1. CALALANG VS WILLIAMS (194w)
548 do not confer legislative power upon the Director of
G.R. No. 478ww | 194w-12-w2
Subject: Commonwealth Act No. 548 is not an undue delegation of legislative power;
Subordinate legislation; Commonwealth Act No. 548 is a valid police power measure; No
violation of social justice
Facts:
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before
the court a petition for a writ of prohibition against respondents, among them, A. D. Williams, as
Chairman of the National Traffic Commission.
It is alleged that the National Traffic Commission, in its resolution of July 17, 194w, resolved to
recommend to the Director of Public Works and the Secretary of Public Works and
Communications that animal-drawn vehicles be prohibited from passing along Rosario Street
(from 7:3w a.m. to 12:3w p.m. and from 1:3w p.m. to 5:3w p.m.) and along Rizal Avenue (from 7
a.m. to 11 p.m.), from a period of one year from the date of the opening of the Colgante Bridge
to traffic. The Director of Public Works. With the adoption of the recommendation, the Mayor of
Manila and the Acting Chief of Police of Manila have enforced the same and, as a consequence,
all animal-drawn vehicles are not allowed to pass and pick up passengers in the indicated
places.
The measure was adopted pursuant of the provisions of Commonwealth Act No. 548 which
authorizes the 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.
Petitioner contends that Commonwealth Act No. 548 is unconstitutional because (a) it
constitutes an undue delegation of legislative power, and (b) it constitutes an unlawful
interference with legitimate business or trade and abridge the right to personal liberty and
freedom of locomotion
Section 1 of Commonwealth Act No. 548 reads as follows:
"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets
designated as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines, the Director of Public Works, with the approval of the Secretary of
Public Works and Communications, shall promulgate the necessary rules and regulations to
regulate and control the use of and traffic on such roads and streets. Such rules and regulations,
with the approval of the President, may contain provisions controlling or regulating the
construction of buildings or other structures within a reasonable distance from along the national
roads. Such roads may be temporarily closed to any or all classes of traffic by the Director of
Public Works and his duly authorized representatives whenever the condition of the road or the
traffic thereon makes such action necessary or advisable in the public convenience and interest,
or for a specified period, with the approval of the Secretary of Public Works and
Communications."
Held:
Commonwealth Act No. 548 is not an undue delegation of legislative power
1. The true distinction is between the delegation of power to make the law, which necessarily
involves a discretion as to what it shall be, and conferring an authority or discretion as to its
execution, to be exercised under and in pursuance of the law. The first cannot be done; to the
latter no valid objection can be made. (see Rubi vs. Provincial Board of Mindoro)
2. Discretion may be committed by the Legislature to an executive department or official. The
Legislature may make decisions of executive departments or subordinate officials thereof, to
whom it has committed the execution of certain acts, final on questions of fact. The growing
tendency in the decisions is to give prominence to the 'necessity' of the case.
3. Section 1 of Commonwealth Act No.
Public Works and the Secretary of Public Works and Communications. The authority therein
conferred upon them and under which they promulgated the rules and regulations, is not to
determine what public policy demands but merely to carry out the legislative policy laid down by
the National Assembly in said Act, to wit, "to promote safe transit upon and avoid obstructions
on, roads and streets designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines" and to close them temporarily to any or all
classes of traffic "whenever the condition of the road or the traffic makes such action necessary
or advisable in the public convenience and interest."
4. The delegated power, if at all, therefore, is not the determination of what the law shall be,
but merely the ascertainment of the facts and circumstances upon which the application of said
law is to be predicated. 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. But it cannot be said that
the exercise of such discretion is the making of the law.
5. As was said in Locke's Appeal (72 Pa. 491): "To assert that a law is less than a law, because
it is made to depend on a future event or act, is to rob the Legislature of the power to act wisely
for the public welfare whenever a law is passed relating to a state of affairs not yet developed, or
to things future and impossible to fully know." The proper distinction the court said was this: "The
Legislature cannot delegate its power to make the law; but it can make a law to delegate a
power to determine some fact or state of things upon which the law makes, or intends to make,
its own action depend. To deny this would be to stop the wheels of government. There are many
things upon which wise and useful legislation must depend which cannot be known to the law-
making power, and, must, therefore, be a subject of inquiry and determination outside of the
halls of legislation."
Subordinate legislation
6. The Court had occasion to observe that the principle of separation of powers has been made
to adapt itself to the complexities of modern governments, giving rise to the adoption, within
certain limits, of the principle of "subordinate legislation," not only in the United States and
England but in practically all modern governments. Accordingly, with the growing complexity of
modern life, the multiplication of the subjects of governmental regulations, and the increased
difficulty of administering the laws, the rigidity of the theory of separation of governmental
powers has, to a large extent, been relaxed by permitting the delegation of greater powers by
the legislative and vesting a larger amount of discretion in administrative and executive officials,
not only in the execution of the laws, but also in the promulgation of certain rules and regulations
calculated to promote public interest.
Commonwealth Act No. 548 is a valid police power measure
7. Commonwealth Act No. 548 aims to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public. In enacting said law, therefore, the
National Assembly was prompted by considerations of public convenience and welfare. It was
inspired by a desire to relieve congestion of traffic, which is, to say the least, a menace to public
safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in
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.
8. The scope of police power keeps expanding as civilization advances. The right to exercise
the police power is a continuing one, and a business lawful today may in the future, because of
the changed situation, the growth of population or other causes, become a menace to the public
health and welfare, and be required to yield to the public good. (Dobbins vs. Los Angeles, see
also People vs. Pomar)
No violation of social justice
9. 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.
1w. The promotion of social justice, however, is to be achieved not through a mistaken
sympathy towards any given group. 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.
11. 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."
2. Philippine Association of Service Exporters, Inc. (PASEI) vs Drilon (1988)
G.R. No. L-81958 | 1988-w6-3w
Subject: Police Power is inherent and plenary which enables the State to promote the general
welfare; Valid delegation of Police Power; The right to travel is subject to the requirements of
public safety as may be provided by law; Protection to labor does not signify the promotion of
employment alone; The non-impairment clause of the Constitution must yield to Government
legitimate purpose
Facts:
PASEI, a firm engaged in the recruitment of Filipino workers for overseas placement challenges
the Constitutional validity of Department Order No. 1 of the DOLE. The Order covers “Guidelines
governing the temporary suspension of deployment of Filipino Domestic and Household
Workers.”
The PASEI argued that the Order discriminates since 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 also asserted that the Order is an invalid exercise of the lawmaking power since police
power being legislative and not executive in character. It also invoked constitutional provision on
worker’s participation in the policy and decision- making processes since the Order was passed
in the absence of prior consultations. Lastly, it contended that the Order will be in violation of
non-impairment clause.
The Solicitor General on behalf of the Secretary of Labor invoked the police power of the State
in the issuance of the Department Order.
Held:
Police Power is inherent and plenary which enables the State to promote the general
welfare
1. Department Order No. 1 is in the nature of a police power measure. The concept of police
power has been defined as the state authority to enact legislation that may interfere with
personal liberty or property in order to promote the general welfare. Its scope is ever-expanding
to meet the exigencies of the times, even to anticipate the future where it could be done.
2. Police power is a fundamental attribute of government that has enabled it to perform the most
vital functions of governance. It may be said to be inherent and plenary power in the State which
enables it to prohibit all things hurtful to the comfort, safety, and welfare of society. It may not be
exercised arbitrarily or unreasonably. Otherwise, it defeats the purpose for which it is exercised,
that is, to advance the public good.
Valid delegation of Police Power
3. 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. In this case, the Labor Code itself vests the Department
of Labor and Employment with rulemaking powers in the enforcement whereof.
Equality before the law does not mean a perfect identity of rights among men and women
but it admits of classifications
4. The Department Order No. 1 applies only to "female contract workers," but it does not 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
(i) such classifications rest on substantial distinctions;
(ii) they are germane to the purposes of the law;
(iii) they are not confined to existing conditions; and
(iv) they apply equally to all members of the same class. The classification made-the preference
for female workers rests on substantial distinctions.
5. All the requirements for valid classification are present in this case. First, insofar as
classifications are concerned, distinction and discrimination are justified and indeed call for a
deployment ban. As a matter of judicial notice, women domestic workers are being ill-treated,
tortured or raped abroad in massive instances as confirmed by testimonies of returning workers
abroad. The same, however, cannot be said of our male workers because there is no evidence
that, except for isolated instances, our men abroad have been afflicted with an identical
predicament.
6. Second, the classification in this case is germane to the purpose behind the measure. It is the
avowed objective of Department Order No. 1 to enhance the protection for Filipino female
overseas workers because of the mistreatment Filipina workers have suffered abroad. A
deployment ban will be for their own good and welfare.
7. Third, the Order does not narrowly apply to existing conditions but intended to apply
indefinitely so long as those conditions exist. This is clear from the Order itself that should the
authorities arrive at legal measure of protection impressed with a greater degree of permanency,
the ban shall be lifted. A stop-gap measure includes bilateral agreements with the Philippines
and mechanisms providing for sufficient safeguards to ensure the welfare and protection of
Filipino workers.
8. Finally, the impugned guidelines to be applicable to all female domestic overseas workers.
That it does not apply to "all Filipina workers" is not an argument for unconstitutionality because
what the Constitution prohibits is the singling out of a select person or group of persons within an
existing class, to the prejudice of such a person or group or resulting in an unfair advantage to
another person or group of persons.
The right to travel is subject to the requirements of public safety as may be provided by
law
9. Department Order No. 1 does not prescribe a total ban on overseas deployment. From
scattered provisions of the Order, it is evident that such a total ban has not been contemplated.
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.
1w. The 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.
Protection to labor does not signify the promotion of employment alone
11. The Constitutional guaranty of worker participation in policy and decision-making processes
affecting their rights and benefits must be submitted to the demands and necessities of the
State's power of regulation. "Protection to labor" does not signify the promotion of employment
alone. What concerns the Constitution more paramountly is that such an employment be above
all, decent, just, and humane. The Government is duty-bound to insure that our toiling
expatriates have adequate protection, personally and economically, while away from home. In
this case, the Government has evidence of the lack or inadequacy of such protection, and as
part of its duty, it has precisely ordered an indefinite ban on deployment.
The non-impairment clause of the Constitution must yield to Government legitimate
purpose
12. The non-impairment clause of the Constitution must yield to the loftier purposes targeted by
the Government. Freedom of contract and enterprise, like all other freedoms, is not free from
restrictions.
13. This Court understands the grave implications the questioned Order has on the business of
recruitment. The concern of the Government, however, is not necessarily to maintain profits of
business firms. In the ordinary sequence of events, it is profits that suffer as a result of
Government regulation. The interest of the State is to provide a decent living to their citizen
which is the intent of the Department Order.
3. C. Alcantara and Sons v. CA (2w12)
G.R. No. 1551w9 and G.R. No. 155135 and G.R. No. 17922w | 2w12-w3-14
Subject: Jurisdiction over the parties acquired either by summons served on them or by their
voluntary appearance before its Labor Arbiter; A strike even if valid can be declared illegal if
there is a “no strike, no lockout” CBA provision; Union officers can be terminated from
employment for an illegal strike;
Facts:
C. Alcantara & Sons, Inc., 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.
The Union conducted a strike vote and went on strike. The Company, on the other hand, filed a
petition to declare the Union’s strike illegal, citing its violation of the no strike, no lockout,
provision of their CBA. Subsequently, the Company amended its petition to implead the named
Union members who allegedly committed prohibited acts during the strike.
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 Union also assailed
as invalid the service of summons on the individual Union members included in the amended
petition.
The Labor Arbiter ruled that the Union’s strike illegal for violating the CBA’s no strike, no lockout,
provision. The NLRC affirmed the decision of the Labor Arbiter insofar as the latter declared the
strike illegal, ordered the Union officers terminated, and directed them to pay damages to the
Company.
Held:
Jurisdiction over the parties acquired either by summons served on them or by their
voluntary appearance before its Labor Arbiter
1. Jurisdiction over parties acquired either by summons served on them or by their voluntary
appearance before its Labor Arbiter
2. The NLRC acquires jurisdiction over parties in cases before it either by summons served on
them or by their voluntary appearance before its Labor Arbiter. Here, while the Union insists that
summons were not properly served on the impleaded Union members with respect to the
Company’s amended petition that sought to declare the strike illegal, the records show that they
were so served. The Return of Service of Summons indicated that 74 out of the 81 impleaded
Union members were served with summons. But they refused either to accept the summons or
to acknowledge receipt of the same. Such refusal cannot of course frustrate the NLRC’s
acquisition of jurisdiction over them. Besides, the affected Union members voluntarily entered
their appearance in the case when they sought affirmative relief in the course of the proceedings
like an award of damages in their favor.
A strike even if valid can be declared illegal if there is a “no strike, no lockout” CBA
provision
3. 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.
4. In this case, 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.
Union officers can be terminated from employment for an illegal strike
5. Since the Union’s strike has been declared illegal, the Union officers can, in accordance with
law be terminated from employment for their actions. This includes the shop stewards. 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.
Dismissal of the criminal complaints against the Union members does not their liability
under the Labor Code
6. As regards the rank and file Union members, Article 264 of the Labor Code provides that
termination from employment is not warranted by the mere fact that a union member has taken
part in an illegal strike. It must be shown that such a union member, clearly identified, performed
an illegal act or acts during the strike.
7. Here, the Union members concerned committed prohibited acts, for which they had in fact
been criminally charged before various courts and the prosecutors’ office in Davao City. They
resisted and defied the implementation of the writ of preliminary injunction issued against the
strikers.
8. The mere fact that the criminal complaints against the terminated Union members were
subsequently dismissed for one reason or another does not extinguish their liability under the
Labor Code. Nor does such dismissal bar the admission of the affidavits, documents, and photos
presented to establish their identity and guilt during the hearing of the petition to declare the
strike illegal. The technical grounds that the Union interposed for denying admission of the
photos are also not binding on the NLRC.
The decision of the Labor Arbiter reinstating a dismissed employee shall immediately be
executory pending appeal
9. The grounds for termination under Article 264 are based on prohibited acts that employees
could commit during a strike. On the other hand, the grounds for termination under Articles 282
to 284 are based on the employee’s conduct in connection with his assigned work. Still, Article
217, which defines the powers of Labor Arbiters, vests in the latter jurisdiction over all
termination cases, whatever be the grounds given for the termination of employment.
Consequently, Article 223, which provides that the decision of the Labor Arbiter reinstating a
dismissed employee shall immediately be executory pending appeal, cannot but apply to all
terminations irrespective of the grounds on which they are based.
1w. Here, although the Labor Arbiter failed to act on the terminated Union members’ motion for
reinstatement pending appeal, the Company had the duty under Article 223 to immediately
reinstate the affected employees even if it intended to appeal from the decision ordaining such
reinstatement. The Company’s failure to do so makes it liable for accrued backwages until the
eventual reversal of the order of reinstatement by the NLRC, a period of four months and nine
days.
Grant of Financial Assistance
11. While it is true that generally the grant of separation pay is not available to employees who
are validly dismissed, there are, in furtherance of the law’s policy of compassionate justice,
certain circumstances that warrant the grant of some relief in favor of the terminated Union
members based on equity.
12. The striking employees’ breach of certain restrictions imposed on their concerted actions at
their employer’s doorsteps cannot be regarded as so inherently wicked that the employer can
totally disregard their long years of service prior to such breach. The records also fail to disclose
any past infractions committed by the dismissed Union members. Thus, the award of financial
assistance to these Union members in the form of one-half month salary for every year of
service to the company up to the date of their termination as equitable and reasonable.
4. ST. MARY’S ACADEMY OF DIPOLOG CITY vs. TERESITA PALACIO, ET AL.
G.R. No. 164913 w8 September 2w1w
FACTS:
In the 199ws, Petitioner hired Respondents Calibod, Laquio, Santander, Saile Padilla,
Andalahao, Decipulo and Montederamos, as teachers, and respondent Palacio as guidance
counselor. In accordance to DECS Memorandum No. 1w, S. 1998 pursuant to RA 7836, the
Petitioner informed the respondents that they cannot be re-accepted for the school year 2www-
2ww1 for not having passed the LET (Licensure Examinations for Teachers), nor can they
continue with their teaching profession.
They filed a complaint contesting that their termination as highly irregular and premature. They
averred their right to security of tenure despite the requirements set by the PRC for they had
special permits to teach and the civil service eligibility required under the law. In addition to this,
the deadline for teachers to register under the Memorandum was set to 19 September 2www,
but the petitioner decided to terminate them as early as 31 March 2www. Lastly, the acceptance
of the Petitioner of other teacher who do not also possess the required eligibility under the
Memorandum showed evident bad faith.
LA Decision:
The LA adjudged the petitioner guilty of illegal dismissal. Thus, petitioner was ordered to
reinstate the respondents or to pay them separation pay at the rate of ½ month wage for every
year of service, plus limited backwages.
NLRC Decision:
The NLRC upheld the LA’s decision, stating that the grounds relied upon by the petitioner or
dismiss the respondents are not among those enumerated by the Labor Code and that the
respondents are regular employees, who cannot be removed without just cause.
CA Decision:
The CA upheld both the decisions of the LA and the NLRC. It further held that the Petitioner
should have adopted a contingency plan if in case the respondents still have not complied with
the aforementioned requirements when the deadline has arrived. The CA also observed that the
petitioner’s ulterior motive for the termination may have been the result of a confrontation
between the principal and the respondents. However, as regards to Padilla, Palacio, Andalahao
and Decipulo, the CA found them to be merely probationary; therefore, there is no illegal
dismissal to speak of.
ISSUE(S):
Whether the dismissal of the respondents were premature because it was effected prior to the
deadline set by the PRC to acquire their license.
Whether the respondents are entitled to backwages from March to 19 September 2www,
because it is only on such date that they were already dismissible for cause.
HELD:
Yes. The Supreme Court agrees with the decisions of the LA, the NLRC and the CA. It is
incumbent upon the Court to afford full protection to labor.The law has provided a specific
timeframe within which respondents could comply, petitioner has no right to deny them of this
privilege accorded to them by law. In so far as Palacio, Calibod, Laquio, Santander and
Montedramos are concerned, being dismissed on March 2www was premature. However, Saile
is not qualified to take the LET, therefore, no prematurity is to speak of on her end. Petitioner’s
intention and desire not to put the students’ education and school operation in jeopardy is
neither a decisive consideration for respondents’ termination prior to the deadline set by law.
The prejudice that respondents’ retention would cause to the school’d operation is only trivial.
Yes. The respondents are entitled to limited backwages computed from 31 March 2www to
September 2www in favor of Palacio, Calibod, Laquio, Santander and Montederamos. The
Petitioner cannot possibly presume that respondents could not timely comply with the
requirements set by law.
5. MATERNITY CHILDREN’S HOSPITAL VS SECRETARY OF LABOR
(Labor Law defined)
G.R. No. 78909
Date: June 3, 1984
Petitioner: Maternity Children’s Hospital, represented by Antera L. Dorado
Respondents: The Honorable Secretary of Labor and the Regional Director of Labor, Region X
Ponente: Medialdea, J.
FACTS:
Petitioner is a semi-governmental hospital in Cagayan De Oro and Employing forty-one (41)
employees. Aside from salary and living allowances, the employees are given food, but the
amount of which is deducted from their respective salaries. On May 3, 1986, ten (1w) employees
filed a complaint with the Regional Director of Labor and Employment, Region 1w, for
underpayment of their salaries and ECOLAS. Consequently, the Regional Director directed two
of his labor standard and welfare officers to investigate and ascertain the truth of the allegations
in the complaint. Based on the report and recommendation, the Regional Director issued an
order dated August 4, 1986, directing payment of
₱ 723, 888.58, to all the petitioner’s employees. The Secretary of Labor likewise affirmed the
Decision and dismissed the Motion for Reconsideration of the petitioner. In a petition for
certiorari, petitioner questioned the jurisdiction of the Regional Director and the all-embracing
applicability of the award involving salary differentials and ECOLAS, in that it covers not only the
hospitals employees who signed the complaints, but also those who are not signatories to the
complaint, and those who were no longer in the service of the hospital at the time the complaint
was filed.
ISSUES: 1. Whether or not the Regional Director had jurisdiction over the case; and
2. Whether or not the Regional Director erred in extending the award to all hospital
employees?
HELD: 1.The answer is in the affirmative the Regional Directors has a jurisdiction in this labor
standard case. This is Labor Standard case, and is governed by Article 128 (b) of the Labor
Code, as amended by E.O. No. 111. “Labor standards refer to the minimum requirements
prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living
allowance and other monetary and welfare benefits, including occupational, safety, and health
standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional
Office, dated September 16, 1987)”.
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. We believed…that even in the absence of E. O. No. 111,
Regional Directors already had enforcement powers over money claims, effective under P.D.
No. 85w, issued on December 16, 1975, which transferred labor standards cases from the
arbitration system to the enforcement system.
2. The Regional Director correctly applied the award with respect to those employees who
signed the complaint, as well as those who did not sign the complaint, but were still connected
with the hospital at the time the complaint was filed. The justification for the award to this group
of employees who were not signatories to the complaint is that the visitorial and enforcement
powers given to the Secretary of Labor. Labor is relevant to, and exercisable over
establishments, not over individual members/employees, because what is sought to be achieved
by its exercise is the observance of, and/ or compliance by such firm/establishment with the
labor standards regulations. However, there is no legal justification for the award in favor of
those employees who were no longer connected with the hospital t the time the complaint was
filed. Article 129 of the Labor Code in aid of the enforcement power of the Regional Director is
not applicable where the employee seeking to be paid is separated from service. His claim is
purely money claim that has to be subject of arbitration proceedings and therefore within the
original and exclusive jurisdiction of the Labor Arbiter.
