8. Daniel Sanchez, et al vs. Harry Lyons Construction, inc., et al.

JULY 13, 2015KNOWYERLAW

G.R. No. L-2779 October 18, 1950

FACTS:

Plaintiffs were employed by DEFENDANT MATERIAL DISTRIBUTORS, INC. and DEFENDANT HARRY LYONS
CONSTRUCTION, INC.

Plaintiffs agreed: “I accept the foregoing appointment, and in consideration thereof I hereby agree that
such employment may be terminated at any time, without previous notice, and I further agree that
salary and wages, shall be computed and paid at the rate specified up to the date of such termination.”

“Also in consideration of such employment I hereby expressly waive the benefit of article 302 of the
Code of Commerce and that of any other law, ruling, or custom which might require notice of discharge
or payment of salary or wages after date of the termination of such employment.”

Plaintiffs were dismissed by the defendants on December 31, 1947 without one months’ previous
notice. Each of the plaintiffs demanded payment of one month’s salary from the defendants and the
latter refused to pay the same.

Plaintiffs claimed from defendants P2,210 plus interest as one month advance past due them. The
parties entered into a stipulation of facts upon which the municipal court rendered judgment for the
plaintiffs RTC ruled in favor of plaintiffs. From this judgment, defendants filed an appeal with this court
purely upon a question of law.

ISSUE: Whether plaintiffs, both those paid on a monthly and daily basis, are entitled to the benefit
granted in article 302 of the Code of Commerce; and secondly, if they are so entitled, was their waiver of
such benefits legal and valid?

HELD: AFFIRMS DECISION OF LOWER COURT.

Article 302 of the Code of Commerce reads as follows:

ART. 302. In cases in which no special time is fixed in the contracts of service, any one of the parties
thereto may cancel it, advising the other party thereof one month in advance.

Applicable when 2 requisites are complied: (1) that no special time is fixed in the contract of service, and
(2) that said employee is a commercial employee

Plaintiffs are commercial employees and no special time has been fixed in their contract for
service. Hence, this Court holds that plaintiffs-appellants come within the purview of article 302 of the
Code of Commerce.

Also, this court holds that such a waiver, made in advance, is void as being contrary to public policy.

It is safe to presume therefore, that an employee or laborer who waives in advance any benefit granted
him by law does so, certainly not in his interest or through generosity but under the forceful
intimidation of urgent need, and hence, he could not have so acted freely and voluntarily.
For all the foregoing, this court hereby affirms the decision of the lower court, with costs against
appellants.

Benigno Vigilla, et al. v Philippine College of Criminology, Inc. GR No. 200094, June 10, 2013

Law Principle:

Anything favorable to the labor-only contractor redounds to the benefit of the employer under the
principle of solidary liability

Facts:

The petitioners work for the Philippine College of Criminology Inc. (PCCr) as janitors, janitress and
supervisor in its maintenance department. The petitioners were made to understand by the respondent
PCCr that they are under the Metropolitan Building Services, Inc. (MBMSI) which is a corporation
engaged in providing janitorial services. PCCr terminated the services of MBMSI on 2009 which resulted
in the dismissal of the petitioners. An illegal dismissal complaint was then filed against PCCr by the
petitioners contending that it is their real employer and not MBMSI. Subsequently, the PCCr submitted
to the Labor Arbiter waivers, releases and quitclaims that were executed by the petitioners in favor to
MBMSI.

The Labor Arbiter and NLRC ruled in favor of the petitioner, however upon filing the petition for review
on certiorari before the Court of Appeals, the CA ruled that the quitclaims, releases and waivers
executed by the petitioners in favor to MBMSI redounds to the benefit of PCCr by virtue of solidary
liability under Article 1217 of the NewCivil Code. The petitioners contend that under Article 106 of the
Labor Code a labor-only contractor's liability is not solidary as it is the employer who should be directly
responsible to the supplied worker.

Issue

Whether or not the quitclaims, releases and waivers executed by the petitioners in favor to MBMSI
redounds to the benefit of PCCr?

Held

Yes.
The Supreme Court held that the basis of the solidary liability of the principal with those engaged in
labor-only contracting is the last paragraph of Article 106 of the Labor Code that provides, "In such cases
of labor-only contracting, 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."

It also pointed out D.O. No. 18-A, s. 2011 section 27 providing for the effects of labor-only contracting
"where upon the finding by competent authority of labor-only contracting shall render the principal
jointly and severally liable with the contractor to the latter's employees, in the same manner and extent
that the principal is liable to employees directly hired by him/her, as provided in Article 106 of the Labor
Code."

Hence, the PCCr's solidary liability was already expunged by virtue of the releases, waivers and
quitclaims executed by the petitioners in favor of MBMSI by virtue of Article 1217 of the Civil Code
providing that "payment made by one of the solidary debtors extinguishes the obligation."

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PLDT vs. NLRC

OCTOBER 23, 2012 ~ VBDIAZ

PLDT vs. NLRC

G.R. No. 80609 August 23, 1988

Facts:

Abucay, a traffic operator of the PLDT, was accused by two complainants of having demanded and
received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval
of their applications for telephone installation. Investigated and heard, she was found guilty as charged
and accordingly separated from the service. She went to the Ministry of Labor and Employment claiming
she had been illegally removed. After consideration of the evidence and arguments of the parties, the
company was sustained and the complaint was dismissed for lack of merit. Nevertheless, the dispositive
portion of labor arbiter’s decision declared:

WHEREFORE, the instant complaint is dismissed for lack of merit.

