PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET
AL., Respondents.
[G.R. No. 47800. December 2, 1940.]
LAUREL, J.:
FACTS:
Maximo Calalang, in his capacity as a private citizen
and as a taxpayer of Manila, brought before this court this
petition for a writ of prohibition against the respondents.
The National Traffic Commission, in its resolution,
resolved to recommend to the Director of Public Works and to
the Secretary of Public Works and Communications that
animal-drawn vehicles be prohibited from passing along
specified areas from a period of one year from the date of the
opening of the Colgante Bridge to traffic. The Chairman of the
National Traffic Commission recommended to the Director of
Public Works the adoption of the measure proposed in the
resolution aforementioned, in pursuance of the provisions of
Commonwealth Act No. 548 which authorizes said Director of
Public Works, with the approval of the Secretary of Public
Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on
national roads. As a consequence of such enforcement, all
animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above-mentioned to the detriment
not only of their owners but of the riding public as well.
Thus, it is contended by the petitioner that
Commonwealth Act No. 548 by which the Director of Public
Works, with the approval of the Secretary of Public Works and
Communications, is authorized to promulgate rules and
regulations for the regulation and control of the use of and
traffic on national roads and streets is unconstitutional
because it constitutes an undue delegation of legislative
power. The petitioner further contends that the rules and
regulations promulgated by the respondents pursuant to the
provisions of Commonwealth Act No. 548 constitute an
unlawful interference with legitimate business or trade and
abridge the right to personal liberty and freedom of
locomotion. The petitioner finally avers that the rules and
regulations complained of infringe upon the constitutional
precept regarding the promotion of social justice to insure the
well-being and economic security of all the people.
ISSUE:
Whether CA No. 48 is unconstitutional on the grounds invoked
by herein petitioner.
RATIO:
No. First, to promulgate rules and regulations on the
use of national roads and to determine when and how long a
national road should be closed to traffic, in view of the
condition of the road or the traffic thereon and the
requirements of public convenience and interest, is an
administrative function which cannot be directly discharged by
the National Assembly. It must depend on the discretion of
some other government official to whom is confided the duty
of determining whether the proper occasion exists for
executing the law. Second, Commonwealth Act No. 548 was
passed by the National Assembly in the exercise of the
paramount police power of the state. Public welfare, then, lies
at the bottom of the enactment of said law, and the state in
1
order to promote the general welfare may interfere with
personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all
kinds of restraints and burdens, in order to secure the general
comfort, health, and prosperity of the state (U.S. v. Gomer
Jesus, 31 Phil., 218).
To this fundamental aim of our Government the
rights of the individual are subordinated. Lastly, Social justice
is "neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization
of social and economic forces by the State so that justice in
its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a
proper economic and social equilibrium in the interrelations of
the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored
principle of salus populi est suprema lex. Social justice,
therefore, must be founded on the recognition of the necessity
of interdependence among divers and diverse units of a
society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and
paramount objective of the state of promoting the health,
comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number."
RULING:
In view of the foregoing, the writ of prohibition
prayed for is hereby denied, with costs against the petitioner.
So ordered.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,
INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor
and Employment, and TOMAS D. ACHACOSO, as
Administrator of the Philippine Overseas Employment
Administration, respondents.
G.R. No. 81958 June 30, 1988
SARMIENTO, J.:
FACTS:
The petitioner, Philippine Association of Service
Exporters, Inc., a firm "engaged principally in the recruitment
of Filipino workers, male and female, for overseas
placement," challenges the Constitutional validity of
Department Order No. 1, Series of 1988, of the Department
of Labor and Employment, in the character of "GUIDELINES
GOVERNING THE TEMPORARY SUSPENSION OF
DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS," in this petition for certiorari and prohibition.
Specifically, the measure is assailed for "discrimination against
males or females;" that it "does not apply to all Filipino
workers but only to domestic helpers and females with similar
skills;" and that it is violative of the right to travel. It is held
likewise to be an invalid exercise of the lawmaking power,
police power being legislative, and not executive, in character.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
In its supplement to the petition, PASEI invokes
Section 3, of Article XIII, of the Constitution, providing for
worker participation "in policy and decision-making processes
affecting their rights and benefits as may be provided by
law." Department Order No. 1, it is contended, was passed in
the absence of prior consultations. It is claimed, finally, to be
in violation of the Charter's non-impairment clause, in addition
to the "great and irreparable injury" that PASEI members face
should the Order be further enforced.
ISSUE:
Whether D.O. No. 1 is unconstitutional.
RATIO:
No. As a general rule, official acts enjoy a presumed
validity. In the absence of clear and convincing evidence to
the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why
the contested measure should be nullified. There is no
question that Department Order No. 1 applies only to "female
contract workers," but it does not thereby make an undue
discrimination between the sexes. It is well-settled that
"equality before the law" under the Constitution does not
import a perfect Identity of rights among all men and women.
It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are
germane to the purposes of the law; (3) they are not confined
to existing conditions; and (4) they apply equally to all
members of the same class. The Court is satisfied that the
classification made-the preference for female workers — rests
on substantial distinctions.
The consequence the deployment ban has on the
right to travel does not impair the right. The right to travel is
subject, among other things, to the requirements of "public
safety," "as may be provided by law." Department Order No.
1 is a valid implementation of the Labor Code, in particular, its
basic policy to "afford protection to labor," pursuant to the
respondent Department of Labor's rule-making authority
vested in it by the Labor Code. Neither is there merit in the
contention that Department Order No. 1 constitutes an invalid
exercise of legislative power. It is true that police power is the
domain of the legislature, but it does not mean that such an
authority may not be lawfully delegated. As we have
mentioned, the Labor Code itself vests the Department of
Labor and Employment with rulemaking powers in the
enforcement whereof.
The petitioner's reliance on the Constitutional
guaranty of worker participation "in policy and decision-
making processes affecting their rights and benefits" is not
well-taken. The right granted by this provision, again, must
submit to the demands and necessities of the State's power
of regulation. Lastly, the non-impairment clause of the
Constitution, invoked by the petitioner, must yield to the loftier
purposes targeted by the Government. Freedom of contract
and enterprise, like all other freedoms, is not free from
restrictions, more so in this jurisdiction, where laissez
faire has never been fully accepted as a controlling economic
way of life.
RULING:
WHEREFORE, the petition is DISMISSED. No costs.
2
C. ALCANTARA & SONS, INC., Petitioner,
vs.
COURT OF APPEALS
G.R. No. 179220
ABAD, J.:
FACTS:
C. Alcantara & Sons, Inc.is a domestic corporation
engaged in the manufacture and processing of plywood.
Nagkahiusang Mamumuo as Alsons-SPFL is the exclusive
bargaining agent of the Company’s rank and file employees.
The other parties to these cases are the Union officers and
their striking members.
The Company and the Union entered into a CBA that
bound them to hold no strike and no lockout in the course of
its life. At some point the parties began negotiating the
economic provisions of their CBA but this ended in a deadlock,
prompting the Union to file a notice of strike. After efforts at
conciliation by the DOLE failed, the Union conducted a strike
vote that resulted in an overwhelming majority of its members
favoring it. The Union reported the strike vote to the DOLE
and, after the observance of the mandatory cooling-off period,
went on strike.
The Company, on the other hand, filed a petition with
the Regional Arbitration Board to declare the Union’s strike
illegal, citing its violation of the no strike, no lockout, provision
of their CBA. For their part, the Union, its officers, and its
affected members filed against the Company a counterclaim
for unfair labor practices, illegal dismissal, and damages.
The Labor Arbiter rendered a decision, declaring the
Union’s strike illegal for violating the CBA’s no strike, no
lockout, provision. The NLRC affirmed said decision insofar as
the former declared the strike illegal, ordered the Union
officers terminated, and directed them to pay damages to the
company. However, the NLRC ruled that the Union members
involved, who were identified in the proceedings held in the
case, should also be terminated for having committed
prohibited and illegal acts. The CA rendered a
decision annulling the NLRC decision and reinstating that of
the Labor Arbiter.
ISSUES:
(1) Whether or not the Union staged an illegal strike; and
(2) Assuming the strike to be illegal, whether or not the
impleaded Union members committed illegal acts during the
strike, justifying their termination from employment;
RATIO:
Yes. A strike may be regarded as invalid although the
labor union has complied with the strict requirements for
staging one as provided in Article 263 of the Labor Code when
the same is held contrary to an existing agreement, such as a
no strike clause or conclusive arbitration clause. Here, the CBA
between the parties contained a "no strike, no lockout"
provision that enjoined both the Union and the Company from
resorting to the use of economic weapons available to them
under the law and to instead take recourse to voluntary
arbitration in settling their disputes. No law or public policy
prohibits the Union and the Company from mutually waiving
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
the strike and lockout maces available to them to give way to
voluntary arbitration.
Since the Union’s strike has been declared illegal, the
Union officers can, in accordance with law be terminated from
employment for their actions. They cannot be shielded from
the coverage of Article 264 of the Labor Code since the Union
appointed them as such and placed them in positions of
leadership and power over the men in their respective work
units.
Accordingly, the impleaded Union members’
termination are justified as the grounds for termination under
Article 264 are based on prohibited acts that employees could
commit during a strike.
RULING:
WHEREFORE, the Court DENIES the petition of the
Nagkahiusang Mamumuo sa Alsons-SPFL and its officers and
members in G.R. 155135 for lack of merit, and REVERSES and
SETS ASIDE the decision of the Court of Appeals in CA-G.R.
SP 59604 dated March 20, 2002. The Court, on the other
hand, GRANTS the petition of C. Alcantara & Sons, Inc. in G.R.
155109 and REINSTATES the decision of the National Labor
Relations Commission in NLRC CA M-004996-99 dated
November 8, 1999.
Further, the Court PARTIALLY GRANTS the petition of
the Nagkahiusang Mamumuo sa Alsons-SPFL and their
dismissed members in G.R. 179220 and ORDERS C. Alcantara
& Sons, Inc. to pay the terminated Union members backwages
for four (4) months and nine (9) days and separation pays
equivalent to one-half month salary for every year of service
to the company up to the date of their termination, with
interest of 12% per annum from the time this decision
becomes final and executory until such backwages and
separation pays are paid. The Court DENIES all other claims.
SO ORDERED.
St. MARY'S ACADEMY of Dipolog City, Petitioner,
vs.
TERESITA PALACIO, MARIGEN CALIBOD, LEVIE
LAQUIO, ELAINE MARIE SANTANDER, ELIZA SAILE,
AND MA. DOLORES MONTEDERAMOS, Respondents.
G.R. No. 164913. September 8, 2010
DEL CASTILLO, J.:
FACTS:
Petitioner hired respondents as classroom teachers
and as guidance counselor. In separate letters, however,
petitioner informed them that their re-application for school
year 2000-2001 could not be accepted because they failed to
pass the Licensure Examination for Teachers. According to
petitioner, as non-board passers, respondents could not
continue practicing their teaching profession pursuant to the
DECS Memorandum No. 10, S. 1998 which requires incumbent
teachers to register as professional teachers pursuant to
Section 27 of RA No. 7836, otherwise known as the Philippine
Teachers Professionalization Act of 1994.
Respondents filed a complaint contesting their
termination as highly irregular and premature. They admitted
that they are indeed non-board passers, however, they also
argued that their security of tenure could not simply be
trampled upon for their failure to register with the PRC or to
pass the LET prior to the deadline set by RA 7836. Further, as
3
the aforesaid law provides for exceptions to the taking of
examination, they opined that their outright dismissal was
illegal because some of them possessed civil service
eligibilities and special permits to teach. Furthermore,
petitioner’s retention and acceptance of other teachers who
do not also possess the required eligibility showed evident bad
faith in terminating respondents.
Petitioner insists that it has the right to terminate
respondents’ services as early as March 2000 without waiting
for the September 19, 2000 deadline set by law for
respondents to register as professional teachers due to the
need to fix the school organization prior to the applicable
school year. Petitioner justifies respondents’ termination by
advancing that it would be difficult to hire licensed teachers in
the middle of the school year as respondents’ replacements.
The Labor Arbiter adjudged petitioner guilty of illegal
dismissal because it terminated the services of the
respondents prior to the deadline fixed by PRC for the
registration of teachers as professional teachers, in violation
of the doctrine regarding the prospective application of laws.
NLRC and the CA both affirmed said decision.
ISSUE:
Whether respondents’ premature termination on the ground
of failure to pass the LET violative of their right to security of
tenure.
RATIO:
Yes. Pursuant to RA 7836, the PRC formulated
certain rules and regulations relative to the registration of
teachers and their continued practice of the teaching
profession. Specific periods and deadlines were fixed within
which incumbent teachers must register as professional
teachers in consonance with the essential purpose of the law
in promoting good quality education by ensuring that those
who practice the teaching profession are duly licensed and are
registered as professional teachers. Clearly, respondents, in
the case at bar, had until September 19, 2000 to comply with
the mandatory requirement to register as professional
teachers.
It is incumbent upon this Court to afford full
protection to labor. Thus, while we take cognizance of the
employer’s right to protect its interest, the same should be
exercised in a manner which does not infringe on the workers’
right to security of tenure. "Under the policy of social justice,
the law bends over backward to accommodate the interests
of the working class on the humane justification that those
with less privilege in life should have more in law."
RULING:
WHEREFORE, the petition is partially GRANTED. The
Decision of the Court of Appeals dated September 24, 2003 in
CA-G.R. SP No. 67691 finding respondents Teresita Palacio,
Marigen Calibod, Levie Laquio, Elaine Marie Santander and
Ma. Dolores Montederamos to have been illegally dismissed
and awarding them separation pay and limited backwages
is AFFIRMED. As regards respondent Eliza Saile, we find her
termination valid and legal. Consequently, the awards of
separation pay and limited backwages in her favor
are DELETED.
SO ORDERED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
MATERNITY CHILDREN'S HOSPITAL, represented by
ANTERA L. DORADO, President, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND THE
REGIONAL DIRECTOR OF LABOR, REGION
X, respondents.
G.R. No. 78909. June 30, 1989
MEDIALDEA, J.:
FACTS:
Petitioner is a semi-government hospital. Ten
employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the
Regional Director of Labor and Employment for underpayment
of their salaries and ECOLAS. The Regional Director directed
two of his Labor Standard and Welfare Officers to inspect the
records of the petitioner to ascertain the truth of the
allegations in the complaints. Based on this inspection report
and recommendation, the Regional Director issued an Order
directing the payment representing underpayment of wages
and ECOLAs to all the petitioner's employees. The Secretary
of Labor affirmed the said decision.
Petitioner contended that based on the rulings in
the Ong vs. Parel and the Zambales Base Metals, Inc. vs.
The Minister of Labor cases, a Regional Director is precluded
from adjudicating money claims on the ground that this is an
exclusive function of the Labor Arbiter under Article 217 of the
present Code.
ISSUE:
Whether or not the Regional Director had jurisdiction over the
case and if so, the extent of coverage of any award that should
be forthcoming, arising from his visitorial and enforcement
powers under Article 128 of the Labor Code.
RATIO:
Yes. This is a labor standards case, and is governed
by Art. 128-b of the Labor Code, as amended by E.O. No. 111.
Under the present rules, a Regional Director
exercises both visitorial and enforcement power over labor
standards cases, and is therefore empowered to adjudicate
money claims, provided there still exists an employer-
employee relationship, and the findings of the regional office
is not contested by the employer concerned.
The Regional Director exercised visitorial rights only
under then Article 127 of the Code. With the promulgation of
PD 850, Regional Directors were given enforcement
powers, in addition to visitorial powers. EO 111 authorizes a
Regional Director to order compliance by an employer with
labor standards provisions of the Labor Code and other
legislation.
Social justice legislation, to be truly meaningful and
rewarding to our workers, must not be hampered in its
application by long-winded arbitration and litigation. Rights
must be asserted and benefits received with the least
4
inconvenience. Labor laws are meant to promote, not defeat,
social justice.
RULING:
ACCORDINGLY, this petition should be dismissed, as
it is hereby DISMISSED, as regards all persons still employed
in the Hospital at the time of the filing of the complaint, but
GRANTED as regards those employees no longer employed at
that time.
SO ORDERED.
PHILIPPINE AIRLINES, INC., petitioner,
vs.
ALBERTO SANTOS, JR., HOUDIEL MAGADIA, GILBERT
ANTONIO, REGINO DURAN, PHILIPPINE AIRLINES
EMPLOYEES ASSOCIATION, and THE NATIONAL
LABOR RELATIONS COMMISSION, respondents.
G.R. No. 77875 February 4, 1993
REGALADO, J.:
FACTS:
Individual respondents are all Port Stewards of
Catering Sub-Department, Passenger Services Department of
petitioner. On various occasions, several deductions were
made from their salary. The deductions represented losses of
inventoried items charged to them for mishandling of
company properties. Private respondents filed a formal
grievance to their manager who resolved the grievance by
denying the petition of individual respondents and adopted
the position that inventory of bonded goods is part of their
duty as catering service personnel. Thereafter, the individual
respondents refused to conduct inventory works and were
eventually suspended.
A complaint for illegal suspension was filed but was
dismissed by the Labor Arbiter. Private respondents appealed
the decision of the labor arbiter to respondent commission
which rendered the aforequoted decision setting aside the
labor arbiter's order of dismissal.
Petitioner submits that since the grievance
machinery was established for both labor and management as
a vehicle to thresh out whatever problems may arise in the
course of their relationship, every employee is duty bound to
present the matter before management and give the latter an
opportunity to impose whatever corrective measure is
possible. Citing Section 1, Article IV of the CBA, petitioner
further argues that respondent employees have the
obligation, just as management has, to settle all labor disputes
through friendly negotiations.
ISSUE:
Whether respondent NLRC has unlawfully neglected the
performance of an act which the law specifically enjoins it to
perform as a duty or has otherwise unlawfully excluded
petitioner from the exercise of a right to which it is entitled
pursuant to the PAL-PALEA Collective Bargaining Agreement
RATIO:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
No. The manager’s failure to act on the matter may
have been due to petitioner's inadvertence, but it is clearly too
much of an injustice if the employees be made to bear the
dire effects thereof. Much as the latter were willing to discuss
their grievance with their employer, the latter closed the door
to this possibility by not assigning someone else to look into
the matter during the manager’s absence. Thus, private
respondents should not be faulted for believing that the
effects of the CBA in their favor had already stepped into the
controversy.
If the Court were to follow petitioner's line of
reasoning, it would be easy for management to delay the
resolution of labor problems, the complaints of the workers in
particular, and hide under the cloak of its officers being "on
leave" to avoid being caught by the 5-day deadline under the
CBA. If this should be allowed, the workingmen will suffer
great injustice for they will necessarily be at the mercy of their
employer. That could not have been the intendment of the
pertinent provision of the CBA, much less the benevolent
policy underlying our labor laws.
It is a fact that the sympathy of the Court is on the
side of the laboring classes, not only because the Constitution
imposes such sympathy, but because of the one-sided relation
between labor and capital. The constitutional mandate for the
promotion of labor is as explicit as it is demanding. The
purpose is to place the workingman on an equal plane with
management — with all its power and influence — in
negotiating for the advancement of his interests and the
defense of his rights. Under the policy of social justice, the law
bends over backward to accommodate the interests of the
working class on the humane justification that those with less
privileges in life should have more privileges in law.
RULING:
ACCORDINGLY, on the foregoing premises, the
instant petition is hereby DENIED and the assailed decision of
respondent National Labor Relations Commission is
AFFIRMED. This judgment is immediately executory. SO
ORDERED.
ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW
NAVIGATION CO., INC., Respondents.
G.R. No. 167614 March 24, 2009
AUSTRIA-MARTINEZ, J.:
FACTS:
Petitioner was hired by Gallant Maritime Services,
Inc. and Marlow Navigation Co., Ltd. (respondents) under a
POEA-approved Contract of Employment for 12 months.
Petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer upon
the assurance and representation of respondents that he
would be promoted. Respondents did not deliver on their
promise. Hence, petitioner refused to stay on as Second
Officer and was repatriated to the Philippines. He had served
only two (2) months and seven (7) days of his contract.
Petitioner then filed with the Labor Arbiter (LA) a
Complaint against respondents for constructive dismissal and
for payment of his money claims
5
The LA rendered a Decision declaring the dismissal
of petitioner illegal and awarding him monetary benefits. In
awarding so, the LA based his computation on the salary
period of three months only -- rather than the entire unexpired
portion of nine months and 23 days of petitioner's
employment contract - applying the last clause in the 5th
paragraph of Section 10, R.A. No. 8042. The NLRC modified
the decision by correcting the LA’s computation. The CA
affirmed the NLRC ruling on the reduction of the applicable
salary rate. However, it skirted the constitutional issue raised
by petitioner.
Petitioner contends that the subject clause is
unconstitutional because it unduly impairs the freedom of
OFWs to negotiate for and stipulate in their overseas
employment contracts a determinate employment period and
a fixed salary package. It also impinges on the equal
protection clause, for it treats OFWs differently from local
Filipino workers (local workers) by putting a cap on the
amount of lump-sum salary to which OFWs are entitled in case
of illegal dismissal, while setting no limit to the same monetary
award for local workers when their dismissal is declared
illegal; that the disparate treatment is not reasonable as there
is no substantial distinction between the two groups; and that
it defeats Section 18, Article II of the Constitution which
guarantees the protection of the rights and welfare of all
Filipino workers, whether deployed locally or overseas. Lastly,
petitioner claims that the subject clause violates the due
process clause, for it deprives him of the salaries and other
emoluments he is entitled to under his fixed-period
employment contract.
The OSG emphasizes that OFWs and local workers
differ in terms of the nature of their employment, such that
their rights to monetary benefits must necessarily be treated
differently. Hence, the OSG posits that there are rights and
privileges exclusive to local workers, but not available to
OFWs; that these peculiarities make for a reasonable and valid
basis for the differentiated treatment under the subject clause
of the money claims of OFWs who are illegally dismissed.
Thus, the provision does not violate the equal protection
clause nor Section 18, Article II of the Constitution. Lastly, the
OSG defends the rationale behind the subject clause as a
police power measure adopted to mitigate the solidary liability
of placement agencies for this "redounds to the benefit of the
migrant workers whose welfare the government seeks to
promote.
ISSUE:
Whether the last clause in the 5th paragraph of Section 10,
R.A. No. 8042 is unconstitutional.
RATIO:
No. Petitioner's claim that the subject clause unduly
interferes with the stipulations in his contract on the term of
his employment and the fixed salary package he will receive
is not tenable. The subject clause may not be declared
unconstitutional on the ground that it impinges on the
impairment clause, for the law was enacted in the exercise of
the police power of the State to regulate a business,
profession or calling with the noble end in view of ensuring
respect for the dignity and well-being of OFWs wherever they
may be employed. Police power legislations adopted by the
State to promote the health, morals, peace, education, good
order, safety, and general welfare of the people are generally
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
applicable not only to future contracts but even to those
already in existence, for all private contracts must yield to the
superior and legitimate measures taken by the State to
promote public welfare.
As to the issue of substantial distinction, to be valid,
the classification must comply with these requirements: 1) it
is based on substantial distinctions; 2) it is germane to the
purposes of the law; 3) it is not limited to existing conditions
only; and 4) it applies equally to all members of the class.
Under Section 10 of R.A. No. 8042, a worker
dismissed from overseas employment without just, valid or
authorized cause is entitled to his salary for the unexpired
portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less. The
subject clause classifies OFWs into two categories. The first
category includes OFWs with fixed-period employment
contracts of less than one year; in case of illegal dismissal,
they are entitled to their salaries for the entire unexpired
portion of their contract. The second category consists of
OFWs with fixed-period employment contracts of one year or
more; in case of illegal dismissal, they are entitled to monetary
award equivalent to only 3 months of the unexpired portion of
their contracts.
Viewed in that light, the subject clause creates a sub-
layer of discrimination among OFWs whose contract periods
are for more than one year: those who are illegally dismissed
with less than one year left in their contracts shall be entitled
to their salaries for the entire unexpired portion thereof, while
those who are illegally dismissed with one year or more
remaining in their contracts shall be covered by the subject
clause, and their monetary benefits limited to their salaries for
three months only. In fine, the Government has failed to
discharge its burden of proving the existence of a compelling
state interest that would justify the perpetuation of the
discrimination against OFWs under the subject clause. The
subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason that
the clause violates not just petitioner's right to equal
protection, but also her right to substantive due process under
Section 1, Article III of the Constitution.
RULING:
WHEREFORE, the Court GRANTS the Petition. The
subject clause "or for three months for every year of the
unexpired term, whichever is less" in the 5th paragraph of
Section 10 of Republic Act No. 8042
is DECLAREDUNCONSTITUTIONAL; and the December 8,
2004 Decision and April 1, 2005 Resolution of the Court of
Appeals are MODIFIED to the effect that petitioner
is AWARDED his salaries for the entire unexpired portion of
his employment contract consisting of nine months and 23
days computed at the rate of US$1,400.00 per month.
No costs.
SO ORDERED.
ANG TIBAY, represented by TORIBIO TEODORO,
manager and propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and
NATIONAL LABOR UNION, INC., respondents.
G.R. No. L-46496 February 27, 1940
6
LAUREL, J.:
FACTS:
Ang Tibay was a manufacturer of rubber slippers. There was
a shortage of leather soles, and it was necessary to
temporarily lay off members of the National Labor Union.
According to the Union however, this was merely a scheme to
systematically terminate the employees from work, and that
the shortage of soles is unsupported. It claims that Ang Tibay
is guilty of unjust labor practice because the owner, Teodoro,
is discriminating against the National Labor Union, and
unjustly favoring the National Workers Brotherhood, which
was allegedly sympathetic to the employer. The Court of
Industrial Relation decided the case and elevated it to the
Supreme Court, but a motion for new trial was raised by the
NLU. But the Ang Tibay filed a motion for opposing the said
motion.
The motion for new trial was raised because according to NLU,
there are documents that are so inaccessible to them that
even with the exercise of due diligence they could not be
expected to have obtained them and offered as evidence in
the Court of Industrial Relations. That these documents,
which NLU have now attached as exhibits are of such far-
reaching importance and effect that their admission would
necessarily mean the modification and reversal of the
judgment rendered therein.
ISSUE:
Whether or not the Union was denied due process by the CIR
RATIO DECIDENDI:
To begin with the issue before us is to realize the functions of
the CIR. The CIR is a special court whose functions are
specifically stated in the law of its creation which is the
Commonwealth Act No. 103). It is more an administrative
board than a part of the integrated judicial system of the
nation. It is not intended to be a mere receptive organ of the
government. Unlike a court of justice which is essentially
passive, acting only when its jurisdiction is invoked and
deciding only cases that are presented to it by the parties
litigant, the function of the CIR, as will appear from perusal of
its organic law is more active, affirmative and dynamic. It not
only exercises judicial or quasi-judicial functions in the
determination of disputes between employers and employees
but its functions are far more comprehensive and extensive.
It has jurisdiction over the entire Philippines, to consider,
investigate, decide, and settle any question, matter
controversy or disputes arising between, and/ or affecting
employers and employees or laborers, and landlords and
tenants or farm-laborers, and regulates the relations between
them, subject to, and in accordance with, the provisions of CA
103.
SC had the occasion to point out that the CIR is not narrowly
constrained by technical rules of procedure, and equity and
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
substantial merits of the case, without regard to technicalities
or legal forms and shall not be bound by any technical rules
of legal evidence but may inform its mind in such manner as
it may deem just and equitable.
The fact, however, that the CIR may be said to be free from
rigidity of certain procedural requirements does not mean that
it can in justiciable cases coming before it, entirely ignore or
disregard the fundamental and essential requirements of due
process in trials and investigations of an administrative
character. There are cardinal primary rights which must be
respected even in proceedings of this character:
(1) the right to a hearing, which includes the right to present
one's cause and submit evidence in support thereof;
(2) The tribunal must consider the evidence presented;
(3) The decision must have something to support itself;
(4) The evidence must be substantial;
(5) The decision must be based on the evidence presented at
the hearing; or at least contained in the record and disclosed
to the parties affected;
(6) The tribunal or body or any of its judges must act on its
own independent consideration of the law and facts of the
controversy, and not simply accept the views of a subordinate;
(7) The Board or body should, in all controversial questions,
render its decision in such manner that the parties to the
proceeding can know the various Issue involved, and the
reason for the decision rendered.
RULING:
Accordingly, the motion for a new trial should be and the same
is hereby granted, and the entire record of this case shall be
remanded to the Court of Industrial Relations, with instruction
that it reopen the case, receive all such evidence as may be
relevant and otherwise proceed in accordance with the
requirements set forth hereinabove. So ordered.
FEDERICO M. LEDESMA, JR., Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC-
SECOND DIVISION) HONS. RAUL T. AQUINO,
VICTORIANO R. CALAYCAY and ANGELITA A.
GACUTAN ARE THE COMMISSIONERS, PHILIPPINE
NAUTICAL TRAINING INC., ATTY. HERNANI FABIA,
RICKY TY, PABLO MANOLO, C. DE LEON and TREENA
CUEVA, Respondents.
G.R. No. 174585 October 19, 2007
CHICO-NAZARIO, J.:
FACTS:
On 4 December 1998, petitioner was employed as a
bus/service driver by the private respondent on probationary
basis, as evidenced by his appointment. As such, he was
required to report at private respondent’s training site in
Dasmariñas, Cavite, under the direct supervision of its site
administrator, Pablo Manolo de Leon (de Leon). On 11
7
November 2000, petitioner filed a complaint against de Leon
for allegedly abusing his authority as site administrator by
using the private respondent’s vehicles and other facilities for
personal ends. In the same complaint, petitioner also accused
de Leon of immoral conduct allegedly carried out within the
private respondent’s premises.
On 27 November 2000, de Leon filed a written report against
the petitioner addressed to private respondent’s Vice-
President for Administration, Ricky Ty (Ty), citing his
suspected drug use.
In view of de Leon’s report, private respondent’s Human
Resource Manager, Trina Cueva (HR Manager Cueva), on 29
November 2000, served a copy of a Notice to petitioner
requiring him to explain within 24 hours why no disciplinary
action should be imposed on him.
On 3 December 2000, petitioner filed a complaint for illegal
dismissal against private respondent before the Labor Arbiter.
In his Position Paper,7 petitioner averred that in view of the
complaint he filed against de Leon for his abusive conduct as
site administrator, the latter retaliated by falsely accusing
petitioner as a drug user. VP for Administration Ty, however,
instead of verifying the veracity of de Leon’s report, readily
believed his allegations and together with HR Manager Cueva,
verbally dismissed petitioner from service on 29 November
2000.
For its part, private respondent countered that petitioner was
never dismissed from employment but merely served a Notice
to Explain why no disciplinary action should be filed against
him in view of his superior’s report that he was suspected of
using illegal drugs. Instead of filing an answer to the said
notice, however, petitioner prematurely lodged a complaint
for illegal dismissal against private respondent before the
Labor Arbiter.
ISSUE:
Whether or not the petitioner was illegally dismissed by the
private respondent?
RATIO DECIDENDI:
Well-entrenched is the principle that in order to establish a
case before judicial and quasi-administrative bodies, it is
necessary that allegations must be supported by substantial
evidence. Substantial evidence is more than a mere scintilla.
It means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.
In the present case, there is hardly any evidence on record so
as to meet the quantum of evidence required, i.e., substantial
evidence. Petitioner’s claim of illegal dismissal is supported by
no other than his own bare, uncorroborated and, thus, self-
serving allegations, which are also incoherent, inconsistent
and contradictory.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
While this Court is not unmindful of the rule that in cases of
illegal dismissal, the employer bears the burden of proof to
prove that the termination was for a valid or authorized cause
in the case at bar, however, the facts and the evidence did
not establish a prima facie case that the petitioner was
dismissed from employment.31 Before the private respondent
must bear the burden of proving that the dismissal was legal,
petitioner must first establish by substantial evidence the fact
of his dismissal from service. Logically, if there is no dismissal,
then there can be no question as to the legality or illegality
thereof.
“The rule is that one who alleges a fact has the burden of
proving it; thus, petitioners were burdened to prove their
allegation that respondents dismissed them from their
employment. It must be stressed that the evidence to prove
this fact must be clear, positive and convincing. The rule that
the employer bears the burden of proof in illegal dismissal
cases finds no application here because the respondents deny
having dismissed the petitioners.” (Machica v. Roosevelt
Services Center, Inc)
It is true that the Constitution affords full protection to labor,
and that in light of this Constitutional mandate, we must be
vigilant in striking down any attempt of the management to
exploit or oppress the working class. However, it does not
mean that we are bound to uphold the working class in every
labor dispute brought before this Court for our resolution.
The law in protecting the rights of the employees, authorizes
neither oppression nor self-destruction of the employer. It
should be made clear that when the law tilts the scales of
justice in favor of labor, it is in recognition of the inherent
economic inequality between labor and management. The
intent is to balance the scales of justice; to put the two parties
on relatively equal positions. There may be cases where the
circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the
result is an injustice to the employer. Justitia nemini neganda
est -- justice is to be denied to none.
RULING:
WHEREFORE, premises considered, the instant Petition is
DENIED. The Court of Appeals Decision dated 28 May 2005
and its Resolution dated 7 September 2006 in CA-G.R. SP No.
79724 are hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
LUZ G. CRISTOBAL, PETITIONER,
VS.
EMPLOYEES' COMPENSATION COMMISSION AND
GOVERNMENT SERVICE INSURANCE SYSTEM
(NATIONAL SCIENCE DEVELOPMENT BOARD);
RESPONDENTS.
G.R. NO. L-49280 APRIL 30, 1980
MAKASIAR, J.:
8
FACTS:
The deceased, Fortunato S. Cristobal was employed as
Supervising Information Officer 11 of the National Science
Development Board (NSDB for short) based in Bicutan,
Taguig, Rizal. His original appointment was dated February
26, 1964 (p. 16, ECC rec.). On April 8, 1976, he developed
loose bowel movement which later worsened and his
excrement was marked with fresh blood. Self-administered
medications were made but symptoms persisted until April 22,
1976 when he was brought to the Hospital of Infant Jesus and
was there treated by Dr. Willie Lagdameo, who diagnosed his
illness as rectal malignancy. On May 28, 1976, he was
discharged with improved conditions but just one year
thereafter, he was again confined at the UST Hospital for the
same ailment. A second operation became necessary because
of the recurrence of malignancy in the pelvis. Despite earnest
medical efforts, he succumbed to his illness on May 27, 1977
The petitioner herein, as the decedent's widow and
beneficiary, filed with the Government Service Insurance
System (GSIS for short), a claim for income (death) benefits
under Presidential Decree No. 626, as amended. The said
claim was denied by the GSIS and in a subsequent request for
reconsideration, the System reiterated its decision
The petitioner herein, as the decedent's widow and
beneficiary, filed with the Government Service Insurance
System (GSIS for short), a claim for income (death) benefits
under Presidential Decree No. 626, as amended. The said
claim was denied by the GSIS and in a subsequent request for
reconsideration, the System reiterated its decision
ISSUE:
Whether or not the family of the deceased is entitled to the
benefits under PD 626
RATIO DECIDENDI:
In the instant case, it is evident that rectal cancer is one of
those borderline cases. Like, it is clear that the purpose of the
resolution is to extend the applicability of the provisions of
P.D. 626, thereby affording a greater number of employees
the opportunity to avail of the benefits under the law. This is
in consonance with the avowed policy of the State, as
mandated by the Constitution and embodied in the New Labor
Code, to give maximum aid and protection to labor. The
Employees' Compensation Commission, like the defunct Court
of Industrial Relations and the Workmen's Compensation
Commission, is under obligation at all times to give meaning
and substance to the constitutional guarantees in favor of the
working man, more specially, the social justice guarantee; for
otherwise, these guarantees would be merely "a lot of
meaningless patter."
From the foregoing statements, it is palpable that the
respondent ECC recognizes, as it is duty bound to, the policy
of the State to afford maximum aid and protection to labor.
Therefore, to require the petitioner to show the actual causes
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
or factors which led to the decendent's rectal malignancy
would not be consistent with this liberal interpretation. It is of
universal acceptance that practically all kinds of cancer belong
to the class of clinical diseases whose exact etiology, cause or
origin, is unknown. It is in this regard that the evidence
submitted by the petitioner deserves serious consideration.
RULING:
WHEREFORE, THE DECISION OF RESPONDENT EMPLOYEES'
COMPENSATION COMMISSION IS HEREBY SET ASIDE AND
THE RESPONDENT GSIS IS HEREBY DIRECTED
1. TO PAY THE PETITIONER THE SUM OF TWELVE
THOUSAND (P12,000.00) PESOS AS DEATH BENEFITS;
2. TO REIMBURSE PETITIONER MEDICAL, SURGICAL
AND HOSPITAL EXPENSES DULY SUPPORTED BY PROPER
RECEIPTS;
3. TO PAY PETITIONER THE SUM OF SEVEN HUNDRED
(P700.00) PESOS AS FUNERAL EXPENSES; AND
4. TO PAY THE PETITIONER ATTORNEY'S FEES
EQUIVALENT TO TEN (10%) PERCENT OF THE DEATH
BENEFITS.
SO ORDERED.
ERNESTO G. YMBONG, Petitioner,
vs.
ABS-CBN BROADCASTING CORPORATION,
VENERANDA SY AND DANTE LUZON, Respondents.
G.R. No. 184885 March 7, 2012
VILLARAMA, JR., J.:
FACTS:
Petitioner Ernesto G. Ymbong started working for ABS-CBN
Broadcasting Corporation (ABS-CBN) in 1993 at its regional
station in Cebu as a television talent, co-anchoring Hoy Gising
and TV Patrol Cebu. His stint in ABS-CBN later extended to
radio when ABS-CBN Cebu launched its AM station DYAB in
1995 where he worked as drama and voice talent, spinner,
scriptwriter and public affairs program anchor.
Like Ymbong, Leandro Patalinghug also worked for ABS-CBN
Cebu. Starting 1995, he worked as talent, director and
scriptwriter for various radio programs aired over DYAB.
On January 1, 1996, the ABS-CBN Head Office in Manila issued
Policy No. HR-ER-016 or the “Policy on Employees Seeking
Public Office.” The pertinent portions read:
1. Any employee who intends to run for any public
office position, must file his/her letter of resignation, at least
thirty (30) days prior to the official filing of the certificate of
candidacy either for national or local election.
9
3. Further, any employee who intends to join a political
group/party or even with no political affiliation but who
intends to openly and aggressively campaign for a candidate
or group of candidates (e.g. publicly speaking/endorsing
candidate, recruiting campaign workers, etc.) must file a
request for leave of absence subject to management’s
approval. For this particular reason, the employee should file
the leave request at least thirty (30) days prior to the start of
the planned leave period.
Because of the impending May 1998 elections and based on
his immediate recollection of the policy at that time, Dante
Luzon, Assistant Station Manager of DYAB issued the following
memorandum:
TO : ALL CONCERNED
FROM : DANTE LUZON
DATE : MARCH 25, 1998
SUBJECT : AS STATED
Please be informed that per company policy, any
employee/talent who wants to run for any position in the
coming election will have to file a leave of absence the
moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to
this company will then be temporarily suspended for the entire
campaign/election period.
For strict compliance.
After the issuance of the March 25, 1998 Memorandum,
Ymbong got in touch with Luzon. Luzon claims that Ymbong
approached him and told him that he would leave radio for a
couple of months because he will campaign for the
administration ticket. It was only after the elections that they
found out that Ymbong actually ran for public office himself at
the eleventh hour. Ymbong, on the other hand, claims that in
accordance with the March 25, 1998 Memorandum, he
informed Luzon through a letter that he would take a few
months leave of absence from March 8, 1998 to May 18, 1998
since he was running for councilor of Lapu-Lapu City.
As regards Patalinghug, Patalinghug approached Luzon and
advised him that he will run as councilor for Naga, Cebu.
According to Luzon, he clarified to Patalinghug that he will be
considered resigned and not just on leave once he files a
certificate of candidacy.
Later, Ymbong and Patalinghug both tried to come back to
ABS-CBN Cebu. According to Luzon, he informed them that
they cannot work there anymore because of company policy.
This was stressed even in subsequent meetings and they were
told that the company was not allowing any exceptions. ABS-
CBN, however, agreed out of pure liberality to give them a
chance to wind up their participation in the radio drama,
Nagbabagang Langit, since it was rating well and to avoid an
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
abrupt ending. The agreed winding-up, however, dragged on
for so long prompting Luzon to issue to Ymbong the
memorandum dated September 14, 1998 automatically
terminating them.
ISSUE:
1. whether Policy No. HR-ER-016 is valid
2. whether the March 25, 1998 Memorandum issued by Luzon
superseded Policy No. HR-ER-016
3. whether Ymbong, by seeking an elective post, is deemed
to have resigned and not dismissed by ABS-CBN.
HELD:
1.ABS-CBN had a valid justification for Policy No. HR-ER-016.
Its rationale is embodied in the policy itself, to wit:
RATIONALE:
ABS-CBN BROADCASTING CORPORATION strongly believes
that it is to the best interest of the company to continuously
remain apolitical. While it encourages and supports its
employees to have greater political awareness and for them
to exercise their right to suffrage, the company, however,
prefers to remain politically independent and unattached to
any political individual or entity.
Therefore, employees who [intend] to run for public office or
accept political appointment should resign from their
positions, in order to protect the company from any public
misconceptions. To preserve its objectivity, neutrality and
credibility, the company reiterates the following policy
guidelines for strict implementation.
We have consistently held that so long as a company’s
management prerogatives are exercised in good faith for the
advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements, this
Court will uphold them. In the instant case, ABS-CBN validly
justified the implementation of Policy No. HR-ER-016. It is
well within its rights to ensure that it maintains its objectivity
and credibility and freeing itself from any appearance of
impartiality so that the confidence of the viewing and listening
public in it will not be in any way eroded. Even as the law is
solicitous of the welfare of the 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.
It is worth noting that such exercise of management
prerogative has earned a stamp of approval from no less than
our Congress itself when on February 12, 2001, it enacted
Republic Act No. 9006, otherwise known as the “Fair Election
Act.” Section 6.6 thereof reads:
10
6.6. Any mass media columnist, commentator, announcer,
reporter, on-air correspondent or personality who is a
candidate for any elective public office or is a campaign
volunteer for or employed or retained in any capacity by any
candidate or political party shall be deemed resigned, if so
required by their employer, or shall take a leave of absence
from his/her work as such during the campaign period:
Provided, That any media practitioner who is an official of a
political party or a member of the campaign staff of a
candidate or political party shall not use his/her time or space
to favor any candidate or political party. [Emphasis and
underscoring supplied.]
2.The CA correctly ruled that though Luzon, as Assistant
Station Manager for Radio of ABS-CBN, has policy-making
powers in relation to his principal task of administering the
network’s radio station in the Cebu region, the exercise of
such power should be in accord with the general rules and
regulations imposed by the ABS-CBN Head Office to its
employees. Clearly, the March 25, 1998 Memorandum issued
by Luzon which only requires employees to go on leave if they
intend to run for any elective position is in absolute
contradiction with Policy No. HR-ER-016 issued by the ABS-
CBN Head Office in Manila which requires the resignation, not
only the filing of a leave of absence, of any employee who
intends to run for public office. Having been issued beyond
the scope of his authority, the March 25, 1998 Memorandum
is therefore void and did not supersede Policy No. HR-ER-016.
Also worth noting is that Luzon in his Sworn Statement
admitted the inaccuracy of his recollection of the company
policy when he issued the March 25, 1998 Memorandum and
stated therein that upon double-checking of the exact text of
the policy statement and subsequent confirmation with the
ABS-CBN Head Office in Manila, he learned that the policy
required resignation for those who will actually run in elections
because the company wanted to maintain its independence.
Since the officer who himself issued the subject memorandum
acknowledged that it is not in harmony with the Policy issued
by the upper management, there is no reason for it to be a
source of right for Ymbong.
3. As Policy No. HR-ER-016 is the subsisting company policy
and not Luzon’s March 25, 1998 Memorandum, Ymbong is
deemed resigned when he ran for councilor.
We find no merit in Ymbong’s argument that “[his] automatic
termination x x x was a blatant [disregard] of [his] right to
due process” as he was “never asked to explain why he did
not tender his resignation before he ran for public office as
mandated by [the subject company policy].” Ymbong’s overt
act of running for councilor of Lapu-Lapu City is tantamount
to resignation on his part. He was separated from ABS-CBN
not because he was dismissed but because he resigned. Since
there was no termination to speak of, the requirement of due
process in dismissal cases cannot be applied to Ymbong.
Thus, ABS-CBN is not duty-bound to ask him to explain why
he did not tender his resignation before he ran for public office
as mandated by the subject company policy.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Ruling:
WHEREFORE, the petition for review on certiorari is DENIED
for lack of merit.
With costs against petitioner.
SO ORDERED.
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and
PEDRO A. TECSON, petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
G.R. No. 162994 September 17, 2004
TINGA, J.:
FACTS:
Tecson was hired by Glaxo as a medical representative on Oct.
24, 1995. Contract of employment signed by Tecson
stipulates, among others, that he agrees to study and abide
by the existing company rules; to disclose to management any
existing future relationship by consanguinity or affinity with
co-employees or employees with competing drug companies
and should management find that such relationship poses a
prossible conflict of interest, to resign from the company.
Company's Code of Employee Conduct provides the same with
stipulation that management may transfer the employee to
another department in a non-counterchecking position or
preparation for employment outside of the company after 6
months.
Tecson was initially assigned to market Glaxo's products in the
Camarines Sur-Camarines Norte area and entered into a
romantic relationship with Betsy, an employee of Astra,
Glaxo's competition. Before getting married, Tecson's District
Manager reminded him several times of the conflict of interest
but marriage took place in Sept. 1998. In Jan. 1999, Tecson's
superiors informed him of conflict of intrest. Tecson asked for
time to comply with the condition (that either he or Betsy
resign from their respective positions). Unable to comply with
condition, Glaxo transferred Tecson to the Butuan-Surigao
City-Agusan del Sur sales area. After his request against
transfer was denied, Tecson brought the matter to Glaxo's
Grievance Committee and while pending, he continued to act
as medical representative in the Camarines Sur-Camarines
Norte sales area. On Nov. 15, 2000, the National Conciliation
and Mediation Board ruled that Glaxo's policy was valid.
ISSUE:
11
Whether or not the policy of a pharmaceutical company
prohibiting its employees from marrying employees of any
competitor company is valid
RATIO DECIDENDI:
On Equal Protection
Glaxo has a right to guard its trade secrets, manufacturing
formulas, marketing strategies, and other confidential
programs and information from competitors. The prohibition
against pesonal or marital relationships with employees of
competitor companies upon Glaxo's employees is reasonable
under the circumstances because relationships of that nature
might compromise the interests of the company. That Glaxo
possesses the right to protect its economic interest cannot be
denied.
It is the settled principle that the commands of the equal
protection clause are addressed only to the state or those
acting under color of its authority. Corollarily, it has been held
in a long array of US Supreme Court decisions that the equal
protection clause erects to shield against merely privately
conduct, however, discriminatory or wrongful.
The company actually enforced the policy after repeated
requests to the employee to comply with the policy. Indeed
the application of the policy was made in an impartial and
even-handed manner, with due regard for the lot of the
employee.
On Constructive Dismissal
Constructive dismissal is defined as a quitting, an involuntary
resignation resorted to when continued employment becomes
impossible, unreasonable or unlikely; when there is demotion
in rank, or diminution in pay; or when a clear discrimination,
insensibility, or disdain by an employer becomes unbearable
to the employee. None of these conditions are present in the
instant case.
RULING:
WHEREFORE, the Petition is DENIED for lack of merit. Costs
against petitioners.
SO ORDERED.
BRICCIO "Ricky" A. POLLO, Petitioner,
vs.
CHAIRPERSON KARINA CONSTANTINO-DAVID,
DIRECTOR IV RACQUEL DE GUZMAN BUENSALIDA,
DIRECTOR IV LYDIA A. CASTILLO, DIRECTOR III
ENGELBERT ANTHONY D. UNITE AND THE CIVIL
SERVICE COMMISSION, Respondents.
G.R. No. 181881 October 18, 2011
VILLARAMA, JR., J.:
FACTS:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
CSC Chairperson Karina David received a document from an
anonymous source, making her aware that there is a corrupt
official in the Commission. She then formed personnel and
directed them to back up all the files of the computers found
therein.
David found, in Bricio Pollo, petitioner, legal pleading or
documents that are related to administrative cases and were
for on the behalf of parties who were facing charges. David
inferred that he was willfully aiding their adverse interests and
it was a practice that he pursued regularly.
Pollo argued that he was not even a lawyer to pursue such
acts. He also asserted that the CSC conducted a fishing
expedition and his right to privacy was violated and that the
source of the complaint was anonymous. The CSC charged
Pollo in violation of RA 6713. After some motions filed to the
CSC, he filed his motion to the CA wherein he was ordered to
be dismissed of his governmental duties. The CA ruled that
the search was legal because in their capacity as employers,
the government agencies could validly conduct search and
seizure in the governmental workplace without meeting the
“probable cause” or warrant requirement for search and
seizure.
ISSUE:
Whether there was illegal search.
RATIO DECIDENDI:
The SC ruled in favor of the CSC. Basing their decision on
other cases, the SC asked whether Pollo has a reasonable
expectation of privacy in his office and computer files and was
the search reasonable in its inception and scope.
On regards the first inquiry, the SC found that he had no
actual expectation of privacy on his work computer. He did
not have a separate office space nor did he use a password
for his computer. He would have visitors which he let them
use his computer. The CSC also implemented a policy that its
employees on notice that they have no expectation of privacy
in anything on their office computers, and that the CSC may
monitor their use. This implies that on-the-spot inspections
may be done to ensure that the computer resources were
used only for such legitimate business purposes.
On the second inquiry, the SC said that the search Pollo's files
were conducted in connection with investigation of work-
related misconduct prompted by an anonymous letter-
complaint. A search by a government employer of an
employee’s office is justified at inception when there are
reasonable grounds for suspecting that it will turn up evidence
that the employee is guilty of work-related misconduct.
Posted 15th August 2014 by Vinson Gabato
RULING:
12
WHEREFORE, the petition for review on certiorari is DENIED.
The Decision dated October 11, 2007 and Resolution dated
February 29, 2008 of the Court of Appeals in CA-G.R. SP No.
98224 are AFFIRMED
MANSION PRINTING CENTER and CLEMENT CHENG,
Petitioners,
vs.
DIOSDADO BITARA, JR. Respondent.
G.R. No. 168120 January 25, 2012
PEREZ, J.:
FACTS:
Petitioners engaged the services of respondent as a helper
(kargador). Respondent was later promoted as the companys
sole driver tasked to pick-up raw materials for the printing
business, collect account receivables and deliver the products
to the clients within the delivery schedules.
Petitioners aver that the timely delivery of the products to the
clients is one of the foremost considerations material to the
operation of the business.It being so, they closely monitored
the attendance of respondent. They noted his habitual
tardiness and absenteeism.
Thus, petitioners issued a Memorandumrequiring respondent
to submit a written explanation why no administrative
sanction should be imposed on him for his habitual tardiness.
Despite respondents undertaking to report on time, however,
he continued to disregard attendance policies.
Consequently, Davis Cheng, General Manager of the company
and son of petitioner Cheng, issued another
Memorandum(Notice to Explain) requiring respondent to
explain why his services should not be terminated. He
personally handed the Notice to Explain to respondent but the
latter, after reading the directive, refused to acknowledge
receipt thereof.He did not submit any explanation and,
thereafter, never reported for work.
Davis Cheng personally served another Memorandum(Notice
of Termination) upon him informing him that the company
found him grossly negligent of his duties, for which reason,
his services were terminated.
On even date, respondent met with the management
requesting for reconsideration of his termination from the
service. However, after hearing his position, the management
decided to implement the Memorandum. Nevertheless, the
management, out of generosity, offered respondent financial
assistance in the amount ofP6,110.00 equivalent to his one
month salary. Respondent demanded that he be given the
amount equivalent to two (2) months salary but the
management declined as it believed it would, in effect, reward
respondent for being negligent of his duties.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Respondent filed a complaintfor illegal dismissal against the
petitioners before the Labor Arbiter.
Labor Arbiter dismissed the complaint for lack of merit.
On appeal to the National Labor Relations Commission, the
findings of the Labor Arbiter was AFFIRMEDen toto.
Before the Court of Appeals, respondent sought the
annulment of the Commissions Resolution on the ground that
they were rendered with grave abuse of discretion and/or
without or in excess of jurisdiction.
The Court of Appeals found for the respondent and reversed
the findings of the Commission.
ISSUE:
Whether or not respondent is illegally dismissed?
RATIO DECIDENDI:
In order to validly dismiss an employee, the employer is
required to observe both substantive and procedural aspects
the termination of employment must be based on a just or
authorized cause of dismissal and the dismissal must be
effected after due notice and hearing.
We, therefore, agree with the Labor Arbiters findings, to wit:
The imputed absence and tardiness of the complainant are
documented. He faltered on his attendance 38 times of the 66
working days. His last absences on 11, 13, 14, 15 and 16
March 2000 were undertaken without even notice/permission
from management. These attendance delinquencies may be
characterized as habitual and are sufficient justifications to
terminate the complainants employment.
On this score,Valiao v. Court of Appealsis instructive:
xxx It bears stressing that petitioners absences and tardiness
were not isolated incidents but manifested a pattern of
habituality. xxx The totality of infractions or the number of
violations committed during the period of employment shall
be considered in determining the penalty to be imposed upon
an erring employee. The offenses committed by him should
not be taken singly and separately but in their totality. Fitness
for continued employment cannot be compartmentalized into
tight little cubicles of aspects of character, conduct, and ability
separate and independent of each other.
InValiao,we definedgross negligenceas want of care in the
performance of ones dutiesandhabitual neglectas repeated
failure to perform ones duties for a period of time, depending
upon the circumstances.51 These are not overly technical
terms, which, in the first place, are expressly sanctioned by
the Labor Code of the Philippines, to wit:
13
ART. 282.Termination by employer.- An employer may
terminate an employment for any of the following causes:
(a) xxx
(b)Gross and habitual neglect by the employee of his duties;
xxx
Clearly, even in the absence of a written company rule
defining gross and habitual neglect of duties, respondents
omissions qualify as such warranting his dismissal from the
service.
We cannot simply tolerate injustice to employers if only to
protect the welfare of undeserving employees. As aptly put by
then Associate Justice Leonardo A. Quisumbing:
Needless to say, so irresponsible an employee like petitioner
does not deserve a place in the workplace, and it is within the
managements prerogative xxx to terminate his employment.
Even as the law is solicitous of the welfare of employees, it
must also protect the rights of an employer to exercise what
are clearly management prerogatives. As long as the
companys exercise of those rights and prerogative is in good
faith to advance its interest and not for the purpose of
defeating or circumventing the rights of employees under the
laws or valid agreements, such exercise will be upheld.
Procedural due process entails compliance with the two-notice
rule in dismissing an employee, to wit: (1) the employer must
inform the employee of the specific acts or omissions for
which his dismissal is sought; and (2) after the employee has
been given the opportunity to be heard, the employer must
inform him of the decision to terminate his employment.
RULING:
WHEREFORE, the Resolution dated 29 June 2001 and the
Order dated 21 February 2002 of the National Labor Relations
Commission in NLRC NCR CASE No. 027871-01 are hereby
REINSTATED with the MODIFICATION that petitioners are
ORDERED to pay respondent the money equivalent of the
five-day service incentive leave for every year of service
covering his employment period from August 1988 to 1 April
2000. This case is hereby REMANDED to the Labor Arbiter for
the computation of respondent’s service incentive leave pay.
SMART COMMUNICATIONS, INC. V. REGINA
ASTORGA - G.R. NO. 148132
SMART COMMUNICATIONS, INC. V. REGINA
ASTORGA- G.R. NO. 151079
REGINA ASTORGA V. SMART COMMUNICATIONS,
INC., ET AL. - G.R. NO. 151372
G.R. No. 14813 January 28, 2008
PONENTE: Nachura
FACTS:
Regina M. Astorga (Astorga) was employed by respondent
Smart Communications, Incorporated (SMART) on May 8,
1997 as District Sales Manager of the Corporate Sales
Marketing Group/ Fixed Services Division (CSMG/FSD). As
District Sales Manager, Astorga enjoyed additional benefits,
namely, annual performance incentive equivalent to 30% of
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
her annual gross salary, a group life and hospitalization
insurance coverage, and a car plan in the amount of
P455,000.00. On May 18, 1998, SMART sent a letter to
Astorga demanding that she pay the current market value of
the Honda Civic Sedan which was given to her under the
company’s car plan program, or to surrender the same to the
company for proper disposition. Astorga, however, failed and
refused to do either, thus prompting SMART to file a suit for
replevin with the Regional Trial Court of Makati (RTC) on
August 10, 1998. In February 1998, SMART launched an
organizational realignment to achieve more efficient
operations. This was made known to the employees on
February 27, 1998. Part of the reorganization was the
outsourcing of the marketing and sales force. Thus, SMART
entered into a joint venture agreement with NTT of Japan,
and formed SMART-NTT Multimedia, Incorporated (SNMI).
Since SNMI was formed to do the sales and marketing work,
SMART abolished the CSMG/FSD, Astorga’s division. SNMI
agreed to absorb the CSMG personnel who would be
recommended by SMART.SMART then conducted a
performance evaluation of CSMG personnel and those who
garnered the highest ratings were favorably recommended to
SNMI. Astorga landed last in the performance evaluation,
thus, she was not recommended by SMART. SMART offered
her a supervisory position in the Customer Care Dept but she
refused the offer. On March 3, 1998, SMART issued a
memorandum advising Astorga of the termination of her
employment on ground of redundancy, effective April 3, 1998.
Astorga received it on March 16, 1998. The termination of her
employment prompted Astorga to file a Complaint for illegal
dismissal, non-payment of salaries and other benefits with
prayer for moral and exemplary damages against SMART. She
claimed that abolishing CSMG and, consequently, terminating
her employment was illegal for it violated her right tosecurity
of tenure.
ISSUE:
Whether the dismissal of Astorga be valid or illegal.
RATIO DECIDENDI:
Astorga is declared validly dismissed. Astorga was terminated
due to redundancy, which is one of the authorized causes for
the dismissal of an employee. Redundancy in an employer’s
personnel force necessarily or even ordinarily refers to
duplication of work. The characterization of an employee’s
services as superfluous or no longer necessary and, therefore,
properly terminable, is an exercise of business judgment on
the part of the employer. An employer is not precluded from
adopting a new policy conducive to a more economical and
effective management even if it is not experiencing economic
reverses. Neither does the law require that the employer
should suffer financial losses before he can terminate the
services of the employee on the ground of redundancy. But
while tilting the scales of justice in favor of workers, the
fundamental law also guarantees the right of the employer to
reasonable returns for his investment.
In this light, we must acknowledge the prerogative of the
employer to adopt such measures as will promote greater
efficiency, reduce overhead costs and enhance prospects of
economic gains, albeit always within the framework of existing
laws. However, SMART failed to comply with the mandated
one (1) month notice prior to termination. The record is clear
14
that Astorga received the notice of termination only on March
16, 1998 or less than a month prior to its effectively on April
3, 1998. Likewise, the Department of Labor and Employment
was notified of the redundancy program only on March 6,
1998.Article 283 of the Labor Code clearly provides: Art. 283.
Closure of establishment and reduction of personnel.
The employer may also terminate the employment of any
employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking
unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof.
RULING:
WHEREFORE, the petition of SMART docketed as G.R. No.
148132 is GRANTED. The February 28, 2000 Decision and
the May 7, 2001 Resolution of the Court of Appeals in CA-G.R.
SP. No. 53831 are SET ASIDE. The Regional Trial Court of
Makati City, Branch 57 is DIRECTED to proceed with the trial
of Civil Case No. 98-1936 and render its Decision with
reasonable dispatch.
On the other hand, the petitions of SMART and Astorga
docketed as G.R. Nos. 151079 and 151372 are DENIED. The
June 11, 2001 Decision and the December 18, 2001
Resolution in CA-G.R. SP. No. 57065,
are AFFIRMED with MODIFICATION. Astorga is declared
validly dismissed. However, SMART is ordered to pay
Astorga P50,000.00 as indemnity for its non-compliance with
procedural due process, her separation pay equivalent to one
(1) month pay, and her salary from February 15, 1998 until
the effective date of her termination on April 3, 1998. The
award of backwages is DELETED for lack of basis.
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO
& SEBASTIAN CHUA, Petitioners, versus RONALDO D.
SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA,
Respondents.
G.R. No.: 164774 April 12, 2006
PONENTE: Puno
FACTS:
According to the respondents, Simbol and Comia allege that
they did not resign voluntarily; they were compelled to resign
in view of an illegal company policy. As to respondent Estrella,
she alleges that she had a relationship with co-worker Zuñiga
who misrepresented himself as a married but separated man.
After he got her pregnant, she discovered that he was not
separated. Thus, she severed her relationship with him to
avoid dismissal due to the company policy. On November 30,
1999, she met an accident and was advised by the doctor at
the Orthopedic Hospital to recuperate for twenty-one (21)
days. She returned to work on December 21, 1999 but she
found out that her name was on-hold at the gate. She was
denied entry. She was directed to proceed to the personnel
office where one of the staff handed her a memorandum. The
memorandum stated that she was being dismissed for
immoral conduct. She refused to sign the memorandum
because she was on leave for twenty-one (21) days and has
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
not been given a chance to explain. The management asked
her to write an explanation. However, after submission of the
explanation, she was nonetheless dismissed by the company.
Due to her urgent need for money, she later submitted a letter
of resignation in exchange for her thirteenth month pay.
Respondents later filed a complaint for unfair labor practice,
constructive dismissal, separation pay and attorney’s fees.
They averred that the aforementioned company policy is
illegal and contravenes Article 136 of the Labor Code.
ISSUE:
Whether or not the 1995 Policy/Regulation of the company is
violative of the Constitutional rights towards marriage and the
family of employees and of article 136 of the Labor Code.
RATIO DECIDENDI:
The Supreme Court held that The 1987 Constitution under
Article II, Section 18; Article XIII, Section 3 state our policy
towards the protection of labor under the following provisions.
The Civil Code likewise protects labor with the following
provisions such as articles 1700 and 1702.
The Labor Code is the most comprehensive piece of legislation
protecting labor. The case at bar involves Article 136 of the
Labor Code which provides:
Art. 136. It shall be unlawful for an employer to require as a
condition of employment or continuation of employment that
a woman employee shall not get married, or to stipulate
expressly or tacitly that upon getting married a woman
employee shall be deemed resigned or separated, or to
actually dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason of her
marriage.
In denying the contention of the petitioner company, the SC
applied the two factors to justify a bona fide occupational
qualification:
Since the finding of a bona fide occupational qualification
justifies an employer’s no-spouse rule, the exception is
interpreted strictly and narrowly. There must be a compelling
business necessity for which no alternative exists other than
the discriminatory practice. To justify a bona fide occupational
qualification, the employer must prove two factors: (1) that
the employment qualification is reasonably related to the
essential operation of the job involved; and, (2) that there is
a factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform
the duties of the job.
The requirement that a company policy must be reasonable
under the circumstances to qualify as a valid exercise of
management prerogative was also at issue in the 1997 case
of Philippine Telegraph and Telephone Company v. NLRC. In
said case, the employee was dismissed in violation of
petitioner’s policy of disqualifying from work any woman
worker who contracts marriage. We held that the company
policy violates the right against discrimination afforded all
women workers under Article 136 of the Labor Code, but
established a permissible exception, viz.:
15
A requirement that a woman employee must remain
unmarried could be justified as a “bona fide occupational
qualification,” or BFOQ, where the particular requirements of
the job would justify the same, but not on the ground of a
general principle, such as the desirability of spreading work in
the workplace. A requirement of that nature would be valid
provided it reflects an inherent quality reasonably necessary
for satisfactory job performance.
The cases of Duncan and PT&T instruct us that the
requirement of reasonableness must be clearly established to
uphold the questioned employment policy. The employer has
the burden to prove the existence of a reasonable business
necessity. The burden was successfully discharged in Duncan
but not in PT&T.
The SC does not find a reasonable business necessity in the
case at bar.
Petitioners’ sole contention that “the company did not just
want to have two (2) or more of its employees related
between the third degree by affinity and/or consanguinity” is
lame. That the second paragraph was meant to give teeth to
the first paragraph of the questioned rule is evidently not the
valid reasonable business necessity required by the law.
It is significant to note that in the case at bar, respondents
were hired after they were found fit for the job, but were
asked to resign when they married a co-employee. Petitioners
failed to show how the marriage of Simbol, then a Sheeting
Machine Operator, to Alma Dayrit, then an employee of the
Repacking Section, could be detrimental to its business
operations. Neither did petitioners explain how this detriment
will happen in the case of Wilfreda Comia, then a Production
Helper in the Selecting Department, who married Howard
Comia, then a helper in the cutter-machine. The policy is
premised on the mere fear that employees married to each
other will be less efficient. If we uphold the questioned rule
without valid justification, the employer can create policies
based on an unproven presumption of a perceived danger at
the expense of an employee’s right to security of tenure.
Petitioners contend that their policy will apply only when one
employee marries a co-employee, but they are free to marry
persons other than co-employees. The questioned policy may
not facially violate Article 136 of the Labor Code but it creates
a disproportionate effect and under the disparate impact
theory, the only way it could pass judicial scrutiny is a showing
that it is reasonable despite the discriminatory, albeit
disproportionate, effect. The failure of petitioners to prove a
legitimate business concern in imposing the questioned policy
cannot prejudice the employee’s right to be free from arbitrary
discrimination based upon stereotypes of married persons
working together in one company. Decision of the CA
affirmed.
RULING:
IN VIEW WHEREOF, the Decision of the Court of Appeals in
CA-G.R. SP No. 73477 dated August 3, 2004 is AFFIRMED.
ARMANDO G. YRASUEGUI, Petitioner, versus
PHILIPPINE AIRLINES, INC., Respondent.
G.R. No.: 168081 October 17, 2008
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
PONENTE: REYES, R.T.
FACTS:
Armando G. Yrasuegui was a former international flight
steward of Philippine Airlines, Inc. (PAL). He stands five feet
and eight inches (5’8”) with a large body frame. The proper
weight for a man of his height and body structure is from 147
to 166 pounds, the ideal weight being 166 pounds, as
mandated by the Cabin and Crew Administration Manual of
PAL. His weight problem dates back to 1984 when PAL advised
him to go on an extended vacation leave from December 29,
1984 to March 4, 1985 to address his weight concerns. For
failure to meet the weight standards another leave without
pay from March 5, 1985 to November 1985 was imposed. He
met the required weight and was allowed to work but his
weight problem recurred, thus another leave without pay from
October 17, 1988 to February 1989. From 1989 to 1992 his
weight fluctuated from 209lb, 215lb, 217lb, 212lb, and 205.
During that period he was requested to lose weight and to
report for weight checks which he constantly failed to do. In
the meantime his status was “off-duty.” Finally in 1993,
petitioner was formally informed by PAL that due to his
inability to attain his ideal weight, “and considering the utmost
leniency” extended to him “which spanned a period covering
a total of almost five (5) years,” his services were considered
terminated “effective immediately.” He then filed a complaint
for illegal dismissal against PAL. The Labor Arbiter ruled that
he was illegally dismissed and entitles to reinstatement,
backwages and attorney’s fees. The NLRC affirmed the LA.
The CA reversed the NLRC.
ISSUE:
Whether or not petitioner was illegally dismissed.
RATIO DECIDENDI:
The obesity of petitioner is a ground for dismissal under Article
282(e) of the Labor Code. The weight standards of PAL
constitute a continuing qualification of an employee in order
to keep the job. Tersely put, an employee may be dismissed
the moment he is unable to comply with his ideal weight as
prescribed by the weight standards. The dismissal would fall
under Article 282(e) of the Labor Code. As explained by the
CA:
x x x [T]he standards violated in this case were not mere
“orders” of the employer; they were the “prescribed weights”
that a cabin crew must maintain in order to qualify for and
keep his or her position in the company. In other words, they
were standards that establish continuing qualifications for an
employee’s position. … The failure to meet the employer’s
qualifying standards is in fact a ground that does not squarely
fall under grounds (a) to (d) and is therefore one that falls
under Article 282(e) – the “other causes analogous to the
foregoing.”
By its nature, these “qualifying standards” are norms that
apply prior to and after an employee is hired. x x x
We hold that the obesity of petitioner, when placed in the
context of his work as flight attendant, becomes an analogous
cause under Article 282(e) of the Labor Code that justifies his
16
dismissal from the service. His obesity may not be
unintended, but is nonetheless voluntary.
The dismissal of petitioner can be predicated on the bona fide
occupational qualification defense. Employment in particular
jobs may not be limited to persons of a particular sex, religion,
or national origin unless the employer can show that sex,
religion, or national origin is an actual qualification for
performing the job. The qualification is called a bona fide
occupational qualification (BFOQ). A common carrier, from the
nature of its business and for reasons of public policy, is bound
to observe extraordinary diligence for the safety of the
passengers it transports. Thus, it is only logical to hold that
the weight standards of PAL show its effort to comply with the
exacting obligations imposed upon it by law by virtue of being
a common carrier. The primary objective of PAL in the
imposition of the weight standards for cabin crew is flight
safety. The task of a cabin crew or flight attendant is not
limited to serving meals or attending to the whims and
caprices of the passengers. The most important activity of
the cabin crew is to care for the safety of passengers and the
evacuation of the aircraft when an emergency
occurs. Passenger safety goes to the core of the job of a cabin
attendant. Truly, airlines need cabin attendants who have the
necessary strength to open emergency doors, the agility to
attend to passengers in cramped working conditions, and the
stamina to withstand grueling flight schedules. On board an
aircraft, the body weight and size of a cabin attendant are
important factors to consider in case of emergency. Aircrafts
have constricted cabin space, and narrow aisles and exit
doors. Thus, the arguments of respondent that “[w]hether
the airline’s flight attendants are overweight or not has no
direct relation to its mission of transporting passengers to
their destination”; and that the weight standards “has nothing
to do with airworthiness of respondent’s airlines,” must fail.
The job of a cabin attendant during emergencies is to speedily
get the passengers out of the aircraft safely. Being
overweight necessarily impedes mobility. Indeed, in an
emergency situation, seconds are what cabin attendants are
dealing with, not minutes.
Three lost seconds can translate into three lost lives.
Evacuation might slow down just because a wide-bodied cabin
attendant is blocking the narrow aisles.
Petitioner is entitled to separation pay. Normally, a legally
dismissed employee is not entitled to separation pay. This may
be deduced from the language of Article 279 of the Labor
Code that “[a]n employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.” Luckily for petitioner, this is not an ironclad
rule. Exceptionally, separation pay is granted to a legally
dismissed employee as an act “social justice,” or based on
“equity.” In both instances, it is required that the dismissal (1)
was not for serious misconduct; and (2) does not reflect on
the moral character of the employee. Here, We grant
petitioner separation pay equivalent to one-half (1/2) month’s
pay for every year of service. It should include regular
allowances which he might have been receiving.
RULING:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
WHEREFORE, the appealed Decision of the Court of Appeals
is AFFIRMED but MODIFIED in that petitioner Armando
G. Yrasuegui is entitled to separation pay in an amount
equivalent to one-half (1/2) months pay for every year of
service, which should include his regular allowances.
MANILA PAVILION HOTEL, OWNED AND OPERATED
BY ACESITE (PHILS.) HOTEL CORPORATION,
Petitioner, versus HENRY DELADA, Respondent.
G.R. No.: 189947 January 25, 2012
PONENTE: Sereno
FACTS:
Delada was the Union President of the Manila Pavilion
Supervisors Association at MPH. He was originally assigned as
Head Waiter of Rotisserie, a fine-dining restaurant operated
by petitioner. Pursuant to a supervisory personnel
reorganization program, MPH reassigned him as Head Waiter
of Seasons Coffee Shop, another restaurant operated by
petitioner at the same hotel. Respondent declined the inter-
outlet transfer and instead asked for a grievance meeting on
the matter, pursuant to their Collective Bargaining Agreement
(CBA). He also requested his retention as Head Waiter of
Rotisserie while the grievance procedure was ongoing.
MPH replied and told respondent to report to his new
assignment for the time being, without prejudice to the
resolution of the grievance involving the transfer. He
adamantly refused to assume his new post at the Seasons
Coffee Shop and instead continued to report to his previous
assignment at Rotisserie. Thus, MPH sent him several
memoranda on various dates, requiring him to explain in
writing why he should not be penalized for the following
offenses: serious misconduct; willful disobedience of the
lawful orders of the employer; gross insubordination; gross
and habitual neglect of duties; and willful breach of trust.
Despite the notices from MPH, Delada persistently rebuffed
orders for him to report to his new assignment. According to
him, since the grievance machinery under their CBA had
already been initiated, his transfer must be held in abeyance.
Thus, on 9 May 2007, MPH initiated administrative
proceedings against him.
ISSUE:
Whether MPH retained the authority to continue with the
administrative case against Delada for insubordination and
willful disobedience of the transfer order.
RATIO DECIDENDI:
Accordingly, we rule in this case that MPH did not lose its
authority to discipline respondent for his continued refusal to
report to his new assignment. In relation to this point, we
recall our Decision in Allied Banking Corporation v. Court of
Appeals.
In Allied Banking Corporation, employer Allied Bank
reassigned respondent Galanida from its Cebu City branch to
its Bacolod and Tagbilaran branches. He refused to follow the
transfer order and instead filed a Complaint before the Labor
Arbiter for constructive dismissal. While the case was pending,
17
Allied Bank insisted that he report to his new assignment.
When he continued to refuse, it directed him to explain in
writing why no disciplinary action should be meted out to him.
Due to his continued refusal to report to his new assignment,
Allied Bank eventually terminated his services. When the issue
of whether he could validly refuse to obey the transfer orders
was brought before this Court, we ruled thus:
The refusal to obey a valid transfer order constitutes willful
disobedience of a lawful order of an employer. Employees may
object to, negotiate and seek redress against employers for
rules or orders that they regard as unjust or illegal. However,
until and unless these rules or orders are declared illegal or
improper by competent authority, the employees ignore or
disobey them at their peril. For Galanida’s continued refusal
to obey Allied Bank's transfer orders, we hold that the bank
dismissed Galanida for just cause in accordance with Article
282(a) of the Labor Code. Galanida is thus not entitled to
reinstatement or to separation pay. (Emphasis supplied,
citations omitted).
It is important to note what the PVA said on Delada’s defiance
of the transfer order:
In fact, Delada cannot hide under the legal cloak of the
grievance machinery of the CBA or the voluntary arbitration
proceedings to disobey a valid order of transfer from the
management of the hotel. While it is true that Delada’s
transfer to Seasons is the subject of the grievance machinery
in accordance with the provisions of their CBA, Delada is
expected to comply first with the said lawful directive while
awaiting the results of the decision in the grievance
proceedings. This issue falls squarely in the case of Allied
Banking Corporation vs. Court of Appeals x x x.
Pursuant to Allied Banking, unless the order of MPH is
rendered invalid, there is a presumption of the validity of that
order. Since the PVA eventually ruled that the transfer order
was a valid exercise of management prerogative, we hereby
reverse the Decision and the Resolution of the CA affirming
the Decision of the PVA in this respect. MPH had the authority
to continue with the administrative proceedings for
insubordination and willful disobedience against Delada and
to impose on him the penalty of suspension. As a
consequence, petitioner is not liable to pay back wages and
other benefits for the period corresponding to the penalty of
90-day suspension.
RULING:
WHEREFORE, the Petition is GRANTED. The Decision and the
Resolution of the Court of Appeals are hereby MODIFIED. We
rule that petitioner Manila Pavilion Hotel had the authority to
continue with the administrative proceedings for
insubordination and willful disobedience against Delada and
to impose on him the penalty of suspension. Consequently,
petitioner is not liable to pay back wages and other benefits
for the period corresponding to the penalty of 90-day
suspension.
PRINCE TRANSPORT, INC. and MR. RENATO CLAROS,
Petitioners, versus DIOSDADO GARCIA, LUISITO
GARCIA, RODANTE ROMERO, REX BARTOLOME,
FELICIANO GASCO, JR., DANILO ROJO, EDGAR
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
SANFUEGO, AMADO GALANTO, EUTIQUIO LUGTU,
JOEL GRAMATICA, MIEL CERVANTES, TERESITA
CABANES, ROE DELA CRUZ, RICHELO BALIDOY,
VILMA PORRAS, MIGUELITO SALCEDO, CRISTINA
GARCIA, MARIO NAZARENO, DINDO TORRES,
ESMAEL RAMBOYONG, ROBETO*MANO, ROGELIO
BAGAWISAN, ARIEL SNACHEZ, ESTAQULO
VILLAREAL, NELSON MONTERO, GLORIA ORANTE,
HARRY TOCA, PABLITO MACASAET and RONALD
GARCITA, Respondents.
G.R. No.: 167291 January 12, 2011
PONENTE: Peralta
FACTS:
Respondents were employees of Prince Transport, Inc. (PTI),
a company engaged in the business of transporting
passengers by land; respondents were hired either as drivers,
conductors, mechanics or inspectors, except for respondent
Diosdado Garcia (Garcia), who was assigned as Operations
Manager. In addition to their regular monthly income,
respondents also received commissions equivalent to 8 to
10% of their wages.The said commissions were reduced to 7
to 9%; this led respondents and other employees of PTI to
hold a series of meetings to discuss the protection of their
interests as employees; these meetings led petitioner Renato
Claros, who is the president of PTI, to suspect that
respondents are about to form a union; he made known to
Garcia his objection to the formation of a union. In December
1997, PTI employees requested for a cash advance, but the
same was denied by management which resulted in
demoralization on the employees' ranks; later, PTI acceded to
the request of some, but not all of the employees; the
foregoing circumstances led respondents to form a union for
their mutual aid and protection. In order to block the
continued formation of the union, PTI caused the transfer of
all union members and sympathizers to one of its sub-
companies, Lubas Transport (Lubas). Despite such transfer,
the schedule of drivers and conductors, as well as their
company identification cards, were issued by PTI; the daily
time records, tickets and reports of the respondents were also
filed at the PTI office; and, all claims for salaries were
transacted at the same office. Later, the business of Lubas
deteriorated because of the refusal of PTI to maintain and
repair the units being used therein, which resulted in the
virtual stoppage of its operations and respondents' loss of
employment. Petitioners, on the other hand, denied the
material allegations of the complaints contending that herein
respondents were no longer their employees, since they all
transferred to Lubas at their own request; petitioners have
nothing to do with the management and operations of
Lubas as well as the control and supervision of the latter's
employees.
ISSUE:
Whether or not the petitioners are guilty of unfair labor
practice.
RATION DECIDENDI:
Yes. The Court agrees with respondents that if Lubas is indeed
an entity separate and independent from PTI why is it that the
latter decides which employees shall work in the former?
18
What is telling is the fact that in a memorandum issued by
PTI, petitioner company admitted that Lubas is one of its sub-
companies. In addition, PTI, in its letters to its employees who
were transferred to Lubas, referred to the latter as its “New
City Operations Bus.”
Moreover, petitioners failed to refute the contention of
respondents that despite the latter’s transfer to Lubas of their
daily time records, reports, daily income remittances of
conductors, schedule of drivers and conductors were all made,
performed, filed and kept at the office of PTI. In fact,
respondents’ identification cards bear the name of PTI.
Petitioners are guilty of unfair labor practice, the Court held
that respondents’ transfer of work assignments to Lubas was
designed by petitioners as a subterfuge to foil the former’s
right to organize themselves into a union. Under Article 248
(a) and (e) of the Labor Code, an employer is guilty of unfair
labor practice if it interferes with, restrains or coerces its
employees in the exercise of their right to self-organization or
if it discriminates 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.
Indeed, evidence of petitioners' unfair labor practice is shown
by the established fact that, after respondents' transfer to
Lubas, petitioners left them high and dry insofar as the
operations of Lubas was concerned. Petitioners withheld the
necessary financial and logistic support such as spare parts,
and repair and maintenance of the transferred buses until only
two units remained in running condition. This left respondents
virtually jobless. Petition denied.
RULING:
WHEREFORE, the instant petition is DENIED. The assailed
Decision and Resolution of the Court of Appeals,
dated December 20, 2004 and February 24, 2005,
respectively, in CA-G.R. SP No. 80953, are AFFIRMED.
PRODUCERS BANK OF THE
PHILIPPINES, Petitioner, versus NATIONAL LABOR
RELATIONS COMMISSION and PRODUCERS BANK
EMPLOYEES ASSOCIATION, Respondents.
G.R. No.: 100701 March 28, 2001
PONENTE: Peralta
FACTS:
The present petition originated from a complaint filed by
private respondent on 11 February 1988 with the Arbitration
Branch, NLRC, charging petitioner with diminution of benefits,
non-compliance with Wage Order No. 6 and non-payment of
holiday pay. In addition, private respondent prayed for
damages.
Labor arbiter dismissed the complaint for lack of merit. NLRC,
however, granted all of private respondent’s claims, except for
damages. Petition filed a Motion for Partial Reconsideration,
which was denied by the NLRC. Hence, recourse to this Court.
Petitioner contends that the NLRC gravely abused its
discretion in ruling as it did for the succeeding reasons stated:
(1) it contravened the Supreme Court decision in Traders
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Royal Bank v. NLRC, et al., G.R. No. 88168, promulgated on
August 30, 1990, (2) its ruling is not justified by law and Art.
100 of the Labor Code, (3) its ruling is contrary to the CBA,
and (4) the so-called “company practice invoked by it has no
legal and moral bases” (4) petitioner,
under conservatorship and distressed, is exempted under
Wage Order No. 6.
ISSUE:
WON respondent is entitled for the payment of the above-
mentioned monetary claims, particularly bonus.
RATIO DECIDENDI:
A bonus is an amount granted and paid to an employee for
his industry and loyalty which contributed to the success of
the employer’s business and made possible the realization of
profits. It is an act of generosity granted by an enlightened
employer to spur the employee to greater efforts for the
success of the business and realization of bigger profits. The
granting of a bonus is a management prerogative, something
given in addition to what is ordinarily received by or strictly
due the recipient.13 Thus, a bonus is not a demandable and
enforceable obligation, except when it is made part of the
wage, salary or compensation of the employee. However, an
employer cannot be forced to distribute bonuses which it can
no longer afford to pay. To hold otherwise would be to
penalize the employer for his past generosity. Thus,
in Traders Royal Bank v. NLRC,16 we held that – It is clear x
x x that the petitioner may not be obliged to pay bonuses to
its employees. The matter of giving them bonuses over and
above their lawful salaries and allowances is entirely
dependent on the profits, if any, realized by the Bank from its
operations during the past year. x x x
In light of these submissions of the petitioner, the contention
of the Union that the granting of bonuses to the employees
had ripened into a company practice that may not be adjusted
to the prevailing financial condition of the Bank has no legal
and moral bases. Its fiscal condition having declined, the Bank
may not be forced to distribute bonuses which it can no longer
afford to pay and, in effect, be penalized for its past generosity
to its employees. –
Private respondent’s contention, that the decrease in the mid-
year and year-end bonuses constituted a diminution of the
employees’ salaries, is not correct, for bonuses are not part of
labor standards in the same class as salaries, cost of living
allowances, holiday pay, and leave benefits, which are
provided by the Labor Code.
This doctrine was reiterated in the more recent case of Manila
Banking Corporation v. NLRC:
Petitioner was not only experiencing a decline in its profits,
but was reeling from tremendous losses triggered by a bank-
run which began in 1983. In such a depressed financial
condition, petitioner cannot be legally compelled to continue
paying the same amount of bonuses to its employees. Thus,
the conservator was justified in reducing the mid-year and
Christmas bonuses of petitioner’s employees. To hold
otherwise would be to defeat the reason for the
conservatorship which is to preserve the assets and restore
the viability of the financially precarious bank. Ultimately, it is
19
to the employees’ advantage that the conservatorship achieve
its purposes for the alternative would be petitioner’s closure
whereby employees would lose not only their benefits, but
their jobs as well.
An employer cannot be forced to distribute bonuses which it
can no longer afford to pay, a bonus is an amount granted
and paid to an employee for his industry and loyalty which
contributed to the success of the employers business and
made possible the realization of profile. It is an act of
generosity and is a management prerogative, given in
addition to what is ordinarily received by or strictly due
the recipient. Thus, it is not a demandable and
enforceable obligation, except when it is made part of the
wage, salary or compensation of the employee.
RULING:
WHEREFORE, for the reasons above stated, the 30 April
1991 Decision of public respondent in NLRC-NCR Case No. 02-
00753-88, entitled Producers Bank Employees Association v.
Producers Bank of the Philippines, and its 18 June 1991
Resolution issued in the same case are hereby SET ASIDE,
with the exception of public respondents ruling on damages.
PHILIPPINE AIRLINES, INC., Petitioner, versus
NATIONAL LABOR RELATIONS COMMISSION and
AIDA M. QUIJANO, Respondents.
G.R. No.: 123294 October 20, 2010
PONENTE: Leonardo-De Castro
FACTS:
An investigating committee chaired by Leslie W. Espino
formally charged Quijano as Manager-ASAD in connection
with the processing and payment of commission claims to
Goldair Pty. Ltd. wherein PAL overpaid commissions to the
latter.
Pending further investigation, the Espino Committee placed
Quijano under preventive suspension and at the same time
required her to submit her answer to the charges.
Another Administrative charge involving the same Goldair
anomaly was filed, this time including Committee Chairman
Leslie W. Espino and Committee Member Romeo R. Ines and
several others, for "gross incompetence and inefficiency,
negligence, imprudence, mismanagement, dereliction of duty,
failure to observe and/or implement administrative and
executive policies, and related acts or omissions." Pending the
result of investigation by another committee chaired by Judge
Martin S. Ocampo, the PAL Board of Directors suspended
respondents.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
The Ocampo Committee having submitted its findings to the
PAL Board of Directors, the latter considered respondents
resigned from the service effective immediately, for loss of
confidence and for acts inimical to the interest of the
company.
Her motion for reconsideration having been denied by the
Board, Quijano filed the instant case against PAL for illegal
suspension and illegal dismissal.
The Labor Arbiter dismissed private respondents complaint.
Undeterred, private respondent filed an appeal before the
NLRC which rendered the assailed Decision vacated and set
aside. Petitioner filed a Motion for Reconsideration but this
was denied by the NLRC.
ISSUE:
Whether or not respondent is illegally dismissed?
RATIO DECIDENDI:
At the onset, it should be noted that the parties do not dispute
the validity of private respondents dismissal from employment
for loss of confidence and acts inimical to the interest of the
employer. The assailed September 29, 1995 Decision of the
NLRC was emphatic in declaring that it was "not prepared to
rule as illegal the preventive suspension and eventual
dismissal from the service of [private respondent]" and
rightfully so because the last position that private respondent
held, Manager-ASAD (Agents Services Accounting Division),
undeniably qualifies as a position of trust and confidence.
Loss of confidence as a just cause for termination of
employment is premised from the fact that an employee
concerned holds a position of trust and confidence. This
situation holds where a person is entrusted with confidence
on delicate matters, such as the custody, handling, or care
and protection of the employers property. But, in order to
constitute a just cause for dismissal, the act complained of
must be "work-related" such as would show the employee
concerned to be unfit to continue working for the employer.
As a general rule, employers are allowed a wider latitude of
discretion in terminating the employment of managerial
personnel or those who, while not of similar rank, perform
functions which by their nature require the employers full trust
and confidence. This must be distinguished from the case of
ordinary rank and file employees, whose termination on the
basis of these same grounds requires a higher proof of
involvement in the events in question; mere uncorroborated
assertions and accusations by the employer will not suffice.
The language of Article 279 of the Labor Code is pregnant
with the implication that a legally dismissed employee is not
entitled to separation pay, to wit:
An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
However, in exceptional cases, this Court has granted
20
separation pay to a legally dismissed employee as an act of
"social justice" or based on "equity." In both instances, it is
required that the dismissal (1) was not for serious misconduct;
and (2) does not reflect on the moral character of the
employee or would involve moral turpitude. This equitable and
humanitarian principle was first discussed by the Court in the
landmark case of Philippine Long Distance Telephone Co.
(PLDT) v. National Labor Relations Commission.
Serious misconduct as a valid cause for the dismissal of an
employee is defined simply as improper or wrong conduct. It
is a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error of
judgment. To be serious within the meaning and intendment
of the law, the misconduct must be of such grave and
aggravated character and not merely trivial or unimportant.
However serious such misconduct, it must, nevertheless, be
in connection with the employees work to constitute just
cause for his separation. The act complained of must be
related to the performance of the employees duties such as
would show him to be unfit to continue working for the
employer. On the other hand, moral turpitude has been
defined as "everything which is done contrary to justice,
modesty, or good morals; an act of baseness, vileness or
depravity in the private and social duties which a man owes
his fellowmen, or to society in general, contrary to justice,
honesty, modesty, or good morals."
In the case at bar, the transgressions imputed to private
respondent have never been firmly established as deliberate
and willful acts clearly directed at making petitioner lose
millions of pesos. At the very most, they can only be
characterized as unintentional, albeit major, lapses in
professional judgment. Likewise, the same cannot be
described as morally reprehensible actions. Thus, private
respondent may be granted separation pay on the ground of
equity which this Court had defined as "justice outside law,
being ethical rather than jural and belonging to the sphere of
morals than of law. It is grounded on the precepts of
conscience and not on any sanction of positive law, for equity
finds no room for application where there is law."
RULING:
WHEREFORE, the assailed NLRC Decision dated September
29, 1995 as well as the Resolution dated November 14, 1995
are AFFIRMED with the MODIFICATION that petitioner
Philippine Airlines, Inc. pay private respondent Aida Quijano
one-half (1/2) month salary for every year of service as
separation pay on equitable grounds.
LEPANTO CERAMICS, INC., Petitioner, vs. LEPANTO
EMPLOYEES ASSOCIATION, Respondent.
G.R. No. 180866 March 2, 2010
PEREZ, J.:
FACTS:
Petitioner Lepanto Ceramics, Incorporated is a duly organized
corporation existing and operating by virtue of Philippine
Laws. Its business is primarily to manufacture, make, buy and
sell, on wholesale basis, among others, tiles, marbles, mosaics
and other similar products.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Respondent Lepanto Ceramics Employees Association
(respondent Association) is a legitimate labor organization
duly registered with the Department of Labor and
Employment. It is the sole and exclusive bargaining agent in
the establishment of petitioner.