6. 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
Facts: This was an instant petition for certiorari to set aside the decision of NLRC setting aside
the suspension of the complaints and directing Philippine Airline to pay complainants their
salaries.
Individual respondents were port stewards of catering sub-department on the passenger
services department of petitioner. Their salaries were deducted due to the mishandling of
company’s properties which the respondents resented. On August 27, 1984, represented by the
union, individual respondents made a formal notice regarding the deductions thru Mr. Abad,
Manager for care taking who was on vacation leave but no action was taken. They then filed a
formal grievance pursuant to the collective bargaining agreement.
On his return, Mr. Abad on December 7, 1984, he informed the grievants and scheduled
meeting. Thereafter, the individual respondents refused to do ramp inventory thinking that since
there was no action taken by Mr. Abad five days after they filed the petition, it shall be resolved
in their favor. But Mr. Abad denied the petition and suspended individual respondents. He also
pointed out that it was only proper that employees were charged for the mishandling of
company’s property.
Private respondents filed a complaint for illegal suspension to the labor arbiter. The decision was
ruled in favor of the petitioner and the complaint was set aside. The labor arbiter’s decision was
appealed to the respondent commission who rendered decision setting aside the labor arbiter’s
order of dismissal. Petitioner’s motion for reconsideration was denied.
Issue: Whether public respondent NLRC acted with grave abuse of discretion amounting to lack
of jurisdiction on resolving in favor of individual respondents who believed that inaction on the
petition they filed for grievance would be resolved in their favor in accordance to their collective
bargaining agreement.
Held: The petition hinges on the interpretation of Sec. 2, Art. IV of the PAL-PALEA Collective
Bargaining Agreement about the processing of grievances. Petitioner submits that since the
grievance machinery was made for both labor and management, employees are duty-bound to
thresh out first all the remedies before the management and give them opportunity to act on it.
But due to the absence of Mr. Abad the grievance was not acted upon.
The court held that the employees should not bear the dire effects of Mr. Abad’s absence. The
management should had someone else to look after the grievance during his absence. 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: Petition was denied and the assailed decision of NLRC was affirmed.
7. SERRANO V. GALLANT MARITIME SERVICES, INC. (2009)
G.R. No. 167614 | 2009-03-24
Subject: The power of judicial review; The non-impairment clause is aligned with the general
principle that laws newly enacted have only a prospective operation; All private contracts must
yield to the police power of the State; Section 10 par 5 of R.A. No. 8042 is unconstitutional for it
violates the rights of OFWs to equal protection; No compelling state interest for the enforcement
of the subject clause; Salary is understood as the basic wage, exclusive of overtime, leave pay
and other bonuses.
Facts:
Antonio Serrano was hired by Gallant Maritime Services and Marlow Navigation. But on the date
of his departure, Serrano was constrained to accept a downgraded employment contract for the
position of Second Officer, upon the assurance and representation of Gallant and Marlow that he
would be made Chief Officer.
Gallant and Marlow did not deliver on their promise. Hence, Serrano refused to stay on as
Second Officer and was repatriated to the Philippines.
Serrano’s employment contract was for a period of 12 months but at the time of his repatriation,
he had served only two months and seven days of his contract, leaving an unexpired portion of
nine months and twenty-three days. He filed with the Labor Arbiter a complaint for constructive
dismissal and for payment of salary for the whole unexpired portion of his contract.
The Labor Arbiter found that Serrano was illegally dismissed and awarded him a lump-sum
representing his salary for three months of the unexpired portion of his contract of employment.
Serrano appealed to the NLRC to question the constitutionality of the last paragraph of Section
10, R.A. No. 8042. Serrano claimed that the last clause of the law limited the OFWs entitlement
in case of illegal dismissal to their lump-sum salary either for the unexpired portion of their
employment contract “or for three months for every year of the unexpired term, whichever is
less.” He argued that it impairs the OFWs constitutional rights to negotiate in terms of their
contract, deprives them of equal protection and denies them due process.
The NLRC affirmed the decision but corrected the computation of the salary. The Court of
Appeals affirmed the NLRC ruling but did not rule on the constitutional issue raised by Serrano.
Held:
The power of judicial review
1. For the Supreme Court to exercise its power of judicial review of the acts of its co-equals,
such as the Congress, the conditions must be obtained:
(1) that there is an actual case or controversy involving a conflict of rights susceptible of judicial
determination;
(2) that the constitutional question is raised by a proper party;
(3) the constitutional question is raised at the earliest opportunity; and
(4) that the constitutional question is the very lis mota of the case.
2. In the instant case, all the conditions are present. First, there exists an actual
controversy directly involving Serrano who is personally aggrieved that the labor tribunals and
the CA computed his monetary award based on the salary period of three months only as
provided under the subject clause. Second, the constitutional challenge is also timely. The
requirement that a constitutional issue be raised at the earliest opportunity entails the
interposition of the issue in the pleadings before a competent court. In this case, the issue is
deemed seasonably raised at the Court of Appeals which has the competence to resolve the
constitutional issue. And third, the monetary claim of Serrano to his lump-sum salary for the
entire unexpired portion of his 12-month employment contract strikes at the very core of the
subject clause which is the constitutional issue.
The non-impairment clause is aligned with the general principle that laws newly enacted
have only a prospective operation
3. The non-impairment clause under Section 10, Article II is aligned with the general principle
that laws newly enacted have only a prospective operation and cannot affect acts or contracts
already perfected.
4. In this case, the enactment of R.A. No. 8042 in 1995 preceded the execution of the
employment contract between Serrano and Gallant Maritime in 1998. Hence, R.A. No. 8042,
particularly the subject clause, does not impair the employment contract of the parties. Rather,
when the parties executed their 1998 employment contract, they were deemed to have
incorporated into it all the provisions of R.A. No. 8042.
All private contracts must yield to the police power of the State
5. The law was enacted in the exercise of the police power of the State to regulate a business,
profession or calling, particularly the recruitment and deployment of OFWs, 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 general welfare of the
people are generally applicable not only to future contracts but even to those already in
existence. All private contracts must yield to the superior and legitimate measures taken by the
State to promote public welfare.
5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for it violates the rights
of OFWs to equal protection
6. Section 18, Article II and Section 3, Article XIII of the Constitution accord all members of the
labor sector, without distinction as to place of deployment, full protection of their rights and
welfare. But these rights are not absolute but subject to the inherent power of Congress to
incorporate a system of classification into its legislation. However, 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.
7. There are three levels of scrutiny at which the Court reviews the constitutionality of a
classification embodied in a law:
a) the deferential or rational basis scrutiny in which the challenged classification needs only
be shown to be rationally related to serving a legitimate state interest;
b) the middle-tier or intermediate scrutiny in which the government must show that the
challenged classification serves an important state interest and that the classification is at least
substantially related to serving that interest; and
c) strict judicial scrutiny in which a legislative classification which impermissibly interferes with
the exercise of a fundamental right or operates to the peculiar disadvantage of a suspect
class[ is presumed unconstitutional, and the burden is upon the government to prove that the
classification is necessary to achieve a compelling state interest and that it is the least
restrictive means to protect such interest.
8. In the instant case, upon employing the standard of strict judicial scrutiny, the subject clause
in R.A. 8042 classifies OFWs into two categories. The first category includes OFWs with fixed-
period employment contracts of less than one year and 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 and in case of
illegal dismissal, they are entitled to monetary award equivalent to only 3 months of the
unexpired portion of their contracts.
9. The disparity in the treatment of these two groups becomes more aggravating because 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. This uniform system
was applicable even to local workers with fixed-term employment.
10. 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.
No compelling state interest for the enforcement of the subject clause
11. In the present case, there is no compelling state interest that the subject clause may possibly
serve. The rationale of the subject clause in the transcripts of the “Bicameral Conference
Committee Meetings on the Magna Carta on OCWs” has no discernible state interest that is
sought to be protected or advanced by the adoption of the subject clause.
12. The argument by the OSG that the purpose of the subject clause is to protect the
employment of OFWs by mitigating the solidary liability of placement agencies must be rejected.
There can never be a justification for any form of government action that alleviates the burden of
one sector, but imposes the same burden on another sector, especially when the favored sector
is composed of private businesses such as placement agencies, while the disadvantaged sector
is composed of OFWs whose protection no less than the Constitution commands. Resort to
these administrative measures is undoubtedly the less restrictive means of aiding local
placement agencies in enforcing the solidary liability of their foreign principals.
13. 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. Hence, Serrano is entitled to his salaries for the entire
unexpired period of nine months and 23 days of his employment contract.
Salary is understood as the basic wage, exclusive of overtime, leave pay and other
bonuses
14. The word salaries in Section 10 (5) do not include overtime and leave pay. For seafarers,
DOLE Department Order No. 33 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. Hence, there is no basis for the automatic inclusion of overtime and
holiday pay in the computation of petitioner's monetary award unless there is evidence that he
performed work during those periods.
8. ANG TIBAY V. COURT OF INDUSTRIAL RELATIONS
G.R. No. 46496 | 1940-02-27
Subject: Court of Industrial Relations, Due Process in Administrative Proceedings, Substantial
Evidence
Facts:
A motion for new trial was filed before the Supreme Court by the respondent labor union seeking
to vacate its previous decision, and to remand the case to the Court of Industrial Relations. On
the other hand, a motion for reconsideration was filed by the Solicitor General seeking to have
the Court reconsider its decision. This case arose out of a labor dispute wherein the employees
of a leather company, members of the respondent union, were laid off, on the basis of an alleged
leather shortage. Thus, a case for unfair labor practice was filed against the leather company,
herein petitioner, before the Court of Industrial Relations. The union now asks for new trial on
the basis of newly discovered evidence which they could not have filed before the Court of
Industrial Relations despite the exercise of due diligence.
Held:
Court of Industrial Relations
1. The Court of Industrial Relations is a special court whose functions are specifically stated in
the law of its creation.
2. It is more an administrative than a part of the integrated judicial system of the nation. It is not
intended to be a mere receptive organ of the Government.
3. 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
Court of Industrial Relations, as will appear from perusal of its organic law, is more active,
affirmative and dynamic.
4. It not only exercises judicial or quasi-judicial functions in the determination of disputes
between employers and employees but its functions in the determination of disputes between
employers and employees but its functions are far more comprehensive and expensive.
5. In fine, it may appeal to voluntary arbitration in the settlement of industrial disputes; may
employ mediation or conciliation for that purpose, or recur to the more effective system of official
investigation and compulsory arbitration in order to determine specific controversies between
labor and capital industry and in agriculture. There is in reality here a mingling of executive and
judicial functions, which is a departure from the rigid doctrine of the separation of governmental
powers.
6. The Court of Industrial Relations is not narrowly constrained by technical rules of procedure,
and the Act requires it to "act according to justice and equity and substantial merits of the case,
without regard to technicalities or legal forms and shall not be bound by any 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."
7. The fact, however, that the Court of Industrial Relations may be said to be free from the
rigidity of certain procedural requirements does not mean that it can, in justifiable cases before it,
entirely ignore or disregard the fundamental and essential requirements of due process in trials
and investigations of an administrative character.
Due Process in Administrative Proceedings
8. There are primary rights which must be respected even in proceedings of this character:
a. The first of these rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in support thereof.
b. Not only must the party be given an opportunity to present his case and to adduce evidence
tending to establish the rights which he asserts but the tribunal must consider the evidence
presented.
c. While the duty to deliberate does not impose the obligation to decide right, it does imply a
necessity which cannot be disregarded, namely, that of having something to support it is a
nullity, a place when directly attached.
d. Not only must there be some evidence to support a finding or conclusion but the evidence
must be "substantial."
e. The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected.
f. The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision. It may be that the volume of work is such that it
is literally Relations personally to decide all controversies coming before them. In the United
States the difficulty is solved with the enactment of statutory authority authorizing examiners or
other subordinates to render final decision, with the right to appeal to board or commission, but
in our case there is no such statutory authority.
g. The Court of Industrial Relations should, in all controversial questions, render its decision in
such a manner that the parties to the proceeding can know the various issues involved, and the
reasons for the decision rendered.
Substantial Evidence
9. It means such relevant evidence as a reasonable mind accept as adequate to support a
conclusion.
9. FEDERICO M. LEDESMA, JR., Petitioner, versus 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 | 2007-10-19
DECISION
CHICO-NAZARIO, J.:
This a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, filed by
petitioner Federico Ledesma, Jr., seeking to reverse and set aside the Decision,[1] dated 28
May 2005, and the Resolution,[2] dated 7 September 2006, of the Court of Appeals in CA-G.R.
SP No. 79724. The appellate court, in its assailed Decision and Resolution, affirmed the
Decision dated 15 April 2003, and Resolution dated 9 June 2003, of the National Labor
Relations Commission (NLRC), dismissing petitioner's complaint for illegal dismissal and
ordering the private respondent Philippine National Training Institute (PNTI) to reinstate
petitioner to his former position without loss of seniority rights.
The factual and procedural antecedents of the instant petition are as follows:
On 4 December 1998, petitioner was employed as a bus/service driver by the private respondent
on probationary basis, as evidenced by his appointment.[3] 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).[4]
On 11 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. A copy of the complaint was duly
received by private respondent's Chief Accountant, Nita Azarcon (Azarcon).[5]
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 for allegedly
violating Section 14, Article IV of the private respondent's Code of Conduct.[6]
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.
Petitioner alleged that he was asked to report at private respondent's main office in España,
Manila, on 29 November 2000. There, petitioner was served by HR Manager Cueva a copy of
the Notice to Explain together with the copy of de Leon's report citing his suspected drug use.
After he was made to receive the copies of the said notice and report, HR Manager Cueva went
inside the office of VP for Administration Ty. After a while, HR Manager Cueva came out of the
office with VP for Administration Ty. To petitioner's surprise, HR Manager Cueva took back the
earlier Notice to Explain given to him and flatly declared that there was no more need for the
petitioner to explain since his drug test result revealed that he was positive for drugs. When
petitioner, however, asked for a copy of the said drug test result, HR Manager Cueva told him
that it was with the company's president, but she would also later claim that the drug test result
was already with the proper authorities at Camp Crame.[8]
Petitioner was then asked by HR Manager Cueva to sign a resignation letter and also remarked
that whether or not petitioner would resign willingly, he was no longer considered an employee
of private respondent. All these events transpired in the presence of VP for Administration Ty,
who even convinced petitioner to just voluntarily resign with the assurance that he would still be
given separation pay. Petitioner did not yet sign the resignation letter replying that he needed
time to think over the offers. When petitioner went back to private respondent's training site in
Dasmariñas, Cavite, to get his bicycle, he was no longer allowed by the guard to enter the
premises.[9]
On the following day, petitioner immediately went to St. Dominic Medical Center for a drug test
and he was found negative for any drug substance. With his drug result on hand, petitioner went
back to private respondent's main office in Manila to talk to VP for Administration Ty and HR
Manager Cueva and to show to them his drug test result. Petitioner then told VP for
Administration Ty and HR Manager Cueva that since his drug test proved that he was not guilty
of the drug use charge against him, he decided to continue to work for the private
respondent.[10]
On 2 December 2000, petitioner reported for work but he was no longer allowed to enter the
training site for he was allegedly banned therefrom according to the guard on duty. This incident
prompted the petitioner to file the complaint for illegal dismissal against the private respondent
before the Labor Arbiter.
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.[11]
Private respondent likewise denied petitioner's allegations that it banned the latter from entering
private respondent's premises. Rather, it was petitioner who failed or refused to report to work
after he was made to explain his alleged drug use. Indeed, on 3 December 2000, petitioner was
able to claim at the training site his salary for the period of 16-30 November 2000, as evidenced
by a copy of the pay voucher bearing petitioner's signature. Petitioner's accusation that he was
no longer allowed to enter the training site was further belied by the fact that he was able to
claim his 13th month pay thereat on 9 December 2000, supported by a copy of the pay voucher
signed by petitioner.[12]
On 26 July 2002, the Labor Arbiter rendered a Decision,[13] in favor of the petitioner declaring
illegal his separation from employment. The Labor Arbiter, however, did not order petitioner's
reinstatement for the same was no longer practical, and only directed private respondent to pay
petitioner backwages. The dispositive portion of the Labor Arbiter's Decision reads:
WHEREFORE, premises considered, the dismissal of the [petitioner] is herein declared to be
illegal. [Private respondent] is directed to pay the complainant backwages and separation pay in
the total amount of One Hundred Eighty Four Thousand Eight Hundred Sixty One Pesos and
Fifty Three Centavos (P184, 861.53).[14]
Both parties questioned the Labor Arbiter's Decision before the NLRC. Petitioner assailed the
portion of the Labor Arbiter's Decision denying his prayer for reinstatement, and arguing that the
doctrine of strained relations is applied only to confidential employees and his position as a
driver was not covered by such prohibition.[15] On the other hand, private respondent
controverted the Labor Arbiter's finding that petitioner was illegally dismissed from employment,
and insisted that petitioner was never dismissed from his job but failed to report to work after he
was asked to explain regarding his suspected drug use.[16]
On 15 April 2003, the NLRC granted the appeal raised by both parties and reversed the Labor
Arbiter's Decision.[17] The NLRC declared that petitioner failed to establish the fact of dismissal
for his claim that he was banned from entering the training site was rendered impossible by the
fact that he was able to subsequently claim his salary and 13th month pay. Petitioner's claim for
reinstatement was, however, granted by the NLRC. The decretal part of the NLRC Decision
reads:
WHEREFORE, premises considered, the decision under review is, hereby REVERSED and SET
ASIDE, and another entered, DISMISSING the complaint for lack of merit.
[Petitioner] is however, ordered REINSTATED to his former position without loss of seniority
rights, but WITHOUT BACKWAGES.[18]
The Motion for Reconsideration filed by petitioner was likewise denied by the NLRC in its
Resolution dated 29 August 2003.[19]
The Court of Appeals dismissed petitioner's Petition for Certiorari under Rule 65 of the Revised
Rules of Court, and affirmed the NLRC Decision giving more credence to private respondent's
stance that petitioner was not dismissed from employment, as it is more in accord with the
evidence on record and the attendant circumstances of the instant case.[20] Similarly ill-fated
was petitioner's Motion for Reconsideration, which was denied by the Court of Appeals in its
Resolution issued on 7 September 2006. [21]
Hence, this instant Petition for Review on Certiorari[22] under Rule 45 of the Revised Rules of
Court, filed by petitioner assailing the foregoing Court of Appeals Decision and Resolution on the
following grounds:
I.
WHETHER, THE HON. COURT OF APPEALS COMMITTED A MISAPPREHENSION OF
FACTS, AND THE ASSAILED DECISION IS NOT SUPPORTED BY THE EVIDENCE ON
RECORD. PETITIONER'S DISMISSAL WAS ESTABLISHED BY THE UNCONTRADICTED
EVIDENCES ON RECORD, WHICH WERE MISAPPRECIATED BY PUBLIC RESPONDENT
NLRC, AND HAD THESE BEEN CONSIDERED THE INEVITABLE CONCLUSION WOULD BE
THE AFFIRMATION OF THE LABOR ARBITER'S DECISION FINDING ILLEGAL DISMISSAL
II.
WHETHER, THE HON. COURT OF APPEALS SUBVERTED DUE PROCESS OF LAW WHEN
IT DID NOT CONSIDER THE EVIDENCE ON RECORD SHOWING THAT THERE WAS NO
JUST CAUSE FOR DISMISSAL AS PETITIONER IS NOT A DRUG USER AND THERE IS NO
EVIDENCE TO SUPPORT THIS GROUND FOR DISMISSAL.
III.
WHETHER, THE HON. COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW
IN NOT FINDING THAT RESPONDENTS SUBVERTED PETITIONER'S RIGHT TO DUE
PROCESS OF THE LAW.[23]
Before we delve into the merits of this case, it is best to stress that the issues raised by
petitioner in this instant petition are factual in nature which is not within the office of a Petition for
Review.[24] The raison d'etre for this rule is that, this Court is not a trier of facts and does not
routinely undertake the re-examination of the evidence presented by the contending parties for
the factual findings of the labor officials who have acquired expertise in their own fields are
accorded not only respect but even finality, and are binding upon this Court.[25]
However, when the findings of the Labor Arbiter contradict those of the NLRC, departure from
the general rule is warranted, and this Court must of necessity make an infinitesimal scrunity and
examine the records all over again including the evidence presented by the opposing parties to
determine which findings should be preferred as more conformable with evidentiary facts.[26]
The primordial issue in the petition at bar is whether the petitioner was illegally dismissed from
employment.
The Labor Arbiter found that the petitioner was illegally dismissed from employment warranting
the payment of his backwages. The NLRC and the Court of Appeals found otherwise.
In reversing the Labor Arbiter's Decision, the NLRC underscored the settled evidentiary rule that
before the burden of proof shifts to the employer to prove the validity of the employee's
dismissal, the employee must first sufficiently establish that he was indeed dismissed from
employment. The petitioner, in the present case, failed to establish the fact of his dismissal. The
NLRC did not give credence to petitioner's allegation that he was banned by the private
respondent from entering the workplace, opining that had it been true that petitioner was no
longer allowed to enter the training site when he reported for work thereat on 2 December 2000,
it is quite a wonder he was able to do so the very next day, on 3 December 2000, to claim his
salary.[27]
The Court of Appeals validated the above conclusion reached by the NLRC and further
rationated that petitioner's positive allegations that he was dismissed from service was negated
by substantial evidence to the contrary. Petitioner's averments of what transpired inside private
respondent's main office on 29 November 2000, when he was allegedly already dismissed from
service, and his claim that he was effectively banned from private respondent's premises are
belied by the fact that he was able to claim his salary for the period of 16-30 November 2000 at
private respondent's training site.
