (10) days from receipt of this order.
Meanwhile, the NLRC affirmed the ruling of the LA that there is illegal dismissal.

Held: The employer is obliged to reinstate and to pay the wages of the dismissed
employee during the period of appeal until its reversal by the higher Court; and that
because he was not reinstated either actually or by payroll, he should be held entitled to
the accrued salaries. Hence, petitioner is entitled for accrued salaries from the time of
the issuance of the order of reinstatement by LA Quinones until such order was
reversed.

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MATLING INDUSTRIAL AND COMMERCIAL CORP. VS. COROS

G.R. No. 157802, 13 October 2010
Jurisdiction of LA and SEC in Illegal dismissal cases

Facts: After his dismissal by Matling as its Vice President for Finance and
Administration, the Coros filed on August 10, 2000 a complaint for illegal suspension
and illegal dismissal against Matling and some of its corporate officers (petitioners) in
the NLRC, Sub-Regional Arbitration Branch XII, Iligan City. Matling moved to dismiss
the complaint, raising the ground, among others, that the complaint pertained to the
jurisdiction of the Securities and Exchange Commission (SEC) due to the controversy
being intra-corporate inasmuch as Coros was a member of Matlings Board of Directors
aside from being its Vice-President for Finance and Administration prior to his
termination.

The NLRC and the CA set aside the dismissal, concluding that Coros complaint for
illegal dismissal was properly cognizable by the LA, not by the SEC, because he was not
a corporate officer by virtue of his position in Matling, albeit high ranking and
managerial, not being among the positions listed in Matlings Constitution and By-Laws.

Held: Conformably with Section 25 of the Corporation Code, a position must be

expressly mentioned in the By-Laws in order to be considered as a corporate office.
Thus, the creation of an office pursuant to or under a By-Law enabling provision is not
enough to make a position a corporate office. In this case, the Board of Directors of
Matling could not validly delegate the power to create a corporate office to the President,
in light of Section 25 of the Corporation Code requiring the Board of Directors itself to
elect the corporate officers. Moreover, even though he might have become a stockholder
of Matling in 1992, his promotion to the position of Vice President for Finance and
Administration in 1987 was by virtue of the length of quality service he had rendered as
an employee of Matling. His subsequent acquisition of the status of
Director/stockholder had no relation to his promotion. Besides, his status of
Director/stockholder was unaffected by his dismissal from employment as Vice
President for Finance and Administration. Thus, as a rule, the illegal dismissal of an
officer or other employee of a private employer is properly cognizable by the LA.

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MANILA JOCKEY CLUB INC. VS. AIMEE TRAJANO

G.R. No. 160982, 26 June 2013
Illegal Dismissal; Reinstatement; Separation pay as an alternative to reinstatement

Facts: MJCI had employed Trajano as a selling teller of betting tickets since November
1989. On April 25, 1998, she reported for work. At around 7:15 p.m., two regular bettors
gave her their respective lists of bets (rota) and money for the bets for Race 14.
Although the bettors suddenly left her, she entered their bets in the selling machine and
segregated the tickets for pick up by the two bettors upon their return. Before closing
time, one of the bettors (requesting bettor) returned and asked her to cancel one of his
bets worth P2,000.00. Since she was also operating the negative machine on that day,
she obliged and immediately cancelled the bet as requested. She gave the remaining
tickets and the P2,000.00 to the requesting bettor, the money pertaining to the canceled
bet. When Race 14 was completed, she counted the bets received and the sold tickets.
She found that the bets and the tickets balanced. But then she saw in her drawer the
receipt for the canceled ticket, but the canceled ticket was not inside the drawer.
Thinking she could have given the canceled ticket to the requesting bettor, she
immediately looked for him but could not find him. It was only then that she
remembered that there were two bettors who had earlier left their bets with her. Thus,
she went to look for the other bettor (second bettor) to ask if the canceled ticket was
with him. When she located the second bettor, she showed him the receipt of the
canceled ticket to counter-check the serial number with his tickets. Thereafter, the
second bettor returned to Trajano and told her that it was one of his bets that had been
canceled, instead of that of the requesting bettor. To complicate things, it was also the
same bet that had won Race 14. Considering that the bet was for a daily double, the
second bettor only needed to win Race 15 in order to claim dividends. At that point, she
realized her mistake, and explained to the second bettor that the cancellation of his
ticket had not been intentional, but the result of an honest mistake on her part. She
offered to personally pay the dividends should the second bettor win Race 15, which
the latter accepted. When Race 15 was completed, the second bettor lost. She was thus
relieved of the obligation to pay any winnings to the second bettor. She was placed
under preventive suspension effective April 28, 1998, for an unstated period of time.
Trajano instituted a complaint for illegal dismissal.