Petitioner and respondent Association entered into a
Collective Bargaining Agreement (CBA) which provides for,
among others, the grant of a Christmas gift package/bonus to
the members of the respondent Association.
The Christmas bonus was one of the enumerated existing
benefits, practice of traditional rights, which shall remain in
full force and effect.
In the succeeding years, 1999, 2000 and 2001, the bonus was
not in cash. Instead, petitioner gave each of the members of
respondent Association Tile Redemption Certificates
equivalent to P3,000.00. The bonus for the year 2002 is the
root of the present dispute. Petitioner gave a year-end cash
benefit of Six Hundred Pesos (P600.00) and offered a cash
advance to interested employees equivalent to one (1) month
salary payable in one year. The respondent Association
objected to the P600.00 cash benefit and argued that this was
in violation of the CBA it executed with the petitioner.
In support of its claim, respondent Association insisted that it
has been the traditional practice of the company to grant its
members Christmas bonuses during the end of the calendar
year, each in the amount of P3,000.00 as an expression of
gratitude to the employees for their participation in the
company’s continued existence in the market. The bonus was
either in cash or in the form of company tiles. In 2002, in a
speech during the Christmas celebration, one of the
company’s top executives assured the employees of said
bonus. However, the Human Resources Development
Manager informed them that the traditional bonus would not
be given as the company’s earnings were intended for the
payment of its bank loans. Respondent Association argued
that this was in violation of their CBA.
The petitioner averred that the complaint for nonpayment of
the 2002 Christmas bonus had no basis as the same was not
a demandable and enforceable obligation. It argued that the
giving of extra compensation was based on the company’s
available resources for a given year and the workers are not
entitled to a bonus if the company does not make profits.
The Voluntary Arbitrator rendered a Decision, declaring that
petitioner is bound to grant each of its workers a Christmas
bonus of P3,000.00 for the reason that the bonus was given
prior to the effectivity of the CBA between the parties and that
the financial losses of the company is not a sufficient reason
to exempt it from granting the same. It stressed that the CBA
is a binding contract and constitutes the law between the
parties.
In affirming respondent Associations right to the Christmas
bonus, the Court of Appeals held:
In the case at bar, it is indubitable that petitioner offered
private respondent a Christmas bonus/gift in 1998 or before
the execution of the 1999 CBA which incorporated the said
benefit as a traditional right of the employees. Hence, the
grant of said bonus to private respondent can be deemed a
practice as the same has not been given only in the 1999 CBA.
Apparently, this is the reason why petitioner specifically
recognized the grant of a Christmas bonus/gift as a practice
or tradition as stated in the CBA.
21
ISSUE:
Whether or not the Court of Appeals erred in affirming the
ruling of the voluntary arbitrator that the petitioner is obliged
to give the members of the respondent Association a
Christmas bonus in the amount of P3,000.00 in 2002.
RATIO DECIDENDI:
We uphold the rulings of the voluntary arbitrator and of the
Court of Appeals.
As a general proposition, an arbitrator is confined to the
interpretation and application of the CBA. He does not sit to
dispense his own brand of industrial justice: his award is
legitimate only in so far as it draws its essence from the CBA.
That was done in this case.
By definition, a bonus is a gratuity or act of liberality of the
giver. It is something given in addition to what is ordinarily
received by or strictly due the recipient. A bonus is granted
and paid to an employee for his industry and loyalty, which
contributed to the success of the employers business and
made possible the realization of profits.
Generally, a bonus is not a demandable and enforceable
obligation. For a bonus to be enforceable, it must have been
promised by the employer and expressly agreed upon by the
parties. Given that the bonus in this case is integrated in the
CBA, the same partakes the nature of a demandable
obligation. Verily, by virtue of its incorporation in the CBA, the
Christmas bonus due to respondent Association has become
more than just an act of generosity on the part of the
petitioner but a contractual obligation it has undertaken.
All given, business losses are a feeble ground for petitioner to
repudiate its obligation under the CBA. The rule is settled that
any benefit and supplement being enjoyed by the 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 to promote their welfare and to afford labor full
protection. Hence, absent any proof that petitioner’s consent
was vitiated by fraud, mistake or duress, it is presumed that
it entered into the CBA voluntarily and had full knowledge of
the contents thereof and was aware of its commitments under
the contract.
The Court is fully aware that implementation to the letter of
the subject CBA provision may further deplete petitioners
resources. Petitioners remedy though lies not in the Courts
invalidation of the provision but in the parties clarification of
the same in subsequent CBA negotiations. Article 253 of the
Labor Code is relevant:
Art. 253. Duty to bargain collectively when there exists a
collective bargaining agreement. - When there is a collective
bargaining agreement, the duty to bargain collectively shall
also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve
a written notice to terminate or modify the agreement at least
sixty (60) days prior to its expiration date. It shall be the duty
of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
agreement during the sixty (60)-day period and/or until a new
agreement is reached by the parties.
RULING:
WHEREFORE, Premises considered, the petition is DENIED for
lack of merit.
The Decision of the Court of Appeals dated 5 April 2006 and
the Resolution of the same court dated 13 December 2007 in
CA-G.R. SP No. 78334 are AFFIRMED.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY,
Petitioner, vs. JOEY B. TEVES, Respondent.
G.R. No. 143511 November 15, 2010
FACTS:
Respondent was employed by petitioner Philippine Long
Distance Telephone Company in 1981 as Clerk II until his
termination from service on June 1, 1992. Petitioner
terminated respondent through an Inter-Office Memorandum
dated May 29, 1992 on account of his three (3) unauthorized
leaves of absence committed within three (3) years in violation
of petitioners rules and regulations.
Respondent was absent from August 23 to September 3, 1990
as his wife gave birth on August 25 but was only discharged
from the hospital on September 2, 1990 due to complications;
since they had no household help, he had to attend to his
wife's needs in the hospital, as well as the needs of their four
kids, including bringing them to school. Respondent called up
through a third party to inform petitioner that he would go on
an extended leave. Upon his reporting for work on
September 4, 1990, he wrote petitioner a letter confirming his
leave of absence without pay for that period and stating the
reasons thereof, with his wife's medical certificate attached.
Dissatisfied, petitioner required respondent to submit further
explanation which the latter did reiterating his previous
explanation. However, in petitioner's Inter-Office
Memorandum dated October 3, 1990, it found respondents
explanation to be unacceptable and unmeritorious for the
latter's failure to call, notify or request petitioner for such
leave; thus, petitioner suspended respondent from work
without pay for 20 days, effective October 8, 1990.
Respondent was absent from May 29 to June 12, 1991. He
was sent a Memorandum reminding him of the July 2, 1990
Memorandum requiring written application prior to a leave of
absence without pay and was directed to report for work on
June 13, 1991 at ten o'clock in the evening lest he be meted
a disciplinary action. Respondent reported for work on even
date, and was required to explain in writing why no
disciplinary action should be taken against him for his
unauthorized leave of absence. In a Memorandum dated June
17, 1991, respondent explained that his absences were due
to the fact that his eldest and youngest daughter were sick
and had to be confined at the nearby clinic; and the medical
certificate confirming said confinement was to follow. Further,
respondent alleged that he had relayed said message to an
officemate, Luis V. Marquez, who unfortunately did not also
report for work. As petitioner found respondents explanation
insufficient, respondent was suspended without pay for 45
days effective July 17, 1991.
22
Eight months thereafter, respondent availed of a seven-day
leave of absence and extended such leave to complete his
annual vacation leave, which was to end on February 11,
1992. However, respondent failed to report for work from
February 11 to February 19, 1992. Petitioner then sent him a
Memorandum dated February 19, 1992, directing him to
report for duty within 72 hours, otherwise, his services would
be terminated for abandonment of work. Respondent
reported for duty and was served another Memorandum
requiring him to explain in writing why no disciplinary action
should be taken against him for his unauthorized absences. In
his explanation, respondent stated that he incurred said
absences because he had many accounts in the office which
were already due and demandable and thought of prolonging
such payment by absenting himself. He further stated that he
realized that what he did was wrong and only worsened his
situation and asked for another chance. Petitioner found such
explanation totally unacceptable. Thus, in an Inter-Office
Memorandum dated May 29, 1992 addressed to respondent,
the latter was terminated from service effective June 1, 1992
due to his third unauthorized absence within a three-year
period.
On March 9, 1993, respondent filed a Complaint for illegal
suspension, illegal dismissal, payment of two Christmas
bonuses and monthly rice subsidy.
Labor Arbiter (LA) Benigno C. Villarente, Jr. rendered his
Decision, declaring that the dismissal of the complainant is
LEGAL
In reversing the LA, the NLRC found that respondent's
absences from August 23 to September 3, 1990 was brought
to petitioner's attention when respondent called through a
third party that respondent would go on an extended leave.
Moreover, the reason for his prolonged absence, i.e., the
unforeseen complications of his wife's condition after giving
birth, supported by a medical certificate, was an eventuality
that needed to be attended to with priority which should have
been accorded credence and favorably considered; and that
dismissing such explanation and placing respondent under
suspension, when his leave of absence was without pay,
merely exacerbated his family's plight.
The NLRC found that respondent's failure to verify whether
his message for petitioner through a co-employee that his
(respondent) two daughters were sick and confined at a
nearby clinic was duly delivered constituted a neglect of duty.
However, the NLRC took into consideration respondent's
reason for such absence and stated that certain leniency
should have been accorded respondent and that his
suspension for 45 days was too harsh for the said offense.
A petition was made to CA which rendered its assailed
Decision, which affirmed and reiterated the NLRC decision.
ISSUE:
Whether or not sufficient ground exists for respondent's
dismissal from service.
RATIO DECIDENDI:
Respondent was terminated from employment by reason of
his third unauthorized absence from
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
THE TERMINATION OF RESPONDENT'S SERVICES IS
JUSTIFIED APPLYING THE TOTALITY OF INFRACTIONS
DOCTRINE.
THERE IS SUBSTANTIAL AND UNDISPUTED EVIDENCE
ESTABLISHING THAT RESPONDENT IS AN ABSENTEE
EMPLOYEE WHO HAS A PROPENSITY TO SIMPLY DISAPPEAR
WITHOUT EVEN GIVING HIS EMPLOYER THE COURTESY OF
A PRIOR NOTICE.
Respondent absented himself because he had many accounts
in the office which were already due and demandable, and he
thought that absenting himself from work would prolong the
payment of his financial obligations; and that he realized that
his action was wrong which worsened his situation and asked
for another chance. Such explanation was found by petitioner
to be unacceptable; thus, respondent was terminated
effective June 1, 1992 for committing three unauthorized
absences within a three-year period. Petitioner found
respondent to have committed the other two incidents of
unauthorized absences from August 23 to September 3, 1990
and from May 29 to June 12, 1991.
Even assuming that respondent's absenteeism constitutes
willful disobedience, such offense does not warrant
respondent's dismissal. Not every case of insubordination or
willful disobedience by an employee reasonably deserves the
penalty of dismissal. There must be a reasonable
proportionality between the offense and the penalty.
While management has the prerogative to discipline its
employees and to impose appropriate penalties on erring
workers, pursuant to company rules and regulations,
however, such management prerogatives must be exercised
in good faith for the advancement of the employers interest
and not for the purpose of defeating or circumventing the
rights of the employees under special laws and valid
agreements. The Court is wont to reiterate that while an
employer has its own interest to protect, and pursuant
thereto, it may terminate an employee for a just cause, such
prerogative to dismiss or lay off an employee must be
exercised without abuse of discretion. Its implementation
should be tempered with compassion and understanding. The
employer should bear in mind that, in the execution of said
prerogative, what is at stake is not only the employees
position, but his very livelihood, his very breadbasket.
 beer, and wholesalers had to buy beer products from them,
Dismissal is the ultimate penalty that can be meted to an
employee. Even where a worker has committed an infraction,
a penalty less punitive may suffice, whatever missteps maybe
committed by labor ought not to be visited with a
consequence so severe. This is not only the laws concern for
the workingman. There is, in addition, his or her family to
consider.
Unemployment brings untold hardships and sorrows upon
those dependent on the wage-earner.
Considering that respondent was illegally dismissed from
service, he is entitled to be reinstated, without loss of seniority
rights and the payment of backwages from the time
respondents compensation was withheld from him until his
reinstatement on November 12, 1997. However, since we find
that respondent's absence from February 11 to 19, 1992 was
unjustified and unauthorized, thus, his suspension for thirty
days would be in order. Hence, the amount equivalent to the
thirty-day suspension, which respondent should have served
23
for his absence on February 11 to 19, 1992, should be
deducted from the backwages to be awarded to him.
RULING:
WHEREFORE, the Decision dated April 24, 2000 and the
Resolution dated May 31, 2000
of the Court of Appeals in CA-G.R. SP No. 50852, are hereby
AFFIRMED with MODIFICATION that the amount equivalent
to respondent’s thirty-day suspension is deducted from the
award of backwages from the time his compensation was
withheld up to his reinstatement.
SAN MIGUEL BREWERY SALES FORCE UNION
(PTGWO), petitioner, vs. HON. BLAS F. OPLE, as
Minister of Labor and SAN MIGUEL CORPORATION,
respondents.
G.R. No. L-53515 February 8, 1989
GRIÑO-AQUINO, J.:
FACTS:
A collective bargaining agreement (effective on May 1, 1978
until January 31, 1981) was entered into by petitioner San
Miguel Corporation Sales Force Union (PTGWO), and the
private respondent, San Miguel Corporation, Section 1, of
Article IV of which provided as follows:
Art. IV, Section 1. Employees within the appropriate
bargaining unit shall be entitled to a basic monthly
compensation plus commission based on their respective
sales.
In 1979, the company introduced a marketing scheme known
as the "Complementary Distribution System" (CDS) whereby
its beer products were offered for sale directly to wholesalers
through San Miguel's sales offices.
The labor union (herein petitioner) filed a complaint for unfair
labor practice in the Ministry of Labor, with a notice of strike
on the ground that the CDS was contrary to the existing
marketing scheme whereby the Route Salesmen were
assigned specific territories within which to sell their stocks of
not from the company. It was alleged that the new marketing
scheme violates Section 1, Article IV of the collective
bargaining agreement because the introduction of the CDS
would reduce the take-home pay of the salesmen and their
truck helpers for the company would be unfairly competing
with them.
The complaint filed by the petitioner against the respondent
company raised two issues: (1) whether the CDS violates the
collective bargaining agreement, and (2) whether it is an
indirect way of busting the union.
The Minister ordered the dismissal of the notice of strike filed
by petitioner. Management however is hereby ordered to pay
an additional three (3) months back adjustment commissions
over and above the adjusted commission under the
complementary distribution system.
ISSUE:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Whether or not the CDS is a valid exercise of management
prerogatives.
RATIO DECIDENDI:
Public respondent was correct in holding that the CDS is a
valid exercise of management prerogatives:
Except as limited by special laws, an employer is free to
regulate, according to his own discretion and judgment, all
aspects of employment, including hiring, work assignments,
working methods, time, place and manner of work, tools to
be used, processes to be followed, supervision of workers,
working regulations, transfer of employees, work supervision,
lay-off of workers and the discipline, dismissal and recall of
work. ... (NLU vs. Insular La Yebana Co., 2 SCRA 924;
Every business enterprise endeavors to increase its profits. In
the process, it may adopt or devise means designed towards
that goal.
So long as a company's management prerogatives are
exercised in good faith for the advancement of the employer's
interest and not for the purpose of defeating or circumventing
the rights of the employees under special laws or under valid
agreements, this Court will uphold them (LVN Pictures
Workers vs. LVN, 35 SCRA 147; Phil. American Embroideries
vs. Embroidery and Garment Workers, 26 SCRA 634; Phil.
Refining Co. vs. Garcia, 18 SCRA 110). San Miguel
Corporation's offer to compensate the members of its sales
force who will be adversely affected by the implementation of
the CDS by paying them a so-called "back adjustment
commission" to make up for the commissions they might lose
as a result of the CDS proves the company's good faith and
lack of intention to bust their union.
RULING:
WHEREFORE, the petition for certiorari is dismissed for lack of
merit.
MANUEL SOSITO, petitioner, vs. AGUINALDO
DEVELOPMENT CORPORATION, respondent.
G.R. No. L-48926 December 14, 1987
CRUZ, J.:
FACTS:
Petitioner Manuel Sosito was employed in 1964 by the private
respondent, a logging company, and was in charge of logging
importation when he went on indefinite leave with the consent
of the company on January 16, 1976.
The private respondent, through its president, announced a
retrenchment program and offered separation pay to
employees in the active service as of June 30, 1976, who
would tender their resignations. The petitioner decided to
accept this offer and so submitted his resignation, "to avail
himself of the gratuity benefits" promised. However, his
resignation was not acted upon and he was never given the
separation pay he expected.
24
The petitioner complained to the Department of Labor, where
he was sustained by the labor arbiter. The company was
ordered to pay Sosito a sum of P 4,387.50, representing his
salary for six and a half months.
On appeal to the National Labor Relations Commission, this
decision was reversed and it was held that the retrenchment
program did not cover the petitioner.
ISSUE:
Whether or not the petitioner is entitled to separation pay
under the retrenchment program of the private respondent.
RATIO DECIDENDI:
It is clear from the memorandum that the offer of separation
pay was extended only to those who were in the active service
of the company. It is equally clear that the petitioner was not
eligible for the promised gratuity, as he was not actually
working with the company as of the said date. Being on
indefinite leave, he was not in the active service of the private
respondent although, if one were to be technical, he was still
in its employ. Even so, during the period of indefinite leave,
he was not entitled to receive any salary or to enjoy any other
benefits available to those in the active service.
Under the law then in force the private respondent could have
validly reduced its work force because of its financial reverses
without the obligation to grant separation pay. This was
permitted under the original Article 272(a), of the Labor Code,
which was in force at the time. To its credit, however, the
company voluntarily offered gratuities to those who would
agree to be phased out pursuant to the terms and conditions
of its retrenchment program, in recognition of their loyalty and
to tide them over their own financial difficulties. The Court
feels that such compassionate measure deserves
commendation and support but at the same time rules that it
should be available only to those who are qualified therefore.
We hold that the petitioner is not one of them.
While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not
be supposed that every labor dispute will be automatically
decided in favor of labor. Management also has its own rights
which, as such, are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with
less privileges in life, this Court has inclined more often than
not toward the worker and upheld his cause in his conflicts
with the employer. Such favoritism, however, has not blinded
us to the rule that justice is in every case for the deserving,
to be dispensed in the light of the established facts and the
applicable law and doctrine.
RULING:
WHEREFORE, the petition is DISMISSED and the challenged
decision AFFIRMED, with costs against the petitioner.
UNION OF FILIPRO EMPLOYEES (UFE), petitioner, vs.
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS
COMMISSION and NESTLÉ PHILIPPINES, INC.
(formerly FILIPRO, INC.), respondents.
G.R. No. 79255 January 20, 1992
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
GUTIERREZ, JR., J.:
FACTS:
Respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed
with the National Labor Relations Commission (NLRC) a
petition for declaratory relief seeking a ruling on its rights and
obligations respecting claims of its monthly paid employees
for holiday pay.
Both Filipro and the Union of Filipino Employees (UFE) agreed
to submit the case for voluntary arbitration and appointed
respondent Benigno Vivar, Jr. as voluntary arbitrator.
Arbitrator Vivar rendered a decision directing Filipro to:
pay its monthly paid employees holiday pay pursuant to Article
94 of the Code, subject only to the exclusions and limitations
specified in Article 82 and such other legal restrictions as are
provided for in the Code.
 To require various companies to reach back to 1975 now and
Filipro filed a motion for clarification seeking (1) the limitation
of the award to three years, (2) the exclusion of salesmen,
sales representatives, truck drivers, merchandisers and
medical representatives (hereinafter referred to as sales
personnel) from the award of the holiday pay, and (3)
deduction from the holiday pay award of overpayment for
overtime, night differential, vacation and sick leave benefits
due to the use of 251 divisor.
Petitioner UFE answered that the award should be made
effective from the date of effectivity of the Labor Code, that
their sales personnel are not field personnel and are therefore
entitled to holiday pay, and that the use of 251 as divisor is
an established employee benefit which cannot be diminished.
The respondent arbitrator issued an order declaring that the
effectivity of the holiday pay award shall retroact to November
1, 1974, the date of effectivity of the Labor Code. He
adjudged, however, that the company's sales personnel are
field personnel and, as such, are not entitled to holiday pay.
He likewise ruled that with the grant of 10 days' holiday pay,
the divisor should be changed from 251 to 261 and ordered
the reimbursement of overpayment for overtime, night
differential, vacation and sick leave pay due to the use of 251
days as divisor.
ISSUES:
1) Whether or not Nestle's sales personnel are entitled to
holiday pay; and
2) Whether or not, concomitant with the award of holiday pay,
the divisor should be changed from 251 to 261 days
RATIO DECIDENDI:
The respondent arbitrator's order to change the divisor from
251 to 261 days would result in a lower daily rate, which is
violative of the prohibition on non-diminution of benefits
found in Article 100 of the Labor Code. To maintain the same
daily rate if the divisor is adjusted to 261 days, then the
dividend, which represents the employee's annual salary,
should correspondingly be increased to incorporate the
holiday pay. There is thus no merit in respondent Nestle's
claim of overpayment of overtime and night differential pay
and sick and vacation leave benefits, the computation of
25
which are all based on the daily rate, since the daily rate is
still the same before and after the grant of holiday pay.
Respondent Nestle's invocation of solutio indebiti, or payment
by mistake, due to its use of 251 days as divisor must fail in
light of the Labor Code mandate that "all doubts in the
implementation and interpretation of this Code, including its
implementing rules and regulations, shall be resolved in favor
of labor." (Article 4). Moreover, prior to September 1, 1980,
when the company was on a 6-day working schedule, the
divisor used by the company was 303, indicating that the 10
holidays were likewise not paid. When Filipro shifted to a 5-
day working schebule on September 1, 1980, it had the
chance to rectify its error, if ever there was one but did not
do so. It is now too late to allege payment by mistake.
The "operative fact" doctrine realizes that in declaring a law
or rule null and void, undue harshness and resulting
unfairness must be avoided. It is now almost the end of 1991.
nullify acts done in good faith is unduly harsh. 1984 is a fairer
reckoning period under the facts of this case.
Applying the aforementioned doctrine to the case at bar, it is
not far-fetched that Nestle, relying on the implicit validity of
the implementing rule and policy instruction before this Court
nullified them, and thinking that it was not obliged to give
holiday pay benefits to its monthly paid employees, may have
been moved to grant other concessions to its employees,
especially in the collective bargaining agreement. This
possibility is bolstered by the fact that respondent Nestle's
employees are among the highest paid in the industry. With
this consideration, it would be unfair to impose additional
burdens on Nestle when the non-payment of the holiday
benefits up to 1984 was not in any way attributed to Nestle's
fault.
RULING:
WHEREFORE, the order of the voluntary arbitrator in hereby
MODIFIED. The divisor to be used in computing holiday pay
shall be 251 days. The holiday pay as above directed shall be
computed from October 23, 1984. In all other respects, the
order of the respondent arbitrator is hereby AFFIRMED.
INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner,
vs. WATERFRONT HOTEL DAVAO, Respondent.
G.R. Nos. 174040-41 September 22, 2010
PERALTA, J.:
FACTS:
Respondent Waterfront Insular Hotel Davao (respondent)
sent the Department of Labor and Employment (DOLE),
Davao City, a Notice of Suspension of Operations notifying the
same that it will suspend its operations for a period of six
months due to severe and serious business losses. In said
notice, respondent assured the DOLE that if the company
could not resume its operations within the six-month period,
the company would pay the affected employees all the
benefits legally due to them.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
During the period of the suspension, Domy R. Rojas (Rojas),
the President of Davao Insular Hotel Free Employees Union
(DIHFEU-NFL), the recognized labor organization in
Waterfront Davao, sent respondent a number of letters asking
management to reconsider its decision.
In letters, Rojas intimated that the members of the Union
were determined to keep their jobs and that they believed
they too had to help respondent.
After series of negotiations, respondent and DIHFEU-NFL,
represented by its President,
Reduce the sick leaves and vacation leaves to 15 days/15days.
Emergency leave and birthday off are hereby waived.
Duty meal allowance is fixed at P30.00 only. No more midnight
snacks and double
Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino
C. Bation, Jr., signed a
Memorandum of Agreement (MOA) wherein respondent
agreed to re-open the hotel subject to certain concessions
offered by DIHFEU-NFL in its Manifesto.
Accordingly, respondent downsized its manpower structure to
100 rank-and-file employees as set forth in the terms of the
MOA. Moreover, as agreed upon in the MOA, respondent also
prepared a new pay scale.
The retained employees individually signed a Reconfirmation
of Employment which embodied the new terms and conditions
of their continued employment, each employee was assisted
by Rojas who also signed the document.
ISSUE:
Whether the non-ratification of the MOA in accordance with
the Union's constitution proven fatal to the validity thereof?
RATIO DECIDENDI:
It must be remembered that after the MOA was signed, the
members of the Union individually signed contracts
denominated as Reconfirmation of Employment. Cullo did not
dispute the fact that of the 87 members of the Union, who
signed and accepted the Reconfirmation of Employment, 71
are the respondent employees in the case at bar. Moreover, it
bears to stress that all the employees were assisted by Rojas,
DIHFEU-NFL's president, who even co-signed each contract.
Stipulated in each Reconfirmation of Employment were the
new salary and benefits scheme. In addition, it bears to stress
that specific provisions of the new contract also made
reference to the MOA. Thus, the individual members of the
union cannot feign knowledge of the execution of the MOA.
Each contract was freely entered into and there is no
indication that the same was attended by fraud,
misrepresentation or duress. To this Court's mind, the signing
of the individual Reconfirmation of Employment should,
therefore, be deemed an implied ratification by the Union
members of the MOA.
Applied to the case at bar, while the terms of the MOA
undoubtedly reduced the salaries and certain benefits
previously enjoyed by the members of the Union, it cannot
escape this Court's attention that it was the execution of the
MOA which paved the way for the re- opening of the hotel,
notwithstanding its financial distress. More importantly, the
26
execution of the MOA allowed respondents to keep their jobs.
It would certainly be iniquitous for the members of the Union
to sign new contracts prompting the re-opening of the hotel
only to later on renege on their agreement on the fact of the
non-ratification of the MOA.
In addition, it bears to point out that Rojas did not act
unilaterally when he negotiated with respondent's
management. The Constitution and By-Laws of DIHFEU-NFL
clearly provide that the president is authorized to represent
the union on all occasions and in all matters in
which representation of the union may be agreed or required.
Furthermore, Rojas was properly authorized under a Board of
Directors Resolution to negotiate with respondent, the
pertinent portions of which read:
while the scales of justice usually tilt in favor of labor, the
peculiar circumstances
herein prevent this Court from applying the same in the
instant petition. Even if our laws endeavor to give life to the
constitutional policy on social justice and on the protection of
labor, it does not mean that every labor dispute will be
decided in favor of the workers. The law also recognizes that
management has rights which are also entitled to respect and
enforcement in the interest of fair play.
RULING:
WHEREFORE, premises considered, the petition is DENIED.
The Decision dated October 11, 2005, and the Resolution
dated July 13, 2006 of the Court of Appeals in consolidated
labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R.
SP No. 83657, are AFFIRMED.
NORBERTO SORIANO, petitioner, vs. OFFSHORE
SHIPPING AND MANNING CORPORATION, KNUT
KNUTSEN O.A.S., and NATIONAL LABOR RELATIONS
COMMISSION (Second Division), respondents.
G.R. No. 78409 September 14, 1989
FERNAN, C.J.:
FACTS:
Petitioner Norberto Soriano, a licensed Second Marine
Engineer, sought employment and was hired by private
respondent Knut Knutsen O.A.S. through its authorized
shipping agent in the Philippines, Offshore Shipping and
Manning Corporation. As evidenced by the Crew Agreement,
petitioner was hired to work as Third Marine Engineer on
board Knut Provider" with a salary of US$800.00 a month on
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
a conduction basis for a period of fifteen (15) days. He
admitted that the term of the contract was extended to six (6)
months by mutual agreement on the promise of the employer
to the petitioner that he will be promoted to Second Engineer.
Thus, while it appears that petitioner joined the aforesaid
vessel on July 23, 1985 he signed off on November 27, 1985
due to the alleged failure of private respondent-employer to
fulfill its promise to promote petitioner to the position of
Second Engineer and for the unilateral decision to reduce
petitioner's basic salary from US$800.00 to US$560.00.
Petitioner was made to shoulder his return airfare to Manila.
In the Philippines, petitioner filed with the Philippine Overseas
Employment Administration (POEA for short), a complaint
against private respondent for payment of salary differential,
overtime pay, unpaid salary for November, 1985 and refund
of his return airfare and cash bond allegedly in the amount of
P20,000.00 contending therein that private respondent
unilaterally altered the employment contract by reducing his
salary of US$800.00 per month to US$560.00, causing him to
request for his repatriation to the Philippines.
Dissatisfied, both parties appealed the aforementioned
decision of the POEA to the National Labor Relations
Commission. Complainant-petitioner's appeal was dismissed
for lack of merit while respondents' appeal was dismissed for
having been filed out of time.
ISSUE:
Whether or not there was alteration of the original
employment contract.
RATIO DECIDENDI:
The Court has in many cases involving the construction of
statutes always cautioned against narrowly interpreting a
statute as to defeat the purpose of the legislator and stressed
that it is of the essence of judicial duty to construe statutes
so as to avoid such a deplorable result (of injustice or
absurdity) and that therefore "a literal interpretation is to be
rejected if it would be unjust or lead to absurd results."
There is no dispute that an alteration of the employment
contract without the approval of the Department of Labor is a
serious violation of law.
Specifically, the law provides:
Article 34 paragraph (i) of the
Labor Code reads:
Prohibited Practices. — It shall be unlawful for any individual,
entity, licensee, or holder of authority:
xxxx
(i) To substitute or alter employment contracts approved and
verified by the Department of Labor from the time of actual
signing thereof by the parties up to and including the period
of expiration of the same without the approval of the
Department of Labor.
In the case at bar, both the Labor Arbiter and the National
Labor Relations Commission correctly analyzed the questioned
annotations as not constituting an alteration of the original
employment contract but only a clarification thereof which by
no stretch of the imagination can be considered a violation of
the above-quoted law. Under similar circumstances, this Court
ruled that as a general proposition, exceptions from the
coverage of a statute are strictly construed. But such
construction nevertheless must be at all times reasonable,
sensible and fair. Hence, to rule out from the exemption
amendments set forth, although they did not materially
27
change the terms and conditions of the original letter of credit,
was held to be unreasonable and unjust, and not in accord
with the declared purpose of the Margin Law.
The purpose of Article 34, paragraph 1 of the Labor Code is
clearly the protection of both parties. In the instant case, the
alleged amendment served to clarify what was agreed upon
by the parties and approved by the Department of Labor. To
rule otherwise would go beyond the bounds of reason and
justice.
As recently laid down by this Court, the rule that there should
be concern, sympathy and solicitude for the rights and welfare
of the working class, is meet and proper. 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 former's favor, is not an
unreasonable or unfair rule. But to disregard the employer's
own rights and interests solely on the basis of that concern
and solicitude for labor is unjust and unacceptable.
Finally, it is well-settled that factual findings of quasi-judicial
agencies like the National Labor Relations Commission which
have acquired expertise because their jurisdiction is confined
to specific matters are generally accorded not only respect but
at times even finality if such findings are supported by
substantial evidence.
In fact since Madrigal v. Rafferty great weight has been
accorded to the interpretation or construction of a statute by
the government agency called upon to implement the same.
RULING:
WHEREFORE, the instant petition is DENIED. The assailed
decision of the National Labor Relations Commission is
AFFIRMED in toto.
THE HONGKONG AND SHANGHAI BANKING
CORPORATION, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and EMMANUEL A.
MENESES, respondents.
G.R. No. 116542, July 30, 1996
PANGANIBAN, J.
FACTS:
Complainant called the bank to inform the latter that he had
an upset stomach and would not be able to report for work.
His superior, however, requested him to report for work
because the department he was then in was undermanned
but complainant insisted that it was impossible for him to
report for work, hence, he was allowed to go on sick leave on
that day. Later on that day, the bank called complainant at his
given Tel. No., but the bank was informed by the answering
party at the phone number given by complainant that
complainant had left early that morning. Complainant
explained that he indeed suffered from an upset stomach and
that he even consulted Dr. Arthur Logos. The bank called up
Dr. Logos to verify the truth of complainant’s statement but
the doctor denied that he examined or attended to
complainant. For this reason, the bank directed complainant
to explain his acts of dishonesty because allegedly he was not
honest in telling the bank that he had an upset stomach, and
that he consulted Dr. Logos on that day. Complainant filed a
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

statement pleading for leniency such that instead of

termination, he be given a lighter penalty.
The arbiter held that the offenses of dishonesty contemplated
by the Bank’s Employee Handbook which would warrant
termination of services are those involving deceit and resulting
in loss of trust and confidence. The arbiter further found that
the private respondents proffered excuse, assuming it to be
false, did not result in any damage to the bank, and therefore
the bank had no reason to lose its trust and confidence in the
private respondent on account of such manner of dishonesty.
Thus, the termination was illegal.
Thus, petitioner argues that the dismissal is reasonable and
valid pursuant to its Employee Handbook.

ISSUE:

Is a provision in the employee’s handbook stating that any

form of dishonesty shall constitute serious offense(s) calling
for termination valid and binding upon the respondent NLRC?

RATIO DECIDENDI:

The general statement in Employee’s Handbook must be

understood in the context of the enumeration of offenses, all
of which are directly related to the function of the petitioner
as a banking institution. It is unarguable that private
respondent’s false information concerning his whereabouts is
not a fraud, nor a false entry in the books of the bank; neither
is it a failure to turn over clients funds, or theft or use of
company assets, or anything analogous as to constitute a
serious offense meriting the extreme penalty of dismissal.
Private respondents acts of dishonesty -- his first offense in
his seven years of employment, as noted by the respondent
NLRC -- did not show deceit nor constitute fraud and did not
result in actual prejudice to petitioner. Certainly, such
peremptory dismissal is far too harsh, too severe, excessive
and unreasonable under the circumstances.
Further, none of the enumerations under Art. 282 of the Labor
Code may apply in the instant case.

RULING:

WHEREFORE, the instant petition is hereby DISMISSED, there

being no showing of grave abuse of discretion on the part of
the respondent NLRC.

28
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
COLGATE PALMOLIVE PHILIPPINES, INC.,
petitioners, vs. HON. BLAS F. OPLE, COLGATE
PALMOLIVE SALES UNION, respondents.
G.R. No. 73681, June 30, 1988
PARAS, J.
FACTS:
The respondent Union filed a Notice of Strike with the Bureau
of Labor Relations (BLR) on ground of unfair labor practice
consisting of alleged refusal to bargain, dismissal of union
officers/members; and coercing employees to retract their
membership with the union and restraining non-union
members from joining the union. On the other hand, petitioner
denied the claims of the respondent Union. It also averred
that the suspension and eventual dismissal of the three
employees were due to infractions committed by them and
that the management reserves the right to discipline erring
employees. The respondent Minister found no merit in the
Union's Complaint for unfair labor practice allegedly
committed by petitioner as regards the alleged refusal of
petitioner to negotiate with the Union, and the secret
distribution of survey sheets allegedly intended to discourage
unionism. It also ruled that the three dismissed employees
were “not without fault” but nonetheless ordered the
reinstatement of the same. Thus, this petition.
ISSUE:
Whether the minister erred in directly certifying the Union
based on the latter’s self-serving assertion that it enjoys the
support of the majority of the sales force in petitioner’s
company and in ordering the reinstatement of the three
dismissed employees.
RATIO DECIDENDI:
The court ruled that the order of the respondent Minister to
reinstate the employees despite a clear finding of guilt on their
part is not in conformity with law. Reinstatement is simply
incompatible with a finding of guilt. Where the totality of the
evidence was sufficient to warrant the dismissal of the
employees the law warrants their dismissal without making
any distinction between a first offender and a habitual
delinquent. Under the law, respondent Minister is duly
mandated to equally protect and respect not only the labor or
workers' side but also the management and/or employers'
side. The law, in protecting the rights of the laborer,
authorizes neither oppression nor self-destruction of the
employer. To order the reinstatement of the erring employees
would in effect encourage unequal protection of the laws as a
managerial employee of petitioner company involved in the
same incident was already dismissed and was not ordered to
be reinstated.
RULING:
WHEREFORE, judgment is hereby rendered REVERSING and
SETTING ASIDE the Order of the respondent Minister, dated
December 27, 1985 for grave abuse of discretion. However,
in view of the fact that the dismissed employees are first
offenders, petitioner is hereby ordered to give them
separation pay. The temporary restraining order is hereby
made permanent.
29
CARLOS DE CASTRO, petitioners, vs. LIBERTY
BROADCASTING NETWORK, INC. and EDGARDO
QUIOGUE, respondents.
G.R. No. 165153, August 25, 2010
BRION, J.
FACTS:
The petitioner, Carlos C. de Castro, worked as a chief building
administrator at LBNI. On May 31, 1996, LBNI dismissed de
Castro on the grounds of serious misconduct, fraud, and willful
breach of the trust reposed in him as a managerial employee.
Allegedly, de Castro solicited and/or received money for his
own benefit from suppliers/dealers/traders, diverted company
funds by soliciting and receiving on different occasions, and
others. Aggrieved, de Castro filed a complaint for illegal
dismissal against LBNI with the NLRC. He maintained that he
could not have solicited commissions from suppliers
considering that he was new in the company. Moreover, the
accusations were belatedly filed as the imputed acts happened
in 1995. The Labor Arbiter ruled in favor of de Castro. NLRC
on motion for reconsideration affirmed the same. However,
CA reversed such decision. In September 23, 2008, the Court
found that de Castro’s dismissal was based on
unsubstantiated charges.
ISSUE:
Whether de Castro was illegally dismissed.
RATIO DECIDENDI:
The court ruled that de Castro’s dismissal was based on
unsubstantiated charges. De Castro had not stayed long in the
company and had not even passed his probationary period
when the acts charged allegedly took place. Properly read, we
found that the acts charged against de Castro took place when
he was still under probationary employment a finding
completely different from LBNIs claim that de Castro was
dismissed during his probationary employment. On the
contrary, de Castro was dismissed on the ninth month of his
employment with LBNI, and by then, he was already a regular
employee by operation of law. As a regular employee, de
Castro was entitled to security of tenure and his illegal
dismissal from LBNI justified the awards of separation pay,
back wages, and damages.
RULING:
WHEREFORE, we DENY the Motion for Reconsideration;
accordingly, our Decision dated September 23, 2008 is hereby
AFFIRMED. The National Labor Relations Commission is,
however, directed to SUSPEND the execution of our
September 23, 2008 Decision until the Stay Order is lifted or
the corporate rehabilitation proceedings are terminated.
Respondent Liberty Broadcasting Network, Inc. is hereby
directed to submit quarterly reports to the National Labor
Relations Commission on the status of its rehabilitation,
subject to the penalty of contempt in case of noncompliance.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
MANOLO A. PEAFLOR, petitioner, vs. OUTDOOR
CLOTHING, respondent.
G.R. No. 177114, January 21, 2010
BRION, J.
FACTS:
Peaflor was hired as probationary Human Resource
Department (HRD) Manager of respondent Outdoor Clothing
Manufacturing Corporation. When an Outdoor Clothing
employee suffered injuries in a bombing incident, the
company required Peaflor to attend to her hospitalization
needs; he had to work outside office premises to undertake
this task. As he was acting on the company’s orders, Peaflor
considered himself to be on official business, but was
surprised when the company deducted six days salary
corresponding to the time he assisted Padilla. Further, while
he was away, Buenaobra was appointed as the new HRD
Manager. Feeling betrayed and discouraged, Peaflor
submitted a letter to Syfu declaring his irrevocable resignation
from his employment with Outdoor Clothing. Then, Peaflor
filed a complaint for illegal dismissal with the labor arbiter,
claiming that he had been constructively dismissed. Outdoor
Clothing posited instead that Peaflor had voluntarily resigned
from his work.
ISSUE:
Whether Peaflor filed his letter of resignation before or after
the appointment of Buenaobra as the new/concurrent HRD
manager.
RATIO DECIDENDI:
If the resignation letter was submitted before Syfu’s
appointment of Buenaobra as new HRD manager, little
support exists for Peaflor’s allegation that he had been forced
to resign due to the prevailing abusive and hostile working
environment. Buenaobra’s appointment would then be simply
intended to cover the vacancy created by Peaflor’s
resignation. On the other hand, if the resignation letter was
submitted after the appointment of Buenaobra, then factual
basis exists indicating that Peaflor had been constructively
dismissed as his resignation was a response to the
unacceptable appointment of another person to a position he
still occupied.
In our view, it is more consistent with human experience that
Peaflor indeed learned of the appointment of Buenaobra only
on March 13, 2000 and reacted to this development through
his resignation letter after realizing that he would only face
hostility and frustration in his working environment. Three
very basic labor law principles support this conclusion and
militate against the company’s case.
1. Settled is the rule that in employee termination
disputes, the employer bears the burden of proving
that the employee’s dismissal was for just and valid
cause. That Peaflor did indeed file a letter of
resignation does not help the companys case as,
other than the fact of resignation, the company must
still prove that the employee voluntarily resigned.
There can be no valid resignation where the act was
made under compulsion or under circumstances
approximating compulsion, such as when an
employee’s act of handing in his resignation was a
30
reaction to circumstances leaving him no alternative
but to resign.
2. Article 4 of the Labor Code states that all doubts in
the interpretation and implementation of the Labor
Code should be interpreted in favor of the
workingman. Peaflor has, at very least, shown
serious doubts about the merits of the company’s
case. In such contest of evidence, the cited Article 4
compels us to rule in Peaflor’s favor.
3. Is the complaint against the employer merely a
convenient afterthought subsequent to an
abandonment or a voluntary resignation? We find
from the records that Peaflor sought almost
immediate official recourse to contest his separation
from service through a complaint for illegal dismissal.
This is not the act of one who voluntarily resigned;
his immediate complaints characterize him as one
who deeply felt that he had been wronged.
RULING:
WHEREFORE, we GRANT the petitioners petition for review on
certiorari, and REVERSE the decision and resolution of the
Court of Appeals in CA-G.R. SP No. 87865 promulgated on
December 29, 2006 and March 14, 2007, respectively. We
REINSTATE the decision of the labor arbiter dated August 15,
2001, with the MODIFICATION that, due to the strained
relations between the parties, respondents are additionally
ordered to pay separation pay equivalent to the petitioner’s
one month’s salary.
FEM'S ELEGANCE LODGING HOUSE, FENITHA
SAAVEDRA and IRIES ANTHONY SAAVEDRA,
petitioners, vs. The Honorable LEON P. MURILLO,
Labor Arbiter, Regional Arbitration Branch, Region X,
National Labor Relations Commission, Cagayan de
Oro City, ALFONSO GALLETO, GEORGE VEDAD,
ROLAND PANTONIAL, REYNALDO DELAORAO,
FELICISIMO BAQUILID, CECILIO SAJOL, ANNABEL
CASTRO, BENJAMIN CABRERA, RHONDEL
PADERANGA, ZENAIDA GUTIB, AIDA IMBAT and
MARIA GRACE ATUEL, respondents.
G.R. Nos. 117442-43, January 11, 1995
QUIASON, J.:
FACTS:
Petitioner FEM's elegance Lodging House is a business
enterprise engaged in providing lodging accommodations. It
is owned by petitioner Fenitha Saavedra and managed by
petitioner Iries Anthony Saavedra. Private respondents are
former employees of petitioners whose services were
terminated
Sometime after their dismissal from the employment of
petitioners, private respondents separately filed two cases
against petitioners before the NLRC. Private respondents
sought for unpaid benefits such as minimum wage, overtime
pay, rest day pay, holiday pay, full thirteenth-month pay and
separation pay
Apre-arbitration conference of the cases took place before the
Labor Arbiter. It was agreed therein: (1) that both labor cases
should be consolidated; and (2) that the parties would file
their respective position papers within thirty days from said
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
date after which the cases would be deemed submitted for
resolution
Petitioners filed their position paper. They inquired from the
NLRC whether private respondents had filed their position
paper. The receiving clerk of the NLRC confirmed that as of
said date private respondents had not yet filed their position
paper.
The following events then transpired: on July 8, petitioners
filed a Motion to dismiss for failure of private respondents to
file their position paper within the agreed period (Rollo, p. 38);
on July 15, private respondents belatedly filed their position
paper; on July 18, petitioners filed a Motion to Expunge
[private respondents'] Position Paper from the records of the
case (Rollo, p. 45); and on August 23, the Labor Arbiter issued
a notice of clarificatory hearing, which was set for September
7 (Rollo, p. 47). Prior to the hearing, petitioners filed a Motion
to Resolve [petitioners'] Motion to dismiss and Motion to
Expunge [private respondent'] Position Paper from the
Records of the Case (Rollo, p. 48).
The Labor Arbiter issued the order denying the motions filed
by petitioners. He held that a fifteen-day delay in filing the
position paper was not unreasonable considering that the
substantive rights of litigants should not be sacrificed by
technicality. He cited Article 4 of the Labor Code of the
Philippines, which provides that all doubts in the interpretation
thereof shall be resolved in favor of labor. He said that even
under Section 15, Rule 5 of the Revised Rules of Court, a delay
in the filing of a position paper is not a ground for a motion to
dismiss under the principle of exclusio unius est excludio
alteriu.
Hence, the present petition where petitioners charged the
Labor Arbiter with grave abuse of discretion for issuing the
order in contravention of Section 3, Rule V of The New Rules
of Procedure of the NLRC
ISSUE:
Whether or not delay in the filing of a position paper is a
ground for a motion to dismiss under the principle of exclusio
unius est excludio alteriu.
RATIO DECIDENDI:
We dismiss the petition for failure of petitioners to exhaust
their remedies, particularly in seeking redress from the NLRC
prior to the filing of the instant petition. Article 223 of the
Labor code of the Philippines provides that decisions, awards
or orders of the Labor Arbiter are appealable to the NLRC.
Thus, petitioners should have first appealed the questioned
order of the Labor Arbiter to the NLRC, and not to this court.
their omission is fatal to their cause.
However, even if the petition was given due course, we see
no merit in petitioners' arguments. The delay of private
respondents in the submission of their position paper is a
procedural flaw, and the admission thereof is within the
discretion of the Labor Arbiter.
Well-settled is the rule that technical rules of procedure are
not binding in labor cases, for procedural lapses may be
disregarded in the interest of substantial justice, particularly
where labor matters are concerned.
The failure to submit a position paper on time is not on of the
grounds for the dismissal of a complaint in labor cases (The
New Rules of procedure of the NLRC, Rule V, Section 15). It
cannot therefore be invoked by petitioners to declare private
respondents as non-suited. This stance is in accord with
31
Article 4 of the Labor Code of the Philippines, which resolves
that all doubts in the interpretation of the law and its
implementing rules and regulations shall be construed in favor
of labor. Needless to state, our jurisprudence is rich with
decisions adhering to the State's basic policy of extending
protection to Labor where conflicting interests between labor
and management exist. Petitioners cannot claim that they
were denied due process inasmuch as they were able to file
their position paper. The proper party to invoke due process
would have been private respondents, had their position
paper been expunged from the records for mere technicality.
Since petitioners assert that their defense is meritorious, it is
to their best interest that the cases be resolved on the merits.
In this manner, the righteousness of their cause can be
vindicated.
HELD:
IN VIEW OF THE FOREGOING, the Court Resolved to DISMISS
the petition for lack of merit.
SO ORDERED.
DOMNA N. VILLAVERT, petitioner, vs. EMPLOYEES'
COMPENSATION COMMISSION & GOVERNMENT
SERVICE INSURANCE SYSTEM (Philippine
Constabulary), respondents.
G.R. No. L-48605 December 14, 1981
FACTS:
Marcellino N. Villavert, son of the petitioner, was an employee
in the Philippine Constabulary as a code verifier. In addition
to his duties, he also performed the duties of a computer
operator and clerk typist. He performed his duties not only as
code verifier but also handled administrative functions,
computer operation and typing jobs due to the shortage of
civilian personnel. On December 11, 1975, Marcelino reported
to his work as usual. He was complaining chest pain and
headache in the late afternoon but because of the voluminous
work, he was still required to render overtime service for
computing allowance and preparing checks for the salary of
the Philippine Constabulary and Integrated National Police
personnel throughout the country on or before December 15,
1975. When he came home due to fatigue he went to his bed
as he arrived without taking his meal. Shortly after, his
mother, the petitioner, noticed that Marcellino was grasping
for breath, perspiring profusely and mumbling incoherent
words. Petitioner tried to wake him but failed to do so. She
therefore rushed him to the hospital but he never regained
consciousness and pronounced that the case of death was
acute hemorrhagic pancreatitis. Petitioner filed claim for the
death benefits of Marcelino to the Government Service
Insurance System together with the affidavit of Lt. Colonel
Felino C. Pacheco attesting that he worked as code verifier
and performed other additional duties. Inter alia, he testified
that the deceased was computer operator consequently
subject to excessive heat and cold. He also testified that the
deceased never drinks alcohol liquor nor smokes nor engages
on immoral habits. To corroborate Pacheco’s affidavit, Rustico
P. Valenzuela, Chief Clerk of the Constabulary Computer
Center certified that indeed the deceased was performing
additional work load due to the shortage of qualified civilian
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
personnel. He also certified that on the said date, the
deceased was complaining of chest pain and headache but he
was obligated to carry on work because of the said deadline.
He also pointed out that Marcelino was not able to consult for
his routine physical check-up due to the rotation of his duties.
The petition was denied by GSIS on the ground that acute
hemorrhagic pancreatitis is not an occupational disease and
the petitioner failed to show that there was causal connection
between the fatal ailment of Marcellino and the nature of his
work. On the hand, Medico-Legal of the National Bureau of
Investigation stated that the exact cause of acute
hemorrhagic pancreatitis is still unknown although the most
research data are agreed that physical and mental stresses
are strong casual factors in the development of the disease.
ISSUE:
whether in claiming death benefits of an employee in GSIS,
the causal connection of occupational disease that caused
death and the nature of work should be clearly established?
HELD:
As stated by the Medico Legal Officer of NBI that although the
cause of acute hemorrhagic pancreatitis is unknown,
researches points out that physical and mental stresses are
strong causal factors in the development of the disease. And
it was clearly established based on evidence presented by the
petitioner that the nature of the work of that deceased directly
caused or at least aggravates his disease. This was supported
by the fact that he never drinks nor smoke nor engages on
immoral habits. And as mandated in Art. 4 of the Labor Code,
“All doubts in the implementation and interpretation of
this Code, including its rules and implementation shall be
resolved in favor of the laborer.
RULING:
the assailed decision was set aside and GSIS was ordered to
pay petitioner death benefits
RUTH JIMENEZ, Petitioner, v. EMPLOYEES’
COMPENSATION COMMISSION and GOVERNMENT
SERVICE INSURANCE SYSTEM, Respondents.
G.R. No. 58176, March 23, 1984
MAKASIAR, J.:
FACTS:
Petitioner is the widow of the late Alfredo Jimenez, who joined
the government service as a constable in the Philippine
Constabulary.
After rendering service for one year, he was promoted to the
rank of constable second class. He was again promoted to the
rank of sergeant.
The deceased has several times admitted to the hospital due
to sickness. Subsequently, the deceased was again confined
at the Cagayan Provincial Hospital and then transferred to the
AFP V. Luna Medical Center at Quezon City for further
treatment. He complained of off-and-on back pains,
32
associated with occasional cough and also the swelling of the
right forearm. The doctors found a mass growth on his right
forearm, which grew to the size of 3 by 2 inches, hard and
associated with pain, which the doctors diagnosed as "aortic
aneurysm, medrastinal tumor".
His condition improved somewhat after treatment and he was
released. He was advised to have complete rest and to
continue medication. He was then given light duty inside the
barracks of their company.
Unfortunately, his ailment continued and became more
serious he died in his house.The cause of death, as found by
the doctors, is "bronchogenic carcinoma" which is a malignant
tumor of the lungs.
An administrative hearing was conducted before the PC
Regional Board. It was their official findings that the subject
enlisted man "died in line of duty”; that the deceased was a
PC member of the 111th PC Company at Tuguegarao,
Cagayan; that he died due to "bronchogenic CA”; and that he
"died not as a result of his misconduct and did not violate any
provisions of the Articles of War". The Board recommended
"that all benefits due to or become due subject EP be paid and
settled to his legal heirs". Thus, as per records of the GSIS,
petitioner was paid benefits due to her deceased husband
under Republic Act No. 610.
Nevertheless, petitioner filed a claim for death benefits under
PD No. 626, as amended with the respondent GSIS. Said claim
was denied by the GSIS on the ground that her husband’s
death is not compensable "for the reason that the
injury/sickness that caused his death is not due to the
circumstances of the employment or in the performance of
the duties and responsibilities of said employment"
ISSUE:
Whether or not her husband’s death from bronchogenic
carcinoma is compensable under the law.
RATIO DECIDENDI:
We cannot deny the fact that the causes of the illness of the
deceased are still unknown and may embrace such diverse
origins which even the medical sciences cannot tell with
reasonable certainty. Indeed, scientists attending the World
Genetic Congress in New Delhi, India, have warned that about
25,000 chemicals used around the world could potentially
cause cancer, and Lawrence Fishbein of the U.S. National
Center for Toxilogical Research pointed out that humans were
daily exposed to literally hundreds of chemical agents via air,
food, medication, both in their industrial home and
environments.
The theory of increased risk is applicable in the instant case.
The sweeping conclusion of the respondent Employees
Compensation Commission to the effect that the cause of the
bronchogenic carcinoma of the deceased was due to his being
a smoker and not in any manner connected with his work as
a soldier, is not in accordance with medical authorities nor
with the facts on record. No certitude can arise from a position
of uncertainty.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

We are dealing with possibilities and medical authorities have
given credence to the stand of the petitioner that her husband
developed bronchogenic carcinoma while working as a soldier
with the Philippine Constabulary. The records show that when
the deceased enlisted with the Philippine Constabulary in
1969, he was found to be physically and mentally healthy. A
soldier’s life is a hard one. As a soldier assigned to field duty,
exposure to the elements, dust and dirt, fatigue and lack of
sleep and rest is a common occurrence. Exposure to chemicals
while handling ammunition and firearms cannot be
discounted. WE take note also of the fact that he became the
security of one Dr. Emilio Cordero of Anulung, Cagayan, and
he always accompanied the doctor wherever the latter went
(p. 26, rec.). Such assignment invariably involved irregular
working hours, exposure to different working conditions, and
body fatigue, not to mention psychological stress and other
similar factors which influenced the evolution of his ailment.
HELD:
WHEREFORE, THE DECISION APPEALED FROM IS HEREBY
SET ASIDE AND THE GOVERNMENT SERVICE INSURANCE
SYSTEM IS HEREBY ORDERED.
whether or not the assailed DOLE and POEA circulars are
contrary to the Constitution, are unreasonable, unfair and
oppressive; and
whether or not the requirements of publication and filing with
the Office of the National Administrative Register were not
complied with.
HELD:
FIRST, the respondents acted well within in their authority
and did not commit grave abuse of discretion. This is because
Article 36 (LC) clearly grants the Labor Secretary to restrict
and regulate recruitment and placement activities, to wit:
Art. 36. Regulatory Power. — The Secretary of Labor shall
have the power to restrict and regulate the recruitment and
placement activities of all agencies within the coverage of this
title [Regulation of Recruitment and Placement Activities] and
is hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the
provisions of this title.