Petitioner, therefore, is now before this Court assailing the Decisions handed down by the NLRC
and the Court of Appeals, and insisting that he was illegally dismissed from his employment.
Petitioner argues that his receipt of his earned salary for the period of 16-30 November 2000,
and his 13th month pay, is neither inconsistent with nor a negation of his allegation of illegal
dismissal. Petitioner maintains that he received his salary and benefit only from the guardhouse,
for he was already banned from the work premises.
We are not persuaded.
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.[28] 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.[29]
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.
Petitioner himself narrated that when his presence was requested on 29 November 2000 at the
private respondent's main office where he was served with the Notice to Explain his superior's
report on his suspected drug use, VP for Administration Ty offered him separation pay if he will
just voluntarily resign from employment. While we do not condone such an offer, neither can we
construe that petitioner was dismissed at that instance. Petitioner was only being given the
option to either resign and receive his separation pay or not to resign but face the possible
disciplinary charges against him. The final decision, therefore, whether to voluntarily resign or to
continue working still, ultimately rests with the petitioner. In fact, by petitioner's own admission,
he requested from VP for Administration Ty more time to think over the offer.
Moreover, the petitioner alleged that he was not allowed to enter the training site by the guard on
duty who told him that he was already banned from the premises. Subsequently, however,
petitioner admitted in his Supplemental Affidavit that he was able to return to the said site on 3
December 2000, to claim his 16-30 November 2000 salary, and again on 9 December 2000, to
receive his 13th month pay. The fact alone that he was able to return to the training site to claim
his salary and benefits raises doubt as to his purported ban from the premises.
Finally, petitioner's stance that he was dismissed by private respondent was further weakened
with the presentation of private respondent's payroll bearing petitioner's name proving that
petitioner remained as private respondent's employee up to December 2000. Again, petitioner's
assertion that the payroll was merely fabricated for the purpose of supporting private
respondent's case before the NLRC cannot be given credence. Entries in the payroll, being
entries in the course of business, enjoy the presumption of regularity under Rule 130, Section 43
of the Rules of Court. It is therefore incumbent upon the petitioner to adduce clear and
convincing evidence in support of his claim of fabrication and to overcome such presumption of
regularity.[30] Unfortunately, petitioner again failed in such endeavor.
On these scores, there is a dearth of evidence to establish the fact of petitioner's dismissal. We
have scrupulously examined the records and we found no evidence presented by petitioner,
other than his own contentions that he was indeed dismissed by private respondent.
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.
In Machica v. Roosevelt Services Center, Inc.,[32] we had underscored that the burden of
proving the allegations rest upon the party alleging, to wit:
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.[33]
In Rufina Patis Factory v. Alusitain,[34] this Court took the occasion to emphasize:
It is a basic rule in evidence, however, that the burden of proof is on the part of the party who
makes the allegations - ei incumbit probatio, qui dicit, non qui negat. If he claims a right granted
by law, he must prove his claim by competent evidence, relying on the strength of his own
evidence and not upon the weakness of that of his opponent.[35]
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.[36]
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.
10. LUZ G. CRISTOBAL, petitioner, vs. EMPLOYEES' COMPENSATION COMMISSION and
GOVERNMENT SERVICE INSURANCE SYSTEM (National Science Development Board);
respondents.
G.R. No. L-49280 | 1980-04-30
DECISION
MAKASIAR, J.:
Petition for review on certiorari of the June 21, 1978 decision of the Employees' Compensation
Commission filed by petitioner in forma pauperis.
The deceased, Fortunato S. Cristobal, was employed as Supervising Information Officer II 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 (p. 6, rec.).
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 stating that -
"Under the present law on compensation, the listed occupational diseases are compensable
when the conditions set therein are satisfied. It also allows certain diseases to be compensable
whenever the claimant is able to prove that the risks of contracting such diseases were
increased by the working conditions attendant to the deceased's employment. This is provided
under Sec. 1(b) Pule III of the Rules and Regulations Implementing Presidential Decree No. 626
which took effect on January 1, 1975. As far as the degree of proof is concerned, the claimant
must be able to show at least by substantial evidence that the development of the ailment was
brought largely by the working conditions present in the nature of employment. In the case of
your husband, it will be noted that the ailment which resulted in his death on May 27, 1977 was
Rectal Malignancy. This ailment, not being listed as an occupational disease, therefore, required
such degree of proof as mentioned above. On the basis, however, of the papers and evidence
on record which you have submitted, it appears that you have not established that the
deceased's employment has any direct causal relationship with the contraction of the ailment.
While it is admitted that the aforementioned ailment supervened in the course of the deceased's
employment as Supervising Information Officer II in the National Science Development Board,
Bicutan, Taguig, Rizal, there has not been any showing that the same directly arose therefrom or
resulted from the nature thereof" (GSIS letter dated February 20, 1978 denying the request of
petitioner for reconsideration).
The petitioner appealed to the ECC, which affirmed the decision of the GSIS.
Hence, this petition.
In resolving the issue of compensability, the respondents herein failed to consider these
outstanding facts patent from the records. The deceased, as Supervising Officer II of the NSDB,
was actually assigned to the Printing Department of the said agency where he was exposed to
various chemicals and intense heat. This fact was corroborated by the affidavit of one Angel
Peres, a co-employee of the deceased, to the effect that -
"I know personally Fortunato Cristobal because he was my Supervisor in the Bureau of Printing;
"During the employment of Fortunato Cristobal at the Bureau of Printing, he contracted sickness
which was later diagnosed as anorectal cancer which caused his death;
"Fortunato Cristobal continued working at the aforementioned Bureau of Printing even when he
was already suffering from a rectal illness and he had been complaining to me that said illness
became more painful whenever he performs his job in the Bureau;
"I also noticed that he oftentimes eat food in the Bureau without washing his hands;
"The place where Fortunato Cristobal was assigned in the Bureau of Printing is very unhygienic
and polluted with chemicals and he oftentimes complain to me that the odor of the chemicals
make him feel dizzy always;
"Fortunato Cristobal always handle chemicals in the Bureau of Printing while in the performance
of his duties" (Annex C, Petition).
These statements find relevance in the medical certificate issued by Dr. Rufo A. Guzman stating
that "the illness may be aggravated by the unhygienic conditions in the Bureau of Printing where
he works. Handling of chemicals for printing, eating without proper washing of hands, tension
due to the pressure of work, plus neglected personal necessity which may be attributed to the
inadequate facilities in the Bureau of Printing" (Annex D, Petition).
Undisputed is the fact that the deceased entered the government free from any kind of disease.
Likewise, it is admitted that the deceased husband's ailment supervened in the course of his
employment with the NSDB. The ECC, however, failed to appreciate the evidence submitted by
the petitioner to substantiate her claim. In denying the claim, it merely relied on the fact that the
certification issued by the physician of the deceased failed to indicate the actual causes or
factors which led to the decedent's rectal maliguancy. This Court, however, is of the opinion that
the affidavit of Angel Peres substantiated by the medical certificate issued by Dr. Rufo A.
Guzman (in relation to the medical findings of Dr. Willie Lagdameo of the Hospital of Infant
Jesus (p. 17, ECC rec.] and Dr. Mercia C. Abremica, its own medical officer [p. 9, ECC rec.])
sufficiently establish proof that the risk of contracting the disease is increased, if not caused, by
the working conditions prevailing in the respondent's (NSDB) premises.
In the case of Eliseo vs. Workmen's Compensation Commission (84 SCRA 188), this Court held:
"We cannot agree with the private respondent that the claim of the petitioner is without any
factual or legal basis nor with the respondent Workmen's Compensation Commission that there
is no evidence substantial enough to show that this leukemia which caused the death of Isabel
Eliseo has a causal relation to the nature of her work with the respondent G & S Manufacturing
Corp. It may be true that the job of a reviser or quality controller, which was the work of claimant
Isabel Eliseo, does not entail physical exertion. It may also be true that all that is required is
alertness of the eye to see and detect any defect or flaw in a garment being revised and to point
out those defects for correction or repair before a garment can pass for distribution and use.
However, it must be admitted that the nature of the work of the claimant required her to deal with
textiles or fabrics which involved chemicals of various kinds and composition and this exposure
of the deceased to these chemicals in private respondent's establishment probably led to the
development of the disease of leukemia or at least aggravated the illness of the claimant from
which she died as a result. In Laron vs. Workmen's Compensation Commission, et al., 73 SCRA
84, We held that in testing the evidence or the relation between the injury or disease and the
employment, probability and not certainty, is the touchstone, reiterated in National Housing
Corp. vs. WCC, 79 SCRA 281."
Section 1(b), Rule III of the Implementing Rules and regulations of P.D. 626 provides -
"For sickness and the resulting disability or death to be compensable, the sickness must be the
result of an occupational disease listed under Annex 'A' of these Rules with the conditions set
therein satisfied otherwise, proof must he shown that the risk of contracting the disease is
increased by the working conditions."
This Court is convinced that the petitioner, by clear and convincing evidence, has adequately
satisfied the second part of the aforequoted provision, following the theory of increased risk as
laid down in the case of Amparo vs. GSIS, ECC Case No. 0046 (August 18, 1976) and reiterated
in Corales vs. ECC, 84 SCRA 762 (August 25, 1978).
Furthermore, in the case of Sepulveda vs. Employees' Compensation Commission (84 SCRA
771 [August 25, 1978]), this Court stated that -
". . . the respondent Commission, under Resolution No. 223 dated March 16, 1977, adopted, as
a policy, the institution of a more compassionate interpretation of the restrictive provisions of
Presidential Decree No. 626, as amended, by its administering agencies, the Social Security
System and the Government Service Insurance System, with respect to, among others,
Myocardial Infarction and other borderline cases. . . ."
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."
(Santos vs. WCC, 75 SCRA 371[1977]).
As pointed out by no less than the respondent ECC itself in its Comment dated January 5, 1978
- husband's cancer was caused by his employment - if science itself is ignorant of the cause of
"It may not be amiss to mention that the ECC has time and again expanded the list of
occupational diseases. This comes about after continuing studies made by the ECC. Indeed,
cancer has already been included as a qualified occupational disease in certain cases -
Occupational Diseases Nature of Employment
1. Cancer of the epithelial. Work involving exposure to lining bladder (Papilloma of
alphanaphtylamine, the bladder) betanapthaylamine or benzidine or any part of the salts; and
auramine or magenta"
"2. Cancer epithellomatomaor The use or handling of, ulceration of the skin of the exposure to
tar, pitch,
corneal bitumen, surface of mineral oil (include paraffin) the eye due to tar, pitch, soot or any
compound product
bitumen, mineral oil or or residue of any of these substances paraffin or any compound product
or residue of any of these substances
xxx xxx xxx
"16. Cancer of the stomach and Woodworkers; wood products other lymphatic and blood
industry carpenters, loggers and forming vessels; nasal cavity employees in pulp and and
sinuses papermills and plywood mills
"17. Cancer of the lungs, liver - Vinyl chloride workers, plastic and brain workers
"Worth nothing is the fact that the above types of cancer have no known etiology. Yet, they are
regarded as occupational. The clear implication is that the law merely requires a reasonable
work-connection" (pp. 59-60, rec.).
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 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 chemical diseases whose exact etiology,
cause or origin, is unknown. It is in this regard that the evidence submitted by the petitioner
deserves serious consideration.
As persuasively pointed out by the petitioner in her memorandum addressed to this Court dated
April 6, 1979 -
xxx xxx xxx
"The respondent GSIS said, 'It is unfortunate that despite the relatively fast pace in the march of
progress, science to this day has not given us the cause of cancer' (p. 11, GSIS Comment).
Hence medical scientists are still venturing into the unknown, so to speak. . . ..
xxx xxx xxx
"Evidently, GSIS has trodden the grounds on an unsure foot. It would seem to insinuate that
petitioner must blame science for having not yet discovered the actual cause of her husband's
fatal illness. Why is it then that petitioner must be required to prove causation - that her
cancer? . . . ."
WE give due consideration to the respondent's application of P.D. 626 in ruling on the claim
since petitioner's husband died on May 27, 1977, after the effectivity of the provisions of the New
Labor Code on Employees' Compensation. Moreover, medical records did not disclose the date
when the deceased employee actually contracted the disease, rectal malignancy having been
discovered only on April 22, 1976 when the deceased sought hospital confinement.
From the above discussion, it is undeniable that the petitioner is entitled to her claim.
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.
PRELIMINARY TITLE
LABOR LAW: BASIC CONCEPTS
1. ERNESTO G. YMBONG, petitioner, vs. ABS-CBN BROADCASTING CORPORATION,
VENERANDA SY AND DANTE LUZON, respondents. (2012)
Labor Law; Termination of Employment; Resignation; Although §11(b) of R.A. No. 6646 does not
require mass media commentators and announcers such as private respondent to resign from
their radio or TV stations but only to go on leave for the duration of the campaign period, we think
that the company may nevertheless validly require them to resign as a matter of policy.
This is not the first time that this Court has dealt with a policy similar to Policy No. HR-ER-016. In
the case of Manila Broadcasting Company v. NLRC, 294 SCRA 486 (1998), this Court ruled: What
is involved in this case is an unwritten company policy considering any employee who files a
certificate of candidacy for any elective or local office as resigned from the company. Although
§11(b) of R.A. No. 6646 does not require mass media commentators and announcers such as
private respondent to resign from their radio or TV stations but only to go on leave for the duration
of the campaign period, we think that the company may nevertheless validly require them to resign
as a matter of policy. In this case, the policy is justified on the following grounds: Working for the
government and the company at the same time is clearly disadvantageous and prejudicial to the
rights and interest not only of the company but the public as well. In the event an employee wins
in an election, he cannot fully serve, as he is expected to do, the interest of his employer. The
employee has to serve two (2) employers, obviously detrimental to the interest of both the
government and the private employer. In the event the employee loses in the election, the
impartiality and cold neutrality of an employee as broadcast personality is suspect, thus readily
eroding and adversely affecting the confidence and trust of the listening public to employer’s
station.
Same; Same; Management Prerogative; 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, the Supreme Court will uphold them.
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
Same; Same; 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.
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.
FACTS:
Ymbong started working for ABS-CBN in 1993 at its regional station in Cebu as a television talent,
co-anchoring Hoy Gising and TV Patrol Cebu. It later extended to radio when ABS-CBN Cebu
launched its AM station DYAB where he worked as drama and voice talent, spinner, scriptwriter
and public affairs program anchor.
Dante Luzon, Assistant Station Manager of DYAB issued a memorandum informing that any
employee or talent who wants to run for any position in the coming election will have to file a leave
of absence the moment he files his certificate of candidacy. Luzon, however, admitted that he saw
that the policy actually required suspension for those who intend to campaign for a political party
or candidate and resignation for those who will actually run in the elections. After the issuance of
the 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 Memorandum, he informed Luzon through a letter that he would take a few months leave
of absence since he was running for councilor of Lapu-Lapu City. Ymbong tried to come back to
ABS-CBN Cebu. Luzon informed him that they cannot work there anymore because of company
policy. ABS-CBN, however, agreed out of pure liberality to give them a chance to wind up their
participation in the radio drama that was rating well and to avoid an abrupt ending. The agreed
winding-up, however, dragged on for so long prompting Luzon to issue to Ymbong a memorandum
that all his drama participation shall be terminated effective immediately. However his involvement
as drama spinner or narrator of the drama “NAGBA[BA]GANG LANGIT” continues until its writer
or director wraps it up one week upon receipt of a separate memo issued to him. Ymbong in
contrast contended that after the expiration of his leave of absence, he reported back to work as
a regular talent and in fact continued to receive his salary. Upon a receipt of a memo he filed an
illegal dismissal complaint against ABS-CBN, Luzon and DYAB Station Manager Veneranda Sy.
He argued that the ground cited by ABS-CBN for his dismissal was not among those enumerated
in the Labor Code. And even granting without admitting the existence of the company policy
supposed to have been violated, Ymbong averred that it was necessary that the company policy
meet certain requirements before willful disobedience of the policy may constitute a just cause for
termination. Ymbong further argued that the company policy violates his constitutional right to
suffrage. ABS-CBN prayed for the dismissal of the complaints arguing that there is no EER
between the company and Ymbong and contended that they are not employees but talents as
evidenced by their talent contracts. The Labor Arbiter found that EER exists between ABS-CBN
and Ymbong considering the stipulations in their appointment letters or talent contracts because
it imposed conditions in the performance of their work, specifically on attendance and punctuality,
which effectively placed them under the control of ABS-CBN. The Labor Arbiter likewise ruled that
although the subject company policy is reasonable and not contrary to law, the same was not
made known to Ymbong and in fact was superseded by another one embodied in the
Memorandum issued by Luzon. Thus, there is no valid or authorized cause in terminating Ymbong
and Patalinghug from their employment. ABS-CBN contended that the Labor Arbiter has no
jurisdiction over the case. The NLRC favored Ymbong and ordered his reinstatement. ABS-CBN
filed a petition against NLRC imputing grave abuse of discretion. The CA declared Ymbong
resigned from employment and not to have been illegally dismissed.
The CA ruled that ABS-CBN is estopped from claiming that Ymbong was not its employee after
applying the provisions of a policy on Employees Seeking Public Office and the guidelines
contained therein specifically pertain to employees and did not even mention talents or
independent contractors. It held that it is a complete turnaround on ABS-CBN’s part to later argue
that Ymbong is only a radio talent or independent contractor and not its employee. By applying
the subject company policy on Ymbong, ABS-CBN had explicitly recognized him to be an
employee and not merely an independent contractor.
The CA likewise held that the subject company policy is the controlling guideline and therefore,
Ymbong should be considered resigned from ABS-CBN. While Luzon has policy-making power
as assistant radio manager, he had no authority to issue a memorandum that had the effect of
repealing or superseding a subsisting policy. Contrary to the findings of the Labor Arbiter, the
subject company policy was effective at that time and continues to be valid and subsisting up to
the present.
The CA cited Patalinghug’s resignation letter to buttress this conclusion, noting that Patalinghug
openly admitted in his letter that his resignation was in line with the said company policy. Since
ABS-CBN applied Policy No. HR-ER-016 to Patalinghug, there is no reason not to apply the same
regulation to Ymbong who was on a similar situation as the former. Thus, the CA found that the
NLRC overstepped its area of discretion to a point of grave abuse in declaring Ymbong to have
been illegally terminated. The CA concluded that there is no illegal dismissal to speak of in the
instant case as Ymbong is considered resigned when he ran for an elective post pursuant to the
subject company policy. Hence, this petition.
Ernesto Ymbong vs. ABS-CBN Broadcasting Corporation, Veranda Sy & Dante Luzon
G.R. No. 184885 | 2012-03-07
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 184885 March 7, 2012
ERNESTO G. YMBONG, Petitioner,
vs.
ABS-CBN BROADCASTING CORPORATION, VENERANDA SY AND DANTE LUZON,
Respondents.
DECISION
VILLARAMA, JR., J.:
Before us is a Rule 45 Petition seeking to set aside the August 22, 2007 Decision1 and September
18, 2008 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 86206 declaring petitioner
to have resigned from work and not illegally dismissed.
The antecedent facts follow:
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.
xxxx
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.
x x x x3 [Emphasis and underscoring supplied.]
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.4 [Emphasis and underscoring supplied.]
Luzon, however, admitted that upon double-checking of the exact text of the policy and
subsequent confirmation with the ABS-CBN Head Office, he saw that the policy actually required
suspension for those who intend to campaign for a political party or candidate and resignation for
those who will actually run in the elections.5
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. Thus,
Patalinghug wrote Luzon the following letter on April 13, 1998:
Dear Mr. Luzon,
I'm submitting to you my letter of resignation as your Drama Production Chief and Talent due to
your company's policy that every person connected to ABS-CBN that should seek an elected
position in the government will be forced to resigned (sic) from his position. So herewith I'm
submitting my resignation with a hard heart. But I'm still hoping to be connected again with your
prestigious company after the election[s] should you feel that I'm still an asset to your drama
production department. I'm looking forward to that day and I'm very happy and proud that I have
served for two and a half years the most stable and the most prestigious Radio and TV Network
in the Philippines.
As a friend[,] wish me luck and Pray for me. Thank you.
Very Truly Yours,
(Sgd.)
Leandro "Boy" Patalinghug6
Unfortunately, both Ymbong and Patalinghug lost in the May 1998 elections.
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 abrupt ending. The agreed winding-up, however, dragged on for so long prompting Luzon to
issue to Ymbong the following memorandum dated September 14, 1998:
TO : NESTOR YMBONG
FROM : DANTE LUZON
SUBJECT : AS STATED
DATE : 14 SEPT. 1998
Please be reminded that your services as drama talent had already been automatically terminated
when you ran for a local government position last election.
The Management however gave you more than enough time to end your drama participation and
other involvement with the drama department.
It has been decided therefore that all your drama participation shall be terminated effective
immediately. However, your involvement as drama spinner/narrator of the drama
"NAGBA[BA]GANG LANGIT" continues until its writer/director Mr. Leandro Patalinghug wraps it
up one week upon receipt of a separate memo issued to him.7
Ymbong in contrast contended that after the expiration of his leave of absence, he reported back
to work as a regular talent and in fact continued to receive his salary. On September 14, 1998, he
received a memorandum stating that his services are being terminated immediately, much to his
surprise. Thus, he filed an illegal dismissal complaint8 against ABS-CBN, Luzon and DYAB
Station Manager Veneranda Sy. He argued that the ground cited by ABS-CBN for his dismissal
was not among those enumerated in the Labor Code, as amended. And even granting without
admitting the existence of the company policy supposed to have been violated, Ymbong averred
that it was necessary that the company policy meet certain requirements before willful
disobedience of the policy may constitute a just cause for termination. Ymbong further argued that
the company policy violates his constitutional right to suffrage.9
Patalinghug likewise filed an illegal dismissal complaint10 against ABS-CBN.