Held: Loss of the employers trust and confidence is a just cause under Article 282 (c), a
provision that ideally applies only to cases involving an employee occupying a position
of trust and confidence, or to a situation where the employee has been routinely
charged with the care and custody of the employers money or property. But the loss of
trust and confidence, to be a valid ground for dismissal, must be based on a willful
breach of trust and confidence founded on clearly established facts. Moreover, the loss
of trust and confidence must be related to the employees performance of duties. As a
selling teller, Trajano held a position of trust and confidence. The nature of her
employment required her to handle and keep in custody the tickets issued and the bets
made in her assigned selling station. The bets were funds belonging to her employer.
Although the act complained of the unauthorized cancellation of the ticket (i.e.,
unauthorized because it was done without the consent of the bettor) was related to
her work as a selling teller, MJCI did not establish that the cancellation of the ticket was
intentional, knowing and purposeful on her part in order for her to have breached the
trust and confidence reposed in her by MJCI, instead of being only out of an honest
mistake.

A review of the records warrants a finding that MJCI did not comply with the
prescribed procedure for dismissal. As for the last procedural requirement of giving the
second notice, the posting of the notice of termination at MJCIs selling stations did not
satisfy it, and the fact that Trajano was eventually notified of her dismissal did not cure
the infirmity. Thus, Trajano is entitled to reinstatement without loss of seniority rights
and other privileges, and to full backwages, inclusive of allowances and other benefits
or their monetary equivalent. However, considering that more than 14 years have
already passed since Trajano initiated her complaint for illegal dismissal in 1998, her
reinstatement is no longer feasible. Consequently, an award of separation pay has
become the practical alternative, computed at one month pay for every year of service.
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RADIO MINDANAO NETWORK, INC. VS. MICHAEL MAXIMO R. AMURAO III

G.R. No. 167225, 22 October 2014
Quitclaims

Facts: Radio Mindanao Network, Inc. (RMN) hired Michael Maximo R. Amurao III
(Amurao) as a radio broadcaster for its DWKC-FM station and production manager for
its metropolitan radio operations. To meet the demand of the broadcasting industry,
RMN decided to reformat and restructure the programming of its DWKC-FM station.
Amurao and other personnel were advised that their employment would necessarily be
affected because of the reformatting. RMN furnished Amurao a letter informing the
latter that his services are deemed terminated and he is entitled to a settlement pay of
P311,922.00. Amurao accepted the offer of RMN and executed an affidavit of
release/quitclaim containing declarations that he has no more claims, right or action of
whatever nature against RMN, that the latter is released and discharged from any and
all claims and demands that maybe due to him and that he read and understood the
terms of his release and quitclaim and consented to such. After 5 months from the
execution of the quitclaim, Amurao filed a complaint against RMN for illegal dismissal
with money claims before the NLRC. Both the Labor Arbiter and NLRC held that the
quitclaim is void for it was not voluntarily executed. The Court of Appeals affirmed
their decision.

Held: The requisites for the validity of Michaels quitclaim were satisfied. Amurao
acknowledged in his quitclaim that he had read and thoroughly understood the terms
of his quitclaim and signed it of his own volition. The settlement pay of P311,922.00 was
credible and reasonable considering that Michael did not even assail such amount as
unconscionably low, or even state that he was entitled to a higher amount. Amurao was
required to sign the quitclaim as a condition to the release of the settlement pay did not
prove that its execution was coerced. Having agreed to part with a substantial amount
of money, RMN took steps to protect its interest and obtain its release from all
obligations once it paid Michael his settlement pay, which it did in this case.

Not all quitclaims are per se invalid or against public policy. Where the party has
voluntarily made the waiver, with a full understanding of its terms as well as its
consequences, and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as a valid and binding undertaking, and may not later
be disowned simply because of a change of mind.

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