Considering that Dr. Bangayan and Mrs. Martinez are not totally blameless in the light of the fact that
the deal happened outhide the premises of respondent company and that their act of giving P3,800.00
without any receipt is tantamount to corruption of public officers, complainant must be given one
month pay for every year of service as financial assistance.

Both the petitioner and the private respondent appealed to the National Labor Relations Board, which
upheld the said decision in toto and dismissed the appeals. The private respondent took no further
action, thereby impliedly accepting the validity of her dismissal. The petitioner, however, is now before
us to question the affirmance of the above- quoted award as having been made with grave abuse of
discretion.

The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is
entitled to reinstatement and backwages as required by the labor laws. However, an employee
dismissed for cause is entitled to neither reinstatement nor backwages and is not allowed any relief at
all because his dismissal is in accordance with law. In the case of the private respondent, she has been
awarded financial assistance equivalent to ten months pay corresponding to her 10 year service in the
company despite her removal for cause. She is, therefore, in effect rewarded rather than punished for
her dishonesty, and without any legal authorization or justification. The award is made on the ground of
equity and compassion, which cannot be a substitute for law. Moreover, such award puts a premium on
dishonesty and encourages instead of deterring corruption.

For its part, the public respondent claims that the employee is sufficiently punished with her dismissal.
The grant of financial assistance is not intended as a reward for her offense but merely to help her for
the loss of her employment after working faithfully with the company for ten years. In support of this
position, the Solicitor General cites the cases of Firestone Tire and Rubber Company of the Philippines v.
Lariosa and Soco v. Mercantile Corporation of Davao, where the employees were dismissed for cause
but were nevertheless allowed separation pay on grounds of social and compassionate justice.

Issue: WON Separation pay is proper.

Held:

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow
worker, the employer may not be required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social justice.

A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than
punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal
only and that the separation pay has nothing to do with the wrong he has committed. Of course it has.
Indeed, if the employee who steals from the company is granted separation pay even as he is validly
dismissed, it is not unlikely that he will commit a similar offense in his next employment because he
thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is not
going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not
deserve the protection and concern of the Constitution.

The policy of social justice is not intended to countenance wrongdoing simply because it is committed
by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense.
Compassion for the poor is an imperative of every humane society but only when the recipient is not a
rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels
any more than can equity be an impediment to the punishment of the guilty. Those who invoke social
justice may do so only if their hands are clean and their motives blameless and not simply because they
happen to be poor. This great policy of our Constitution is not meant for the protection of those who
have proved they are not worthy of it, like the workers who have tainted the cause of labor with the
blemishes of their own character.

Applying the above considerations, we hold that the grant of separation pay in the case at bar is
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and
affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has worked with the
PLDT for more than a decade, if it is to be considered at all, should be taken against her as it reflects a
regrettable lack of loyalty that she should have strengthened instead of betraying during all of her 10
years of service with the company. If regarded as a justification for moderating the penalty of dismissal,
it will actually become a prize for disloyalty, perverting the meaning of social justice and undermining
the efforts of labor to cleanse its ranks of all undesirables.

Petition granted

Songco, et al. vs. National Labor Relations Commission

G.R. Nos. 50999-51000

(March 23, 1990)

FACTS: Zuelig filed an application for clearance to terminate the services of Songco, and others, on the
ground of retrenchment due to financial losses. During the hearing, the parties agreed that the sole
issue to be resolved was the basis of the separation pay due. The salesmen received monthly salaries of
at least P400.00 and commission for every sale they made.

The Collective Bargaining Agreements between Zuelig and the union of which Songco, et al. were
members contained the following provision: "Any employee who is separated from employment due to
old age, sickness, death or permanent lay-off, not due to the fault of said employee, shall receive from
the company a retirement gratuity in an amount equivalent to one (1) month's salary per year of
service."

The Labor Arbiter ordered Zuelig to pay Songco et al., separation pay equivalent to their one month
salary (exclusive of commissions, allowances, etc.) for every year of service with the company.

The National Labor Relations Commission sustained the Arbiter.

ISSUE: Whether or not earned sales commissions and allowances should be included in the monthly
salary of Songco, et al. for the purpose of computing their separation pay.

RULING:

In the computation of backwages and separation pay, account must be taken not only of the basic salary
of the employee, but also of the transportation and emergency living allowances.

Even if the commissions were in the form of incentives or encouragement, so that the salesman would
be inspired to put a little more industry on jobs particularly assigned to them, still these commissions
are direct remunerations for services rendered which contributed to the increase of income of the
employee. Commission is the recompense compensation or reward of an agent, salesman, executor,
trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of
his transactions or on the profit to the principal. The nature of the work of a salesman and the reason
for such type of remuneration for services rendered demonstrate that commissions are part of Songco,
et al's wage or salary.

The Court takes judicial notice of the fact that some salesmen do not receive any basic salary, but
depend on commissions and allowances or commissions alone, although an employer-employee
relationships exists.

If the opposite view is adopted, i.e., that commissions do not form part of the wage or salary, then in
effect, we will be saying that this kind of salesmen do not receive any salary and, therefore, not entitled
to separation pay in the event of discharge from employment. This narrow interpretation is not in
accord with the liberal spirit of the labor laws, and considering the purpose of separation pay which is,
to alleviate the difficulties which confront a dismissed employee thrown to the streets to face the harsh
necessities of life.

In Soriano vs. NLRC (155 SCRA 124), we held that the commissions also claimed by the employee
(override commission plus net deposit incentive) are not properly includible in such base figure since
such commissions must be earned by actual market transactions attributable to the petitioner
[salesman]. Since the commissions in the present case were earned by actual transactions attributable
to Song, et al., these should be included in their separation pay. In the computation thereof, what
should be taken into account is the average commission earned during their last year of employment.