ABS-CBN prayed for the dismissal of the complaints arguing that there is no employer-employee
relationship between the company and Ymbong and Patalinghug. ABS-CBN contended that they
are not employees but talents as evidenced by their talent contracts. However, notwithstanding
their status, ABS-CBN has a standing policy on persons connected with the company whenever
they will run for public office.11
On July 14, 1999, the Labor Arbiter rendered a decision12 finding the dismissal of Ymbong and
Patalinghug illegal, thus:
WHEREFORE, in the light of the foregoing, judgment is rendered finding the dismissal of the two
complainants illegal. An order is issued directing respondent ABS[-]CBN to immediately reinstate
complainants to their former positions without loss of seniority rights plus the payment of
backwages in the amount of P200,000.00 to each complainant.
All other claims are dismissed.
SO ORDERED.13
The Labor Arbiter found that there exists an employer-employee relationship between ABS-CBN
and Ymbong and Patalinghug considering the stipulations in their appointment letters/talent
contracts. The Labor Arbiter noted particularly that the appointment letters/talent contracts
imposed conditions in the performance of their work, specifically on attendance and punctuality,
which effectively placed them under the control of ABS-CBN. The Labor Arbiter likewise ruled that
although the subject company policy is reasonable and not contrary to law, the same was not
made known to Ymbong and Patalinghug and in fact was superseded by another one embodied
in the March 25, 1998 Memorandum issued by Luzon. Thus, there is no valid or authorized cause
in terminating Ymbong and Patalinghug from their employment.
In its memorandum of appeal14 before the National Labor Relations Commission (NLRC), ABS-
CBN contended that the Labor Arbiter has no jurisdiction over the case because there is no
employer-employee relationship between the company and Ymbong and Patalinghug, and that
Sy and Luzon mistakenly assumed that Ymbong and Patalinghug could just file a leave of absence
since they are only talents and not employees. In its Supplemental Appeal,15 ABS-CBN insisted
that Ymbong and Patalinghug were engaged as radio talents for DYAB dramas and personality
programs and their contract is one between a self-employed contractor and the hiring party which
is a standard practice in the broadcasting industry. It also argued that the Labor Arbiter should not
have made much of the provisions on Ymbong's attendance and punctuality since such
requirement is a dictate of the programming of the station, the slating of shows at regular time
slots, and availability of recording studios â€" not an attempt to exercise control over the
manner of his performance of the contracted anchor work within his scheduled spot on air. As for
the pronouncement that the company policy has already been superseded by the March 25, 1998
Memorandum issued by Luzon, the latter already clarified that it was the very policy he sought to
enforce. This matter was relayed by Luzon to Patalinghug when the latter disclosed his plans to
join the 1998 elections while Ymbong only informed the company that he was campaigning for the
administration ticket and the company had no inkling that he will actually run until the issue was
already moot and academic. ABS-CBN further contended that Ymbong and Patalinghug's
"reinstatement" is legally and physically impossible as the talent positions they vacated no longer
exist. Neither is there basis for the award of back wages since they were not earning a monthly
salary but paid talent fees on a per production/per script basis. Attached to the Supplemental
Appeal is a Sworn Statement16 of Luzon.
On March 8, 2004, the NLRC rendered a decision17 modifying the labor arbiter's decision. The
fallo of the NLRC decision reads:
WHEREFORE, premises considered, the decision of Labor Arbiter Nicasio C. Aninon dated 14
July 1999 is MODIFIED, to wit:
Ordering respondent ABS-CBN to reinstate complainant Ernesto G. Ymbong and to pay his full
backwages computed from 15 September 1998 up to the time of his actual reinstatement.
SO ORDERED.18
The NLRC dismissed ABS-CBN's Supplemental Appeal for being filed out of time. The NLRC
ruled that to entertain the same would be to allow the parties to submit their appeal on piecemeal
basis, which is contrary to the agency's duty to facilitate speedy disposition of cases. The NLRC
also held that ABS-CBN wielded the power of control over Ymbong and Patalinghug, thereby
proving the existence of an employer-employee relationship between them.
As to the issue of whether they were illegally dismissed, the NLRC treated their cases differently.
In the case of Patalinghug, it found that he voluntarily resigned from employment on April 21, 1998
when he submitted his resignation letter. The NLRC noted that although the tenor of the
resignation letter is somewhat involuntary, he knew that it is the policy of the company that every
person connected therewith should resign from his employment if he seeks an elected position in
the government. As to Ymbong, however, the NLRC ruled otherwise. It ruled that the March 25,
1998 Memorandum merely states that an employee who seeks any elected position in the
government will only merit the temporary suspension of his services. It held that under the principle
of social justice, the March 25, 1998 Memorandum shall prevail and ABS-CBN is estopped from
enforcing the September 14, 1998 memorandum issued to Ymbong stating that his services had
been automatically terminated when he ran for an elective position.
ABS-CBN moved to reconsider the NLRC decision, but the same was denied in a Resolution
dated June 21, 2004.19
Imputing grave abuse of discretion on the NLRC, ABS-CBN filed a petition for certiorari20 before
the CA alleging that:
I.
RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AND SERIOUSLY
MISAPPRECIATED THE FACTS IN NOT HOLDING THAT RESPONDENT YMBONG IS A
FREELANCE RADIO TALENT AND MEDIA PRACTITIONERâ€"NOT A "REGULAR
EMPLOYEE" OF PETITIONERâ€"TO WHOM CERTAIN PRODUCTION WORK HAD BEEN
OUTSOURCED BY ABS-CBN CEBU UNDER AN INDEPENDENT CONTRACTORSHIP
SITUATION, THUS RENDERING THE LABOR COURTS WITHOUT JURISDICTION OVER THE
CASE IN THE ABSENCE OF EMPLOYMENT RELATIONS BETWEEN THE PARTIES.
II.
RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN DECLARING
RESPONDENT YMBONG TO BE A REGULAR EMPLOYEE OF PETITIONER AS TO CREATE
A CONTRACTUAL EMPLOYMENT RELATION BETWEEN THEM WHEN NONE EXISTS OR
HAD BEEN AGREED UPON OR OTHERWISE INTENDED BY THE PARTIES.
III.
EVEN ASSUMING THE ALLEGED EMPLOYMENT RELATION TO EXIST FOR THE SAKE OF
ARGUMENT, RESPONDENT NLRC IN ANY CASE COMMITTED A GRAVE ABUSE OF
DISCRETION IN NOT SIMILARLY UPHOLDING AND APPLYING COMPANY POLICY NO. HR-
ER-016 IN THE CASE OF RESPONDENT YMBONG AND DEEMING HIM AS RESIGNED AND
DISQUALIFIED FROM FURTHER ENGAGEMENT AS A RADIO TALENT IN ABS-CBN CEBU
AS A CONSEQUENCE OF HIS CANDIDACY IN THE 1998 ELECTIONS, AS RESPONDENT
NLRC HAD DONE IN THE CASE OF PATALINGHUG.
IV.
RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AND DENIED DUE
PROCESS TO PETITIONER IN REFUSING TO CONSIDER ITS SUPPLEMENTAL APPEAL,
DATED OCTOBER 18, 1999, "FOR BEING FILED OUT OF TIME" CONSIDERING THAT THE
FILING OF SUCH A PLEADING IS NOT IN ANY CASE PROSCRIBED AND RESPONDENT
NLRC IS AUTHORIZED TO CONSIDER ADDITIONAL EVIDENCE ON APPEAL; MOREOVER,
TECHNICAL RULES OF EVIDENCE DO NOT APPLY IN LABOR CASES.
V.
RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN GRANTING THE
RELIEF OF REINSTATEMENT AND BACKWAGES TO RESPONDENT YMBONG SINCE HE
NEVER OCCUPIED ANY "REGULAR" POSITION IN PETITIONER FROM WHICH HE COULD
HAVE BEEN "ILLEGALLY DISMISSED," NOR ARE ANY OF THE RADIO PRODUCTIONS IN
WHICH HE HAD DONE TALENT WORK FOR PETITIONER STILL EXISTING. INDEED, THERE
IS NO BASIS WHATSOEVER FOR THE AWARD OF BACKWAGES TO RESPONDENT
YMBONG IN THE AMOUNT OF P200,000.00 CONSIDERING THAT, AS SHOWN BY THE
UNCONTROVERTED EVIDENCE, HE WAS NOT EARNING A MONTHLY "SALARY" OF
"P20,000.00," AS HE FALSELY CLAIMS, BUT WAS PAID TALENT FEES ON A "PER
PRODUCTION/PER SCRIPT" BASIS WHICH AVERAGED LESS THAN P10,000.00 PER
MONTH IN TALENT FEES ALL IN ALL.21
On August 22, 2007, the CA rendered the assailed decision reversing and setting aside the March
8, 2004 Decision and June 21, 2004 Resolution of the NLRC. The CA declared Ymbong resigned
from employment and not to have been illegally dismissed. The award of full back wages in his
favor was deleted accordingly.
The CA ruled that ABS-CBN is estopped from claiming that Ymbong was not its employee after
applying the provisions of Policy No. HR-ER-016 to him. It noted that said policy is entitled "Policy
on Employees Seeking Public Office" and the guidelines contained therein specifically pertain to
employees and did not even mention talents or independent contractors. It held that it is a
complete turnaround on ABS-CBN's part to later argue that Ymbong is only a radio talent or
independent contractor and not its employee. By applying the subject company policy on Ymbong,
ABS-CBN had explicitly recognized him to be an employee and not merely an independent
contractor.
The CA likewise held that the subject company policy is the controlling guideline and therefore,
Ymbong should be considered resigned from ABS-CBN. While Luzon has policy-making power
as assistant radio manager, he had no authority to issue a memorandum that had the effect of
repealing or superseding a subsisting policy. Contrary to the findings of the Labor Arbiter, the
subject company policy was effective at that time and continues to be valid and subsisting up to
the present. The CA cited Patalinghug's resignation letter to buttress this conclusion, noting that
Patalinghug openly admitted in his letter that his resignation was in line with the said company
policy. Since ABS-CBN applied Policy No. HR-ER-016 to Patalinghug, there is no reason not to
apply the same regulation to Ymbong who was on a similar situation as the former. Thus, the CA
found that the NLRC overstepped its area of discretion to a point of grave abuse in declaring
Ymbong to have been illegally terminated. The CA concluded that there is no illegal dismissal to
speak of in the instant case as Ymbong is considered resigned when he ran for an elective post
pursuant to the subject company policy.
-----
Ymbong argues that the subject company policy is a clear interference and a gross violation of an
employee's right to suffrage. He is surprised why it was easy for the CA to rule that Luzon's
memorandum ran counter to an existing policy while on the other end, it did not see that it was in
conflict with the constitutional right to suffrage. He also points out that the issuance of the March
25, 1998 Memorandum was precisely an exercise of the management power to which an
employee like him must respect; otherwise, he will be sanctioned for disobedience or worse, even
terminated. He was not in a position to know which between the two issuances was correct and
as far as he is concerned, the March 25, 1998 Memorandum superseded the subject company
policy. Moreover, ABS-CBN cannot disown acts of its officers most especially since it prejudiced
his property rights.
As to the validity of his dismissal, Ymbong contends that the ground relied upon by ABS-CBN is
not among the just and authorized causes provided in the Labor Code, as amended. And even
assuming the subject company policy passes the test of validity under the pretext of the right of
the management to discipline and terminate its employees, the exercise of such right is not without
bounds. Ymbong avers that his automatic termination was a blatant disregard of his right to due
process. 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.24
Ymbong likewise asseverates that both the Labor Arbiter and the NLRC were consistent in their
findings that he was illegally dismissed. It is settled that factual findings of labor administrative
officials, if supported by substantial evidence, are accorded not only great respect but even
finality.25
ABS-CBN, for its part, counters that the validity of policies such as Policy No. HR-ER-016 has
long been upheld by this Court which has ruled that a media company has a right to impose a
policy providing that employees who file their certificates of candidacy in any election shall be
considered resigned.26 Moreover, case law has upheld the validity of the exercise of management
prerogatives even if they appear to limit the rights of employees as long as there is no showing
that management prerogatives were exercised in a manner contrary to law.27 ABS-CBN contends
that being the largest media and entertainment company in the country, its reputation stems not
only from its ability to deliver quality entertainment programs but also because of neutrality and
impartiality in delivering news.
ABS-CBN further argues that nothing in the company policy prohibits its employees from either
accepting a public appointive position or from running for public office. Thus, it cannot be
considered as violative of the constitutional right of suffrage. Moreover, the Supreme Court has
recognized the employer's right to enforce occupational qualifications as long as the employer is
able to show the existence of a reasonable business necessity in imposing the questioned policy.
Here, Policy No. HR-ER-016 itself states that it was issued "to protect the company from any
public misconceptions" and "[t]o preserve its objectivity, neutrality and credibility." Thus, it cannot
be denied that it is reasonable under the circumstances.29
ABS-CBN likewise opposes Ymbong's claim that he was terminated. ABS-CBN argues that on the
contrary, Ymbong's unilateral act of filing his certificate of candidacy is an overt act tantamount to
voluntary resignation on his part by virtue of the clear mandate found in Policy No. HR-ER-016.
Ymbong, however, failed to file his resignation and in fact misled his superiors by making them
believe that he was going on leave to campaign for the administration candidates but in fact, he
actually ran for councilor. He also claims to have fully apprised Luzon through a letter of his
intention to run for public office, but he failed to adduce a copy of the same.30
As to Ymbong's argument that the CA should not have reversed the findings of the Labor Arbiter
and the NLRC, ABS-CBN asseverates that the CA is not precluded from making its own findings
most especially if upon its own review of the case, it has been revealed that the NLRC, in affirming
the findings of the Labor Arbiter, committed grave abuse of discretion amounting to lack or excess
of jurisdiction when it failed to apply the subject company policy in Ymbong's case when it readily
applied the same to Patalinghug.31
Essentially, the issues to be resolved in the instant petition are: (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; and (3) whether Ymbong, by seeking an elective post, is deemed to have
resigned and not dismissed by ABS-CBN.
Policy No. HR-ER-016 is valid.
This is not the first time that this Court has dealt with a policy similar to Policy No. HR-ER-016. In
the case of Manila Broadcasting Company v. NLRC,32 this Court ruled:
What is involved in this case is an unwritten company policy considering any employee who files
a certificate of candidacy for any elective or local office as resigned from the company. Although
§11(b) of R.A. No. 6646 does not require mass media commentators and announcers such as
private respondent to resign from their radio or TV stations but only to go on leave for the duration
of the campaign period, we think that the company may nevertheless validly require them to resign
as a matter of policy. In this case, the policy is justified on the following grounds:
Working for the government and the company at the same time is clearly disadvantageous and
prejudicial to the rights and interest not only of the company but the public as well. In the event an
employee wins in an election, he cannot fully serve, as he is expected to do, the interest of his
employer. The employee has to serve two (2) employers, obviously detrimental to the interest of
both the government and the private employer.
In the event the employee loses in the election, the impartiality and cold neutrality of an employee
as broadcast personality is suspect, thus readily eroding and adversely affecting the confidence
and trust of the listening public to employer's station.33
ABS-CBN, like Manila Broadcasting Company, also 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.
x x x x34 [Emphasis supplied.]
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.35 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.361á¢wphi1
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:
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.]
Policy No. HR-ER-016 was not superseded by the March 25, 1998 Memorandum
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.
Ymbong is deemed resigned when he ran for councilor.
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]."37
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.
In addition, we do not subscribe to Ymbong's claim that he was not in a position to know which of
the two issuances was correct. Ymbong most likely than not, is fully aware that the subsisting
policy is Policy No. HR-ER-016 and not the March 25, 1998 Memorandum and it was for this
reason that, as stated by Luzon in his Sworn Statement, he only told the latter that he will only
campaign for the administration ticket and not actually run for an elective post. Ymbong claims he
had fully apprised Luzon by letter of his plan to run and even filed a leave of absence but records
are bereft of any proof of said claim. Ymbong claims that the letter stating his intention to go on
leave to run in the election is attached to his Position Paper as Annex "A," a perusal of said
pleading attached to his petition before this Court, however, show that Annex "A" was not his letter
to Luzon but the September 14, 1998 Memorandum informing Ymbong that his services had been
automatically terminated when he ran for a local government position.
Moreover, as pointed out by ABS-CBN, had Ymbong been truthful to his superiors, they would
have been able to clarify to him the prevailing company policy and inform him of the consequences
of his decision in case he decides to run, as Luzon did in Patalinghug's case.
WHEREFORE, the petition for review on certiorari is DENIED for lack of merit.
With costs against petitioner.
SO ORDERED.
2. DUNCAN ASSOCIATION OF DETAILMEN VS. GLAXO WELLCOME (2004)
G.R. No. 162994 | 2004-09-17
Subject: The company policy of prohibiting an employee from having a relationship with an
employee of a competitor company is a valid exercise of management prerogative to protect its
economic interest; It is a management prerogative to reassign its employees in another area.
Facts: Pedro A. Tecson was hired by Glaxo Wellcome as medical representative. He signed a
contract of employment which stipulates, among others, that he agrees to study and abide by
existing company rules; to disclose to management any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug companies and
should management find that such relationship poses a possible conflict of interest, to resign
from the company.
Tecson married Bettsy, an employee of Astra Pharmaceuticals, a competitor of Glaxo. Bettsy
supervised the district managers and medical representatives of her company and prepared
marketing strategies for Astra in her area. Tecson’s superiors informed him that his marriage to
Bettsy gave rise to a conflict of interest.
Glaxo transferred Tecson to another sales area. Tecson brought this matter to Glaxo’s
Grievance Committee. During the pendency of the grievance proceedings, Tecson was paid his
salary, but was not issued samples of products which were competing with similar products
manufactured by Astra. He was also not included in product conferences regarding such
products.
Tecson contended that Glaxo’s policy against employees marrying employees of competitor
companies violates the equal protection clause of the Constitution because it creates invalid
distinctions among employees on account only of marriage. They claim that the policy restricts
the employees’ right to marry.
In defense, Glaxo argued that the subject company policy is a management prerogative. The
policy is also aimed at preventing a competitor company from gaining access to its secrets,
procedures and policies.
The NCMB declared as valid Glaxo’s policy on relationships between its employees and persons
employed with competitor companies, and affirming Glaxo’s right to transfer Tecson to another
sales territory. The Court of Appeals declared that Glaxo’s policy prohibiting its employees from
having personal relationships with employees of competitor companies is a valid exercise of its
management prerogatives.
Held:
The company policy of prohibiting an employee from having a relationship with an
employee of a competitor company is a valid exercise of management prerogative to
protect its economic interest
1. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and
other confidential programs and information from competitors, especially so that it and Astra are
rival companies in the highly competitive pharmaceutical industry.
2. The prohibition against personal 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. In laying down the
assailed company policy, Glaxo only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures.
3. Glaxo possesses the right to protect its economic interests under the Constitution. Indeed,
while our laws endeavor to give life to the constitutional policy on social justice and 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.
4. It is clear that Glaxo does not impose an absolute prohibition against relationships between its
employees and those of competitor companies. Its employees are free to cultivate relationships
with and marry persons of their own choosing. What the company merely seeks to avoid is a
conflict of interest between the employee and the company that may arise out of such
relationships.
5. Also the assailed company policy forms part of Employee’s Code of Conduct and of its
contracts with its employees, such as that signed by Tecson, was made known to him prior to
his employment. Since Tecson knowingly and voluntarily entered into a contract of employment
with Glaxo, the stipulations therein have the force of law between them and, thus, should be
complied with in good faith.” He is therefore estopped from questioning said policy.
It is a management prerogative to reassign its employees in another area
6. Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when
continued employment becomes impossible, unreasonable, or unlikely; when there is a
demotion in rank or diminution in pay; or when a clear discrimination, insensibility or disdain by
an employer becomes unbearable to the employee.
7. In this case, the record does not show that Tecson was demoted or unduly discriminated upon
by reason of such transfer. Glaxo properly exercised its management prerogative in reassigning
Tecson to the Butuan City sales area. Glaxo gave Tecson several chances to eliminate the
conflict of interest brought about by his relationship with Bettsy. Glaxo was constrained to
reassign Tecson to a sales area different from that handled by his wife for Astra. Notably,
Tecson was not terminated from employment but only reassigned him to another area.
8. The drug company has the right to transfer or reassign its employee in accordance with its
operational demands and requirements. More so if such reassignments are part of the
employment contract. (See Abbott vs. NLRC)
3. POLLO V. DAVID-CONSTANTINO
G.R. No. 181881 | 2011-10-18
Subject: Right to Privacy, Reasonable Expectation of Privacy, Initiating and Administrative
Complaint in the CSC
Facts:
An unsigned letter-complaint was filed before the Civil Service Commission (CSC) accusing the
petitioner of acting as counsel of another person in the latter's case before the same agency.
Upon the instructions of the respondent CSC Chairperson, the computers within the division
where the petitioner was assigned were searched, the files therein were copied, and later on
sealed and secured to preserve the files therein. Based on the evidence obtained from such
search, a formal charge was filed against him for dishonesty, grave misconduct, conduct
prejudicial to the best interest of the service, and violation of R.A. 6713. He was found guilty by
the CSC, and meted out with the penalty of dismissal from service. Petitioner thereafter
questioned the legality of the search conducted by the CSC on his computer before the
Supreme Court.
Held:
Right to Privacy
1.The constitutional guarantee is not a prohibition of all searches and seizures but only of
'unreasonable' searches and seizures.