1. TO PAY THE PETITIONER THE SUM OF TWELVE
THOUSAND (P12,000.00) PESOS AS DEATH BENEFITS;
2. TO REIMBURSE THE PETITIONER’s MEDICAL AND
HOSPITAL EXPENSES DULY SUPPORTED BY PROPER
RECEIPTS; AND
3. TO PAY THE PETITIONER THE SUM OF ONE THOUSAND
TWO HUNDRED (P1,200.00) PESOS FOR BURIAL EXPENSES.
SO ORDERED.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,
INC. petitioner, vs. HON. RUBEN D. TORRES, as
Secretary of the Department of Labor & Employment,
and JOSE N. SARMIENTO, as Administrator of the
PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, respondents.
[G.R. No. 101279. August 6, 1992.]
SECOND, the vesture of quasi-legislative and quasi-judicial
powers in administrative bodies is constitutional. It is
necessitated by the growing complexities of the modern
society.
THIRD, the orders and circulars issued are however, invalid
and unenforceable. The reason is the lack of proper
publication and filing in the Office of the National
Administrative Registrar as required in Article 2 of the Civil
Code to wit:
Art. 2. Laws shall take effect after fifteen (15) days following
the completion of their publication in the Official Gazatte,
unless it is otherwise provided;
Article 5 of the Labor Code to wit:

FACTS:
Art. 5. Rules and Regulations. — The Department of Labor
and other government agencies charged with the
DOLE Secretary Ruben D. Torres issued Department Order
administration and enforcement of this Code or any of its parts
No. 16 Series of 1991 temporarily suspending the recruitment
shall promulgate the necessary implementing rules and
by private employment agencies of “Filipino domestic helpers
regulations. Such rules and regulations shall become effective
going to Hong Kong”. As a result of the department order
fifteen (15) days after announcement of their adoption in
DOLE, through the POEA took over the business of deploying
newspapers of general circulation;
Hong Kong bound workers.
and Sections 3(1) and 4, Chapter 2, Book VII of the
The petitioner, PASEI, the largest organization of private
Administrative Code of 1987 which provide:
employment and recruitment agencies duly licensed and
authorized by the POEA to engage in the business of obtaining
Sec. 3. Filing. — (1) Every agency shall file with the University
overseas employment for Filipino land-based workers filed a
of the Philippines Law Center, three (3) certified copies of
petition for prohibition to annul the aforementioned order and
every rule adopted by it. Rules in force on the date of
to prohibit implementation.
effectivity of this Code which are not filed within three (3)
months shall not thereafter be the basis of any sanction
ISSUES:
against any party or persons. (Chapter 2, Book VII of the
Administrative Code of 1987.)
whether or not respondents acted with grave abuse of
discretion and/or in excess of their rule-making authority in
Sec. 4. Effectivity. — In addition to other rule-making
issuing said circulars;
requirements provided by law not inconsistent with this Book,

33
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
each rule shall become effective fifteen (15) days from the
date of filing as above provided unless a different date is fixed
by law, or specified in the rule in cases of imminent danger to
public health, safety and welfare, the existence of which must
be expressed in a statement accompanying the rule. The
agency shall take appropriate measures to make emergency
rules known to persons who may be affected by them.
(Chapter 2, Book VII of the Administrative Code of 1987).
Prohibition granted.
G.R. No. L-51353 June 27, 1988
SHELL PHILIPPINES, INC., Plaintiff-Appellee, vs.
CENTRAL BANK OF THE PHILIPPINES
FACTS:
On May 1, 1970, Congress approved the Act imposing a
stabilization tax on consignments abroad (RA 6125)that there
shall be imposed, assessed and collected a stabilization tax on
the gross F.O.B. peso proceeds, based on the rate of
exchange prevailing at the time of receipt of such proceeds,
whether partial or total, of any exportation. And that "Any
export products the aggregate annual F.O.B. value of which
shall exceed five million United States dollars in any one
calendar year during the effectivity of this Act shall likewise
be subject to the rates of tax in force during the fiscal years
following its reaching the said aggregate value."
The apellee Shell Philippines reach 5 M dollars of their by
product petroleum, the Monetary Board issued its Resolution
No. 47 to the stabilization tax effective January 1, 1972. Under
the Central Bank Circular No. 309, implemented by Resolution
No. 47, appellee had to pay the stabilization tax beginning
January 1, 1972, which it did under protest. The n later filed
a suit against Central Bank praying that the resolution be
declared bul and void. The lower court sustained that the
resolution as void. The TC opined mentioning the difference
between calendar year and fiscal year wherein calendar year
refers to one year starting from January to December. Fiscal
year, as it is usually and commonly used, refers to the period
covered between July 1 of a year to June 30 of the following
year. The Central appealed the above cited decision of TC
ISSUES:
WON Monetary Board Resolution No. 47is null and void?
Which should prevail in case of discrepancy, the basic law or
the rule and regulation issued to implement said law?
HELD:
1) YES.
While it is true that under the same law the Central Bank was
given the authority to promulgate rules and regulations to
implement the statutory provision in question but its authority
is limited only to carrying into effect what the law being
implemented provides. The trial court was correct in declaring
that "Monetary Board Resolution No. 47 is void insofar as it
34
imposes the tax mentioned in Republic Act No. 6125 on the
export seria residue of (plaintiff) the aggregate annual F.O.B.,
value of which reached five million United States dollars in
1971 effective on January 1, 1972." The said resolution runs
counter to the provisions of R.A. 6125 which provides that
"(A)ny export product the aggregate annual F.O.B. value of
which shall exceed five million United States dollars in any one
calendar year during the effectivity of this Act shall likewise
be subject to the rates of tax in force during the fiscal year
following its reaching the said aggregate value."
2) In case of discrepancy between the basic law and a rule or
regulation issued to implement said law, the basic law prevails
because said rule or regulation cannot go beyond the terms
and provisions of the basic law (People v. Lim, 108 Phil. 1091)
The rule or regulation should be within the scope of the
statutory authority granted by the legislature to the
administrative agency. (Davis, Administrative Law, p. 194,
197, cited in Victorias Milling Co., Inc. v. Social Security
Commission, 114 Phil. 555, 558)
The respondent was liable to pay the tax and that the Central
Bank merely collected the said tax prematurely. There is
likewise no controversy over the rate of tax in force when
payment became due. Thus, the tax refund granted by the
trial court was not proper because the tax paid was in fact,
and in law due to the government at the correct time.
The Court decline to grant to the respondent an amount
equivalent to the interest on the prematurely collected tax
because of the well entrenched rule that in the absence of a
statutory provision clearly or expressly directing or authorizing
payment of interest on the amount to be refunded to the
taxpayer, the Government cannot be required to pay interest.
Likewise, it is the rule that interest may be awarded only when
the collection of tax sought to be refunded was attended with
arbitrariness (Atlas Fertilizer Corp. v. Commission on Internal
Revenue, 100 SCRA 556). There is no indication of
arbitrariness in the questioned act of the appellant.
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES'
UNION (IBAAEU), Petitioner, vs. HON. AMADO G.
INCIONG, Deputy Minister, Ministry of Labor and
INSULAR BANK OF ASIA AND AMERICA,
Respondents.
G.R. No. L-52415 October 23, 1984
FACTS:
Petitioner filed a complaint against the respondent bank for
the payment of holiday pay before the then Department of
Labor, National Labor Relations Commission, Regional Office
No. IV in Manila. Labor Arbiter Ricarte T. Soriano rendered a
decision in the above-entitled case, granting petitioner's
complaint for payment of holiday pay. The records disclosed
that employees of respondent bank were not paid their wages
on unworked regular holidays as mandated by the Code,
particularly Article 208. Accordingly, on February 16, 1976, by
authority of Article 5 of the same Code, the Department of
Labor (now Ministry of Labor) promulgated the rules and
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
regulations for the implementation of holidays with pay. The
controversial section thereof reads:
Sec. 2. Status of employees paid by the month. - Employees
who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than
the statutory or established minimum wage shall be presumed
to be paid for all days in the month whether worked or not.
For this purpose, the monthly minimum wage shall not be less
than the statutory minimum wage multiplied by 365 days
divided by twelve"
On April 23, 1976, Policy Instruction No. 9 was issued by the
then Secretary of Labor (now Minister) interpreting the above-
quoted rule, pertinent . When the petitioner filed motion for
the writ of execution to enforce the arbiters decision whereby
the respondent bank was ordered to pay for the daily waged
for the unworked holiday pay in accordance with the award,
respondent bank opposed claiming that it is based on and
justified by Policy Instruction No. 9 which interpreted the rules
implementing P. D. 850. NLRC dismissed the respondents
bank appeal but Minister of Labor through Deputy Minister
Amado Inciong set aside the decision of NLRC and instead
dismissed the instant case for lack of merit.
ISSUE:
Whether or not the decision of a Labor Arbiter awarding
payment of regular holiday pay can still be set aside on appeal
by the Deputy Minister of Labor even though it has already
become final and had been partially executed, the finality of
which was affirmed by the National Labor Relations
Commission sitting en banc, on the basis of an Implementing
Rule and Policy Instruction promulgated by the Ministry of
Labor long after the said decision had become final and
executory.
HELD:
NO.
Section 2, Rule IV, Book III of the implementing rules and
Policy Instruction No. 9 issued by the then Secretary of Labor
are null and void since in the guise of clarifying the Labor
Code's provisions on holiday pay, they in effect amended them
by enlarging the scope of their exclusion.
Article 94 of the Labor Code, as amended by P.D. 850,
provides:
Art. 94. Right to holiday pay. - (a) Every worker shall be paid
his regular daily wage during regular holidays, except in retail
and service establishments regularly employing less than ten
(10) workers. ...
The coverage and scope of exclusion of the Labor Code's
holiday pay provisions is spelled out under Article 82 thereof
which reads:
Art. 82. Coverage. - The provision of this Title shall apply to
employees in all establishments and undertakings, whether
for profit or not, but not to government employees,
managerial employees, field personnel members of the family
35
of the employer who are dependent on him for support
domestic helpers, persons in the personal service of another,
and workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations
From the above-cited provisions, it is clear that monthly paid
employees are not excluded from the benefits of holiday pay.
However, the implementing rules on holiday pay promulgated
by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting, under Rule IV,
Book Ill of the implementing rules, Section 2 which provides
that: "employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a
salary of not less than the statutory or established minimum
wage shall be presumed to be paid for all days in the month
whether worked or not.
It is elementary in the rules of statutory construction
that when the language of the law is clear and
unequivocal the law must be taken to mean exactly
what it says. In the case at bar, the provisions of the Labor
Code on the entitlement to the benefits of holiday pay are
clear and explicit - it provides for both the coverage of and
exclusion from the benefits. This violates Article 4 of the Labor
Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor
of labor." Moreover, it shall always be presumed that the
legislature intended to enact a valid and permanent statute
which would have the most beneficial effect that its language
permits (Orlosky vs. Haskell, 155 A. 112.)
Obviously, the Secretary (Minister) of Labor had exceeded his
statutory authority granted by Article 5 of the Labor Code
authorizing him to promulgate the necessary implementing
rules and regulations.
ELDEPIO LASCO, Et. Al., all represented by MARIANO
R. ESPINA, petitioner, vs. UNITED NATIONS
REVOLVING FUND FOR NATURAL RESOURCES
EXPLORATION (UNRFNRE) represented by its
operations manager, DR. KYRIACOS LOUCA, OSCAR
N. ABELLA, LEON G. GONZAGA, JR., MUSIB M. BUAT,
Commissioners of National Labor Relations
Commission (NLRC), Fifth Division, Cagayan de Oro
City and IRVING PETILLA, Labor Arbiter of Butuan
City, respondents.
G.R. Nos. 109095-109107
February 23, 1995
QUIASON, J.:
FACTS:
Petitioners were dismissed from their employment
with private respondent, the United Nations Revolving Fund
for Natural Resources Exploration (UNRFNRE), which is a
special fund and subsidiary organ of the United Nations. The
UNRFNRE is involved in a joint project of the Philippine
Government and the United Nations for exploration work in
Dinagat Island.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
In the case before the NLRC, the private respondent alleged
in their motion to dismiss that respondent Labor Arbiter had
no jurisdiction over its personality since it enjoyed diplomatic
immunity pursuant to the 1946 Convention on the Privileges
and Immunities of the United Nations. In support thereof,
private respondent attached a letter from the Department of
Foreign Affairs dated August 26, 1991, which acknowledged
its immunity from suit. The letter confirmed that private
respondent, being a special fund administered by the United
Nations, was covered by the 1946 Convention on the
Privileges and Immunities of the United Nations of which the
Philippine Government was an original signatory.
Private respondent issued an order dismissing the complaints
on the ground that private respondent was protected by
diplomatic immunity.
ISSUE:
Whether or not the private respondents, being a special fund
administered by the United Nations are entitled to immunity
of suit in labor disputes.
RATIO DECIDENDI:
Article 223 of the Labor Code provides that decisions of the
NLRC are final and executory. Thus, they may only be
questioned through certiorari as a special civil action under
Rule 65 of the Revised Rules of Court.
Convention on the Privileges and Immunities of the
Specialized Agencies of the
United Nations, to which the Philippines was a signatory,
Sections 4 and 5 of Article III thereof:
Sec. 4. The specialized agencies, their property and
assets, wherever located and by whomsoever held
shall enjoy immunity from every form of legal
process except insofar as in any particular case they
have expressly waived their immunity. It is, however,
understood that no waiver of immunity shall extend
to any measure of execution (Emphasis supplied).
Sec. 5. The premises of the specialized agencies shall
be inviolable. The property and assets of the
specialized agencies, wherever located and by
whomsoever held, shall be immune from search,
requisition, confiscation, expropriation and any other
form of interference, whether by executive,
administrative, judicial or legislative action
(Emphasis supplied).
Sec. 2, Article II of the 1987 Constitution:
Sec. 2. The Philippines renounces war as an
instrument of national policy, adopts the generally
accepted principles of international law as part of the
law of the land and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity
with all nations.
RULING:
36
The Office of the Solicitor General is of the view that private
respondent is covered by the mantle of diplomatic immunity.
Private respondent is a specialized agency of the United
Nations. Under Article 105 of the Charter of the United
Nations:
1. The Organization shall enjoy in the territory of its
Members such privileges and immunities as are
necessary for the fulfillment of its purposes.
2. Representatives of the Members of the United
Nations and officials of the Organization shall
similarly enjoy such privileges and immunities as are
necessary for the independent exercise of their
functions in connection with the organization.
Corollary to the cited article is the Convention on the Privileges
and Immunities of the Specialized Agencies of the United
Nations, to which the Philippines was a signatory (Vol. 1,
Philippine Treaty Series, p. 621). We quote Sections 4 and 5
of Article III thereof:
Sec. 4. The specialized agencies, their property and
assets, wherever located and by whomsoever
held shall enjoy immunity from every form of legal
process except insofar as in any particular case they
have expressly waived their immunity. It is, however,
understood that no waiver of immunity shall
extend to any measure of execution (Emphasis
supplied).
As a matter of state policy as expressed in the
Constitution, the Philippine Government adopts the generally
accepted principles of international law (1987 Constitution,
Art. II, Sec. 2). Being a member of the United Nations and a
party to the Convention on the Privileges and Immunities of
the Specialized Agencies of the United Nations, the Philippine
Government adheres to the doctrine of immunity granted to
the United Nations and its specialized agencies. Both treaties
have the force and effect of law.
REPUBLIC OF THE PHILIPPINES, represented by the
NATIONAL PARKS DEVELOPMENT
COMMITTEE, petitioner, vs. THE HON. COURT OF
APPEALS and THE NATIONAL PARKS DEVELOPMENT
SUPERVISORY ASSOCIATION & THEIR
MEMBERS, respondents.
G.R. No. 87676
December 20, 1989
GRIÑO-AQUINO, J.:
FACTS:
National Parks Development Committee (NPDC) was originally
created under EO 30 and later renamed under EO 68. It was
also registered in the Securities and Exchange Commission as
a non-stock and non-profit corporation known as “The
National Parks Development Committee, Inc.” For their failure
to submit certain documents, NPDC was ordered to show
cause why its Certificate of Registration should not be
suspended, to which they replied that they had no objection
to the suspension, cancellation, or revocation of the Certificate
of Registration of NPDC. By virtue of EO 120, NPDC was
attached to the Department of Tourism and was provided with
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
a separate budget subject to the audit by the Commission on
audit.
NPDC Employees Association (NPDCEA) entered into two
collecting bargaining agreements with NPDC. These unions
staged a strike at the Rizal Park, Fort Santiago, Paco Park, and
Pook ni Mariang Makiling alleging unfair labor practices by the
NPDC. The NPDC filed with the Regional Trial Court in Manila
a complaint against the union to declare the strike illegal and
to restrain it on the ground that they have no right to strike
as government employees but they may form a union.
The lower court dismissed the petition assailing that it is the
Department of Labor who has jurisdiction over the case
because there exists an employer-employee relationship
between NPDC and the strikers. The petitioner appealed to
the CA on certiorari but the latter affirmed the decision of the
trial court. Hence, this petition.
ISSUE:
Whether the petitioner, National Parks Development
Committee (NPDC), is a government agency, or a private
corporation, for on this issue depends the right of its
employees to strike.
RATIO DECIDENDI:
Sec. 2, Article IX of the Philippine Constitution
(1) The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of
the Government, including government-owned
and controlled corporations with original
charters.
RULING:
The Court ruled that NPDC is an agency of the government,
not a government-owned or controlled corporation, hence, its
employees are covered by the Civil Service rules and
regulations. Its employees are Civil Service employees.
The Court also ruled that “While NPDC employees are allowed
under the 1987 Constitution to organize and join unions of
their choice, there is as yet no law permitting them to strike.
In case of a labor dispute between the employees and the
government, Section 15 of Executive Order No. 180 dated
June 1, 1987 provides that the Public Sector Labor-
Management Council, not the Department of Labor and
Employment, shall hear the dispute. Clearly, the Court of
Appeals and the lower court erred in holding that the labor
dispute between the NPDC and the members of the NPDSA is
cognizable by the Department of Labor and Employment.”
PNOC ENERGY DEVELOPMENT CORPORATION and
MARCELINO TONGCO, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION and MANUEL S.
PINEDA, respondents.
G.R. No. 100947
May 31, 1993
37
NARVASA, C.J.:
FACTS:
Manuel Pineda was employed with the PNOC-ADC as a clerk.
He later on become a Geothermal Construction Secretary
during which he also decided to run for councilor of the
Municipality of Kananga, Leyte. An objection to his candidacy
was raised alleging that he could not actively participate in
politics unless he is officially resigned from PNOC-EDC.
However, nothing resulted from such protest and Pineda
eventually won in the elections. He was proclaimed as a
councilor. Pineda raised a question before the Secretary of
Justice on whether or not he was "considered automatically
resigned upon filing of (his) certificate of candidacy," and
whether or not, in case he was elected, he could "remain
appointed to any corporate offspring of a government-owned
or controlled corporation. Nevertheless, he took his oath of
office and continued working for PNOC-EDC
Eventually, PNOC-EDC notified Pineda that he is separated
from his service upon their [PNOC-EDC] inquiry in their legal
department regarding the status of Pineda as employee in
view of his candidacy for the office of the municipal councilor
and that the said department said that Pineda should be
considered ipso facto resigned upon the filing of his Certificate
of Candidacy. Pineda filed an illegal dismissal case in the NLRC
to which it ruled for Pineda’s reinstatement and payment of
full backwages. NLRC stated that PNOC-EDC, being a GOCC
incorporated under the Corporation Code, the general law, are
not deemed to be within the coverage of the Civil Service Law,
and consequently their employees, like those of PNOC-EDC,
are subject to the provisions of the Labor Code rather than
the Civil Service Law.
ISSUE:
Whether an employee in a government-owned or controlled
corporation without an original charter nevertheless falls
within the scope of Sec. 66 of the Omnibus Election Code.
RATIO DECIDENDI:
Sec. 2, Article IX of the Philippine Constitution
(1) The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of
the Government, including government-owned
and controlled corporations with original
charters.
RULING:
The Court held that the Congress, in reviewing the Omnibus
Election Code, made no effort to distunguis between the two
classes of GOCCs or their employees, particularly as regards
the rule that any employee “in government-owned and
controlled corporations, shall be considered ipso facto
resigned from his office upon filing of his certificate of
candidacy.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
The Court ruled that Sec. 66 of the Omnibus Election Code
applies to officers and employees in GOCCs, even those
organized under the general laws and therefore not having an
original charter, and even if they do not fall under the Civil
Service Law but under the Labor Code. In other words, Sec.
66 constitutes as a just cause for termination of employment
in addition to those set forth in the Labor Code, as amended.
BENJAMIN C. JUCO, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and NATIONAL HOUSING
CORPORATION, respondents.
G.R. No. 98107
August 18, 1997
HERMOSISIMA, JR., J.:
FACTS:
Petitioner was hired as a project engineer of National housing
Corporation. He was separated from the service for having
been implicated in a crime of theft and/or malversation of
public funds. He filed an illegal dismissal case against the NHC
with the Department of Labor. The Labor Arbiter dismissed
the case stating that it has no jurisdiction over the case. The
case before the Labor Arbiter went up to the Supreme Court
which decided for the Respondent. Thereafter, Petitioner filed
with the Civil Service Commission a complaint for illegal
dismissal which the CSC dismissed for lack of jurisdiction.
Subsequently, petitioner filed with the NLRC a case for illegal
dismissal wherein the case was dismissed on appeal for lack
of jurisdiction.
Respondent NLRC, though Labor Arbiter Caday, ruled that
Juco’s dismissal was illegal as there was evidence in the record
that the criminal case against Juco was fabricated, prompting
the trial court to dismiss the charges against him and ruled
furthermore that Juco’s complaint filed was not barred by
prescription. NHC appealed the NLRC’s decision in which the
latter reversed its earlier decision on the ground of lack of
jurisdiction.
ISSUE:
Whether or not NLRC, or the CSC has jurisdiction over the
case.
RATIO DECIDENDI:
Sec. 2, Article IX of the Philippine Constitution
(1) The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of
the Government, including government-owned
and controlled corporations with original
charters.
38
RULING:
The Court held that it is the NLRC that has jurisdiction over
the case. The National Housing Corporation is a government
owned corporation organized in 1959 in accordance with
Executive Order No. 399, otherwise known as the Uniform
Charter of Government Corporation, dated January 1, 1959.
Its shares of stock are and have been one hundred percent
(100%) owned by the Government from its incorporation
under Act 1459, the former corporation law. Considering the
fact that the NHA had been incorporated under Act 1459, the
former corporation law, it is but correct to say that it is a
government-owned or controlled corporation whose
employees are subject to the provisions of the Labor Code.
The Supreme Court held that the NHA is now within the
jurisdiction of the Department of Labor and Employment, it
being a government-owned and/or controlled corporation
without an original charter. Thus, the NLRC erred in dismissing
petitioner's complaint for lack of jurisdiction because the rule
now is that the Civil Service now covers only government-
owned or controlled corporations with original charters.
Having been incorporated under the Corporation Law, its
relations with its personnel are governed by the Labor Code
and come under the jurisdiction of the National Labor
Relations Commission.
People of the Philippines vs. Domingo Panis
GR No. L–58674–77, July 11, 1990
FACTS:
On January 9, 1981, four information were filed in the in the
Court of First Instance (CFI) of Zambales and Olongapo City
alleging that herein private respondent Serapio Abug,
"without first securing a license from the Ministry of Labor as
a holder of authority to operate a fee-charging employment
agency, did then and there wilfully, unlawfully and criminally
operate a private fee charging employment agency by
charging fees and expenses (from) and promising
employment in Saudi Arabia" to four separate individuals.
Abug filed a motion to quash contending that he cannot be
charged for illegal recruitment because according to him,
Article 13(b) of the Labor Code says there would be illegal
recruitment only "whenever two or more persons are in any
manner promised or offered any employment for a fee.”
Denied at first, the motion to quash was reconsidered and
granted by the Trial Court in its Orders dated June 24, 1981,
and September 17, 1981. In the instant case, the view of the
private respondents is that to constitute recruitment and
placement, all the acts mentioned in this article should involve
dealings with two or more persons as an indispensable
requirement. On the other hand, the petitioner argues that
the requirement of two or more persons is imposed only
where the recruitment and placement consists of an offer or
promise of employment to such persons and always in
consideration of a fee.
ISSUE:
Whether or not Article 13(b) of the Labor Code provides for
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
the innocence or guilt of the private respondent of the crime
of illegal recruitment
COURT RULING:
The Supreme Court reversed the CFI’s Orders and reinstated
all four-information filed against private respondent.
The Article 13(b) of the Labor Code was merely intended to
create a presumption, and not to impose a condition on the
basic rule nor to provide an exception thereto.
Where a fee is collected in consideration of a promise or offer
of employment to two or more prospective workers, the
individual or entity dealing with them shall be deemed to be
engaged in the act of recruitment and placement. The words
"shall be deemed" create the said presumption.
HELLENIC PHILIPPINE SHIPPING, INC., petitioner,
vs.
EPIFANIO C. SIETE and NATIONAL LABOR
RELATIONS COMMISSION (NLRC), respondents.
G.R. No. 84082 March 13, 1991
CRUZ, J.:
FACTS:
Siete was employed on May 22, 1985, as Master of M/V Houda
G by Sultan Shipping Co., Ltd., through its crewing agent,
herein petitioner. He boarded the vessel on May 24, 1985. On
July 8, 1985, Capt. Wilfredo Lim boarded the vessel and
advised Siete that he had instructions from the owners to take
over its command. On July 12, 1985, Siete filed a complaint
against the petitioner for illegal dismissal and non-payment of
his salary and other benefits under their employment contract.
Petitioner dismissed private respondent because of his failure
to complete with the instruction of Sultan Shipping to erase
the timber load line on the vessel and for his negligence in the
discharge of the cargo at Tripoli that endangered the vessel
and stevedores. The Philippine Overseas Employment
Administration (POEA) dismissed the complaint, holding that
there was valid cause for Siete's removal.
On January 4, 1988, the private respondent appealed to the
NLRC, contending that the records presented by the petitioner
were prepared long after his dismissal. He insisted that he
was dismissed without even being informed of the charges
against him or given an opportunity to refute them. NLRC
reversed the POEA Administrator, holding that the dismissal
violated due process and that the documents submitted by the
petitioner were hearsay, self-serving, and not verified.
ISSUE(s):
Whether the dismissal is illegal for failure to observe due
process.
Liability of the Agency with the Employer for claims which
might arise in connection with the employment contract.
HELD:
Yes.
39
Substantial evidence has established that the private
respondent was indeed not notified of the charges against him
and that no investigation was conducted to justify his
dismissal.
The Labor Code provides as follows:
Sec. 2. Notice of dismissal. — Any employer who seeks to
dismiss a worker shall furnish him a written notice stating the
particular acts or omission constituting the grounds for his
dismissal.
Sec. 5 xxx The employer shall afford the worker ample
opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires.
Sec. 6. Decision to dismiss. — The employer shall immediately
notify a worker in writing of a decision to dismiss him stating
clearly the reasons therefor.
The petitioner argues that whatever defects might have
tainted the private respondent's dismissal were subsequently
cured when the charges against him were specified and
sufficiently discussed in the position papers submitted by the
parties to the POEA. That argument is unacceptable. The issue
before the POEA was in fact the lack of due process in Siete's
dismissal. The law requires that the investigation be
conducted before the dismissal, not after. That omission
cannot be corrected by the investigation later conducted by
the POEA. As the Solicitor General correctly maintained, the
due process requirement in the dismissal process is different
from the due process requirement in the POEA proceeding.
Both requirements must be separately observed.
Private employment agencies are jointly and severally liable
with the foreign-based employer for any violation of the
recruitment agreement or the contract of employment. A
verified undertaking was made by the petitioner that it would
"assume joint and solidary liability with the employer for all
claims and liabilities which (might) arise in connection with the
implementation of the contract of employment.
Furthermore, the Supreme Court said that the private
respondent was illegally dismissed because, first, he was not
accorded a fair investigation as required by law, and second,
because the grounds invoked for his separation have not been
proved by the petitioner.
DELIA D. ROMERO, Petitioner,
vs
PEOPLE OF THE PHILIPPINES, ROMULO PADLAN and
ARTURO SIAPNO, Respondents
G.R. No. 171644 November 23, 2011
PERALTA, J.:
FACTS:
The Regional Trial Court (RTC) of Dagupan City, found
petitioner guilty beyond reasonable doubt of the crime of
Illegal Recruitment as defined in paragraph (a) of Article 38
of Presidential Decree No. 2018.
Sometime in August 2000, ARTURO SIAPNO went to
petitioner's stall. He was convinced by the petitioner that if he
could give her US$3,600.00 for the processing of his papers,
he could leave the country within 1 to 2 weeks for a job
placement in Israel. Arturo was able to secure the amount
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
needed through relatives help then petitioner processed
Arturo's papers and contacted Jonney Erez Mokra. Jonney
instructed Arturo to attend a briefing in Dau, Mabalacat,
Pampanga.
Afterwards, Arturo left for Israel sometime in September
2000. He was able to work and receive US$800.00 salary per
month. After three months of stay in Israel, he was caught by
the immigration officials, incarcerated for ten days and was
eventually deported. After arriving in the country, Arturo
immediately sought the petitioner who then promised him that
she would send him back to Israel, which did not happen.
Meanwhile, sometime in September 2000, ROMULO PADLAN
went to petitioner's stall at Calasiao, Pangasinan to inquire
about securing a job in Israel. Convinced by petitioner's words
of encouragement and inspired by a high potential salary,
Romulo asked petitioner the amount of money required in
order for him to be able to go to Israel. Petitioner informed
him that as soon as he could give her US$3,600.00, his papers
would be immediately processed. When he was able to raise
the amount, Romulo went back to petitioner and handed her
the money. Petitioner contacted JonneyErezMokra who
instructed Romulo to attend a briefing at his house in Dau,
Mabalacat, Pampanga. Romulo was able to leave for Israel on
October 26, 2000 and was able to secure a job but
unfortunately, after two and a half months, he was caught by
Israel's immigration police and detained for 25 days. He was
subsequently deported because he did not possess a working
visa. On his return, Romulo demanded from petitioner the
return of his money, but the latter refused and failed to do so.
Petitioner also claims that the testimony of Arturo Siapno
saying that he paid a certain amount of money to the former
must not be given any credence due to the absence of any
receipt or any other documentary evidence proving such.
ISSUE:
Whether or not DELIA D. ROMERO is guilty of the act of Illegal
Recruitment.
HELD:
Yes. As testimonies of SIAPNO and PADLAN shows that
petitioner was able to convince the private respondents to
apply for work in Israel after parting with their money in
exchange for the services she would render. Such act of the
petitioner, without a doubt, falls within the meaning of
recruitment and placement as defined in Article 13 (b) of the
Labor Code.
The Court ruled that in illegal recruitment cases, the failure to
present receipts for money that was paid in connection with
the recruitment process will not affect the strength of the
evidence presented by the prosecution as long as the payment
can be proved through clear and convincing testimonies of
credible witnesses.
WHEREFORE, the Petition for Review on Certiorari of
petitioner Delia D. Romero is hereby DENIED. Consequently,
the Decision and Resolution of the Court of Appeals, affirming
the Decision of the Regional Trial Court, finding petitioner
guilty beyond reasonable doubt of the crime of Illegal
Recruitment as defined in paragraph (a) of Article 38 of
40
Presidential Decree (P.D.) No. 2018, are hereby AFFIRMED
with the MODIFICATION on the penalty to be imposed.
[1] “Art. 38. Illegal Recruitment. — (a) Any recruitment
activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or
non-holders of authority shall be deemed illegal and
punishable under Article 39 of this Code. The Ministry of Labor
and Employment or any law enforcement officers may initiate
complaints under this Article.” x x x PRESIDENTIAL DECREE
NO. 2018
[2] Article 13 (b) of the Labor Code defines recruitment and
placement as: any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising
for employment, locally or abroad, whether for profit or not:
Provided, that any person or entity which, in any manner,
offers or promises for a fee, employment to two or more
persons shall be deemed engaged in recruitment and
placement.
PEOPLE OF THE PHILIPPINES, Appellee, v. MELISSA
CHUA, Appellant.
G.R. No. 184058: March 10, 2010
CARPIO MORALES, J.:
FACTS:
Appellant was indicted for Illegal Recruitment (Large Scale)
and for five counts of Estafa in violation of Article 38 (a) of
the the New Labor Code of the Philippines, in relation to Art.
13 (b) and (c ) thereof, as further amended by Sec. 6 (a), (1)
and (m) of RA 8042.
Appellant denied the charges. Claiming having worked as a
temporary cashier from January to October, 2002 at the office
of Golden Gate, owned by one Marilyn Calueng, she
maintained that Golden Gate was a licensed recruitment
agency and that Josie, who is her godmother, was an agent.
Admitting having receivedP80,000 each from Marilyn and Tan,
receipt of which she issued but denying receiving any amount
from King, she claimed that she turned over the money to the
documentation officer, one Arlene Vega, who in turn remitted
the money to Marilyn Calueng whose present whereabouts
she did not know.
ISSUE:
Whether or not the appellant is guilty of illegal recruitment?
HELD:
Yes. The term recruitment and placement is defined under
Article 13(b) of the Labor Code of the Philippines as any act
of canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or
abroad, whether for profit or not. Provided, That any person
or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged
in recruitment and placement. On the other hand, illegal
recruitment is defined under Article 38, paragraph (a) of the
Labor Code, as amended.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
From the foregoing provisions, it is clear that any recruitment
activities to be undertaken by non-licensee or non-holder of
contracts, or as in the present case, an agency with an expired
license, shall be deemed illegal and punishable under Article
39 of the Labor Code of the Philippines. And illegal recruitment
is deemed committed in large scale if committed against three
or more persons individually or as a group.
Thus for illegal recruitment in large scale to prosper, the
prosecution has to prove three essential elements, to wit: (1)
the accused undertook a recruitment activity under Article
13(b) or any prohibited practice under Article 34 of the Labor
Code; (2) the accused did not have the license or the authority
to lawfully engage in the recruitment and placement of
workers; and (3) the accused committed such illegal activity
against three or more persons individually or as a group.
In the present case, Golden Gate, of which appellant admitted
being a cashier from January to October 2002, was initially
authorized to recruit workers for deployment abroad. Per the
certification from the POEA, Golden Gates license only expired
on February 23, 2002 and it was delisted from the roster of
licensed agencies on April 2, 2002.
Appellant was positively pointed to as one of the persons who
enticed the complainants to part with their money upon the
fraudulent representation that they would be able to secure
for them employment abroad. In the absence of any evidence
that the complainants were motivated by improper motives,
the trial courts assessment of their credibility shall not be
interfered with by the Court.
Even if appellant were a mere temporary cashier of Golden
Gate, that did not make her any less an employee to be held
liable for illegal recruitment as principal by direct participation,
together with the employer, as it was shown that she actively
and consciously participated in the recruitment process.
Assuming arguendo that appellant was unaware of the illegal
nature of the recruitment business of Golden Gate that does
not free her of liability either. Illegal Recruitment in Large
Scale penalized under Republic Act No. 8042, or The Migrant
Workers and Overseas Filipinos Act of 1995, is a special law,
a violation of which is malum prohibitum, not malum in se.
Intent is thus immaterial. And that explains why appellant
was, aside from Estafa, convicted of such offense.
IMELDA DARVIN, petitioner, vs. HON. COURT OF
APPEALS and PEOPLE OF THE PHILIPPINES,
respondents.
[G.R. No. 125044. July 13, 1998]
ROMERO, J.:
FACTS:
Imelda Darvin was convicted of simple illegal recruitment
under the Labor Code by the RTC. It stemmed from a
complaint of one Macaria Toledo who was convinced by the
petitioner that she has the authority to recruit workers for
abroad and can facilitate the necessary papers in connection
thereof. In view of this promise, Macaria gave her P150,000
supposedly intended for US Visa and air fare.
41
On appeal, the CA affirmed the decision of the trial court in
toto, hence this petition.
ISSUE:
Whether or not appellant is guilty beyond reasonable doubt of
illegal recruitment.
HELD:
No.
Art. 13 of the Labor Code provides the definition of
recruitment and placement as: xxx b.) any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or
procuring workers and includes referrals, contract services,
promising or advertising for employment locally or abroad,
whether for profit or not: Provided, that any reason person or
entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged
in recruitment and placement.
Art. 38 of the Labor Code provides:
a.)Any recruitment activities, including the prohibited
practices enumerated under Article 43 of the Labor Code, to
be undertaken by non-licensees or non-holders of authority
shall be deemed illegal and punishable under Article 39 of the
Labor Code.
Applied to the present case, to uphold the conviction of
accused-appellant, two elements need to be shown: (1) the
person charged with the crime must have undertaken
recruitment activities: and (2) the said person does not have
a license or authority to do so.
In the case, the Court found no sufficient evidence to prove
that accused-appellant offered a job to private respondent. It
is not clear that accused gave the impression that she was
capable of providing the private respondent work abroad.
What is established, however, is that the private respondent
gave accused-appellant P150,000.
By themselves, procuring a passport, airline tickets and
foreign visa for another individual, without more, can hardly
qualify as recruitment activities. Aside from the testimony of
private respondent, there is nothing to show that appellant
engaged in recruitment activities.
At best, the evidence proffered by the prosecution only goes
so far as to create a suspicion that appellant probably
perpetrated the crime charged. But suspicion alone is
insufficient, the required quantum of evidence being proof
beyond reasonable doubt. When the People’s evidence fail to
indubitably prove the accused’s authorship of the crime of
which he stand accused, then it is the Court’s duty, and the
accused’s right, to proclaim his innocence.
EDGARDO M. PANGANIBAN, Petitioner, v. TARA
TRADING SHIP MANAGEMENT INC. AND SHINELINE
SDN BHD, Respondents.
G.R. No. 187116: October 18, 2010
MENDOZA,J.:
FACTS:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
In November 2005, petitioner was hired by respondent Tara
Trading Ship management, Inc.(Tara),in behalf of its foreign
principal, respondent Shinline SDN BHD (Shinline) to work as
an Oiler on board MV Thailine 5 with a monthly salary of
US$409.00. Sometime in April 2006, petitioner began
exhibiting signs of mental instability. He was repatriated on
May 24, 2006 for further medical evaluation and
management. Petitioner was referred by respondents to the
Metropolitan Medical Center where he was diagnosed to be
suffering from brief psychotic disorder.
Despite his supposed total and permanent disability and
despite repeated demands for payment of disability
compensation, respondents allegedly failed and refused to
comply with their contractual obligations. Petitioner filed a
Complaint against respondents for total and permanent
disability benefits, reimbursement of medical and hospital
expenses, moral and exemplary damages, and attorney’s fees
equivalent to 10% of total claims.
Respondents maintained that petitioner requested for an early
repatriation and arrived at the point of hire on May 24, 2006;
that while on board the vessel, he confided to a co-worker,
Henry Santos, that his eating and sleeping disorders were due
to some family problems; that Capt. Zhao, the master of the
vessel, even asked him if he wanted to see a doctor; that he
initially declined; that on May 22, 2006, petitioner approached
Capt. Zhao and requested for a vacation and early
repatriation; that the said request was granted; that upon
arrival, petitioner was subjected to a thorough psychiatric
evaluation; and that after a series of check-ups, it was
concluded that his illness did not appear to be work-related.
Respondents argued that petitioner was not entitled to full
and permanent disability benefits under the Philippine
Overseas Employment Administration Standard Employment
Contract (POEA SEC) because there was no declaration from
the company-designated physician that he was permanently
and totally disabled and that the claim for damages was
without basis as no bad faith can be attributed to them.
The Labor Arbiter ruled in favor of the petitioner. Respondents
appealed to the NLRC which affirmed the decision of the Labor
Arbiter. The Court of Appeals reversed the decision of the
NLRC.
ISSUE:
Whether the Petitioner is entitled to full and total disability
benefits.
Whether the illness is work related.
HELD: No.
In Mabuhay Shipping Services, Inc. v. NLRC, the Court held
that the death of a seaman even during the term of
employment does not automatically give rise to
compensation. This is not the work-related instance
contemplated by the provisions of the employment contract in
order to be entitled to the benefits. Otherwise, every seaman
would automatically be entitled to compensation because the
nature of his work is not land-based and the submission of the
seaman to the company-designated physician as to the nature
of the illness suffered by him would just be an exercise of
futility.
42
The fact is that the petitioner failed to establish, by substantial
evidence, that his brief psychotic disorder was caused by the
nature of his work as oiler of the company-owned vessel. The
Court can only surmise that the brief psychotic disorder
suffered by him was brought about by a family problem. His
daughter was sick and, as a seafarer, he could not just decide
to go home and be with his family. Even the psychiatric report
prepared by the evaluating private psychiatrist of petitioner
shows that the hospitalization of petitioners youngest
daughter caused him poor sleep and appetite.
Further, Section 20-B of the POEA Amended Standard Terms
and Conditions Governing the Employment of Filipino
Seafarers on Board Ocean-Going Vessels (POEA-SEC)
provides for compensation and benefits for injury or illness
suffered by a seafarer. It says that, in order to claim disability
benefits under the Standard Employment Contract, it is the
company-designated physician who must proclaim that the
seaman suffered a permanent disability, whether total or
partial, due to either injury or illness, during the term of the
latter’s employment. In this case, the findings of respondents
designated physician that petitioner has been suffering from
brief psychotic disorder and that it is not work-related must
be respected. The Court commiserates with the petitioner, but
absent substantial evidence from which reasonable basis for
the grant of benefits prayed for can be drawn, the Court is left
with no choice but to deny his petition, lest an injustice be
caused to the employer.
PEOPLE OF THE PHILIPPINES, appellee, vs. VICENTA
MEDINA LAPIS, ANGEL MATEO, AIDA DE LEON (at
large) and JEAN AM-AMLAW (at large), appellants.
G.R. Nos. 145734-35 October 15, 2002
PANGANIBAN, J.:
FACTS:
The RTC found accused Vicenta Medina Lapis and Angel
Mateo are pronounced guilty of violating Section 6, of Republic
Act No. 8042, the Migrant Workers and Overseas Filipinos Act
of 1995 and Article 315 (2) (a) of the Revised Penal Code.
On March, 1998 and thereafter in Makati City, the above-
named accused, conspiring and confederating with each
other, did then and there willfully, unlawfully and feloniously
recruit the herein complainants, MELCHOR F. DEGSI and
PERPETUA L. DEGSI for employment as an office worker and
as a cook or mechanic in Japan, for and in consideration
thereof, they were required to pay the amount of P158,600.00
as alleged placement and processing fees, which the
complainants delivered and paid the amount of P158,600.00
Philippine Currency, knowing that they have no capacity
whatsoever and with no intention to fulfill their promise, but
merely as a pretext, scheme or excuse to get or exact money
from said complainant. For their part, appellants deny that
they were engaged in recruitment activities, and that they
promised foreign employment to the victims.
ISSUE(S):
Whether the accused are guilty of: (1) illegal recruitment
committed by a syndicate; and (2) estafa under Art. 315 of
the RPC.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
HELD:
(1) Yes.
Illegal recruitment is committed when these two elements
concur: (1) the offenders have no valid license or authority
required by law to enable them to lawfully engage in the
recruitment and placement of workers, and (2) the offenders
undertake any activity within the meaning of recruitment and
placement defined in Article 13(b) or any prohibited practices
enumerated in Article 34 of the Labor Code.
Undisputed is the fact that the former did not have any valid
authority or license to engage in recruitment and placement
activities. It is also important to determine whether illegal
recruitment committed by appellants can be qualified as a
syndicated illegal recruitment or an offense involving
economic sabotage.
Section 6 of RA 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, provides that
illegal recruitment shall be considered an offense involving
economic sabotage when it is committed by a syndicate or
carried out by a group of three or more persons conspiring
and confederating with one another. In several cases, illegal
recruitment has been deemed committed by a syndicate if
carried out by a group of three or more persons conspiring
and/or confederating with each other in carrying out any
unlawful or illegal transaction, enterprise or scheme defined
under Article 38(b) of the Labor Code.
In this case, it cannot be denied that all four (4) accused --
Jane Am-amlaw, Aida de Leon, Angel Mateo and Vicenta
Medina Lapis participated in a network of deception. Verily,
the active involvement of each in the various phases of the
recruitment scam formed part of a series of machinations.
(2) Yes
Under the cited provision of the Revised Penal Code, estafa is
committed by any person who defrauds another by using a
fictitious name; or by falsely pretending to possess power,
influence, qualifications, property, credit, agency, business;
by imaginary transactions or similar forms of deceit executed
prior to or simultaneous with the fraud. Moreover, these false
pretenses should have been the very reason that motivated
complainants to deliver property or pay money to the
perpetrators of the fraud. While appellants insist that these
constitutive elements of the crime were not sufficiently shown
by the prosecution, the records of the case prove otherwise.
The requirement that the fraudulent statements should have
been made prior to or simultaneous with the actual payment
was satisfied. Verily, by their acts of falsely representing
themselves as persons who had the power and the capacity
to recruit workers for abroad, appellants induced
complainants to pay the required fees. There is estafa if,
through insidious words and machinations, appellants deluded
complainants into believing that, for a fee, the latter would be
provided overseas jobs.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.
MERCY LOGAN y CALDERON, accused-appellant.
G.R. Nos. 135030-33. July 20, 2001
DE LEON, JR., J.:
43
FACTS:
On August 1994, in Quezon City, , the above-named accused,
without any authority of law, did then and there, wilfully,
unlawfully and feloniously, for a fee, enlist, recruit and
promise employment/job placement abroad to the following
persons, to wit: (1) Rodrigo Acorda; (2) Orlando Velasco; and
(3) Florente Casia. Without first securing the required license
or authority from the Department of Labor and Employment.
Rodrigo was required by the appellant to pay a placement fee
in the amount of One Hundred Fifty Thousand Pesos
(P150,000.00). Rodrigo initially paid Ten Thousand Pesos
(P10,000.00) to the appellant on January 31, 1994 and he was
required to fill up an application form. While his travel
documents were allegedly being processed, Rodrigo was
asked by the appellant to pay the additional amount of Twenty
Thousand Pesos (P20,000.00). Likewise, the other private
complainants relied on the accused’s promises of employment
in Japan. Appellant Mercy Logan denied that she swindled the
private complainants of their money nor promised them any
overseas employment. In her appeal, appellant Mercy Logan
essentially claims that she did not represent herself as a job
recruiter to the private complainants.
ISSUE:
Whether Logan is liable for estafa and illegal recruitment in
large scale.
HELD: Yes
The essential elements of the crime of illegal recruitment in
large scale , are as follows: 1) the accused engages in the
recruitment and placement of workers, as defined under
Article 13(b) or in any prohibited activities under Article 34 of
the Labor Code; 2) the accused has not complied with the
guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an
authority to recruit and deploy workers, whether locally or
overseas; and 3) the accused commits the same against three
(3) or more persons, individually or as a group.
It has been established that the three (3) private complainants
met with the appellant on separate occasions where she
promised them employment either as construction workers or
piggery helpers in Japan for a fee. Despite subsequent
payment of her required fees, she failed to secure for the
three (3) private complainants any overseas employment.
Clearly, the appellant was engaged in large scale recruitment
and placement activities which were illegal for the reason that
she had no license nor authority from the Secretary of Labor
and Employment.
It is well-settled that a person who has committed illegal
recruitment may be charged and convicted separately of the
crime of illegal recruitment under the Labor Code and estafa
under paragraph 2(a) of Article 315 of the Revised Penal
Code. The reason for the rule is that the crime of illegal
recruitment is malum prohibitum where the criminal intent of
the accused is not necessary for conviction, while the crime of
estafa is malum in se where the criminal intent of the accused
is necessary for conviction. In other words, a person convicted
under the Labor Code may also be convicted of offenses
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

punishable by other laws. Art. 314 provides that: Any person
who shall defraud another by any of the means mentioned
hereinbelow xxx
Xxx xxx xxx
2. By means of any of the following false pretenses or
fraudulent acts executed prior to or simultaneously with the
commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess
power, influence, qualifications, property, credit, agency,
business or imaginary transactions; or by means of other
similar deceits.
xxx xxx xxx
The elements of the above mode of committing estafa are: a)
that there must be a false pretense, fraudulent act or
fraudulent means; b) that such false pretense, fraudulent act
or fraudulent means must be made or executed prior to or
simultaneously with the commission of the fraud; c) that the
offended party must have relied on the false pretense,
fraudulent act or fraudulent means, i.e., he was induced to
part with his money or property because of the false pretense,
fraudulent act or fraudulent means; and, d) that as a result
thereof, the offended party suffered damage.
PEOPLE OF THE PHILIPPINES VS. MELISSA CHUA
G.R. NO. 187052 SEPTEMBER 13, 2012
employment for a fee. Appellant Chua engaged in recruitment
when she represented to private complainants that she could
send them to work abroad upon submission of the required
documents and payment of the placement fee.
PEOPLE OF THE PHILIPPINES VS. LEONIDA MERIS Y
PADILLA
G.R. NOS. 117145-50 & 117447 MARCH 28, 2000
Kapunan,J:
Facts:
Private complainants allege that the accused introduced them
to a certain recruiter Micua who assured them of a job in Hong
Kong after payment of placement fees. The complainants paid
the said fee to the accused. However, the complainants were
never deployed. Some complainants asked for the return of
their placement fees but the accused failed to return them.
The complainants filed a case for illegal recruitment in large
and estafa. The accused contends that she is also a victim of
Micua and that she only helped the complainants out of good
heart.

Issue:
Villarama, Jr.,J:

Whether or not the accused engaged in illegal recruitment.

Facts:

Private complainants allege that they were offered Ratio Decidendi:

employment abroad by the accused. They contend that the
Illegal recruitment is conducted in a large scale if perpetrated
accused assured them of a job abroad after payment of
80,000 pesos placement fee. However, they were not against three (3) or more persons individually or as a group.
This crime requires proof that the accused: (1) engaged in the
deployed even after paying the required fee. It is later found
recruitment and placement of workers defined under Article
out that the respondent is neither authorized nor licensed to
13 or in any of the prohibited activities under Article 34 of the
recruit workers for overseas employment. Respondent denies
recruiting the complainants asserting that she is merely a Labor Code; (2) does not have a license or authority to
lawfully engage in the recruitment or and placement of
cashier in their agency. Accused was convicted for illegal
workers; and (3) committed the infraction against three or
recruitment in large and estafa.
more, persons, individually or as a group.
Issue:
Ruling:
Whether or not the accused is guilty for illegal recruitment in
The Court held that the prosecution undoubtedly proved that
large.
accused-appellant, without license or authority, engaged in
Ratio Decidendi: recruitment and placement activities. The accused took a
direct and active participation in the recruitment of the private
complainants by referring and persuading them to apply for
Illegal recruitment is deemed committed by a syndicate if
deployment abroad.
carried out by a group of three (3) or more persons conspiring
or confederating with one another. It is deemed committed in
DOUGLAS MILLARES AND ROGELIO LAGDA VS.
large scale if committed against three (3) or more persons
NATIONAL LABOR RELATIONS COMMISSION
individually or as a group.
The persons criminally liable for the above offenses are the G.R. NO. 110524 JULY 29, 2002
principals, accomplices and accessories. In case of juridical
Kapunan,J:
persons, the officers having control, management or direction
of their business shall be liable.
Facts:
Ruling:
Petitioners are employed as Chief Engineers in ESSO
International Shipping Company Ltd. (Esso International).
The Court held that in order to hold a person liable for illegal
Both of them applied for an extended leave which were not
recruitment, it is enough that he or she promised or offered