2.The search of petitioner's computer was justified there being reasonable ground for suspecting
that the files stored therein would yield incriminating evidence relevant to the investigation being
conducted by CSC as government employer of such misconduct subject of the anonymous
complaint.
Warrantless Searches by Employers
3.There are "special needs" which authorize warrantless searches involving public employees
for work-related reasons. The Court thus laid down a balancing test under which government
interests are weighed against the employee's reasonable expectation of privacy. This
reasonableness test implicates neither probable cause nor the warrant requirement, which are
related to law enforcement.
Reasonable Expectation of Privacy
4.To determine whether an employee has a reasonable expectation of privacy, the relevant
surrounding circumstances to consider include (1) the employee's relationship to the item
seized; (2) whether the item was in the immediate control of the employee when it was seized;
and (3) whether the employee took actions to maintain his privacy in the item. These factors are
relevant to both the subjective and objective prongs of the reasonableness inquiry, and we
consider the two questions together.
Substantial Evidence
5. Well-settled is the rule that the findings of fact of quasi-judicial agencies, like the CSC, are
accorded not only respect but even finality if such findings are supported by substantial
evidence. Substantial evidence is such amount of relevant evidence which a reasonable mind
might accept as adequate to support a conclusion, even if other equally reasonable minds might
conceivably opine otherwise.
Initiating an Administrative Complaint in the CSC
6. The administrative complaint is deemed to have been initiated by the CSC itself when
Chairperson David, after a spot inspection and search of the files stored in the hard drive of
computers in the two divisions adverted to in the anonymous letter -- as part of the disciplining
authority's own fact-finding investigation and information-gathering -- found a prima facie case
against the petitioner who was then directed to file his comment.
4. MANSION PRINTING and CHENG VS. BITARA DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
TOPIC: GROSS AND HABITUAL NEGLECT OF DUTY (ART. 282[B])
G.R. No. 168120
January 25, 2012
FACTS: Mansion Printing Center is a single proprietorship engaged in the printing of quality self-
adhesive labels, brochures, posters, stickers, packaging and the like.
Mansion engaged the services of Bitara as a helper (kargador). Respondent was later promoted
as the company’s sole driver tasked, among others, to 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.
Petitioners issued a Memorandum requiring respondent to submit a written explanation why no
administrative sanction should be imposed on him for his habitual tardiness, to which he replied.
But despite respondent’s undertaking to report on time, however, he continued to disregard
attendance policies. Respondent filed a complaint for illegal dismissal against the petitioners
before the Labor Arbiter.
ISSUE: Whether there was gross and habitual neglect of duty on the part of Bitara, warranting his
dismissal from service.
HELD: YES; there is no illegal dismissal.
Valiao v. Court of Appeals is instructive:
xxx It bears stressing that petitioner’s 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.
In Valiao, we defined gross negligence as “want of care in the performance of one’s duties”and
habitual neglect as “repeated failure to perform one’s duties for a period of time, depending upon
the circumstances.” These are not overly technical terms, which, in the first place, are expressly
sanctioned by the Labor Code of the Philippines, to wit:
ART. 282. Termination by employer. – An employer may terminate an employment for any of the
following causes:
xxx
(b) Gross and habitual neglect by the employee of his duties;
xxx
Bitara’s weekly time record for the first quarter of the year 2000 revealed that he came late 19
times out of the 47 times he reported for work. He also incurred 19 absences out of the 66 working
days during the quarter. His absences without prior notice and approval from March 11-16, 2000
were considered to be the most serious infraction of all because of its adverse effect on business
operations.
Clearly, even in the absence of a written company rule defining gross and habitual neglect of
duties, respondent’s omissions qualify as such warranting his dismissal from the service.
NOTES:
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 management’s 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 company’s 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.
5. SMART COMMUNICATIONS, INC. vs. ASTORGA
G.R. No. 148132 January 28, 2008 Redundancy, authorized causes for dismissal, Article 283,
One month Notice, Backwages
JULY 5, 2018
FACTS: Astorga was employed by Smart as District Sales Manager of the Corporate Sales
Marketing Group/ Fixed Services Division. 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 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. 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. Astorga continued reporting for
work. SMART issued a memorandum advising Astorga of the termination of her employment on
ground of redundancy, Astorga filed a Complaint for illegal dismissal, non-payment of salaries and
other benefits with prayer for moral and exemplary damages against SMART. In the meantime,
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 before the RTC which was subsequently denied.

Astorga elevated the denial of her motion via certiorari to the CA, which, in its February 28, 2000
Decision,19 reversed the RTC ruling. Granting the petition and, consequently, dismissing the
replevin case, the CA held that the case is intertwined with Astorga’s complaint for illegal
dismissal; thus, it is the labor tribunal that has rightful jurisdiction over the complaint. SMART’s
motion for reconsideration having been denied.
On the other hand, the labor arbiter held that Astorga’s dismissal from employment illegal. While
recognizing SMART’s right to abolish any of its departments, the Labor Arbiter held that such right
should be exercised in good faith and for causes beyond its control. The Arbiter found the abolition
of CSMG done neither in good faith nor for causes beyond the control of SMART, but a ploy to
terminate Astorga’s employment. The Arbiter also ruled that contracting out the functions
performed by Astorga to an in-house agency like SNMI was illegal.
SMART also appealed the unfavorable ruling of the Labor Arbiter in the illegal dismissal case to
the NLRC which declared the abolition of CSMG and the creation of SNMI to do the sales and
marketing services for SMART a valid organizational action.
ISSUE:
Whether or not Astorga’s dismissal was valid.
RULING:
Astorga was terminated due to redundancy, which is one of the authorized causes for the
dismissal of an employee. The nature of redundancy as an authorized cause for dismissal is
explained in the leading case of Wiltshire File Co., Inc. v. National Labor Relations Commission,
viz:
x x x redundancy in an employer’s personnel force necessarily or even ordinarily refers to
duplication of work. That no other person was holding the same position that private respondent
held prior to termination of his services does not show that his position had not become redundant.
Indeed, in any well organized business enterprise, it would be surprising to find duplication of work
and two (2) or more people doing the work of one person.
We believe that redundancy, for purposes of the Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirements of the
enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a
position or positions may be the outcome of a number of factors, such as overhiring of workers,
decreased volume of business, or dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.
However, as aptly found by the CA, SMART failed to comply with the mandated one month notice
prior to termination.
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 x x x.
SMART’s assertion that Astorga cannot complain of lack of notice because the organizational
realignment was made known to all the employees as early as February 1998 fails to persuade.
Astorga’s actual knowledge of the reorganization cannot replace the formal and written notice
required by the law. In the written notice, the employees are informed of the specific date of the
termination, at least a month prior to the effectivity of such termination, to give them sufficient time
to find other suitable employment or to make whatever arrangements are needed to cushion the
impact of termination.
Smart gave her a formal notice of termination barely two (2) weeks before the effective date of
termination, a period very much shorter than that required by law.
This procedural infirmity, however, would not render the termination of Astorga’s employment
illegal. The validity of termination can exist independently of the procedural infirmity of the
dismissal.
In DAP Corporation v. CA, the dismissal of the employees therein valid and for authorized cause
even if the employer failed to comply with the notice requirement under Article 283 of the Labor
Code.
The Court found the need to modify, by increasing, the indemnity awarded by the CA to Astorga,
as a sanction on SMART for non-compliance with the one-month mandatory notice requirement,
in light of our ruling in Jaka Food Processing Corporation v. Pacot, viz.:
[I]f the dismissal is based on a just cause under Article 282 but the employer failed to comply with
the notice requirement, the sanction to be imposed upon him should be tempered because the
dismissal process was, in effect, initiated by an act imputable to the employee, and (2) if the
dismissal is based on an authorized cause under Article 283 but the employer failed to comply
with the notice requirement, the sanction should be stiffer because the dismissal process was
initiated by the employer’s exercise of his management prerogative.
The award of backwages to Astorga by the CA should be deleted for lack of basis. Backwages is
a relief given to an illegally dismissed employee. Thus, before backwages may be granted, there
must be a finding of unjust or illegal dismissal from work.The Labor Arbiter ruled that Astorga was
illegally dismissed. But on appeal, the NLRC reversed the Labor Arbiter’s ruling and categorically
declared Astorga’s dismissal valid. This ruling was affirmed by the CA in its assailed Decision.
Since Astorga’s dismissal is for an authorized cause, she is not entitled to backwages.
6. STAR PAPER CORP. VS. SIMBOL (2006)
G.R. No. 164774 | 2006-04-12
Subject: The requirement that a company policy must be reasonable under the circumstances
to qualify as a valid exercise of management prerogative; The questioned policy may not facially
violate Article 136 of the Labor Code but it creates a disproportionate effect
Facts: Star Paper Corporation has two policies for its employees: 1. New applicants will not be
allowed to be hired if in case he/she has a relative, up to the 3rd degree of relationship, already
employed by the company; and 2) In case of two of our employees (singles, one male and
another female) developed a friendly relationship during the course of their employment and
then decided to get married, one of them should resign to preserve the policy stated above.
Ronaldo D. Simbol, Wilfreda N. Comia and Lorna E. Estrella were all regular employees of the
Star Paper Corporation. Simbol met Alma Dayrit, also an employee of the company, whom he
married. Simbol resigned pursuant to the company policy. Same goes with Comia who was hired
by the company wherein he also met Howard Comia, a co-employee, whom she married. He
resigned pursuant to the company policy.
Estrella was hired by Star Paper and met Luisito Zuñiga, also a co-worker. Zuñiga, a married
man, got Estrella pregnant. The company allegedly could have terminated her services due to
immorality but Estrella opted to resign.

Simbol, Comia and Estrella 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. They also contended that they
were dismissed due to their union membership.
The Labor Arbiter dismissed the complaint and ruled that the company policy is a management
prerogative. The NLRC affirmed the decision of the Labor Arbiter. The Court of Appeals
reversed the NLRC decision.
Held:
The requirement that a company policy must be reasonable under the circumstances to
qualify as a valid exercise of management prerogative
1. Art. 136 of the Labor Code provides that “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.”
2. It is true that the policy of Star Paper prohibiting close relatives from working in the same
company takes the nature of an anti-nepotism employment policy. Companies adopt these
policies to prevent the hiring of unqualified persons based on their status as a relative, rather
than upon their ability. There are two types of employment policies involve spouses: policies
banning only spouses from working in the same company (no-spouse employment policies),
and those banning all immediate family members, including spouses, from working in the same
company (anti-nepotism employment policies).
3. The standard of reasonableness of the company policy of “no spousal rule” must be clearly
established. The employer has the burden to prove the existence of a reasonable business
necessity.
4. In this case, the contention that "the company did not just want to have two or more of its
employees related between the third degree by affinity and/or consanguinity" is evidently not the
valid reasonable business necessity required by the law.
The questioned policy may not facially violate Article 136 of the Labor Code but it creates
a disproportionate effect
5. Simbol, Comia and Estrella were hired after they were found fit for the job, but were asked to
resign when they married a co-employee. Star Paper 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 Star Paper 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 the
questioned rule will be upheld 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.
6. 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 Star Papers 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.
7. ARMANDO G. YRASUEGUI, petitioners, vs.
PHILIPPINE AIRLINES, INC., respondents.
G.R. No. 168081, October 17, 2008 (569 SCRA 467)
VERSION 1:
FACTS: THIS case portrays the peculiar story of an international flight steward who was
dismissed because of his failure to adhere to the weight standards of the airline company.
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.
In 1984, the weight problem started, which prompted PAL to send him to an extended vacation
until November 1985. He was allowed to return to work once he lost all the excess weight. But
the problem recurred. He again went on leave without pay from October 17, 1988 to February
1989.
Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner remained
overweight. On January 3, 1990, he was informed of the PAL decision for him to remain
grounded until such time that he satisfactorily complies with the weight standards. Again, he was
directed to report every two weeks for weight checks, which he failed to comply with.
On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight
check would be dealt with accordingly. He was given another set of weight check dates, which
he did not report to.
On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for
violation of company standards on weight requirements. Petitioner insists that he is being
discriminated as those similarly situated were not treated the same.
On June 15, 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.”
LABOR ARBITER: held that the weight standards of PAL are reasonable in view of the nature of
the job of petitioner. However, the weight standards need not be complied with under pain of
dismissal since his weight did not hamper the performance of his duties.
NLRC affirmed.
CA: the weight standards of PAL are reasonable. Thus, petitioner was legally dismissed
because he repeatedly failed to meet the prescribed weight standards. It is obvious that the
issue of discrimination was only invoked by petitioner for purposes of escaping the result of his
dismissal for being overweight.
ISSUE: WON he was validly dismissed.
HELD: YES
A reading of the weight standards of PAL would lead to no other conclusion than that they
constitute a continuing qualification of an employee in order to keep the job. The dismissal of the
employee would thus fall under Article 282(e) of the Labor Code.
In the case at bar, the evidence on record militates against petitioner’s claims that obesity is a
disease. That he was able to reduce his weight from 1984 to 1992 clearly shows that it is
possible for him to lose weight given the proper attitude, determination, and self-discipline.
Indeed, during the clarificatory hearing on December 8, 1992, petitioner himself claimed that
“[t]he issue is could I bring my weight down to ideal weight which is 172, then the answer is yes.
I can do it now.”

Petitioner has only himself to blame. He could have easily availed the assistance of the
company physician, per the advice of PAL.
In fine, 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
dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As
the CA correctly puts it, “[v]oluntariness basically means that the just cause is solely attributable
to the employee without any external force influencing or controlling his actions. This element
runs through all just causes under Article 282, whether they be in the nature of a wrongful action
or omission. Gross and habitual neglect, a recognized just cause, is considered voluntary
although it lacks the element of intent found in Article 282(a), (c), and (d).”
NOTES:
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). In short, the test of reasonableness of the company policy is used because
it is parallel to BFOQ. BFOQ is valid “provided it reflects an inherent quality reasonably
necessary for satisfactory job performance.”
The business of PAL is air transportation. As such, it has committed itself to safely transport its
passengers. In order to achieve this, it must necessarily rely on its employees, most particularly
the cabin flight deck crew who are on board the aircraft. The weight standards of PAL should be
viewed as imposing strict norms of discipline upon its employees.
The primary objective of PAL in the imposition of the weight standards for cabin crew is flight
safety.
Separation pay, however, should be awarded in favor of the employee as an act of social justice
or based on equity. This is so because his dismissal is not for serious misconduct. Neither is it
reflective of his moral character.
VERSION 2:
Facts: Complainant was an international flight steward who was dismissed because of his
failure to adhere to the weight standards of the company.
Issue: Was the dismissal valid?
Held: SC upheld the legality of dismissal. Separation pay, however, should be awarded in favor
of the employee as an act of social justice or based on equity. This is so because his dismissal
is not for serious misconduct. Neither is it reflective of his moral character.
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. His obesity may not be unintended, but
is nonetheless voluntary. “[V]oluntariness basically means that the just cause is solely
attributable to the employee without any external force influencing or controlling his actions. This
element runs through all just causes under Article 282, whether they be in the nature of a
wrongful action or omission. Gross and habitual neglect, a recognized just cause, is considered
voluntary although it lacks the element of intent found in Article 282(a), (c), and (d).”
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.
Bona fide occupational qualification (BFOQ)
The Constitution, the Labor Code, and RA No. 7277 or the Magna Carta for Disabled Persons
contain provisions similar to BFOQ.
Argument that BFOQ is a statutory defense must fail
Meiorin Test (US jurisprudence) in determining whether an employment policy is justified:
(1) the employer must show that it adopted the standard for a purpose rationally connected to
the performance of the job;
2) the employer must establish that the standard is reasonably necessary to the accomplishment
of that work-related purpose; and
(3) the employer must establish that the standard is reasonably necessary in order to
accomplish the legitimate work-related purpose.
In Star Paper Corporation v. Simbol, this Court held that in order to justify a BFOQ, the employer
must prove:
(1) the employment qualification is reasonably related to the essential operation of the job
involved; and
(2) that there is factual basis for believing that all or substantially all persons meeting the
qualification would be unable to properly perform the duties of the job.
In short, the test of reasonableness of the company policy is used because it is parallel to
BFOQ. BFOQ is valid “provided it reflects an inherent quality reasonably necessary for
satisfactory job performance.”
The weight standards of PAL are reasonable. 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.
The primary objective of PAL in the imposition of the weight standards for cabin crew is flight
safety. It cannot be gainsaid that cabin attendants must maintain agility at all times in order to
inspire passenger confidence on their ability to care for the passengers when something goes
wrong.
Exceptionally, separation pay is granted to a legally dismissed employee as an act “social
justice,” or based on “equity.” Provided the dismissal:
Entitled to separation pay, even if terminated for just cause
(1) was not for serious misconduct; and
(2) does not reflect on the moral character of the employee.
Thus, he was granted separation pay equivalent to one-half (1/2) month’s pay for every year of
service.
8. MANILA PAVILION HOTEL, owned and operated by ACESITE (PHILS.) Hotel
Corporation, Petitioner, vs. HENRY DELADA, Respondent.
G.R. No. 189947 | 2012-01-25
SECOND DIVISION
Before the Court is a Petition for Review on Certiorari filed under Rule 45 of the Revised Rules
of Court, assailing the 27 July 2009 Decision and 12 October 2009 Resolution of the Court of
Appeals (CA).1
Facts: The present Petition stems from a grievance filed by respondent Henry Delada against
petitioner Manila Pavilion Hotel (MPH). 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. He attended the hearings together with union representatives.
Meanwhile, the parties failed to reach a settlement during the grievance meeting concerning the
validity of MPH's transfer order. Respondent then elevated his grievance to the Peers Resources
Development Director. Still, no settlement between the parties was reached. Respondent
appealed the matter to the Grievance Committee level. The committee recommended that he
proceed to the next level of the grievance procedure, as it was unable to reach a decision on the
matter. Consequently, on 20 April 2007, Delada lodged a Complaint before the National
Conciliation and Mediation Board. On 25 May 2007, the parties agreed to submit the following
issues for voluntary arbitration:
I. Whether or not the transfer of the union president from head waiter at Rotisserie to head waiter
at seasons restaurant is valid and justified;
II. Whether or not the preventive suspension of the complainant is valid and justified;
III. Whether or not the preventive suspension of the complainant is a valid ground to strike;
IV. Whether or not the respondent may be held liable for moral and exemplary damages and
attorney's fees; and
V. Whether or not the complainant may be held liable for moral and exemplary damages and
attorney's fees. 2
While respondent's Complaint concerning the validity of his transfer was pending before the Panel
of Voluntary Arbitrators (PVA), MPH continued with the disciplinary action against him for his
refusal to report to his new post at Seasons Coffee Shop. Citing security and safety reasons,
petitioner also placed respondent on a 30-day preventive suspension. On 8 June 2007, MPH
issued a Decision, which found him guilty of insubordination based on his repeated and willful
disobedience of the transfer order. The Decision imposed on Delada the penalty of 90-day
suspension. He opposed the Decision, arguing that MPH had lost its authority to proceed with the
disciplinary action against him, since the matter had already been included in the voluntary
arbitration.
On 14 December 2007, the PVA issued a Decision and ruled that the transfer of Delada was a
valid exercise of management prerogative. According to the panel, the transfer order was done in
the interest of the efficient and economic operations of MPH, and that there was no malice, bad
faith, or improper motive attendant upon the transfer of Delada to Seasons Coffee Shop. They
found that the mere fact that he was the Union President did not "put color or ill motive and
purpose" to his transfer. On the contrary, the PVA found that the real reason why he refused to
obey the transfer order was that he asked for additional monetary benefits as a condition for his
transfer. Furthermore, the panel ruled that his transfer from Rotisserie to Seasons Coffee Shop
did not prejudice or inconvenience him. Neither did it result in diminution of salaries or demotion
in rank. The PVA thus pronounced that Delada had no valid and justifiable reason to refuse or
even to delay compliance with the management's directive.
The PVA also ruled that there was no legal and factual basis to support petitioner's imposition of
preventive suspension on Delada. According to the panel, the mere assertion of MPH that "it is
not far-fetched for Henry Delada to sabotage the food to be prepared and served to the
respondent's dining guest and employees because of the hostile relationship then existing" was
more imagined than real. It also found that MPH went beyond the 30-day period of preventive
suspension prescribed by the Implementing Rules of the Labor Code when petitioner proceeded
to impose a separate penalty of 90-day suspension on him. Furthermore, the PVA ruled that MPH
lost its authority to continue with the administrative proceedings for insubordination and willful
disobedience of the transfer order and to impose the penalty of 90-day suspension on respondent.
According to the panel, it acquired exclusive jurisdiction over the issue when the parties submitted
the aforementioned issues before it. The panel reasoned that the joint submission to it of the issue
on the validity of the transfer order encompassed, by necessary implication, the issue of
respondent's insubordination and willful disobedience of the transfer order. Thus, MPH effectively
relinquished its power to impose disciplinary action on Delada.3
As to the other issues, the panel found that there was no valid justification to conduct any strike
or concerted action as a result of Delada's preventive suspension. It also ruled that since the 30-
day preventive suspension and the penalty of 90-day suspension was invalid, then MPH was liable
to pay back wages and other benefits.
The CA affirmed the Decision of the PVA and denied petitioner's Motion for Reconsideration.
Consequently, MPH filed the instant Petition.
Issue: Despite the various issues surrounding the case, MPH limited its appeal to the following:
I. Whether MPH retained the authority to continue with the administrative case against Delada for
insubordination and willful disobedience of the transfer order.
II. Whether MPH is liable to pay back wages.
Discussion: Petitioner argues that it did not lose its authority to discipline Delada notwithstanding
the joint submission to the PVA of the issue of the validity of the transfer order. According to
petitioner, the specific issue of whether respondent could be held liable for his refusal to assume
the new assignment was not raised before the PVA, and that the panel's ruling was limited to the
validity of the transfer order. Thus, petitioner maintains that it cannot be deemed to have
surrendered its authority to impose the penalty of suspension.