44
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
approved by the company. They were considered to be absent
without leave and later dismissed for abandonment and
unavailability for contractual sea service. Petitioners filed a
case for illegal dismissal. NLRC ruled that they were casual
employees. Petitioners insist that they should be considered
regular employees, since they have rendered services which
are usually necessary and desirable to the business of their
employer, and that they have rendered more than twenty (20)
years of service.
Issue:
Whether or not the petitioners were regular employees.
Ratio Decidendi:
Seafarers are considered contractual employees. They can not
be considered as regular employees under Article 280 of the
Labor Code. Their employment is governed by the contracts
they sign everytime they are rehired and their employment is
terminated when the contract expires. Their employment is
contractually fixed for a certain period of time.
Ruling:
The Court held that there are certain forms of employment
which also require the performance of usual and desirable
functions and which exceed one year but do not necessarily
attain regular employment status under Article 280. Overseas
workers including seafarers fall under this type of employment
which are governed by the mutual agreements of the parties.
MARCIAL GU-MIRO VS. ROLANDO ADORABLE
G.R. NO. 160952 AUGUST 20, 2004
Ynares-Santiago, J:
Facts:
Petitioner Marcial Gu-Miro was formerly employed as a Radio
Officer of respondent Bergesen D.Y. Philippines, which acted
for and in behalf of its principal Bergesen D.Y. ASA, on board
its different vessels. Petitioner’s services were terminated due
to the installation of labor saving devices which made his
services redundant. Upon his forced separation from the
company, petitioner requested that he be given the incentive
bonus plus the additional allowances he was entitled to.
Respondent company, however, refused to accede to his
request. Petitioner filed before the NLRC a complaint for the
payment of incentive bonus and back wages contending that
he is a regular employee of respondent company and thus,
entitled to backwages or, at the very least, separation pay.
Issues:
Whether or not the petitioner is a regular employee.
Ratio Decidendi:
Seafarers are considered contractual employees. They can not
be considered as regular employees under Article 280 of Labor
45
Code. Their employment is governed by the contracts they
sign every time they are rehired and their employment is
terminated when the contract expires. Their employment is
contractually fixed for a certain period of time. They fall under
the exception of Article 280 whose employment has been fixed
for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the nature of the work
or services to be performed is seasonal in nature and
employment is for the duration of the season.
Ruling:
The Court held that petitioner cannot be considered as a
regular employee notwithstanding that the work he performs
is necessary and desirable in the business of respondent
company. An exception is made in the situation of seafarers.
The exigencies of their work necessitate that they be
employed on a contractual basis.
ROBERTO RAVAGO VS. ESSO EASTERN MARINE LTD.
G.R. NO. 158334 MARCH 14, 2005
Callejo, Sr., J:
Facts:
Petitioner Ravago was employed as an assistant engineer in
Esso Eastern Marine Ltd. Due to an accident, he was found to
have partial permanent inability and was declared not fit to
return to his job as seaman. Ravago filed a complaint for
illegal dismissal with prayer for reinstatement, backwages,
damages and attorney’s fee insisting that he was fit to resume
to work and he was not a mere contractual employee because
the respondents regularly and continuously rehired him for 23
years and, for his continuous service, was awarded a CEIP
payment upon his termination from employment. Respondent
denied that Ravago was dismissed without notice and just
cause. Rather, his services were no longer engaged in view of
the disability he suffered which rendered him unfit to work as
a seafarer.
Issue:
Whether or not petitioner was a regular employee.
Ratio Decidendi:
Seafarers are considered contractual employees. They can not
be considered as regular employees under Article 280 of Labor
Code. Their employment is governed by the contracts they
sign every time they are rehired and their employment is
terminated when the contract expires. Their employment is
contractually fixed for a certain period of time. They fall under
the exception of Article 280 whose employment has been fixed
for a specific project or undertaking the completion or
termination of which has been determined at the time of the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
engagement of the employee or where the nature of the work
or services to be performed is seasonal in nature and
employment is for the duration of the season.
Ruling:
The Court ruled that seamen and overseas contract workers
are not covered by the term "regular employment" as defined
in Article 280 of the Labor Code. Furthermore, petitioner’s
contract did not provide for separation benefits. In this
connection, it is important to note that neither does the POEA
standard employment contract for Filipino seamen provide for
such benefits. As a Filipino seaman, petitioner is governed by
the Rules and Regulations Governing Overseas Employment
and the said Rules do not provide for separation or
termination pay.
OSM SHIPPING PHILIPPINES, INC. VS. NATIONAL
LABOR RELATIONS COMMISSION
G.R. NO. 138193 MARCH 5, 2003
Panganiban, J:
Facts:
Private respondent was hired by OSM Shipping for and in
behalf of its principal, Phil Carrier Shipping Agency Services
Co. (PC-SLC) to board its vessel M/V Princess Hoa as a Master
Mariner for a contract period of ten (10) months. Private
respondent alleged that from the start of his work with M/V
Princess Hoa, he was not paid any compensation at all and
was forced to disembark the vessel sometime in January 1995
because he cannot even buy his basic personal necessities.
Private respondent filed a case for illegal dismissal and non-
payment of salaries, overtime pay and vacation pay. OSM
alleged that the shipowner changed its plans on the use of the
vessel. Instead of using it for overseas trade, it decided to use
it in the coastwise trade, thus, the crewmembers hired never
left the Philippines and were merely used by the shipowner in
the coastwise trade. Considering that the M/V Princess Hoa
was a foreign registered vessel and could not be used in the
coastwise trade, the shipowner converted the vessel to
Philippine registry.Petitioner contends that using the vessel in
coastwise trade and subsequently chartering it to another
principal had the effect of novating the employment contract.
Issue:
Whether or not OSM Shipping is liable to the private
respondent.
Ratio Decidendi:
46
An employment contract, like any other contract, is perfected
at the moment (1) the parties come to agree upon its terms;
and (2) concur in the essential elements thereof: (a) consent
of the contracting parties, (b) object certain which is the
subject matter of the contract and (c) cause of the obligation.
A contract cannot be novated by the will of only one party.
Ruling:
The Court held that the non-deployment of the ship overseas
did not affect the validity of the perfected employment
contract. After all, the decision to use the vessel for coastwise
shipping was made by petitioner only and did not bear the
written conformity of private respondent. Petitioner, as
manning agent, is jointly and severally liable with its principal.
TRANS ACTION OVERSEAS CORPORATION VS.
SECRETARY OF LABOR
G.R. NO. 109573 SEPTEMBER 5, 1997
Romero, J:
Facts:
Petitioner company is a private fee-charging employment
agency. Private respondents sought employment as domestic
helpers through petitioner's employees. They failed to be
deployed despite payment of placement fees. They demanded
refund but it was proved unavailing, thus they instituted a
complaint against the petitioner. Upon finding the petitioner
liable, Secretary of Labor cancelled its license. Petitioner
asserts that Secretary of Labor acted with grave abuse of
discretion in cancelling its license as the Philippine Overseas
Employment Agency has sole jurisdiction to hear and decide
illegal recruitment cases, including the authority to cancel
recruitment licenses.
Issue:
Whether or not the Secretary of Labor can cancel recruitment
licenses.
Ratio Decidendi:
A non-licensee or non-holder of authority means any person,
corporation or entity which has not been issued a valid license
or authority to engage in recruitment and placement by the
Secretary of Labor, or whose license or authority has been
suspended, revoked or cancelled by the POEA or the
Secretary.
Ruling:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
The Court held that the power to suspend or cancel any
license or authority to recruit employees for overseas
employment is concurrently vested with the POEA and the
Secretary of Labor.
MANUELA S. CATAN/M.S. CATAN PLACEMENT
AGENCY vs. THE NATIONAL LABOR RELATIONS
COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION and FRANCISCO D. REYES
G.R. No. 77279 April 15, 1988
CORTES, J.:
FACTS:
Petitioner, a duly licensed recruitment agency, recruited
private respondent to work for Ali and Fahd Shabokshi Group
as a steelman. The contract is for one year from May 15, 1981
to May 14, 1982, and renewable automatically if neither of the
parties notifies the other party of his wishes to terminate the
contract by at least one month prior to the expiration of the
contractual period. It was then automatically renewed when
private respondent was not repatriated by his Saudi employer
but instead was assigned to work as a crusher plant operator
where his right ankle was crushed under the machine he was
operating. After the expiration of the renewed term, private
respondent returned to the Philippines and his ankle was
operated where he incurred expenses. Private respondent
filed a claim on the basis of the provision in the employment
contract that the employer shall compensate the employee if
he is injured or permanently disabled in the course of
employment. POEA rendered judgment in favor of the private
respondent which was affirmed by the NLRC on appeal.
However petitioner disclaims liability on the ground that its
agency agreement with the Saudi principal had already
expired when the injury was sustained, and that he was
injured while the original employment contract had already
expired.
ISSUE:
Whether or not private respondent has a valid claim for
compensation due to the injury sustained against the
petitioner.
RATIO DECIDENDI:
A private employment agency may be sued jointly and
solidarily with its foreign principal for violations of the
recruitment agreement and the contracts of employment.
RULING:
Private respondent’s contract of employment cannot be said
to have expired as it was automatically renewed because of
the non-notice of termination given one month prior as
indicated in the contract agreement. Therefore, the injury was
sustained during the lifetime of the contract. Even if indeed
petitioner and the Saudi principal had already severed their
47
agency agreement at the time private respondent was injured,
petitioner may still be sued for a violation of the employment
contract because no notice of the agency agreement’s
termination was given to the private respondent. No evidence
was also introduced that private respondent was not medically
fit to work when he returned to Saudi. By purchasing a ticket
for his return to work, it is as if petitioner had certified his
fitness to work.
Wherefore, in view of the foregoing, the petition is dismissed
for lack of merit, with costs against petitioner.
ROYAL CROWN INTERNATIONALE VS. NATIONAL
LABOR RELATIONS COMMISSI0N and VIRGILIO P.
NACIONALES
G.R. No. 78085 October 16, 1989
CORTES, J.:
FACTS:
In 1983, Royal Crown International, a private employment
agency, recruited and deployed Virgilio P. Nacionales for
employment with ZAMEL as an architectural draftsman in
Saudi Arabia. On February 13, 1984, ZAMEL terminated the
employment of private respondent on the ground that his
performance was below at par. For the next three successive
days, the private respondent was detained at his quarters and
was not allowed to report to work until his exit papers were
ready. On February 16, 1984, he was made to board a plane
bound for the Philippines. Private respondent filed a complaint
for illegal termination against petitioner and ZAMEL with
POEA. Petitioner filed a motion for reconsideration but the
NLRC denied it for lack of merit. Hence petitioner filed a
petition for review.
ISSUE:
Whether or not private employment agency may be held
jointly and severally liable with foreign-based employer for
any claim arising from the employment contracts recruited
and deployed abroad.
RATIO DECIDENDI:
For petitioner voluntarily assumed solidarity liability under
various contractual undertakings it submitted to the Bureau of
Employment services.
RULING:
Under Section 2 Rule V Book 1 of Rules to Implement the
Labor Code, the requirement to operate a private employment
agency for overseas recruitment and placement is to submit a
document whereby it assumed all responsibilities for the
proper use of its recruited and deployed for overseas
employment. And also it is required to file with the Bureau a
formal appointment or agency contract executed by foreign-
based employer in its favor to recruit and hire personnel for
the former, which contained a provision empowering it to sue
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
and be sued jointly and solidarity with foreign principle for any
of the violations of the recruitment and the contracts of
employment. This is under Section 10 (a) (2), Rule V Book 1,
Rules to Implement the Labor Code. It was required as well
to post such cash and surety bonds as determined by the
Secretary of Labor to guarantee compliance with prescribed
recruitment procedure, rules and regulations and terms and
conditions of employment as appropriate. It cannot be denied
that the petitioner is an agent of ZAMEL, one of the documents
presented by the petitioner contains an admission that it is the
representative and agent of ZAMEL.
Wherefore, the Court Resolved to DISMISS the instant
petition.
PEOPLE OF THE PHILIPPINES VS. REYDANTE
CALONZO Y AMBROSIO
G.R. Nos. 115150-55 September 27, 1996
BELLOSILLO, J.:
FACTS:
Calonzo informed Danilo de los Reyes and Belarmino
Torregrosa that they can provide them employment abroad
specifically Italy, so they took stock of their assets to came up
with figures sufficient to process their application abroad.
They boarded to Thailand and were told that their visas for
Italy will be processed there. Calonzo collected money again
from them purportedly to defray the expenses for their visas,
only to find out that Calonzo returned to the Philippines. De
los Reyes and Torregrosa were able to go back to the
Philippines through the help of one Loreta Castaeda. The
promises remained unfulfilled so they looked again for
Calonzo but this time their quarry had already absconded.
Upon verification, the POEA certified that neither RAC
Business Agency nor Calonzo was authorized to recruit
workers for employment abroad. Three other victims
appeared and narrated the same experience. However
Calonzo disclaims all the allegations of the complainants.
ISSUE:
Whether or not the acts qualify as illegal recruitment.
RATIO DECIDENDI:
Illegal recruitment in large scale exists when a person
undertakes: (1) any recruitment activity prohibited under the
Labor Code; (2) does not have authority or license to engage
in such recruitment; and (3) commits the same against three
or more persons.
RULING:
In this case, the testimony of the complainants evidently
showed that Calonzo was engaged in recruitment activities in
large scale. Firstly, he deluded complainants into believing
that jobs awaited them in Italy by distinctly impressing upon
them that he had the facility to send them for work abroad.
48
Secondly, POEA likewise certified neither Calonzo nor RAC
Business Agency was licensed to recruit workers for
employment abroad. Thirdly, Calonzo recruited five (5)
workers thus making the crime illegal recruitment in large
scale constituting economic sabotage. The Court also
reiterated the rule that a person convicted for illegal
recruitment under the Labor Code can be convicted for
violation of the Revised Penal Code provisions on estafa
provided the elements of the crime are present. The Court is
convinced that Calonzo defrauded complainants through
deceit. They were obviously misled into believing that he could
provide them employment in Italy. As a result, the five (5)
complainants who desperately wanted to augment their
income and improve their lot parted with their hard-earned
money.
Wherefore, the Court rendered judgment finding Calonzo
guilty of Illegal Recruitment in Large Scale.
HORTENCIA SALAZAR VS. HON. TOMAS D.
ACHACOSO, in his capacity as Administrator of the
Philippine Overseas Employment Administration, and
FERDIE MARQUEZ
G.R. No. 81510 March 14, 1990
SARMIENTO, J.:
FACTS:
On October 21, 1987, Rosalie Tesoro filed with the POEA a
complaint against petitioner. Having ascertained that the
petitioner had no license to operate a recruitment agency,
public respondent Administrator Tomas D. Achacoso issued
his challenged Closure and Seizure order. The POEA brought
a team to the premises of Salazar to implement the order.
There it was found that petitioner was operating Hannalie
Dance Studio. Before entering the place, the team served said
Closure and Seizure order on a certain Mrs. Flora Salazar who
voluntarily allowed them entry into the premises. Mrs. Flora
Salazar informed the team that Hannalie Dance Studio was
accredited with Moreman Development (Phil.). However,
when required to show credentials, she was unable to produce
any. Inside the studio, the team chanced upon twelve talent
performers — practicing a dance number and saw about
twenty more waiting outside. The team confiscated assorted
costumes which were duly receipted for by Mrs. Asuncion
Maguelan and witnessed by Mrs. Flora Salazar. A few days
after, petitioner filed a letter with the POEA demanding the
return of the confiscated properties. They alleged lack of
hearing and due process, and that since the house the POEA
raided was a private residence, it was robbery. On February
2, 1988, the petitioner filed this suit for prohibition. Although
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
the acts sought to be barred are already fait accompli, thereby
making prohibition too late, we consider the petition as one
for certiorari in view of the grave public interest involved.
ISSUE:
Whether or not the Secretary of Labor may validly issue
warrants of search and seizure.
RATIO DECIDENDI:
The Court reiterated that the Secretary of Labor, not being a
judge, may no longer issue search or arrest warrants. Hence,
the authorities must go through the judicial process. To that
extent, it was declared Article 38, paragraph (c), of the Labor
Code, unconstitutional and of no force and effect.
RULING:
The Closure and Seizure order in question, assuming, ex
gratia argumenti, that it was validly issued, is clearly in the
nature of a general warrant. The law pronounced that a
warrant must identify clearly the things to be seized,
otherwise, it is null and void. Under Article III, Section 2, of
the l987 Constitution, it is only judges, and no other, who may
issue warrants of arrest and search, exception is in cases of
deportation of illegal and undesirable aliens, whom the
President or the Commissioner of Immigration may order
arrested, following a final order of deportation, for the
purpose of deportation.
Wherefore, the petition is granted. Article 38, paragraph (c)
of the Labor Code is declared unconstitutional and null and
void. The respondents are ORDERED to return all materials
seized as a result of the implementation of Search and Seizure
Order No. 1205.
PEOPLE OF THE PHILIPPINES VS. SAMINA ANGELES y
CALMA
G.R. No. 132376 April 11, 2002
YNARES, SANTIAGO J.:
FACTS:
Maria Tolosa Sardeo was working in Saudi Arabia when she
received a call from her sister, Priscilla, who was in Paris,
France. Priscilla advised Maria to return to the Philippines and
await the arrival of her friend, accused Samina Angeles, who
would assist in processing her travel and employment
documents to Paris. Heeding her sister’s advice, Maria
returned to the Philippines. Marceliano Tolosa likewise
received and followed the same instructions from his sister
Priscilla. They eventually met the accused to whom they gave
the money required for the processing of their documents.
Precila Olpindo and Vilma Brina also received the same
instructions from Precila’s sister who met the accused in
Belgium. Precila’s sister told her that the accused could help
process her documents for employment in Canada. The
accused told Precila and Vilma that it was easier to complete
49
the processing of their papers if they would start from Jakarta,
Indonesia rather than from Manila. So Precila, Vilma and
accused Angeles flew to Jakarta. However, accused returned
to the Philippines after two days, leaving the two behind.
Precila tried to get in touch with the accused but could not be
reached anymore. Maria and Marceliano also began looking
for her after she disappeared with their money. The POEA
presented a certification to the effect that accused Angeles
was not duly licensed to recruit workers here and abroad. The
accused, however, contended that she never represented to
the complainants that she could provide them with work
abroad. She pointed out that none of the complainants
testified on what kind of jobs were promised to them, how
much they would earn, the length of their employment and
even the names of their employers, which are basic subjects
a prospective employee would first determine.
ISSUE:
Whether or not the accused Samina Angeles is guilty of illegal
recruitment.
RATIO DECIDENDI:
Illegal recruitment is qualified when a non-holder or non-
licensee offers or promises for a fee employment abroad to
two or more persons.
RULING:
To prove illegal recruitment, it must be shown that the
accused gave complainants the distinct impression that he had
the power or ability to send complainants abroad for work
such that the latter were convinced to part with their money
in order to be employed. To be engaged in the practice of
recruitment and placement, it is plain that there must at least
be a promise or offer of an employment from the person
posing as a recruiter whether locally or abroad. In this case,
none of the complainants testified that the accused lured them
to part with their hard-earned money with promises of jobs
abroad. On the contrary, they were all consistent in saying
that their relatives abroad where the ones who contacted
them and urged them to meet the accused who would assist
them in processing their travel documents. The accused did
not have to make promises of employment as these were
already done by complainants’ relatives. However, clearly
Samina Angeles defrauded complainants by falsely pretending
to possess the power and capacity to process their travel
documents.
Wherefore, in view of the foregoing, accused Samina
Angeles is found guilty beyond reasonable doubt of the crime
of estafa as to the cases of Maria Tolosa Sardeo, Marceliano
Tolosa and Precila Olpindo, and was acquitted for failure of
the prosecution to prove her guilt beyond reasonable doubt
against Vilma Brina and the filed case for illegal recruitment.
PEOPLE OF THE PHILIPPINES VS. LOMA GOCE y
OLALIA, DAN GOCE and NELLY D. AGUSTIN
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
G.R. No. 113161 August 29, 1995
REGALADO, J.:
FACTS:
On January 1988, an information for illegal recruitment
committed by a syndicate and in large scale, punishable under
Articles 38 and 39 of the labor code as amended by PD 2018,
filed against Dan and Loma Goce and Nelly Agustin in the RTC
of Manila, alleging that in or about during the period
comprised between May 1986 and June 25, 1987, both dates
inclusive in the City of Manila, the accused conspired and
represent themselves to have the capacity to recruit Filipino
workers for employment abroad. On January 1987, a warrant
of arrest was issued against the 3 accused bot none of them
was arrested. Hence, on February 1989, the RTC ordered the
case archived but issued a standing warrant os arrest against
the accused. Thereafter, knowing the whereabouts of the
accused, Rogelio Salado requested for a copy of the warrant
of arrest and eventually Nelly Agustin was apprehended by
the Paranaque Police. Agustin's counsel filed a motion to
revive the case and requested to set a hearing for purpose of
due process and for accused to immediately have her day in
court. On the arraignment, Agustin pleaded not guilty and the
trial went on with four complainants testified for the
prosecution and receipts of the processing fees they paid.
Agustin for the defense asserted that Goce couple were
licensed recruiters but denied her participation in the
recruitment and denied knowledge of the receipts as well. On
November 1993, trial court rendered judgment finding that
Agustin as a principal in the crime of illegal recruitment in
large scale with sentence of life imprisonment and pay
P100,000.00.
ISSUES:
Whether or not the act of introducing complainants to the
Goce couple falls within the meaning of illegal recruitment and
placement under Article 13 (b) in relation to Article 34 of the
Labor Code.
RATIO DECIDENDI:
The recruitment and placement refers to any act of
canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or
abroad, whether for profit or not; provided, that any person
or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged
in recruitment and placement.
RULING:
The testimonial evidence shows that she indeed further
committed acts constitutive of illegal recruitment. All four
prosecution witnesses testified that it was Agustin whom they
initially approached regarding their plans of working overseas.
It was from her that they learned about the fees they had to
50
pay, as well as the papers that they had to submit. It was
after they had talked to her that they met the accused spouses
who owned the placement agency. As correctly held by the
trial court, being an employee of the Goces, it was therefore
logical for appellant to introduce the applicants to said
spouses, they being the owners of the agency. As such,
appellant was actually making referrals to the agency of which
she was a part. She was therefore engaging in recruitment
activity. Agustin played a pivotal role in the operations of the
recruitment agency, working together with the Goce couple.
There is illegal recruitment when one gives the impression of
having the ability to send a worker abroad. It is undisputed
that appellant gave complainants the distinct impression that
she had the power or ability to send people abroad for work
such that the latter were convinced to give her the money she
demanded in order to be so employed. It cannot be denied
that Agustin received from complainants various sums for
purpose of their applications. Her act of collecting from each
of the complainants’ payment for their respective passports,
training fees, placement fees, medical tests and other sundry
expenses unquestionably constitutes an act of recruitment
within the meaning of the law.
Wherefore, the appealed judgment of the court a quo is
hereby affirmed in toto, with costs against accused-appellant
Nelly D. Agustin.
PEOPLE OF THE PHILIPPINES VS. ABELARDO
AVENDAÑO
G.R. No. 96277-88 December 2, 1992
GRIÑO-AQUINO, J.:
FACTS:
Six (6) separate information for Illegal Recruitment of some
38 workers were filed against Abelardo Avendaño, who
represented himself to have the capacity to contract, enlist
and transport Filipino workers for employment abroad, did,
then and there, wilfully, unlawfully and feloniously, for a fee,
recruit and promise employment/job placement abroad to the
complainants. The cases were consolidated and jointly tried.
The accused was proven to be the Treasurer of MCBRAJ Agro-
Industrial Development Company (MAINDECO) located in
Malabon City which is also his residence. The company is not
licensed nor authorized to recruit workers for overseas
employment. On the other hand, the accused tried to show
that MAINDECO was really engaged in the construction
business, and was duly registered with the Securities and
Exchange Commission. Avendaño claimed that was just
appointed treasurer of the corporation and, as such, he
received payments and issued receipts.
ISSUE:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Whether or not the accused Abelardo Avendaño is guilty of
illegal recruitment.
RATIO DECIDENDI:
Illegal recruitment, when committed by a syndicate or in large
scale shall be considered an offense involving economic
sabotage. Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or
scheme, and it is deemed committed in large scale if
committed against three (3) or more persons individually or
as a group.
RULING:
It is admitted that MAINDECO is not licensed or authorized by
the Department of Labor and Employment to engage in
recruitment of persons for overseas employment.
Consequently, the recruitment activities undertaken by
MAINDECO are illegal. The accused admitted that the
complainants, who paid for certificates of stock of MAINDECO,
were told by the President of the corporation that they would
be sent to Papua, New Guinea pursuant to the joint venture
tuna industry. The accused was aware that the complainants
were offered job opportunities in Papua, New Guinea. The
assurance that they would be sent abroad, in addition to being
stockholders of the corporation, impelled the complainants to
give their money to the accused. Thus, aside from being
required to pay for the certificates of stock, the complainants
were likewise required to submit documents, such as bio-data,
birth certificates, marriage contracts, clearances and
certificates of previous employment. Such acts constitute offer
or promise for employment abroad with a fee.
Wherefore, in view of the foregoing, judgment is hereby
rendered finding accused Abelardo Avendaño guilty beyond
reasonable doubt of the crime of Illegal Recruitment
committed in large scale, thus constituting economic
sabotage.
MISSING: CASE of PEOPLE v. BALDOZO
PEOPLE OF THE PHILIPPINES vs. TAN TIONG MENG
alias "TOMMY TAN"
G.R. No. 120835-40, April 10, 1997
PADILLA, J.:
FACTS:
Accused-appellant Tan Tiong Meng alias "Tommy Tan", using
a private employment recruiting agency, enlist and transport
Filipino workers for employment abroad and promise
employment in Taiwan when in fact he did not possess the
authority or license from the Philippine Overseas Employment
Administration to do so. He was charged with Illegal
Recruitment in Large Scale and six (6) counts of estafa. The
Court finds the accused guilty beyond reasonable doubt of the
51
crime of illegal recruitment in large scale. In the appeal, Tan
contends that he merely acted as a collector of money for the
principal recruiter Borja who made the representations that he
could give the applicants jobs in Taiwan. He maintains that he
merely received commissions from the transactions and that
the deceit was employed not by him but by Borja who
introduced him as a job recruiter.
ISSUE:
Whether the elements of the illegal recruitment are present in
the present case.
RATIO:
Yes. The Labor Code defines recruitment and placement as
"(A)ny act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment,
locally or abroad, whether for profit or not; Provided, that any
person or entity which, in any manner, offers or promises for
a fee employment to two or more persons shall be deemed
engaged in recruitment and placement." The Labor Code
prohibits any person or entity, not authorized by the POEA,
from engaging in recruitment and placement activities. The
argument that the deceit was employed by Borja and not by
accused-appellant is untenable. All the complainants agreed
that it was Tan who assured them of jobs in Taiwan. The
assurances were made intentionally to deceive the would-be
job applicants to part with their money. It is clear that
accused-appellant's acts of accepting placement fees from job
applicants and representing to said applicants that he could
get them jobs in Taiwan constitute recruitment and placement
under the above provision of the Labor Code. Likewise,
Accused-appellant's guilt of six (6) separate crimes of estafa
has likewise been proven because the Court reiterated the rule
that a person convicted for illegal recruitment under the Labor
Code can be convicted for violation of the Revised Penal Code
provisions on estafa provided the elements of the crime are
present, to wit: (a) that the accused defrauded another by
abuse of confidence or by means of deceit, and (b) that
damage or prejudice capable of pecuniary estimation is
caused to the offended party or third person. Both elements
have been proven in this case.
RULING:
WHEREFORE, the judgment appealed from finding accused-
appellant Tan Tiong Meng alias “Tommy Tan” guilty of illegal
recruitment in large scale and six (6) counts of estafa, is
hereby AFFIRMED. Costs against accused-appellant. SO
ORDERED.
PEOPLE OF THE PHILIPPINES vs. DELIA SADIOSA y
CABENTA
G.R. No. 107084. May 15, 1998
ROMERO, J.:
FACTS:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Arsenia Conse went to Nueva Ecija where she met the four
complainants. She enticed the four to apply for overseas
employment. Apparently convinced by Conse, the four went
with her and introduced them to accused-appellant Delia
Sadiosa. On that occasion, Sadiosa assured the four that she
could dispatch them to Kuwait and forthwith demanded from
each of them for processing fee. The four did give accused-
appellant the money demanded. However, when they asked
for the return of their money, accused-appellant refused and
ignored their demand. Consequently, the four filed the
complaint for illegal recruitment against Sadiosa. It also
testified that Sadiosa was neither licensed nor authorized to
recruit workers for overseas employment. Sadiosa resolutely
denied having a hand in the illegal recruitment, claiming that
she merely received the money on behalf of one Mrs. Ganura
who owned the recruitment agency as an officer. Accused-
appellant further claimed that although she was not listed in
the POEA as an employee of the recruitment agency of Mrs.
Ganura, she had a special power of attorney issued by her
employer to receive payments from applicants.
ISSUE:
Whether the elements of illegal recruitment in a large scale
are exist in the present case.
RATIO:
Yes, the information filed against accused-appellant
sufficiently shows that it is for the crime of illegal recruitment
in large scale. Under the Labor Code, the essential elements
of the crime of illegal recruitment in large scale are as follows:
(1) the accused engages in the recruitment and placement of
workers, as defined under Article 13 (b) or in any prohibited
activities under Article 34 of the Labor Code; (2) accused has
not complied with the guidelines issued by the Secretary of
Labor and Employment, particularly with respect to the
securing of a license or an authority to recruit and deploy
workers, whether locally or overseas; and (3) accused
commits the same against three or more persons, individually
or as a group. It alleges that accused-appellant, knowing fully
well that she was not a duly licensed job recruiter, falsely
represented that she could secure employment as domestic
helpers abroad for the four complainants. Accused-appellant
promised the four complainants employment as domestic
helpers in Kuwait. All the essential elements of the crime of
illegal recruitment in large scale, which we have enumerated
above, are present in this case.
RULING:
WHEREFORE, the appealed decision of the Regional Trial
Court of Pasay City, Branch 113 finding appellant Delia
Sadiosa y Cabenta GUILTY beyond reasonable doubt of the
crime of illegal recruitment in large scale and imposing on her
life imprisonment, the payment of the fine of P100,000.00 and
the reimbursement of the amounts defrauded from
complainants is hereby AFFIRMED. Costs against accused-
appellant. SO ORDERED.
52
PEOPLE OF THE PHILIPPINES vs. ANITA BAUTISTA y
LATOJA
G.R. No. 113547 February 9, 1995
PUNO, J.:
FACTS:
Accused Anita Bautista approached Romeo Paguio and offered
job openings abroad. At that time, Paguio had relatives who
were interested to work abroad. Bautista introduced Paguio to
Abrico as a person who could facilitate immediate employment
in Taiwan. Abrero informed him that the applicants could
leave for Taiwan within a period of one-month from the
payment of placement fees and she promised Paguio and
complainants that the latter could leave for Taiwan before
September 25, 1991, but they failed. Paguio secured a
certification From POEA attesting that Bautista and Abrero are
not licensed or authorized to recruit workers for overseas
employment hence, complaining about their being victims of
illegal recruitment by Abrero and Bautista.
ISSUE:
Whether reasonable doubt exists to warrant the acquittal of
appellant Anita Bautista.
RATIO:
No. It is settled that the essential elements of the crime of
illegal recruitment in large scale are: (1) the accused engages
in the recruitment and placement of workers, as defined under
Article 13 (b) or in any prohibited activities under Article 34 of
the Labor Code; (2) accused has not complied with the
guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an
authority to recruit and deploy workers, either locally or
overseas; and (3) accused commits the same against three
(3) or more persons, individually or a group. In the present
case, appellant's active participation in the recruitment
process of complainants belies her claim of innocence.
Complainants' recruitment was initiated by appellant during
her initial meeting with Romeo Paguio. She gave the
impression to Romeo Paguio and the complainants that her
cohort, Rosa Abrero, could send workers for employment
abroad. She introduced Rosa Abrero to Romeo Paguio. Both
women assured the departure of complainants to Taiwan
within one month from payment of the placement fee of
P40,000.00 per person. They even claimed that complainants
would work as factory workers for a monthly salary of $850.00
per person. Moreover, it was appellant who informed Romeo
Paguio that complainants' scheduled trip to Taiwan would be
on October 10, 1991, instead of the original departure date of
September 25, 1991, due to some problems on their visas and
travel documents. Hence, the elements of illegal recruitment
are present.
RULING:
WHEREFORE, Premises considered, the decision of the Court
of Appeals, finding appellant ANITA BAUTISTA guilty beyond
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
reasonable doubt of the crime of Illegal Recruitment in Large
Scale (Criminal Case Nos. 92-102377) and Estafa (Criminal
Case Nos. 92-102378, 92-102379, 92-102389) is AFFIRMED.
No costs. SO ORDERED.
PEOPLE OF THE PHILIPPINES vs. NELIA
CORONACION y NOQUE and EDUARDO AQUINO y
AQUINO
G.R. No. 97845 September 29, 1994
KAPUNAN, J.:
FACTS:
The accused representing to have the capacity to contract,
enlist and transport Filipino workers for employment abroad,
recruit and promise employment in Saudi Arabia to the five
persons without first having secured the required license or
authority from the Ministry of Labor. The trial court found
Coronacion and Aquino guilty as charged and the prosecution
likewise proved Coronacion and Eduardo do not have any
license or authority from POEA to recruit workers for overseas
employment.
ISSUE:
Whether the accused are liable for the large recruitment in a
large scale.
RATIO:
Yes. The Labor Code provides that the crime of illegal
recruitment in large scale is committed when a person (a)
undertakes any recruitment activity defined under Article
13(b) or any prohibited practice enumerated under Article 34
of the Labor Code; (b) does not have a license or authority to
lawfully engage in the recruitment and placement of workers;
and (c) commits the same against three or more persons,
individually or as a group. Illegal recruitment is deemed
committed by a syndicate if carried out by a group of three
(3) or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction,
enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale
if committed against three (3) or more persons individually or
as a group. In the case at bench, the appellants are neither
licensees nor holders of any authority from POEA to engage
in recruitment and placement activities as evidenced by a
certification of the said agency. It was likewise established
that the private complainants were unaware of the appellants'
lack of authority when they transacted business with them. It
was only later, upon inquiry at POEA, that they discovered the
appellants' lack of authority. Finally, the number of private
complainants, certainly more than three, is beyond dispute.
RULING:
WHEREFORE, the judgment of conviction rendered by the trial
court is hereby AFFIRMED, with the sole modification that the
penalty properly imposable and hereby imposed is life
53
imprisonment and not reclusion perpetua. Costs against
appellants. SO ORDERED.
PEOPLE OF THE PHILIPPINES v. CARMELITA
PUERTOLLANO COMIA
G.R. No. 109761, September 1, 1994
DAVIDE, JR., J.:
FACTS:
Carmelita Puertollano Comia was charged with illegal
recruitment in large scale. The complaining victims were
testified in open court that the accused defrauded each of
them of sizeable cash on the assurance that they would be
given janitorial jobs in Hongkong. To the mind of the Court,
Dr. Zenaida Andres is a non-existent person invented by the
accused and when the complainants started to show their
impatience to the accused, they waited for the Dra. Andres to
come, after which they agreed to call her but the telephone
number they dialed turned out to be McDonald's. After trial on
the merits, the court promulgated its decision finding the
accused guilty beyond reasonable doubt of the offense
charged and sentencing her to suffer the penalty of life
imprisonment and to pay a fine.
ISSUE:
Whether the accused may be held liable for the illegal
recruitment.
RATIO:
Yes. Under the Labor Code, Illegal recruitment is deemed
committed by a syndicate if carried out by a group of three
(3) or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction,
enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale
when a person (a) undertakes any recruitment activity defined
under Article 13(b) or any prohibited practice enumerated
under Article 34 of the Labor Code; (b) does not have a license
or authority to lawfully engage in the recruitment and
placement of workers; and (c) commits the same against
three or more persons, individually or as a group. In this case,
the accused cannot feign innocence of the illegal recruitment
by claiming that she too was a victim of the illegal recruitment
of Dr. Andres. Firstly, all the transactions from the beginning
to the end were handled by the accused. In fact, none of the
complainants ever met said Dr. Andres. Secondly, if the
accused were a victim of Dr. Andres and she really felt
aggrieved, she could have filed a case against her for illegal
recruitment. Well-founded belief that said Dr. Andres is a
fictitious person conjured by the accused to support her
nefarious scheme in the recruitment process.
RULING:
WHEREFORE, the appealed decision of the Regional Trial
Court of Makati, Metro Manila, in Criminal Case No. 91-6443
is hereby AFFIRMED, subject to the above modification
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
decreeing the restitution of the amounts the accused had
obtained from the complainants. Costs against accused
Carmelita Puertollano Comia. SO ORDERED.
DOUGLAS MILLARES and ROGELIO LAGDA v.
NATIONAL LABOR RELATIONS COMMISSION, TRANS-
GLOBAL MARITIME AGENCY, INC. and ESSO
INTERNATIONAL SHIPPING CO., LTD.
GR. No. 110524. July 29, 2002
KAPUNAN, J.:
FACTS:
Millares was employed by ESSO through its local manning
agency as promoted as chief engineer until he retired. Millares
applied for leave of absence for one month which was
approved then he wrote to the operations manager for his
intention to avail the optional retirement. But ESSO denied the
retirement because he was employed on a contractual basis
and he did not comply with requirement for claiming benefits
under CEIP. ESSO advised Millares that in view of his absence
without leave, which is equivalent to abandonment of his
position, he had been dropped from the roster of crew
members. On the other hand, Lagda applied for a leave of
absence which was approved by Trans-global and advised him
to report for re-assignment but Trans-global denied availing
the optional retirement plan on the same grounds as with
Millares. Millares and Lagda filed a complaint-affidavit before
POEA for illegal dismissal and non-payment of employee
benefits against ESSO and Trans-global. POEA dismissed the
complaint for lack of merit, which was affirmed by NLRC.
ISSUE:
Whether Petitioners may be considered as regular employees
despite of being seafarers.
RATIO:
No. From the foregoing cases, it is clear that seafarers are
considered contractual employees. Their employment is
governed by the contracts they sign every time they are
rehired and their employment is terminated when the contract
expires. Their employment is contractually fixed for a certain
period of time. They fall under the exception of Article 280
whose employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of 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.
Thus, petitioners are not considered regular or permanent
employees under Article 280 of the Labor Code. Since there
was no dismissal to speak of, it follows that petitioners are not
entitled to reinstatement or payment of separation pay or
backwages, as provided by law. However, with respect to the
benefits under the Consecutive Enlistment Incentive Plan
(CEIP), petitioners are still entitled to receive 100% of the
total amount credited to him under the CEIP. Although
54
petitioners are contractual employees, their compensation
and benefits are covered by the contracts they signed and the
CEIP is part and parcel of the contract.
RULING:
IN VIEW OF THE FOREGOING, THE COURT Resolved to
Partially GRANT Private Respondents Second Motion for
Reconsideration and Intervenor FAMES Motion for
Reconsideration in Intervention. The Decision of the National
Labor Relations Commission dated June 1, 1993 is hereby
REINSTATED with MODIFICATION. The Private Respondents,
Trans-Global Maritime Agency, Inc. and Esso International
Shipping Co.,Ltd. are hereby jointly and severally ORDERED
to pay petitioners One Hundred Percent (100%) of their total
credited contributions as provided under the Consecutive
Enlistment Incentive Plan (CEIP). SO ORDERED.
PENTAGON INTERNATIONAL SHIPPING INC.
VS. ADELANTAR
GR. No. 157373. July 27, 2004
FACTS:
Respondent Adelantar was hired by Dubai Ports Authority of
Jebel Ali under an employment contract (1st contract) which
provided for an unlimited period of employment. A month later
Adelantar and Pentagon, for and in behalf of Dubai Ports
Authority of Jebel Ali, entered into a POEA standard
employment contract (2nd contract), this time providing for a
12-month period. Later on, however, the management barred
Adelantar from entering the port due to a previous dispute
with his superior, which causes his termination and was
eventually repatriated after 9 months and 7 days of service.
Adelantar filed a complaint for illegal dismissal with money
claim against Pentagon.
The Labor Arbiter (LA) found that the dismissal of Adelantar
was illegal. Consequently, he ordered Pentagon to pay
Adelantar the backwages representing the latters 3 months
basic salary. Adelantar appealed to the NLRC arguing that the
LA erred in granting backwages of only three (3) months. The
NLRC affirmed the LA decision and held that under Section 10
of R.A. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, an illegally dismissed contract
worker is entitled to the salaries corresponding to the
unexpired portion of his contract, or for three (3) months for
every year of the unexpired term, whichever is less.
Adelantar appealed to CA. In CA, the court modified the
amounts awarded by the LA and NLRC. It awards the full
backwages of respondent computing from the time of
dismissal up to the finality of the decision using as a basis
Article 279 of the Labor Code and not RA 8042.
ISSUE
Whether Art. 279 of the Labor Code governs in the awards for
backwages of Adelantar, a seafarer.
RULING:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
NO.
We held that Filipino seamen are governed by the Rules and
Regulations of the POEA. The Standard Employment Contract
governing the Employment of All Filipino Seamen on Board
Ocean-Going Vessels of the POEA, particularly in Part I, Sec.
C specifically provides that the contract of seamen shall be for
a fixed period. In no case should the contract of seamen be
longer than 12 months.
Under the circumstances, the Court of Appeals erred in
resolving the issue of backwages based on the first contract
which provided for an unlimited period of employment as this
violated the explicit provision of the Rules and Regulations of
the POEA. While we recognize that Adelantar executed a
contract with Dubai Ports Authority of Ali Jebel and might even
have applied said contract in his overseas station, this contract
was not sanctioned by the POEA.
The Court of Appeals erred when it adjudged the first contract
as the basis for Pentagons liability instead of the second
contract, which is in conformity with the POEAs Standard
Employment Contract.
Besides, in Millares v. NLRC, we held that:
. . . It is clear that seafarers are considered contractual
employees. They cannot be considered as regular employees
under Article 280 of the Labor Code. Their employment is
governed by the contracts they sign every time they are
rehired and their employment is terminated when the contract
expires. Their employment is contractually fixed for a certain
period of time. They fall under the exception of Article 280
whose employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of 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.
Therefore, Adelantar, a seafarer, is not a regular employee as
defined in Article 280 of the Labor Code. Hence, he is not
entitled to full backwages and separation pay in lieu of
reinstatement as provided in Article 279 of the Labor Code. As
we held in Millares, Adelantar is a contractual employee
whose rights and obligations are governed primarily by Rules
and Regulations of the POEA and, more importantly, by R.A.
8042, or the Migrant Workers and Overseas Filipinos Act of
1995.
SKIPPERS UNITED PACIFIC, INC. VS. CABILES
GR. No. 175558. February 08 2012
FACTS:
Skippers United Pacific, Inc. deployed, in behalf of Skippers,
De Gracia, Lata, and Aprosta to work on board the vessel MV
Wisdom Star. Respondents claimed that Skippers failed to
remit their respective allotments for almost five months,
compelling them to air their grievances with the Romanian
Seafarers Free Union. The Romanian Seafarers Union sent a
fax letter, relaying the complaints of his crew. Respondents
were unceremoniously discharged from MV Wisdom Stars and
immediately repatriated. Upon arrival in the Philippines,
55
respondents filed a complaint for illegal dismissal with the
Labor Arbiter. Petitioner claims that respondents demanded
immediate repatriation because they were not satisfied with
the ship. The Labor Arbiter dismissed respondents’ complaint
for illegal dismissal because the seafarers voluntarily pre-
terminated their employment contracts by demanding for
immediate repatriation due to dissatisfaction with the ship.
ISSUE:
(1) Whether the dismissal of the respondents is valid
(2) Whether the computation of money claims is correct.
RULING:
(1) NO. Article 285 of the Labor Code recognizes termination
by the employee of the employment contract by serving
written notice on the employer at least one (1) month in
advance. Given that provision, the law contemplates the
requirement of a written notice of resignation. In the absence
of a written resignation, it is safe to presume that the
employer terminated the seafarers. In addition, the telex
message relied upon by the Labor Arbiter and NLRC bore
conflicting dates of 22 January 1998 and 22 January 1999,
giving doubt to the veracity and authenticity of the document.
In 22 January 1998, respondents we’re not even employed
yet by the foreign principal. For these reasons, the dismissal
of De Gracia, et al. was illegal.
(2) NO. The Migrant Workers Act provides that salaries for
the unexpired portion of the employent contract or three (3)
months for every year of the unexpired term, whichever is
less, shall be awarded to the overseas Filipino worker, in cases
of illegal dismissal. However, in Serrano v. Gallant Maritime
Services and Marlow Navigation Co. Inc., the Supreme Court,
declared unconstitutional the clause or for three months for
every year of the unexpired term, whichever is less and
awarded the entire unexpired portion of the employment
contract to the overseas Filipino worker. Later, Section 7 of
Republic Act No. 10022 (RA 10022) amended Section 10 of
the Migrant Workers Act, and once again reiterated the
provision of awarding the unexpired portion of the
employment contract or three (3) months for every year of
the unexpired term, whichever is less. Nevertheless, since the
termination occurred on January 1999 before the passage of
the amendatory RA 10022, we shall apply RA 8042, as
unamended, without touching on the constitutionality of
Section 7 of RA 10022 because an unconstitutional clause in
the law confers no rights, imposes no duties and affords no
protection. The unconstitutional provision is inoperative, as if
it was not passed into law at all.
ELIZABETH M. GAGUI, Petitioner,
vs.
SIMEON DEJERO and TEODORO R.
PERMEJO, Respondents.
G.R. No. 196036 October 23, 2013
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
SERENO, CJ:
FACTS:
Simeon Dejero and Teodoro Permejo filed separate
Complaints for illegal dismissal, nonpayment of salaries and
overtime pay, refund of transportation expenses, damages,
and attorney’s fees against PRO Agency Manila, Inc., and
Abdul Rahman Al Mahwes. After due proceedings, Labor
Arbiter Pedro Ramos rendered a decision ordering
respondents Pro Agency Manila, Inc., and Abdul Rahman Al
Mahwes to jointly and severally pay complainants. Pursuant
to such decision, Labor Arbiter Ramos issued a Writ of
Execution.When the writ was returned unsatisfied, an Alias
Writ of Execution was issued, but was also returned
unsatisfied. Respondents filed a Motion to Implead
Respondent Pro Agency Manila, Inc.’s Corporate Officers and
Directors as Judgment Debtors. It included petitioner as the
Vice-President/Stockholder/Director of PRO Agency, Manila,
Inc. After due hearing, Executive Labor Arbiter Voltaire A.
Balitaan issued an Order granting respondents’ motion.
A 2nd Alias Writ of Execution was issued, which resulted in
the garnishment of petitioner’s bank deposit in the amount of
₱85,430.48. However, since the judgment remained
unsatisfied, respondents sought the issuance of a third alias
writ of execution on 26 February 2004.
Executive Labor Arbiter Lita V. Aglibut issued an
Order granting respondents’ motion for a third alias writ.
Accordingly, the 3rd Alias Writ of Execution was issued,
resulting in the levying of two parcels of lot owned by
petitioner located in San Fernando, Pampanga.
Petitioner then filed a Motion to Quash 3rd Alias Writ of
Execution; and a Supplemental Motion to Quash Alias Writ of
Execution. In these motions, petitioner alleged that apart
from not being made aware that she was impleaded as one of
the parties to the case, the dispositive portion of the 7 May
1997 Decision (1997 Decision) did not hold her liable in any
form whatsoever. More importantly, impleading her for the
purpose of execution was tantamount to modifying a decision
that had long become final and executory.
Executive Labor Arbiter Lita V. Aglibut issued an Order
denying petitioner’s motions on the following grounds: (1)
records disclosed that despite having been given sufficient
notices to be able to register an opposition, petitioner refused
to do so, effectively waiving her right to be heard; and (2)
under Section 10 of Republic Act No. 8042 (R.A. 8042) or the
Migrant Workers and Overseas Filipinos Act of 1995, corporate
officers may be held jointly and severally liable with the
placement agency for the judgment award.
Aggrieved, petitioner appealed to the NLRC, which rendered
a Decision denying the respondents Gagui appeal.
The NLRC ruled that "in so far as overseas migrant workers
are concerned, it is R.A. 8042 itself that describes the nature
of the liability of the corporation and its officers and directors.
x x x [I]t is not essential that the individual officers and
directors be impleaded as party respondents to the case
instituted by the worker. A finding of liability on the part of
the corporation will necessarily mean the liability of the
corporate officers or directors."
Upon appellate review, the CA affirmed the NLRC in a
Decision28 promulgated on 15 November 2010:
From the foregoing, the Court finds no reason to hold the
NLRC guilty of grave abuse of discretion amounting to lack or
excess of jurisdiction in affirming the Order of Executive Labor
56
Arbiter Aglibut which held petitioner solidarily liable with PRO
Agency Manila, Inc. and Abdul Rahman Al Mahwes as
adjudged in the May 7, 1997 Decision of Labor Arbiter Pedro
Ramos.
The CA stated that there was "no need for petitioner to be
impleaded x x x because by express provision of the law, she
is made solidarily liable with PRO Agency Manila, Inc., for any
and all money claims filed by private respondents." The CA
further said that this is not a case in which the liability of the
corporate officer must be established because an allegation of
malice must be proven. The general rule is that corporate
officers, directors and stockholders are not liable, except when
they are made liable for their corporate act by a specific
provision of law, such as R.A. 8042.
ISSUES:
1. Whether or not this petition was filed on time; and
2. Whether or not petitioner may be held jointly and severally
liable with PRO Agency Manila, Inc. in accordance with Section
10 of R.A. 8042, despite not having been impleaded in the
Complaint and named in the Decision.
RATIO DECIDENDI:
Liability of Corporate Officers
RULING:
SEC. 10. MONEY CLAIMS. - Notwithstanding any provision of
law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any
law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and
other forms of damages.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims under
this section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and
shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement
agency, as provided by law, shall be answerable for all money
claims or damages that may be awarded to the workers. If
the recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the case may
be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and
damages. (Emphasis supplied)
In Sto. Tomas v. Salac, we had the opportunity to pass upon
the constitutionality of this provision. We have thus
maintained:
The key issue that Gumabay, et al. present is whether or not
the 2nd paragraph of Section 10, R.A. 8042, which holds the
corporate directors, officers, and partners of recruitment and
placement agencies jointly and solidarily liable for money
claims and damages that may be adjudged against the latter
agencies, is unconstitution.
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL
and MINISTRY OF PUBLIC HEALTH-KUWAIT
Petitioners,
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
vs.
MA. JOSEFA ECHIN, Respondent.
G.R. No. 178551 October 11, 2010
CARPIO MORALES, J.:
FACTS:
Respondent Echin was hired by petitioner ATCI in behalf of its
principal co-petitioner, Ministry of Public Health of Kuwait, for
the position of medical technologist under a two-year contract
with a monthly salary of US$1,200.00.Within a year,
Respondent was terminated for not passing the probationary
period which was under the Memorandum of Agreement.
Ministry denied respondent‘s request and she returned to the
Philippines shouldering her own fair. Respondent filed with the
National Labor Relations Commission (NLRC) a complaint
against ATCI for illegal dismissal. Labor Arbiter rendered
judgment in favor of respondent and ordered ATCI to pay
her$3,600.00, her salary for the three months unexpired
portion of the contract. ATCI appealed Labor Arbiter‘s
decision, however, NLRC affirmed the latter‘s decision and
denied petitioner ATCI‘s motion for reconsideration. Petitioner
appealed to the Court Appeals contending that their principal
being a foreign government agency is immune from suit, and
as such, immunity extended to them. Appellate Court affirmed
NLRC‘s decision. It noted that under the law, a private
employment agency shall assume all responsibilities for the
implementation of the contract of employment of an overseas
worker; hence, it can be sued jointly and severally with the
foreign principal for any violation of the recruitment
agreement or contract of employment.
Petitioner‘s motion for reconsideration was denied; hence,
this present petition.
ISSUE:
Whether or not petitioners be held liable considering that the
contract specifically stipulates that respondent‘s employment
shall be governed by the Civil Service Law and Regulations of
Kuwait.
RATIO DECIDENDI:
Doctrine of Procesual Presumption: The party invoking the
application of a foreign law has the burden proving the law,
otherwise the same shall be presumed as similar to ours.
RULING:
Court denied the petition. According to RA 8042:
“The obligations covenanted in the recruitment agreement
entered into by and between the local agent and its foreign
principal are not coterminous with the term of such agreement
so that if either or both of the parties decide to end the
agreement,the responsibilities of such parties towards the
contracted employees under the agreement do not at all end,
but the same extends up to and until the expiration of the
employment contracts of the employees recruited and
employed pursuant to the said recruitment agreement. In
international law, the party who wants to have a foreign law
applied to a dispute or case has the burden of proving the
57
foreign law. Where a foreign law is not pleaded or, even if
pleaded, is not proved, the presumption is that foreign law is
the same as ours. Thus, we apply Philippine labor laws in
determining the issues presented before us.
ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW
NAVIGATION CO., INC., Respondents.
G.R. No. 167614 March 24, 2009
FACTS:
Petitioner was hired by Gallant Maritime Services, Inc. and
Marlow Navigation Co., Ltd. (respondents) under a Philippine
Overseas Employment Administration (POEA)-approved
Contract of Employment with the following terms and
conditions:
Duration of contract 12 months
Position Chief Officer
Basic monthly salary US$1,400.00
Hours of work 48.0 hours per week
Overtime US$700.00 per month
Vacation leave with pay 7.00 days per month
On March 19, 1998, the date of his departure, petitioner was
constrained to accept a downgraded employment contract for
the position of Second Officer with a monthly salary of
US$1,000.00, upon the assurance and representation of
respondents that he would be made Chief Officer by the end
of April 1998. Respondents did not deliver on their promise
to make petitioner Chief Officer. Hence, petitioner refused to
stay on as Second Officer and was repatriated to the
Philippines on May 26, 1998. Petitioner’s employment
contract was for a period of 12 months or from March 19,
1998 up to March 19, 1999, but at the time of his repatriation
on May 26, 1998, he had served only two (2) months and
seven (7) days of his contract, leaving an unexpired portion
of nine (9) months and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against
respondents for constructive dismissal and for payment of his
money claims in the total amount of US$26,442.73. The LA
rendered a Decision, declaring the dismissal of petitioner
illegal and awarding him monetary benefits, declaring that the
dismissal of the complainant (petitioner) by the respondents
in the above-entitled case was illegal and the respondents are
hereby ordered to pay the complainant [petitioner], jointly
and severally, in Philippine Currency, based on the rate of
exchange prevailing at the time of payment, the amount of
EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS
(US $8,770.00), representing the complainant’s salary for
three (3) months of the unexpired portion of the aforesaid
contract of employment.
Respondents appealed to the National Labor Relations
Commission (NLRC) to question the finding of the LA that
petitioner was illegally dismissed. The NLRC modified the LA
Decision and corrected the LA’s computation of the lump-sum
salary awarded to petitioner by reducing the applicable salary
rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042
“does not provide for the award of overtime pay, which should
be proven to have been actually performed, and for vacation
leave pay.
Petitioner filed a Motion for Partial Reconsideration, but this
time he questioned the constitutionality of the subject clause.
The NLRC denied the motion.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Petitioner filed a Petition for Certiorari with the CA, reiterating
the constitutional challenge against the subject clause. After
initially dismissing the petition on a technicality, the CA
eventually gave due course to it, as directed by this Court in
its Resolution which granted the petition for certiorari,filed by
petitioner.
The CA affirmed the NLRC ruling on the reduction of the
applicable salary rate; however, the CA skirted the
constitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA,
petitioner brings his cause to this Court on the following
grounds:
The Court of Appeals and the labor tribunals have decided the
case in a way not in accord with applicable decision of the
Supreme Court involving similar issue of granting unto the
migrant worker back wages equal to the unexpired portion of
his contract of employment instead of limiting it to three (3)
months.
Even without considering the constitutional limitations [of]
Sec. 10 of Republic Act No. 8042, the Court of Appeals gravely
erred in law in excluding from petitioner’s award the overtime
pay and vacation pay provided in his contract since under the
contract they form part of his salary.
The Court now takes up the full merit of the petition mindful
of the extreme importance of the constitutional question
raised therein.
ISSUES:
 Whether Section 10 (par 5) of RA 8042 is
unconstitutional
 Proper computation of the Lump-sum salary to be
awarded to petitioner by reason of his illegal dismissal
 Whether the overtime and leave pay should form part of
the salary basis in the computation of his monetary
award
RULING:
1. The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees:
No person shall be deprived of life, liberty, or property without
due process of law nor shall any person be denied the equal
protection of the law.
Section 18, Article II and Section 3, Article XIII accord all
members of the labor sector, without distinction as to place of
deployment, full protection of their rights and welfare.
To Filipino workers, the rights guaranteed under the foregoing
constitutional provisions translate to economic security and
parity: all monetary benefits should be equally enjoyed by
workers of similar category, while all monetary obligations
should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or
spared the burden imposed on, others in like circumstances.
Imbued with the same sense of “obligation to afford
protection to labor,” the Court in the present case also
employs the standard of strict judicial scrutiny, for it perceives
in the subject clause a suspect classification prejudicial to
OFWs.
Upon cursory reading, the subject clause appears facially
neutral, for it applies to all OFWs. However, a closer
examination reveals that the subject clause has a
58
discriminatory intent against, and an invidious impact on
OFWs
The subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason
that the clause violates not just petitioner’s right to equal
protection, but also her right to substantive due process under
Section 1, Article III of the Constitution.
2. Second Issue
It is plain that prior to R.A. No. 8042, all OFWs, regardless of
contract periods or the unexpired portions thereof, were
treated alike in terms of the computation of their monetary
benefits in case of illegal dismissal. Their claims were
subjected to a uniform rule of computation: their basic
salaries multiplied by the entire unexpired portion of their
employment contracts.
The enactment of the subject clause in R.A. No. 8042
introduced a differentiated rule of computation of the money
claims of illegally dismissed OFWs based on their employment
periods, in the process singling out one category whose
contracts have an unexpired portion of one year or more and
subjecting them to the peculiar disadvantage of having their
monetary awards limited to their salaries for 3 months or for
the unexpired portion thereof, whichever is less, but all the
while sparing the other category from such prejudice, simply
because the latter’s unexpired contracts fall short of one year.
Prior to R.A. No. 8042, a uniform system of computation of
the monetary awards of illegally dismissed OFWs was in place.
This uniform system was applicable even to local workers with
fixed-term employment.
The subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason that
the clause violates not just petitioner’s right to equal
protection, but also her right to substantive due process under
Section 1, Article III of the Constitution.
The subject clause being unconstitutional, petitioner is
entitled to his salaries for the entire unexpired period of nine
months and 23 days of his employment contract, pursuant to
law and jurisprudence prior to the enactment of R.A. No.
8042.
3. Third Issue
Petitioner contends that his overtime and leave pay should
form part of the salary basis in the computation of his
monetary award, because these are fixed benefits that have
been stipulated into his contract.
Petitioner is mistaken.
The word salaries in Section 10(5) does not include overtime
and leave pay. For seafarers like petitioner, DOLE Department
Order No. 33, series 1996, provides a Standard Employment
Contract of Seafarers, in which salary is understood as the
basic wage, exclusive of overtime, leave pay and other
bonuses; whereas overtime pay is compensation for all work
“performed” in excess of the regular eight hours, and holiday
pay is compensation for any work “performed” on designated
rest days and holidays.
In the same vein, the claim for the day’s leave pay for the
unexpired portion of the contract is unwarranted since the
same is given during the actual service of the seamen.
WHEREFORE, the Court GRANTS the Petition. The subject
clause “or for three months for every year of the unexpired
term, whichever is less” in the 5th paragraph of Section 10 of
Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL;
and the December 8, 2004 Decision and April 1, 2005
Resolution of the Court of Appeals are MODIFIED to the effect
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
that petitioner is AWARDED his salaries for the entire
unexpired portion of his employment contract consisting of
nine months and 23 days computed at the rate of
US$1,400.00 per month.
CLAUDIO S. YAP VS. THENAMARIS SHIPS
MANAGEMENT AND INTERMARE MARITIME
AGENCIES
G.R. NO. 179532 MAY 30, 2011
NACHURA, J.:
FACTS:
Claudio S. Yap was employed as electrician of the vessel, M/T
SEASCOUT on 14 August 2001 by Intermare Maritime
Agencies, Inc. in behalf of its principal, Vulture Shipping
Limited. The contract of employment entered into by Yap and
Capt. Francisco B. Adviento, the General Manager of
Intermare, was for a duration of 12 months. On 23 August
2001, Yapboarded M/T SEASCOUT and commenced his job
as electrician. However, on or about 08 November 2001, the
vessel was sold. The Philippine Overseas Employment
Administration (POEA) was informed about the sale on 06
December 2001 in a letter signed by Capt. Adviento. Yap,
along with the other crewmembers, was informed by the
Master of their vessel that the same was sold and will be
scrapped. They were also informed about the Advisory sent
by Capt. Constatinou, which states, among others: “Please
Ask Yr Officers And Ratings If They Wish To Be Transferred
To Other Vessels After Vessel S Delivery (Greek Via Athens-
Philipinos Via Manila For Crew Not Wish Transfer To Declare
Their Prospected Time For Reembarkation In Order To
Schedule Them Accly”
Yap received his seniority bonus, vacation bonus, extra bonus
along with the scrapping bonus. However, with respect to the
payment of his wage, he refused to accept the payment of
one-month basic wage. He insisted that he was entitled to the
payment of the unexpired portion of his contract since he was
illegally dismissed from employment. He alleged that he opted
for immediate transfer but none was made.
Respondents, for their part, contended that Yap was not
illegally dismissed. They alleged that following the sale of the
M/T SEASCOUT, Yap signed off from the vessel on 10
November 2001 and was paid his wages corresponding to the
months he worked or until 10 November 2001 plus his
seniority bonus, vacation bonus and extra bonus. They further
alleged that Yaps employment contract was validly terminated
due to the sale of the vessel and no arrangement was made
for Yaps transfer to Thenamaris other vessels.
Thus, Claudio S. Yap (petitioner) filed a complaint for Illegal
Dismissal with Damages and Attorneys Fees before the Labor
Arbiter (LA). Petitioner claimed that he was entitled to the
salaries corresponding to the unexpired portion of his
contract. Subsequently, he filed an amended complaint,
impleading Captain Francisco Adviento of respondents
Intermare Maritime Agencies, Inc. (Intermare) and
Thenamaris Ships Management (respondents), together with
C.J. Martionos, Interseas Trading and Financing Corporation,
and Vulture Shipping Limited/Stejo Shipping Limited.
ISSUES:
59
Whether or not Section 10 of R.A. [No.] 8042, to the extent
that it affords an illegally dismissed migrant worker the lesser
benefit of salaries for [the] unexpired portion of his
employment contract or for three (3) months for
every year of the unexpired term, whichever is less is
constitutional; and
Assuming that it is, whether or not the Court of Appeals
gravely erred in granting petitioner only three (3) months
backwages when his unexpired term of 9 months is far
short of the every year of the unexpired term threshold.
RATIO DECIDENDI:
Equal Protection; No law should single out one classification
of OFWs and burden it witha peculiar disadvantage.
RULING:
This case should not be different from Serrano.
As a general rule, an unconstitutional act is not a law; it
confers no rights; it imposes no duties; it affords no
protection; it creates no office; it is inoperative as if it has not
been passed at all. The general rule is supported by Article 7
of the Civil Code, which provides:
Art. 7. Laws are repealed only by subsequent ones, and their
violation or non-observance shall not be excused by disuse or
custom or practice to the contrary.
The doctrine of operative fact serves as an exception to the
aforementioned general rule. In Planters Products, Inc. v.
Fertiphil Corporation,[29] we held:
The doctrine of operative fact, as an exception to the general
rule, only applies as a matter of equity and fair play. It nullifies
the effects of an unconstitutional law by recognizing that the
existence of a statute prior to a determination of
unconstitutionality is an operative fact and may have
consequences which cannot always be ignored. The past
cannot always be erased by a new judicial declaration.
The doctrine is applicable when a declaration of
unconstitutionality will impose an undue burden on those who
have relied on the invalid law. Thus, it was applied to a
criminal case when a declaration of unconstitutionality would
put the accused in double jeopardy or would put in limbo the
acts done by a municipality in reliance upon a law creating
it.[30]
Following Serrano, we hold that this case should not be
included in the aforementioned exception. After all, it was not
the fault of petitioner that he lost his job due to an act of
illegal dismissal committed by respondents. To rule otherwise
would be iniquitous to petitioner and other OFWs, and would,
in effect, send a wrong signal that principals/employers and
recruitment/manning agencies may violate an OFWs security
of tenure which an employment contract embodies and
actually profit from such violation based on an
unconstitutional provision of law.
In the same vein, we cannot subscribe to respondents
postulation that the tanker allowance of US$130.00 should not
be included in the computation of the lump-sum salary to be
awarded to petitioner.
First. It is only at this late stage, more particularly in their
Memorandum, that respondents are raising this issue. It was
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
not raised before the LA, the NLRC, and the CA. They did not
even assail the award accorded by the CA, which computed
the lump-sum salary of petitioner at the basic salary of
US$1,430.00, and which clearly included the US$130.00
tanker allowance. Hence, fair play, justice, and due process
dictate that this Court cannot now, for the first time on appeal,
pass upon this question. Matters not taken up below cannot
be raised for the first time on appeal. They must be raised
seasonably in the proceedings before the lower tribunals.
Questions raised on appeal must be within the issues framed
by the parties; consequently, issues not raised before the
lower tribunals cannot be raised for the first time on
appeal.[31]
Second. Respondents invocation of Serrano is unavailing.
Indeed, we made the following pronouncements in Serrano,
to wit:
The word salaries in Section 10(5) does not include overtime
and leave pay. For seafarers like petitioner, DOLE Department
Order No. 33, series 1996, provides a Standard Employment
Contract of Seafarers, in which salary is understood as the
basic wage, exclusive of overtime, leave pay and other
bonuses; whereas overtime pay is compensation for all work
performed in excess of the regular eight hours, and holiday
pay is compensation for any work performed on designated
rest days and holidays.[32]
SAMEER OVERSEAS PLACEMENT AGENCY,
INC., Petitioner, v. JOY C. CABILES, Respondent.
G.R. No. 170139 August 05, 2014
LEONEN, J.:
FACTS:
Sameer Overseas Placement Agency, Inc., is a recruitment
and placement agency. Responding to an ad it published,
respondent, Joy C. Cabiles, submitted her application for a
quality control job in Taiwan. Such application was accepted.
Joy was later asked to sign a one-year employment contract
for a monthly salary of NT$15,360.00. She alleged that
Sameer Overseas Agency required her to pay a placement fee
of P70,000.00 when she signed the employment contract.
Joy was deployed to work for Taiwan Wacoal, Co. Ltd.
(Wacoal) on June 26, 1997. She alleged that in her
employment contract, she agreed to work as quality control
for one year. In Taiwan, she was asked to work as a cutter.
Sameer Overseas Placement Agency claims that on July 14,
1997, a certain Mr. Huwang from Wacoal informed Joy,
without prior notice, that she was terminated and that "she
should immediately report to their office to get her salary and
passport." She was asked to "prepare for immediate
repatriation."
Joy claims that she was told that from June 26 to July 14,
1997, she only earned a total of NT$9,000. According to her,
Wacoal deducted NT$3,000 to cover her plane ticket to
Manila.
Then Joy filed a complaint with the National Labor Relations
Commission against petitioner and Wacoal. She claimed that
she was illegally dismissed. She asked for the return of her
placement fee, the withheld amount for repatriation costs,
payment of her salary for 23 months as well as moral and
60
exemplary damages. She identified Wacoal as Sameer
Overseas Placement Agency's foreign principal.
ISSUE:
Whether the Court of Appeals erred when it affirmed the ruling
of the NLRC finding respondent illegally dismissed and
awarding her three months7 worth of salary, the
reimbursement of the cost of her repatriation,and attorneys
fees despite the alleged existence of just causes of
termination.
Whether there was a just cause for termination because there
was a finding of wacoal that respondent was inefficient in her
work.
Whether the Pacific that should not assume responsibility for
wacoal’s contractual obligations to the workers originally
recruited by petitioner.
RULING:
Sameer Overseas Placement Agency failed to show that there
was just cause for causing Joy's dismissal. The employer,
Wacoal, also failed to accord her due process of law.
Indeed, employers have the prerogative to impose
productivity and quality standards at work. They may also
impose reasonable rules to ensure that the employees comply
with these standards. Failure to comply may be a just cause
for their dismissal. Certainly, employers cannot be compelled
to retain the services of an employee who is guilty of acts that
are inimical to the interest of the employer. While the law
acknowledges the plight and vulnerability of workers, it does
not "authorize the oppression or self-destruction of the
employer." Management prerogative is recognized in law and
in our jurisprudence.
This prerogative, however, should not be abused. It is
"tempered with the employee's right to security of
tenure."Workers are entitled to substantive and procedural
due process before termination. They may not be removed
from employment without a valid or just cause as determined
by law and without going through the proper procedure.
Security of tenure for labor is guaranteed by our Constitution.
Employees are not stripped of their security of tenure when
they move to work in a different jurisdiction. With respect to
the rights of overseas Filipino workers, we follow the principle
of lex loci contractus.
By our laws, overseas Filipino workers (OFWs) may only be
terminated for a just or authorized cause and after compliance
with procedural due process requirements.
Article 282 of the Labor Code enumerates the just causes of
termination by the employer. Thus:
Art. 282. Termination by employer. An employer may
terminate an employment for any of the following
causes:
(a) Serious misconduct or willful disobedience by
the employee of the lawful orders of his employer
or representative in connection with his work;
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

(b) Gross and habitual neglect by the employee of that the authority granted involves the exercise of discretion
his duties; on the part of the issuing authority.
GMC’s right to choose whom to employ is limited by the
(c) Fraud or willful breach by the employee of the statutory requirement of an employment permit. The Labor
trust reposed in him by his employer or duly Code empowers the Labor Secretary to determine as to the
authorized representative; availability of the services of a “person in the Philippines who
is competent, able and willing at the time of the application to
(d) Commission of a crime or offense by the
perform the services for which an alien is desired” and DOLE
employee against the person of his employer or
any immediate member of his family or his duly is the agency vested with jurisdiction to determine the
authorized representatives; and question of availability of local workers.

(e) Other causes analogous to the foregoing. RULING:

GENERAL MILLING CORPORATION and EARL ACCORDINGLY, the Court Resolved to DISMISS the Petition
TIMOTHY CONE, petitioners, vs. HON. RUBEN D. for certiorari for lack of merit. Costs against petitioners.
TORRES, in his capacity as Secretary of Labor and
Employment, HON. BIENVENIDO E. LAGUESMA, in his ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN,
capacity as Acting Secretary of Labor and Petitioners, vs. APRILITO R. SEBOLINO, KHIM V.
Employment, and BASKETBALL COACHES
COSTALES, ALVIN V. ALMOITE, and JOSEPH S.
ASSOCIATION OF THE PHILIPPINES, respondents.
SAGUN, Respondents.
G.R. No. 93666 April 22, 1991
G.R. No. 187320 January 26, 2011
FELICIANO, J.:
BRION, J.:
FACTS:
FACTS:
An Alien Employment Permit was issued by the DOLE in favor
Sebolino et al filed several complaints for illegal dismissal
of petitioner Cone, a US citizen, as sports consultant and
against petitioners Atlanta and its President, Chan. Atlanta is
assistant coach for petitioner GMC. A contract of employment
a domestic corporation engaged in the manufacture of steel
was entered into between Cone and GMC. Cone changed his
pipes. The complainants alleged that they had attained
status from temporary to visitor to pre-arranged employee,
regular status since they work with Atlanta for more than 6
which the Commission on Immigration and Deportation
months from the start of an apprenticeship agreement and
approved. After a year, GMC requested the renewal of Cone's
were illegally dismissed when the apprenticeship agreement
alien employment permit and the same was approved by the
expired. Atlanta and Chan argued that the workers were not
DOLE. However, the Basketball Coaches Association of the
entitled to regularization and to their money claims because
Philippines (BCAP) appealed the issuance of said alien
they were engaged as apprentices under a government-
employment permit to the Secretary of Labor on the ground
approved apprenticeship program and that their names did
that there was no showing that there is no person in the
not appear in the list of employees. Subsequently a
Philippines who is competent, able and willing to perform the
compromise agreement was entered into by the respondent
services required nor that the hiring of petitioner Cone would
with Atlanta, but the remaining respondents had refused to
redound to the national interest. GMC filed a petition for
sign.
Certiorari alleging that the Secretary abused his discretion
when he revoked Cone's alien employment permit and that
the Labor Code does not empower the Secretary to determine
ISSUE:
if the employment of an alien would redound to national
interest.
Whether the respondents are employees of Atlanta and thus
entitled to their money claims
ISSUE:

RATIO DECIDENDI:
Whether the Secretary of Labor acted with grave abuse of
discretion in revoking Cone’s Alien Employment Permit
The Supreme Court ruled in favor of the employees. Even if
we recognize the company’s need to train its employees
RACIO DECIDENDI:
through apprenticeship, we can only consider the first
apprenticeship agreement for the purpose. With the
The Supreme Court ruled that the Secretary of Labor did not
expiration of the first agreement and the retention of the
act with grave abuse of discretion in revoking Cone’s Alien
employees, Atlanta had, to all intents and purposes,
Employment Permit. GMC’s claim that hiring of a foreign coach
recognized the completion of their training and their
is an employer’s prerogative has no legal basis. Under Section
acquisition of a regular employee status. This reality is
40 of the Labor Code, an employer seeking employment of an
highlighted by the CA finding that the respondents occupied
alien must first obtain an employment permit from the
positions such as machine operator, scale man and extruder
Department of Labor. The permissive language used indicates

61
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
operator - tasks that are usually necessary and desirable in
Atlanta’s usual business or trade as manufacturer of plastic
building materials. These tasks and their nature characterized
the four as regular employees under Article 280 of the Labor
Code. Thus, when they were dismissed without just or
authorized cause, without notice, and without the opportunity
to be heard, their dismissal was illegal under the law.
On the supposed compromise agreement they entered into,
Costales, Almoite, Sebolino and Sagun refuse to accept the
agreements’ validity, contending that the company’s
apprenticeship program is merely a ploy “to continually
deprive them of their rightful wages and benefits which are
due them as regular employees.”
RULING:
WHEREFORE, premises considered, we hereby DENY the
petition for lack of merit. The assailed decision and resolution
of the Court of Appeals are AFFIRMED. Costs against the
petitioner Atlanta Industries, Inc.
PROFESSIONAL VIDEO, INC., Petitioner, vs.
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT
AUTHORITY, Respondent.
G.R. No. 155504 June 26, 2009
BRION, J.:
Facts:
Professional Video Inc. (PROVI) signed and executed the
“Contract Agreement Project PVC ID Card Issuance” for the
provision of goods and services in the printing and encoding
of the PVC cards. PROVI was to provide TESDA with the
system and equipment compliant with the specifications
defined in the proposal. In return, TESDA would pay PROVI a
specified sum of money after TESDA’s acceptance of the
contracted goods and services. PROVI alleged that TESDA has
still an outstanding balance of 35 Million pesos and still
remains unpaid. TESDA argued that public funds cannot be
the subject of garnishment. RTC denied TESDA's motion to
quash. CA set aside the RTC's order and denied PROVI's
motion for reconsideration.
ISSUE:
Whether the writ of attachment or garnishment against
TESDA is valid
RATIO DECIDENDI:
The Supreme Court ruled that TESDA’s funds are public in
character, hence exempt from attachment or garnishment. It
agrees with TESDA that it is not engaged in business, and
there is nothing in the records to show that its purchase of
the PVC cards from PROVI is for a business purpose. While
TESDA admits that it will charge the trainees with a fee for
the PVC cards, it claims that this fee is only to recover their
costs and is not intended for profit. TESDA is an
instrumentality of the government undertaking governmental
62
functions. Disbursements of public funds must be covered by
the corresponding appropriation as required by law. The
functions and public services rendered by the State cannot be
allowed to be paralyzed or disrupted by the diversion of public
funds from their legitimate and specific objects, as
appropriated by law.
RULING:
WHEREFORE, premises considered, we hereby DENY the
petition filed by petitioner Professional Video, Inc., and
AFFIRM the Court of Appeals’ Decision dated July 23, 2002,
and Resolution of September 27, 2002, in CA-G.R. SP No.
67599. Costs against the petitioner.
CENTURY CANNING CORPORATION, Petitioner, vs.
COURT OF APPEALS and GLORIA C. PALAD,
Respondents.
G.R. No. 152894 August 17, 2007
CARPIO, J.:
FACTS:
Petitioner hired Gloria C. Palad as "fish cleaner" at petitioner’s
tuna and sardines factory. Palad signed on an apprenticeship
agreement with petitioner and received an apprentice
allowance. Petitioner submitted its apprenticeship program for
approval to the TESDA of the DOLE. Months after, TESDA
approved petitioner’s apprenticeship program. Palad received
a rating of "needs improvement" based on her performance
and numerous tardiness and absences. As a consequence,
petitioner issued a termination notice to Palad. Palad then filed
a complaint for illegal dismissal, underpayment of wages, and
non-payment of pro-rated 13th month pay for the year 1997.
The Labor Arbiter dismissed Palad's complaint, however
ordered Century Canning to pay the complainant representing
her last salary and prorated 13th month pay. NLRC affirmed
LA's decision. Upon denial of Palad’s motion for
reconsideration, she filed a special civil action for certiorari
with the CA. CA set aside the NLRC's decision on the ground
that the apprenticeship agreement was not valid and binding
because it was executed more than two months before the
TESDA approved petitioner’s apprenticeship program.
ISSUE:
Whether Palad was an apprentice of Century Canning
Corporation
RATIO DECIDENDI:
The Supreme Court cited its previous ruling in the case of Nitto
Enterprises vs. NLRC that Article 61 of the Labor Code held
that an apprenticeship program should first be approved by
the DOLE before an apprentice may be hired, otherwise the
person hired will be considered a regular employee. Prior
approval by the DOLE of the proposed apprenticeship
program is, therefore, a condition sine qua non before an
apprenticeship agreement can be validly entered into. The act
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
of filing the proposed apprenticeship program with the DOLE
is a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice
relationship. Hence, since the apprenticeship agreement
between petitioner and private respondent has no force and
effect in the absence of a valid apprenticeship program duly
approved by the DOLE.
Since Palad is not considered an apprentice because the
apprenticeship agreement was enforced before the TESDA’s
approval of petitioner’s apprenticeship program, Palad is
deemed a regular employee performing the job of a "fish
cleaner." Clearly, the job of a "fish cleaner" is necessary in
petitioner’s business as a tuna and sardines factory. Under
Article 280 of the Labor Code, an employment is deemed
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.
RULING:
WHEREFORE, we AFFIRM the Decision dated 12 November
2001 and the Resolution dated 5 April 2002 of the Court of
Appeals in CA-G.R. SP No. 60379.
NITTO ENTERPRISES, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and ROBERTO
CAPILI, respondents.
G.R. No. 114337 September 29, 1995
KAPUNAN, J.:
FACTS:
Nitto Enterprises hired Capili as an apprentice machinist for a
period of 6 months with a daily wage rate of P66.75 which
was 75% of the applicable minimum wage. While working,
Capili accidentally hit and injured the leg of an office secretary.
On the same day after office hours, he entered a workshop
which was not his work station and then operated a machine
without authority and in the process injured his left thumb.
Petitioner covered the expenses for his medication. He was
asked to resign in a letter. A Quitclaim and Release was
executed by Capili in favor of petitioner. Capili filed a
complaint for illegal dismissal and payment of other monetary
benefits. However, the Labor Arbiter held that the termination
was valid. The NLRC reversed the same and declared Capili as
a regular employee, thus was illegally dismissed. The Labor
Arbiter now ruled for the reinstatement of Capili and his
backwages. Petitioner filed a motion for reconsideration but
was denied.
ISSUE:
Whether Capili is a regular employee or an apprentice
RATIO DECIDENDI:
The Supreme Court ruled that he is a regular employee.
Petitioner did not comply with the requirements of the law.
The apprenticeship agreement between petitioner and private
63
respondent was executed on May 28, 1990 and on the same
date, an apprenticeship program was prepared by petitioner
and submitted to the DOLE. However, the apprenticeship
agreement was filed only on June 7, 1990.
It is mandated under Article 61 of the Labor Code that
apprenticeship agreements entered into by the employer and
apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of
Labor and Employment. Absence of such renders the
apprenticeship agreement no force and effect.
Prior approval by the DOLE of the proposed apprenticeship
program is, therefore, a condition sine quo non before an
apprenticeship agreement can be validly entered into. The act
of filing the proposed apprenticeship program with the DOLE
is a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice
relationship. He should rightly be considered as a regular
employee of petitioner as defined by Article 280 of the Labor
Code and pursuant to the constitutional mandate to protect
the rights of workers and promote their welfare.
RULING:
WHEREFORE, finding no abuse of discretion committed by
public respondent National Labor Relations Commission, the
appealed decision is hereby AFFIRMED.
MARITES BERNARDO, ET. Al, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION and FAR
EAST BANK AND TRUST COMPANY, respondents.
G.R. No. 122917 July 12, 1999
PANGANIBAN, J.:
FACTS:
Petitioners numbering 43 are deaf–mutes who were hired on
various periods from 1988 to 1993 by respondent Far East
Bank and Trust Co. as Money Sorters and Counters through a
uniformly worded agreement called "Employment Contract for
Handicapped Workers", among which included that the
EMPLOYEE shall undergo a training period of 1 month, after
which the BANK shall determine whether or not he/she should
be allowed to finish the remaining term of this Contract.
Subsequently, they were dismissed.
Petitioners maintain that they should be considered regular
employees, because their task as money sorters and counters
was necessary and desirable to the business of respondent
bank. They further allege that their contracts served merely
to preclude the application of Article 280 and to bar them from
becoming regular employees. Private respondent, on the
other hand, submits that petitioners were hired only as
“special workers and should not in any way be considered as
part of the regular complement of the Bank” and were only
hired due to "pakiusap". They were told from the start, "with
the assistance of government representatives," that they
could not become regular employees. They were “special”
workers under Article 80 of the Labor Code.
ISSUE:
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Whether petitioners are regular employees
RATIO DECIDENDI:
The Supreme Court ruled that the facts, viewed in light of the
Labor Code and the Magna Carta for Disabled Persons,
indubitably show that the petitioners, except sixteen of them,
should be deemed regular employees. As such, they have
acquired legal rights that this Court is duty-bound to protect
and uphold, not as a matter of compassion but as a
consequence of law and justice.
The uniform employment contracts of the petitioners
stipulated that they shall be trained for a period of one month,
after which the employer shall determine whether or not they
should be allowed to finish the 6-month term of the contract.
Furthermore, the employer may terminate the contract at any
time for a just and reasonable cause. Unless renewed in
writing by the employer, the contract shall automatically
expire at the end of the term.
The renewal of the contracts of the handicapped workers and
the hiring of others lead to the conclusion that their tasks were
beneficial and necessary to the bank. More important, these
facts show that they were qualified to perform the
responsibilities of their positions. In other words, their
disability did not render them unqualified or unfit for the tasks
assigned to them.
Section 5 of the Magna Carta provides that no disabled person
shall be denied access to opportunities for suitable
employment. Since the Magna Carta accords them the rights
of qualified able-bodied persons, they are thus covered by
Article 280 of the Labor Code which provides for the regular
and casual employment. The test whether an employee is
regular as laid down in De Leon vs. NLRC is whether the
particular activity performed by the employee is usually
necessary or desirable in the usual business or trade of the
employer.
RULING:
WHEREFORE, premises considered, the Petition is hereby
GRANTED. The June 20, 1995 Decision and the August 4,
1995 Resolution of the NLRC are REVERSED and SET ASIDE.
Respondent Far East Bank and Trust Company is hereby
ORDERED to pay back wages and separation pay to each of
the following twenty-seven (27) petitioners, namely, Marites
Bernardo, Elvira Go Diamante, Rebecca E. David, David P.
Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez,
Joselito O. Agdon, George P. Ligutan Jr., Liliberh Q.
Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes,
Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia
de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret
Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth
Ventura and Grace S. Pardo. The NLRC is hereby directed to
compute the exact amount due each of said employees,
pursuant to existing laws and regulations, within fifteen days
from the finality of this Decision. No costs.
64
"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE
PHILIPPINES (BLUM), ET AL., petitioners, vs. HON.
RONALDO B. ZAMORA, PRESIDENTIAL ASSISTANT
FOR LEGAL AFFAIRS, OFFICE OF THE PRESIDENT,
HON. AMADO G. INCIONG, UNDERSECRETARY OF
LABOR, SAN MIGUEL CORPORATION, GENARO
OLIVES, ENRIQUE CAMAHORT, FEDERICO OÑATE,
ERNESTO VILLANUEVA, ANTONIO BOCALING and
GODOFREDO CUETO, respondents.
G.R. No. L-48645 January 7, 1987
GUTIERREZ, JR., J.:
FACTS:
The petitioners worked exclusively at the San Miguel
Corporation (SMC) as pahinantes or kargadors for almost 7
years. Their work was neither regular nor continuous,
depending on the volume of bottles to be loaded and
unloaded, as well as the business activity of the company.
However, work exceeded the eight-hour day and sometimes,
necessitated work on Sundays and holidays and for this, they
were neither paid overtime nor compensation. BLUM filed a
complaint against SMC and its officers for unfair labor practice
and illegal dismissal. It was alleged that respondents ordered
the individual complainants to disaffiliate from the
complainant union; and that management dismissed the
individual complainants when they insisted on their union
membership. Respondents denied the same contending that
complainants are not and have never been employees of
respondent company but employees of the independent
contractor; that respondent company has never had control
over the means and methods followed by the independent
contractor. The Labor Arbiter found for complainants which
was concurred in by the NLRC. On appeal, the Secretary set
aside the NLRC ruling, stressing the absence of an employer-
employee relationship.
ISSUE:
Whether an employer-employee relationship exists between
the workers and San Miguel Corporation
RATIO DECIDENDI:
The Supreme Court ruled that there exists an employer-
employee relationship in this case. In determining the
existence of an employer-employee relationship, the elements
that are generally considered are the following: (a) the
selection and engagement of the employee; (b) the payment
of wages; (c) the power of dismissal; and (d) the employer's
power to control the employee with respect to the means and
methods by which the work is to be accomplished. It is the
called "control test" that is the most important element.
The records fail to show that SMC entered into mere oral
agreements of employment with the workers. Considering the
length of time that the petitioners have worked with the
company, there is justification to conclude that they were
engaged to perform activities necessary in the usual business
or trade and the petitioners are, therefore regular employees.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Despite past shutdowns of the glass plant, the workers
promptly returned to their jobs. The term of the petitioner’s
employment appears indefinite and the continuity and
habituality of the petitioner’s work bolsters the claim of an
employee status.
The existence of an independent contractor relationship is
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". None of the above
criteria exists in the case at bar.
RULING:
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is
GRANTED. The San Miguel Corporation is hereby ordered to
REINSTATE petitioners, with three (3) years backwages.
However, where reinstatement is no longer possible, the
respondent SMC is ordered to pay the petitioners separation
pay equivalent to one (1) month pay for every year of service.
GRANDTEQ INDUSTRIAL STEEL PRODUCTS, INC. and
ABELARDO M. GONZALES, Petitioners, vs. EDNA
MARGALLO, Respondent.
G.R. No. 181393 July 28, 2009
CHICO-NAZARIO, J.:
FACTS
Grandteq, the petitioner is a domestic corporation engaged in
the business of selling welding electrodes, alloy steels,
aluminum and copper alloys. It employed Edna Margallo,
respondent as Sales Engineer. As an employee, the
respondent availed of the car loan program offered to her by
the petitioner. She paid the downpayment and the
amortization of the car from her own pocket. However, due
to alleged moonlighting, sabotage and breach of trust and
confidence against her, she resigned from the company
unfortunately the car that she had was sold to another
employee. Further, she was never paid from her money
claims. The petitioner contended that the respondent had no
right to the refund of her car loan payments because under
the terms it expressly provided that in the event of resignation
during the effectivity of said agreement, her car loan
payments would be forfeited in favor of Grandteq, and
Grandteq would regain possession of the car. As to the money
claims, Margallo was not entitled to sales commission because
the computation should be based on actual collections within
180 days from invoice date which she failed to achieve. Hence,
the respondent filed a complaint to the Labor Arbiter.
ISSUE/S:
1. WHETHER OR NOT THE TERMS IN THE CAR LOAN
AGREEMENT IS VALID?
65
2. WHETHER OR NOT TMS. MARGALLO IS ENTITLED
TO MONEY CLAIMS?
RATIO:
The contracting parties may establish such stipulations,
clauses, terms and conditions as they want, and their
agreement would have the force of law between them.
However, those terms and conditions agreed upon must not
be contrary to law, morals, customs, public policy or public
order. Precisely, the law overrides such conditions which are
prejudicial to the interest of the worker. The law affords
protection to an employee, and it will not countenance any
attempt to subvert its spirit and intent. The sheer inequality
that characterizes employer-employee relations, where the
scales generally tip against the employee, often scarcely
provides him real and better options. Moreover, in
controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation
of agreements and writing should be resolved in the former’s
favor
In cases involving money claims of employees, the employer
has the burden of proving that the employees did receive their
wages and benefits and that the same were paid in
accordance with law.
RULING:
The court held that the said provisions plainly are contrary to
the fundamental principles of justice and fairness. It must be
remembered that Margallo herself paid for the down payment
and her share in the monthly amortization of the car. The
principle that no person may unjustly enrich oneself at the
expense of another (Nemo cum alteris detrimento locupletari
potest) is embodied in Article 22 of the New Civil Code.
SANDIGAN SAVINGS and LOAN BANK, INC., and
SANDIGAN REALTY DEVELOPMENT CORPORATION,
petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION and
ANITA M. JAVIER, respondents.
G.R. No. 112877 February 26, 1996
HERMOSISIMA, JR., J.:
FACTS:
Private respondent Anita M. Javier worked as a realty sales
agent of the petitioner Sandigan Realty Development
Corporation (Sandigan Realty). Their agreement was that
Javier would receive a 5% commission for every sale, or if no
sale was made, she would receive a monthly allowance of
P500,00. Subsequently, Javier was hired as a marketing
collector of petitioner Sandigan Savings and Loan Bank
(Sandigan Banks) by Angel Andan, the President of both the
Sandigan Bank and Sandigan Realty. On 20 April 1990, Javier
was advised by Angel Andan not to report for work anymore.
This in effect was a notice of dismissal. Despite the notice,
respondent kept showing to work until she left because she
could no longer find her table. Hence, the complaint of illegal
dismissal and requesting for reinstatement.
ISSUE:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
WHETHER OR NOT THERE WAS AN EMPLOYER-EMPLOYEE
RELATIONSHIP EXISTED?
RATIO:
In determining the existence of an employer-employee
relationship, the following elements are generally considered:
(1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the
employer's power to control the employee with respect to the
means and methods by which the work is to be accomplished.
RULING:
The court held that private respondent was not a regular
employee of Sandigan Realty Development Corporation but of
the Sandigan Savings and Loan Bank, Inc.
As it appears that Sandigan Realty had no control over the
conduct of Javier as a realty sales agent since its only concern
or interest was in the result of her work and not in how it was
achieved, there cannot now be any doubt that Javier was not
an employee, much less a regular employee of the Sandigan
Realty. Hence, she cannot be entitled to the right to security
of tenure nor to backwages and separation pay as a
consequence of her separation therefrom. Evidently, the legal
relation of Javier to the Sandigan Realty can be that of an
independent contractor, where the control of the contracting
party is only with respect to the result of the work, as
distinguished from an employment relationship where the
person rendering service is under the control of the hirer with
respect to the details and manner of performance
However, private respondent Anita Javier is considered a
regular employee of Sandigan Banks since the four elements
of an employee-employer relationship are present, so by
virtue of her employment status, is, under the law entitled to
security of tenure, which means that she has the right to
continue in employment until the same is terminated under
conditions required by Article 279 of the Labor Code.
SMART COMMUNICATIONS, INC., petitioner, vs.
REGINA M. ASTORGA, respondent.
G.R. No. 148132 January 28, 2008
NACHURA, J.:
FACTS:
Regina M. Astorga was employed by respondent Smart
Communications, Incorporated (SMART) as District Sales
Manager of the Corporate Sales Marketing Group/ Fixed
Services Division (CSMG/FSD). In February 1998, SMART
launched an organizational realignment to achieve more
efficient operations. Part of the reorganization was the
outsourcing of the marketing and sales force. Thus, SMART
entered into a joint venture agreement with NTT of Japan,
and formed SMART-NTT Multimedia, Incorporated (SNMI).
Since SNMI was formed to do the sales and marketing work,
SMART abolished the CSMG/FSD, Astorga’s division. SMART
then conducted a performance evaluation of CSMG personnel
and those who garnered the highest ratings were favorably
66
recommended to SNMI. Astorga landed last in the
performance evaluation, thus, she was not recommended by
SMART. SMART, nonetheless, offered her a supervisory
position in the Customer Care Department, but she refused
the offer because the position carried lower salary rank and
rate. The termination of her employment prompted Astorga
to file a Complaint for illegal dismissal, non-payment of
salaries and other benefits with prayer for moral and
exemplary damages against SMART. She claimed that
abolishing CSMG and, consequently, terminating her
employment was illegal for it violated her right to security of
tenure. She also posited that it was illegal for an employer,
like SMART, to contract out services which will displace the
employees, especially if the contractor is an in-house agency.
SMART responded that there was valid termination. It argued
that Astorga was dismissed by reason of redundancy, which
is an authorized cause for termination of employment, and the
dismissal was effected in accordance with the requirements of
the Labor Code. The redundancy of Astorga’s position was the
result of the abolition of CSMG and the creation of a
specialized and more technically equipped SNMI, which is a
valid and legitimate exercise of management prerogative.
ISSUE:
WHETHER OR NOT THE DISMISSAL OF ASTORGA WAS
VALID?
RATIO:
Article 283 of the Labor Code clearly provides:
Closure of establishment and reduction of personnel. — The
employer may also terminate the employment of any
employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking
unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof
RULING:
The court held that the dismissal of Astorga was valid. The
organizational realignment introduced by SMART, which
culminated in the abolition of CSMG/FSD and termination of
Astorga’s employment was an honest effort to make SMART’s
sales and marketing departments more efficient and
competitive.
Indeed, the labor law has inclined towards the worker and
upheld his cause in most of his conflicts with his employer.
This favored treatment is consonant with the social justice
policy of the Constitution. But while tilting the scales of justice
in favor of workers, the fundamental law also guarantees the
right of the employer to reasonable returns for his
investment. In this light, we must acknowledge the
prerogative of the employer to adopt such measures as will
promote greater efficiency, reduce overhead costs and
enhance prospects of economic gains, albeit always within the
framework of existing laws. Accordingly, the Court found the
dismissal of the employees therein valid and for authorized
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
cause even if the employer failed to comply with the notice
requirement under Article 283 of the Labor Code.
ANGELINA FRANCISCO, Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, KASEI
CORPORATION, SEIICHIRO TAKAHASHI, TIMOTEO
ACEDO, DELFIN LIZA, IRENE BALLESTEROS,
TRINIDAD LIZA and RAMON ESCUETA, Respondents.
G.R. No. 170087 August 31, 2006
YNARES-SANTIAGO, J.:
FACTS:
Petitioner was hired by the respondent, Kasei Corporation
during its incorporation stage. In 1996, petitioner was
designated as Acting Manager, handling recruitment of all
employees as well as handling all other matters pertaining to
the operation of Kasei Restaurant which is owned and
operated by Kasei Corporation.
In January 2001, petitioner was replaced by Liza R. Fuentes
as Manager. On October 15, 2001, petitioner asked for her
salary from the treasurer but she was informed that she is no
longer connected with the company. Since she was no longer
being paid, she did not report for work and instead filed an
action for constructive dismissal before the Labor Arbiter.
Private respondents averred that petitioner is not an employee
of Kasei Corporation for she was only as one of its technical
consultants on accounting matters and act concurrently as
Corporate Secretary. As technical consultant, she works at her
own discretion without control and supervision of Kasei
Corporation. Since her designation depended solely upon the
will of management, she may be terminated any time
considering that her services were only temporary in nature
and dependent on the needs of the corporation.
ISSUE:
Whether or not there was an employer-employee relationship
between petitioner and private respondent Kasei Corporation?
RATIO:
Generally, courts have relied on the so-called right of control
test where the person for whom the services are performed
reserves a right to control not only the end to be achieved but
also the means to be used in reaching such end. However, in
certain cases the control test is not sufficient to give a
complete picture of the relationship between the parties,
owing to the complexity of such a relationship where several
positions have been held by the worker. The better approach
would therefore be to adopt a two-tiered test involving: (1)
the putative employer’s power to control the employee with
respect to the means and methods by which the work is to be
accomplished; and (2) the underlying economic realities of the
activity or relationship.
Thus, the determination of the relationship between employer
and employee depends upon the circumstances of the whole
economic activity, such as: (1) the extent to which the
services performed are an integral part of the employer’s
business; (2) the extent of the worker’s investment in
equipment and facilities; (3) the nature and degree of control
67
exercised by the employer; (4) the worker’s opportunity for
profit and loss; (5) the amount of initiative, skill, judgment or
foresight required for the success of the claimed independent
enterprise; (6) the permanency and duration of the
relationship between the worker and the employer; and (7)
the degree of dependency of the worker upon the employer
for his continued employment in that line of business.
RULING:
The court held that there was an employer-employee
relationship between the petitioner and the private
respondent.
When petitioner was designated as General Manager,
respondent corporation made a report to the SSS. Petitioner’s
membership in the SSS as manifested by a copy of the SSS
specimen signature card which was signed by the President of
Kasei Corporation and the inclusion of her name in the on-line
inquiry system of the SSS prove the existence of an employer-
employee relationship between petitioner and respondent
corporation. It is therefore apparent that petitioner is
economically dependent on respondent corporation for her
continued employment in the latter’s line of business.
In Domasig v. National Labor Relations Commission, it was
held that in a business establishment, an identification card is
provided not only as a security measure but mainly to identify
the holder thereof as a bona fide employee of the firm that
issues it.
ABS-CBN BROADCASTING CORPORATION, petitioner,
vs.
MARLYN NAZARENO, MERLOU GERZON, JENNIFER
DEIPARINE, and JOSEPHINE LERASAN, respondents.
G.R. No. 164156 September 26, 2006
CALLEJO, SR., J.:
FACTS
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is
engaged in the broadcasting business and owns a network of
television and radio stations, Petitioner employed
respondents Nazareno, Gerzon, Deiparine, and Lerasan as
production assistants (PAs) on different dates. They were
assigned at the news and public affairs, for various radio
programs in the Cebu Broadcasting Station. They were issued
ABS-CBN employees’ identification cards and were required to
work for a minimum of eight hours a day, including Sundays
and holidays.
On December 19, 1996, petitioner and the ABS-CBN Rank-
and-File Employees executed a Collective Bargaining
Agreement (CBA) However, since petitioner refused to
recognize PAs as part of the bargaining unit, respondents
were not included to the CBA.
On October 12, 2000, respondents filed a Complaint for
Recognition of Regular Employment Status, Underpayment of
Overtime Pay, Holiday Pay, Premium Pay, Service Incentive
Pay, Sick Leave Pay, and 13th Month Pay with Damages
against the petitioner before the NLRC.
ISSUE:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
WHETHER OR NOT THERE EXISTS AN EMPLOYER-EMPLOYEE
RELATIONSHIP?
RATIO:
Where a person has rendered at least one year of service,
regardless of the nature of the activity performed, or where
the work is continuous or intermittent, the employment is
considered regular as long as the activity exists, the reason
being that a customary appointment is not indispensable
before one may be formally declared as having attained
regular status, as provided in Article 280 of the Labor Code.
Thus, there are two kinds of regular employees under the law:
(1) those engaged to perform activities which are necessary
or desirable in the usual business or trade of the employer;
and (2) those casual employees who have rendered at least
one year of service, whether continuous or broken, with
respect to the activities in which they are employed.
RULING:
The court held that there exist an employer-employee
relationship between the petitioner and the respondent.
In the case at bar, the employer-employee relationship
between petitioner and respondents has been proven. 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 petitioner’s
personnel department just like any ordinary employee.
Secondly, 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. Thirdly, Petitioner could
always discharge respondents should it find their work
unsatisfactory, and respondents are highly dependent on the
petitioner for continued work. Lastly, 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. It follows
then that respondents are entitled to the benefits provided for
in the existing CBA between petitioner and its rank-and-file
employees. As regular employees, respondents are entitled to
the benefits granted to all other regular employees of
petitioner under the CBA
DANILO B. TABAS, Et. Al., petitioners,
vs.
CALIFORNIA MANUFACTURING COMPANY, INC.,
LILY-VICTORIA A. AZARCON, NATIONAL LABOR
RELATIONS COMMISSION, and HON. EMERSON C.
TUMANON, respondents.
G.R. No. L-80680 January 26, 1989
SARMIENTO, J.:
68
FACTS
Petitioners were employees of Livi Manpower Services, Inc.
(Livi), which subsequently assigned them to work as
"promotional merchandisers" to California Manufacturing
Company pursuant to a manpower supply agreement. The
agreement provided that California "has no control or
supervisions whatsoever over [Livi's] workers with respect to
how they accomplish their work or perform [Californias]
obligation"; the Livi "is an independent contractor and
nothing herein contained shall be construed as creating
between [California] and [Livi] . . . the relationship of
principal[-]agent or employer[-]employee'; that "it is hereby
agreed that it is the sole responsibility of [Livi] to comply with
all existing as well as future laws, rules and regulations
pertinent to employment of labor" and that "[California] is
free and harmless from any liability arising from such laws or
from any accident that may befall workers and employees of
[Livi] while in the performance of their duties for [California].
It was further expressly stipulated that the assignment of
workers to California shall be on a "seasonal and contractual
basis"; that "[c]ost of living allowance and the 10 legal
holidays will be charged directly to [California] at cost "; and
that "[p]ayroll for the preceeding [sic] week [shall] be
delivered by [Livi] at [California's] premises." The petitioners
were then made to sign employment contracts with durations
of six months, upon the expiration of which they signed new
agreements with the same period, and so on.
The petitioners now allege that they had become regular
California employees and demand, as a consequence whereof,
similar benefits. They likewise claim that pending further
proceedings below, they were notified by California that they
would not be rehired. As a result, they filed an amended
complaint charging California with illegal dismissal.
ISSUE:
WHETHER OR NOT THE PETIONERS ARE ALREADY REGULAR
EMPOLYEES OF THE RESPONDENT?
RATIO:
ART. 106. Contractor or sub-contractor. — Whenever an
employee enters into a contract with another person for the
performance of the former's work, the employees of the
contractor and of the latter's sub-contractor, if any, shall be
paid in accordance with the provisions of this Code. In the
event that the contractor or sub-contractor fails to pay wages
of his employees in accordance with this Code, the employer
shall be jointly and severally liable with his contractor or sub-
contractor to such employees to the extent of the work
performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him
Article 281. Probationary employment. Probationary
employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when
he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is
allowed to work after a probationary period shall be
considered a regular employee.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
The court granted the petition.
In the case at bar, Livi is admittedly an "independent
contractor providing temporary services of manpower to its
client. When it thus provided California with manpower, it
supplied California with personnel, as if such personnel had
been directly hired by California. Hence, Article 106 of the
Code applies. Further, petitioners had been given an initial six-
month contract renewed for another six months. Accordingly,
under Article 281 of the Code, they had become regular
employees-of-California-and had acquired a security of
tenure, by virtue of the required one-year length-of-service.
Hence, they cannot be separated without due process of law.
LOLITA LOPEZ, petitioner,
vs.
BODEGA CITY (Video-Disco Kitchen of the
Philippines) and/or ANDRES C. TORRES-
YAP, respondents.
G.R. No. 155731 September 3, 2007
AUSTRIA-MARTINEZ, J.:
FACTS:
Petitioner was the "lady keeper" of Bodega City tasked with
manning its ladies' comfort room. However, in February 25,
1995, respondent decided to terminate the concessionaire
agreement between them. Hence, the complaint to the Labor
Arbiter for illegal dismissal.
The respondents contended that no employer-employee
relationship ever existed between them and petitioner; that
the latter's services rendered within the premises of Bodega
City was by virtue of a concessionaire agreement she entered
into with respondents.
ISSUE:
WHETHER OR NOT THERE WAS AN EMPLOYER-EMPLOYEE
RELATIONSHIP EXISTED?
RATIO:
To ascertain the existence of an employer-employee
relationship, jurisprudence has invariably applied the four-fold
test, namely: (1) the manner of selection and engagement;
(2) the payment of wages; (3) the presence or absence of the
power of dismissal; and (4) the presence or absence of the
power of control. Of these four, the last one is the most
important. Under the control test, an employer-employee
relationship exists where the person for whom the services
are performed reserves the right to control not only the end
achieved, but also the manner and means to be used in
reaching that end.
RULING:
The court held that there was no employer-employee
relationship between the petitioner and the respondent.
69
Petitioner failed to cite a single instance to prove that she was
subject to the control of respondents insofar as the manner in
which she should perform her job as a "lady keeper" was
concerned.
It is true that petitioner was required to follow rules and
regulations prescribing appropriate conduct while within the
premises of Bodega City. However, this was imposed upon
petitioner as part of the terms and conditions in the
concessionaire agreement embodied in a 1992 letter of Yap
addressed to petitioner. The concessionaire agreement
merely stated that petitioner shall maintain the cleanliness of
the ladies' comfort room and observe courtesy guidelines that
would help her obtain the results they wanted to achieve.
There is nothing in the agreement which specifies the
methods by which petitioner should achieve these results.
Respondents did not indicate the manner in which she should
go about in maintaining the cleanliness of the ladies' comfort
room. Neither did respondents determine the means and
methods by which petitioner could ensure the satisfaction of
respondent company's customers. In other words, petitioner
was given a free hand as to how she would perform her job
as a "lady keeper." In fact, the last paragraph of the
concessionaire agreement even allowed petitioner to engage
persons to work with or assist her in the discharge of her
functions.
VICTORY LINER, INC., Petitioner, vs. PABLO M. RACE,
Respondent.
G.R. No. 164820 March 28, 2007
CHICO-NAZARIO, J.
FACTS:
In June 1993, Pablo Race was employed by the petitioner as
a bus driver. He was assigned to the Alaminos, Pangasinan -
Cubao, Quezon City, route on the evening schedule. On the
night of 24 August 1994, While traversing Moncada, Tarlac,
the bus he was driving was bumped by a Dagupan-bound bus.
Respondent suffered a fractured left leg and was rushed to
the Country Medical and Trauma Center in Tarlac City where
he was operated on and confined from 24 August 1994 up to
10 October 1994. He was further treated at a hospital in
Dagupan City, where his confinement lasted one month. In
January 1998, the respondent went to Victory Liner’s office to
report for work. He was, however, informed by the petitioner
that he was considered resigned from his job. He was offered
a consideration of 50,000, but this was later raised to 100,000.
Respondent refused the offer and filed a complaint for illegal
dismissal.
The Labor Arbiter dismissed the complaint for lack of merit.
He stated that the prescriptive period for filing an illegal
dismissal case is four years from the dismissal of the employee
concerned. The Arbiter also ruled that the respondent was not
a regular employee but a mere field personnel and, therefore,
not entitled to service incentive leave, holiday pay, overtime
pay and 13th month pay. He also ruled that respondent failed
to present evidence showing that he was entitled to the
money claims. On the other hand, the NLRC reversed the
Labor Arbiter’s decision and ordered Race to be reinstated
with full back wages. It ruled that Race was illegally dismissed
and that the respondent’s filing of complaint was well-within
the four-year prescriptive period. The CA ruled that there was
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
no grave abuse of discretion by the NLRC and ruled that Race
did not abandon his work.
ISSUES:
1) Whether or not the respondent was illegally dismissed.
2) Whether or not respondent abandoned his work.
3) Whether or not the complaint for illegal dismissal was filed
within the prescriptive period.
RATIO DECIDENDI:
1) Yes, the respondent was illegally dismissed. In the
termination of employment, the employer must (a) give the
employee a written notice specifying the ground or grounds
of termination, giving to said employee reasonable
opportunity within which to explain his side; (b) conduct a
hearing or conference during which the employee concerned,
with the assistance of counsel if the employee so desires, is
given the opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and (c)
give the employee a written notice of termination indicating
that upon due consideration of all circumstances, grounds
have been established to justify his termination. Petitioner
miserably failed to comply with the foregoing requirements.
There was nothing in the records which evinces that petitioner
had sent a written notice to the respondent informing him of
the ground or grounds of his termination or the reason why
he was deemed resigned. It does not also appear that the
petitioner held a hearing or conference where the respondent
was given the opportunity to answer the charges of
abandonment, insubordination and habitual neglect of duty
against him. Neither did the petitioner send a written notice
to the respondent informing the latter that his service is
terminated after considering all the circumstances.
2) Respondent did not abandon his work. It should be
emphasized that two factors must be present in order to
constitute an abandonment: (a) the failure to report for work
or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship. The
second factor is the more determinative factor and is
manifested by overt acts from which it may be deduced that
the employee has no more intention to work. The intent to
discontinue the employment must be shown by clear proof
that it was deliberate and unjustified. Mere absence from work
does not imply abandonment.
The respondent’s absence from work for a long period of time
was obviously due to the fact that he was still recuperating
from two operations on his fractured leg. Petitioner knew this
very well. In fact, petitioner shouldered the respondent’s
medication and hospital expenses during the latter’s
confinement and operation in two hospitals. Moreover, when
the respondent was able to walk, although limping heavily, he
still reported for work to the petitioner and was granted sick
and disability leave. Clearly then, respondent did not abandon
his job on 10 November 1994.
3) Yes, it was filed within the prescriptive period. The four-
year prescriptive period shall commence to run only upon the
accrual of a cause of action of the worker. It is settled that in
illegal dismissal cases, the cause of action accrues from the
time the employment of the worker was unjustly terminated.
Thus, the four-year prescriptive period shall be counted and
computed from the date of the employee’s dismissal up to the
date of the filing of complaint for unlawful termination of
employment.
70
It is error to conclude that the employment of the respondent
was unjustly terminated on 10 November 1994 because he
was, at that time, still confined at the Specialist Group
Hospital, Dagupan City, for further treatment of his fractured
left leg. He must be considered as merely on sick leave at such
time. Likewise, the respondent cannot also be deemed as
illegally dismissed from work upon his release from the said
hospital in December 1994 up to December 1997 since the
records show that the respondent still reported for work to the
petitioner and was granted sick and disability leave by the
petitioner during the same period. The respondent must be
considered as unjustly terminated from work in January 1998
since this was the first time he was informed by the petitioner
that he was deemed resigned from his work. During that same
occasion, the petitioner, in fact, tried to convince the
respondent to accept an amount of ₱50,000.00 as a
consolation for his dismissal but the latter rejected it. Thus, it
was only at this time that the respondent’s cause of action
accrued. Consequently, the respondent’s filing of complaint
for illegal dismissal on 1 September 1999 was well within the
four-year prescriptive period.
RULING:
WHEREFORE, the petition is PARTLY GRANTED insofar as it
prays for the non-reinstatement of respondent. The Decision
of the Court of Appeals dated 26 April 2004 in CA-G.R. SP No.
74010, is hereby AFFIRMED with the following
MODIFICATIONS: Petitioner is ordered to pay the respondent,
in lieu of reinstatement, separation pay of ONE (1) MONTH
PAY for every year of service, and full backwages inclusive of
allowances and other benefits or their monetary equivalent
from 1 January 1998 up to the finality of this Decision. No
costs.
BIENVENIDO D. GOMA, Petitioner, vs. PAMPLONA
PLANTATION INCORPORATED, Respondent.
G.R. No. 160905 July 4, 2008
NACHURA, J.
FACTS:
Bienvenido Goma rendered service in the construction of the
facilities of Pamplona Leisure Corporation (PPLC) in 1995. He
alleges that he worked as a carpenter at the Hacienda
Pamplona and that he worked from 7:30 a.m. to 12:00 noon
and from 1:00 p.m. to 5:00 p.m. daily with a salary rate of
P90.00 a day paid weekly. He further alleged that he worked
continuously until 1997, when he was not given any work
assignment. On a claim that he was a regular employee,
petitioner claimed that he was illegally dismissed when the
respondent refused without just cause to give him work
assignment.
On the other hand, respondent denied having hired the
petitioner as its regular employee. It argued that petitioner
Goma was hired by a certain Antoy Caaveral, the manager of
the hacienda at the time it was owned by Mr. Bower and
leased by Manuel Gonzales, a jai-alai pelotari known as
Ybarra. Respondent Pamplona added that it was not obliged
to absorb the employees of the former owner.
Petitioner filed a complaint for illegal dismissal, underpayment
of wages, non-payment of premium pay for holiday and rest
day, five (5) days incentive leave pay, damages and attorneys
fees, against the respondent.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
The Labor Arbiter dismissed the case for lack of merit,
concluding that petitioner was hired by the former owner,
hence, was not an employee of the respondent. Consequently,
his money claims were denied. On appeal to the NLRC, the
petitioner obtained favorable judgment when the tribunal
reversed and set aside the Labor Arbiters decision. It upheld
the existence of an employer-employee relationship, taking
into consideration that petitioner worked for the respondent
for a period of two years, which makes him a regular
employee.
Respondent Pamplona then instituted a special civil action
for certiorari under Rule 65 before the Court of Appeals which
granted the same and consequently annulled and set aside
the NLRC decision. It concluded that there was no employer-
employee relationship, and that while the respondents
business required the performance of occasional repairs and
carpentry work, the retention of a carpenter in its payroll was
not necessary or desirable in the conduct of its usual business.
It added that although the petitioner was an employee of the
former owner of the hacienda, the respondent was not
required to absorb such employees because employment
contracts are in personam and binding only between the
parties.
ISSUE:
Whether or not an employee-employer relationship existed
between the petitioner and the respondent.
RATIO DECIDENDI:
The petitioner admitted having been employed by the former
owner prior to 1993 or before the respondent took over the
ownership and management of the plantation, however, he
likewise alleged having been hired by the respondent as a
carpenter in 1995 and having worked as such for two years
until 1997. At the outset, respondent denied that it hired the
petitioner. However, in its petition filed before the CA,
respondent admitted that the petitioner was hired as a project
employee. The Court further ruled that petitioner is a regular
employee by operation of law under Article 280 of the Labor
Code for the reason that he has worked for a period of 2 years
for the respondent.
RULING:
WHEREFORE, premises considered, the petition is GRANTED.
The Decision of the Court of Appeals dated August 27, 2003
and its Resolution dated November 11, 2003 in CA-G.R. SP
No. 74892 are REVERSED and SET ASIDE. Petitioner is found
to have been illegally dismissed from employment and thus,
is ENTITLED to: 1) Salary Differential embodied in the NLRC
decision dated October 24, 2000 in NLRC Case No. V-000882-
99; 2) Separation Pay; 3) Backwages; and 4) Attorneys fees
equivalent to ten percent (10%) of the monetary awards.
Upon finality of this judgment, let the records of the case be
remanded to the NLRC for the computation of the exact
amounts due the petitioner.
DR. CARLOS L. SEVILLA and LINA O. SEVILLA,
petitioners-appellants, vs. THE COURT OF APPEALS,
TOURIST WORLD SERVICE, INC., ELISEO S. CANILAO,
and SEGUNDINA NOGUERA, respondents-appellees.
G.R. No. L-41182-3 April 16, 1988
71
SARMIENTO, J.
FACTS:
Segundina Noguera entered into a lease contract with Tourist World
Service Inc., represented by Eliseo Canilao, wherein the former
agreed to lease her premises to the latter for use as a branch office. When
the office was opened, it was run by Lina Sevilla, petitioner
herein, who was also a signatory to the lease agreement. She
held herself solidarily liable with Tourist World Inc. to pay the
monthly rentals and was given the title of branch manager for
appearance’s sake only. Sevilla earned her own commissions
and did not receive any salary from Tourist World.
The respondent was later informed that Sevilla was connected
with rival firm, and since the branch office was losing its
business, Tourist World considered closing down its office. On
January 3, 1962, the contract with appellee for the use of the
branch office premises was terminated and while the
effectivity thereof was January 31, 1962, the appellees no
longer used it. Because of this, Gabino Canilao, the secretary
of Tourist World, went over to the branch office, and
found the premises locked. Being unable to contact Lina
Sevilla, he padlocked the premises on June 4, 1962 to protect
the interests of the Tourist World Service. When neither
appellant Sevilla nor any of his employees could
enter, a complaint was filed by the appellants against
the appellees. Tourist World insisted that Sevilla was a mere
employee, being the “branch manager” of its branch office
and that she had no say on the lease executed with
the private respondent, Noguera.
ISSUE:
Whether or not an employer-employee relationship existed
between Sevilla and Tourist World Service.
RATIO DECIDENDI:
No employer-employee relationship existed between the
parties. Lina Sevilla, was not subject to control by the private
respondent Tourist World Service, Inc., either as to the result
of the enterprise or as to the means used in connection
therewith. In the first place, under the contract of lease
covering the Tourist Worlds Ermita office, she had bound
herself insolidum as and for rental payments, an arrangement
that would be like claims of a master-servant relationship.
True the respondent Court would later minimize her
participation in the lease as one of mere guaranty, that does
not make her an employee of Tourist World, since in any case,
a true employee cannot be made to part with his own money
in pursuance of his employer's business, or otherwise, assume
any liability thereof. In that event, the parties must be bound
by some other relation, but certainly not employment.
In addition to this, when the branch office was opened, the
same was run by the herein appellant Lina O. Sevilla payable
to Tourist World Service, Inc. by any airline for any fare
brought in on the effort of Mrs. Lina Sevilla. Under these
circumstances, it cannot be said that Sevilla was under the
control of Tourist World Service, Inc. "as to the means used."
Sevilla in pursuing the business, obviously relied on her own
gifts and capabilities.
The fact that Sevilla had been designated 'branch manager"
does not make her, ergo, Tourist World's employee.
Employment is determined by the right-of-control test and
certain economic parameters. Titles are weak indicators.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
WHEREFORE, the Decision promulgated on January 23, 1975
as well as the Resolution issued on July 31, 1975, by the
respondent Court of Appeals is hereby REVERSED and SET
ASIDE. The private respondent, Tourist World Service, Inc.,
and Eliseo Canilao, are ORDERED jointly and severally to
indemnify the petitioner, Lina Sevilla, the sum of 25,00.00 as
and for moral damages, the sum of P10,000.00, as and for
exemplary damages, and the sum of P5,000.00, as and for
nominal and/or temperate damages.
Costs against said private respondents.
GRAND ASIAN SHIPPING LINES, INC., EDUARDO P.
FRANCISCO and WILLIAM HOW, Petitioners, vs.
WILFREDO GALVEZ, JOEL SALES, CRISTITO GRUTA,
DANILO ARGUELLES, RENATO BATAYOLA, PATRICIO
FRESMILLO, JOVY NOBLE, EMILIO DOMINICO,
BENNY NILMAO, and JOSE AUSTRAL, Respondents.
G.R. No. 178184 January 29, 2014
DEL CASTILLO, J.
FACTS:
Petitioner Grand Asian Shipping Lines, Inc. (GASLI) is a
domestic corporation engaged in transporting liquified
petroleum gas from Petron Corporation’s refinery to its plant
and depot. Sometime in January 2000, one of the vessel’s
Oilers, Richard Abis, reported to GASLI’s Office and Crewing
Manager, an alleged illegal activity being committed by
respondents involving the vessel, M/T Dorothy Uno. It was
reported that in about four to five voyages a week, a
substantial volume of fuel oil is unconsumed and stored in the
vessel’s fuel tanks. However, Gruta, the vessel’s Chief
Engineer, would misdeclare it as consumed fuel in the
Engineer’s Voyage Reports. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at
nighttime. The respondents would then divide among
themselves the proceeds of the sale.
As a result of Abis’ report, an investigation, audit and
examination of the Engineer’s Voyage Reports was conducted
by the petitioner’s internal auditor. A Certification of
Overstatement of Fuel Oil Consumption was issued, which led
to the filing of a formal complaint for qualified before the
Criminal Investigation and Detection Group (CIDG) at Camp
Crame against respondents. GASLI then placed respondents
under preventive suspension, and after conducting
administrative hearings, petitioner company decided to
terminate respondents from employment. The respondents
except Joel Sales, the vessel’s Chief Mate, were thus served
with notices informing them of their termination for serious
misconduct, willful breach of trust, and commission of a crime
or offense against their employer.
Respondents and the other dismissed crewmembers filed with
the NLRC separate complaints for illegal suspension and
dismissal, underpayment/non-payment of salaries/wages,
overtime pay, premium pay for holiday and rest day, holiday
pay, service incentive leave pay, hazard pay, tax refunds and
indemnities for damages and attorney’s fees against
petitioners. The Labor Arbiter rendered a Decision finding the
dismissal of all 21 complainants illegal. However, the NLRC
found that the respondent’s dismissal was valid, with the
exception of Sales. It also struck down the monetary awards
72
given by the Labor Arbiter. In addition, it also ruled that
Galvez, a ship captain, is considered a managerial employee
not entitled to premium pay for holiday and rest day, holiday
pay and service incentive leave pay.
Respondents, excluding the other complainants, filed a
Petition for Certiorari with the CA. The CA conformed with the
Labor Arbiter’s ruling that petitioners’ evidence was
inadequate to support the charge of pilferage and justify
respondents’ termination.
ISSUES:
1) Whether or not the respondents were illegally
dismissed.
2) Whether or not Gruta and Galvez are entitled to
holidays pay and their other monetary claims.
RATIO DECIDENDI:
1) Not all the respondents were dismissed for just
causes. In termination disputes, the burden of
proving that the dismissal is for a just or valid cause
rests on the employers. Failure on their part to
discharge such burden will render the dismissal
illegal. As specified in the termination notice,
respondents were dismissed on the grounds of (i)
serious misconduct, particularly in engaging in
pilferage while navigating at sea, (ii) willful breach of
the trust reposed by the company, and (iii)
commission of a crime or offense against their
employer. Mere filing of a formal charge does not
automatically make the dismissal valid. Evidence
submitted to support the charge should be evaluated
to see if the degree of proof is met to justify
respondents’ termination. The affidavit executed by
Montegrico simply contained the accusations of Abis
that respondents committed pilferage, which
allegations remain uncorroborated.
With regard to the issue of lost of trust and
confidence, distinction should be made between
managerial and rank and file employees. With
respect to rank-and-file personnel, loss of trust and
confidence, as ground for valid dismissal, requires
proof of involvement in the alleged events while for
managerial employees, the mere existence of a basis
for believing that such employee has breached the
trust of his employer would suffice for his dismissal.
Galvez, as the ship captain, is considered a
managerial employee since his duties involve the
governance, care and management of the vessel.
Gruta, as chief engineer, is also a managerial
employee for he is tasked to take complete charge of
the technical operations of the vessel. As captain and
as chief engineer, Galvez and Gruta perform
functions vested with authority to execute
management policies and thereby hold positions of
responsibility over the activities in the vessel. Indeed,
their position requires the full trust and confidence
of their employer for they are entrusted with the
custody, handling and care of company property and
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
exercise authority over it. Thus, there is some basis
for the loss of confidence reposed on Galvez and
Gruta.
2) Galvez and Gruta, as managerial employees, are not
entitled to their claims for holiday pay, service
incentive leave pay and premium pay for holiday and
restday. Article 82 of the Labor Code specifically
excludes managerial employees from the coverage of
the law regarding conditions of employment which
include hours of work, weekly rest periods, holidays,
service incentive leaves and service charges.
RULING:
WHEREFORE, the Court of Appeals’ Decision dated September
12, 2006 and the Resolution dated May 23, 2007 in CA-G.R.
SP No. 82379 are ANNULLED and SET ASIDE. Respondents
Wilfredo Galvez and Cristito Gruta are hereby DECLARED
dismissed from employment for just cause while respondent
Joel Sales was not dismissed from employment.
"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE
PHILIPPINES, ET AL., petitioners, vs. HON. RONALDO
B. ZAMORA, PRESIDENTIAL ASSISTANT FOR LEGAL
AFFAIRS, OFFICE OF THE PRESIDENT, HON. AMADO
G. INCIONG, UNDERSECRETARY OF LABOR, SAN
MIGUEL CORPORATION, GENARO OLIVES, ENRIQUE
CAMAHORT, FEDERICO OÑATE, ERNESTO
VILLANUEVA, ANTONIO BOCALING and GODOFREDO
CUETO, respondents.
G.R. No. L-48645 January 7, 1987
GUTIERREZ, JR., J.
FACTS:
The petitioners are workers who have been employed at the
San Miguel Parola Glass Factory since 1961, averaging about
seven years of service at the time of their termination. They
worked as "cargadores" or "pahinante" at the SMC Plant. Their
Work did not necessarily mean a full eight hour day for the
petitioners. However, work,at times, exceeded the eight hour
day and necessitated work on Sundays and holidays. For this,
they were neither paid overtime nor compensation for work
on Sundays and holidays. Petitioners were also paid every ten
days on a piece rate basis.
Sometime in January, 1969, 140 workers organized and
affiliated themselves with the petitioner union and engaged in
union activities. They aired their grievances such as being paid
below the minimum wage law, inhuman treatment, being
forced to borrow at usurious rates of interest and to buy raffle
tickets, coerced by withholding their salaries, and salary
deductions made without their consent. However, their gripes
and grievances were not heeded by the respondents. On
February 6, 1969, the petitioner union filed a notice of strike
with the Bureau of Labor Relations in connection with the
dismissal of some of its members who were allegedly
castigated for their union membership and warned that should
they persist in continuing with their union activities they would
be dismissed from their jobs. Although several conciliation
conferences were scheduled for the parties to settle their
differences, San Miguel refused to bargain with its workers,
reasoning that the petitioners were not its employees.
On February 20, 1969, all the petitioners were dismissed from
73
their jobs and, thereafter, denied entrance to respondent
company's glass factory despite their regularly reporting for
work. A complaint for illegal dismissal and unfair labor practice
was filed by the petitioners.
ISSUE:
Whether or not the petitioners are not employees for the
reason that they rendered work on piece basis.
RATIO DECIDENDI:
The petitioners are still employees despite working on piece
basis. As reiterated in the Court’s ruling in Dy Keh Beng v.
International Labor and Marine Union of the Philippines (90
SCRA 161): "Circumstances must be construed to determine
indeed if payment by the piece is just a method of
compensation and does not define the essence of the relation.
Units of time and units of work are in establishments like
respondent are just yardsticks whereby to determine rate of
compensation, to be applied whenever agreed upon. We
cannot construe payment by the piece where work is done in
such an establishment so as to put the worker completely at
liberty to turn him out and take in another at pleasure."
Article 106 of the Labor Code provides the legal effect of a
labor only contracting scheme, to wit:
... the person or intermediary shall be considered merely as
an agent 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.
RULING:
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is
GRANTED. The San Miguel Corporation is hereby ordered to
REINSTATE petitioners, with three (3) years backwages.
However, where reinstatement is no longer possible, the
respondent SMC is ordered to pay the petitioners separation
pay equivalent to one (1) month pay for every year of service.
NATIONAL WATERWORKS and SEWERAGE
AUTHORITY, petitioner, vs. NWSA CONSOLIDATED
UNIONS, ET AL., respondents.
G.R. No. L-18939 August 31, 1964
BAUTISTA ANGELO, J.
FACTS:
Petitioner NAWASA and respondent NWASA Consolidated
Labor Unions are parties in a controversy involving the
implementation of RA No. 1880 or the 40-Hour Work Week
Law and the alleged violations of their CBA. The intervenors,
Jesus Centeno, Cesar Cabrera, Feliciano Duiguan, Cecilio
Remotigue also demanded overtime pay as managerial
employees. NAWASA contends that as a public corporation, it
does not have control, supervision or jurisdiction to fix rates
concerning the operation of its services. It further argued that
as a public utility, it is exempted from paying additional
compensation for work rendered on Sundays and legal
holidays, and that the intervenors are not entitled to the
benefits of CA No. 444 as amended.
ISSUES:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
1) Whether or not NAWASA is a public utility and,
therefore, exempted from paying additional
compensation for work on Sundays and legal
holidays.
2) Whether or not the intervenors are "managerial
employees" within the meaning of Republic Act 2377
and, therefore, not entitled to the benefits of
Commonwealth Act No. 444, as amended.
RATIO DECIDENDI:
1) NAWASA is a public utility because its primary
function is to construct, maintain and operate water
reservoirs and waterworks for the purpose of
supplying water to the inhabitants, as well as
consolidate and centralize all water supplies and
drainage systems in the Philippines. A public utility is
exempt from paying additional compensation for
work on Sundays and legal holidays conformably to
Section 4 of Commonwealth Act No. 444 which
provides that the prohibition, regarding employment
of Sundays and holidays unless an additional sum of
25% of the employee's regular remuneration is paid
shall not apply to public utilities such as those
supplying gas, electricity, power, water or providing
means of transportation or communication. In other
words, the employees and laborers of NAWASA can
be made to work on Sundays and legal holidays
without being required to pay them an additional
compensation of 25%.
In the case at bar, however, it has been stipulated
that prior to the enactment of Republic Act No. 1880,
providing for the implementation of the 40-Hour
Week Law, the Metropolitan Water District had been
paying 25% additional compensation for work on
Sundays and legal holidays to its employees and
laborers by virtue of Resolution No. 47, series of
1948, of its board of Directors, which practice was
continued by the NAWASA when the latter took over
the service. And in the collective bargaining
agreement entered into between the NAWASA and
respondent unions it was agreed that all existing
benefits enjoyed by the employees and laborers prior
to its effectivity shall remain in force and shall form
part of the agreement, among which certainly is the
25% additional compensation for work on Sundays
and legal holidays therefore enjoyed by said laborers
and employees. It may, therefore, be said that while
under Commonwealth Act No. 444 a public utility is
not required to pay additional compensation to its
employees and workers for work done on Sundays
and legal holidays, there is, however, no prohibition
for it to pay such additional compensation if it
voluntarily agrees to do so. The NAWASA committed
itself to pay this additional compensation. It must
pay not because of compulsion of law but because
of contractual obligation.
2) The intervenors in the case at bar are not managerial
employees and are thus, entitled to compensation.
Section 2 of Republic Act 2377 provides:
74
Sec. 2. This Act shall apply to all persons employed
in any industry or occupation, whether public or
private with the exception of farm laborers, laborers
who prefer to be paid on piece work basis,
managerial employees, outside sales personnel,
domestic servants, persons in the personal service of
another and members of the family of the employer
working for him.
The term "managerial employee" in this Act shall
mean either (a) any person whose primary duty
consists of the management of the establishment in
which he is employed or of a customarily recognized
department or subdivision thereof, or (b) ally officer
or member of the managerial staff.
One of the distinguishing characteristics managerial employee
may be known as expressed in the explanatory note of
Republic Act No. 2377 is that he is not subject to the rigid
observance of regular office hours. The true worth of his
service does not depend so much on the time he spends in
office but more on the results he accomplishes. In fact, he is
free to go out of office anytime.
The intervenors herein are holding position of responsibility.
One of them is the Secretary of the Board of Directors.
Another is the private secretary of the general manager.
Another is a public relations officer, and many other chiefs of
divisions or sections and others are supervisors and overseers.
Respondent court, however, after examining carefully their
respective functions, duties and responsibilities found that
their primary duties do not bear any direct relation with the
management of the NAWASA, nor do they participate in the
formulation of its policies nor in the hiring and firing of its
employees. The chiefs of divisions and sections are given
ready policies to execute and standard practices to observe
for their execution. Hence, it concludes, they have little
freedom of action, as their main function is merely to carry
out the company's orders, plans and policies. As a matter of
fact, they are required to observe working hours and record
their time work and are not free to come and go to their
offices, nor move about at their own discretion. They do not,
therefore, come within the category of "managerial
employees" within the meaning of the law.
RULING:
We hereby affirm the decision of respondent court in all other
respects, without pronouncement as to costs.
SAN MIGUEL BREWERY, INC., petitioner, vs.
DEMOCRATIC LABOR ORGANIZATION, ET AL.,
respondents.
G.R. No. L-18353 July 31, 1963
BAUTISTA ANGELO, J.:
FACTS:
The Democratic Labor Association demanded overtime, night-
shift differential and additional compensation for work done
during Sundays and holidays as provided for in CA No. 444 on
behalf of its outside sales personnel. Petitioner San Miguel
Brewery, on the other hand, contended that its salesmen are
not covered by CA No. 444 for the reason that the
commissions they earn outside of the required eight hours of
work already takes the place of overtime compensation. The
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
situation of their salesmen can be likened to an employee who
is paid on piece-work or commission basis, which is excluded
from the operation of the Eight-Hour Labor Law.
ISSUE:
Whether or not the petitioner’s salesmen are covered by the
compensation paid to employees for work rendered beyond
eight hours and for work done during Sundays and legal
holidays.
RATIO DECIDENDI:
Compensation for overtime work under the Eight Hour Law
only has application where an employee or laborer is paid on
a monthly or daily basis, or is paid a monthly or daily
compensation, in which case, if he is made to work beyond
the requisite period of 8 hours, he should be paid the
additional compensation prescribed by law. This law has no
application when the employee or laborer is paid on a piece-
work, "pakiao", or commission basis, regardless of the time
employed. The philosophy behind this exemption is that his
earnings in the form of commission based on the gross
receipts of the day. His participation depends upon his
industry so that the more hours he employs in the work the
greater are his gross returns and the higher his commission.
As explained in Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F.
2d 202:
The reasons for excluding an outside salesman are fairly
apparent. Such salesman, to a greater extent, works
individually. There are no restrictions respecting the time he
shall work and he can earn as much or as little, within the
range of his ability, as his ambition dictates. In lieu of overtime
he ordinarily receives commissions as extra compensation. He
works away from his employer's place of business, is not
subject to the personal supervision of his employer, and his
employer has no way of knowing the number of hours he
works per day.
With regard to the compensation for work performed during
Sundays and holidays, the employees in the case herein are
entitled to the compensation abovementioned for the reason
that it runs counter to law. Section 4 of Commonwealth Act
No. 444 expressly provides that no person, firm or corporation
may compel an employee or laborer to work during Sundays
and legal holidays unless he is paid an additional sum of 25%
of his regular compensation. This proviso is mandatory,
regardless of the nature of compensation. The only exception
is with regard to public utilities who perform some public
service.
RULING:
WHEREFORE, the decision of the industrial court is hereby
modified as follows: the award with regard to extra work
performed by those employed in the outside or field sales
force is set aside. The rest of the decision insofar as work
performed on Sundays and holidays covering watchmen and
security guards, as well as the award for night salary
differentials, is affirmed. No costs.
75
ARICA, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, respondents.
G.R. No. 78210. February 28, 1989.
PARAS, J.
FACTS:
Petitioners contend that the preliminary activities as workers
of respondents STANFILCO in the assembly area is
compensable as working time (from 5:30 to 6:00 o'clock in
the morning) since these preliminary activities are necessarily
and primarily for private respondent's benefit.
These preliminary activities of the workers are as follows:
a. First there is the roll call. This is followed by getting
their individual work assignments from the foreman.
b. Thereafter, they are individually required to
accomplish the Laborer's Daily Accomplishment
Report during which they are often made to explain
about their reported accomplishment the following
day.
c. Then they go to the stockroom to get the working
materials, tools and equipment.
d. Lastly, they travel to the field bringing with them
their tools, equipment and materials.
All these activities take 30 minutes to accomplish.
The Minister of Labor RULING that the thirty-minute assembly
time long practiced and institutionalized by mutual consent of
the parties under the Collective Bargaining Agreement cannot
be considered as waiting time within the Labor Code. The
thirty-minute assembly is a deeply-rooted, routinary practice
of the employees, and the proceedings attendant thereto are
not infected with complexities as to deprive the workers the
time to attend to other personal pursuits. They are not new
employees as to require the company to deliver long briefings
regarding their respective work assignments. The thirty-
minute assembly time was not primarily intended for the
interests of the employer, but ultimately for the employees to
indicate their availability or non-availability for work during
every working day.
ISSUE:
Whether or not the 30-minute activity of the petitioners before
the scheduled working time is compensable under the Labor
Code.
RATIO DECIDENDI:
The records show that the Labor Arbiters' decision pointed out
in detail the basis of his findings and conclusions, and no
cogent reason can be found to disturb these findings nor of
those of the National Labor Relations Commission which
affirmed the same.
RULING:
PREMISES CONSIDERED, the petition is DISMISSED for lack
of merit and the decision of the National Labor Relations
Commission is AFFIRMED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
UNIVERSITY OF PANGASINAN FACULTY UNION,
petitioner, vs. UNIVERSITY OF PANGASINAN,
respondent.
G.R. No. L-63122. February 20, 1984.
GUTIERREZ, JR., J.
FACTS:
In November and December, 1981, the petitioner’s members
were fully paid their regular monthly salaries. However, from
November 7 to December 5, during the semestral break, they
were not paid their ECOLA. The private respondent claims that
the teachers are not entitled thereto because the semestral
break is not an integral part of the school year and there being
no actual services rendered by the teachers during said
period, the principle of "No work, no pay" applies.
ISSUE:
Whether or not petitioner’s members are entitled to ECOLA
during the semestral break.
RATIO DECIDENDI:
The semestral breaks are in the nature of work interruptions
beyond the employees’ control. These breaks cannot be
considered as absences within the meaning of the law for
which deductions may be made from monthly allowances. The
"No work, no pay" principle does not apply in the instant case.
It is clear from the aforequoted provision of law that it
contemplates a "no work" situation where the employees
voluntarily absent themselves. Petitioners, in the case at bar,
certainly do not, ad voluntatem, absent themselves during
semestral breaks. Rather, they are constrained to take
mandatory leave from work.
By analogy, we may apply the principle enunciated in the
Omnibus Rules Implementing the Labor Code to wit, the
principles in determining hours worked [Sec. 4(d)] “The time
during which an employee is inactive by reason of
interruptions in his work beyond his control shall be
considered time either if the imminence of the resumption of
work requires the employee’s presence at the place of work
or if the interval is too brief to be utilized effectively and
gainfully in the employee’s own interest.”
The semestral break scheduled is an interruption beyond
petitioner’s control. Thus, the semestral break may also be
considered as "hours worked." For this, the teachers are paid
regular salaries and, for this, they should be entitled to
ECOLA. Not only do the teachers continue to work during this
short recess but much less do they cease to live for which the
cost of living allowance is intended. The legal principles of "No
work, no pay; No pay, no ECOLA" must necessarily give way
to the purpose of the law to augment the income of
employees to enable them to cope with the harsh living
conditions brought about by inflation; and to protect
employees and their wages against the ravages brought by
these conditions.
RULING:
WHEREFORE the petition for certiorari is hereby GRANTED.
The private respondent is ordered to pay its regular fulltime
teachers/employees emergency cost of living allowances for
the semestral break from November 7 to December 5, 1981
76
and the undistributed balance of the sixty (60%) percent
incremental proceeds from tuition increases for the same
schoolyear as outlined above. The respondent Commission is
sustained insofar as it DENIED the payment of salaries for the
suspended extra loads on September 21, 1981.
SIME DARBY PILIPINAS INC., petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION,
respondent.
G.R. NO. 119205. April 15, 1998.
BELLOSILLO, J.
FACTS:
Prior to the present controversy, all company factory workers
in Marikina including members of private respondent union
worked from 7:45 a.m. to 3:45 p.m. with a 30 minute paid on
call lunch break. Petitioner issued a memorandum to all
factory-based employees advising all its monthly salaried
employees in its Marikina Tire Plant a change in work
schedule.
By the change in the work schedule and discontinuance of the
30-minute paid on call lunch break, private respondent filed a
complaint before the Labor Arbiter for unfair labor practice,
discrimination and evasion of liability. However, the Labor
Arbiter dismissed the complaint on the ground that the change
in the work schedule and the elimination of the 30-minute paid
lunch break of the factory workers constituted a valid exercise
of management prerogative and that the new work schedule,
break time and one-hour lunch break did not have the effect
of diminishing the benefits granted to factory workers as the
working time did not exceed eight hours.
On the other hand, the public respondent declared that the
new work schedule deprived the employees of the benefits of
time-honored company practice of providing its employees a
30-minute paid lunch break resulting in an unjust diminution
of company privileges prohibited by Art. 100 of the Labor
Code, as amended. Hence, this petition.
ISSUE:
Is the act of management in revising the work schedule of its
employees and discarding their paid lunch break constitutive
of unfair labor practice?
RATIO DECIDENDI:
The right to fix the work schedules of the employees rests
principally on their employer. In the instant case petitioner, as
the employer, cites as reason for the adjustment the efficient
conduct of its business opeRATIO DECIDENDIns and its
improved production. It RATIO DECIDENDInalizes that while
the old work schedule included a 30-minute paid lunch break,
the employees could be called upon to do jobs during that
period as they were on call.
For a full one-hour undisturbed lunch break, the employees
can freely and effectively use this hour not only for eating but
also for their rest and comfort which are conducive to more
efficiency and better performance in their work. Since the
employees are no longer required to work during this one-
hour lunch break, there is no more need for them to be
compensated for this period. We agree with the Labor Arbiter
that the new work schedule fully complies with the daily work
period of eight hours without violating the Labor Code.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

RULING:
WHEREFORE, the Petition is GRANTED. The Resolution of the
National Labor Relations Commission dated 29 November
1994 is SET ASIDE and the decision of the Labor Arbiter dated
26 November 1993 dismissing the complaint against petitioner
for unfair labor practice is AFFIRMED.

PAN AMERICAN WORLD AIRWAYS SYSTEM

(PHILIPPINES), petitioner, vs. PAN AMERICAN
EMPLOYEES ASSCOIATION, respondent.
G.R. No. L-16275. February 23, 1961.

REYES, J.B.L., J.

FACTS:

Petitioner herein claims that the one-hour meal period should

not be considered as overtime work (after deducting 15
minutes), because the evidence showed that complainants
could rest completely, and were not in any manner under the
control of the company during that period.
The court below found, on the contrary, that during the so
called meal period, the mechanics were required to stand by
for emergency work; that if they happened not to be available
when called, they were reprimanded by the leadman; that as
in fact it happened on many occasions, the mechanics had
been called from their meals or told to hurry Employees
Association up eating to perform work during this period.

ISSUE:

Whether the one-hour meal period should be considered

overtime work is not supported by substantial evidence.

RATIO DECIDENDI:

Far from being unsupported by substantial evidence, the

record clearly confirms the above factual findings of the
Industrial Court.

RULING:

The judgment appealed from is affirmed. Costs against

appellant.

77
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
G.R. No. 141020, June 12, 2008]
CASINO LABOR ASSOCIATION, PETITIONER, VS. COURT OF
APPEALS, PHIL. CASINO OPERATORS CORPORATION (PCOC)
AND PHIL. SPECIAL SERVICES CORPORATION (PSSC),
RESPONDENTS.
FACTS:
The series of events which ultimately led to the filing of the
petition at bar started with the consolidated cases[4] filed by
the petitioner labor union with the Arbitration Branch of the
NLRC. In an Order[5] dated 20 July 1987, the Labor Arbiter
dismissed the consolidated cases for lack of jurisdiction over
the respondents therein, Philippine Amusement and Gaming
Corporation (PAGCOR) and Philippine Casino Operators
Corporation (PCOC). Petitioner attempted to file different
motions insisting on the jurisdiction of NLRC over the case but
repeatedly denied. The petition was then brought to CA but
the CA dismissed the petition for certiorari as it found no grave
abuse on the part of NLRC.
ISSUE:
Whether or not the NLRC has jurisdiction over employer-
employee relations in PAGCOR, PCOC and PSSC?
HELD:
NO.
78
The respondent corporations were created by an original
charter in accordance with the Constitution and jurisprudence,
corporations with original charter "fall under the jurisdiction of
the Civil Service Commission and not the Labor Department."
The present Constitution specifically provides in Article IX B,
Section 2(1) that "the civil service embraces all branches,
subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled
corporations with original charters
The Court stated further that P.D. 1869 exempts casino
employees from the coverage of Labor Code provisions and
although the employees are empowered by the Constitution
to form unions, these are "subject to the laws passed to
regulate unions in offices and corporations governed by the
Civil Service Law.
It is the Civil Service Commission, and not the NLRC, that has
jurisdiction over the employer-employee problems in
PAGCOR, PCOC and PSSC.
G.R. No. 84111 December 22, 1989
JIMMY O. YAOKASIN, petitioner,
vs.
THE COMMISSIONER OF CUSTOMS, SALVADOR M. MISON
and the DISTRICT COLLECTOR OF THE PORT OF TACLOBAN,
VICENTE D. YUTANGCO,
FACTS:
On May 27, 1988, the Philippine Coast Guard seized 9000
bags/ sacks of refined sugar, which were being unloaded from
the M/V Tacloban, and turned them over to the custody of the
Bureau of Customs.
The petitioner presented a sales invoice from the Jordan
Trading of Iloilo to prove that the sugar was purchased locally.
The District Collector of Customs, however, proceeded with
the seizure of the bags of sugar. At first the District Collector
ordered for the release of the bag but when the entire records
of the case where transmitted to Commissioner of Customs,
the Economic Intelligence and Investigation Board (EIIB) filed
a Motion for Reconsideration, for "further hearing on the
merits", based on evidence that the seized sugar was of
foreign origin. Petitioner opposed the decision based on the
contention that June 7, 1988 decision of the District Collector
of Customs became final and executory, in view of the
absence of an appeal therefrom by the "aggrieved party"
(himself) within the 15-day period provided for in Sec. 2313
of the Tariff and Customs Code. Hence, the release of the
9,000 bags of sugar must be upheld. On the other hand, the
District Collector and the Commissioner of Customs argue that
since the June 7, 1988 decision is adverse to the government,
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

the case should go to the Commissioner of Customs on
automatic review, pursuant to Memorandum Order No. 20-87,
dated May 18, 1987, of former Acting Commissioner of
Customs Alexander Padilla
ISSUE:
WON the Commissioner of Customs has the power to
automatically review over the decision of the Collector of
Customs in protest and seizure cases?
subsequent reorganizations, other provisions, such as Section
12 have not been repealed by subsequent legislation.
Section 12 of the Plan applies to petitioner's shipment of 9,000
bags of sugar. Taxes being the lifeblood of the Government,
Section 12, which the Commissioner of Customs in his
Customs Memorandum Order No. 20-87, enjoined all
collectors to follow strictly, is intended to protect the interest
of the Government in the collection of taxes and customs
duties in those seizure and protest cases which, without the
automatic review provided therein, neither the Commissioner
of Customs nor the Secretary of Finance would probably ever
know about.

PETITION FOR REVIEW IS DENIED FOR LACK OF MERIT.

TEMPORARY RESTRAINING ORDER IS MADE PERMANENT.
HELD:

YES.

Under the memorandum order implements Section 12 (Art.

IV, Part. IV, Vol. I) of the Integrated Reorganization Plan
(hereafter, "PLAN") which provides:

12. The Collector of Customs at each principal port of entry

shall be the official head of the customs service in his port and
district responsible to the Commissioner. He shall have the
authority to take final action on the enforcement of tariff and
customs laws within his collection district and on
administrative matters in accordance with Chapter III, Part II
of this Plan. Decisions of the Collector of Customs in seizure
and protest cases are subject to review by the Commissioner
upon appeal as provided under existing laws; provided,
however, that where a decision of a Collector of Customs in
such seizure and protest cases is adverse to the government,
it shall automatically be reviewed by the Commissioner of
Customs which, if affirmed, shall automatically be elevated for
final review by the Secretary of Finance; provided, further that
if within thirty days from receipt of the records of the case by
the Commissioner of Customs or the Secretary of Finance, no
decision is rendered by the Commissioner of Customs or the
Secretary of Finance, the decision under review shall become
final and executory.

In Presidential Decree No. 1, dated September 24, 1972,

former President Marcos decreed and ordered that the Plan
be (4 adopted, approved, and made as part of the law of the
land." Under the 1987 Constitution, "[a]ll existing laws,
decrees, executive orders, proclamations, letters of
instruction, and other executive issuances not inconsistent
[ G.R. No. 116542. July 30, 1996
with this Constitution shall remain operative until amended,
repealed, or revoked" (Sec. 3, Art. XVIII). While some
provisions of the Plan have ceased to be operative because of

79
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
THE HONGKONG AND SHANGHAI BANKING
CORPORATION,Petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and EMMANUEL A. MENESES, Respondents
FACTS:
The complainant is a regular rank and file employee of HSBC,
was charged with dishonesty for not telling the truth why he
was absent on leave for days. The respondent claiming that
he was having a stomach upset but when the bank called up
the number, was informed that he is not at home and that his
alibi of having himself checked- up by a doctor the bank find
out when called the doctor to verify that it was of not true.
With this the bank came out with a memorandum from the
Vice-President, Human Resources Department terminating his
services effective March 16, 1993 pursuant to Article 13,
Section VI of the Collective Bargaining Agreement between
the union of the rank and file employees of the bank and the
company and the banks Code of Conduct.
The following day, February 17, 1993, the bank sent
complainant another memorandum directing him to settle his
outstanding loan amounting to PHP179,834.00, net of a
months salary the bank was paying him in lieu of notice not
later than June 16, 1993. NLRC’s arbiter declared the
termination illegal and ordered petitioner bank to reinstate
private respondent to his former position without loss of
seniority rights and with backwages.
ISSUE:
1) Whether or not the NLRC committed grave abuse of
discretion in ruling that private respondents act of making a
false statement as to the real reason for his absence on
February 3, 1993 did not constitute such dishonesty as would
warrant his termination from service.
2) WON the bank can exercise power and prerogative to
terminate an employee’s services?
HELD:
1) NO.
Private respondents false information concerning his
whereabouts on February 3, 1993 is not a fraud, nor a false
80
entry in the books of the bank; neither is it a failure to turn
over clients funds, or theft or use of company assets, or
anything "analogous" as to constitute a serious offense
meriting the extreme penalty of dismissal. NLRC effectively
penalized him by disallowing compensation for the three years
counted from the time he received notice of his dismissal on
February 23, 1993.
Under Art. 282 of the Labor Code, "an employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his
family or his duly authorized representative; and
(e) Other causes analogous to the foregoing."
None of the above apply in the instant case. To be lawful, the
cause for termination must be a serious and grave
malfeasance to justify the deprivation of a means of livelihood.
This is merely in keeping with the spirit of our Constitution
and laws which lean over backwards in favor of the working
class, and mandate that every doubt must be resolved in their
favour.
2) NO.
The employers prerogative and power to discipline and
terminate an employees services may not be exercised in an
arbitrary or despotic manner as to erode or render
meaningless the constitutional guarantees of security of
tenure and due process
Our labor laws, both substantive and procedural, require strict
compliance before an employee may be dismissed. 8 Clearly,
it is the NLRCs right and duty to review employers exercise of
their prerogative to dismiss so as to prevent abuse and
arbitrariness.
Indeed, upholding petitioners argument (that the NLRC
cannot review petitioners disciplinary rules) would mean
upsetting the entire labor arbitral machinery, for it would
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
result in depriving the labor arbiter and the NLRC of their
jurisdiction to determine the justness of a cause for dismissal
as granted by Arts. 217 and 218 of the Labor Code.
PETITION DISMISSED.
EMPLOYERS CONFEDERATION OF THE PHILIPPINES,
petitioner, vs. NATIONAL WAGES AND PRODUCTIVITY
COMMISSION AND REGIONAL TRIPARTITE WAGES
AND PRODUCTIVITY BOARD-NCR, TRADE UNION
CONGRESS OF THE PHILIPPINES, respondents.
G.R. No. 96169 September 24, 1991
SARMIENTO, J.:
Facts:
On October 15, 1990, the Regional Board of the National
Capital Region issued Wage Order No. NCR-01, increasing the
minimum wage by P17.00 daily in the National Capital Region.
The Trade Union Congress of the Philippines (TUCP) moved
for reconsideration; so did the Personnel Management
Association of the Philippines (PMAP). ECOP opposed.
On October 23, 1990, the Board issued Wage Order No.
NCR01-A, amending Wage Order No. NCR-01. It provides that
all workers and employees in the private sector in the National
Capital Region already receiving wages above the statutory
minimum wage rates up to one hundred and twenty-five
pesos (P125.00) per day shall also receive an increase of
seventeen pesos (P17.00) per day.
ECOP appealed to the National Wages and Productivity
Commission contending that the board's grant of an "across-
the-board" wage increase to workers already being paid more
than existing minimum wage rates (up to P125.00 a day) as
an alleged excess of authority. ECOP further alleges that
under the Republic Act No. 6727, the boards may only
prescribe "minimum wages," not determine "salary ceilings."
ECOP likewise claims that Republic Act No. 6727 is meant to
promote collective bargaining as the primary mode of settling
81
wages, and in its opinion, the boards cannot preempt
collective bargaining agreements by establishing ceilings.
On November 6, 1990, the Commission promulgated an
Order, dismissing the appeal for lack of merit. On November
14, 1990, the Commission denied reconsideration. ECOP then,
elevated the case via petition for review on certiorari to the
Supreme Court.
Issue:
Whether Wage Order No. NCR-01-A providing for new wage
rates, as well as authorizing various Regional Tripartite Wages
and Productivity Boards to prescribe minimum wage rates for
all workers in the various regions, and for a National Wages
and Productivity Commission to review, among other
functions, wage levels determined by the boards is valid.
Ratio Decidendi:
The Supreme Court ruled in favor of the National Wages and
Productivity Commission and Regional Tripartite Wages and
Productivity Board-NCR, Trade Union Congress of the
Philippines and denied the petition of ECOP.
The Supreme Court held that Republic Act No. 6727 was
intended to rationalize wages, first, by providing for full-time
boards to police wages round-the-clock, and second, by giving
the boards enough powers to achieve this objective. The Court
is of the opinion that Congress meant the boards to be
creative in resolving the annual question of wages without
labor and management knocking on the legislature's door at
every turn.
The Court's opinion is that if Republic No. 6727 intended the
boards alone to set floor wages, the Act would have no need
for a board but an accountant to keep track of the latest
consumer price index, or better, would have Congress done it
as the need arises, as the legislature, prior to the Act, has
done so for years. The fact of the matter is that the Act sought
a "thinking" group of men and women bound by statutory
standards. The Court is not convinced that the Regional Board
of the National Capital Region, in decreeing an across-the-
board hike, performed an unlawful act of legislation. It is true
that wage-firing, like rate-fixing, constitutes an act Congress;
it is also true, however, that Congress may delegate the power
to fix rates provided that, as in all delegations cases, Congress
leaves sufficient standards. As this Court has indicated, it is
impressed that the above-quoted standards are sufficient, and
in the light of the floor-wage method's failure, the Court
believes that the Commission correctly upheld the Regional
Board of the National Capital Region.
Ruling:
WHEREFORE, premises considered, the petition is DENIED.
No pronouncement as to costs.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

KAR ASIA, INC. and/or CELESTINO S. BARETTO, conclusion that the December 1994 COLA was not received.
petitioners, vs. MARIO CORONA, RICKY HEPGANO, It appears that the payslips for the same period bear the
JOHNNY COLLADOS, CONSTANTINO LAGARAS, RANEL signatures of the respondents plus a certification that they
BALANSAG, ARNOLD AVILA, PETER ARCENAL, received the full compensation for the services rendered.
ARNOLD CABAHUG, BERNARD BETE, RUPERTO Ruling:
RESTAURO, WILLY CRUZ, RANDY BASNILLO, ARMAN WHEREFORE, based on the foregoing, the petition is
BASTE, ERNESTO ESPINA, PATRICIO AGUDELA, GRANTED. The February 28, 2002 decision of the Court of
IRENEO BANGOY, PALERMO AUTENTICO, GEORGE Appeals in CA-G.R. SP No. 57972 is REVERSED and SET
TAGAYTAY, BENITO MATUGAS, and WILFREDO ASIDE. The Decision of the NLRC dated August 23, 1999
ESPINA, respondents. dismissing respondent’s claims of unpaid COLA for December
G.R. No. 154985. August 24, 2004 1993 and December 1994, and deleting the awards for moral
YNARES-SANTIAGO, J.: damages, attorney’s fees and litigation expenses for lack of
Facts: sufficient basis, is AFFIRMED.
Respondents, regular employees of petitioner KAR ASIA, Inc.,
an automotive dealer in Davao City, filed a complaint for
underpayment of wages and attorney’s fees before Branch XI,
Regional Arbitration Branch of Davao City. They claimed that
they were not paid their cost of living allowance (COLA), as
mandated by the Regional Tripartite and Wages Productivity
Board (RTWPB) XI Wage Order No. 3, for the months of
December 1993 and December 1994, and prayed that
petitioner be ordered to pay the same with 1% interest per
month, as well as attorney’s fees equivalent to 10% of the
total monetary award.
Petitioner Company and its president presented in evidence
the payrolls for December 1993 and December 1994 showing
that the respondents acknowledged in writing the receipt of
their COLA, and the affidavits of Ermina Daray and Cristina
Arana, cashiers of KAR ASIA, refuting respondents claim that
they were made to sign blank pieces of paper.
The Labor Arbiter rendered a decision in favor of petitioners.
NLRC affirmed the decision of the Labor Arbiter but deleted
the award of moral damages, attorney’s fees, and litigation
expenses for lack of sufficient basis. Respondents filed a
petition for certiorari with the Court of Appeals, which
reversed the decision of the NLRC and ordered petitioner
company to pay the respondents the P25.00 per day COLA
plus interest thereon.
Hence, this petition.
Issue:
Whether or not the COLA of the employees for year 1993 and
1994 have been paid as mandated under RTWPB XI Wage
Order No. 3.
Ratio Decidendi:
Yes, the COLA of the employees for the year 1993 and 1994
have been deemed paid.
The allegations of harassment are inadmissible as self-serving
statements and therefore cannot be repositories of truth. He
who asserts not he who denies must prove; unfortunately, the
respondents miserably failed to discharge this burden. We
also agree with the observation of the Labor Arbiter that in
1993 there was no labor dispute since the labor unrest took
place only in the later part of 1997. Hence, there was no
reason for management to harass its employees. Regarding
the 1993 COLA, the respondents filed the complaint for
underpayment of wage on September 24, 1997. Thus, the
action for the payment of the December 1993 COLA has
already prescribed. On the other hand, the 1994 COLA
contains a computation of the amounts payable to the
employees for the given period, including a breakdown of the
allowances and deductions on the amount due, but the
signatures of the respondents are conspicuously missing.
Ideally, the signatures of the respondents should appear in
the payroll as evidence of actual payment. However, the
absence of such signatures does not necessarily lead to the

82
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

G & M (Phils.), Inc., petitioner, vs. EPIFANIO CRUZ, WHEREFORE, the petition is DENIED for lack merit.
respondent.

G.R. NO. 140495. April 15, 2005

AUSTRIA-MARTINEZ, J.:

Facts:

Respondent Epifanio Cruz filed a complaint against petitioner

for illegal dismissal, underpayment and non-payment of
wages, and refund of transportation expenses after being
deported by his employer, Salim Al Yami Est. According to
respondent, the cause for his dismissal was his complaint for
sub-human working conditions, non-payment of wages and
overtime pay, salary deduction and change of employer.

Respondent alleged that when he arrived in the Kingdom of

Saudi Arabia, he was made to sign an employment contract in
blank and his salary was reduced to SR604.00. Respondent
further claims that he was only paid in an amount equivalent
to five months’ salary and he did not receive his salary for the
last two months. Respondent submitted a copy of his pay slip
showing the amount of SR604.00 as his basic salary.
Petitioner G & M (Phils.), Inc. recruited respondent Cruz as
trailer driver for its foreign principal, Salim Al Yami Est., for a
period of two years, and with a stipulated monthly salary of
US$625. Petitioner contends that respondent abandoned his
job when he joined an illegal strike and refused to report for
work, constituting a breach of his employment contract and a
valid cause for termination of employment. The Labor Arbiter
and the NLRC granted Cruz's claim for underpayment of
wages and two months unpaid salary, strengthened by the
Court of Appeals' dismissal of G & M's special civil action for
certiorari, hence this petition for review on certiorari under
Rule 45 of the Rules of Court.

Issues:

Whether or not in complaints involving underpayment of

salaries, the employee has the burden of proving such
underpayment?

Ratio Decidendi:

No. It is the burden of petitioner, G&M Phils. Inc. to prove that

the salaries paid by its foreign principal complied with the
contractual stipulations of their agency-worker agreement.
The rule is that the burden of proving payment of monetary
claims rests on the employer, in this case, herein petitioner,
being the employment agency or recruitment entity, and
agent of the foreign principal, Salim Al Yami Est. which
recruited respondent. Where a person is sued for a debt
admits that the debt was originally owed, and pleads payment
in whole or in part, it is incumbent upon him to prove such
payment. This is based on the principle of evidence that each
party must prove his affirmative allegations. Since petitioner
asserts that respondent has already been fully paid of his
stipulated salary, the burden is upon petitioner to prove such
fact of full payment. The debtor has the burden of showing
with legal certainty that the obligation has been discharged by
payment.

Ruling:

83
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
PEDRO CHAVEZ, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, SUPREME PACKAGING,
INC. and ALVIN LEE, Plant Manager, respondents.
G.R. No. 146530. January 17, 2005
CALLEJO, SR., J.:
Facts:
The respondent company, Supreme Packaging Inc., is in the
business of manufacturing cartons and other packaging
materials for export and distribution. The petitioner, Pedro
Chavez, was a truck driver (from October 25, 1984) tasked to
deliver the respondent company’s products to its various
customers. The respondent furnished petitioner with a truck
that all deliveries were made in accordance with the routing
slips issued by the respondent company indicating the order,
time and urgency of delivery.
On 1992, the petitioner expressed his desire to avail the
benefits that a regular employee were receiving such as
overtime pay, nightshift differential pay, and 13th month pay,
among others but nothing was complied. On February 20,
1995, petitioner filed a complaint for regularization with the
Regional Arbitration Branch No. III of NLRC in San Fernando,
Pampanga. Before the case could be heard, respondent
terminated the services of the petitioner.
Consequently, on May 25, 1995, the petitioner filed an
amended complaint against the respondents for illegal
dismissal, unfair labor practice and non-payment of overtime
pay, nightshift differential pay, 13th month pay, among
others.
The Labor Arbiter found that the petitioner’s dismissal was
anchored on his insistent demand to be regularized. Hence,
for lack of a valid and just cause therefor and for their failure
to observe the due process requirements, the respondents
were found guilty of illegal dismissal.
The respondents seasonably interposed an appeal with the
NLRC. However, the appeal was dismissed by the NLRC.
However, upon reconsideration, NLRC reversed its initial
decision and, this time, holding that no employer-employee
relationship existed between the respondent company and the
petitioner. The NLRC ruled that the contract of service was
not intended to circumvent Article 280 of the Labor Code on
the regularization of employees. Said contract, including the
fixed period of employment contained therein, having been
knowingly and voluntarily entered into by the parties.
On appeal, the appellate court rendered decision reversing
decision of the NLRC and reinstating the decision of the Labor
Arbiter. However, on motion for reconsideration by the
respondents, the CA made a complete turnaround as it
rendered the assailed Resolution upholding the contract of
service between the petitioner and the respondent company.
In reconsidering its decision, the CA explained that the extent
of control exercised by the respondents over the petitioner
was only with respect to the result but not to the means and
methods used by him.
Hence this petition.
84
Issue:
Whether there exists an employer-employee relationship?
Ratio Decidendi:
Yes an employer-employee do exist. The elements to
determine the existence of an employment relationship are:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the employer’s power to control the employee’s
conduct.
The most important element is the employer’s control of the
employee’s conduct, not only as to the result of the work to
be done, but also as to the means and methods to accomplish
it.
First. Undeniably, it was the respondents who engaged the
services of the petitioner without the intervention of a third
party.
Second. Wages are defined as “remuneration or earnings,
however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece or
commission basis, or other method of calculating the same,
which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or
to be done, or for service rendered or to be rendered. The
petitioner is paid on a per trip basis is not significant. This is
merely a method of computing compensation.
Third. The respondent’s power to dismiss the petitioner was
inherent in the fact that they engaged the services of the
petitioner as truck driver. They exercised this power by
terminating the petitioner’s services albeit in the guise of
severance of contractual relation due allegedly to the latter’s
breach of his contractual obligation.
Fourth. Compared to an employee, an independent contractor
is one who carries on a distinct and independent business and
undertakes to perform the job, work or service on its own
account and under its own responsibility according to its 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. Hence while an
independent contractor enjoys independence and freedom
from the control and supervision of his principal, an employee
is subject to the employer’s power to control the means and
methods by which the employee’s work is to be performed
and accomplished.
A careful review of the records shows that the latter
performed his work under the respondents’ supervision and
control. The existence of an employer-employee relationship
cannot be negated by expressly repudiating it in a contract
and providing therein that the employee is an independent
contractor when the facts clearly show otherwise.
Employment status is defined by law and not by what the
parties say it should be.
Ruling:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

WHEREFORE, the instant petition is GRANTED. The Resolution

dated December 15, 2000 of the Court of Appeals reversing
its Decision dated April 28, 2000 in CA-G.R. SP No. 52485 is
REVERSED and SET ASIDE. The Decision dated February 3,
1997 of the Labor Arbiter in NLRC Case No. RAB-III-02-6181-
5, finding the respondents guilty of illegally terminating the
employment of petitioner Pedro Chavez, is REINSTATED.

85
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
BERNARDO JIMENEZ and JOSE JIMENEZ, as Operators
of JJs TRUCKING, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, PEDRO JUANATAS and
FREDELITO JUANATAS, respondents.
G.R. No. 116960. April 2, 1996
REGALADO, J.:
Facts:
Private respondents Pedro and Fredelito Juanatas, father and
son, filed a claim for unpaid wages/commissions, separation
pay and damages against JJ s Trucking and/or Dr. Bernardo
Jimenez. They alleged that they were hired by herein
petitioner as driver-mechanic and helper, respectively, in his
trucking firm, JJ Trucking. They were assigned to a ten-
wheeler truck to haul soft drinks of Coca-Cola Bottling
Company and paid on commission basis. Private respondents
further alleged that for the years 1988 and 1989 they received
only a partial commission of P84,000.00 from petitioners total
gross income of almost P1,000,000.00 for the said two years.
Consequently, with their commission for that period being
computed at 20% of said income, there was an unpaid
balance to them of P106,211.86; that until March, 1990 when
their services were illegally terminated, they were further
entitled to P15,050.309 which, excluding the partial payment
of P7,000.00, added up to a grand total of P114,261.86 due
and payable to them; and that petitioners refusal to pay their
aforestated commission was a ploy to unjustly terminate
them.
Disputing the complaint, petitioners contend that respondent
Fredelito was not an employee of the firm but was merely a
helper of his father Pedro and that all commissions for 1988
and 1989, as well as those up to March, 1990, were duly paid;
and that the truck driven by respondent Pedro was sold to one
Winston Flores in 1991 and, therefore, private respondents
were not illegally dismissed.
Labor Arbiter rendered a decision ordering respondents JJs
Trucking and/or Dr. Bernardo Jimenez to pay jointly and
severally complainant Pedro a separation pay plus attorneys
fee and dismissing the complaint of Fredelito for lack of merit.
On appeal, NLRC modified the decision of the labor arbiter and
declared Fredelito as respondent’s employee and shares in
(the) commission and separation pay awarded to his father.
Hence, this petition.
Issue:
1. Whether or not private respondents were not paid
their commissions in full, and
2. Whether or not respondent Fredelito was an
employee of JJs Trucking
Ratio Decidendi:
1. Yes, the entire amount of commissions was not paid,
this by reason of the evident failure of herein
petitioners to present evidence that full payment
thereof has been made. It is a basic rule in evidence
86
that each party must prove his affirmative
allegations.
As a general rule, one who pleads payment has the
burden of proving it. In the instant case, the right of
respondent Pedro Juanatas to be paid a commission
equivalent to 17%, later increased to 20%, of the
gross income is not disputed by petitioners. Although
private respondents admit receipt of partial payment,
petitioners still have to present proof of full payment.
For failure to present evidence to prove payment,
petitioners defaulted in their defense and in effect
admitted the allegations of private respondents.
2. No, Fredelito, the son, was not an employee of
petitioners. The elements that are generally
considered are the following: (1) the selection and
engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power
to control the employees conduct,18 with the control
test assuming primacy in the overall consideration.
In the case at bar, the aforementioned elements are
not present. The agreement was between petitioner
JJs Trucking and respondent Pedro. The hiring of a
helper was discretionary on the part of Pedro. Under
their contract, should he employ a helper, he would
be responsible for the latters compensation. With or
without a helper, respondent Pedro was entitled to
the same percentage of commission. Respondent
Fredelito was hired by his father, Pedro, and the
compensation he received was paid by his father out
of the latter’s commission. Further, Fredelito was not
subject to the control and supervision of and
dismissal by petitioners but of and by his father.
Ruling:
WHEREFORE, the judgment of respondent National Labor
Relations Commission is hereby AFFIRMED, with the
MODIFICATION that paragraph 1 thereof, declaring
Fredelito Juanatas an employee of petitioners and entitled to
share in the award for commission and separation pay, is
hereby DELETED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
ALLAN VILLAR, DANILO INDITA, ARTURO MANIMTIM,
GERSON DATALIO, GERRY VILLARALBO, ALFONSO
PIPINO, NOEL ANGAY and EXEQUIEL MANIMTIM,
petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and HI-TECH MANUFACTURING
CORPORATION, respondents.
G.R. No. 130935. May 11, 2000
BELLOSILLO, J.:
Facts:
HI-TECH MANUFACTURING CORPORATION (HI-TECH), a
corporation duly organized and existing under Philippine laws,
is engaged in the business of manufacturing cartons for
commercial purposes. On different dates, HI-TECH hired
petitioners to perform various jobs for the company such as
slitter machine operator, inkman, silk screen printer, truck
helper, rubber dye setter, forklift operator and stitching
machine operator.
Petitioners, who were members of the Federation of Free
Workers Union, filed before the Department of Labor a
petition for certification election among the rank-and-file
employees of HI-TECH. The petition was granted and a
certification election was conducted inside the company
premises. However, petitioners lost in the election as the HI-
TECH employees voted for "No Union."
On succeeding days, petitioners failed to report for work. They
alleged that they were barred from entering the premises of
HI-TECH; hence, they immediately filed before the Labor
Arbiter separate complaints for illegal dismissal and labor
standards claims against HI-TECH, Herman T. Go, owner, and
Carmen Belano, general manager.
Petitioners claimed that they were summarily dismissed from
employment by the management of HI-TECH in retaliation for
organizing a labor union in the work premises as well as in
filing the petition for certification election before the
Department of Labor. They further averred that they were
paid daily wages below the minimum fixed by law and that
they were required to work six (6) days a week from 8 oclock
in the morning to 7 oclock in the evening without being paid
for the overtime. Neither were they paid their service incentive
leave pay and 13th month pay.
On the other hand, HI-TECH denied having dismissed
petitioners. It contended that petitioners were probably stung
by their defeat in the certification election such that they
refused to work thereafter. In support of these allegations,
private respondent presented in evidence the affidavits of
employees who initially joined petitioners in filing their
complaints but later desisted from pursuing their claims. The
pertinent portions of the affidavits uniformly read that they
were not dismissed by the company but they resigned
voluntarily ad that they received salary in accordance with
law.
A consolidated decision was rendered by Labor Arbiter in favor
of petitioners ordering HI-TECH to reinstate petitioners to
their former positions without loss of seniority rights and with
full back wages, and to pay their mandated monetary benefits.
On appeal by HI-TECH, the NLRC in its decision vacated and
set aside the Labor Arbiters Decision and ordered petitioners
to report back to work, or if no longer feasible, directed HI-
TECH to pay petitioners their separation benefits.
Hence, this petition.
Issue:
87
1. Whether or not the petitioners were illegally
dismissed.
2. Whether or not petitioners are entitled to back wages
and other monetary benefits
Ratio Decidendi:
1. Yes, the petitioners were illegally dismissed. It is
well-settled that factual findings of quasi-judicial
agencies such as the NLRC are generally accorded
not only respect but, at times, even finality.
However, the rule is not absolute and admits of
certain well-recognized exceptions. Thus, when the
findings of fact of the NLRC are not supported by
substantial evidence, capricious or arbitrary, and
directly at variance with those of the Labor Arbiter,
this Court may make an independent evaluation of
the facts of the case.
It is clear from the records that sometime in August
1994, immediately after petitioners supposedly
"refused to work" having lost earlier in the
certification election, several complaints for illegal
dismissal against HI-TECH were filed by petitioners.
These are sufficient proofs that they were never
guilty of leaving their jobs. The concept of
abandonment of work is inconsistent with the
immediate filing of complaints for illegal dismissal.
An employee who took steps to protest his layoff
could not by any logic be said to have abandoned his
work. Abandonment is a matter of intention and
cannot lightly be presumed from certain equivocal
acts. To constitute abandonment, there must be
clear proof of deliberate and unjustified intent to
sever the employer-employee relationship. Mere
absence of the employee is not sufficient. The
burden of proof to show a deliberate and unjustified
refusal of an employee to resume his employment
without any intention of returning rests on the
employer. HI-TECH failed to discharge its burden.
Hence, it is concluded that petitioners did not
abandon their jobs but were illegally dismissed
therefrom by private respondent. As a consequence,
they are entitled to reinstatement with full back
wages, undiminished by earnings elsewhere, to be
computed from their illegal dismissal to their actual
reinstatement.
2. Yes, petitioners are entitled to back wages and other
monetary benefits. First, petitioners executed a
JOINT AFFIDAVIT specifying their daily wages,
positions and periods of employment, which was
made the basis of the Labor Arbiters computation of
the monetary awards. Second, all that the NLRC
needed to do was to refer to the prevailing minimum
wage to ascertain the correctness of petitioners
claims. Third, and most importantly, the burden of
proving payment of monetary claims rests on the
employer.
As a general rule, one who pleads payment has the
burden of proving it. Even where the plaintiff must
allege non-payment, the general rule is that the
burden rests on the defendant to prove payment,
rather than on the plaintiff to prove non-payment.
The debtor has the burden of showing with legal
certainty that the obligation has been discharged
with payment. The reason for the rule is that the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
pertinent personnel files, payrolls, records,
remittances and other similar documents which will
show that overtime, differentials, service incentive
leave and other claims of workers have been paid are
not in the possession of the worker but in the
custody and absolute control of the employer. Thus,
in choosing not to present evidence to prove that it
had paid all the monetary claims of petitioners, HI-
TECH failed once again to discharge the onus
probandi.
Ruling:
WHEREFORE, the petition is GRANTED. The assailed
Decision dated 30 May 1997 and Resolution dated 31 July
1997 of the National Labor Relations Commission are SET
ASIDE, and the Labor Arbiters Decision of 15 August 1996 is
REINSTATED. Private respondent is directed to reinstate
petitioners to their former positions without loss of seniority
rights and with full back wages, as well as to pay their
monetary benefits in accordance with the computation made
by Labor Arbiter Emerson C. Tumanon in his Decision of 15
August 1996. However, insofar as Arturo Manimtim and
Exequiel Manimtim are concerned, this case is remanded to
the Labor Arbiter for purposes of determining the amounts
they received as consideration for their quitclaims and
thereafter deducting these amounts from their monetary
awards.
88
MERCURY DRUG CO., INC., petitioner, vs. NARDO
DAYAO, ET AL., respondent.
G.R. No. L-30452.
September 30, 1982.
GUTIERREZ, JR., J.
FACTS:
This is a verified petition filed by Nardo Dayao and 70 others
against Mercury Drug Co., Inc. and Mercury Drug Co., Inc.,
Employees Association, praying for payment of extra
compensation on work done at night. In a separate motion,
respondent management and respondent union move to
dismiss on the ground that the CIR has no jurisdiction over
the acts complained of against the respondent union. The CIR
and Court En Banc dismiss the motion. Thus, respondent
management filed an affirmative and special defenses. Then,
the respondent court ruled that respondent Mercury Drug
Company, Inc. is hereby ordered to pay additional sum or
premium equivalent to 25% of their respective basic or regular
salaries for nighttime services. Not satisfied, respondents filed
a motion for its reconsideration but was denied by the court.
Then, petitioner Mercury Drug Company, Inc. contended that
respondent CIR erred in sustaining private respondents'
claims for nighttime work premiums not only because of the
declared policy on collective bargaining freedom expressed in
RA 875 and the express prohibition in section 7 of said statute,
but also because of the waiver of said claims and the total
absence of evidence thereon.
ISSUE:
Whether respondent CIR erred in sustaining respondent’s
claim on nighttime work premiums.
RATIO DECIDENDI:
The respondent CIR did not err in sustaining respondent’s
claim on nighttime work premiums. The computations
presented by the petitioner miserably failed to show the exact
and correct annual salary as stated in the respective contracts
of employment of the respondent employees. The figures
arrived at in each case did not tally with the annual salaries
on to the employees' contracts of employment, the difference
varying from P1.20 to as much as P14.40 always against the
interest of the employees. The respondent court sustained the
private respondents' evidence to the effect that their 25%
additional compensation for work done on Sundays and Legal
Holidays were not included in their respective monthly
salaries. The private respondents presented evidence through
the testimonies of Nardo Dayao, Ernesto Talampas, and Josias
Federico who are themselves among the employees who filed
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

the case for unfair labor practice in the respondent court and
are private respondents herein.
RULING:
WHEREFORE, the petition is hereby dismissed. The decision
and resolution appealed from are affirmed with costs against
the petitioner.