In Sime Darby Pilipinas, Inc. v. Deputy Administrator Magsalin,4 we ruled that the voluntary
arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to
determine the scope of his own authority - subject only, in a proper case, to the certiorari
jurisdiction of this Court. In that case, the specific issue presented was "the issue of performance
bonus." We then held that the arbitrator had the authority to determine not only the issue of
whether or not a performance bonus was to be granted, but also the related question of the amount
of bonus, were it to be granted. We then said that there was no indication at all that the parties to
the arbitration agreement had regarded "the issue of performance bonus" as a two-tiered issue,
only one aspect of which was being submitted to arbitration; thus, we held that the failure of the
parties to specifically limit the issues to that which was stated allowed the arbitrator to assume
jurisdiction over the related issue.
A more recent case is Ludo & Luym Corporation v. Saornido.5 In that case, we recognized that
voluntary arbitrators are generally expected to decide only those questions expressly delineated
by the submission agreement; that, nevertheless, they can assume that they have the necessary
power to make a final settlement on the related issues, since arbitration is the final resort for the
adjudication of disputes. Thus, we ruled that even if the specific issue brought before the
arbitrators merely mentioned the question of "whether an employee was discharged for just
cause," they could reasonably assume that their powers extended beyond the determination
thereof to include the power to reinstate the employee or to grant back wages. In the same vein,
if the specific issue brought before the arbitrators referred to the date of regularization of the
employee, law and jurisprudence gave them enough leeway as well as adequate prerogative to
determine the entitlement of the employees to higher benefits in accordance with the finding of
regularization. Indeed, to require the parties to file another action for payment of those benefits
would certainly undermine labor proceedings and contravene the constitutional mandate providing
full protection to labor and speedy labor justice.
Consequently, could the PVA herein view that the issue presented before it - the question of the
validity of the transfer order - necessarily included the question of respondent Delada's
insubordination and willful disobedience of the transfer order?
Pursuant to the doctrines in Sime Darby Pilipinas and Ludo & Luym Corporation, the PVA was
authorized to assume jurisdiction over the related issue of insubordination and willful disobedience
of the transfer order. Nevertheless, the doctrine in the aforementioned cases is inapplicable to the
present Petition. In those cases, the voluntary arbitrators did in fact assume jurisdiction over the
related issues and made rulings on the matter. In the present case, however, the PVA did not
make a ruling on the specific issue of insubordination and willful disobedience of the transfer order.
The PVA merely said that its disagreement with the 90-day penalty of suspension stemmed from
the fact that the penalty went beyond the 30-day limit for preventive suspension:
But to us, what militates against the validity of Delada's preventive suspension is the fact that it
went beyond the 30-day period prescribed by the Implementing Rules of the Labor Code (Section
4, Rules XIV, Book V). The preventive suspension of Delada is supposed to expire on 09 June
2007, but without notifying Delada, the MPH proceeded to impose a separate penalty of 90-days
suspension to him which took effect only on 18 June 2007, or way beyond the 30-day rule
mandated by the Rules. While the intention of the MPH is to impose the 90-day suspension as a
separate penalty against Delada, the former is already proscribed from doing so because as of 05
June 2007, the dispute at hand is now under the exclusive jurisdiction of the panel of arbitrators.
In fact, by its own admission, the MPH categorically stated in its Position Paper that as of 25 May
2007, or before the suspension order was issued, MPH and Delada had already formulated and
submitted the issues for arbitration. For all legal intents and purposes, therefore, the MPH has
now relinquished its authority to suspend Delada because the issue at this juncture is now within
the Panel's ambit of jurisdiction. MPH's authority to impose disciplinary action to Delada must now
give way to the jurisdiction of this panel of arbitrators to rule on the issues at hand. By necessary
implication, this Panel is thus constrained to declare both the preventive suspension and the
separate suspension of 90-days meted to Delada to be not valid and justified.6
First, it must be pointed out that the basis of the 30-day preventive suspension imposed on Delada
was different from that of the 90-day penalty of suspension. The 30-day preventive suspension
was imposed by MPH on the assertion that Delada might sabotage hotel operations if preventive
suspension would not be imposed on him. On the other hand, the penalty of 90-day suspension
was imposed on respondent as a form of disciplinary action. It was the outcome of the
administrative proceedings conducted against him. Preventive suspension is a disciplinary
measure resorted to by the employer pending investigation of an alleged malfeasance or
misfeasance committed by an employee.7 The employer temporarily bars the employee from
working if his continued employment poses a serious and imminent threat to the life or property of
the employer or of his co-workers.8 On the other hand, the penalty of suspension refers to the
disciplinary action imposed on the employee after an official investigation or administrative hearing
is conducted.9 The employer exercises its right to discipline erring employees pursuant to
company rules and regulations.10 Thus, a finding of validity of the penalty of 90-day suspension
will not embrace the issue of the validity of the 30-day preventive suspension. In any event,
petitioner no longer assails the ruling of the CA on the illegality of the 30-day preventive
suspension.11
It can be seen that, unlike in Sime Darby Pilipinas and Ludo & Luym Corporation, the PVA herein
did not make a definitive ruling on the merits of the validity of the 90-day suspension. The panel
only held that MPH lost its jurisdiction to impose disciplinary action on respondent. 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.12
In Allied Banking Corporation,13 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, 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).14
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.15
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.
WHEREFORE, the Petition is GRANTED. The Decision and the Resolution of the Court of
Appeals are herebyMODIFIED. 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.
SO ORDERED.

9. PRINCE TRANSPORT, INC. VS. GARCIA
G.R. No. 167291
January 12, 2011
Subject matter: Unfair Labor Practices
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.
Held: 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?
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.
10. PRODUCERS BANK OF THE PHILIPPINES, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION and PRODUCERS BANK EMPLOYEES
ASSOCIATION, respondents.
G.R. No. 100701 March 28, 2001
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 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.
HELD:
As to the bonuses, private respondent declared in its position papers filed with the NLRC that –
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 employee’s one-month basic pay and a Christmas
bonus equivalent to an employee’s one whole month salary (basic pay plus allowance);
When P.D. 851, the law granting a 13thmonth 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;
From 1981 up to 1983, the bank continued giving one month basic pay as mid-year bonus, one
month basic pay as 13thmonth pay but the Christmas bonus was no longer based on the
allowance but on the basic pay of the employees which is higher;
In the early part of 1984, the bank was placed under conservatorship but it still provided the
traditional mid-year bonus;
By virtue of an alleged Monetary Board Resolution No. 1566, bank only gave a one-half (1/2)
month basic pay as compliance of the 13thmonth pay and none for the Christmas bonus.
Respondent’s Contention: 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 of Presidential Decree
No. 4429 which 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 employee’s regular compensation.
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. On the contrary, section 4 of the collective
bargaining agreement states that –
Acts of Grace. Any other benefits or privileges which are not expressly provided in this Agreement,
even if now accorded or hereafter accorded to the employees, shall be deemed purely acts of
grace dependent upon the sole judgment and discretion of the BANK to grant, modify or withdraw.
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.12 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,14
except when it is made part of the wage, salary or compensation of the employee.15
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.
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. NLR1
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 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.
11. PHILIPPINE AIRLINES, INC. VS. NATIONAL LABOR RELATIONS COMMISSION AND
AIDA QUIJANO
G.R. No. 123294 | 2010-10-20
This is a Petition for Certiorari under Rule 65 of the Rules of Court seeking to annul, reverse and
set aside the following issuances of public respondent National Labor Relations Commission
(NLRC): (1) Decision[1] dated September 29, 1995 in NLRC NCR CA 007860-94 (NLRC NCR 00-
03-01859-91), entitled Aida M. Quijano v. Philippine Airlines, Inc., which set aside the
Decision[2] of Labor Arbiter Roberto I. Santos and ordered petitioner Philippine Airlines, Inc. (PAL)
to pay private respondent Aida M. Quijano (Quijano) her separation pay in accordance with
petitioners Special Retirement & Separation Program, and (2) Resolution[3] dated November 14,
1995 denying petitioners Motion for Reconsideration thereof.
It bears stressing that pursuant to St. Martin Funeral Home v. National Labor Relations
Commission[4] and In Re: Dismissal of Special Civil Actions in NLRC Cases,[5] all special civil
actions arising out of any decision, final resolution or order of the NLRC must be filed with the
Court of Appeals. However, since both parties of this case had filed their respective Memoranda
prior to the promulgation of our decision in St. Martin Funeral Home, this case was no longer
referred to the Court of Appeals.
The following are the pertinent facts, as summarized by the NLRC:
Complainant Quijano rose from the ranks starting as accounting clerk in December 1967 until she
became effective September 1, 1984, Manager-Agents Services Accounting Division (ASAD), vice
Josefina Sioson.
ASAD, the specific unit in PAL charged with the processing, verification, reconciliation, and
validation of all claims for commission filed by agents worldwide, is under the direct supervision
and control of the Vice President-Comptroller, and within the scope of the audit program of the
Vice President-Internal Audit & Control.
On May 5, 1989, an investigating committee chaired by Leslie W. Espino (hereinafter referred to
as the Espino Committee) formally charged Quijano as Manager-ASAD in connection with the
processing and payment of commission claims to Goldair Pty. Ltd. (Goldair for short) wherein PAL
overpaid commissions to the latter amounting to several million Australian dollars during the period
1984-1987. Specifically, Quijano was charged as Manager-ASAD with the following:
Failure on the job and gross negligence resulting in loss of trust and confidence in that you failed
to:
a. Exercise the necessary monitoring, control and supervision over your Senior Accounts
Analyst to ensure that the latter was performing the basic duties and responsibilities of her job in
checking and verifying the correctness and validity of the commission claims from Goldair.
b. Adopt and perform the necessary checks and verification procedures as demanded by your
position in order to ensure that the commission claims of Goldair which you were approving for
payment were correct and valid claims thus resulting in consistent substantial overpayments to
Goldair over a period of more than three years.
c. Require or otherwise cause a final reconciliation of the remaining balance due as
commission claims to Goldair for a particular month such that a claim for a particular month was
never liquidated in a final amount and thus contributing to consistent overpayments to Goldair.
The Senior Accounts Analyst referred to in the charge was Dora Jane Prado Curammeng who
was included as a respondent. Curammeng was specifically assigned to handle and process
commissions of agents in, among others, the Australia Region, and Goldair was among the travel
agents whose production reports and commission claims were handled by her. Curammeng was
accused of failing to verify the completeness of the documents supporting the claims; to trace and
match each ticket in the production report submitted by Goldair with the IATA, BSP and CTO sales
report; and to perform a complete verification of the net/net amounts claimed in the production
reports against the approved marketing arrangements. However, Curammeng had already
resigned and became a resident of Canada at the time of the investigation conducted by the
Espino Committee.
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. As directed, Quijano
submitted her answer wherein, among others, she explained as follows:
My staff processes production reports submitted by both passenger and cargo agents. In 1984,
they were only seven (7) people (with one on loan to Financial Analysis Division) and yet they
process commission claims of an average of PHP four billion annually. My colleagues who are
responsible for processing and recording gross passenger and cargo sales have around 51
people. Just the ratio of my staff to accounting sales staff, which is one to seven, would indicate
the heavy load our unit experience.
I wish to emphasize however, that the staff assigned under my division have been selected on the
basis of their judgment competence considering the very nature of marketing arrangements with
agents are strictly private and confidential. Under the circumstances I have just mentioned, my
staffs judgment and competence is heavily relied on particularly when random checking of
commission claims for traffic documents and airway bills against sales reports is being performed
by them. I also seek your appreciation of the work environment we are in and the intermittent
conflicts we experience due to the pressure of prompt settlement of claims to agents and yet
having the satisfaction that the processing procedures are adequate.
May I reiterate to the Committee that when my staff informed me of their findings of double claims
on the production reports for the months of October and November 1987, I followed this up with a
representative of Goldair. On June 1988, I received a handwritten note from the representative of
Goldair signed by its General Manager Aleco Papazoglou, a xerox copy of it is hereto attached as
Annex A. Mr. Papazoglou, in this note, guaranteed to me that he will undertake to collect any
excessive payments on the agent fees from his agents and pay these to us afterwards.
At this point, I would like to emphasize that ASAD, before known as Confidential Staff under the
Office of the VP-Comptroller, became a unit since 1976. Due to the confidential nature of its
functions, the accounting procedures were not written. The procedures being performed by the
staff were mainly practices handed down from their predecessors. Further, the procedures were
tailored to adopt to the market environment of the country which were based on the approved
marketing arrangements. But of course, there were inherent internal controls.
A final check whether accounting procedures being observed were appropriate in accordance with
accounting standards, is the periodic examination of both our internal and external auditors.
During all these 4-1/2 years I have been with ASAD, I did not receive any feedback that there were
weaknesses or lapses in accounting controls and procedures being followed.
In 1985, Cressop Mccormick & Paget made a study of the CMAs. They conducted an interview of
all key personnel including me who were involved in handling CMAs. It was of course necessary
for them to observe and evaluate the existing accounting procedures and controls. Their report,
however, did not mention any adverse findings concerning my division.
In 1986, Sycip, Gorres, Velayo & Co. were engaged to look into the CMA functional specifications
and to propose the best method of allocating commission expenses to flown revenues. To be able
for them to render a report, it is, of course, necessary for them to delve into the reports we receive
and the records we maintain. It is safe to surmise that they walked through our accounting
procedures. No mention, however, of weaknesses on our accounting procedures and controls was
made in their report.
Again, during the early part of 1987, all the production reports from Australia for the period April
to September 1986 were borrowed and audited by Internal Audit and control. We apprised the
auditor then of the various procedures we observed in processing these production reports. We
did not receive any adverse feedback about their audit. Our confidence that the AMAs were
properly enforced by Australian agents and that there were no irregularities committed were thus
regained. We shifted our concentration to the other agents particularly those under Nett-Nett
settlement arrangements and tried to recall any commission that should be disallowed.
In the middle of 1987, a special team from the Commission on Audit conducted a fraud audit and
again, interviewed my staff and I on our accounting procedures. Incentive commission figures by
agent by country were also furnished to them. I wasnt informed of any flaws in our accounting
procedures and control nor existence of any fraud.
My division underwent scrutiny of three (3) prestigious consulting firms and of our own internal
audit. I relied heavily on the absence of any unfavorable findings on accounting procedures and
controls from them since their studies were quite extensive and lengthy. It is quite surprising at
times why I am now asked how I could have failed to observe that certain accounting procedures
were not being followed by my staff.
Also, Internal Audit & Control made a regular audit in Australia in November, 1986 headed by no
less than the Vice President-Internal Audit & Control. They did not discover any fraud nor report
any questionable transaction on Passenger but on Cargo transaction only. If they, the auditors,
did not find any discrepancy when their concentration is on Australia alone, how much more with
us when our concentration is on the whole system? The production reports of Goldair was
borrowed and assessed by the auditor before and after the regular audit.
The other members of the Espino Committee were Ricardo G. Paloma, then Senior Vice
President-Strategic Planning & Corporate Services wrote a dissenting opinion to the Final Draft
Majority Report in the following manner, to wit:
A new set of procedures was apparently installed by Romeo Ines and Josefina Sioson in April,
1984 (without any evident formal authorization by the Comptroller Dept.) upon receipt of Aleco
Papazoglous letter that automatic payment be made upon presentation of his production reports
in Manila Gold Air gained immunity against any possibility of cross of their production reports: it
was simply impossible to cross check the production reports against sales reports are not yet in
by the time the hand carried production reports arrive in ASAD.
Upon assumption of office by Aida Quijano this new set of procedure was carried over. She was
made to understand that these were the OFFICIAL PROCEDURES, contrary to the actual
procedure which called for production reports being initially checked by PAL Melbourne during the
1981 to 1983 period. This initial check which had until them been handled by the Regional Office
was combined with the secondary check and were all dumped on ASAD.
A mitigating factor in Quijanos favor is that UNSEEN HANDS designed or allowed this new
procedures to be put in place. Ines, who became the VP Internal Audit should have known the
prescribed procedures (or at the very least the actual practice during the period 1981 to 1983
when he was the VP Comptroller) and yet, did not alert her. Unknowingly, Quijano allowed the by-
pass and the automatic payment of 80% upon presentation of production reports because Sioson
assured her that was the procedure previously followed. Trustingly, she became a participant in
this mess.
It should be noted that the Romeo Ines mentioned in the dissenting opinion is the same Romeo
R. Ines who was one of the members of the Espino Committee and who was later named a
respondent in the second Goldair charge, together with Chairman Espino. Romeo R. Ines was the
VP-Comptroller for the period 1981-1983 and VP-Internal Audit for the period 1984-1987. While
Josefina Sioson, as earlier shown, was the Manager-ASAD during the period 1981-1983 until she
was replaced by Quijano on September 1, 1984. Incidentally, as found by respondents witness
Benigno Datoc, the Goldair fraud started in 1981 and continued until its discovery sometime in the
latter part of 1987. And as of that year, Goldair had been PALs agent for about seventeen (17)
years already.
On July 2, 1990, 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 Leslie W. Espino, Executive Vice-President and Chief Operating Officer; Ramon C.
Lozon, Senior Vice-President-Finance; Romeo R. Ines, Vice President-Internal Audit & Control;
Josefina Sioson, Manager-Staff Pricing; except respondents VP-Comptroller Robin C. Dui and
Manager-ASAD Aida Quijano who were already suspended by the Espino Committee, and
respondent Juan Yoga, former Regional Vice President-Australia who has already retired.
Meantime, PAL filed a civil case in Australia against Goldair seeking to recover AUD 11 million.
Twice, Quijano went to Australia as witness for PAL. Thereafter, a settlement was reached
whereby Goldair was to pay PAL a total of around AUD 7 million inclusive of court costs. A criminal
case was nevertheless filed against Goldairs owner, Alexandro Papazoglou, by the Fraud Squad
Victorian Police.
The Ocampo Committee having submitted its findings to the PAL Board of Directors, the latter, in
a resolution dated January 18, 1991, considered respondents Leslie W. Espino, Ramon C. Lozon,
Romeo R. Ines, Robin C. Dui, Josefina Sioson, and Aida M. Quijano, resigned from the service
effective immediately, for loss of confidence and for acts inimical to the interest of the company.
The Board found as follows:
This is the extended Resolution.
The Goldair fraud has caused a total loss to PAL as of August 1990 in the amount of AUD 14.6
million (PHP 204 million). Goldair is a company that served then as the General Sales Agent of
PAL in Australia against Goldair, a settlement was reached whereby Goldair was to pay PAL a
total of around AUD 7 million inclusive of court costs. This settlement is said to be the most
practical and realistic under the circumstances. A criminal case was nevertheless filed against
Goldairs owner, Alexandro Papazoglou, by the Fraud Squad Victorian Police. Hearings are still
going on.
According to the evidence received and evaluated by the investigating committee, PAL lost the
above huge sum of money to Goldair as a result of false, padded, erroneous or irregular claims
for commissions submitted by Goldair and unwittingly paid by PAL. The Agents Services
Accounting Division (ASAD), one of the divisions under the Comptroller Department, is the specific
unit in the company charged with the processing, verification, and validation of all claims for
commissions filed by the companys agents worldwide (excluding the U.S. which is processed by
the San Francisco Regional Office). Consequently, responsibility for the Goldair fraud has been
attributed mainly to the failure of ASAD to properly process and validate Goldairs commission
claims prior to payment.
Thus, the following lapses or irregularities were uncovered in the course of the investigations that
have been conducted:
1. No adequate effort was exerted to see to it that the supporting documents
(photocopies of tickets submitted and attached to the production report were complete). Neither
was a verification or comparison made between the tickets and the production report.
2. The simple and basic step of verifying the names of the passengers and their ticket
numbers against ticket numbers, even on a check basis, to see whether they were reported more
than once was not accomplished. If done, double or multiple reporting of tickets could have been
readily detected.
3. Validation of the correctness of prorate values, by performing the proration, was not
undertaken.
4. No reconciliation was made of all the amounts due the agent for a particular month.
Such reconciliation would have disclosed whether or not the account for a particular month could
be closed.
5. Production reports were not cross-checked against sales report or flight coupon
registers.
6. Superiors failed to adequately monitor the activities of their subordinates to ensure
that the latter were performing their duties.
7. The policy that cash vouchers could be approved only by duly authorized persons
was in several cases violated.
Resolving the case of Quijano, the Board said:
The charge against Ms. Quijano is that:
Quijano was the Manager-ASAD (Agents Services Accounting Division) in 1984-87, and
responsible for the final scrutiny of agents Production Reports and final recommendation for
payment of travel agents commissions.
As Manager-ASAD from 1984 to 1987 (when the fraud was discovered), she failed to uncover or
detect and report or grossly disregarded the fraud although the commissions vis--vis production
were scandalously high.
Ms. Quijano claims that she relied heavily on Ms. Curammengs judgment competence to perform
her work, particularly the completeness of the documents check. She argues that if she were to
do the completeness check herself, there would be no need for the analyst. This argument,
however, wittingly or unwittingly, misconceives the nature of her job. Precisely, her basic role and
duty as a manager was to make sure that the analysts in her division were performing the tasks
assigned to them. But Ms. Quijano did not see to it that the completeness check was actually
being performed by Ms. Curammeng. This lapse in control, contributed materially to the double,
multiple and fictitious reporting of tickets, and double claims for commissions perpetrated by
Goldair. Ms. Quijano was certainly not expected to personally do and perform the completeness
check herself. But as manager, it was clearly incumbent upon her to see to it that this
completeness check was being done by her subordinates competently and efficiently. Yet, Ms.
Quijano even failed to adopt ways and means of keeping herself sufficiently informed of the
activities of her staff members so as to prevent or at least discover at an early stage the fraud
being perpetrated on a massive scale by Goldair against her company.
Her incompetence at her job is patent.
Her motion for reconsideration having been denied by the Board in a Resolution dated February
19, 1991, Quijano filed on March 25, 1991 the instant case against PAL for illegal suspension and
illegal dismissal.[6]
The Labor Arbiter dismissed private respondents complaint in a Decision dated September 7,
1994, the dispositive portion of which reads:
WHEREFORE, in conformity with the opinion above-expressed, judgment is hereby rendered
dismissing the above-captioned case for lack of merit and, consequently, the respondent is
absolved from any liability.[7]
Undeterred, private respondent filed an appeal before the NLRC which rendered the assailed
Decision dated September 29, 1995, the dispositive portion of which reads:
WHEREFORE, in view of all the foregoing considerations, the decision appealed from should be,
as it is hereby, VACATED and SET ASIDE and another one entered, directing the Philippine
Airlines, Inc., thru its responsible officials, to pay Aida M. Quijano her separation pay in accordance
with its Special Retirement & Separation Program dated February 15, 1988, plus ten percent
(10%) of the total amount by way of attorneys fee.[8]
Petitioner filed a Motion for Reconsideration but this was denied by the NLRC in its Resolution
dated November 14, 1995, the dispositive portion of which reads:
After due consideration of the Motion for Reconsideration filed by respondent-appellee on October
20, 1995, from the Decision of September 29, 1995, the Commission (Second Division)
RESOLVED to deny the same for lack of merit.[9]
Hence, this petition for certiorari.
Both parties submitted their respective Memoranda[10] in late 1997, however, on September 11,
1998, petitioner filed a Motion for Suspension of Proceedings[11] based on Presidential Decree No.
902-A which reads, in part:
That upon appointment of management committee, rehabilitation receiver, board or body,
pursuant to this Decree, all actions for claims against corporations, partnerships or associations
under management or receivership pending before any court, tribunal, board or body shall be
suspended accordingly.[12] (Underscoring supplied.)
The said motion referred to an Order[13] dated June 23, 1998 of the Securities and Exchange
Commission (SEC) which appointed an Interim Rehabilitation Receiver for petitioner pursuant to
Presidential Decree No. 902-A that was followed by the issuance of another Order[14] dated July
1, 1998 which commanded that all claims against PAL are deemed suspended.
After hearing both parties on the question of whether or not the Court should render judgment
during the state of suspension of claims, we ruled in the negative in a Resolution[15] dated
September 4, 2000, the dispositive portion of which reads:
IN VIEW THEREOF, the Motion for Suspension of Proceedings of petitioner is GRANTED.[16]
Private respondent filed a Motion for Reconsideration[17] on October 3, 2000 of the above
Resolution but we denied the same in a Resolution[18] dated November 13, 2000.
Since then petitioner was required by this Court to submit periodic status reports on the
rehabilitation proceedings, the last of which was dated October 22, 2007,[19]declaring that the
petitioners request to exit from rehabilitation had been granted by the SEC via an Order[20] issued
on September 28, 2007, the dispositive portion of which reads:
WHEREFORE, in the light of the foregoing, and considering PALs firm commitment to settle its
outstanding obligations as well as the fact that its operations and its financial condition have
been normalized and stabilized in conformity with the Amended and Restated Rehabilitation
Plan exemplifying a successful corporate rehabilitation, the PALs request to exit from rehabilitation
is hereby GRANTED.
The PRR is likewise directed to furnish all creditors and parties concerned with copies of this Order
at the expense of the Petitioner and submit proof of service thereof to the Commission, within
fifteen (15) days from date of receipt of this Order.[21]
Considering the foregoing and the fact that both parties have long submitted their respective
Memoranda in the instant case, private respondent filed a Motion to Resume Proceedings and to
Render Judgment[22] on December 11, 2007. In compliance with this Courts Resolution[23] dated
January 21, 2008 requiring petitioner to comment on private respondents motion, petitioner filed
a Comment/Manifestation[24] on February 28, 2008 which confirmed that with the issuance of the
Securities and Exchange Commissions September 28, 2007 Order granting PALs request to exit
from rehabilitation, there is no longer any legal impediment to the resumption of the instant
proceedings.
In the instant petition, petitioner puts forward a singular argument, to wit:
ASSUMING ARGUENDO (WITHOUT ADMITTING) THAT THE EQUITABLE CONSIDERATIONS
CITED BY THE NLRC DID EXIST, THE SAME CANNOT JUSTIFY THE AWARD OF
SEPARATION PAY TO MRS. QUIJANO (despite the finding that she was legally suspended and
thereafter legally dismissed) IN THE FACE OF OVERWHELMING EVIDENCE SUBMITTED BY
PETITIONER WHICH CLEARLY SHOW THAT PHILIPPINE AIRLINES, INC. LOST SEVERAL
MILLION AUSTRALIAN DOLLARS AS A RESULT OF THE FRAUD COMMITTED BY GOLDAIR
AND THAT SAID FRAUD COULD ONLY HAVE BEEN MADE POSSIBLE BY MRS. QUIJANOS
PATENT MISMANAGEMENT AND GROSS INCOMPETENCE AS ASAD MANAGER IN FAILING
TO DETECT THE IRREGULARITY. IN AWARDING SEPARATION PAY TO MRS. QUIJANO,
THE NLRC COMMITTED A GRAVE ABUSE OF ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION.[25]
We affirm the NLRC ruling with modification.
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][26] 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.[27]
The January 18, 1991 Resolution of the PAL Board of Directors, the relevant portions of which are
discussed in the narration of the facts of this case as culled from the assailed September 29, 1995
NLRC Decision, clearly laid out the reasons why it considered private respondent along with her
other co-employees in PAL resigned from the service effective immediately for loss of confidence
and for acts inimical to the interest of the company. In private respondents case, the Resolution
underscored her acts of mismanagement and gross incompetence which made her fail to detect
the irregularities in the Goldair account that resulted in huge financial losses for
petitioner. Admittedly, the said findings are not backed by proof beyond reasonable doubt but are,
nevertheless, given credence since they have been adopted by both the labor arbiter and the
NLRC and are supported by substantial evidence. As we have consistently held, the degree of
proof required in labor cases is not as stringent as in other types of cases. [28]
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. [29]
Having succinctly disposed of the issue of the validity of private respondents dismissal, we now
delve into the true crux of this controversy which is the legality of the award of separation pay to
private respondent despite having been lawfully terminated for a just cause.
Petitioner argues that, in light of the fact that a just cause forms the basis for her lawful termination
from the job, private respondent is not entitled to separation pay.Likewise, petitioner insists that
even assuming that the equitable considerations cited by the NLRC did exist, the same cannot
justify the award of separation pay. And, in awarding the same, the NLRC committed grave abuse
of discretion amounting to lack of jurisdiction.
We do not agree.
Grave abuse of discretion is an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law or to act in contemplation of law as when the judgment rendered is not based on
law and evidence but on caprice, whim and despotism.[30] This Court holds that the NLRC did not
gravely abuse its discretion in granting separation pay to private respondent as the same is not
characterized by caprice or arbitrariness being rooted in established jurisprudence.
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 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[31] 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,[32] wherein it was held:
Strictly speaking, however, it is not correct to say that there is no express justification for the grant
of separation pay to lawfully dismissed employees other than the abstract consideration of equity.
The reason is that our Constitution is replete with positive commands for the promotion of social
justice, and particularly the protection of the rights of the workers. The enhancement of their
welfare is one of the primary concerns of the present charter. In fact, instead of confining itself to
the general commitment to the cause of labor in Article II on the Declaration of Principles of State
Policies, the new Constitution contains a separate article devoted to the promotion of social justice
and human rights with a separate sub-topic for labor. Article XIII expressly recognizes the vital
role of labor, hand in hand with management, in the advancement of the national economy and
the welfare of the people in general. The categorical mandates in the Constitution for the
improvement of the lot of the workers are more than sufficient basis to justify the award of
separation pay in proper cases even if the dismissal be for cause.
xxxx
There should be no question that where it comes to such valid but not iniquitous causes as failure
to comply with work standards, the grant of separation pay to the dismissed employee may be
both just and compassionate, particularly if he has worked for some time with the company. For
example, a subordinate who has irreconcilable policy or personal differences with his employer
may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. A
working mother who has to be frequently absent because she has also to take care of her child
may also be removed because of her poor attendance, this being another authorized ground. It is
not the employee's fault if he does not have the necessary aptitude for his work but on the other
hand the company cannot be required to maintain him just the same at the expense of the
efficiency of its operations. He too may be validly replaced. Under these and similar
circumstances, however, the award to the employee of separation pay would be sustainable under
the social justice policy even if the separation is for cause.
But where the cause of the separation is more serious than mere inefficiency, the generosity of
the law must be more discerning. There is no doubt it is compassionate to give separation pay to
a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such
generosity if his offense is misappropriation of the receipts of his sales. This is no longer mere
incompetence but clear dishonesty. A security guard found sleeping on the job is doubtless subject
to dismissal but may be allowed separation pay since his conduct, while inept, is not depraved.
But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in
the company premises, the situation is changed completely. This is not only inefficiency but
immorality and the grant of separation pay would be entirely unjustified.
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.[33]
In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations
Commission,[34] we clarified that the grant of separation pay may still be precluded even if the
ground for the employees dismissal is not serious misconduct under Article 282(a) of the Labor
Code but other just causes under the same article and/or other authorized causes provided for
under the Labor Code. However, the TMPCWA case still recognized the social justice exception
prescribed in Philippine Long Distance Telephone Company. To quote the relevant portions of
that decision:
Explicit in PLDT are two exceptions when the NLRC or the courts should not grant separation pay
based on social justice serious misconduct (which is the first ground for dismissal under Art. 282)
or acts that reflect on the moral character of the employee. What is unclear is whether the ruling
likewise precludes the grant of separation pay when the employee is validly terminated from work
on grounds laid down in Art. 282 of the Labor Code other than serious misconduct.
A recall of recent cases decided bearing on the issue reveals that when the termination is legally
justified on any of the grounds under Art. 282, separation pay was not allowed. x x x.
xxxx
In all of the foregoing situations, the Court declined to grant termination pay because the causes
for dismissal recognized under Art. 282 of the Labor Code were serious or grave in nature and
attended by willful or wrongful intent or they reflected adversely on the moral character of
the employees. We therefore find that in addition to serious misconduct, in dismissals based on
other grounds under Art. 282 like willful disobedience, gross and habitual neglect of duty, fraud or
willful breach of trust, and commission of a crime against the employer or his family, separation
pay should not be conceded to the dismissed employee.
In analogous causes for termination like inefficiency, drug use, and others, the NLRC or
the courts may opt to grant separation pay anchored on social justice in consideration of the
length of service of the employee, the amount involved, whether the act is the first offense, the
performance of the employee and the like, using the guideposts enunciated in PLDT on the
propriety of the award of separation pay.[35] (Emphases supplied.)
In other words, under the present jurisprudential framework, the grant of separation pay as a
matter of equity to a validly dismissed employee is not contingent on whether the ground for
dismissal is expressly under Article 282(a) but whether the ground relied upon is akin to serious
misconduct or involves willful or wrongful intent on the part of the employee.
It, thus, becomes pertinent to examine the ground relied upon for the dismissal of private
respondent and to determine if the special circumstances described in PLDT are present in the
case at bar.
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.[36] 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.[37]
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. [38]
A perusal of the assailed September 29, 1995 NLRC Decision would show that the following
equitable considerations were relied upon by the NLRC to arrive at its assailed ruling, to wit:
a) The Goldair fraud was found to have started in 1981. Private respondent became the
Manager-ASAD only on September 1, 1984. The former Manager-ASAD from 1981 to August
1984 was Josefina Sioson.[39]
b) ASAD is under the direct supervision and control of the Vice President-Comptroller
and within the scope of the audit program of the Vice President-Internal Audit and Control. The
VP-Comptroller for the period 1981 to 1983 and the VP-Internal Audit for the period 1984 to 1987
was Romeo Ines.[40]
c) The accounting procedures and controls inherited by private respondent when she
took over ASAD were subjected to the scrutiny of prestigious accounting firms like Cressop,
McCormick & Paget in 1985, the Sycip, Gorres, Velayo & Co., Inc. in 1986, including a special
team from the Commission on Audit in 1987 all of which made no adverse findings concerning
ASAD.[41]
d) No less than the VP-Internal Audit made a regular audit in Australia in November 1986
and in the early part of 1987, by borrowing all production reports covering April to September
1986, but found no irregularities nor made any adverse feedback against ASAD.[42]
e) Private respondent was the first to discover the overpayment of commission claims
to Goldair in 1984 in rate differences in net/net settlement which, after her intervention, did not
recur. She was also the one who first discovered the fraud in double and fictitious commission
claims and promptly took action when she withheld all provisional payments due Goldair.[43]
f) Even after the Goldair anomaly was discovered, private respondent could have
availed of PALs Special Retirement and Separation Program, but she stayed put and had gone
twice to Australia, while under preventive suspension, to attend court proceedings as a witness
for petitioner enabling the said company to recover and minimize its economic loss. [44]
g) Private respondent has no derogatory record during the entire period of her
employment with petitioner for more than two decades. She steadily rose from the ranks until she
became the ASAD Manager.[45]
h) In the dissenting opinion of Ricardo Paloma, Vice Chairman of the Espino Committee
and PAL Senior VP Strategic Planning and Corporate Service, to the Final Draft Majority Report,
he observed that a mitigating factor in [private respondents] favor is that UNSEEN HANDS
designed or allowed this new procedures to be put in place. Ines, who became the VP Internal
Audit should have known the prescribed procedures (or at the very least the actual practice during
the period 1981 to 1983 when he was the VP Comptroller) and yet, did not alert her. Unknowingly,
[private respondent] allowed the by-pass and the automatic payment of 80% upon presentation of
production reports because Sioson assured her that was the procedure previously followed.
Trusting, she became a participant in this mess.[46]
Considering the foregoing uncontroverted special circumstances, we rule that the NLRC did not
commit grave abuse of discretion amounting to lack of jurisdiction in ordering petitioner to pay
private respondent separation pay for equitable considerations.
However, we do not agree with the NLRC that private respondents separation pay should be
awarded in accordance with PALs Special Retirement & Separation Program dated February 15,
1988 plus ten percent (10%) of the total amount by way of attorneys fees.
At the risk of stating the obvious, private respondent was not separated from petitioners employ
due to mandatory or optional retirement but, rather, by termination of employment for a just
cause. Thus, any retirement pay provided by PALs Special Retirement & Separation Program
dated February 15, 1988 or, in the absence or legal inadequacy thereof, by Article 287 of the
Labor Code[47] does not operate nor can be made to operate for the benefit of private respondent.
Even private respondents assertion that, at the time of her lawful dismissal, she was already
qualified for retirement does not aid her case because the fact remains that private respondent
was already terminated for cause thereby rendering nugatory any entitlement to mandatory or
optional retirement pay that she might have previously possessed.
Likewise, attorneys fees are not proper in this case because the same can only be awarded when
the employee is illegally dismissed in bad faith and is compelled to litigate or incur expenses to
protect his rights by reason of the unjustified act of his employer.[48] The aforementioned conditions
do not obtain in this case.
As to the matter of the proper amount of separation pay to be awarded to private respondent on
the basis of equitable considerations, our pronouncement in Yrasuegui v. Philippine Airlines,
Inc.[49] is instructive, to wit:
Here, We grant petitioner separation pay equivalent to one-half (1/2) months pay for every year of
service. It should include regular allowances which he might have been receiving. We are not blind
to the fact that he was not dismissed for any serious misconduct or to any act which would reflect
on his moral character. We also recognize that his employment with PAL lasted for more or less
a decade.
Private respondents circumstances are more or less identical to the above-cited case in the sense
that, as previously discussed, her dismissal was neither for serious misconduct nor for an offense
involving moral turpitude. Furthermore, her employment with petitioner spanned more than two
decades unblemished with any derogatory record prior to the infractions at issue in the case at
bar.
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.
12. LEPANTO CERAMICS, INC., Petitioner, v. LEPANTO CERAMICS EMPLOYEES
ASSOCIATION, Respondent.
(G.R. NO. 180866; MARCH 2, 2010)
FACTS: 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. In December 1998,
petitioner gave a P3, 000.00 bonus to its employees, members of the respondent Association.
Subsequently, in September 1999, 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 benefit, 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. The parties failed to amicably settle the
dispute. The respondent Association filed a Notice of Strike with the National Conciliation
Mediation Board. The efforts to conciliate failed.
The case was then referred to the Voluntary Arbitrator for resolution where the Complaint was
docketed as Case No. LAG-PM-12-095-02.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. The
Voluntary Arbitrator further expounded that since the employees had already been given P600.00
cash bonus, the same should be deducted from the claimed amount of P3,000.00, thus leaving a
balance of P2,400.00. Petitioner elevated the case to the Court of Appeals which affirmed toto the
decision of the Voluntary Arbitrator.
ISSUE: Is the petitioner obliged to give the members of the respondent Association a Christmas
bonus?
HELD: 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 employer's
business and made possible the realization of profits. A bonus is also granted by an enlightened
employer to spur the employee to greater efforts for the success of the business and realization
of bigger 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.
A CBA refers to a 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 other contracts, the parties to 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. It is a familiar and fundamental doctrine in labor law
that the CBA is the law between the parties and they are obliged to comply with its provisions.
This principle stands strong and true in the case at bar. A reading of the provision of the CBA
reveals that the same provides for the giving of a Christmas gift package/bonus without
qualification. Terse and clear, the said provision did not state that the Christmas package shall be
made to depend on the petitioner's financial standing. The records are also bereft of any showing
that the petitioner made it clear during CBA negotiations that the bonus was dependent on any
condition. Indeed, if the petitioner and respondent Association intended that the P3,000.00 bonus
would be dependent on the company's earnings, such intention should have been expressed in
the CBA.
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 petitioners
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.
Petition is DENIED.
13. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. JOEY B. TEVES
G.R. NO. 143511; NOVEMBER 15, 2010
FACTS: Petitioner terminated respondent through an Inter-Office Memorandum dated on account
of his three (3) unauthorized leaves of absence committed within three (3) years in violation of
petitioners rules and regulations.
Respondent filed a Complaint for illegal dismissal. Labor Arbiter (LA) Benigno C. Villarente, Jr.
rendered his Decision declaring that the dismissal of complainant LEGAL. Respondent interposed
an appeal with the NLRC. NLRC rendered its Decision reversing the LAs Decision. Petitioner's
motion for reconsideration was denied by the NLRC. Petitioner filed a Petition for Certiorari with
prayer for the issuance of a temporary restraining order and/or injunction assailing the Decisin and
Resolution of NLRC. CA rendered its assailed Decision, which affirmed and reiterated the NLRC
decision.
The CA found that (1) petitioner complied with the two-notice requirement which was essential to
respondent's right to due process; (2) respondent was given a notice to explain in writing why no
disciplinary action should be meted on him for his unauthorized absences from February 11 to 19,
1992; and (3) when respondents explanation proved unacceptable to petitioner, respondent was
sent another notice informing him of his termination by reason of three unauthorized absences
within a three-year period, a conduct which was circumscribed in petitioner's rules and regulations.
Notwithstanding compliance with the requirement of due process, the CA affirmed the illegality of
respondent's dismissal finding that respondent's comportment cannot be characterized as grave
so as to constitute grave misconduct; that his first two leaves of absence were satisfactorily
justified; and that he should not have been suspended from service by reason of such absences.
However, the CA found that respondents failure to report for work on February 11 to 19, 1992
appeared to be the only unauthorized and unjustified leave of absence during his 11 years of stay
with petitioner, and it did not merit the harsh penalty of dismissal.
Petitioner filed a motion for reconsideration, but was denied by the CA.
ISSUE: Was respondent illegally dismissed?
HELD: 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.
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. DENIED.
FACTS: Respondent was employed as Clerk of PLDT until he was terminated because he violated
the (3) unauthorized leaves of absence committed within 3 years, contrary to the policy of PLDT.
From 1990 and 1992, there were 3 instances of unauthorized leaves of absence from the
Respondent. On the final instance, the explanation of Teves was unmeritorious, which led to his
dismissal. He filed a complaint of illegal dismissal before the Labor Arbiter.
The Arbiter found out that the dismissal was legal, but it ordered PLDT to give 20,000 php to
Teves. Teves appealed to the NLRC, which reversed the Arbiters decision. It upheld the validity
of the absence on account of Teves wife having complications during childbirth.
PLDT filed a petition for Certiorari with the CA, which affirmed the decision of the NLRC. The CA
found that respondent's comportment cannot be characterized as grave so as to constitute grave
misconduct; that his first two leaves of absence were satisfactorily justified
ISSUE: Does the conduct of Teves warrant and justify dismissal?
HELD: 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.
However, since one of the instances is unjustified, it is to be subtracted from the reinstatement.
PARTIALLY GRANTED.
14. SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO) VS. HON. BLAS OPLE G.R.
NO. L-53515, FEBRUARY 8, 1989

FACTS: For 3 years, a collective bargaining agreement was being implemented by San Miguel
Corporation Sales Force Union (PTGWO), and San Miguel Corporation. Section 1, of Article IV of
which provided “Employees within the appropriate bargaining unit shall be entitled to a basic
monthly compensation plus commission based on their respective sales.” Then, the company
introduced a marketing scheme known as “Complementary Distribution System”(CDS) whereby
its beer products were offered for sale directly to wholesalers through San Miguel’s Sales Offices.