89
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

EMIRATE SECURITY AND MAINTENANCE SYSTEMS,

INC., petitioners, vs. GLENDA MENESE, respondent.

G.R. No. 182848.

October 5, 2011.

BRION, J.

FACTS:
Menese was required to work 7 days a week, from 8:00 a.m.
to 5:00 p.m. She was also required to report for work on
holidays, except on New Year’s Day and Christmas. She
claimed that she was never given overtime, holiday, rest day
and premium pay. Menese further alleged that on May 4,
2001, she started getting pressures from the agency for her
to resign from her position because it had been committed to
a certain Amy Claro. She claimed that the petitioners
dismissed her from the service without just cause and due
process. The petitioners denied liability. They alleged that
they had been receiving numerous complaints from security
guards and other agency employees about Menese’s
unprofessional conduct. The petitioners posit that Menese is
not entitled to overtime pay because she did not work beyond
the eight 8 hour working period; her 1 hour time off from
twelve noon to 1:00 p.m. is not compensable. However,
Menese contended that she continued working even during
the 1 hour break meal.
ISSUE:
Whether Menese is entitled to overtime pay.
RATIO DECIDENDI:
In Global Incorporated v. Commissioner Atienza, a claim for
overtime pay will not be granted for want of factual and legal
basis. There is no such proof in support of Menese’s claim for
overtime pay other than her contention that she worked from
8:00 a.m. up to 5:00 p.m. She presented no evidence to show
that she was working during the entire one hour meal break.
Thus, she is not entitled to overtime pay.
RULING:
WHEREFORE, premises considered, except for the overtime
pay award and the refund of deposit for the cash bond, the
petition is DENIED for lack of merit. The assailed decision and
resolution of the Court of Appeals are AFFIRMED, with the
following modifications:
1) The deletion of the overtime pay award; and
2) Adjustment of the refund of the cash or surety bond deposit
award from P2, 500.00 to P600.00.
Costs against the petitioners.

90
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

NATIONAL SUGAR REFINERIES CORPORATION, under general supervision work along specialized or
petitioner,vs. NATIONAL LABOR RELATIONS technical lines requiring special training, experience,
COMMISSION and NBSR SUPERVISORY UNION, or knowledge; or (iii) execute under general
(PACIWU) TUCP, respondents. supervision special assignments and tasks; and
(4) Who do not devote more 20 percent of their hours
G.R. No. 101761. worked in a work-week to activities which are not
March 24, 1993. directly and closely related to the performance of the
work described in paragraphs (1), (2), and above."
REGALADO, J. The respondent union is clearly officers or members of the
managerial staff because they meet all the conditions
FACTS: prescribed by law and, hence, they are not entitled to
Private respondent union represents the former supervisors of overtime, rest day. In other words, for purposes of forming
the NASUREFCO Batangas Sugar Refinery. The petitioner and joining unions, certification elections, collective
implemented a Job Evaluation (JE) Program affecting all bargaining, and so forth, the union members are supervisory
employees, from rank-and-file to department heads. As a employees. In terms of working conditions and rest periods
result, all positions were re-evaluated, and all employees and entitlement to the questioned benefits, however, they are
including the members of respondent union were granted officers or members of the managerial staff, hence they are
salary adjustments and increases in benefits commensurate not entitled thereto.
to their actual duties and functions. About ten years prior to RULING:
the JE Program, the members of respondent union used to be WHEREFORE, the impugned decision and resolution of
paid overtime, rest day and holiday pay. Two years after the respondent National Labor Relations Commission
implementation of the JE Program, the members of herein promulgated on July 19, 1991 and August 30, 1991,
respondent union filed a complainant with the executive labor respectively, are hereby ANNULLED and SET ASIDE for having
arbiter for non-payment of overtime, rest day and holiday pay been rendered and adopted with grave abuse of discretion,
allegedly in violation of Article 100 of the Labor Code. and the basic complaint of private respondent union is
ISSUE: DISMISSED.
Whether supervisory employees, as defined in Article 212(m),
Book V of the Labor Code, should be considered as officers or
members of the managerial staff under Article 82, Book III of
the same Code, and hence are not entitled to overtime rest
day and holiday pay.
RATIO DECIDENDI:
Article 82, Book III of the Labor Code states that “The
provisions of this title shall apply to employees in all
establishments and undertakings whether for profit or not, but
not to xxx xxx xxx managerial employees xxx xxx xxx
'managerial employees' refer to those whose primary duty
consists of the management of the establishment in which
they are employed or of a department or subdivision thereof,
and to other officers or members of the managerial staff.”
Section 2, Rule I, Book III of the Rules to Implement the Labor
Code states
“(b) Managerial employees, if they meet all of the following
conditions, namely:
(1) Their primary duty consists of the management of
the establishment in which they are employed or of
a department or subdivision thereof:
(2) They customarily and regularly direct the work of two
or more employees therein:
(3) They have the authority to hire or fire other
employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as WILGEN LOON, JERRY ARCILLA, ALBERTPEREYE,
to the promotion or any other change of status of ARNOLD PEREYE, EDGARDO OBOSE, ARNEL MALARAS,
other employees are given particular weight. PATROCINO TOETIN, EVELYN LEONARDO, ELMER
(c) Officers or members of a managerial staff if they perform GLOCENDA, RUFO CUNAMAY, ROLANDOSAJOL,
the following duties and responsibilities: ROLANDO ABUCAYON, JENNIFER NATIVIDAD,
(1) The primary duty consists of the performance of MARITESS TORION, ARMANDO LONZAGA, RIZAL
work directly related to management policies of their
GELLIDO, EVIRDE HAQUE, MYRNA VINAS, RODELITO
employer;
AYALA, WINELITO OJEL, RENATO RODREGO, NENA
(2) Customarily and regularly exercise discretion and
independent judgment; ABINA, EMALYN OLIVEROS, LOUIE ILAGAN, JOEL
(3) (i) Regularly and directly assist a proprietor or a ENTIG, ARNEL ARANETA, BENJAMIN COSE, WELITO
managerial employee whose primary duty consists of LOON and WILLIAM ALIPAO, Petitioners,
the management of the establishment in which he is vs.
employed or subdivision thereof; or (ii) execute POWER MASTER, INC., TRI-C GENERAL SERVICES, and

91
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

SPOUSES HOMER and CARINA ALUMISIN, and the resolution dated August 28, 2009 of the Court of
Respondents. Appeals in CA-G.R. SP No. 95182. This case is REMANDED to
the Labor Arbiter for the sole purpose of computing
G.R. No. 189404 petitioners' full backwages (computed from the date of their
December 11, 2013 respective dismissals up to the finality of this decision) and
their salary differential, service incentive leave, holiday,
BRION, J.: thirteenth month pays, and attorney's fees equivalent to ten
percent (10%) of the withheld wages. The respondents are
FACTS: further directed to immediately post a satisfactory bond
conditioned on the satisfaction of the awards affirmed in this
Respondents Power Master, Inc. and Tri-C General Services Decision.
employed and assigned the petitioners as janitors and
leadsmen in various PLDT offices in Metro Manila area.
Subsequently, the petitioners filed a complaint for money
claims against respondents for alleged nonpayment of
minimum wages, overtime, holiday, premium, service
incentive leave, and thirteenth month pays. They further
averred that the respondents made them sign blank payroll
sheets. On June 11, 2001, the petitioners amended their
complaint and included illegal dismissal as their cause of
action. They claimed that the respondents relieved them from
service in retaliation for the filing of their original complaint.

The Labor Arbiter partially ruled in favor of the petitioners.

The LA awarded the petitioners salary differential, service
incentive leave, and thirteenth month pays. In awarding these
claims, the LA stated that the burden of proving the payment
of these money claims rests with the employer. The LA also
awarded attorney’s fees in favor of the petitioners, pursuant
to Article 111 of the Labor Code.

However, the LA denied the petitioners claims for backwages,

overtime, holiday, and premium pays. The LA observed that
the petitioners failed to show that they rendered overtime
work and worked on holidays and rest days without
compensation. The LA further concluded that the petitioners
cannot be declared to have been dismissed from employment
because they did not show any notice of termination of
employment.

ISSUES:

Whether petitioners are entitled to overtime pay?

RATIO:

NO. Petitioners failed to provide sufficient factual basis for the

award of overtime, and premium pays for holidays and rest
days. The burden of proving entitlement to overtime pay and
premium pay for holidays and rest days rests on the employee
because these are not incurred in the normal course of
business. In the present case, the petitioners failed to adduce
any evidence that would show that they actually rendered
service in excess of the regular eight working hours a day, and
that they in fact worked on holidays and rest days.
RULING:
JULIO N. CAGAMPAN, SILVINO C. VICERA, JORGE C.
DE CASTRO, JUANITO R. DE JESUS, ARNOLD J.
MIRANDA, MAXIMO O. ROSELLO & ANICETO L.
BETANA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, & ACE
MARITIME AGENCIES, INC., respondents.

WHEREFORE, based on these premises, G.R. Nos. 85122-24

we REVERSE and SET ASIDE the decision dated June 5, 2009, March 22, 1991

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require their employers to pay them overtime even when they

PARAS, J.:
FACTS:
On April 17 and 18,1985, petitioners, all seamen, entered into
separate contracts of employment with the Golden Light
Ocean Transport, Ltd., through its local agency, private
respondent ACE MARITIME AGENCIES, INC.
Petitioners were deployed on May 7, 1985, and discharged on
July 12, 1986.
are not actually working; otherwise, every sailor on board a
vessel would be entitled to overtime for sixteen hours each
day, even if he spent all those hours resting or sleeping in his
bunk, after his regular tour of duty. The correct criterion in
determining whether or not sailors are entitled to overtime
pay is not, therefore, whether they were on board and cannot
leave ship beyond the regular eight working hours a day, but
whether they actually rendered service in excess of said
number of hours.
RULING:

Thereafter, petitioners filed complaints for non-payment of WHEREFORE, the decision of the NLRC is hereby AFFIRMED
overtime pay, vacation pay and terminal pay against private with the modification that petitioners Cagampan and Vicera
respondent. In addition, they claimed that they were made to are awarded their leave pay according to the terms of the
sign their contracts in blank. Likewise, petitioners averred that contract.
although they agreed to render services on board the vessel
Rio Colorado managed by Golden Light Ocean Transport, Ltd.,
the vessel they actually boarded was MV "SOIC I" managed
by Columbus Navigation. Two (2) petitioners, Jorge de Castro
and Juanito de Jesus, charged that although they were
employed as ordinary seamen (OS), they actually performed
the work and duties of Able Seamen (AB).

POEA granted their prayers, but NLRC reversed such decision.

ISSUE:

Whether petitioners, which are seafarers are entitled to

overtime pay.

RATIO:

NO. The grant of overtime pay embodied in an employment

contract is not automatic. There must be first rendition of
overtime work and the proof to such rendition.

The contract provision means that the fixed overtime pays of

30% would be the basis for computing the overtime pay if and
when overtime work would be rendered. Simply, stated, the
rendition of overtime work and the submission of sufficient
proof that said work was actually performed are conditions to
be satisfied before a seaman could be entitled to overtime pay
which should be computed on the basis of 30% of the basic
monthly salary. In short, the contract provision guarantees
the right to overtime pay but the entitlement to such benefit
must first be established. Realistically speaking, a seaman, by
the very nature of his job, stays on board a ship or vessel
beyond the regular eight-hour work schedule. For the
employer to give him overtime pay for the extra hours when
he might be sleeping or attending to his personal chores or
even just lulling away his time would be extremely unfair and
unreasonable.

Seamen are required to stay on board their vessels by the very ROMEO LAGATIC, petitioner,
nature of their duties, and it is for this reason that, in addition vs.
to their regular compensation, they are given free living NATIONAL LABOR RELATIONS COMMISSION,
quarters and subsistence allowances when required to be on CITYLAND DEVELOPMENT CORPORATION, STEPHEN
board. It could not have been the purpose of our law to

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ROXAS, JESUS GO, GRACE LIUSON, and ANDREW
LIUSON, respondents.
G.R. No. 121004
January 28, 1998
ROMERO, J.:
FACTS:
Petitioner Romeo Lagatic was employed in May 1986 by
Cityland, first as a probationary sales agent, and later on as a
marketing specialist. He was tasked with soliciting sales for
the company, with the corresponding duties of accepting call-
ins, referrals, and making client calls and cold calls. Cold calls
refer to the practice of prospecting for clients through the
telephone directory. Cityland, believing that the same is an
effective and cost-efficient method of finding clients, requires
all its marketing specialists to make cold calls.
for longer weekends for employees. In the instant case,
petitioner’s workweek was never compressed. Instead, he
claims payment for work over and above his normal 5 days of
work in a week. Applying by analogy the principle that
overtime cannot be offset by undertime, to allow off-setting
would prejudice the worker. He would be deprived of the
additional pay for the rest day work he has rendered and
which is utilized to offset his equivalent time off on regular
workdays. To allow Cityland to do so would be to circumvent
the law on payment of premiums for rest day and holiday
work.
Notwithstanding the foregoing discussion, petitioner failed to
show his entitlement to overtime and rest day pay due, to the
lack of sufficient evidence as to the number of days and hours
when he rendered overtime and rest day work. Entitlement to
overtime pay must first be established by proof that said
overtime work was actually performed, before an employee
may avail of said benefit.

Petitioner was dismissed by City Land on the ground of Gross RULING:

Insubordination by non-compliance with the submission of
cold calls and for issuing a written statement posted in his WHEREFORE, premises considered, the assailed Resolution is
desk “TO HELL WITH COLD CALLS”. AFFIRMED and this petition is hereby DISMISSED for lack of
merit. Costs against petitioner.
Petitioner filed complaint against City Land for illegal
dismissal, illegal deduction, underpayment, overtime and rest
day pay, damages and attorney’s fees.

ISSUE:

Whether petitioner is entitled to Overtime pay.

RATIO:

NO. With respect to petitioners claims for overtime pay, rest

day pay and holiday premiums, Cityland maintains that
Saturday and Sunday call-ins were voluntary activities on the
part of sales personnel who wanted to realize more sales and
thereby earn more commissions. It is their contention that
sales personnel were clamoring for the privilege to attend
Saturday and Sunday call-ins, as well as to entertain walk-in
clients at project sites during weekends, that Cityland had to
stagger the schedule of sales employees to give everyone a
chance to do so. But simultaneously, Cityland claims that the
same were optional because call-ins and walk-ins were not
scheduled every weekend. If there really were a clamor on
the part of sales staff to voluntarily work on weekends, so
much so that Cityland needed to schedule them, how come
no call-ins or walk-ins were scheduled on some weekends?

In addition to the above, the labor arbiter and the NLRC

sanctioned respondents practice of offsetting rest day or
holiday work with equivalent time on regular workdays on the
ground that the same is authorized by Department Order 21,
Series of 1990. As correctly pointed out by petitioner, said D.
O. was misapplied in this case. The D. O. involves the
shortening of the workweek from six days to five days but
with prolonged hours on those five days. Under this scheme,
non-payment of overtime premiums was allowed in exchange

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PHILIPPINE NATIONAL BANK, petitioner,
vs.
PHILIPPINE NATIONAL BANK EMPLOYEES
ASSOCIATION (PEMA) and COURT OF INDUSTRIAL
RELATIONS, respondents.
G.R. No. L-30279
July 30, 1982
BARREDO, J.:
FACTS:
Petitioner and PEMA disputed the revision in the computation
of overtime pay in the CBA. PEMA wanted the cost of living
allowance which was granted in 1958, and longevity pay
which was granted in 1961 to be included in the computation.
PNB refused and the 2 parties later went before the CIR to
resolve the dispute.
CIR favors PEMA and ordered the inclusion of COLA and
Longevity pay in the computation of Overtime pay. CIR relied
in the ruling of NAWASA v. NAWASA Consolidated Unions
which held that “for purposes of computing overtime
compensation, regular wage includes all payments which the
parties have agreed shall be received during the work week,
including differentiated payments for working at undesirable
times, such as at night and the board and lodging customarily
furnished the employee.” This prompted PNB to appeal, hence
this case.
ISSUE:
Whether the cost of living allowance and longevity pay should
be included in the computation of overtime pay
RATIO:
NO. In any event, as stressed by Us in the Shell cases, the
basis of computation of overtime pay beyond that required by
CA 444 must be the collective bargaining agreement; it is not
for the court to impose upon the parties anything beyond what
they have agreed upon which is not tainted with illegality. On
the other hand, where the parties fail to come to an
agreement, on a matter not legally required, the court abuses
its discretion when it obliges any of them to do more than
what is legally obliged.
Doctrinally, We hold that, in the absence of any specific
provision on the matter in a collective bargaining agreement,
what are decisive in determining the basis for the computation
of overtime pay are two very germane considerations, namely,
(1) whether or not the additional pay is for extra work done
or service rendered and (2) whether or not the same is
intended to be permanent and regular, not contingent nor
temporary and given only to remedy a situation which can
change any time. We reiterate, overtime pay is for extra effort
beyond that contemplated in the employment contract, hence
when additional pay is given for any other purpose, it is
95
illogical to include the same in the basis for the computation
of overtime pay.
RULING:
WHEREFORE, judgment is hereby rendered reversing the
decision appealed from, without costs.
PAMPANGA SUGAR DEVELOPMENT CO.,
INC., petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS AND SUGAR
WORKERS ASSOCIATION, respondents.
G.R. No. L-39387
June 29, 1982
MAKASIAR, J.:
FACTS:
Petitioner Pampanga Sugar Development Company Inc. seeks
the reversal of the decision of the respondent CIR awarding
respondent Sugar Workers Association's counsel attorney's
fees equivalent to 20% in the judgment and ordering the
lower court's Examining Division to compute the wage and
fringe benefits differentials due the 28 individual workers who
did not execute quitclaims as well as attorney's fees
corresponding to 20% of the benefits due to 53 workers who
entered into agreements waiving their rights and benefits
under the decision.
Sometime in February, 1956, the workers' affiliates of
respondent Union staged a strike against petitioner company.
This labor dispute was certified by the President to the Court
of Industrial Relations. After six years, the said Court issued
an order directing petitioner company to reinstate the
members of respondent union. On March 12, 1963 some 88
union members were thus reinstated by petitioner. However,
petitioner discriminated against the reemployed workers with
respect to wage rates, off-season pay, cost of living
allowance, milling bonus and Christmas bonus by depriving
them of aforesaid benefits or by granting to some members
benefits lesser than those given to members of the Pasudeco
Workers Union, another labor group in the service of
petitioner. On December 4, 1972, the CIR handed down a
decision adjudging herein petitioner guilty of unfair labor
practice acts and directing petitioner to pay wage differentials
to certain workers and fringe benefits as would be found due
and payable to them and to readmitted seasonal and casual
members of respondent union totalling 88 with the exception
of 7 workers.
ISSUE:
Whether quitclaims (waiver) are valid
RATIO:
NO. The court held that such quitclaims are not valid because
of these reasons: Firstly, the quitclaims are secured after the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
petitioner lost its case on the lower court. It's obvious that
petitioner wants to frustrate the decision of the lower court
not to grant benefits to the workers. Secondly, while rights
may be waived they must not be contrary to law, public order,
public policy, morals or good customs or prejudicial to a third
person with a right recognized by law. The quitclaims are not
valid because they are contrary to law. It is provided in the
quitclaims that the workers will forego their benefits and the
petitioner company is exempt from legal liability. Third, the
quitclaims are contrary to public policy. Parties to litigations
cannot be allowed to trifle with the judicial system by coming
to court and later on agreeing to a compromise without the
knowledge and approval of the court. In the case at bar, the
lower court has already rendered a decision on the issues
presented before the alleged quitclaims agreements were
made. It shows the evident bad faith of the petitioner to
comply with its legal obligation.
RULING:
Wherefore, the petition is hereby dismissed and respondent
cir (now the nlrc) is hereby directed to implement its order
dated june 6,1974.
Costs against petitioner.
96
JPL MARKETING PROMOTIONS, Petitioner,
vs.
COURT OF APPEALS, NATIONAL LABOR RELATIONS
COMMISSION, NOEL GONZALES, RAMON ABESA III
and FAUSTINO ANINIPOT, Respondents.
G.R. No. 151966
July 8, 2005
TINGA, J.:
FACTS:
JPL Marketing and Promotions is a domestic corporation
engaged in the business of recruitment and placement of
workers. On the other hand, private respondents were
employed by JPL as merchandisers on separate dates and
assigned at different establishments in Naga City and Daet,
Camarines Norte as attendants to the display of California
Marketing Corporation (CMC), one of petitioner’s clients.
On 13 August 1996, JPL notified private respondents that CMC
would stop its direct merchandising activity in the Bicol
Region, Isabela, and Cagayan Valley effective 15 August
1996. They were advised to wait for further notice as they
would be transferred to other clients. However, on 17 October
1996, private respondents filed before the NLRC complaints
for illegal dismissal, praying for separation pay, 13th month
pay, service incentive leave pay and payment for moral
damages. While the case is pending and before the expiration
of 6 months having a floating status, some of the respondents
applied and was employed to the store where they were
originally assigned by JPL.
ISSUE:
Whether respondents are entitled to separation pay, 13th
month pay, and service incentive leave pay.
RATIO:
Under Arts. 283 and 284 of the Labor Code, separation pay is
authorized only in cases of dismissals due to any of these
reasons:
(a) installation of labor saving devices;
(b) redundancy;
(c) retrenchment;
(d) cessation of the employer's business; and
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

(e) when the employee is suffering from a disease and his

continued employment is prohibited by law or is prejudicial to
his health and to the health of his co-employees.

However, separation pay shall be allowed as a measure of

social justice in those cases where the employee is validly
dismissed for causes other than serious misconduct or those
reflecting on his moral character, but only when he was
illegally dismissed.

The common denominator of the instances where payment of

separation pay is warranted is that the employee was
dismissed by the employer. In the instant case, there was no
dismissal to speak of. What they received from JPL was not a
notice of termination of employment, but a memo informing
them of the termination of CMC’s contract with JPL.

More importantly, they were advised that they were to be
reassigned. At that time, there was no severance of
employment to speak of.
Furthermore, Art. 286 of the Labor Code allows the bona fide
suspension of the operation of a business or undertaking for
a period not exceeding six (6) months, wherein some
employee/employees are placed on the so-called "floating
status." When that "floating status" of an employee lasts for
more than six months, he may be considered to have been
illegally dismissed from the service. Thus, he is entitled to the
corresponding benefits for his separation, and this would
apply to suspension either of the entire business or of a
specific component thereof.
As clearly borne out by the records of this case, private
respondents sought employment from other establishments
even before the expiration of the six (6)-month period
provided by law. JPL did not terminate their employment; they
themselves severed their relations with JPL. Thus, they are
not entitled to separation pay.
Nonetheless, JPL cannot escape the payment of 13th month
pay and service incentive leave pay to private respondents.
Said benefits are mandated by law and should be given to
employees as a matter of right.
RULING:
WHEREFORE, the petition is GRANTED IN PART.
The Decision and Resolution of the Court of Appeals in CA-
G.R. SP No. 62631 are hereby MODIFIED. The award of
separation pay is deleted. Petitioner is ordered to pay private
respondents their 13th month pay commencing from the date
of employment up to 15 August 1996, as well as service
incentive leave pay from the second year of employment up
to 15 August 1996. No pronouncement as to costs.
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES'
UNION (IBAAEU), petitioner,
vs.
HON. AMADO G. INCIONG, Deputy Minister, Ministry
of Labor and INSULAR BANK OF ASIA AND
AMERICA, respondents.
G.R. No. L-52415
October 23, 1984
MAKASIAR, J.:
FACTS:
On June 20, 1975, the petitioner who are monthly paid
employees filed a complaint against the respondent bank for
the payment of holiday pay before the then Department of
Labor, NLRC in Manila. The Labor Arbiter granted petitioner’s
complaint. Respondent bank complied by paying the holiday
pay to and including January 1976. On December 1975, PD
850 was promulgated amending the provisions of the Labor
Code with the controversial section stating that monthly paid
employees receiving uniform monthly pay is presumed to be
already paid the “10 paid legal holidays”. Policy instruction 9
was issued thereafter interpreting the said rule. Respondents
bank stopped the payment by reason of the promulgated PD
850 and Policy Instruction 9.
ISSUE:
Whether monthly paid employees are excluded from the
benefit of holiday pay.
RATIO:
NO. Article 94 of the Labor Code, as amended by P.D. 850,
provides:
Art. 94. Right to holiday pay. — (a) Every worker shall be paid
his regular daily wage during regular holidays, except in retail
and service establishments regularly employing less than ten
(10) workers. ...

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The coverage and scope of exclusion of the Labor Code's
holiday pay provisions is spelled out under Article 82 thereof
which reads:
Art. 82. Coverage. — The provision of this Title shall apply to
employees in all establishments and undertakings, whether
for profit or not, but not to government employees,
managerial employees, field personnel members of the family
of the employer who are dependent on him for support
domestic helpers, persons in the personal service of another,
and workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations.
Obviously, the Secretary of Labor had exceeded his statutory
authority granted by Article 5 of the Labor Code authorizing
him to promulgate the necessary implementing rules and
regulations.
RULING:
Wherefore, the petition is hereby granted, the order of public
respondent is set aside, and the decision of labor arbiter
Ricarte t. Soriano dated August 25, 1975, is hereby reinstated.
Costs against private respondent Insular Bank of Asia And
America

From the above-cited provisions, it is clear that monthly paid

employees are not excluded from the benefits of holiday pay.
However, the implementing rules on holiday pay promulgated
by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting that:
"employees who are uniformly paid by the month, irrespective
of the number of working days therein, with a salary of not
less than the statutory or established minimum wage shall be
presumed to be paid for all days in the month whether worked
or not.

Public respondent maintains that “The rules implementing P.

D. 850 and Policy Instruction No. 9 were issued to clarify the
policy in the implementation of the ten (10) paid legal
holidays. As interpreted, 'unworked' legal holidays are deemed
paid insofar as monthly paid employees are concerned if (a)
they are receiving not less than the statutory minimum wage,
(b) their monthly pay is uniform from January to December,
and (c) no deduction is made from their monthly salary on
account of holidays in months where they occur. As explained
in Policy Instruction No, 9, 'The ten (10) paid legal holidays
law, to start with, is intended to benefit principally daily paid THE CHARTERED BANK EMPLOYEES
employees. In case of monthly, only those whose monthly ASSOCIATION, petitioner,
salary did not yet include payment for the ten (10) paid legal vs.
holidays are entitled to the benefit' ". This contention is HON. BLAS F. OPLE, in his capacity as the Incumbent
untenable. Secretary of Labor, and THE CHARTERED
BANK, respondents.
It is elementary in the rules of statutory construction that
when the language of the law is clear and unequivocal the law G.R. No. L-44717
must be taken to mean exactly what it says. In the case at August 28, 1985
bar, the provisions of the Labor Code on the entitlement to
the benefits of holiday pay are clear and explicit - it provides GUTIERREZ, JR., J.:
for both the coverage of and exclusion from the benefits. In
Policy Instruction No. 9, the then Secretary of Labor went as FACTS:
far as to categorically state that the benefit is principally
intended for daily paid employees, when the law clearly states Petitioner instituted a complaint with the Department of Labor
that every worker shall be paid their regular holiday pay. This against Chartered Bank, for the payment of ten (10) unworked
is a flagrant violation of the mandatory directive of Article 4 of legal holidays, as well as for premium and overtime
the Labor Code, which states that "All doubts in the differentials for worked legal holidays from November 1, 1974.
implementation and interpretation of the provisions of this Both the arbitrator and NLRC ruled in favor of the petitioners.
Code, including its implementing rules and regulations, shall On appeal, the Minister of Labor set aside the decision of the
be resolved in favor of labor." Moreover, it shall always be NLRC and dismissed the petitioner's claim for lack of merit
presumed that the legislature intended to enact a valid and basing its decision on the provisions of Book III of the
permanent statute which would have the most beneficial Integrated Rules and Policy Instruction No. 9. Hence, this
effect that its language permits. petition.

ISSUE:

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Whether the petitioners as monthly paid employees are

excluded from the benefit of holiday pay

RATIO:

YES. This is similar in the case of IBAAEU vs. Inciong, as

ruled, Section 2, Rule IV, Book III of the Integrated Rules and
Policy Instruction No. 9, must be declared null and void for
being ultra vires.

The provisions of the Labor Code on the entitlement to the

benefits of holiday pay are clear and explicit it provides for
both the coverage of and exclusion from the benefit. In Policy
Instruction No. 9, the then Secretary of Labor went as far as
to categorically state that the benefit is principally intended
for daily paid employees, when the law clearly states that
every worker shall be paid their regular holiday pay.
UNION OF FILIPRO EMPLOYEES (UFE) vs. BENIGNO
VIVAR, JR., NATIONAL LABOR RELATIONS
ART. 82. Coverage. The provision of this Title shall apply to
COMMISSION and NESTLÉ PHILIPPINES, INC.
employees in all establishments and undertakings, whether
(formerly FILIPRO, INC.)
for profit or not, but not to government employees,
G.R. No. 79255, January 20, 1992
managerial employees, field personnel members of the family
GUTIERREZ, JR., J.
of the employer who are dependent on him for support,
FACTS: This labor dispute stems from the exclusion of sales
domestic helpers, persons in the personal service of another,
personnel from the holiday pay award and the change of the
and workers who are paid by results.
divisor in the computation of benefits from 251 to 261 days.
Filipro, Inc. (now Nestle Philippines, Inc.) filed with the
The questioned Section 2, Rule IV, Book III of the Integrated
National Labor Relations Commission (NLRC) a petition for
Rules and the Secretary's Policy Instruction No. 9 add another
declaratory relief seeking a ruling on its rights and obligations
excluded group, namely, "employees who are uniformly paid
respecting claims of its monthly paid employees for holiday
by the month."
pay in the light of the Court's decision in Chartered Bank
When the law provides benefits for "employees in all
Employees Association v. Ople. Both Filipro and the Union of
Filipino Employees (UFE) agreed to submit the case for
establishments and undertakings, whether for profit or not"
voluntary arbitration and appointed respondent Benigno
and lists specifically the employees not entitled to those
Vivar, Jr. as voluntary arbitrator. On January 2, 1980,
benefits, the administrative agency implementing that law
Arbitrator Vivar rendered a decision directing Filipro to: pay its
cannot exclude certain employees from its coverage simply
monthly paid employees holiday pay pursuant to Article 94 of
because they are paid by the month or because they are
the Code, subject only to the exclusions and limitations
already highly paid.
specified in Article 82 and such other legal restrictions as are
provided for in the Code. Filipro filed a motion for clarification
seeking (1) the limitation of the award to three years, (2) the
exclusion of salesmen, sales representatives, truck drivers,
merchandisers and medical representatives (hereinafter
RULING:
referred to as sales personnel) from the award of the holiday
pay, and (3) deduction from the holiday pay award of
WHEREFORE, order of the public respondent is hereby
overpayment for overtime, night differential, vacation and sick
REVERSED and SET ASIDE. The decision of the National Labor
leave benefits due to the use of 251 divisor. UFE answered
that the award should be made effective from the date of
Relations Commission which affirmed the resolution of the
effectivity of the Labor Code, that their sales personnel are
Labor Arbiter but deleted interest payments is REINSTATED.
not field personnel and are therefore entitled to holiday pay,
and that the use of 251 as divisor is an established employee
benefit which cannot be diminished. On 1986, Vivar issued an
order declaring that the effectivity of the holiday pay award
shall retroact to November 1, 1974, the date of effectivity of
the Labor Code. He adjudged, however, that the company's
sales personnel are field personnel and, as such, are not
entitled to holiday pay. He likewise ruled that with the grant
of 10 days' holiday pay, the divisor should be changed from
251 to 261 and ordered the reimbursement of overpayment

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for overtime, night differential, vacation and sick leave pay
due to the use of 251 days as divisor.
ISSUE: 1) Whether Nestle's sales personnel are entitled to
holiday pay; 2) Whether concomitant with the award of
holiday pay, the divisor should be changed from 251 to 261
days
RATIO DECIDENDI:
1) Sales personnel in this case are not entitled to
holiday pay. The law requires that the actual hours
of work in the field be reasonably ascertained. The
company has no way of determining whether or not
these sales personnel, even if they report to the
office before 8:00 a.m. prior to field work and come
back at 4:30 p.m, really spend the hours in between
2)
in actual field work. The Court ruled that the
requirement for the salesmen and other similarly
situated employees to report for work at the office at
8:00 a.m. and return at 4:00 or 4:30 p.m. is not
within the realm of work in the field as defined in the
Code but an exercise of purely management
prerogative of providing administrative control over
such personnel. The theoretical analysis that
salesmen and other similarly-situated workers on the
given time creating the assumption that their field
work is supervised, is surface projection. Actual field
work begins after 8:00 a.m., when the sales
personnel follow their field itinerary, and ends
immediately before 4:00 or 4:30 p.m. when they
report back to their office. The period between the
given time comprises their hours of work in the field,
the extent or scope and result of which are subject
to their individual capacity and industry and which
"cannot be determined with reasonable certainty."
This is the reason why effective supervision over field
work of salesmen and medical representatives, truck
drivers and merchandisers is practically a physical
impossibility. Consequently, they are excluded from
the ten holidays with pay award. Moreover, the
requirement that "actual hours of work in the field
cannot be determined with reasonable certainty"
must be read in conjunction with Rule IV, Book III of
the Implementing Rules which provides:
This rule shall apply to all employees except: xxx xxx
xxx (e) Field personnel and other employees whose
time and performance is unsupervised by the
employer xxx xxx
Hence, in deciding whether or not an employee's
actual working hours in the field can be determined
with reasonable certainty, query must be made as to
whether or not such employee's time and
performance is constantly supervised by the
employer.
As enunciated in the case of San Miguel Brewery,
Inc. v. Democratic Labor Organization, the Court had
occasion to discuss the nature of the job of a
salesman. Citing the case of Jewel Tea Co. v.
Williams, C.C.A. Okla., 118 F. 2d 202, the Court
stated: The reasons for excluding an outside
100
salesman are fairly apparent. Such a salesman, to a
greater extent, works individually. There are no
restrictions respecting the time he shall work and he
can earn as much or as little, within the range of his
ability, as his ambition dictates. In lieu of overtime
he ordinarily receives commissions as extra
compensation. He works away from his employer's
place of business, is not subject to the personal
supervision of his employer, and his employer has no
way of knowing the number of hours he works per
day. While in that case the issue was whether or not
salesmen were entitled to overtime pay, the same
rationale for their exclusion as field personnel from
holiday pay benefits also applies.
The divisor should be 251 days. The reimbursement
of such overpayment with the use of 251 as divisor
arises concomitant with the award of ten holidays
with pay. The divisor assumes an important role in
determining whether or not holiday pay is already
included in the monthly paid employee's salary and
in the computation of his daily rate. As held in the
case of, Chartered Bank Employees Association v.
Ople (supra) that even without the presumption
found in the rules and in the policy instruction, the
company practice indicates that the monthly salaries
of the employees are so computed as to include the
holiday pay provided by law.
In the case of Chartered Bank, in computing
overtime compensation for its employees, employs a
"divisor" of 251 days. The 251 working days divisor
is the result of subtracting all Saturdays, Sundays
and the ten (10) legal holidays from the total number
of calendar days in a year. In the petitioner's case,
its computation of daily ratio since September 1,
1980, is as follows: monthly rate x 12 months (251
days). Following the criterion laid down in the
Chartered Bank case, the use of 251 days' divisor by
respondent Filipro indicates that holiday pay is not
yet included in the employee's salary, otherwise the
divisor should have been 261. It must be stressed
that the daily rate, assuming there are no intervening
salary increases, is a constant figure for the purpose
of computing overtime and night differential pay and
commutation of sick and vacation leave credits.
Necessarily, the daily rate should also be the same
basis for computing the 10 unpaid holidays. To
change the divisor from 251 to 261 days would result
in a lower daily rate which is violative of the
prohibition on non-diminution of benefits found in
Article 100 of the Labor Code.
RULING:
WHEREFORE, the order of the voluntary arbitrator in
hereby MODIFIED. The divisor to be used in
computing holiday pay shall be 251 days. The holiday
pay as above directed shall be computed from
October 23, 1984. In all other respects, the order of
the respondent arbitrator is hereby AFFIRMED. SO
ORDERED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
PRODUCERS BANK OF THE PHILIPPINES, vs.
NATIONAL LABOR RELATIONS COMMISSION and
PRODUCERS BANK EMPLOYEES ASSOCIATION
G.R. No. 100701, March 28, 2001
GONZAGA-REYES, J.:
FACTS: Present petition originated from a complaint filed by
private respondent on 11 February 1988. The Labor Arbiter
found private respondents claims to be unmeritorious and
dismissed its complaint. In a complete reversal, however, the
NLRC granted all of private respondents claims, except for
damages:
1. The unpaid bonus (mid-year and Christmas bonus) and
13th month pay; 2) xxx 3) xxx
ISSUE: Whether the NLRC gravely abused its discretion in
granting the payment of bonuses and 13th month pay?
RATIO DECIDENDI:
a) As to Bonuses
As to the bonuses, private respondent declared in its position
paper filed with the NLRC that:
1. Producers Bank of the Philippines, a banking institution, has
been providing several benefits to its employees since 1971
when it started its operation. Among the benefits it had been
regularly giving is a mid-year bonus equivalent to an
employees one-month basic pay and a Christmas bonus
equivalent to an employees one whole month salary (basic
pay plus allowance);
2. When P.D. 851, the law granting a 13th month pay, took
effect, the basic pay previously being given as part of the
Christmas bonus was applied as compliance to it (P.D. 851),
the allowances remained as Christmas bonus;
101
3. From 1981 up to 1983, the bank continued giving one
month basic pay as mid-year bonus, one month basic pay as
13th month pay but the Christmas bonus was no longer based
on the allowance but on the basic pay of the employees which
is higher;
4. In the early part of 1984, the bank was placed under
conservatorship but it still provided the traditional mid-year
bonus;
5. By virtue of an alleged Monetary Board Resolution No.
1566, the bank only gave a one-half (1/2) month basic pay as
compliance of the 13th month pay and none for the Christmas
bonus
Private respondent argues that the mid-year and Christmas
bonuses, by reason of their having been given for thirteen
consecutive years, have ripened into a vested right and, as
such, can no longer be unilaterally withdrawn by petitioner
without violating Article 100 prohibits the diminution or
elimination of benefits already being enjoyed by the
employees. Although private respondent concedes that the
grant of a bonus is discretionary on the part of the employer,
it argues that, by reason of its long and regular concession, it
may become part of the employees regular compensation.
On the other hand, petitioner asserts that it cannot be
compelled to pay the alleged bonus differentials due to its
depressed financial condition, as evidenced by the fact that in
1984 it was placed under conservatorship by the Monetary
Board. According to petitioner, it sustained losses in the
millions of pesos from 1984 to 1988, an assertion which was
affirmed by the labor arbiter. Moreover, petitioner points out
that the collective bargaining agreement of the parties does
not provide for the payment of any mid-year or Christmas
bonus.
A bonus is an amount granted and paid to an employee for
his industry and loyalty which contributed to the success of
the employers business and made possible the realization of
profits. It is an act of generosity granted by an enlightened
employer to spur the employee to greater efforts for the
success of the business and realization of bigger profits. The
granting of a bonus is a management prerogative, something
given in addition to what is ordinarily received by or strictly
due the recipient. Thus, a bonus is not a demandable and
enforceable obligation, except when it is made part of the
wage, salary or compensation of the employee.
However, an employer cannot be forced to distribute bonuses
which it can no longer afford to pay. To hold otherwise would
be to penalize the employer for his past generosity.
It was established by the labor arbiter and the NLRC and
admitted by both parties that petitioner was placed under
conservatorship by the Monetary Board.
Under Section 28-A, the Monetary Board may place a bank
under the control of a conservator when it finds that the bank
is continuously unable or unwilling to maintain a condition of
solvency or liquidity.
Petitioner was not only experiencing a decline in its profits,
but was reeling from tremendous losses triggered by a bank-
run which began in 1983. In such a depressed financial
condition, petitioner cannot be legally compelled to continue
paying the same amount of bonuses to its employees. Thus,
the conservator was justified in reducing the mid-year and
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Christmas bonuses of petitioner's employees. To hold
otherwise would be to defeat the reason for the
conservatorship which is to preserve the assets and restore
the viability of the financially precarious bank. Ultimately, it is
to the employees' advantage that the conservatorship
achieves its purposes for the alternative would be petitioner's
closure whereby employees would lose not only their benefits,
but their jobs as well.
b) As to 13th Month Pay
With regard to the 13th month pay, the NLRC adopted the
position taken by private respondent and held that the
conservator was not justified in diminishing or not paying the
13th month pay and that petitioner should have instead
applied for an exemption, in accordance with section 7 of
Presidential Decree No. 851 (PD 851), as amended by
Presidential Decree No. 1364, but that it did not do so. In the
case at bar, even assuming the truth of private respondent's
claims as contained in its position paper or Memorandum
regarding the payments received by its members in the form
of 13th month pay, mid-year bonus and Christmas bonus, it is
noted that, for each and every year involved, the total amount
given by petitioner would still exceed, or at least be equal to,
one month basic salary and thus, may be considered as an
"equivalent" of the 13thmonth pay mandated by PD 851.
Thus, petitioner is justified in crediting the mid-year bonus
and Christmas bonus as part of the 13th month pay.
RULING:
WHEREFORE, for the reasons above stated, the 30 April 1991
Decision of public respondent in NLRC-NCR Case No. 02-
00753-88, entitled Producers Bank Employees Association v.
Producers Bank of the Philippines, and its 18 June 1991
Resolution issued in the same case are hereby SET ASIDE,
with the exception of public respondents ruling on damages.
SO ORDERED.
102
ASIAN TRANSMISSION CORPORATION vs. The Hon.
COURT OF APPEALS, Thirteenth Division, HON.
FROILAN M. BACUNGAN as Voluntary Arbitrator,
KISHIN A. LALWANI, Union, Union representative to
the Panel Arbitrators; BISIG NG ASIAN
TRANSMISSION LABOR UNION (BATLU); HON.
BIENVENIDO T. LAGUESMA in his capacity as
Secretary of Labor and Employment; and DIRECTOR
CHITA G. CILINDRO in her capacity as Director of
Bureau of Working Conditions
G.R. No. 144664, March 15, 2004
CARPIO-MORALES, J.
FACTS: The Department of Labor and Employment (DOLE),
through Undersecretary Cresenciano B. Trajano, issued an
Explanatory Bulletin dated March 11, 1993 wherein it clarified,
inter alia, that employees are entitled to 200% of their basic
wage on April 9, 1993, whether unworked, which, apart from
being Good Friday [and, therefore, a legal holiday], is also
Araw ng Kagitingan [which is also a legal holiday]. The bulletin
reads: "On the correct payment of holiday compensation on
April 9, 1993 which apart from being Good Friday is also Araw
ng Kagitingan, i.e., two regular holidays falling on the same
day, this Department is of the view that the covered
employees are entitled to at least two hundred percent
(200%) of their basic wage even if said holiday is unworked.
The first 100% represents the payment of holiday pay on April
9, 1993 as Good Friday and the second 100% is the payment
of holiday pay for the same date as Araw ng Kagitingan. Said
bulletin was reproduced on January 23, 1998, when April 9,
1998 was both Maundy Thursday and Araw ng Kagitingan x x
x x Despite the explanatory bulletin, petitioner opted to pay
its daily paid employees only 100% of their basic pay on April
9, 1998. Respondent Bisig ng Asian Transmission Labor Union
(BATLU) protested.
Subject of interpretation in the case at bar is Article 94 of the
Labor Code which reads: ART. 94. Xxx xxx (c) As used in this
Article, "holiday" includes by virtue of Executive Order No.
203 issued on June 30, 1987, regular holidays are now: 1.
New Year’s Day January 1 2. Maundy Thursday Movable Date
3. Good Friday Movable Date 4. Araw ng Kagitingan April 9
(Bataan and Corregidor Day) 5. Labor Day May 1 6.
Independence Day June 12 7. National Heroes Day Last
Sunday of August 8. Bonifacio Day November 30 9. Christmas
Day December 25 10. Rizal Day December 30
The voluntary arbitrator ruled in favor of the Bisig ng Asian
Transmission Labor Union (BATLU), it was held that Article 94
of the Labor Code provides for holiday pay for every regular
holiday, the computation of which is determined by a legal
formula which is not changed by the fact that there are two
holidays falling on one day, like on April 9, 1998 when it was
Araw ng Kagitingan and at the same time was Maundy
Thursday; and that the law, as amended, enumerates ten
regular holidays for every year should not be interpreted as
authorizing a reduction to nine the number of paid regular
holidays "just because April 9 (Araw ng Kagitingan) in certain
years, like 1993 and 1998, is also Holy Friday or Maundy
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Thursday." In the assailed decision, the Court of Appeals
upheld the findings of the Voluntary Arbitrator, holding that
the Collective Bargaining Agreement (CBA) between petitioner
and BATLU, the law governing the relations between them,
clearly recognizes their intent to consider Araw ng Kagitingan
and Maundy Thursday, on whatever date they may fall in any
calendar year, as paid legal holidays during the effectivity of
the CBA and that "[t]here is no condition, qualification or
exception for any variance from the clear intent that all
holidays shall be compensated." The Court of Appeals further
held that "in the absence of an explicit provision in law which
provides for [a] reduction of holiday pay if two holidays
happen to fall on the same day, any doubt in the interpretation
and implementation of the Labor Code provisions on holiday
pay must be resolved in favor of labor."
ISSUE: Whether the respondent court of appeals committed
grave abuse of discretion in holding that any doubts about the
validity of the policies enunciated in the explanatory bulletin
was laid to rest by the reissuance of the said explanatory
bulletin
RATIO DECIDENDI: This Court finds no ground to disturb
the assailed decision of the Court of Appeals. Holiday pay is a
legislated benefit enacted as part of the Constitutional
imperative that the State shall afford protection to labor.7 Its
purpose is not merely "to prevent diminution of the monthly
income of the workers on account of work interruptions. In
other words, although the worker is forced to take a rest, he
earns what he should earn, that is, his holiday pay." It is also
intended to enable the worker to participate in the national
celebrations held during the days identified as with great
historical and cultural significance. Independence Day (June
12), Araw ng Kagitingan (April 9), National Heroes Day (last
Sunday of August), Bonifacio Day (November 30) and Rizal
Day (December 30) were declared national holidays to afford
Filipinos with a recurring opportunity to commemorate the
heroism of the Filipino people, promote national identity, and
deepen the spirit of patriotism. Labor Day (May 1) is a day
traditionally reserved to celebrate the contributions of the
working class to the development of the nation, while the
religious holidays designated in Executive Order No. 203 allow
the worker to celebrate his faith with his family.
As reflected above, Art. 94 of the Labor Code, as amended,
affords a worker the enjoyment of ten paid regular holidays.
The provision is mandatory,10 regardless of whether an
employee is paid on a monthly or daily basis. Unlike a bonus,
which is a management prerogative, holiday pay is a statutory
benefit demandable under the law. Since a worker is entitled
to the enjoyment of ten paid regular holidays, the fact that
two holidays fall on the same date should not operate to
reduce to nine the ten holiday pay benefits a worker is entitled
to receive. It is elementary, under the rules of statutory
construction, that when the language of the law is clear and
unequivocal, the law must be taken to mean exactly what it
says. In the case at bar, there is nothing in the law which
provides or indicates that the entitlement to ten days of
holiday pay shall be reduced to nine when two holidays fall on
the same day.
Only an employee who works on the day immediately
preceding or after a regular holiday shall be entitled to the
holiday pay. A paid legal holiday occurring during the
103
scheduled vacation leave will result in holiday payment in
addition to normal vacation pay but will not entitle the
employee to another vacation leave. Under similar
circumstances, the COMPANY will give a day’s wage for
November 1st and December 31st whenever declared a
holiday. When required to work on said days, the employee
will be paid according to Art. VI, Sec. 3B hereof.
RULING: WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED
SAN MIGUEL CORPORATION, petitioner, vs. THE
HONORABLE COURT OF APPEALS-FORMER
THIRTEENTH DIVISION, HON. UNDERSECRETARY
JOSE M. ESPAOL, JR., Hon. CRESENCIANO B.
TRAJANO, and HON. REGIONAL DIRECTOR ALLAN M.
MACARAYA
G.R. No. 146775, January 30, 2002
KAPUNAN, J.
FACTS: 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. In the course of the inspection, 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. 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 but its appeal was dismissed for having been
filed late. The dismissal of the appeal for late filing was later
on reconsidered in the order of 17 July 1998 after it was found
that the appeal was filed within the reglementary period.
However, the appeal was still dismissed for lack of merit and
the order of Director Macaraya was affirmed. SMC went to this
Court for relief via a petition for certiorari, which this Court
referred to the Court of Appeals. The appellate court, in the
now questioned decision, promulgated on 08 May 2000, ruled,
as follows: WHEREFORE, the Order dated December 17, 1993
of Director Macaraya and Order dated July 17, 1998 of
Undersecretary Espaol, Jr. is hereby MODIFIED with regards
the payment of Muslim holiday pay from 200% to 150% of
the employee's basic salary. Let this case be remanded to the
Regional Director for the proper computation of the said
holiday pay. SO ORDERED. Its motion for reconsideration
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
having been denied for lack of merit, SMC filed a petition for
certiorari before this Court, alleging that:
ISSUE: Whether public respondents seriously erred and
committed grave abuse of discretion when they granted
muslim holiday pay to non-muslim employees of SMC-ilicoco
and ordering SMC to pay the same retroactive for one (1) year
from the date of the promulgation of the compliance order
issued on December 17, 199
RATIO DECIDENDI: Muslim holidays are provided under
Articles 169 and 170, Title I, Book V, of Presidential Decree
No. 1083,[8] 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 Jadīd (New Year), which falls on the first day of the first
lunar month of Muharram; (b) Maulid-un-Nabī (Birthday of the
Prophet Muhammad), which falls on the twelfth day of the
third lunar month of Rabi-ul-Awwal; (c) Lailatul Isrā Wal Mirāj
(Nocturnal Journey and Ascension of the Prophet
Muhammad), which falls on the twenty-seventh day of the
seventh lunar month of Rajab; (d) Īd-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) Īd-ūl-Adhā (Hari Raya Haji),which falls on the tenth
day of the twelfth lunar month of Dhūl-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
created; (2) Upon proclamation by the President of the
Philippines, Muslim holidays may also be officially observed in
other provinces and cities. The foregoing provisions should be
read in conjunction with Article 94 of the Labor Code, which
provides: Art. 94. Right to holiday pay. (a) Every worker shall
be paid his regular daily wage during regular holidays, except
in retail and service establishments regularly employing less
than ten (10) workers; (b) The employer may require an
employee to work on any holiday but such employee shall be
paid a compensation equivalent to twice his regular rate; x x
x. Petitioner asserts that Article 3(3) of Presidential Decree
No. 1083 provides that (t)he provisions of this Code shall be
applicable only to Muslims x x x. However, there should be no
distinction between Muslims and non-Muslims as regards
payment of benefits for Muslim holidays. The Court of Appeals
did not err in sustaining Undersecretary Espaol who stated:
Assuming arguendo that the respondents position is correct,
then by the same token, Muslims throughout the Philippines
are also not entitled to holiday pays on Christian holidays
declared by law as regular holidays. We must remind the
respondent-appellant that wages and other emoluments
granted by law to the working man are determined on the
basis of the criteria laid down by laws and certainly not on the
basis of the workers faith or religion. At any rate, Article 3(3)
of Presidential Decree No. 1083 also declares that x x x
nothing herein shall be construed to operate to the prejudice
of a non-Muslim. In addition, the 1999 Handbook on Workers
Statutory Benefits, approved by then DOLE Secretary
Bienvenido E. Laguesma on 14 December 1999 categorically
stated: Considering that all private corporations, offices,
agencies, and entities or establishments operating within the
104
designated Muslim provinces and cities are required to
observe Muslim holidays, both Muslim and Christians working
within the Muslim areas may not report for work on the days
designated by law as Muslim holidays.
On the question regarding the jurisdiction of the Regional
Director Allan M. Macaraya, Article 128, Section B of the Labor
Code, as amended by Republic Act No. 7730, provides: Article
128. Visitorial and enforcement power. x x x (b)
Notwithstanding the provisions of Article 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 the inspection. The Secretary or his duly
authorized representative 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. x x x In the case before
us, Regional Director Macaraya acted as the duly authorized
representative of the Secretary of Labor and Employment and
it was within his power to issue the compliance order to SMC.
In addition, the Court agrees with the Solicitor General that
the petitioner did not deny that it was not paying Muslim
holiday pay to its non-Muslim employees. Indeed, petitioner
merely contends that its non-Muslim employees are not
entitled to Muslim holiday pay.
RULING: WHEREFORE, in view of the foregoing, the petition
is DISMISSED. SO ORDERED.
VIVIAN Y. IMBUIDO vs. NATIONAL LABOR RELATIONS
COMMISSION, INTERNATIONAL INFORMATION
SERVICES, INC. and GABRIEL LIBRANDO
G.R. No. 114734, March 31, 2000
BUENA, J.
FACTS: Imbuido was employed as a data encoder by
International Information Services, Inc., (ISSI) a domestic
corporation engaged in the business of data encoding and
keypunching, she entered into thirteen (13) separate
employment contracts with ISSI, each contract lasting only for
a period of three (3) months. Aside from the basic hourly rate,
specific job contract number and period of employment, each
contract contains the following terms and conditions:
a. This Contract is for a specific project/job contract only and
shall be effective for the period covered as above-mentioned
unless sooner terminated when the job contract is completed
earlier or withdrawn by client, or when employee is dismissed
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
for just and lawful causes provided by law. The happening of
any of these events will automatically terminate this contract
of employment.
b. Subject shall abide with the Companys rules and regulations
for its employees attached herein to form an integral part
hereof
c. The nature of your job may require you to render overtime
work with pay so as not to disrupt the Companys commitment
of scheduled delivery dates made on said job contract.
Imbuido and twelve (12) other employees of ISSI allegedly
agreed to the filing of a petition for certification election
involving the rank-and-file employees of ISSI. Thus, on
October 8, 1991, Lakas Manggagawa sa Pilipinas (LAKAS) filed
a petition for certification election with the Bureau of Labor
Relations (BLR), docketed as NCR-OD-M-9110-128.
Subsequently, Imbuido received a termination letter from ISSI
allegedly "due to low volume of work."
Thus, Imbuido filed a complaint for illegal dismissal with
prayer for service incentive leave pay and 13th month
differential pay, with the NLRC, National Capital Region,
Arbitration Branch, docketed as NLRC-NCR Case No. 05-
02912-92.
Imbuido alleged that her employment was terminated not due
to the alleged low volume of work but because she "signed a
petition for certification election among the rank and file
employees of respondents," thus charging private respondent
with committing unfair labor practices.
She further complained of non-payment of service incentive
leave benefits and underpayment of 13th month pay. On the
other hand, ISSI maintained that it had valid reasons to
terminate Imbuido they stressed that its business "relies
heavily on companies availing of its services. And the
employment of Imbuido was for a "specific project with a
specified period of engagement."
Labor Arbiter ruled in favor of Imbuido, and accordingly
ordered her reinstatement without loss of seniority rights and
privileges, and the payment of backwages and service
incentive leave pay. Citing that Imbuido is a regular employee,
after finding that it is crystal clear that herein complainant
performed a job which are usually necessary or desirable in
the usual business of ISSI. Furthermore, the LA concluded
that petitioner was illegally dismissed because the alleged
reason for her termination, that is, low volume of work, is "not
among the just causes for termination recognized by law,"
hence, he ordered her immediate reinstatement without loss
of seniority rights and with full backwages.
On appeal, the NLRC reversed the decision of the labor arbiter
in a decision. The NLRC held that the complainant while hired
as a regular worker, is statutorily guaranteed, in her tenurial
security, only up to the time the specific project for which she
was hired is completed." Hence, the NLRC concluded that
"[w]ith the specific project "at RCBC 014" admittedly
completed, Imbuido has therefore no valid basis in charging
illegal dismissal for her concomittant (sic) dislocation.
ISSUE: Whether Imbuido was a regular employee, not a
project employee
RATIO DECIDENDI: The Court agreed with the findings of
the NLRC that petitioner is a project employee. The principal
test for determining whether an employee is a project
employee or a regular employee is whether the project
105
employee was assigned to carry out a specific project or
undertaking, the duration and scope of which were specified
at the time the employee was engaged for that project. A
project employee is one whose employment has been fixed
for a specific project or undertaking, the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or service to
be performed is seasonal in nature and the employment is for
the duration of the season. In the instant case, petitioner was
engaged to perform activities which were usually necessary or
desirable in the usual business or trade of the employer, as
admittedly, petitioner worked as a data encoder for private
respondent, and her employment was fixed for a specific
project or undertaking the completion or termination of which
had been determined at the time of her engagement, as may
be observed from the series of employment contracts
between petitioner and private respondent, all of which
contained a designation of the specific job contract and a
specific period of employment.
However, even as we concur with the NLRCs findings that
petitioner is a project employee, we have reached a different
conclusion. In the recent case of Maraguinot, Jr. vs. NLRC, we
held that "[a] project employee or a member of a work pool
may acquire the status of a regular employee when the
following concur: 1) There is a continuous rehiring of project
employees even after the cessation of a project; and 2) The
tasks performed by the alleged "project employee" are vital,
necessary and indispensable to the usual business or trade of
the employer. The evidence on record reveals that petitioner
was employed by private respondent as a data encoder,
performing activities which are usually necessary or desirable
in the usual business or trade of her employer, continuously
for a period of more than three (3) years, from August 26,
1988 to October 18, 1991[36] and contracted for a total of
thirteen (13) successive projects.
We have previously ruled that "[h]owever, the length of time
during which the employee was continuously re-hired is not
controlling, but merely serves as a badge of regular
employment." Based on the foregoing, we conclude that
petitioner has attained the status of a regular employee of
private respondent.
RULING: WHEREFORE, the instant petition is GRANTED. The
assailed decision of the National Labor Relations Commission
in NLRC NCR CA No. 003845-92 dated September 27, 1993,
as well as its Order dated January 11, 1994, are hereby
ANNULLED and SET ASIDE for having been rendered with
grave abuse of discretion, and the decision of the Labor
Arbiter in NLRC NCR Case No. 05-02912-92 is REINSTATED
with MODIFICATION as above-stated, with regard to the
computation of back wages and service incentive leave pay.
Sc SO ORDERED.
NICANOR M. BALTAZAR vs. SAN MIGUEL BREWERY,
INC.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
G.R. No. L-23076, February 27, 1969
DIZON, J.
FACTS: It appears that Baltazar was appointed salesman-in-
charge of San Miguel Brewery, Inc., Dagupan warehouse.
Sixteen (16) regular workers went on a strike. For the purpose
of relieving the tension prevailing at the place — because it
was alleged that the unfair treatment dispensed to the
employees by Baltazar was the cause of the strike — Baltazar
was recalled to the Manila office upon recommendation of its
sales supervisor and industrial relations officer, who found
out, after a personal investigation, that the employees'
grievance was well founded. The day following Baltazar's
recall to Manila the strikers returned to work voluntarily. When
Baltazar reported at main office in Manila, the latter's sales
supervisor informed him that he was not to return to Dagupan
anymore. Thereafter, he reported for work at the main office
apparently without being given any specific work or
assignment. For a period of more than one and one-half
months, he absented himself from work without prior
authority from his superiors and without advising them or
anybody else of the reason for his prolonged absence. For this
reason, pursuant firstly, to existing rules and regulations
considering ten unexcused or unauthorized absences within a
calendar year as sufficient ground for an outright dismissal
from employment, and secondly, the provisions of appellant's
health, welfare and retirement plan requiring that sick leave,
to be considered authorized or excusable, must be certified to
by the company physician. Baltazar received a letter informing
him that he was dismissed for a cause.
Baltazar commenced the present action. After trial upon the
issues arising from the parties' pleadings, the trial court ruled
that Baltazar's dismissal was justified, and, as a consequence,
dismissed his complaint. For insufficiency of evidence, the
court also dismissed appellant's counterclaim. But despite the
dismissal of Baltazar's complaint and the finding that his
dismissal from employment was for cause, the trial court
ordered appellant to pay him one month separation pay, plus
the cash value of six months accumulated sick leave.
ISSUE: Whether the trial court erred in requiring the
defendant appellant to pay separation pay after having found
and declared as an established fact that the dismissal of
Baltazar was fully justified.
RATIO DECIDENDI: The Court ruled that Baltazar is not
entitled to one month separation pay. In the Marcaida case
this Court, speaking through the now Chief Justice Roberto
Concepcion, said the following: Republic Act No. 1052 makes
reference to termination of employment, instead of dismissal,
precisely to exclude employees separated from the service for
causes attributable to their own fault. It would, patently, be
absurd to grant a right thereto to an employee guilty of the
same breach of obligation, when the employment is without a
definite period, as if he were entitled to greater protection
than employees engaged for a fixed duration.
RULING: WHEREFORE, the appealed decision is hereby
reversed, without special pronouncement as to costs. It is so
ordered.
106
Leiden Fernandez, Brenda Gadiano, Gloria Adriano,
Emelia Negapatan, Jesus Tomongha, Eleonor
Quianola, Asteria Campo, Florida Villaceran, Florida
Taledo, Marilyn Lim and Joseph Canonigo, petitioners,
vs.
National Labor Relations Commission, Fourth Division,
Margueritte Lhuillier and/or Agencia Cebuana-H.
Lhuillier, respondents.
GR No. 105892
January 28, 1998
Panganiban, J:
FACTS:
The herein petitioners are employees of private
respondent Agencia Cebuana-H. Lhuillier and/or Margueritte
Lhuillier, filed a complaint before Department of Labor for
illegal dismissal and payment of bank wages when the latter
denied them their demand to increase their salaries and
subsequently terminated their employment. The Labor Arbiter
favored petitioners but the public respondent NLRC vacated
the Labor Arbiter’s order. The motion for reconsideration is
denied thus this petition.
It is the Solicitor General’s opinion that the Labor
Arbiter’s decision be reinstated substantially, that the award
of service incentive leave be limited to three years. This is
based on Article 291 of the Labor Code which provides; that
all money claims arising from employer-employee relations
accruing during the effectivity of this code shall be filed within
three years from the time the cause of action accrued;
otherwise they shall be forever barred.
ISSUE: Whether or not the claim for service incentive leaves
may be limited to a certain number of years.
RATIO DECIDENDI:
The Supreme Court held in negative. Sec. 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.
To limit the award to three years is to unduly restrict
such right. The law does not prohibit its communication.
Therefore, in accordance with RA No. 6715, petitioners are
entitled to their full backwages, inclusive of allowances and
other benefits or their monetary equivalent, from the time
their actual compensation was withheld form them up to the
time of their actual reinstatement.
RULING:
Wherefore, the petition is hereby granted, and the
assailed decision and resolution are reversed and set aside.
The Labor Arbiter’s decision is reinstated with modificcations.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
MAYON HOTEL & RESTAURANT, et. al., petitioners, vs.
ROLANDO ADANA, et. al., respondents
GR No. 157634
May 16, 2005
PUNO, J.:
FACTS:
Petitioner Mayon Hotel & Restaurant is a single
proprietor business registered in the name of petitioner Pacita
O. Po, whose mother, petitioner Josefa Po Lam, manages the
establishment. The hotel and restaurant employed about
sixteen (16) employees.
Due to the expiration and non-renewal of the lease
contract for the rented space occupied by the said hotel and
restaurant at Rizal Street, the hotel operations of the business
were suspended on March 31, 1997. The operation of the
restaurant was continued in its new location at Elizondo
Street, Legazpi City, while waiting for the construction of a
new Mayon Hotel & Restaurant at Peñaranda Street,
Legazpi City. Only nine (9) of the sixteen (16) employees
continued working in the Mayon Restaurant at its new site.
The 16 employees filed complaints for underpayment of
wages and other money claims against petitioners.
Executive Labor Arbiter Gelacio L. Rivera, Jr.
rendered a Joint Decision in favor of the employees. The Labor
Arbiter awarded substantially all of respondents’ money
claims, and held that respondents Loveres, Macandog and
Llarena were entitled to separation pay, while respondents
Guades, Nicerio and Alamares were entitled to their
retirement pay. The Labor Arbiter also held that based on the
evidence presented, Josefa Po Lam is the owner/proprietor of
Mayon Hotel & Restaurant and the proper respondent in these
cases.
On appeal to the NLRC, the decision of the Labor
Arbiter was reversed, and all the complaints were dismissed.
Respondents filed a motion for reconsideration with
the NLRC and when this was denied, they filed a petition for
certiorari with the CA. CA reversed the NLRC decision and the
employers filed MR which was denied, hence the case before
the SC.
ISSUE:
Whether or not tin the absence of illegal dismissal case,
where an employee may not be entitled to a separation pay,
may still be entitled to the Labor Standards benefits.
RATIO DECIDENDI:
Illegal Dismissal: claim for separation pay
First, petitioners admit that since April 1997, when
hotel operations were suspended due to the termination of
the lease of the old premises, respondents Loveres,
Macandog, Llarena, Nicerio and Guades have not been
permitted to work. Second, even after six months of what
should have been just a temporary lay-off, the same
respondents were still not recalled to work. As a matter of
fact, the Labor Arbiter even found that as of the time when
107
he rendered his Joint Decision on July 2000 — or more than
three (3) years after the supposed “temporary lay-off,” the
employment of all of the respondents with petitioners had
ceased, notwithstanding that the new premises had been
completed and the same operated as a hotel with bar and
restaurant. This is clearly dismissal — or the permanent
severance or complete separation of the worker from the
service on the initiative of the employer regardless of the
reasons therefor. But they made no mention of any intent to
recall these respondents to work upon completion of the new
premises. And even assuming that the closure was due to a
reason beyond the control of the employer, it still has to
accord its employees some relief in the form of severance pay.
While we recognize the right of the employer to
terminate the services of an employee for a just or authorized
cause, the dismissal of employees must be made within the
parameters of law and pursuant to the tenets of
fair play.66 And in termination disputes, the burden of proof
is always on the employer to prove that the dismissal was for
a just or authorized cause.67 Where there is no showing of a
clear, valid and legal cause for termination of employment,
the law considers the case a matter of illegal dismissal.
RULING:
IN VIEW WHEREOF, the petition is hereby
DENIED. The Decision of January 17, 2003 of the Court of
Appeals in CA-G.R. SP No. 68642 upholding the Joint Decision
of July 14, 2000 of the Labor Arbiter in RAB V Case Nos. 04-
00079-97 and 04-00080-97 is AFFIRMED, with the following
MODIFICATIONS:
(1) Granting separation pay of one-half (1/2) month
for every year of service to respondents Loveres,
Macandog and Llarena;
(2) Granting retirement pay for respondents Guades,
Nicerio, and Alamares;
(3) Removing the deductions for food facility from the
amounts due to all respondents;
(4) Awarding moral damages of P20,000.00 each for
respondents Loveres, Macandog, Llarena,
Guades, Nicerio, Atractivo, and Broola;
(5) Deleting the award of exemplary damages
of P10,000.00 from all respondents except
Loveres, Macandog, Llarena, Guades, Nicerio,
Atractivo, and Broola; and
(6) Granting attorney’s fees of P10,000.00 each to all
respondents.
The case is REMANDED to the Labor Arbiter for the
RECOMPUTATION of the total monetary benefits awarded and
due to the employees concerned in accordance with the
decision. The Labor Arbiter is ORDERED to submit his
compliance thereon within thirty (30) days from notice of this
decision, with copies furnished to the parties.
SO ORDERED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Auto Bus Transport Systems, Inc., petitioner vs
Antonio Bautista, respondent
GR No. 156367
May 16, 2005
Chico-Nazario, J:
FACTS:
Antonio Bautista was employed by Auto Bus
Transport Systems, Inc. he was assigned to Isabela-Manila
route and he was paid by commission. In January 2000, while
he was driving his bus, he bumped another bus owned by
Auto Bus. He claimed that the accident was due to fatigue for
he did not slept for more than 24 hours. Auto Bus terminated
Bautista after due hearing as part of management
prerogative. Bautista sued Auto Bus for illegal dismissal and
among others claim for his unpaid service incentive leave pay.
Auto Bus averred that Bautista is a commissioned
employee and a field personnel thus not entitled to service
incentive leave pay.
ISSUE: Whether or not Antonio Bautista is entitled to service
incentive leave pay.
Whether Bautista is a field employee.
RATIO DECIDENDI:
Yes. Bautista is entitled to service incentive leave pay,
the Supreme Court emphasized that it does not mean that just
because an employee is paid on commission basis he is
already banned to received service incentive leave pay.
Bautista is not a field employee. He has a specific route
to traverse as a bus driver and that is a specific place that he
needs to be at work. There are inspectors haired by Auto Bus
stops who inspects the passengers the punched tickets and
the driver. Therefore, he is supervised though he is away from
108
the Auto Bus main office, contrary to Article 82 of Labor Code
which he defines field personnel.
Wherefore, premises considered, the instant petition is
hereby denied. The assailed decision of the Court of Appeals
is hereby affirmed. No costs.
So ordered.
Mansion Printing Center and Clement Cheng,
petitioners, vs. Diosdado Bitara Jr., respondent
GR No. 168120
January 25, 2012
Carpio, J:
FACTS:
Mansion Printing Center is a single proprietorship
engaged in the printing of quality self-adhesive labels,
brochures, posters and stickers.
Mansion engaged the services of Bitara as a helper.
Respondent later was promoted as the company’s sole driver
tasked, among others, to deliver the products to the clients
within the delivery schedules.
Petitioners avert that the timely delivery of the
products to the clients is one of the foremost considerations
material to the operation of the business. It being so, they
closely monitored the attendance of respondent. They noted
his habitual tardiness and absenteeism.
Petitioners issued a Memorandum requiring respondent to
submit a written explanation why no administrative sanction
should be imposed on him for his habitual tardiness. However,
despite respondents undertaking to report on time, he
continued to disregard attendance policies, and was
eventually dismissed. Respondent filed a complaint for illegal
dismissal.
ISSUE: Whether or not Bitara is illegally dismissed.
RATIO DECIDENDI:
No. there is no illegal dismissal. Article 282 of the
Labor Code provides that an employer may terminate an
employment for any of the following reasons:
b) Gross and habitual neglect by the employee of his duties…
Clearly, even in the absence of a written company
rule defining gross and habitual neglect of duties,
respondent’s omission qualify as such warranting his dismissal
from the service. The court cannot simply tolerate injustice to
employees if only to protect the welfare of undeserving
employees. It is within the management prerogative to
terminate his employment. Even as the law is solicitous of the
welfare of the employees, it must also protect the rights of an
employer to exercise what are clearly management
prerogatives.
Accordingly the court affirmed the ruling of the
National Labor Relations Commission that the dismissal is valid
however the respondent shall be entitled to the money
equivalent of five day service incentive leave.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
Wherefore the resolution dated June 29, 2001 and
the order dated February 21, 2002 of the National Labor
Relations Commission are hereby reinstated with modification
that petitioners are ordered to pay respondent the money
equivalent of the five day service incentive leave.
ROSARIO A. GAA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, EUROPHIL
INDUSTRIES CORPORATION, and CESAR R. ROXAS,
Deputy Sheriff of Manila, respondents.
G.R. No. L-44169
December 3, 1985
Patajo, J.:
FACTS:
Europhil Industries Corporation was formerly one
of the tenants in Trinity Building while Gaa was then
the building administrator. December 12, 1973 - Europhil
Industries commenced an action in the CFI of Manila for
damages against Gaa for trespassing upon its rights, namely,
cutting of its electricity, and removing its name from the
building directory and gate passes of its officials and
employees. June 28, 1974 – CFI ruled in favor of Europhil
ordering Gaa to pay the former actual damages, moral
damages, exemplary damages and to pay the costs. August
1, 1975 - A writ of garnishment was issued pursuant to which
Deputy Sheriff Roxas served a Notice of Garnishment upon El
Grande Hotel, where Gaa was then employed, garnishing her
"salary, commission and/or remuneration." Gaa then filed
with the CFI of Manila a motion to lift said garnishment on
the ground that her salaries, commission and,
or remuneration are exempted from execution under Article
1708 of the New Civil Code. CFI: denied Gaa’s motion and her
subsequent MR. CA: dismissed Gaa’s petition on the ground
that Gaa is not a mere laborer as contemplated under Article
1708 as the term laborer does not apply to one who holds a
managerial or supervisory position like that of petitioner, but
only to those "laborers occupying the lower strata." It also
held that the term "wages" means the pay given" as hire or
reward to artisans, mechanics, domestics or menial servants,
109
and laborers employed in manufactories, agriculture, mines,
and other manual occupation and usually employed to
distinguish the sums paid to persons hired to perform manual
labor, skilled or unskilled, paid at stated times, and measured
by the day, week, month, or season.
ISSUE:
Whether or not Gaa may be considered a laborer as contemplated
under Article 1708 of the Civil Code.
RATION DECIDENDI:
NO. Gaa is not an ordinary or rank and file laborer but
a responsibly placed employee of El Grande Hotel. Considering
the importance of Gaa's function in El Grande Hotel, it is
undeniable that Gaa is occupying a position equivalent to that
of a managerial or supervisory position. The word "laborer"
includes everyone who performs any kind of mental or
physical labor, but as commonly and customarily used and
understood, it only applies to one engaged in some form
of manual or physical labor. In Kline vs. Russell it was held
that a laborer, within the statute exempting from garnishment
the wages of a "laborer," is one whose work depends on mere
physical power to perform ordinary manual labor, and not one
engaged in services consisting mainly of work requiring
mental skill or business capacity, and involving the exercise of
intellectual faculties. Article 1708 used the word "wages" and
not "salary" in relation to "laborer" when it declared what are
to be exempted from attachment and execution. The
term "wages" as distinguished from "salary", applies to
the compensation for manual labor, skilled or unskilled, paid
at stated times, and measured by the day, week, month,
or season, while "salary" denotes a higher degree
of employment, or a superior grade of services, and implies a
position of office: by contrast, the term wages " indicates
considerable pay for a lower and less responsible character of
employment, while "salary" is suggestive of a larger and more
important service. Bell vs. Indian Livestock Co it was held
that salary is understood to relate to position of office, to be
the compensation given for official or other service,
as distinguished from 'wages', the compensation for labor."
Persons belonging to this class usually look to the reward of a
day's labor for immediate or present support, and such
persons are more in need of the exemption than any others.
RULING:
IN VIEW OF THE FOREGOING, We find the present
petition to be without merit and hereby AFFIRM the decision
of the Court of Appeals, with costs against petitioner.
SO ORDERED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
SLL INTERNATIONAL CABLES SPECIALIST and SONNY
L. LAGON, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, 4th
DIVISION, ROLDAN LOPEZ, EDGARDO ZUÑIGA and
DANILO CAÑETE, Respondents.
G.R. No. 172161
March 2, 2011
Mendoza, J.:
FACTS:
Respondents were supposedly employed by
petitioner as project employees in 11996, 1997, 1998, and
1999. They were paid less than the minimum wage for the
four periods of their employment. During their 4th
employment, Lagon, the employer, due to economic
constraints, had to cut down on the overtime work of the
employees. Thus, when respondent-employees asked for
overtime work, Lagon had to refuse them, and told them that
if they insist, they would have to go home at their own
expense and that they would not be given any more time nor
be allowed to stay in their quarters. The case was brought
before the Labor Arbiter, on a complaint for illegal dismissal,
non-payment of wages, non-payment of 13th month pay,
among other things, against the employer. The employer
reasoned that the employees were project employees, since
they were employed for a specific undertaking, and thus were
not regular employees entitled to minimum wage. Further, the
employer reasoned that the employees were actually paid
above the minimum wage, since the allowances for snacks,
lodging house, electricity, water, and transportation should be
included in the wages.
The LA opined that private respondents were regular
employees because they were repeatedly hired by petitioners
and they performed activities which were usual, necessary
and desirable in the business or trade of the employer. With
regard to the underpayment of wages, the LA found that
private respondents were underpaid. It ruled that the free
board and lodging, electricity, water, and food enjoyed by
them could not be included in the computation of their wages
because these were given without their written consent. The
LA, however, found that petitioners were not liable for illegal
dismissal.The LA viewed private respondent's act of going
home as an act of indifference when petitioners decided to
prohibit overtime work. The NLRC and CA affirmed and ruled
against the employer.
ISSUE:
Whether or not the employees entitled to minimum
wage?
Whether or not the free board and lodging, electricity,
water, and food enjoyed by the employees be included in the
computation of the wages
RATION DECIDENDI:
110
Preliminarily, the Court noted that the case involves
factual disputes decided by the trial courts, whose decisions
the Court cannot disturb. Settled is the fact that decisions by
labor arbiters, due to their expertise, cannot be disturbed and
are accorded respect and finality when supported by
substantial evidence. Thus it cannot decide on the issue of
whether the employees are project or regular employees, and
must affirm the ruling that they are regular employees. In any
case, project employees are entitled to the minimum wage,
since they are not among the exclusions enumerated in the
Labor Code Implementing Rules.
On the issue of whether the facilities should be included as
wages, a four-pronged test must be completed: 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. Mere availment
is not sufficient to allow deductions from employees’ wages.
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
employees’ 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.
RULING:
WHEREFORE, the petition is DENIED. The temporary
restraining order issued by the Court on November 29, 2006
is deemed, as it is hereby ordered, DISSOLVED.
SO ORDERED.
KAMAYA POINT HOTEL, petitioner, vs.NATIONAL
LABOR RELA TIONS COMMISSION, FEDERA TION OF
FREE WORKERS and MEMIA QUIAMBAO, respondent.
G.R. No. 75289
August 31, 1989
FERNAN, C.J.:
Facts:
Respondent Memia Quiambao with thirty others who are
members of private respondent Federation of Free
Workers (FFW) were employed by petitioner as hotel
crew . On the basis of the profitability of the company's
business operations, management granted a 14th month
pay to its employees starting in 1979. In January 1982,
operations ceased to give way to the hotel's conversion
into a training center for Libyan scholars. However, due
totechnical and financing problems, the Libyans pre-
terminated the program which the company suffered losses.
In a couple of months it effected a retrenchment program until
finally on January 7, 1984, it totally closed its business.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
In 1983, private respondent filed withthe Ministry of
Labor and Employmenta complaint against petitioner for
illegal suspension, violation of the CBA and non-payment
of the 14thmonth pay for the year 1982 . After the hearing,
Labor Arbiter ordered the payment of 14th month and other
monetary equivalent of benefits mentioned in the CBA. On
appeal, the National Labor Relations Commission (NLRC)
set aside the award of monetary benefits under the CBA but
affirmed the grant of the 14th month. This 14th month payis
now an existing benefit which cannot be withdrawn without
violating article 100 of the Labor Code. To allow its withdrawal
now would certainly amount to a diminution of existing
benefits which complainants are presently enjoying. Hence,
this instant petition.
Issue:
Whether or not the private respondents are entitled to a 14th
month pay?
Ratio Decidendi:
We find it difficult to comprehend why the NLRC and the
Labor Arbiter, despite their admission that the 14th month
pay has no contractual or legal basis, still chose to rule
in favor of private respondents. It is patently obvious
thatArticle 100 is clearly without applicability. The date of
effectivity of the Labor Code is May 1, 1974. In the case at
bar, petitioner extended its 14th month pay beginning 1979
until 1981. What is demanded is payment of the 14th month
pay for 1982. Indubitably from these facts alone, Article 100
of the Labor Code cannot apply.Also contractually, as gleaned
from the collective bargaining agreement between
management and the union, there is no stipulation as to
such extra remuneration. Evidently, this omission is an
acknowledgment that such benefit is entirely contilagent or
dependent on the profitability of the company's operations
Verily , a 14th month pay is a misnomer because it is
basically a bonus and, therefore, gratuitous in nature.
The granting of the 14th month pay is a management
prerogative which cannot be forced upon the employer.
It is something given in addition to what is ordinarily
received by or strictly due the recipient. It is a gratuity to
which the recipient has no right to make a demand.
Ruling:
WHEREFORE, the petition is hereby GRANTED. The portion
of the decision of the National Labor Relations Commission
dated June 25, 1986 ordering the payment of 14th month pay
to private respondents is set aside.
NORMA MABEZA, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, PETER NG/HOTEL
SUPREME, respondents.
G.R. No. 118506
April 18, 1997
KAPUNAN, J.:
Facts:
Petitioner Mabeza contends that she and her co-employees at
the Hotel Supreme were asked by the hotel's management to
sign an instrument attesting to the latter's compliance with
minimum wage and other labor standard provisions of law.
Petitioner signed the affidavit but refused to go to the City
Prosecutor's Office to swear to the veracity and contents of
the affidavit as instructed by management. According to her,
respondent strongly chided her for refusing to attest to the
affidavit. She thereafter reluctantly filed a leave of absence
from her job which was denied by management. When she
111
attempted to return to work, she was informed not report to
work and, instead, continue with her unofficial leave of
absence. Consequently, filed a complaint for illegal dismissal.
In his defense, respondent Peter Ng alleged that petitioner
surreptitiously left (her job) without notice to the
management" and that she actually abandoned her work.
Eleven (11) months after the original complaint for illegal
dismissal was filed, private respondent raised a new ground,
loss of confidence, which was supported by a criminal
complaint for Qualified Theft.
Issue:
Whether or not the dismissal by the private respondent of
petitioner constitutes an unfair labor practice.
Ratio Decidendi:
It is settled that in termination cases the employer bears the
burden of proof to show that the dismissal is for just cause,
the failure of which would mean that the dismissal is not
justified and the employee is entitled to reinstatement. It is
crystal clear that the circumstances upon which private
respondent anchored his claim that petitioner "abandoned"
her job were not enough to constitute just cause to sanction
the termination of her services under Article 283 of the Labor
Code. For abandonment to arise, there must be concurrence
of two things: 1) lack of intention to work; and 2) the presence
of overt acts signifying the employee's intention not to work.
Loss of confidence as a just cause for dismissal was never
intended to provide employers with a blank check for
terminating their employees. Such a vague, all-encompassing
pretext as loss of confidence, if unqualifiedly given the seal of
approval by this Court, could readily reduce to barren form
the words of the constitutional guarantee of security of
tenure. Having this in mind, loss of confidence should ideally
apply only to cases involving employees occupying positions
of trust and confidence or to those situations where the
employee is routinely charged with the care and custody of
the employer's money or property.
Without doubt, the act of compelling employees to sign an
instrument indicating that the employer observed labor
standards provisions of law when he might have not, together
with the act of terminating or coercing those who refuse to
cooperate with the employer's scheme constitutes unfair labor
practice.
Ruling:
WHEREFORE, premises considered, the RESOLUTION of the
National Labor Relations Commission dated April 24, 1994 is
REVERSED and SET ASIDE, with costs.
STATES MARINE CORPORATION and ROYAL LINE,
INC., petitioners, vs. CEBU SEAMEN'S ASSOCIATION,
INC., respondent. Pedro B. Uy Calderon for petitioners.
Gaudioso C. Villagonzalo for
respondent.
G.R. No. L-12444
February 28, 1963
PAREDES, J.:
Facts:
In a complaint filed by the herein respondent, the Union
alleged that the officers and men working on board the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
petitioners' vessels have not been paid their sick leave,
vacation leave and overtime pay and that after the Minimum
Wage Law had taken effect, the petitioners required their
employees on board their vessels, to pay the sum of P.40 for
every meal, while the masters and officers were not required
to pay their meals.
In their defense, that petitioners argued that the company
have suffered financial losses in the operation of their vessels
and that there is no law which provides for the payment of
sick leave or vacation leave to employees or workers of private
firms and that in enacting Rep. Act No. 602 (Minimum Wage
Law), the Congress had in mind that the amount of P.40 per
meal, furnished the employees should be deducted from the
daily wages. The CIR rendered a decision in favor of the
respondent union. Hence, the instant petition.
Issue:
Whether or not the “meals” are deductible from the salaries
in view of the passage of the Minimum Wage Law.
Ratio Decidendi:
We hold that such deductions are not authorized. Section 3,
par. f, of the Minimum Wage Law, (R.A. No. 602), provides as
follows — (f) Until and unless investigations by the Secretary
of Labor on his initiative or on petition of any interested party
result in a different determination of the fair and reasonable
value, the furnishing of meals shall be valued at not more than
thirty centavos per meal for agricultural employees and not
more than forty centavos for any other employees covered by
this Act…”
It would appear that there exists a contradiction between the
provisions of section 3(f) and section 19 of Rep. Act No. 602;
but from a careful examination of the same, it is evident that
Section 3(f) constitutes the general rule, while section 19 is
the exception. It is argued that the food or meals given to the
deck officers, marine engineers and unlicensed crew members
in question, were mere "facilities" which should be deducted
from wages, and not "supplements" which, according to said
section 19, should not be deducted from such wages, because
it is provided therein: "Nothing in this Act shall deprive an
employee of the right to such fair wage..or in reducing
supplements furnished on the date of enactment."
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 criterion is not so much with the kind of the
benefit or item (food, lodging, bonus or sick leave) given, but
its purpose. Considering, therefore, as definitely found by the
respondent court that the meals were freely given to crew
members prior to August 4, 1951, while they were on the high
seas "not as part of their wages but as a necessary matter in
the maintenance of the health and efficiency of the crew
personnel during the voyage", the deductions therein made
for the meals given after, should be returned to them, and the
operator of the coastwise vessels affected should continue
giving the same benefit.
RULING:
In view hereof, the petition is dismissed, with costs against
the petitioners.
TRADERS ROYAL BANK, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION & TRADERS ROYAL
BANK EMPLOYEES UNION, respondents.
G.R. No. 88168
August 30, 1990
GRIÑO-AQUINO, J.:
Facts:
112
In 1986, the Union filed a letter-complaint against TRB with
the Bureau of Labor Relations which was later on Certified by
the Secretary of Labor for resolution, claiming diminution of
benefits enjoyed by the employees since time immemorial,
e.g. mid-year and yearend bonus. Petitioner, on the other
hand, insisted that it had paid the employees holiday pay. The
practice of giving them bonuses at year's end, would depend
on how profitable the operation of the bank had been.
Generally, the bonus given was two (2) months basic mid-year
and two (2) months gross end-year.
The NLRC rendered a decision ordering respondent bank to
pay petitioner members-employees holiday differential, and
mid-year bonus differential for 1986. A motion for
reconsideration was filed by TRB but it was denied. Hence,
this petition for certiorari.
Issue:
Whether or not decrease in the midyear and yearend bonuses
constitutes a diminution of benefits due to employees.
Ratio Decidendi:
Private respondent's contention, that the decrease in the
midyear and year-end bonuses constituted a diminution of the
employees' salaries, is not correct, for bonuses are not part of
labor standards in the same class as salaries, cost of living
allowances, holiday pay, and leave benefits, which are
provided by the Labor Code.
A bonus is "a gratuity or act of liberality of the giver which the
recipient has no right to demand as a matter of right". "It is
something given in addition to what is ordinarily received by
or strictly due the recipient." The granting of a bonus is
basically a management prerogative which cannot be forced
upon the employer "who may not be obliged to assume the
onerous burden of granting bonuses or other benefits aside
from the employee's basic salaries or wages.”
It is clear that the petitioner may not be obliged to pay
bonuses to its employees. The matter of giving them bonuses
over and above their lawful salaries and allowances is entirely
dependent on the profits, if any, realized by the Bank from its
operations during the past year.
In the light of these submissions of the petitioner, the
contention of the Union that the granting of bonuses to the
employees had ripened into a company practice that may not
be adjusted to the prevailing financial condition of the Bank
has no legal and moral bases. Its fiscal condition having
declined, the Bank may not be forced to distribute bonuses
which it can no longer afford to pay and, in effect, be
penalized for its past generosity to its employees.
RULING:
WHEREFORE, the petition for certiorari is granted. The
decision of the National Labor Relations Commission is
modified by deleting the award of bonus differentials to the
employees for 1986. In other respects, the decision is
affirmed. Costs against the respondent union
CEBU INSTITUTE OF TECHNOLOGY (CIT), petitioner, vs.
HON. BLAS OPLE, in his capacity as Minister, Ministry
of Labor and Employment, et.al
G.R. No. L-58870
December 18, 1987
CORTES, J.:
Facts:
The present controversy was precipitated by the claims of
some school personnel for allowances and other benefits and
the refusal of the private schools concerned to pay said
allowances and benefits on the ground that said items should
be deemed included in the salary increases they had paid out
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
of the 60% portion of the proceeds from tuition fee increases
provided for in section 3 (a) of Pres. Decree No. 451. In the
instant case, petitioner filed a Complaint against petitioner CIT
for non-payment of: a) cost of living allowances (COLA), b)
thirteenth (13th) month pay differentials and c) service
incentive leave. The position taken by CIT during the
conference held by the labor management committee was
that it had paid the allowances mandated by various decrees
but the same had been integrated in the teacher's hourly rate.
The Minister of Labor and Employment ruled that the basic
hourly rate designated in the Teachers' Program is regarded
as the basic hourly rate of teachers exclusive of the COLA, and
that COLA should not be taken from the 60% incremental
proceeds of the approved increase in tuition fee. Hence, this
instant petition.
Issue:
Whether or not allowances and other fringe benefits of faculty
members and other school employees may be charged against
the 60% portion of the tuition fee increases provided for in
section 3(a) of Pres. Dec. No. 451.
Ratio Decidendi:
Section 3(a) of Pres. Dec. No. 451 imposes among the
conditions for the approval of tuition fee increases, the
allocation of 60% per cent of the incremental proceeds
thereof for increases in salaries or wages of school personnel
and not for any other item such as allowances or other fringe
benefits.
As aptly put by the Court in University of Pangasinan Faculty
Union v. University of Pangasinan, supra: “The sixty (60%)
percent incremental proceeds from the tuition increase are to
be devoted entirely to wage or salary increases which means
increases in basic salary. The law cannot be construed to
include allowances which are benefits over and above the
basic salaries of the employees. To charge such benefits to
the 60% incremental proceeds would be to reduce the
increase in basic salary provided by law, an increase intended
also to help the teachers and other workers tide themselves
and their families over these difficult economic times.”
In the light of existing laws which exclude allowances from
the basic salary or wage in the computation of the amount of
retirement and other benefits payable to an employee, this
Court will not adopt a different meaning of the terms "salaries
or wages" to mean the opposite, i.e. to include allowances in
the concept of salaries or wages.
RULING:
WHEREFORE, the Court rules: In G.R. No. 58870, the Order
of respondent Minister of Labor and Employment is
SUSTAINED insofar as it ordered petitioner Cebu Institute of
Technology to pay its teaching staff. (1) Cost of living
allowance under Pres. Dec.Nos.525 and 1123; (2) Cost of
living allowance under Pres. Dec. Nos. 1614, 1634, 1678 and
1713; and (3) Service incentive leave due them.
ATOK-BIG WEDGE MUTUAL BENEFIT ASSOCIATION,
petitioner, vs. A TOK-BIG WEDGE MINING COMPANY,
INCORPORATED, respondents. Pablo C. Sanidad for
petitioner. Roxas and Sarmiento for respondents.
G.R. No. L-7349
July 19, 1955
REYES, J. B. L., J.:
113
Facts:
The petitioner labor union submitted to the respondents
several demands, among which was an increase in daily wage.
The matter was referred to the CIR for arbitration and
settlement. In 1951, the Court rendered a decision fixing the
minimum wage which the mining company appealed from
(G.R. No. L-5276). Subsequently, the respondent filed an
urgent petition for authority to stop operations and lay off
employees and laborers as the continued operation of the
company would lead to its immediate bankruptcy and
collapse. To avert the closure, the parties were convened for
voluntary conciliation which, after lengthy discussion, arrived
at an agreement (October 1952) fixing minimum wage and
provision of facilities to be charged in full or partially by the
respondent, against laborer or employee, as it may see fit
pursuant to the exigencies of its operation.
Later, Case No. G.R. No. L-5276 was decided by this Court
affirming the decision of the CIR fixing the minimum cash
wage of the laborers and employees at P3.20 cash, without
rice ration, or P2.65, with rice ration. In June 1953, the labor
union filed a petition for the enforcement of the terms of the
agreement of October 29, 1952, as allegedly modified by the
decision of this Court in G.R. No. L-5276 and the provisions of
the Minimum Wage Law, which has since taken effect, praying
for the payment of the minimum cash wage of P3.45 a day
with rice ration, or P4.00 without rice ration, and the payment
of differential pay from August 4, 1952, when the award
became effective. Petitioner argues that to allow the
deductions stipulated in the Agreement of October 1952 from
the minimum daily wage would be a waiver of the minimum
wage fixed by the law and hence null and void, since RA 602,
section 20, provides that "no agreement or contract, oral or
written, to accept a lower wage or less than any other under
this Act, shall be valid". Petitioner also argues that to allow
the deductions of the facilities would be contrary to the
mandate of RA 602 prohibiting reduction in supplements
furnished on the date of enactment.
Issue:
Whether or not deductions stipulated in agreement from the
minimum wage is void.
Ratio Decidendi:
An agreement to deduct certain facilities received by the
laborers from their employer is not a waiver of the minimum
wage fixed by the law. Wage, as defined by Sec. 2 of RA 602,
"includes the fair and reasonable value as determined by the
Secretary of Labor, of board, lodging, or other facilities
customarily furnished by the employer to the employee."
The meaning of the term "supplements" has been fixed by the
Code of Rules and Regulations promulgated by the Wage
Administration Office to implement the Minimum Wage Law
as: extra renumeration or benefits received by wage earners
from their employees and include but are not restricted to pay
for vacation and holidays not worked; paid sick leave or
maternity leave; overtime rate in excess of what is required
by law; sick, pension, retirement, and death benefits; profit-
sharing; family allowances; Christmas, war risk and cost-of-
living bonuses; or other bonuses other than those paid as a
reward for extra output or time spent on the job.
"Supplements", therefore, constitute extra renumeration or
special privileges or benefits given to or received by the
laborers over and above their ordinary earnings or wages.
Facilities, on the other hand, are items of expense necessary
for the laborer's and his family's existence and subsistence, so
that by express provision of the law (sec. 2 [g]) they form part
of the wage and when furnished by the employer are
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
deductible therefrom since if they are not so furnished, the
laborer would spend and pay for them just the same. It is thus
clear that the facilities mentioned in the agreement of October
29, 1952 do not come within the term "supplements" as used
in Art. 19 of the Minimum Wage Law.
Ruling:
Finding no reason to sustain the present petition for review,
the same is, therefore, dismissed, with costs against the
petitioner Atok-Big Wedge Mutual Benefit Association
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,
INC., petitioner,
vs.
HON. RUBEN D. TORRES, as Secretary of the
Department of Labor & Employment, and JOSE N.
SARMIENTO, as Administrator of the PHILIPPINE
OVERSEAS EMPLOYMENT
ADMINISTRATION, respondents.
G.R. No. 101279
August 6, 1992
GRIÑO-AQUINO, J.:
FACTS:
As a result of published stories regarding the abuses
suffered by Filipino housemaids employed in Hong Kong, then
DOLE Secretary Ruben Torres issued Department Order
No.16, Series of 1991, temporarily suspending the
recruitment by private employment agencies of Filipino
domestic helpers going to Hong Kong. The DOLE itself,
through the POEA took over the business of deploying such
Hong Kong-bound workers. The POEA Administrator also
issued Memorandum Circular No. 37, Series of 1991, on the
processing of employment contracts of domestic workers for
Hong Kong. The said Circular and Order were allegedly not
published hence, cannot be enforces and implemented.
114
ISSUE:
Whether or not the said DOLE Circulars should not
be implemented for their lack of publication and filing with the
Office of the National Administrative Register.
RATIO DECIDENDI:
Art. 5. Rules and Regulations. — The Department of
Labor and other government agencies charged with the
administration and enforcement of this Code or any of its parts
shall promulgate the necessary implementing rules and
regulations. Such rules and regulations shall become effective
fifteen (15) days after announcement of their adoption in
newspapers of general circulation.
RULING:
The Court held that the questioned circulars are therefore a
valid exercise of the police power as delegated to the
executive branch of Government.
Nevertheless, they are legally invalid, defective and
unenforceable for lack of power publication and filing in the
Office of the National Administrative Register as required in
Article 2 of the Civil Code, Article 5 of the Labor Code and
Sections 3(1) and 4, Chapter 2, Book VII of the Administrative
Code of 1987 which provide:
xxxxx
Art. 5. Rules and Regulations. — The Department of Labor
and other government agencies charged with the
administration and enforcement of this Code or any of its parts
shall promulgate the necessary implementing rules and
regulations. Such rules and regulations shall become effective
fifteen (15) days after announcement of their adoption in
newspapers of general circulation. (Emphasis supplied, Labor
Code, as amended.)
Xxxxx
The Court also reiterated the case of Tañada vs. Tuvera, 146
SCRA 446 stating:
. . . Administrative rules and regulations must also be
published if their purpose is to enforce or implement existing
law pursuant also to a valid delegation. (p. 447.)
Interpretative regulations and those merely internal in nature,
that is, regulating only the personnel of the administrative
agency and not the public, need not be published. Neither is
publication required of the so-called letters of instructions
issued by administrative superiors concerning the rules or
guidelines to be followed by their subordinates in the
performance of their duties. (p. 448.)
We agree that publication must be in full or it is no publication
at all since its purpose is to inform the public of the content
of the laws. (p. 448.)
For lack of proper publication, the administrative circulars in
question may not be enforced and implemented.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
SHELL PHILIPPINES, INC., plaintiff-appellee,
vs.
CENTRAL BANK OF THE PHILIPPINES, defendant-
appellant.
G.R. No. L-51353
June 27, 1988
GUTIERREZ, JR., J.:
FACTS:
On May 1, 1970, Congress approved the Act
imposing a stabilization tax on consignments abroad (RA
6125) that there shall be imposed, assessed and collected a
stabilization tax on the gross F.O.B. peso proceeds, based on
the rate of exchange prevailing at the time of receipt of such
proceeds, whether partial or total, of any exportation. And
that "Any export products the aggregate annual F.O.B. value
of which shall exceed five million United States dollars in any
one calendar year during the effectivity of this Act shall
likewise be subject to the rates of tax in force during the fiscal
years following its reaching the said aggregate value."
The appellee, Shell Philippines reach 5 million dollars
of their byproduct petroleum, the Monetary Board issued its
Resolution No. 47 to the stabilization tax effective January 1,
1972. Under the Central Bank Circular No. 309, implemented
by Resolution No. 47, appellee had to pay the stabilization tax
beginning January 1, 1972, which it did under protest. Shell
Philippines later filed a suit against Central Bank praying that
the resolution be declared null and void. The lower court
sustained that the resolution as void. The trial court opined
mentioning the difference between calendar year and fiscal
year wherein calendar year refers to one year starting from
January to December. Fiscal year, as it is usually and
commonly used, refers to the period covered between July
1 of a year to June 30 of the following year. The Central
appealed the above cited decision of the trial court.
ISSUE:
Whether or not Monetary Board Resolution No. 47 is
null and void?
RATIO DECIDENDI:
Administrative regulations adopted under legislative
authority by a particular department must be in harmony with
the provisions of the law, and should be for the sole purpose
of carrying into effect its general provisions. By such
regulations, of course, the law itself cannot be extended. (U.S.
v. Tupasi Molina, supra). An administrative agency cannot
amend an act of Congress (Santos v. Estenzo, 109 Phil. 419,
115
422; Teoxon v. Members of the Board of Administrators, L-
25619, June 30, 1970, 33 SCRA 585; Manuel v. General
Auditing Office, L-28952, December 29, 1971,42 SCRA 660;
Deluao v. Casteel, L-21906, August 29, 1969, 29 SCRA 350).
The rule-making power must be confined to details for
regulating the mode or proceeding to carry into effect the law
as it has been enacted. The power cannot be extended to
amending or expanding the statutory requirements or to
embrace matters not covered by the statute. Rules that
subvert the statute cannot be sanctioned. (University of Santo
Tomas v. Board of Tax Appeals, 93 Phil. 376, 382, citing 12
C.J. 845-46. As to invalid regulations, see Collector of Internal
Revenue v. Villamor, 69 Phil. 319; Wise & Co. v. Meer, 78 Phil.
665, 676; Del Mar v. Phil. Veterans Administration, L-27299,
June 27, 1973, 51 SCRA 340, 349).
RULING:
While it is true that under the same law the Central
Bank was given the authority to promulgate rules and
regulations to implement the statutory provision in question
but its authority is limited only to carrying into effect what the
law being implemented provides. The trial court was correct
in declaring that "Monetary Board Resolution No. 47 is void
insofar as it imposes the tax mentioned in Republic Act No.
6125 on the export seria residue of (plaintiff) the aggregate
annual F.O.B., value of which reached five million United
States dollars in 1971 effective on January 1, 1972." The said
resolution runs counter to the provisions of R.A. 6125 which
provides that "(A)ny export product the aggregate annual
F.O.B. value of which shall exceed five million United States
dollars in any one calendar year during the effectivity of this
Act shall likewise be subject to the rates of tax in force during
the fiscal year following its reaching the said aggregate value."
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES'
UNION (IBAAEU), petitioner,
vs.
HON. AMADO G. INCIONG, Deputy Minister, Ministry
of Labor and INSULAR BANK OF ASIA AND
AMERICA, respondents.
G.R. No. L- 52415
October 23, 1984
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
MAKASIAR, J.:
FACTS:
Petitioner filed a complaint against the respondent
bank for the payment of holiday pay before the then
Department of Labor, National Labor Relations Commission,
Regional Office No. IV in Manila. Labor Arbiter Ricarte T.
Soriano rendered a decision in the above-entitled case,
granting petitioner's complaint for payment of holiday pay.
The records disclosed that employees of respondent bank
were not paid their wages on unworked regular holidays as
mandated by the Code, particularly Article 208. Accordingly,
on February 16, 1976, by authority of Article 5 of the same
Code, the Department of Labor (now Ministry of Labor)
promulgated the rules and regulations for the implementation
of holidays with pay. The controversial section thereof reads:
Sec. 2. Status of employees paid by the month. -
Employees who are uniformly paid by the month,
irrespective of the number of working days therein,
with a salary of not less than the statutory or
established minimum wage shall be presumed to be
paid for all days in the month whether worked or not.
For this purpose, the monthly minimum wage shall
not be less than the statutory minimum wage multiplied by
365 days divided by twelve"
On April 23, 1976, Policy Instruction No. 9 was issued
by the then Secretary of Labor (now Minister) interpreting the
above-quoted rule, pertinent. When the petitioner filed motion
for the writ of execution to enforce the arbiters decision
whereby the respondent bank was ordered to pay for the daily
waged for the unworked holiday pay in accordance with the
award, respondent bank opposed claiming that it is based on
and justified by Policy Instruction No. 9 which interpreted the
rules implementing P. D. 850. NLRC dismissed the
respondent’s bank appeal but Minister of Labor through
Deputy Minister Amado Inciong set aside the decision of NLRC
and instead dismissed the instant case for lack of merit.
ISSUE:
Whether or not the decision of a Labor Arbiter
awarding payment of regular holiday pay can still be set aside
on appeal by the Deputy Minister of Labor even though it has
already become final and had been partially executed, the
finality of which was affirmed by the National Labor Relations
Commission sitting en banc, on the basis of an Implementing
Rule and Policy Instruction promulgated by the Ministry of
Labor long after the said decision had become final and
executory.
RATIO DECIDENDI:
Art. 5 of the Labor Code
Art. 5. Rules and Regulations. The Department of
Labor and other government agencies and charged with the
administration and enforcement of this Code or any of its parts
shall promulgate the necessary implementing rules and
regulations. Such rules and regulations shall become effective
fifteen (15) days after announcement of their adoption in
newspapers of general circulation
RULING:
The Court held that Section 2, Rule IV, Book III of
the implementing rules and Policy Instruction No. 9 issued by
the then Secretary of Labor are null and void since in the guise
116
of clarifying the Labor Code's provisions on holiday pay, they
in effect amended them by enlarging the scope of their
exclusion.
Article 94 of the Labor Code, as amended by P.D. 850,
provides:
Art. 94. Right to holiday pay. - (a) Every worker shall
be paid his regular daily wage during regular
holidays, except in retail and service establishments
regularly employing less than ten (10) workers. ...
The coverage and scope of exclusion of the Labor Code's
holiday pay provisions is spelled out under Article 82 thereof
which reads:
Art. 82. Coverage. - The provision of this Title shall
apply to employees in all establishments and
undertakings, whether for profit or not, but not to
government employees, managerial employees, field
personnel members of the family of the employer
who are dependent on him for support domestic
helpers, persons in the personal service of another,
and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations
From the above-cited provisions, it is clear that
monthly paid employees are not excluded from the benefits
of holiday pay. However, the implementing rules on holiday
pay promulgated by the then Secretary of Labor excludes
monthly paid employees from the said benefits by inserting,
under Rule IV, Book Ill of the implementing rules, Section 2
which provides that: "employees who are uniformly paid by
the month, irrespective of the number of working days
therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for
all days in the month whether worked or not.
It is elementary in the rules of statutory construction
that when the language of the law is clear and unequivocal
the law must be taken to mean exactly what it says. In the
case at bar, the provisions of the Labor Code on the
entitlement to the benefits of holiday pay are clear and explicit
- it provides for both the coverage of and exclusion from the
benefits. This violates Article 4 of the Labor Code, which states
that "All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules
and regulations, shall be resolved in favor of labor." Moreover,
it shall always be presumed that the legislature intended to
enact a valid and permanent statute which would have the
most beneficial effect that its language permits (Orlosky vs.
Haskell, 155 A. 112.)
Obviously, the Secretary (Minister) of Labor had
exceeded his statutory authority granted by Article 5 of the
Labor Code authorizing him to promulgate the necessary
implementing rules and regulations.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
TRADERS ROYAL BANK EMPLOYEES UNION-
INDEPENDENT, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and EMMANUEL NOEL A.
CRUZ, respondents.
G.R. No. 120592. March 14, 1997
REGALADO, J.:
Facts:
Petitioner Traders Royal Bank (TRB) Employees Union and
private respondent Atty. Emmanuel Noel A. Cruz, head of the
E.N.A. Cruz and Associates law firm, entered into a retainer
agreement on February 26, 1987 in the amount of P3,000.00
as monthly retainer fee. Said retainer agreement was
terminated by the union on April 4, 1990.
During the existence of that agreement, petitioner union
referred to private respondent the claims of its members for
holiday, mid-year and year-end bonuses against their
employer, Traders Royal Bank (TRB). After the appropriate
complaint was filed by private respondent, the case was
certified by the Secretary of Labor to the National Labor
Relations Commission (NLRC) on March 24, 1987.
The NLRC rendered a decision awarding the employees
holiday pay differential, mid-year bonus differential, and year-
end bonus differential.
Petitioner TRB challenged the NLRC’s decision before the
Supreme Court. The Court modified the decision of the NLRC
by deleting the award of mid-year and year-end bonus
differentials while affirming the award of holiday pay
differential.
The bank voluntarily complied with such final judgment and
paid its concerned employees their respective entitlement in
said sum through their payroll.
After private respondent received the above decision of the
Supreme Court, he notified the petitioner union, the TRB
management and the NLRC of his right to exercise and
enforce his attorney’s lien over the award of holiday pay
differential.
Thereafter, private respondent filed a motion before the Labor
Arbiter for the determination of his attorney’s fees, praying
that 10% of the total award for holiday pay differential
computed by TRB at P175,794.32, or the amount
of P17,579.43, be declared as his attorneys fees, and that
petitioner union be ordered to pay said amount to him.
The labor arbiter granted the motion of private respondent,
ordering petitioner union to pay the attorney’s fees due the
private respondent the amount of P17,574.43 or 10% per
cent of the P175,794.32 awarded by the Supreme Court to its
members.
Petitioner to file an appeal with the NLRC which affirmed the
Labor Arbiter’s decision. The motion for reconsideration filed
by petitioner was denied by the NLRC. Hence the petition.
Petitioner contends that the challenged resolution of the NLRC
is null and void as it is in violation of the retainer agreement.
All attorney’s fees due to private respondent were covered by
the retainer fee of P3,000.00 which it has been regularly
paying to private respondent under their retainer
agreement. To be entitled to the additional attorney’s fees as
provided in Part D (Special Billings) of the agreement, it avers
that there must be a separate mutual agreement between the
union and the law firm prior to the performance of the
additional services by the latter. Since there was no
agreement as to the payment of the additional attorney’s fees,
then it is considered waived.
117
Private respondent contends that a retainer fee is not the
attorney’s fees contemplated for and commensurate to the
services he rendered to petitioner. He asserts that although
there was no express agreement as to the amount of his fees
for services rendered in the case for recovery of differential
pay, Article 111 of the Labor Code supplants this omission by
providing for an award of ten percent (10%) of a money
judgment in a labor case as attorney’s fees.
Issue:
Whether or not the attorney’s fees of private respondent is
included in his monthly retainer fee of P3,000.00.
Ratio Decidendi:
As provided in the retainer agreement, the P3,000.00 which
petitioner pays monthly to private respondent does not cover
the services the latter actually rendered before the labor
arbiter and the NLRC in behalf of the former. As stipulated in
Part C of the agreement, the monthly fee is intended merely
as a consideration for the law firms commitment to render the
services enumerated in Part A (General Services) and Part B
(Special Legal Services) of the retainer agreement.
There are two kinds of retainer fees a client may pay his
lawyer: general retainer, or a retaining fee, and a special
retainer. A general retainer, or retaining fee, is the fee paid to
a lawyer to secure his future services as general counsel for
any ordinary legal problem that may arise in the routinary
business of the client and referred to him for legal action. The
future services of the lawyer are secured and committed to
the retaining client. For this, the client pays the lawyer a fixed
retainer fee which could be monthly or otherwise, depending
upon their arrangement. The fees are paid whether or not
there are cases referred to the lawyer. The reason for the
remuneration is that the lawyer is deprived of the opportunity
of rendering services for a fee to the opposing party or other
parties. In fine, it is a compensation for lost opportunities.
A special retainer is a fee for a specific case handled or special
service rendered by the lawyer for a client.
Evidently, the P3,000.00 monthly fee provided in the retainer
agreement between the union and the law firm refers to a
general retainer, or a retaining fee, as said monthly fee covers
only the law firms pledge, or its commitment to render certain
legal services. The fee is not payment for private respondent’s
execution or performance of the services listed in the contract,
subject to some particular qualifications or permutations
stated there.
Petitioner and private respondent were not able to come into
agreement as to the law firm’s actual performance of services
in favor of the union. Hence, the retainer agreement cannot
control the measure of remuneration for private respondent’s
services.
Petitioner cannot deny that it did benefit from private
respondents efforts as the law firm was able to obtain an
award of holiday pay differential in favor of the union. It
cannot even hide behind the cloak of the monthly retainer
of P3,000.00 paid to private respondent because, as
demonstrated earlier, private respondents actual rendition of
legal services is not compensable merely by said amount.
Private respondent is entitled to an additional remuneration
for pursuing legal action in the interest of petitioner before the
labor arbiter and the NLRC, on top of the P3,000.00 retainer
fee he received monthly from petitioner. The law firm’s
services are decidedly worth more than such basic fee in the
retainer agreement.
Ruling:
WHEREFORE, the impugned resolution of respondent National
Labor Relations Commission affirming the order of the labor
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
arbiter is MODIFIED, and petitioner is hereby ORDERED to pay
the amount of TEN THOUSAND PESOS (P10,000.00) as
attorney’s fees to private respondent for the latter’s legal
services rendered to the former.
LOURDES G. MARCOS, ALEJANDRO T. ANDRADA,
BALTAZARA J. LOPEZ AND VILMA
CRUZ, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and INSULAR LIFE ASSURANCE CO.,
LTD., respondents.
G.R. No. 111744
September 8, 1995
REGALADO, J.:
Petitioners were regular employees of private respondent
Insular Life Assurance Co., Ltd., but they were dismissed on
November 1, 1990 due to redundancy. A special redundancy
benefit was paid to them, which included payment of accrued
vacation leave and 50% of unused current sick leave, special
redundancy benefit, equivalent to 3 months salary for every
year of service; and additional cash benefits, in lieu of other
benefits provided by the company or required by law.
Petitioner Marcos had been in the employ of private
respondent for more than 20 years; petitioner Andrada, more
than 25 years; petitioner Lopez, exactly 30 years; and
petitioner Cruz, more than 20 years.
Petitioners, particularly Baltazara J. Lopez, sent a letter to
respondent company claiming that they should receive their
respective service awards and other prorated bonuses which
they had earned.
Private respondent required petitioners to execute a "Release
and Quitclaim," and petitioners complied but with a written
protest reiterating their previous demand that they were
nonetheless entitled to receive their service awards.
Petitioners inquired from the Legal Service of the
DOLE whether respondent corporation could legally refuse the
payment of their service awards as mandated in their
Employee's Manual.
The labor department issued its opinion holding that: First… a
gratuity or bonus… may become regarded as part of regular
compensation and thus demandable; Second, the award is
earned at the pertinent anniversary date which becomes a
crucial determining factor. Since the award accrues on that
date, it is of no moment that the entitled employee is
separated from service (for whatever cause) before the
awards are physically handed out; Third, even if the award
has not accrued — as when an employee is separated from
service because of redundancy before the applicable 5th year
anniversary, the material benefits of the award must be given,
prorated, by Insular Life. This is especially true (in)
redundancy, wherein he/she had no control; and Fourth, the
fact that you were required to sign "Release and Quitclaim"
does not affect petitioners’ right to the material benefits of the
service award. . . .
Meanwhile, private respondent celebrated its 80th anniversary
wherein the management approved the grant of an
anniversary bonus equivalent to one month salary only to
permanent and probationary employees. Respondent
company announced the grant of performance bonus to both
rank and file employees and supervisory specialist grade and
managerial staff equivalent to 2 months salary and 2.75 basic
salary, respectively, as of December 30, 1990. The
performance bonus, however, would be given only to
permanent employees as of March 30, 1991.
Despite the opinion of the DOLE, private respondent refused
to pay petitioners’ service awards. This prompted the latter to
file a consolidated complaint before the NLRC Labor Arbiter,
for payment of their service awards, including performance
and anniversary bonuses.
In their complaint, petitioners contended that they are
likewise entitled to the performance and anniversary bonuses
L. because, at the time the performance bonus was announced
to be given, they were only short of 2 months service to be
entitled to the full amount thereof as they had already served
the company for 10 months prior to the declaration of the
grant of said benefit. Also, they lacked only 15 days to be
entitled to the full amount of the anniversary bonus when it
was announced to be given to employees as of November 15,
1990.
The labor arbiter ordered respondent company to pay
petitioners their service awards, anniversary bonuses and
prorated performance bonuses, including 10% thereof as
attorney's fees.
Respondent company appealed to the NLRC.
The NLRC upheld the validity of the quitclaim document
executed by petitioners, holding that they were not placed
under duress or were compelled by means of force to sign the
document and that they voluntarily accepted the redundancy
benefit package.
Hence, this petition.
Issues:
1. Whether or not quitclaim document is valid.
2. Whether or not petitioners are entitled to the service
awards.
Ratio Decidendi:
1. The law does not consider as valid any agreement
whereby a worker agrees to receive less
compensation than what he is entitled to recover. A
deed of release or quitclaim cannot bar an employee
from demanding benefits to which he is legally
entitled.
We have heretofore explained that the reason why quitclaims
commonly frowned upon as contrary to public policy, and why
they are held to be ineffective to bar claims for the full
measure of the workers' legal rights, is the fact that the
employer and the employee obviously do not stand on the
same footing. The employer drove the employee to the wall.
The latter must have harsh necessities of life. He thus found
himself in no position to resist money proffered. His, then, is
a case of adherence, not of choice. One thing sure, however,
is that petitioners did not relent on their claim. They pressed
it. They are deemed not have waived any of their
rights. Renuntiatio non praesumitur.
Quitclaims and/or complete releases executed by the
employees do not estop them from pursuing their claims
arising from unfair labor practices of the employer. The basic
reason for this is that such quitclaims and/or complete
releases are against public policy and, therefore, null and void.
The acceptance of termination does not divest a laborer of the
right to prosecute his employer for unfair labor practice
acts. While there maybe possible exceptions to this holding,
we do not perceive any in the case at bar.
In the instant case, when petitioners signed the instrument of
release and quitclaim, they made a written manifestation
reserving their right to demand the payment of their service
awards. The element of total voluntariness in executing that
instrument is negated by the fact that they expressly stated
therein their claim for the service awards, a manifestation
equivalent to a protest and a disavowal of any waiver thereof.
118
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
2. Equity demands that the performance and
anniversary bonuses should be prorated to the
number of months that petitioners actually served
respondent company in the year 1990.
In Insular Life Assurance Co., Ltd., et al. vs. NLRC, et al., this
Court ruled that "as to the service award differentials claimed
by some respondent union members, the company policy shall
likewise prevail, the same being based on the employment
contracts or collective bargaining agreements between the
parties. As the petitioners had explained, pursuant to their
policies on the matter, the service award differential is given
at the end of the year to an employee who has completed
years of service divisible by 5.
A bonus is not a gift or gratuity, but is paid for some services
or consideration and is in addition to what would ordinarily be
given. The term "bonus" as used in employment contracts,
also conveys an idea of something which is gratuitous, or
which may be claimed to be gratuitous, over and above the
prescribed wage which the employer agrees to pay.
If one enters into a contract of employment under an
agreement that he shall be paid a certain salary by the week
or some other stated period and, in addition, a bonus, in case
he serves for a specified length of time, there is no reason for
refusing to enforce the promise to pay the bonus, if the
employee has served during the stipulated time, on the
ground that it was a promise of a mere gratuity.
In the case at bar, equity demands that the performance and
anniversary bonuses should be prorated to the number of
months that petitioners actually served respondent company
in the year 1990.
Ruling:
WHEREFORE, the assailed decision and resolution of
respondent National Labor Relations Commission are hereby
SET ASIDE and the decision of Labor Arbiter Alex Arcadio
Lopez is REINSTATED.
119
JPL MARKETING PROMOTIONS, Petitioner, versus
COURT OF APPEALS, NATIONAL LABOR RELATIONS
COMMISSION, NOEL GONZALES, RAMON ABESA III
and FAUSTINO ANINIPOT, Respondents.
G.R. No. 151966
July 8, 2005
TINGA, J.:
Facts:
JPL Marketing and Promotions (JPL) is a domestic corporation
engaged in the business of recruitment and placement of
workers. On the other hand, private respondents Noel
Gonzales, Ramon Abesa III and Faustino Aninipot were
employed by JPL as merchandisers on separate dates and
assigned at different establishments in Naga City and Daet,
Camarines Norte as attendants to the display of California
Marketing Corporation (CMC), one of petitioner’s clients.
On 13 August 1996, JPL notified private respondents that CMC
would stop its direct merchandising activity in the Bicol
Region, Isabela, and Cagayan Valley effective 15 August
1996. They were advised to wait for further notice as they
would be transferred to other clients. However, on 17 October
1996, private respondents Abesa and Gonzales filed before
the NLRC Sub V complaints for illegal dismissal, praying for
separation pay, 13th month pay, service incentive leave pay
and payment for moral damages. Aninipot filed a similar case.
The Executive Labor Arbiter dismissed the complaints for lack
of merit. The Labor Arbiter found that Gonzales and Abesa
applied with and were employed by the store where they were
originally assigned by JPL even before the lapse of the 6-
month period given by law to JPL to provide private
respondents a new assignment. Thus, they may be considered
to have unilaterally severed their relation with JPL, and cannot
charge JPL with illegal dismissal. The Labor Arbiter held that
it was incumbent upon private respondents to wait until they
were reassigned by JPL, and if after six months they were not
reassigned, they can file an action for separation pay but not
for illegal dismissal. The claims for 13th month pay and service
incentive leave pay was also denied since private respondents
were paid way above the applicable minimum wage during
their employment.
Private respondents appealed to the NLRC. In
its Resolution, the NLRC agreed with the Labor Arbiter’s
finding that when private respondents filed their complaints,
the 6-month period had not yet expired, and that CMC’s
decision to stop its operations in the areas was beyond the
control of JPL, thus, they were not illegally dismissed.
However, it found that despite JPL’s effort to look for clients
to which private respondents may be reassigned it was unable
to do so, and hence they are entitled to separation pay.
The NLRC ordered the payment of separation pay, Service
Incentive Leave pay, and 13th month pay.
JPL filed a petition for certiorari with the Court of Appeals
claiming that private respondents are not by law entitled to
separation pay, service incentive leave pay and 13th month
pay.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
The Court of Appeals dismissed the petition and affirmed
in toto the NLRC resolution.
In the instant petition for review, JPL claims that the case does
not fall under any of the instances where separation pay is
due.
In addition, even assuming arguendo that private
respondents are entitled to the benefits awarded, the
computation thereof should only be from their first day of
employment with JPL up to 15 August 1996, the date of
termination of CMCs contract, and not up to the finality of the
27 July 2000 resolution of the NLRC.
Private respondents claim that their dismissal, while not
illegal, was tainted with bad faith. They allege that they were
deprived of due process because the notice of termination was
sent to them only 2 days before the actual termination.
JPL denied that the notice it sent to them was a notice of
actual termination. The said memo merely notified them of
the end of merchandising for CMC, and that they will be
transferred to other clients. Moreover, JPL is not bound to
observe the 30-day notice rule as there was no dismissal to
speak of.
Issues:
1. Whether or not private respondents are entitled to
separation pay, 13thmonth pay and service incentive
leave pay; and
2. Granting that they are so entitled, what should be
the reckoning point for computing said awards.
Ratio Decidendi:
1. Private respondents are not entitled to separation
pay, but can claim 13th month pay and service
incentive leave pay.
Under Arts. 283 and 284 of the Labor Code, separation pay is
authorized only in cases of dismissals due to any of these
reasons: (a) installation of labor saving devices; (b)
redundancy; (c) retrenchment; (d) cessation of the employer's
business; and (e) when the employee is suffering from a
disease and his continued employment is prohibited by law or
is prejudicial to his health and to the health of his co-
employees. However, separation pay shall be allowed as a
measure of social justice in those cases where the employee
is validly dismissed for causes other than serious misconduct
or those reflecting on his moral character, but only when he
was illegally dismissed. In addition, Sec. 4(b), Rule I, Book VI
of the Implementing Rules to Implement the Labor Code
provides for the payment of separation pay to an employee
entitled to reinstatement but the establishment where he is to
be reinstated has closed or has ceased operations or his
present position no longer exists at the time of reinstatement
for reasons not attributable to the employer.
The common denominator of the above instances is that the
employee was dismissed by the employer. In the instant case,
there was no dismissal to speak of. Private respondents were
simply not dismissed at all, whether legally or illegally. What
they received from JPL was not a notice of termination of
employment, but a memo informing them of the termination
of CMCs contract with JPL. More importantly, they were
120
advised that they were to be reassigned. At that time, there
was no severance of employment to speak of.
Furthermore, Art. 286 of the Labor Code allows the bona fide
suspension of the operation of a business or undertaking for
a period not exceeding 6 months, wherein an
employee/employees are placed on the so-called floating
status. When that floating status of an employee lasts for
more than six months, he may be considered to have been
illegally dismissed from the service. Thus, he is entitled to the
corresponding benefits for his separation, and this would
apply to suspension either of the entire business or of a
specific component thereof.
As clearly borne out by the records of this case, private
respondents sought employment from other establishments
even before the expiration of the 6-month period provided by
law. As they admitted in their comment, all three of them
applied for and were employed by another establishment after
they received the notice from JPL. JPL did not terminate their
employment; they themselves severed their relations with
JPL. Thus, they are not entitled to separation pay.
Nonetheless, JPL cannot escape the payment of 13th month
pay and service incentive leave pay to private respondents.
Said benefits are mandated by law and should be given to
employees as a matter of right.
Presidential Decree No. 851, as amended, requires an
employer to pay its rank and file employees a 13th month pay
not later than 24 December of every year. However,
employers not paying their employees a 13th month pay or its
equivalent are not covered by said law. The term its
equivalent was defined by the laws implementing guidelines
as including Christmas bonus, mid-year bonus, cash bonuses
and other payment amounting to not less than 1/12 of the
basic salary but shall not include cash and stock dividends,
cost-of-living-allowances and all other allowances regularly
enjoyed by the employee, as well as non-monetary benefits.
On the other hand, service incentive leave, as provided in Art.
95 of the Labor Code, is a yearly leave benefit of five (5) days
with pay, enjoyed by an employee who has rendered at least
one year of service. The term at least one year of service shall
mean service within 12 months, whether continuous or broken
reckoned from the date the employee started working.
In this case, private respondents were not given their
13th month pay and service incentive leave pay while they
were under the employ of JPL. Instead, JPL provided salaries
which were over and above the minimum wage. The Court
rules that the difference between the minimum wage and the
actual salary received by private respondents cannot be
deemed as their 13th month pay and service incentive leave
pay as such difference is not equivalent to or of the same
import as the said benefits contemplated by law. Thus, as
properly held by the Court of Appeals and by the NLRC, private
respondents are entitled to the 13th month pay and service
incentive leave pay.
2. While computation for the 13th month pay should
properly begin from the first day of employment, the
service incentive leave pay should start a year after
commencement of service, for it is only then that the
employee is entitled to said benefit. On the other
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
hand, the computation for both benefits should only
be up to 15 August 1996, or the last day that private
respondents worked for JPL.
These benefits are given by law on the basis of the service
actually rendered by the employee, and in the particular case
of the service incentive leave, is granted as a motivation for
the employee to stay longer with the employer. There is no
cause for granting said incentive to one who has already
terminated his relationship with the employer.
Ruling:
WHEREFORE, the petition is GRANTED IN PART.
The Decision and Resolution of the Court of Appeals in CA-
G.R. SP No. 62631 are hereby MODIFIED. The award of
separation pay is deleted. Petitioner is ordered to pay private
respondents their 13th month pay commencing from the date
of employment up to 15 August 1996, as well as service
incentive leave pay from the second year of employment up
to 15 August 1996. No pronouncement as to costs.
HONDA PHILS., INC., petitioner, vs. SAMAHAN NG
MALAYANG MANGGAGAWA SA HONDA, respondent.
G.R. No. 145561.
June 15, 2005
YNARES-SANTIAGO, J.:
Facts:
The case stems from the Collective Bargaining Agreement
(CBA) forged between petitioner Honda and respondent union
Samahan ng Malayang Manggagawa sa Honda (respondent
union) which binds the company to maintain the present
practice in the implementation of the 13th month pay; grant a
14th Month Pay, computed on the same basis as computation
of 13th Month Pay; and continue the practice of granting, in
its discretion, financial assistance to covered employees in
December of each year, of not less than 100% of basic pay.
This CBA is effective until year 2000. In the latter part of 1998,
the parties started re-negotiations for the fourth and fifth
years of their CBA. When the talks between the parties
bogged down, respondent union filed a Notice of Strike on the
ground of bargaining deadlock. Thereafter, Honda filed a
Notice of Lockout.
Respondent union filed a second Notice of Strike on the
ground of unfair labor practice alleging that Honda illegally
contracted out work to the detriment of the workers.
121
Respondent union went on strike and picketed the premises
of Honda. The striking employees were ordered to return to
work and the management accepted them back under the
same terms prior to the strike staged.
The management of Honda issued a memorandum
announcing its new computation of the 13th and 14th month
pay to be granted to all its employees whereby the 31-day
long strike shall be considered unworked days for purposes of
computing said benefits. As per the company’s new formula,
the amount equivalent to 1/12 of the employees’ basic salary
shall be deducted from these bonuses, with a commitment
however that in the event that the strike is declared legal,
Honda shall pay the amount deducted.
Respondent union opposed the pro-rated computation of the
bonuses. Honda sought the opinion of the Bureau of Working
Conditions (BWC) on the issue. BWC agreed with the pro-rata
payment of the 13th month pay as proposed by Honda.
The matter was brought before the Grievance Machinery in
accordance with the parties’ existing CBA but when the issue
remained unresolved, it was submitted for voluntary
arbitration. The Voluntary Arbitrator invalidated Honda’s
computation.
A petition was filed with the Court of Appeals but was
dismissed.
Hence, the instant petition for review.
Issue:
Whether or not the pro-rated computation of the 13th month
pay and the other bonuses in question is valid and lawful.
Ratio Decidendi:
The Court denied the pro-rated computation.
A CBA refers to the negotiated contract between a legitimate
labor organization and the employer concerning wages, hours
of work and all other terms and conditions of employment in
a bargaining unit. As in all contracts, the parties in a CBA may
establish such stipulations, clauses, terms and conditions as
they may deem convenient provided these are not contrary to
law, morals, good customs, public order or public policy. Thus,
where the CBA is clear and unambiguous, it becomes the law
between the parties and compliance therewith is mandated by
the express policy of the law.
In this case, Honda wanted to implement a pro-rated
computation of the benefits based on the no work, no pay
rule. According to the company, the phrase “present practice”
as mentioned in the CBA refers to the manner and requisites
with respect to the payment of the bonuses, i.e., 50% to be
given in May and the other 50% in December of each year.
Respondent union, however, insists that the CBA provisions
relating to the implementation of the 13th month pay
necessarily relate to the computation of the same.
The provisions of the CBA did not state categorically state
whether the computation of the 13th month pay, 14th month
pay and the financial assistance would be based on one full
month’s basic salary of the employees, or pro-rated based on
the compensation actually received. The arbitrator thus
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
properly resolved the ambiguity in favor of labor as mandated
by Article 1702 of the Civil Code. The Court of Appeals
affirmed the arbitrator’s finding and added that the
computation of the 13thmonth pay should be based on the
length of service and not on the actual wage earned by the
worker.
Presidential Decree No. 851, otherwise known as the
13th Month Pay Law, which required all employers to pay their
employees a 13th month pay, was issued to protect the level
of real wages from the ravages of worldwide inflation. Under
the Revised Guidelines on the Implementation of the
13th month pay, the minimum 13th month pay required by law
shall not be less than 1/12 of the total basic salary earned by
an employee within a calendar year, which includes
all remunerations or earnings paid by his employer for
services rendered but does not include allowances and
monetary benefits which are not considered or 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.
The revised guidelines also provided for a pro-ration of this
benefit only in cases of resignation or separation from
work. As the rules state, an employee is also entitled to a pay
in proportion to the length of time he worked during the year,
reckoned from the time he started working during the
calendar year. Thus, the computation of the 13th month pay
should be based on the length of service and not on the actual
wage earned by the worker. In the present case, there being
no gap in the service of the workers during the calendar year
in question, the computation of the 13th month pay should
not be pro-rated but should be given in full.
Lastly, the foregoing interpretation of law and jurisprudence
is more in keeping with the underlying principle for the grant
of this benefit. It is primarily given to alleviate the plight of
workers and to help them cope with the exorbitant increases
in the cost of living. To allow the pro-ration of the 13th month
pay in this case is to undermine the wisdom behind the law
and the mandate that the workingman’s welfare should be the
primordial and paramount consideration. What is more, the
factual milieu of this case is such that to rule otherwise
inevitably results to dissuasion, if not a deterrent, for workers
from the free exercise of their constitutional rights to self-
organization and to strike in accordance with law.
Ruling:
WHEREFORE, the instant petition is DENIED. The decision and
the resolution of the Court of Appeals dated September 14,
2000 and October 18, 2000, respectively, in CA-G.R. SP No.
59052, affirming the decision rendered by the Voluntary
Arbitrator on May 2, 2000, are hereby AFFIRMED in toto.
INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner
versus WATERFRONT INSULAR HOTEL DAVAO,
Respondent
G.R. Nos. 174040-41,
September 22, 2010
PERALTA, J.:
122
Facts:
On November 6, 2000, respondent Waterfront Insular Hotel
Davao sent the DOLE Region XI, Davao City, a Notice of
Suspension of Operations notifying the same that it will
suspend its operations for a period of 6 months due to severe
and serious business losses.
During the period of the suspension, Domy R. Rojas, the
President of Davao Insular Hotel Free Employees Union sent
respondent a number of letters asking management to
reconsider its decision.
Rojas intimated that the members of the Union were
determined to keep their jobs and that they intend to help
respondent by suspension of the CBA for ten years, among
others.
After series of negotiations, respondent and DIHFEU-NFL
signed a MOA wherein respondent agreed to re-open the hotel
subject to certain concessions offered by DIHFEU-NFL in its
Manifesto. Respondent downsized its manpower structure to
100 rank-and-file employees. Moreover, a new pay scale was
also prepared by respondent.
On June 15, 2001, respondent resumed its business
operations.
On August 22, 2002, Darius Joves and Debbie Planas, claiming
to be local officers of the National Federation of Labor, filed a
Notice of Mediation before the National Conciliation and
Mediation Board. The issue raised in said Notice was the
Diminution of wages and other benefits through unlawful
MOA.
Respondent and petitioner signed a Submission Agreement.
Submitted for the resolution of the Voluntary Arbiter was the
determination of whether or not there was a diminution of
wages and other benefits through an unlawful MOA.
Respondent filed with the NCMB a Manifestation that the
persons who filed the instant complaint in the name of the
Insular Hotel Employees Union-NFL have no authority to
represent the Union and in reiterated in another letter its
position that the individual union members have no standing
to file the notice of mediation before the NCMB.
The Voluntary Arbiter rendered a decision in favor of
petitioners. The CA reversed the Voluntary Arbiter’s decision.
Thus, this petition.
Issue:
1. Whether or not the individual members of the Union
have the requisite standing to question the MOA
before the NCMB; and
2. Whether or not the federation to which the local
union is affiliated have the standing to do so.
Ratio Decidendi:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
1. No. Petitioners have not been duly authorized to
represent the union.
In Atlas Farms, Inc. v. National Labor Relations
Commission. Pursuant to Article 260 of the Labor
Code, the parties to a CBA shall name or designate
their respective representatives to the grievance
machinery and if the grievance is unsettled in that
level, it shall automatically be referred to the
voluntary arbitrators designated in advance by
parties to a CBA. Consequently, only disputes
involving the union and the company shall be
referred to the grievance machinery or voluntary
arbitrators.
2. No.
In Coastal Subic Bay Terminal, Inc. v. Department of
Labor and Employment: A local union does not owe
its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its
members. Mere affiliation does not divest the local
union of its own personality, neither does it give the
mother federation the license to act independently of
the local union. It only gives rise to a contract of
agency, where the former acts in representation of
the latter. Hence, local unions are considered
principals while the federation is deemed to be
merely their agent.
As provided under the NCMB Manual of Procedures,
only a certified or duly recognized bargaining
representative and an employer may file a notice of
mediation, declare a strike or lockout or request
preventive mediation. The Collective Bargaining
Agreement (CBA), on the other, recognizes that
DIHFEU-NFL is the exclusive bargaining
representative of all permanent employees. The
inclusion of the word NFL after the name of the local
union merely stresses that the local union is NFL's
affiliate. It does not, however, mean that the local
union cannot stand on its own. The local union owes
its creation and continued existence to the will of its
members and not to the federation to which it
belongs. The spring cannot rise higher than its
source, so to speak.
Ruling:
WHEREFORE, premises considered, the petition
is DENIED. The Decision dated October 11, 2005, and the
Resolution dated July 13, 2006 of the Court of Appeals in
consolidated labor cases docketed as CA-G.R. SP No. 83831
and CA-G.R. SP No. 83657, are AFFIRMED.
123
SEVILLA TRADING COMPANY, petitioner, vs. A.V.A.
TOMAS E. SEMANA, SEVILLA TRADING WORKERS
UNION–SUPER, respondents.
G.R. No. 152456.
April 28, 2004
PUNO, J.:
Facts: For two to three years prior to 1999, petitioner Sevilla
Trading Company added to the base figure, in its computation
of the 13th-month pay of its employees, the amount of other
benefits received by the employees which are beyond the
basic pay: Overtime premium for regular overtime, legal and
special holidays; Legal holiday pay, premium pay for special
holidays; Night premium; Bereavement leave pay; Union leave
pay; Maternity leave pay; Paternity leave pay; Company
vacation and sick leave pay; and Cash conversion of unused
company vacation and sick leave.
Petitioner alleged that it entrusted the preparation of the
payroll to its office staff, including the computation and
payment of the 13th-month pay and other benefits. It then
allegedly discovered the error of including non-basic pay or
other benefits in the base figure used in the computation of
the 13th-month pay of its employees.
Petitioner then effected a change in the computation of the
thirteenth month pay. Now excluded from the base figure
used in the computation of the thirteenth month pay were the
above-cited benefits previously included in the computation.
The daily piece-rate workers represented by private
respondent Sevilla Trading Workers Union – SUPER (Union,
for short), a duly organized and registered union, through the
Grievance Machinery in their Collective Bargaining Agreement,
contested the new computation and reduction of their
thirteenth month pay but failed to resolve the issue.
The issue of "whether or not the exclusion of leaves and other
related benefits in the computation of 13th-month pay is valid"
to respondent Accredited Voluntary Arbitrator Tomas E.
Semana of the National Conciliation and Mediation Board, for
resolution.
The Union alleged that petitioner violated the rule prohibiting
the elimination or diminution of employees’ benefits as
provided for in Art. 100 of the Labor Code, as
amended. Petitioner insisted that the computation of the
13th-month pay is based on basic salary, excluding benefits
such as leaves with pay, as per P.D. No. 851, as amended.
A.V.A. Semana decided in favor of the Union. Petitioner
appealed which the CA dismissed. Hence, this petition. In
addition to its earlier allegations, petitioner claimed that
assuming the old computation will be upheld, the reversal to
the old computation can only be made to the extent of
including non-basic benefits actually included by petitioner in
the base figure in the computation of their 13th-month pay in
the prior years. It must exclude those non-basic benefits
which, in the first place, were not included in the original
computation.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Issue: Whether or not the computation for the employees’
13th month pay which includes other benefits may be
withdrawn by petitioner.
Ratio Decidendi:
Such practice favorable to the employees cannot be
unilaterally withdrawn by the employer without violating Art.
100 of the Labor Code.
When petitioner Sevilla Trading still included over the years
non-basic benefits of its employees, such as maternity leave
pay, cash equivalent of unused vacation and sick leave,
among others in the computation of the 13th-month pay, this
may only be construed as a voluntary act on its part. Putting
the blame on the petitioner’s payroll personnel is inexcusable.
In Davao Fruits Corporation vs. Associated Labor
Unions, “For two to three years prior to 1999, petitioner had
freely, voluntarily and continuously included in the
computation of its employees’ thirteenth month pay, without
the payments for sick, vacation and maternity leave, premium
for work done on rest days and special holidays, and pay for
regular holidays. The considerable length of time the
questioned items had been included by petitioner indicates a
unilateral and voluntary act on its part, sufficient in itself to
negate any claim of mistake.”
A company practice favorable to the employees had indeed
been established and the payments made pursuant thereto,
ripened into benefits enjoyed by them. And any benefit and
supplement being enjoyed by the employees cannot be
reduced, diminished, discontinued or eliminated by the
employer, by virtue of Sec. 10 of the Rules and Regulations
Implementing P.D. No. 851, and Art. 100 of the Labor Code
of the Philippines which prohibit the diminution or elimination
by the employer of the employees’ existing benefits. [Tiangco
vs. Leogardo, Jr., 122 SCRA 267 (1983)]
The grant of these benefits has ripened into company practice
or policy which cannot be peremptorily withdrawn. In the case
at bar, petitioner Sevilla Trading kept the practice of including
non-basic benefits such as paid leaves for unused sick leave
and vacation leave in the computation of their 13th-month pay
for at least two (2) years. This, we rule likewise constitutes
voluntary employer practice which cannot be unilaterally
withdrawn by the employer without violating Art. 100 of the
Labor Code:
Art. 100. 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.
Ruling:
IN VIEW WHEREOF, the petition is DENIED. The Decision
of the Court of Appeals in CA-G.R. SP No. 63086 dated 27
November 2001 and its Resolution dated 06 March 2002 are
hereby AFFIRMED.
124
DAVAO INTEGRATED PORT STEVEDORING SERVICES,
petitioner, vs. RUBEN V. ABARQUEZ, in his capacity as
an accredited Voluntary Arbitrator and THE
ASSOCIATION OF TRADE UNIONS (ATU-TUCP),
respondents.
G.R. No. 102132.
March 19, 1993
ROMERO, J p:
Facts:
Petitioner Davao Integrated Port Stevedoring Services
(petitioner-company) and private respondent ATU-TUCP
(Union) entered into a collective bargaining agreement (CBA)
which, under Sections 1 and 3, Article VIII thereof, provide
for sick leave with pay benefits each year to its employees
who have rendered at least one (1) year of service with the
company, thus:
"ARTICLE VIII
Section 1. Sick Leaves — The Company agrees to
grant 15 days sick leave with pay each year to every
regular non-intermittent worker who already
rendered at least one year of service with the
company. However, such sick leave can only be
enjoyed upon certification by a company designated
physician, and if the same is not enjoyed within one
year period of the current year, any unenjoyed
portion thereof, shall be converted to cash and shall
be paid at the end of the said one year period. And
provided however, that only those regular workers of
the company whose work are not intermittent, are
entitled to the herein sick leave privilege.
xxx xxx xxx
Section 3. — All intermittent field workers of the
company who are members of the Regular Labor
Pool shall be entitled to vacation and sick leaves per
year of service with pay under the following schedule
based on the number of hours rendered including
overtime,
xxx xxx xxx
The commutation of the unenjoyed portion of the sick leave
with pay benefits of the intermittent workers or its conversion
to cash was, however, discontinued or withdrawn when
petitioner-company under a new assistant manager, Mr.
Benjamin Marzo (who replaced Mr. Cecilio Beltran, Jr. upon
the latter's resignation in June 1989), stopped the payment of
its cash equivalent on the ground that they are not entitled to
the said benefits under Sections 1 and 3 of the 1989 CBA.
The Union objected to the said discontinuance of
commutation or conversion to cash of the unenjoyed sick
leave with pay benefits of petitioner's intermittent workers
contending that it is a deviation from the true intent of the
parties that negotiated the CBA; that it would violate the
principle in labor laws that benefits already extended shall not
be taken away and that it would result in discrimination
between the non-intermittent and the intermittent workers of
the petitioner-company.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

125
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

Issue:
Whether or not intermittent workers are entitled to
commutation of their unenjoyed sick leave benefits with pay.
Ratio Decidendi:
A collective bargaining agreement (CBA), as used in Article
252 of the Labor Code, refers to a contract executed upon
request of either the employer or the exclusive bargaining
representative incorporating the agreement reached after
negotiations with respect to wages, hours of work and all
other terms and conditions of employment, including
proposals for adjusting any grievances or questions arising
under such agreement.
A CBA, as a labor contract within the contemplation of Article
1700 of the Civil Code of the Philippines which governs the
relations between labor and capital, 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.
It is thus erroneous for petitioner to isolate Section 1, Article
VIII of the 1989 CBA from the other related section on sick
leave with pay benefits, specifically Section 3 thereof, in its
attempt to justify the discontinuance or withdrawal of the
privilege of commutation or conversion to cash of the
unenjoyed portion of the sick leave benefit to regular
intermittent workers.
Ruling:
WHEREFORE, in view of the foregoing, the petition is
DISMISSED. The award (decision) of public respondent dated
September 10, 1991 is hereby AFFIRMED. No costs.

126
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

DEVELOPMENT BANK OF THE PHILIPPINES, under Articles 2241 and 2242 of the Civil Code, except to the
petitioner, vs. THE NATIONAL LABOR RELATIONS extent that such claims for unpaid wages are already covered
COMMISSION, ONG PENG, ET AL., respondents., by Article 2241, (6)- (claims for laborers’ wages, on the goods
G.R. No. 100264-81, manufactured or the work done); or by Article 2242,(3)-
Jan 29, 1993 (claims of laborers and other workers engaged in the
GUTIERREZ, JR., J. construction, reconstruction or repair of buildings, canals and
other works, upon said buildings, canals and other works.
Since claims for unpaid wages fall outside the scope of Article
Facts:
2241 (6) and 2242 (3), and not attached to any specific
November 14, 1986, private respondents filed with DOLE- property, they would come within the category of ordinary
Daet, Camarines Norte, 17 individual complaints against preferred credits under Article 2244.
Republic Hardwood Inc. (RHI) for unpaid wages and
separation pay. These complaints were thereafter endorsed to
Ruling:
Regional Arbitration Branch of the NLRC since the petitioners
WHEREFORE, the petition is hereby GRANTED. The assailed
had already been terminated from employment.
RHI alleged that it had ceased to operate in 1983 due to the decision of public respondent National Labor Relations
government ban against tree-cutting and that in May 24, Commission dated April 15, 1991 and its resolution dated May
1981, its sawmill was totally burned resulting in enormous 17, 1991 are SET ASIDE. The temporary restraining order
losses and that due to its financial setbacks, RHI failed to pay issued by the Court on July 29, 1991 is made PERMANENT.
its loan with the DBP. RHI contended that since DBP
foreclosed its mortgaged assets on September 24,1985, then
any adjudication of monetary claims in favor of its former
employees must be satisfied against DBP. Private respondent
impleaded DBP.
Labor Arbiter favored private respondents and held RHI and
DBP jointly and severally liable to private respondents. DBP
appealed to the NLRC. NLRC affirmed LA’s judgment. DBP
filed M.R. but it was dismissed.
Issue:
Whether or not private respondents’ separation pay should be
preferred than the DBP’s lien over the RHI’s mortgaged
assets.

Ratio Decidendi:

Article 110 must be read in relation to the Civil Code

concerning the classification, concurrence and preference of
credits, which is application in insolvency proceedings where
the claims of all creditors, preferred or non-preferred, may be
adjudicated in a binding manner. Before the workers’
preference provided by Article 110 may be invoked, there
must first be a declaration of bankruptcy or a judicial
liquidation of the employer’s business.
NLRC committed grave abuse of discretion when it affirmed
the LA’s ruling. DBP’s lien on RHI’s mortgaged assets, being a
mortgage credit, is a special preferred credit under Article
2242 of the Civil Code while the workers’ preference is
an ordinary preferred credit under Article 2244.
A distinction should be made between a preference of credit
and a lien. A preference applies only to claims which do not
attach to specific properties. A lien creates a charge on a
particular property. The right of first preference as regards
unpaid wages recognized by Article 110 does not constitute a
lien on the property of the insolvent debtor in favor of
workers. It is but a preference of credit in their favor, a
preference in application. It is a method adopted to determine
and specify the order in which credits should be paid in the
final distribution of the proceeds of the insolvent’s assets. It is
a right to a first preference in the discharge of the funds of
the judgment debtor.
Article 110 of the Labor Code does not create a lien in favor
of workers or employees for unpaid wages either upon all of
the properties or upon any particular property owned by their
employer. Claims for unpaid wages do not therefore fall at all
within the category of specially preferred claims established

127
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

A.N. BOLINAO, JR., JUAN A. AGSALON, JR., ZOSIMO L.

CARREON AND REYNOLD P. DANNUG, petitioners, vs.
HON. MANUEL S. PADOLINA, PHELPS DODGE (PHILS.)
INC., BANK OF AMERICA, AND DEPUTY SHERIFF
CARLOS G. MAOG, respondents.
G.R. No. 81415
June 6, 1990
PARAS, J.
Facts:
Petitioners A.N. Bolinao, Jr., Reynold P. Dannug, Juan A.
Agsalon, Jr. and Zosimo L. Carreon were all former employees
of Sabena Mining Corporation, which had a copper and gold
project in operation, located in New Bataan, Davao del Norte.
In 1982 and 1983 they were laid off without being recalled.
Petitioners filed a formal complaint for collection of unpaid
salaries, unused accrued vacation and sick leave benefits,
13th month pay and separation pay before the National Labor
Relations Commission (NLRC).
A compromise agreement was entered into by the parties,
wherein petitioners were to be paid on a staggered basis the
collective amount of P385,583.95. The company faithfully
complied with the scheduled payments only up to March, 1985
because it ceased operations effective April 1, 1985. With this
development, petitioners moved for the issuance of a writ of
execution.
The Labor Arbiter issued a writ of execution against the
company to collect the balance of P311,580.14. On June 27,
1985 Deputy Sheriff Antonio P. Soriano garnished the
remaining amount of P150,279.64 in the savings account of
the company at the Development Bank of the Philippines
(DBP). However, the same amount was previously garnished
by two creditors of the company; namely, Bank of America
and Phelps Dodge (Phils.).
Issue:
Whether or not petitioners enjoy preferential right or claim
over the funds of Sabena Mining Corporation.
Ratio Decidendi:
Clear from the provisions of Article 110 of the Labor Code and
Section 10, Rule VIII, Book H of the Revised Rules and
Regulations Implementing the Labor Code, that a declaration
of bankruptcy or a judicial liquidation must be present before
the worker's preference may be enforced. Thus, it was held
that Article 110 of the Labor Code and its implementing rule
cannot be invoked absent a formal declaration of bankruptcy
or a liquidation order.
In the case at bar, there was no showing of any insolvency
proceeding or declaration of bankruptcy or judicial liquidation
that was being filed by Sabena Mining Corporation. It is only
an extra-judicial foreclosure that was being enunciated as
when DBP extra-judicially foreclosed the assets of Sabena
Mining Corporation. Conversely, to hold that Article 110 is also
applicable in extra-judicial proceedings would be putting the
worker in a better position than the State which could only
assert its own prior preference in case of ajudicial proceeding.
Article 110 must not be viewed in isolation and must always
be reckoned with the provisions of the Civil Code
Ruling:
PREMISES CONSIDERED, the petition is hereby DISMISSED
for lack of merit and the questioned Order dated January 5,
1988 issued by the respondent court is hereby AFFIRMED.

128
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

RTG Construction, Inc., petitioner vs. Roberto Facto, WHEREFORE, the petition is PARTLY GRANTED. The
respondent Decision of the Court of Appeals dated August 21, 2003
GR No. 163872, is MODIFIED by deleting the award for backwages. In lieu
Dec 21, 2009 thereof, petitioners are ORDERED to pay respondent nominal
PERALTA, J. damages in the amount of Thirty Thousand Pesos
Facts: (P30,000.00). In all other respects, the assailed Decision and
Private respondent Roberto Facto was employed by RTG Resolution of the Court of Appeals are AFFIRMED.
Construction as helper mechanic. In 1985, he was promoted
to the position of junior mechanic. He was suspended on four
occasions because of various infractions ranging from
absenteeism to creating disturbance in the workplace.
On August 10, 2000, Facto again received a Memorandum of
even date, this time informing him that he was terminated
from his employment effective that same day.
Facto filed a Complaint for illegal dismissal against RTG
Construction. He alleged in his Position Paper that his
termination was illegal, as the same was not based on just or
authorized cause. He also alleged that he was denied his right
to due process because he was not given the chance to
explain his side.
Issue:
Whether or not there was a violation of due process.
Ratio Decidendi:
Yes. There is a violation of due process.
Procedural due process in the dismissal of employees requires
notice and hearing. The employer must furnish the employee
two written notices before termination may be effected. The
first notice apprises the employee of the particular acts or
omissions for which his dismissal is sought, while the second
notice informs the employee of the employer's decision to
dismiss him. The requirement of a hearing, on the other hand,
is complied with as long as there is an opportunity to be heard;
an actual hearing need not necessarily be conducted.
In the present case, while petitioners complied with the
second notice, apprising Facto of petitioner's decision to
terminate him from his employment, the records are bereft of
any evidence to prove that there was compliance with the first
notice as well as with the requirement of a hearing.
Moreover, petitioner failed to afford Facto his right to be heard
in connection with the aforementioned charge. Section 2(d),
Rule 1, Book VI of the Omnibus Rules Implementing the Labor
Code states that:
Sec. 2. Security of Tenure. x x x
(d) In all cases of termination of employment, the following
standards of due process shall be substantially observed:
For termination of employment based on just causes as
defined in Article 282 of the Labor Code:
xxx xxx xxx
A written notice served on the employee specifying the
ground or grounds for termination, and giving said
(i)
employee reasonable opportunity within which to explain
his side.

A hearing or conference during which the employee

concerned, with the assistance of counsel if he so desires,
(ii)
is given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.

A written notice of termination served on the employee,

indicating that upon due consideration of all the
(iii)
circumstances, grounds have been established to justify
his termination.

Ruling:

129
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

COCA-COLA BOTTLERS PHILIPPINES, INC., petitioner,
vs RICKY E. DELA CRUZ, ROLANDO M. GUASIS, MANNY
C. PUGAL, RONNIE L. HERMO, ROLANDO C. SOMERO,
JR., DIBSON D. DIOCARES, and IAN B. ICHAPARE,
respondents.
G.R. No. 184977,
December 7, 2009
BRION, J.
Facts:
Respondents filed two separate complaints for regularization
with money claims against Coca-Cola Bottlers Philippines, Inc.
Before the Labor Arbiter, the respondents alleged that they
are route helpers assigned to work in the petitioner’s trucks.
They go from the Coca-Cola sales offices or plants to customer
outlets; they were hired either directly by the petitioner or by
its contractors, but they do not enjoy the full remuneration,
benefits and privileges granted to the petitioner’s regular sales
force.
They argued that the services they render are necessary and
desirable in the regular business of the petitioner. In defense,
the petitioner contended that it entered into contracts of
services with Peerless and Excellent Partners Cooperative, Inc.
(Excellent) to provide allied services; under these contracts,
Peerless and Excellent retained the right to select, hire,
dismiss, supervise, control and discipline and pay the salaries
of all personnel they assign to the petitioner; in return for
these services, Peerless and Excellent were paid a stipulated
fee.
the company, on the one hand, and Peerless and Excellent,
on the other. The Court of Appeals noted that both the
Peerless and the Excellent contracts show that their obligation
was solely to provide the company with “the services of
contractual employees,” and nothing more. These contracted
services were for the handling and delivery of the company’s
products and allied services. Following D.O. 18-02 and the
contracts that spoke purely of the supply of labor, the Court
of Appeals concluded that Peerless and Excellent were labor-
only contractors unless they could prove that they had the
required capitalization and the right of control over their
contracted workers.
The contractors were not independently selling and
distributing company products, using their own equipment,
means and methods of selling and distribution; they only
supplied the manpower that helped the company in the
handing of products for sale and distribution. In the context
of D.O. 18-02, the contracting for sale and distribution as an
independent and self-contained operation is a legitimate
contract, but the pure supply of manpower with the task of
assisting in sales and distribution controlled by a principal falls
within prohibited labor-only contracting. Consequently, the
contracted personnel, engaged in component functions in the
main business of the company under the latter’s supervision
and control, cannot but be regular company employees.
Ruling:
WHEREFORE, premises considered, we hereby DENY the
petition and accordingly AFFIRM the challenged decision and
resolution of the Court of Appeals in CA-G.R. SP No. 102988.
Costs against the petitioner.

The petitioner posited that there is no employer-employee

relationship between the company and the respondents and
the complaints should be dismissed for lack of jurisdiction on
the part of the NLRC. In reply, the respondents countered that
they worked under the control and supervision of the
company’s supervisors who prepared their work schedules
and assignments. Peerless and Excellent, too, did not have
sufficient capital or investment to provide services to the
petitioner. The respondents thus argued that the petitioner’s
contracts of services with Peerless and Excellent are in the
nature of "labor-only" contracts prohibited by law.

Issue:

Whether or not there was labor-only contracting.

Ratio Decidendi:

Yes. The contract between the principal and the contractor is

not the final word on how the contracted workers relate to the
principal and the purported contractor; the relationships must
be tested on the basis of how they actually operate. The
legitimate job contractor must have the capitalization and
equipment to undertake the sale and distribution of the
manufacturer’s products, and must do it on its own using its
own means and selling methods.

Even before going into the realities of workplace operations,

the Court of Appeals found that the service contracts
themselves provide ample leads into the relationship between

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PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
EMMANUEL BABAS, DANILO T. BANAG, ARTURO V.
VILLARIN, SR., EDWIN JAVIER, SANDI BERMEO, REX
ALLESA, MAXIMO SORIANO, JR., ARSENIO ESTORQUE,
and FELIXBERTO ANAJAO, petitioners, vs LORENZO
SHIPPING CORPORATION, respondent.
G.R. No. 186091,
December 15, 2010
NACHURA, J.
Facts:
Lorenzo Shipping Corporation (LSC) is a duly organized
domestic corporation engaged in the shipping industry. LSC
entered into a General Equipment Maintenance Repair and
Management Services Agreement (Agreement) with Best
Manpower Services, Inc. (BMSI). Under the Agreement, BMSI
undertook to provide maintenance and repair services to LSC’s
container vans, heavy equipment, trailer chassis, and
generator sets. BMSI further undertook to provide checkers
to inspect all containers received for loading to and/or
unloading from its vessels.
Simultaneous with the execution of the Agreement, LSC
leased its equipment, tools, and tractors to BMSI. The period
of lease was coterminous with the Agreement.
BMSI then hired petitioners on various dates to work
at LSC as checkers, welders, utility men, clerks, forklift
operators, motor pool and machine shop workers, technicians,
trailer drivers, and mechanics.
In September 2003, petitioners filed with the Labor Arbiter
(LA) a complaint for regularization against LSC and BMSI. On
October 1, 2003, LSC terminated the Agreement, effective
October 31, 2003. Consequently, petitioners lost their
employment.
BMSI asserted that it is an independent contractor. It averred
that it was willing to regularize petitioners; however, some of
them lacked the requisite qualifications for the job. LSC
averred that petitioners were employees of BMSI and were
assigned to LSC by virtue of the Agreement. BMSI is an
independent job contractor with substantial capital or
investment in the form of tools, equipment, and machinery
necessary in the conduct of its business. The Agreement
between LSC and BMSI constituted legitimate job contracting.
Thus, petitioners were employees of BMSI and not of LSC.
The Labor Arbiter dismissed petitioners’ complaint on
the ground that petitioners were employees of BMSI. It was
BMSI which hired petitioners, paid their wages, and exercised
control over them. The NLRC reversed the Labor Arbiter.
Issue:
Whether or not respondent was engaged in labor-only
contracting.
Ratio Decidendi:
Yes. In De Los Santos v. NLRC, the character of the business,
i.e., whether as labor-only contractor or as job contractor,
should be measured in terms of, and determined by, the
131
criteria set by statute. The parties cannot dictate by the mere
expedience of a unilateral declaration in a contract the
character of their business.
The Court has observed that:
First, petitioners worked at LSC’s premises, and nowhere else.
Other than the provisions of the Agreement, there was no
showing that it was BMSI which established petitioners’
working procedure and methods, which supervised petitioners
in their work, or which evaluated the same. There was
absolute lack of evidence that BMSI exercised control over
them or their work.
Second, LSC was unable to present proof that BMSI had
substantial capital. There was no proof pertaining to the
contractor’s capitalization, nor to its investment in tools,
equipment, or implements actually used in the performance
or completion of the job, work, or service that it was
contracted to render. What is clear was that the equipment
used by BMSI were owned by, and merely rented from, LSC.
Third, petitioners performed activities which were
directly related to the main business of LSC. The work of
petitioners as checkers, welders, utility men, drivers, and
mechanics could only be characterized as part of, or at least
clearly related to, and in the pursuit of, LSC’s business.
Lastly, BMSI had no other client except for LSC, and neither
BMSI nor LSC refuted this finding, thereby bolstering the NLRC
finding that BMSI is a labor-only contractor.
The CA erred in considering BMSI’s Certificate of Registration
as sufficient proof that it is an independent contractor.
Jurisprudence states that a Certificate of Registration issued
by the Department of Labor and Employment is not conclusive
evidence of such status. The fact of registration simply
prevents the legal presumption of being a mere labor-only
contractor from arising.
Ruling:
WHEREFORE, the petition is GRANTED. The Decision and the
Resolution of the Court of Appeals in CA-G.R. SP. No. 103804
are REVERSED and SET ASIDE. Petitioners Emmanuel Babas,
Danilo T. Banag, Arturo V. Villarin, Sr., Edwin Javier, Sandi
Bermeo, Rex Allesa, and Arsenio Estorque are declared
regular employees of Lorenzo Shipping Corporation. Further,
LSC is ordered to reinstate the seven petitioners to their
former position without loss of seniority rights and other
privileges, and to pay full backwages, inclusive of allowances,
and other benefits or their monetary equivalent, computed
from the time compensation was withheld up to the time of
actual reinstatement.
No pronouncement as to costs.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RAMY GALLEGO, petitioner vs. BAYER PHILIPPINES,
INC., DANPIN GUILLERMO, PRODUCT IMAGE
MARKETING, INC., and EDGARDO BERGONIA,
respondents
G.R. No. 179807
July 31, 2009
CARPIO MORALES, J.:
FACTS:
Ramy Gallego was a crop protection technician to promote
and market BAYER products. Petitioner’s employment with
BAYER came to a halt, and sought employment with another
company. BAYER reemployed petitioner through PRODUCT
IMAGE, Respondent Bergonia being President and General
Manager. In 2001, he was directed by Pet Pascual, the newly
assigned BAYER sales representative, to submit a resignation
letter, but he refused; In 2002, he was summoned by his
immediate supervisors and was ordered to quit his
employment to which he refused. He then received a
memorandum that his area of responsibility would be
transferred to Luzon, of which memorandum he sought
reconsideration but to no avail; and that Guillermo and
Bergonia spread rumors that reached the dealers in Antique
to the effect that he was not anymore connected with BAYER
and any transaction with him would no longer be honored.
He filed a complaint for illegal dismissal with NLRC against
respondents BAYER, Guillermo, PRODUCT IMAGE, and
Bergonia. They denied the existence of an employer-
employee relationship between BAYER and petitioner, that his
work was occasioned by Contract of Promotional Services had
executed with PRODUCT IMAGE whereby PRODUCT IMAGE
was to promote and market BAYER products on its own
account and in its own manner and method. That as an
independent contractor, PRODUCT IMAGE retained the
exclusive power of control over petitioner as it assigned full-
time supervisors to exercise control and supervision over its
employees assigned at BAYER. They alleged that petitioner
was a field worker who had no fixed hours and worked under
minimal supervision, his performance being gauged only by
his accomplishment reports duly certified to by BAYER acting
as his de facto supervisor; that petitioner was not
dismissed, but went on official leave, and stopped reporting
for work thereafter; and that petitioner was supposed to have
been reassigned to South Luzon for personnel reorganization
program, but he likewise failed to report to his new work
station. LA held respondents guilty of illegal dismissal
ISSUE:
Whether or not, PRODUCT IMAGE is a labor-only contactor
and BAYER should be deemed petitioners’ principal employer;
and whether petitioner was illegally dismissed from his
employment.
RATIO DECIDENDI:
No. the Court finds substantial evidence to support the finding
of the NLRC that PRODUCT IMAGE is a legitimate job
132
contractor. Permissible job contracting or subcontracting
refers to an arrangement whereby a principal agrees to farm
out with a contractor or subcontractor the performance of a
specific job, work, or service within a definite or
predetermined period, regardless of whether such job, work
or, service is to be performed or completed within or outside
the premises of the principal. Under this arrangement, the
following conditions must be met: (a) the contractor carries
on a distinct and independent business and undertakes the
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 his work except as to the
results thereof; (b) the contractor has
substantial capital or investment; and (c) the agreement
between the principal and contractor or subcontractor assures
the contractual employees entitlement to all labor and
occupational safety and health standards, free exercise of the
right to self-organization, security of tenure, and social
welfare benefits.
The existence of an employer-employee relationship is
determined on the basis of four standards, namely: (a) the
manner of selection and engagement of the putative
employee; (b) the mode of payment of wages; (c) the
presence or absence of power of dismissal; and (d) the
presence or absence of control of the putative employees
conduct. Most determinative among these factors is the so-
called control test.
The presence of the first requisite which refers to selection
and engagement is evidenced by a document entitled Job
Offer, whereby PRODUCT IMAGE offered to hire petitioner as
crop protection technician. On the second requisite regarding
the payment of wages, it was PRODUCT IMAGE that paid the
wages and other benefits of petitioner, pursuant to the
stipulation in the contract between PRODUCT IMAGE and
BAYER that BAYER shall pay PRODUCT IMAGE an amount
based on services actually rendered without regard to the
number of personnel employed by PRODUCT IMAGE; and that
PRODUCT IMAGE shall faithfully comply with the provisions of
the Labor Code and hold BAYER free and harmless from any
claim of its employees arising from the contract. As to the
third requisite which relates to the power of dismissal, and the
fourth requisite which relates to the power of control, both
powers are vested in PRODUCT IMAGE. The Contract of
Promotional Services provides that PRODUCT IMAGE shall
have the power to discipline its employees assigned at BAYER,
such that no control whatsoever shall be exercised by BAYER
over those personnel on the manner and method by which
they perform their duties, and that all directives, complaints,
or observations of BAYER relating to the performance of the
employees of PRODUCT IMAGE shall be addressed to the
latter. The only control measure retained by BAYER over
petitioner was to act as his de facto supervisor. PRODUCT
IMAGE is ineluctably the employer of petitioner.
SC held no evidence that petitioner was dismissed. What it
finds is that petitioner unilaterally stopped reporting for work
before filing a complaint for illegal dismissal. While in cases of
illegal dismissal, the employer bears the burden of proving
that the dismissal is for a valid or authorized cause, the
employee must first establish by substantial evidence the fact
of dismissal.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
WHEREFORE, the petition is, in light of the
foregoing, DENIED.
COCA-COLA BOTTLERS PHILS., INC., Petitioner vs
ALAN M. AGITO, REGOLO S. OCA III, ERNESTO G.
ALARIAO, JR., ALFONSO PAA, JR., DEMPSTER P. ONG,
URRIQUIA T. ARVIN, GIL H. FRANCISCO, and EDWIN
M. GOLEZ, Respondents.
G.R. No. 179546
February 13, 2009
CHICO-NAZARIO, J.:
FACTS:
In 2002, respondents filed before the NLRC two complaints
against petitioner, Interserve, Peerless Integrated Services,
Inc., Better Builders, Inc., and Excellent Partners, Inc. for
reinstatement with backwages, regularization, nonpayment of
13th month pay, and damages. Respondents alleged that they
were salesmen assigned at the Lagro Sales Office, but were
not regularized. Their employment was terminated without
just cause and due process. LA held that respondents were
employees of Interserve and not of petitioner. LA placed
considerable weight on the fact that Interserve was registered
with the DOLE as an independent job contractor. It was
Interserve that kept and maintained respondent’s employee
records, including their Personal Data Sheets; Contracts of
Employment; and remittances to SSS, Medicare and Pag-ibig
Fund, thus, further supporting the LA finding that respondents
were employees of Interserve. She ruled that the circulars,
rules and regulations which petitioner issued from time to time
to respondents were not indicative of control as to make the
latter its employees.
NLRC affirmed LA Decision and pronounced that no employer-
employee relationship existed between petitioner and
respondents. It reiterated the findings that Interserve was an
independent contractor as evidenced by its substantial assets
and registration with the DOLE. CA reversed the NLRC
decision. The CA deemed that the respondents, who were
133
tasked to deliver, distribute, and sell Coca-Cola products,
carried out functions directly related and necessary to the
main business of petitioner. The appellate court finally noted
that certain provisions of the Contract of Service between
petitioner and Interserve suggested that the latters
undertaking did not involve a specific job, but rather the
supply of manpower.
ISSUE:
Whether or not, Interserve is a legitimate job contractor.
RATIO DECIDENDI:
No, Intersevere is engaged in prohibited, labor-contracting.
Article 106. Contractor or subcontractor. - Whenever an
employer enters into a contract with another person for the
performance of the formers work, the employees of the
contractor and of the latters subcontractor, if any, shall be
paid in accordance with the provisions of this Code. In the
event that the contractor or subcontractor fails to pay the
wages of his employees in accordance with this Code, the
employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent
of the work performed under the contract, in the same
manner and extent that he is liable to employees directly
employed by him. There is labor-only contracting where the
person supplying workers to an employee does not have
substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and
the workers recruited and placed by such persons are
performing activities which are directly related to the principal
business of such employer.
In such cases, the person or intermediary shall be considered
merely as an agent 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. Rules Implementing Articles
106-109 of the Labor Code, as amended, provides the
guidelines in determining whether labor-only contracting
exists provides in Section 5 that Prohibition against labor-only
contracting. Labor-only contracting is hereby declared
prohibited. For this purpose, labor-only contracting shall refer
to an arrangement where the contractor or subcontractor
merely recruits, supplies, or places workers to perform a job,
work or service for a principal, and any of the following
elements are [is] present: i) The contractor or subcontractor
does not have substantial capital or investment which relates
to the job, work, or service to be performed and the
employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly
related to the main business of the principal; or ii) The
contractor does not exercise the right to control the
performance of the work of the contractual employee.
Interserve did not have substantial capital or investment in
the form of tools, equipment, machineries, and work
premises; and respondents, its supposed employees,
performed work which was directly related to the principal
business of petitioner. Interserve did not obligate itself to
perform an identifiable job, work, or service for petitioner, but
merely bound itself to provide the latter with specific types of
employees. These contractual provisions strongly indicated
that Interserve was merely a recruiting and manpower agency
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
providing petitioner with workers performing tasks directly
related to the latters principal business.
With the finding that Interserve was engaged in prohibited
labor-only contracting, petitioner shall be deemed the true
employer of respondents. As regular employees of petitioner,
respondents cannot be dismissed except for just or authorized
causes, none of which were alleged or proven to exist in this
case, the only defense of petitioner against the charge of
illegal dismissal being that respondents were not its
employees. Records also failed to show that petitioner
afforded respondents the twin requirements of procedural due
process, i.e., notice and hearing, prior to their
dismissal. Respondents were not served notices informing
them of the particular acts for which their dismissal was
sought. Nor were they required to give their side regarding
the charges made against them. Certainly, the respondents
dismissal was not carried out in accordance with law and,
therefore, illegal.[48]
Given that respondents were illegally dismissed by petitioner,
they are entitled to reinstatement, full backwages, inclusive of
allowances, and to their other benefits or the monetary
equivalents thereof computed from the time their
compensations were withheld from them up to the time of
their actual reinstatement, as mandated under Article 279 of
the Labor Code,.
RULING:
IN VIEW OF THE FOREGOING, the instant Petition
is DENIED. The Court AFFIRMS WITH MODIFICATION the
Decision dated 19 February 2007 of the Court of Appeals in
CA-G.R. SP No. 85320. The Court DECLARES that respondents
were illegally dismissed and, accordingly, ORDERS petitioner
to reinstate them without loss of seniority rights, and to pay
them full back wages computed from the time their
compensation was withheld up to their actual
reinstatement. Costs against the petitioner.
MANILA MANDARIN EMPLOYEES UNION, petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION,
Second Division, and the MANILA MANDARIN
HOTEL, respondents.
G.R. No. 108556.
November 19, 1996
NARVASA, C.J.:
FACTS:
134
In 1986, the Manila Mandarin Employees Union was an
exclusive bargaining agent of MANDARIN filed with the NLRC
Arbitration Branch a complaint in its members behalf to
compel MANDARIN to pay the salary differentials of the
individual employees concerned because of wage distortions
in their salary structure allegedly created by the upward
revisions of the minimum wage pursuant to various
Presidential Decrees and Wage Orders, and the failure of
MANDARIN to implement the corresponding increases in the
basic salary rate of newly-hired employees. LA ruled in favor
of the UNION, holding that there were in fact wage distortions
entitling its members to salary adjustments.
ISSUE:
Whether or not a wage distortion exists as a consequence of
the grant of a wage increase to employees
RATIO DECIDENDI:
No wage distortion. Upon the enactment of R.A. No. 6727
(Wage Rationalization Act, amending, among others, Article
124 of the Labor Code), that the term wage distortion came
to be explicitly defined as a situation where an increase in
prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage or
salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation. The issue of
whether or not a wage distortion exists as a consequence of
the grant of a wage increase to certain employees, is a
question of fact; and as a rule, factual findings in labor cases,
where grounded on substantial evidence. It indeed appears
that the clear mandate of those issuances was merely to
increase the prevailing minimum wages of particular employee
groups. There were no across-the-board increases to all
employees; increases were required only as regards those
specified therein. It was therefore incorrect for the UNION to
claim that all its members became automatically entitled to
across-the-board increases upon the effectivity of the Decrees
and Wage Orders in question. And even if there were wage
distortions, which is not the case here, the appropriate
remedy thereunder prescribed is for the employer and the
union to negotiate to correct them; or, if the dispute be not
thereby resolved, to thresh out the controversy through the
grievance procedure in the collective bargaining agreement,
or through conciliation or arbitration.
A review of the records convinces this Court that respondent
NLRC committed no grave abuse of discretion in holding that
no wage distortion was demonstrated by the UNION. It was,
to be sure, incumbent on the UNION to prove by substantial
evidence its assertion of the existence of a wage distortion. It
presented no such evidence to establish, as required by the
law, what, if any, were the designed quantitative differences
in wage or salary rates between employee groups, and if there
were any severe contractions or elimination of these
quantitative differences.
The Court agrees that the claimed wage distortion was
actually a result of the UNIONS failure to appreciate various
circumstances relating to the employment of the thirteen
employees.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Neither did respondent Commission gravely abuse its
discretion in ruling against the UNION on the issue of
underpayment of wages. A comparative analysis of the wages
of the Hotels employees from 1978 to 1984 vis a vis the
minimum wages fixed by law for the same period reveals that
at no time during the said period was there any underpayment
of wages by the respondent Hotel. On the contrary, the
prevailing monthly salaries of the subject hotel employees
appear to be and above the minimum amounts required under
the applicable Presidential Decrees and Wage Orders.
RULING:
WHEREFORE, the assailed Decision of respondent
Commission promulgated on September 11, 1992 -- reversing
the judgment of the Labor Arbiter and dismissing the UNIONS
complaint - - being based on substantial evidence and in
accord with applicable laws and jurisprudence, as well as said
Commissions Resolution dated November 24, 1992 -- denying
reconsideration -- are hereby AFFIRMED in toto.
135
METROPOLITAN BANK and TRUST COMPANY,
Petitioner, vs NATIONAL LABOR RELATIONS
COMMISSION, FELIPE A. PATAG and BIENVENIDO C.
FLORA, Respondents.
G.R. No. 152928
June 18, 2009
LEONARDO-DE CASTRO, J.:
FACTS: Respondents Patag and Flora were former employees
of Metrobank. Both respondents availed of the banks
compulsory retirement plan. When a new negotiations were
on-going between Metrobank and its rank and file employees.
Patag and Flora wrote a letter to the bank requesting that his
retirement benefits be computed at the new rate should there
be an increase in anticipation of possible changes in officers
benefits after the signing of the new CBA with the rank and
file. Metrobank did not reply to their requests. Metrobank’s
First Vice-President Paul Lim, Jr. informed Patag and Flora of
their ineligibility to the improved officers benefits as they had
already ceased their employment and were no longer officers
of the bank. Patag and Flora filed with LA their consolidated
complaint against Metrobank for underpayment of retirement
benefits and damages, asserting that pursuant to the 1998
Officers Benefits Memorandum, they were entitled to
additional retirement benefits. LA dismissed the complaint of
Patag and Flora. NLRC partially granted the appeal and
directed Metrobank to pay Patag and Flora their unpaid
beneficial improvements under the 1998 Officers Benefits
Memorandum.
ISSUE:
Whether or not, respondents can still recover higher benefits
under the 1998 Officers Benefits Memorandum despite the
fact that they have compulsorily retired prior to the issuance
of said memorandum and did not meet the condition therein
requiring them to be employed.
RATIO DECIDENDI:
No. To be considered a company practice, the giving of the
benefits should have been done over a long period of time,
and must be shown to have been consistent and
deliberate. The test or rationale of this rule on long
practice requires an indubitable showing that the employer
agreed to continue giving the benefits knowing fully well that
said employees are not covered by the law requiring payment
thereof.
Petitioner Metrobank favorably adjusted its officers benefits,
including retirement benefits, after the approval of each CBA
with the rank and file employees, to be effective every January
1st of the same year as the CBAs approval, and without any
condition regarding the date of employment of the officer,
from 1986 to 1997 or for about eleven (11) years.
It is the jurisprudential rule that where there is an established
employer practice of regularly, knowingly and voluntarily
granting benefits to employees over a significant period of
time, despite the lack of a legal or contractual obligation on
the part of the employer to do so, the grant of such benefits
ripens into a vested right of the employees and can no longer
be unilaterally reduced or withdrawn by the employer.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

When Metrobank opted to impose a new condition in its
Officers Benefits Memorandum dated June 10, 1998, it already
had knowledge of respondents requests. Indeed, the
imposition of the said condition shortly after respondents
made their requests is suspicious, to say the least. Such
conduct on the part of Metrobank deserves no sympathy from
this Court.
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. The policy is to
extend the applicability to a greater number of employees who
can avail of the benefits under the law, which is in consonance
with the avowed policy of the State to give maximum aid and
protection to labor. This principle gives us even greater reason
to affirm the findings of the CA.
Board of Directors approved a New Salary Scale for the
purpose of making its hiring rate competitive in the industry’s
labor market. The New Salary Scale increased the hiring rates
of new employees by P900.00. Accordingly, the salaries of
employees who fell below the new minimum rates were also
adjusted to reach such rates under their levels.
Bankards move drew the petitioner to press for the increase
in the salary of its old, regular employees. Petitioner filed
Notices of Strike on the grounds of refusal to bargain,
discrimination, and other acts of ULP. The strike was averted,
when the dispute was certified by the Secretary of Labor and
Employment for compulsory arbitration.
ISSUE:
Whether or not the unilateral adoption by an employer of an
upgraded salary scale that increased the hiring rates of new
employees without increasing the salary rates of old
employees resulted in wage distortion.

RULING: HELD:
No wage distortion. Upon the enactment of R.A. No. 6727,
WHEREFORE, the petition for review is WAGE RATIONALIZATION ACT, wage distortion was explicitly
hereby DENIED. The assailed decision and resolution of the defined as a situation where an increase in prescribed wage
CA in CA-G.R. No. 63144 are hereby AFFIRMED. rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates
between and among employee groups in an establishment as
to effectively obliterate the distinctions embodied in such
wage structure based on skills, length of service, or other
logical bases of differentiation. Four elements of wage
distortion, to wit: (1.) An existing hierarchy of positions with
corresponding salary rates; (2) A significant change in the
salary rate of a lower pay class without a concomitant increase
in the salary rate of a higher one; (3) The elimination of the
distinction between the two levels; and (4) The existence of
the distortion in the same region of the country. To determine
the existence of wage distortion, the historical classification of
the employees prior to the wage increase must be established.
Likewise, it must be shown that as between the different
classification of employees, there exists a historical gap or
difference. Thus the employees of private respondent have
been historically classified into levels, i.e. I to V, and not
on the basis of their length of service. Petitioner cannot
make a contrary classification of private respondents
employees without encroaching upon recognized
management prerogative of formulating a wage structure,
in this case, one based on level.
It is thus clear that there is no hierarchy of positions between
the newly hired and regular employees of Bankard, hence, the
first element of wage distortion provided in Prubankers is
wanting. While seniority may be a factor in determining the
wages of employees, it cannot be made the sole basis in
cases where the nature of their work differs. Whether or not
a new additional scheme of classification of employees for
compensation purposes should be established by the
Company (and the legitimacy or viability of the bases of
distinction there embodied) is properly a matter of
BANKARD EMPLOYEES UNION-WORKERS ALLIANCE management judgment and discretion, and ultimately,
TRADE UNIONS, petitioner, vs. NATIONAL LABOR perhaps, a subject matter for bargaining
RELATIONS COMMISSION and BANKARD, negotiations between employer and employees. It is
INC., respondents. assuredly something that falls outside the concept of wage
distortion.
G.R. No. 140689.
As did the Court of Appeals, this Court finds that the third
February 17, 2004
element provided in Prubankers is also wanting. Even
CARPIO MORALES, J.: assuming that there is a decrease in the wage gap between
FACTS: the pay of the old employees and the newly hired employees,
Bankard classifies its employees by levels, to wit: Level I, to Our mind said gap is not significant as
Level II, Level III, Level IV, and Level V. On May 28, 1993, its

136
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

to obliterate or result in severe contraction of the intentional PATRICIA HALAGUEA, MA. ANGELITA L. PULIDO, MA.
quantitative differences in the salary rates between the TERESITA P. SANTIAGO, MARIANNE V. KATINDIG,
employee group. As already stated, the classification under BERNADETTE A. CABALQUINTO, LORNA B. TUGAS,
the wage structure is based on the rank of an employee, not MARY CHRISTINE A. VILLARETE, CYNTHIA A.
on seniority. For this reason, ,wage distortion does not appear STEHMEIER, ROSE ANNA G. VICTA, NOEMI R.
to exist. CRESENCIO, and other flight attendants of
Apart from the findings of fact of the NLRC and the Court of
PHILIPPINE AIRLINES, Petitioners vs PHILIPPINE
Appeals that some of the elements of wage distortion are
AIRLINES INCORPORATED,Respondent
absent, petitioner cannot legally obligate Bankard to correct
the alleged wage distortion as the increase in the wages and G.R. No. 172013
salaries of the newly-hired was not due to a prescribed law or October 2, 2009
wage order. PERALTA, J.:
The wordings of Article 124 are clear. If it was the intention
of the legislators to cover all kinds of wage adjustments, then FACTS:
the language of the law should have been broad, not
restrictive as it is currently phrased: Petitioners were employed as female flight attendants of
Article 124. Standards/Criteria for Minimum Wage Fixing.
Where the application of any prescribed wage increase respondent PAL, who are members of the Flight Attendants
by virtue of a law or Wage Order issued by any
Regional Board results in distortions of the wage structure and Stewards Association of the Philippines (FASAP), exclusive
within an establishment, the employer and the union shall
bargaining representative of the flight attendants, flight
negotiate to correct the distortions. Any dispute arising from
the wage distortions shall be resolved through the grievance
stewards and pursers of respondent. Respondent and FASAP
procedure under their collective bargaining agreement and, if
it remains unresolved, through voluntary arbitration be entered into a CBA incorporating the terms and conditions of
preserved.
If the compulsory mandate under Article 124 to correct wage their agreement. Section 144 provides that For the Cabin
distortion is applied to voluntary and unilateral increases by
the employer in fixing hiring rates which is inherently a Attendants hired before 22 November 1996, the compulsory
business judgment prerogative, then the hands of the
employer would be completely tied even in cases where an requirement shall be 55 for females and 60 for males.
increase in wages of a particular group is justified due to a re-
evaluation of the high productivity of a particular group, or as Petitioners and several female cabin crews manifested that
in the present case, the need to increase the competitiveness
of Bankards hiring rate. An employer would be discouraged the aforementioned CBA provision on compulsory retirement
from adjusting the salary rates of a particular group of
employees for fear that it would result to a demand by all is discriminatory, and demanded for an equal treatment with
employees for a similar increase, especially if the financial
conditions of the business cannot address an across-the-board their male counterparts. RTC held that allegations in the
increase. The mere factual existence of wage distortion does
not, however, ipso facto result to an obligation to Petition do not make out a labor dispute arising from
rectify it, absent a law or other source of obligation which
requires its rectification. employer-employee relationship as none is shown to exist.
In fine, absent any indication that the voluntary increase of
salary rates by an employer was done arbitrarily and illegally This case is not directed specifically against respondent arising
for the purpose of circumventing the laws or was devoid of
any legitimate purpose other than to discriminate against the from any act of the latter, nor does it involve a claim against
regular employees, this Court will not step in to interfere with
this management prerogative. Employees are of course not the respondent. Rather, this case seeks a declaration of the
precluded from negotiating with its employer and lobby for
nullity of the questioned provision of the CBA, which is within
wage increases through appropriate channels, such as
through a CBA.
the Court's competence, with the allegations in the Petition
RULING:
WHEREFORE, the present petition is hereby DENIED. constituting the bases for such relief sought.
CA ordered to DISMISS the civil case.

ISSUE:

Whether or not, the RTC has jurisdiction over the petitioners'

action challenging the legality or constitutionality of the

provisions on the compulsory retirement age contained in the

CBA between respondent PAL and FASAP.

137
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RATIO DECIDENDI:
As the issue involved is constitutional in character, NLRC has
no jurisdiction over the case and, petitioners pray that
judgment be rendered on the merits declaring Section 144 of
CBA null and void. The RTC has no jurisdiction over the
subject matter of petitioners' petition for declaratory relief
because the Voluntary Arbitrator or panel of Voluntary
Arbitrators have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the
interpretation or implementation of the CBA. Regular courts
have no power to set and fix the terms and conditions of
employment. Not every controversy or money claim by an
employee against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee
relationship is merely incidental and the cause of action
precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court. Here, the employer-
employee relationship between the parties is merely incidental
and the cause of action ultimately arose from different sources
of obligation, i.e., the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not
by reference to the Labor Code or other labor relations statute
or a collective bargaining agreement but by the general civil
law, the jurisdiction over the dispute belongs to the regular
courts of justice and not to the labor arbiter and the NLRC. In
such situations, resolution of the dispute requires expertise,
not in labor management relations nor in wage structures and
other terms and conditions of employment, but rather in the
application of the general civil law. Clearly, such claims fall
outside the area of competence or expertise ordinarily
ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies
138
disappears. This Court holds that the grievance machinery and
voluntary arbitrators do not have the power to determine and
settle the issues at hand.
RULING:
WHEREFORE, the petition is PARTLY GRANTED. The
Decision and Resolution of the Court of Appeals, dated August
31, 2005 and March 7, 2006, respectively, in CA-G.R. SP. No.
86813 are REVERSED and SET ASIDE. The Regional Trial
Court of Makati City, Branch 147 is DIRECTED to continue the
proceedings in Civil Case No. 04-886 with deliberate dispatch.
Philippine Telegraph and Telephone Company vs NLRC
G.R. No. 118978.
May 23, 1997
FACTS:
PT&T (Philippine Telegraph & Telephone Company) initially
hired Grace de Guzman specifically as “Supernumerary Project
Worker”, for a fixed period from November 21, 1990 until April
20, 1991 as reliever for C.F. Tenorio who went on maternity
leave. She was again invited for employment as replacement
of Erlina F. Dizon who went on leave on 2 periods, from June
10, 1991 to July 1, 1991 and July 19, 1991 to August 8, 1991.
On September 2, 1991, de Guzman was again asked to join
PT&T as a probationary employee where probationary period
will cover 150 days. She indicated in the portion of the job
application form under civil status that she was single
although she had contracted marriage a few months
earlier. When petitioner learned later about the marriage, its
branch supervisor, Delia M. Oficial, sent de Guzman a
memorandum requiring her to explain the
discrepancy. Included in the memorandum, was a reminder
about the company’s policy of not accepting married women
for employment. She was dismissed from the company
effective January 29, 1992. Labor Arbiter handed down
decision on November 23, 1993 declaring that petitioner
illegally dismissed De Guzman, who had already gained the
status of a regular employee. Furthermore, it was apparent
that she had been discriminated on account of her having
contracted marriage in violation of company policies.
ISSUE:
Whether the alleged concealment of civil status can be
grounds to terminate the services of an employee.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

RATIO DECIDENDI:

Article 136 of the Labor Code, one of the protective laws for
women, explicitly prohibits discrimination merely by reason of
marriage of a female employee. It is recognized that
company is free to regulate manpower and employment from
hiring to firing, according to their discretion and best business
judgment, except in those cases of unlawful discrimination or
those provided by law.

PT&T’s policy of not accepting or disqualifying from work any

woman worker who contracts marriage is afoul of the right
against discrimination provided to all women workers by our
labor laws and by our Constitution. The record discloses
clearly that de Guzman’s ties with PT&T were dissolved
principally because of the company’s policy that married
women are not qualified for employment in the company, and
not merely because of her supposed acts of dishonesty.

The government abhors any stipulation or policy in the nature

adopted by PT&T. As stated in the labor code: “ART. 136.
Stipulation against marriage. — It shall be unlawful for an
employer to require as a condition of employment or
continuation of employment that a woman shall not get
married, or to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of
marriage.”

The policy of PT&T is in derogation of the provisions stated in

Art.136 of the Labor Code on the right of a woman to be free
from any kind of stipulation against marriage in connection
with her employment and it likewise is contrary to good morals
and public policy, depriving a woman of her freedom to
choose her status, a privilege that is inherent in an individual
as an intangible and inalienable right. The kind of policy
followed by PT&T strikes at the very essence, ideals and
purpose of marriage as an inviolable social institution and
ultimately, family as the foundation of the nation. Such policy
must be prohibited in all its indirect, disguised or dissembled
forms as discriminatory conduct derogatory of the laws of the
land not only for order but also imperatively required.

HELD:

ON THE FOREGOING PREMISES, the petition of Philippine

Telegraph and Telephone Company is hereby DISMISSED
for lack of merit, with double costs against petitioner.

SO ORDERED.

139
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Coca-Cola Bottlers Phils., Inc. vs. Alan M. Agito, et al.
G.R. No. 179546,
February 13, 2009
FACTS:
Agito, et al. are salesmen assigned at the Lagro Sales Office
of Coca-Cola for a number of years but were not regularized.
Their employment was terminated without just cause and due
process. They filed complaints against Coca-Cola, Interserve,
Peerless Integrated Services, Inc. Better Builders, Inc., and
Excellent Partners, Inc. However, they failed to state a reason
for filing complaints against Interserve, Peerless, Better
Builders and Excellent Partners.
Coca-Cola averred that Agito, et al. were employees of
Interserve who were tasked to perform contracted services in
accordance with the provision of the Contract of Services. The
contract covering the period of April 1, 2002 to September 30,
2002 constituted legitimate job contracting.
To prove that Interserve is an independent contractor, Coca-
Cola presented the following: (1) AOI of Interserve; (2)
Certificate of Registration of Interserve with BIR; (3) ITR with
Audited Financial Statements of Interserve for 2001; and (4)
Certificate of Registration of Interserve as an independent
contractor issued by DOLE.
As a result, Coca-Cola asserted that Agito, et al. were
employees of Interserve since it was the latter which hired
them, paid their wages and supervised their work, as proven
by: (1) PDFs are in the records of Interserve; (2) Contracts of
Temporary Employment with Interserve; and (3) payroll
records of Interserve.
LA found for Coca-Cola and held that Interserve was a
legitimate job contractor. The complaints against Peerless,
Better Building and Excellent Partners was dismissed for
failure to pursue the case.
On appeal, NLRC affirmed LA's decision.
CA reversed the NLRC decision and ruled that Interserve was
a labor-only contractor with insufficient capital and
investments for the services which it was contracted to
perform. Additionally, CA determined that Coca-Cola had
effective control over the means and method of Agito, et al.'s
work as evidenced by the Daily Sales Monitoring Report, the
Conventional Route System Proposed Set-Up, and the
memoranda issued by the supervisor of petitioner addressed
to workers. Respondents' tasks were directly related and
necessary to the main business of Coca-Cola. Finally, certain
provisions of the Contract of Service between Coca-Cola and
Interserve suggested that the latter's undertaking did not
involve a specific job but rather the supply of manpower.
ISSUE:
Whether or not Interserve is a legitimate job contractor
HELD:
Legitimate Contracting vs. Labor-Only Contracting
140
The relations which may arise in a situation, where there is an
employer, a contractor, and employees of the contractor, are
identified and distinguished under Article 106 of the Labor
Code:
Article 106. Contractor or subcontractor. - Whenever an
employer enters into a contract with another person for the
performance of the formers work, the employees of the
contractor and of the latters subcontractor, if any, shall be
paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay
the wages of his employees in accordance with this Code, the
employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent
of the work performed under the contract, in the same
manner and extent that he is liable to employees directly
employed by him.
The Secretary of Labor may, by appropriate regulations,
restrict or prohibit the contracting out of labor to protect the
rights of workers established under this Code. In so
prohibiting or restriction, he may make appropriate
distinctions between labor-only contracting and job
contracting as well as differentiations within these types of
contracting and determine who among the parties involved
shall be considered the employer for purposes of this Code, to
prevent any violation or circumvention of any provision of this
Code.
There is labor-only contracting where the person supplying
workers to an employee does not have substantial capital or
investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and
placed by such persons are performing activities which are
directly related to the principal business of such employer. In
such cases, the person or intermediary shall be considered
merely as an agent 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.
The afore-quoted provision recognizes two possible relations
among the parties: (1) the permitted legitimate job contract,
or (2) the prohibited labor-only contracting.
A legitimate job contract, wherein an employer enters into a
contract with a job contractor for the performance of the
formers work, is permitted by law. Thus, the employer-
employee relationship between the job contractor and his
employees is maintained. In legitimate job contracting, the
law creates an employer-employee relationship between the
employer and the contractors employees only for a limited
purpose, i.e., to ensure that the employees are paid their
wages. The employer becomes jointly and severally liable with
the job contractor only for the payment of the employees
wages whenever the contractor fails to pay the same. Other
than that, the employer is not responsible for any claim made
by the contractors employees.
On the other hand, labor-only contracting is an arrangement
wherein the contractor merely acts as an agent in recruiting
and supplying the principal employer with workers for the
purpose of circumventing labor law provisions setting down
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
the rights of employees. It is not condoned by law.A finding
by the appropriate authorities that a contractor is a labor-only
contractor establishes an employer-employee relationship
between the principal employer and the contractors
employees and the former becomes solidarily liable for all the
rightful claims of the employees.
Section 5 of the Rules Implementing Articles 106-109 of the
Labor Code, as amended, provides the guidelines in
determining whether labor-only contracting exists:
Section 5. Prohibition against labor-only contracting. Labor-
only contracting is hereby declared prohibited. For this
purpose, labor-only contracting shall refer to an arrangement
where the contractor or subcontractor merely recruits,
supplies, or places workers to perform a job, work or service
for a principal, and any of the following elements are [is]
present:
i) The contractor or subcontractor does not have
substantial capital or investment which relates to the job,
work, or service to be performed and the employees recruited,
supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main
business of the principal; or
ii) The contractor does not exercise the right to
control the performance of the work of the contractual
employee.
The foregoing provisions shall be without prejudice to the
application of Article 248(C) of the Labor Code, as amended.
Substantial capital or investment refers to capital stocks and
subscribed capitalization in the case of corporations, tools,
equipment, implements, machineries and work premises,
actually and directly used by the contractor or subcontractor
in the performance or completion of the job, work, or service
contracted out.
The right to control shall refer to the right reversed to the
person for whom the services of the contractual workers are
performed, to determine not only the end to be achieved, but
also the manner and means to be used in reaching that end.
(Emphasis supplied.)
When there is labor-only contracting, there is
employer-employee relationship between the
principal and the contractual employee
When there is labor-only contracting, Section 7 of the same
implementing rules, describes the consequences thereof:
Section 7. Existence of an employer-employee relationship.
The contractor or subcontractor shall be considered the
employer of the contractual employee for purposes of
enforcing the provisions of the Labor Code and other social
legislation. The principal, however, shall be solidarily liable
with the contractor in the event of any violation of any
provision of the Labor Code, including the failure to pay
wages.
The principal shall be deemed the employer of the contractual
employee in any of the following case, as declared by a
competent authority:
141
a. where there is labor-only contracting; or
b. where the contracting arrangement falls within
the prohibitions provided in Section 6 (Prohibitions) hereof.
According to the foregoing provision, labor-only contracting
would give rise to: (1) the creation of an employer-employee
relationship between the principal and the employees of the
contractor or sub-contractor; and (2) the solidary liability of
the principal and the contractor to the employees in the event
of any violation of the Labor Code.
Even if employees are not performing activities
indispensable to the business of the principal, labor-
contracting may still exist if the contractor does not
demonstrate substantial capital or investment
The law clearly establishes an employer-employee relationship
between the principal employer and the contractors employee
upon a finding that the contractor is engaged in labor-only
contracting. Article 106 of the Labor Code categorically
states: There is labor-only contracting where the person
supplying workers to an employee does not have substantial
capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers
recruited and placed by such persons are performing activities
which are directly related to the principal business of such
employer. Thus, performing activities directly related to the
principal business of the employer is only one of the two
indicators that labor-only contracting exists; the other is lack
of substantial capital or investment. The Court finds that both
indicators exist in the case at bar.
Interserve has no substantial capital; it is impossible
to measure whether or not there is substantial capital
because the Contract between Coca-Cola and
Interserve does not specify the work or the project
that needs to be performed or completed.
At the outset, the Court clarifies that although Interserve has
an authorized capital stock amounting toP2,000,000.00,
only P625,000.00 thereof was paid up as of 31 December
2001. The Court does not set an absolute figure for what it
considers substantial capital for an independent job
contractor, but it measures the same against the type of work
which the contractor is obligated to perform for the
principal. However, this is rendered impossible in this case
since the Contract between petitioner and Interserve does not
even specify the work or the project that needs to be
performed or completed by the latters employees, and uses
the dubious phrase tasks and activities that are considered
contractible under existing laws and regulations. Even in its
pleadings, petitioner carefully sidesteps identifying or
describing the exact nature of the services that Interserve was
obligated to render to petitioner. The importance of
identifying with particularity the work or task which Interserve
was supposed to accomplish for petitioner becomes even
more evident, considering that the Articles of Incorporation of
Interserve states that its primary purpose is to operate,
conduct, and maintain the business of janitorial and allied
services. But respondents were hired as salesmen and
leadman for petitioner. The Court cannot, under such
ambiguous circumstances, make a reasonable determination
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
if Interserve had substantial capital or investment to
undertake the job it was contracting with petitioner.
Burden of proof of substantial capital rests in the
contractor, or in its absence, the principal claiming it
to be an independent contractor
The contractor, not the employee, has the burden of proof
that it has the substantial capital, investment, and tool to
engage in job contracting. Although not the contractor itself
(since Interserve no longer appealed the judgment against it
by the Labor Arbiter), said burden of proof herein falls upon
petitioner who is invoking the supposed status of Interserve
as an independent job contractor. Noticeably, petitioner failed
to submit evidence to establish that the service vehicles and
equipment of Interserve, valued at P510,000.00
and P200,000.00, respectively, were sufficient to carry out its
service contract with petitioner. Certainly, petitioner could
have simply provided the courts with records showing the
deliveries that were undertaken by Interserve for the Lagro
area, the type and number of equipment necessary for such
task, and the valuation of such equipment. Absent evidence
which a legally compliant company could have easily provided,
the Court will not presume that Interserve had sufficient
investment in service vehicles and equipment, especially since
respondents allegation that they were using equipment, such
as forklifts and pallets belonging to petitioner, to carry out
their jobs was uncontroverted.
Interserve did not exercise the right to control the
performance of the work of the respondents
The lack of control of Interserve over the respondents can be
gleaned from the Contract of Services between Interserve (as
the CONTRACTOR) and petitioner (as the CLIENT).
Paragraph 3 of the Contract specified that the personnel of
contractor Interserve, which included the respondents, would
comply with CLIENT as well as CLIENTs policies, rules and
regulations. It even required Interserve personnel to subject
themselves to on-the-spot searches by petitioner or its duly
authorized guards or security men on duty every time the said
personnel entered and left the premises of petitioner. Said
paragraph explicitly established the control of petitioner over
the conduct of respondents. Although under paragraph 4 of
the same Contract, Interserve warranted that it would
exercise the necessary and due supervision of the work of its
personnel, there is a dearth of evidence to demonstrate the
extent or degree of supervision exercised by Interserve over
respondents or the manner in which it was actually
exercised. There is even no showing that Interserve had
representatives who supervised respondents work while they
were in the premises of petitioner.
Also significant was the right of petitioner under paragraph 2
of the Contract to request the replacement of the
CONTRACTORS personnel. True, this right was conveniently
qualified by the phrase if from its judgment, the jobs or the
projects being done could not be completed within the time
specified or that the quality of the desired result is not being
achieved, but such qualification was rendered meaningless by
the fact that the Contract did not stipulate what work or job
the personnel needed to complete, the time for its completion,
or the results desired. The said provision left a gap which
could enable petitioner to demand the removal or replacement
142
of any employee in the guise of his or her inability to complete
a project in time or to deliver the desired result. The power to
recommend penalties or dismiss workers is the strongest
indication of a companys right of control as direct employer.
Paragraph 4 of the same Contract, in which Interserve
warranted to petitioner that the former would provide
relievers and replacements in case of absences of its
personnel, raises another red flag. An independent job
contractor, who is answerable to the principal only for the
results of a certain work, job, or service need not guarantee
to said principal the daily attendance of the workers assigned
to the latter. An independent job contractor would surely have
the discretion over the pace at which the work is performed,
the number of employees required to complete the same, and
the work schedule which its employees need to follow.
As the Court previously observed, the Contract of Services
between Interserve and petitioner did not identify the work
needed to be performed and the final result required to be
accomplished. Instead, the Contract specified the type of
workers Interserve must provide petitioner (Route Helpers,
Salesmen, Drivers, Clericals, Encoders & PD) and their
qualifications (technical/vocational course graduates,
physically fit, of good moral character, and have not been
convicted of any crime). The Contract also states that, to
carry out the undertakings specified in the immediately
preceding paragraph, the CONTRACTOR shall employ the
necessary personnel, thus, acknowledging that Interserve did
not yet have in its employ the personnel needed by petitioner
and would still pick out such personnel based on the criteria
provided by petitioner. In other words, Interserve did not
obligate itself to perform an identifiable job, work, or service
for petitioner, but merely bound itself to provide the latter with
specific types of employees. These contractual provisions
strongly indicated that Interserve was merely a recruiting and
manpower agency providing petitioner with workers
performing tasks directly related to the latters principal
business.
Certification issued by DOLE is not sufficient to prove
independent contractorship
The certification issued by the DOLE stating that Interserve is
an independent job contractor does not sway this Court to
take it at face value, since the primary purpose stated in the
Articles of Incorporation of Interserve is
misleading. According to its Articles of Incorporation, the
principal business of Interserve is to provide janitorial and
allied services. The delivery and distribution of Coca-Cola
products, the work for which respondents were employed and
assigned to petitioner, were in no way allied to janitorial
services. While the DOLE may have found that the capital
and/or investments in tools and equipment of Interserve were
sufficient for an independent contractor for janitorial services,
this does not mean that such capital and/or investments were
likewise sufficient to maintain an independent contracting
business for the delivery and distribution of Coca-Cola
products.
HELD:
IN VIEW OF THE FOREGOING, the instant Petition
is DENIED. The Court AFFIRMS WITH
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

MODIFICATION the Decision dated 19 February 2007 of

the Court of Appeals in CA-G.R. SP No. 85320. The
Court DECLARES that respondents were illegally dismissed
and, accordingly, ORDERS petitioner to reinstate them
without loss of seniority rights, and to pay them full back
wages computed from the time their compensation was
withheld up to their actual reinstatement. Costs against the
petitioner.

SO ORDERED.

143
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

Delfin Villarama vs NLRC and authority over the group in the matter of morality and
discipline of his subordinates, but he actively facilitated the
GR No. 106341, commission of immoral conduct of his subordinates by driving
Sep 02, 1994 his car into the motel.

FACTS: As a managerial employee, petitioner is bound by a more

Petitioner Villarama was charged with sexual harassment by
Divina Gonzaga, a clerk-typist assigned in his department. The
humiliating experience compelled her to resign from work.
The letter prompted Mr. Leopoldo Prieto, President of Golden
Donuts, Inc., to call petitioner to a meeting then required to
explain the letter against him. It appears that petitioner
agreed to tender his resignation. Private respondent moved
swiftly to separate petitioner. Thus, private respondent
approved petitioner's application for leave of absence with
pay. It also issued an inter-office memorandum, advising "all
concerned" that petitioner was no longer connected with the
company. Mr. Prieto sent a letter to petitioner confirming their
agreement that petitioner would be officially separated from
the private respondent. For his failure to tender his
resignation, petitioner was dismissed by private respondent.
Feeling aggrieved, petitioner filed an illegal dismissal
case 2 against private respondent.
Labor Arbiter Salimar V. Nambi held that due process was not
observed in the dismissal of petitioner and there was no valid
cause for dismissal. On appeal to NLRC, it reversed prior
decision of LA.
exacting work ethics. He failed to live up to this higher
standard of responsibility when he succumbed to his moral
perversity. And when such moral perversity is perpetrated
against his subordinate, he provides justifiable ground for his
dismissal for lack of trust and confidence. It is the right, nay,
the duty of every employer to protect its employees from over
sexed superiors.
To be sure, employers are given wider latitude of discretion in
terminating the employment of managerial employees on the
ground of lack of trust and confidence.
HELD:
WHEREFORE, premises considered, the assailed resolution
of public respondent is hereby AFFIRMED WITH
MODIFICATION that the award of separation pay is
DELETED. Private respondent is ordered to pay petitioner the
amount of P1,000.00 for non-observance of due process, and
the equivalent amount of his unused vacation/sick leave and
proportionate 13th month pay. No pronouncement as to costs.
SO ORDERED.

ISSUE:

whether there was valid cause to terminate petitioner.

RATIO DECIDENDI:

Petitioner claims that his alleged immoral act was

unsubstantiated, hence, he could not be dismissed. We hold
otherwise. The records show that petitioner was confronted
with the charge against him. Initially, he voluntarily agreed to
be separated from the company. He took a leave of absence
preparatory to this separation. This agreement was confirmed
by the letter to him by Mr. Prieto dated August 7, 1989. A few
days after, petitioner reneged on the agreement. He refused
to be terminated on the ground that the seriousness of his
offense would not warrant his separation from service. So he
alleged in his letter to Mr. Prieto dated August 16, 1989. But
even in this letter, petitioner admitted his "error" vis-a-
vis Miss Gonzaga. As a manager, petitioner should know the
evidentiary value of his admissions. Needless to stress, he
cannot complain there was no valid cause for his separation.
Moreover, loss of trust and confidence is a good ground for
dismissing a managerial employee. It can be proved by
substantial evidence which is present in the case at bench. As
further observed by the Solicitor General:

. . . assuming arguendo that De Jesus and Gonzaga were

sweethearts and that petitioner merely acceded to the request
of the former to drop them in the motel, petitioner acted in
collusion with the immoral designs of De Jesus and did not
give due regard to Gonzaga's feeling on the matter and acted
in chauvinistic disdain of her honor, thereby justifying public
respondent's finding of sexual harassment. Thus, petitioner
not only failed to act accordingly as a good father of the family
because he was not able to maintain his moral ascendancy

144
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Maria Lourdes Domingo vs Rogelio Ayala
G.R. No. 155831,
February 18, 2008
FACTS:
On November 16, 1998, Ma. Lourdes T. Domingo (Domingo),
then Stenographic Reporter III at the NLRC, filed a Complaint
for sexual harassment against Rayala before Secretary
Bienvenido Laguesma of the Department of Labor and
Employment (DOLE). To support the Complaint, Domingo
executed an Affidavit narrating the incidences of sexual
harassment complained of. After the last incident narrated,
Domingo filed for leave of absence and asked to be
immediately transferred. Thereafter, she filed the Complaint
for sexual harassment on the basis of Administrative Order
No. 250, the Rules and Regulations Implementing RA 7877 in
the Department of Labor and Employment.
Upon receipt of the Complaint, the DOLE Secretary referred
the Complaint to the OP, Rayala being a presidential
appointee. The OP, through then Executive Secretary Ronaldo
Zamora, ordered Secretary Laguesma to investigate the
allegations in the Complaint and create a committee for such
purpose.
The Committee heard the parties and received their respective
evidence. On March 2, 2000, the Committee submitted its
report and recommendation to Secretary Laguesma. It found
Rayala guilty of the offense charged and recommended the
imposition of the minimum penalty provided under AO 250,
which it erroneously stated as suspension for six (6) months.
Rayala filed a Motion for Reconsideration, which the OP
denied. He then filed a Petition for Certiorari and Prohibition
with Prayer for Temporary Restraining Order under Rule 65 of
the Revised Rules on Civil Procedure which was also denied.
Rayala argued that his acts does not constitute sexual
harassment because for it to exist, there must be a demand,
request or requirement of sexual favor.
ISSUE:
Whether or not Rayala commited sexual harassment.
RATIO DECIDENDI:
Yes.
The law penalizing sexual harassment in our jurisdiction is RA
7877. Section 3 thereof defines work-related sexual
harassment in this wise:
Sec. 3. Work, Education or Training-related Sexual
Harassment Defined. – Work, education or training-related
sexual harassment is committed by an employer, manager,
supervisor, agent of the employer, teacher, instructor,
professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a
work or training or education environment, demands,
requests or otherwise requires any sexual favor from the
other, regardless of whether the demand, request or
145
requirement for submission is accepted by the object of said
Act.
(a) In a work-related or employment environment, sexual
harassment is committed when:
(1) The sexual favor is made as a condition in the
hiring or in the employment, re-employment or
continued employment of said individual, or in
granting said individual favorable compensation,
terms, conditions, promotions, or privileges; or the
refusal to grant the sexual favor results in limiting,
segregating or classifying the employee which in a
way would discriminate, deprive or diminish
employment opportunities or otherwise adversely
affect said employee;
(2) The above acts would impair the employee’s
rights or privileges under existing labor laws; or
(3) The above acts would result in an intimidating,
hostile, or offensive environment for the employee.
Even if we were to test Rayala’s acts strictly by the standards
set in Section 3, RA 7877, he would still be administratively
liable. It is true that this provision calls for a “demand, request
or requirement of a sexual favor.” But it is not necessary that
the demand, request or requirement of a sexual favor be
articulated in a categorical oral or written statement. It may
be discerned, with equal certitude, from the acts of the
offender. Holding and squeezing Domingo’s shoulders,
running his fingers across her neck and tickling her ear, having
inappropriate conversations with her, giving her money
allegedly for school expenses with a promise of future
privileges, and making statements with unmistakable sexual
overtones – all these acts of Rayala resound with deafening
clarity the unspoken request for a sexual favor.
HELD:
WHEREFORE, the foregoing premises considered, the
October 18, 2002 Resolution of the Court of Appeals in CA-
G.R. SP No. 61026 is AFFIRMED. Consequently, the petitions
in G.R. Nos. 155831, 155840, and 158700 are DENIED. No
pronouncement as to costs.
SO ORDERED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Remington Industrial Sales Corp vs Erlinda Castaneda
G.R. Nos. 169295-96,
November 20, 2006
FACTS:
The present controversy began when private respondent,
Erlinda Castaneda ("Erlinda") instituted a complaint for illegal
dismissal, underpayment of wages, non-payment of overtime
services, non-payment of service incentive leave pay and non-
payment of 13th month pay against Remington before the
NLRC. Erlinda alleged that she started working as company
cook for Remington, a corporation engaged in the trading
business; that she worked for six (6) days a week, starting as
early as 6:00 a.m. because she had to do the marketing and
would end at around 5:30 p.m., or even later, after most of
the employees, if not all, had left the company premises; that
she continuously worked with Remington until she was
unceremoniously prevented from reporting for work when
Remington transferred to a new site. She averred that she
reported for work at the new site only to be informed that
Remington no longer needed her services. Erlinda believed
that her dismissal was illegal because she was not given the
notices required by law; hence, she filed her complaint for
reinstatement without loss of seniority rights, salary
differentials, service incentive leave pay, 13th month pay and
10% attorney’s fees.
ISSUE:
Whether or not Castaneda is a regular employee or a domestic
servant?
RATIO DECIDENDI:
Castaneda is deemed a regular employee.
In Apex Mining Company, Inc. v. NLRC, this Court held that
a househelper in the staff houses of an industrial company
was a regular employee of the said firm. We ratiocinated that:
Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as
amended, the terms “househelper” or “domestic servant” are
defined as follows:
“The term ‘househelper’ as used herein is synonymous to the
term ‘domestic servant’ and shall refer to any person, whether
male or female, who renders services in and about the
employer’s home and which services are usually necessary or
desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment
of the employer’s family.”
The foregoing definition clearly contemplates such
househelper or domestic servant who is employed in the
employer’s home to minister exclusively to the personal
comfort and enjoyment of the employer’s family. Such
definition covers family drivers, domestic servants, laundry
women, yayas, gardeners, houseboys and similar househelps.
xxx xxx xxx
The criteria is the personal comfort and enjoyment of the
family of the employer in the home of said employer. While
it may be true that the nature of the work of a househelper,
domestic servant or laundrywoman in a home or in a company
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staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually
serving the family while in the latter case, whether it is a
corporation or a single proprietorship engaged in business or
industry or any other agricultural or similar pursuit, service is
being rendered in the staffhouses or within the premises of
the business of the employer. In such instance, they are
employees of the company or employer in the business
concerned entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or
domestic servant is assigned to certain aspects of the business
of the employer that such househelper or domestic servant
may be considered as such an employee. The Court finds no
merit in making any such distinction. The mere fact that the
househelper or domestic servant is working within the
premises of the business of the employer and in relation to or
in connection with its business, as in its staffhouses for its
guest or even for its officers and employees, warrants the
conclusion that such househelper or domestic servant is and
should be considered as a regular employee of the employer
and NOT as a mere family househelper or domestic servant
as contemplated in Rule XIII, Section 1(b), Book 3 of the
Labor Code, as amended.
In the case at bar, the petitioner itself admits in its position
paper that respondent worked at the company premises and
her duty was to cook and prepare its employees’ lunch and
merienda. Clearly, the situs, as well as the nature of
respondent’s work as a cook, who caters not only to the needs
of Mr. Tan and his family but also to that of the petitioner’s
employees, makes her fall squarely within the definition of a
regular employee under the doctrine enunciated in the Apex
Mining case. That she works within company premises, and
that she does not cater exclusively to the personal comfort of
Mr. Tan and his family, is reflective of the existence of the
petitioner’s right of CONTROL over her functions, which is the
PRIMARY indicator of the existence of an employer-employee
relationship.
HELD:
IN VIEW WHEREOF, the petition is DENIED for lack of
merit. The assailed Decision dated January 31, 2005, and the
Resolution dated August 11, 2005, of the Court of Appeals in
CA-G.R. SP Nos. 64577 and 68477 are AFFIRMED. Costs
against petitioner.
SO ORDERED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

petitioner who attends to the needs of the company's guest

and other persons availing of said facilities. By the same
token, it cannot be considered to extend to then driver,
houseboy, or gardener exclusively working in the company,
the staffhouses and its premises. They may not be considered
as within the meaning of a "househelper" or "domestic
servant" as above-defined by law.

The criteria is the personal comfort and enjoyment of the

Apex Mining Co., Inc. Vs NLRC
G.R. No. 94951,
April 22, 1991
FACTS:
Private respondent Sinclita Candida was employed by
petitioner Apex Mining Company, Inc. to perform laundry
services at its staff house located at Masara, Maco, Davao del
Norte. While she was attending to her assigned task and she
was hanging her laundry, she accidentally slipped and hit her
back on a stone. She reported the accident to her immediate
supervisor Mila de la Rosa and to the personnel officer,
Florendo D. Asirit. As a result of the accident she was not able
to continue with her work. She was permitted to go on leave
for medication. De la Rosa offered her the amount of P
2,000.00 which was eventually increased to P5,000.00 to
persuade her to quit her job, but she refused the offer and
preferred to return to work. Petitioner did not allow her to
return to work and dismissed her. Private respondent filed a
request for assistance with the Department of Labor and
Employment to which the latter ordered to pay monetary
awards.
family of the employer in the home of said employer. While it
may be true that the nature of the work of a househelper,
domestic servant or laundrywoman in a home or in a company
staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually
serving the family while in the latter case, whether it is a
corporation or a single proprietorship engaged in business or
industry or any other agricultural or similar pursuit, service is
being rendered in the staffhouses or within the premises of
the business of the employer. In such instance, they are
employees of the company or employer in the business
concerned entitled to the privileges of a regular employee.
HELD:
WHEREFORE, the petition is DISMISSED and the appealed
decision and resolution of public respondent NLRC are hereby
AFFIRMED. No pronouncement as to costs.
SO ORDERED.

ISSUE:

Whether or not the private respondent should be treated as

househelper or domestic servant or regular employee?

RATIO DECIDENDI:

Under Rule XIII, Section l(b), Book 3 of the Labor Code, as

amended, the terms "househelper" or "domestic servant" are
defined as follows:

The term "househelper" as used herein is synonymous to the

term "domestic servant" and shall refer to any person,
whether male or female, who renders services in and about
the employer's home and which services are usually necessary
or desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment
of the employer's family.

The foregoing definition clearly contemplates such

househelper or domestic servant who is employed in the
employer's home to minister exclusively to the personal
comfort and enjoyment of the employer's family. Such
definition covers family drivers, domestic servants, laundry
women, yayas, gardeners, houseboys and other similar
househelps.

The definition cannot be interpreted to include househelp or

laundrywomen working in staffhouses of a company, like

147