The union alleged that the new marketing scheme violates Sec 1, Art IV f the CBA because the
introduction of the CDS would reduce the take home pay of the salesmen.
ISSUE: Whether or not the new marketing scheme should be upheld considering that the act was
unilaterally made by the employer.
RULING: Yes, because it is a valid exercise of managerial prerogative. 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. 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.
15. SOSITO VS. AGUINALDO DEVELOPMENT CORP.
G.R. NO. L-48926
DECEMBER 14, 1987
FACTS:
Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging company,
and was in charge of logging importation, with a monthly salary of P675.00, 1 when he went on
indefinite leave with the consent of the company on January 16, 1976. On July 20, 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 not later than July 31, 1976. The petitioner decided to accept this offer and so
submitted his resignation on July 29, 1976, "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. The petitioner complained to the Department of Labor,
where he was sustained by the labor arbiter. The company was ordered to pay Sosito the 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 petitioner was not
covered by the retrenchment program.
ISSUE: Whether or not the petitioner is covered by the retrenchment program and thus entitled to
separation benefits.
HELD:
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 as of June 30, 1976. 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. We note that 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.
CONSTRUCTION IN FAVOR OF LC (ARTICLE 4)
1.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
Facts:
On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National
Labor Relations Commission (NLRC) a petition for claims of its monthly paid employees for holiday
pay.
Abitrator Vivar: Filipro to pay its monthly paid employees holiday pay pursuant to Art 94 of Labor
Code, subject to exclusions and limitations in Art 82.
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.
Arbitrator Vivar: On January 14, 1986, 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 and whether or not the previous use of 251 as divisor resulted in overpayment
for overtime, night differential, vacation and sick leave pay.
Held:
1. Sales personnel are not entitled to holiday pay.
Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel
as “non-agritultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.”
The 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
in actual field work.
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:
Rule IV Holidays with Pay
Sec. 1. Coverage — 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 . . . (Emphasis supplied)
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.
2. The divisor in computing the award of holiday pay should still be 251 days.
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 petitioner union also assails the respondent arbitrator’s ruling that, concomitant with the award
of holiday pay, the divisor should be changed from 251 to 261 days to include the additional 10
holidays and the employees should reimburse the amounts overpaid by Filipro due to the use of
251 days’ divisor.
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. If the employees are already paid
for all non-working days, the divisor should be 365 and not 251.
In the petitioner’s case, its computation of daily ratio since September 1, 1980, is as follows:
monthly rate x 12 months / 251 days
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.
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.
To illustrate, if prior to the grant of holiday pay, the employee’s annual salary is P25,100, then
dividing such figure by 251 days, his daily rate is P100.00 After the payment of 10 days’ holiday
pay, his annual salary already includes holiday pay and totals P26,100 (P25,100 + 1,000). Dividing
this by 261 days, the daily rate is still P100.00. 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 which are all based on the daily rate, since the daily rate is still the same before
and after the grant of holiday pay.
SC Decision:
The Court thereby resolves that the grant of holiday pay be effective, not from the date of
promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code, but
from October 23, 1984, the date of promulgation of the IBAA case (Insular Bank of Asia and
America Employees’ Union (IBAAEU) v. Inciong, where the court declared that Sec 2, Rule IV,
Book III of IRR which excluded monthly paid employees from holiday pay benefits, are null and
void).
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 V. WATERFRONT HOTEL DAVAO (2010)
FACTS: On Nov. 2000, the Hotel sent DOLE a Notice of Suspension of Operations for 6 months
due to severe and serious business losses.- During the suspension, Rojas, Pres. of Davao insular
Hotel Free Employees Union (DIHFEU-NFL) the recognized labor organization in the Hotel, sent
the Hotel several letters asking it to reconsider its decision. The Union members wanted to keep
their jobs and to help the Hotel, so it suggested several ideas in its Manifesto to solve the high
cost on payroll, such as: downsize manpower structure to 100 rank-and-file EEs, a new pay scale,
etc.
DIHFEU-NFL signed a memorandum of agreement where the Hotel agreed to re-open the hotel.
The retained employees individually signed a “reconfirmation of Employment.” In June 2001, the
Hotel resumed its business operations. On Aug. 2002, Darius Joves and Debbie Planas, local
officers of the National Federation of Labor (NFL), filed a Notice of Mediation before the NCMB,
stating that the Union involved was "DARIUS JOVES/DEBBIEPLANAS ET. AL, National
Federation of Labor." The issue was the diminution of wages and benefits through unlawful MOA.
In support of his authority to file the complaint, Joves, assisted by Atty. Cullo, presented several
SPAs which were, undated and unnotarized.
Petitioner and respondent signed a Submission Agreement, where the union stated was
"INSULAR HOTEL EMPLOYEES UNION-NFL."- The Hotel filed with the NCMB a Manifestation
with Motion for a Second Preliminary Conference, alleging that the persons who filed the complaint
in the name of the Insular Hotel Employees Union-NFL have no authority to represent the Union.
Cullo confirmed that the case was filed not by the IHEU-NFL but by the NFL. When asked to
present his authority from NFL, Cullo admitted that the case was filed by individual employees
named in the SPAs.- The Hotel argued that the persons who signed the complaint were not the
authorized representativesof the Union indicated in the Submission Agreement nor were they
parties to the MOA. It filed a Motion to Withdraw, which Cullo then filed an Opposition to where
the same was captioned: NATIONAL FEDERATION OF LABOR and 79 Individual Employees,
Union Members, Complainants,-versus-Waterfront Insular Hotel Davao, Respondent. Cullo
reiterated that the complainants were not representing IHEU-NFL.
The Accredited Voluntary Arbitrator (AVA) denied the Motion to Withdraw.- The Hotel submitted
its Motion for reconsideration and stressed that the Submission Agreement was void because the
Union did not consent thereto.- Cullo filed a Comment/Opposition to the Hotel's motion for
recomendation. Again, Cullo admitted that the case was not initiated by the IHEUNFL, saying that
the individual complainants are not representing the union but filing the complaint through their
appointed attorneys-in-fact to assert their individual rights as workers who are entitled to the
benefits granted by law and stipulated in the collective bargaining agreement. There is no mention
there of Insular Hotel Employees Union, but only National Federation of Labor (NFL). The local
union was not included as party-complainant considering that it was a party to theassailed MOA.
The AVA denied the Motion. He, however, ruled that the Hotel was correct when it objected to
NFL as proper party-complainant, as the proper one is INSULAR HOTEL EMPLOYEES UNION-
NFL. In the submission agreement, the party complainant written is INSULAR HOTEL
EMPLOYEES UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79 other
members. However, since the NFL is the mother federation of the local union, and signatory to
the existing CBA, it can represent the union.
Cullo, in subsequent documents, started using the caption "Insular Hotel Employees Union-NFL,
Complainant.
The case was remanded to the NCMB.
The Hotel reiterated to the NCMB that the individual union members have no standing. The Hotel
did not appear before the NCMB to select a new AVA. The new AVA decided in favor of cullo,
declaring the Memorandum of agreement invalid. The Hotel appealed to CA, questioning among
others the jurisdiction of the NCMB. The CA ruled in favor of the hotel, declaring the memorandum
of agreement valid and enforceable.
ISSUES: 1. Did CA err in finding that the AVA has no jurisdiction over the case because the notice
of mediation does not mention the name of the local union but only the affiliate federation? 2. Do
the individual members of the union have the requisite standing to question the Memorandum of
agreement before the BCMB? 3. If the individual members of the union have no authority to file
the case, does the federation to which the local union is affiliated has the standing to do so?
LAW: Art. 260, 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.
RULING: In the notice of mediation filed in the NCMB, it stated that the union involved was darius
joves/Debbie Planes et al., National federation of labor. In the submission agreement, however, it
stated that the union involved was Insular Hotel Employees Union-NFL. Cullo clarified in
subsequent documents captioned as National Federation of Labor and 79 individual employees,
members, complainants that the complainants are not representing the union but filing the
complaint through their appointed attorneys in fact. While it is undisputed that the submission
agreement was signed by respondent IHEU-NFL, then represented by Joven and Cullo, this court
finds that there are 2 circumstances which affect its validity: first, the Notice of Mediation was filed
by a party who had no authority to do so; second, that respondent had persistently voiced out its
objection questioning the authority of Joves, Cullo and the individual members of the Union to file
the complaint before the NCMB. Procedurally, the first step to submit a case for mediation is to
file a notice of preventive mediation with the NCMB. It is only after this step that a submission
agreement may be entered into by the parties concerned.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive
mediation, to wit: Who may file a notice or declare a strike or lockout or request preventive
mediation. - Any certified or duly recognized bargaining representative may file a notice or declare
a strike or request for preventive mediation in cases of bargaining deadlocks and unfair labor
practices. The employer may file a notice or declare a lockout or request for preventive mediation
in the same cases. In the absence of a certified or duly recognized bargaining representative, any
legitimate labor organization in the establishment may file a notice, request preventive mediation
or declare a strike, but only on grounds of unfair labor practice. it is clear that only a certified or
duly recognized bargaining agent may file a notice or request for preventive mediation. It is cur
ious that even Cullo himself admitted, in a number of pleadings, that the case was filed not by the
Union but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to
entertain the notice filed before it. Even though respondent signed a Submission Agreement, it
had, however, immediately manifested its desire to withdraw from the proceedings after it became
apparent that the Union had no part in the complaint. As a matter of fact, only four days had lapsed
after the signing of the Submission Agreement when respondent called the attention of AVA Olvida
in a "Manifestation with Motion for a Second Preliminary Conference"51 that the persons who filed
the instant complaint in the name of Insular Hotel Employees Union-NFL had no authority to
represent the Union. Respondent cannot be estopped in raising the jurisdictional issue, because
it is basic that the issue of jurisdiction may be raised at any stage of the proceedings, even on
appeal, and is not lost by waiver or by estoppel. Petitioners have not been duly authorized to
represent the union. Art. 260, 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.
The CBA 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 of which it belongs. 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. Merely 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. The
petition is hereby denied and affirmed the decision of CA.
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
Facts: Petitioner was hired by private respondent Knut Knutsen O.A.S. through an authorized
shipping agent. He was hired as Third Marine Engineer with a salary of US$ 800 a month. The
contract was extended for 6 months by mutual agreement on the promise of the employer that
petitioner will be promoted as Second Engineer. He joined the vessel on July 23, 1985 but he
signed off on November 27, 1985 due to the failure of private respondent to fulfill its promise of
promoting him and the alleged unilateral alteration of his basic salary from US$ 800 to US$ 560.
Petitioner was made to shoulder his return airfare to Manila. On his return, he filed with POEA
complaint against private respondent for payment of salary differential, overtime pay, unpaid
salary for November 1985 and refund for his airfare and his cash bond allegedly in the amount of
P20,000. He contended that private respondent unilaterally altered the contract and compelled
him to request for his repatriation to the Philippines. POEA found that petitioner-complainant’s
total monthly salary was US$ 800 inclusive of the fixed overtime which was in accordance with
the Wage Scale submitted to the Accreditation Department of its office therefore the petitioner was
not entitled of any salary differential; the allegation of the petitioner-complainant that there was
contract substitution was not true because the Employment Contract correction was in accordance
with the Wage Scale duly approved by POEA; and the petitioner is not entitled with refund of on
his repatriation expense because it was voluntary on his part. Lastly, he only deposited P15,000
of cash bond instead of P 20, 000. POEA ruled that private respondent pay the petitioner the
amount of P15,000 for the reimbursement of cash bond and 10% of the said award for attorney’s
fee. The decision was appealed to NLRC but both are dismissed, the complainant-petitioner for
lack of merit while respondent’s appeal was filed out of time. Petitioner’s motion for reconsideration
was also denied.
Issue: Whether the NLRC committed grave abuse of discretion when it disregarded the
alteration of the employment contract, which is prohibited under Art. 34 of the Labor Code ,when
in fact it is in accordance with the wage scale approved by the POEA?
Held: There was no alteration in the contract. The correction was only made to specify the salary
and overtime pay. It was a mere breakdown of the total amount of US$560 as basic wage and
US$ 240 as overtime pay. The court held that the presence of petitioner’s signature makes it
impossible for him to misunderstand the amount of compensation. His acts were tainted with bad
faith: he failed to disclose that he was the one who requested for his repatriation when the promise
of promoting him did not prosper; he only posted P 15, 000 instead of P20,000 as cash bond; he
claimed that his salary for November was not paid when in fact he was the one who owed private
respondent for cash advancement and; when he finished his contract, despite of the prodding to
continue his work until the renewal of his contract, petitioner insisted on his termination. The
conflict centers on the failure of the respondent company to give the petitioner the promised
promotion. Although alteration of contract is a serious violation of the law, the court held that laws
should be given reasonable interpretation. It should not be interpreted in such a way that it defeats
the purpose of the law. And the purpose of Art. 34 of the Labor Code was the protection of both
parties. While it is true that when there is doubt on the interpretation of agreement and writings, it
should be resolved in favor of the employee, it does not mean that the employer’s right should be
disregarded. Doing so for the interests solely of the labor would also be unjust and unacceptable.
Ruling: petition was denied. The assailed decision of the NLRC is affirmed in toto.
HSBC v. NLRC [G.R. No. 116542. July 30, 1996
Facts:
Complainant is a regular rank and file employee of HSBC in Makati City. It appears that on
February 3, 1993, 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.
On February 4, 1993 the bank called up Dr. Logos to verify the truth of complainants statement
but the doctor denied that he examined or attended to complainant on February 3, 1993 and the
last time complainant consulted him was in December 1992. 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 on February 3, 1993, and that he consulted Dr. Logos on that
day.
Complainant, in his written statement, further admitted that his statement about his not staying at
his house for one week and his consulting a doctor was incorrect, but that the same was not given
with malicious intention or deceit or meant to commit fraud against the bank, its operations,
customers and employees.
However, on February 16, 1993, the bank came out with a memorandum 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.
Petitioner insists that private respondent should be dismissed in accordance with rules contained
in its employees handbook stating that any form of dishonesty shall constitute serious offenses
calling for termination.
Issue:
(1) Whether or not private respondents act of making a false statement as to the real reason for
his absence on did not constitute such dishonesty as would warrant his termination from service.
(2) Whether or not NLRC arbitrarily imposed its value judgment and standard on petitioners
disciplinary rules, thereby unilaterally restricting the Banks power and prerogative to discipline its
employees according to reasonable rules and regulations
Held:
(1) YES. It is unarguable that private respondents false information concerning his whereabouts
on February 3, 1993 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.
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.
(2) NO. It is the NLRC's right and duty to review employer’s exercise of their prerogative to dismiss
so as to prevent abuse and arbitrariness as granted under Arts. 217 and 218 of the Labor Code.
The employers prerogative and power to discipline and terminate an employee’s 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. Petition
DISMISSED.
COLGATE PALMOLIVE PHILIPPINES, Inc. vs. HON. BLAS F. OPLE, COLGATE
PALMOLIVE SALES UNION.
G.R. No. 73681. June 30, 1988
FACTS:
The respondent Union filed a Notice of Strike with the Bureau of Labor Relations against petitioner
for 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. Failure to amicably settle the dispute, the Ministry of Labor
and Employment (MOLE) assumed the jurisdiction over the dispute.
In its position paper to MOLE, Petitioner denied accusations and contended that the union is not
the certified agent of the company salesman; that its legitimate status is in question and that the
dismissal of three salesmen is with just cause.
ISSUE:
Whether the MOLE committed error in reinstating the three salesmen despite its own finding that
there is indeed a just cause in dismissing them.
RULING: Yes, 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 worker's side but also the management and/or employer's 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.
CARLOS C. DE CASTRO, Petitioner, versus LIBERTY BROADCASTING NETWORK, INC.
and EDGARDO QUIOGUE, Respondents.
G.R. No. 165153 | 2008-09-23
Before us is the Petition for Review on Certiorari[1] filed by petitioner Carlos C. de Castro
(petitioner) to annul, reverse and/or set aside the Decision[2] dated May 25, 2004 and the
Resolution[3] dated August 30, 2004 of the Former Special Third Division of the Court of Appeals
(CA) in CA-G.R. SP No. 79207 entitled "Liberty Broadcasting Network, Inc. and Edgardo B.
Quiogue v. National Labor Relations Commission and Carlos C. de Castro."
Facts: The petitioner commenced his employment with respondent Liberty Broadcasting Network,
Inc. (respondent company) as Building Administrator on August 7, 1995. On May 16, 1996, the
respondent company, through its HRM Senior Manager (Personnel Manager) Bernard Mandap,
sent a notice to the petitioner requiring him to explain within forty-eight (48) hours why he should
not be made liable for violation of the Company Code of Conduct for acts constituting serious
misconduct, fraud and willful breach of the trust reposed in him as a managerial employee.[4]
In his answer, the petitioner denied the allegations against him contained in the affidavits of
respondents' witnesses, Vicente Niguidula (Niguidula) and Gil Balais (Balais).[5] The petitioner
labeled all of the respondents' accusations as completely baseless and sham, designed to protect
Niguidula and Balais who were the favorite boys of respondent Edgardo Quiogue (Quiogue), the
Executive Vice President of the respondent company. At the petitioner's request, the respondent
company scheduled a formal hearing at 2:00 p.m. of May 28, 1996. However, the petitioner sent
a notice that he would not participate when he learned through his wife that criminal cases for
estafa and qualified theft had been filed against him at the Makati Prosecutor's Office. He felt that
the hearing was a "moro-moro" investigation. On May 24, 1996, the respondent company further
charged the petitioner with "Violation of Company Code of Conduct," based on the affidavits of
Balais, Cristino Samarita (Samarita), and Jose Aying (Aying).[6]
On May 31, 1996, the respondent company issued a Notice of Dismissal to the petitioner based
on the following grounds:
1. Soliciting and/or receiving money for his own benefit from suppliers/dealers/traders Aying and
Samarita, representing "commissions" for job contracts involving the repair, reconditioning and
replacement of parts of the airconditioning units at the company's Antipolo Station, as well as the
installation of fire exits at the Technology Centre;
2. Diversion of company funds by soliciting and receiving on different occasions a total of
P14,000.00 in "commissions" from Aying for a job contract in the company's Antipolo Station;
3. Theft of company property involving the unauthorized removal of one gallon of Delo oil from
the company storage room;
4. Disrespect/discourtesy towards a co-employee, for using offensive language against
Niguidula;
5. Disorderly behavior, for challenging Niguidula to a fight during working hours within company
premises, thereby creating a disturbance that interrupted the normal flow of activities in the
company;
6. Threat and coercion, for threatening to inflict bodily harm on the person of Niguidula and for
coercing Balais, a subordinate, into soliciting money in his (the petitioner's) behalf from
suppliers/contractors;
7. Abuse of authority, for instructing Balais to collect commissions from Aying and Samarita, and
for requiring Raul Pacaldo (Pacaldo) to exact 2%-5% of the price of the contracts awarded to
suppliers; and
8. Slander, for uttering libelous statements against Niguidula.
The petitioner filed a complaint for illegal dismissal against the respondents with the National
Labor Relations Commission (NLRC) Arbitration Branch in the National Capital Region. At the
arbitration, he denied committing the offenses charged. He maintained that: he could not
encourage solicitation of commissions from suppliers considering that he was quite new in the
company; the accusations are belated because the imputed acts happened in 1995; the one gallon
of Delo oil he allegedly carted away was at the room of Balais at the time, which circumstance he
immediately relayed to Mandap; the affidavits of Niguidula and Balais are not reliable because he
had altercations with them; in the first week of May 1996, he reprimanded Balais for incurring
unnecessary overtime work, which Balais resented; on May 9, 1996, Niguidula verbally assaulted
and challenged him to a fight, which he reported to respondent Quiogue and to the Makati Police.
Attached to the petitioner's position paper were the affidavits[8] of Aying and Ronalisa O. Rosana,
a telephone operator of the company.
On April 30, 1999, Labor Arbiter Felipe Pati rendered a Decision in the petitioner's favor, holding
the respondent company liable for illegal dismissal.[9] Arbiter Pati disbelieved the affidavits of
Niguidula, Balais, Pacaldo, Samarita, and Aying in view of the circumstances prior to their
execution. The Arbiter noted that Niguidula and Balais had altercations with petitioner prior to the
issuance of the notice of violation to the latter; the affidavit of Samarita showed that it was not
petitioner who personally asked commission from him but Balais; Aying's credibility had been
placed in serious doubt because he recanted his previous affidavit and issued another stating that
the petitioner did not actually ask commission from him; and Pacaldo's affidavit should not also be
believed because he was a subordinate of Niguidula who had an ax to grind against the petitioner.
On appeal, the NLRC reversed the Labor Arbiter's decision and adopted the findings of Labor
Arbiter Tamayo who had reviewed the appeal on the NLRC's instructions.[10] It ruled that Arbiter
Pati erred in disregarding the affidavits of the respondents' witnesses.
The petitioner filed a motion for reconsideration which the NLRC granted in a Resolution
promulgated on September 20, 2002.[11] The NLRC held that the charges against petitioner "were
never really substantiated other than by the 'bare allegations' in the affidavits of witnesses" who
were the company's employees and who had altercations with petitioner prior to the execution of
their affidavits.
The NLRC turned down the motion for reconsideration that the respondent company subsequently
filed.[12] The respondent company thus elevated the case to the CA via a petition for certiorari
under Rule 65 of the Rules of Court. The CA granted the petition in its Decision promulgated on
May 25, 2004,[13] thereby effectively confirming the validity of the petitioner's dismissal. The
appellate court found that the NLRC gravely abused its discretion when it disregarded the
affidavits of all the respondents' witnesses, particularly those of Balais, Samarita, Niguidula, and
Pacaldo who were one in saying that the petitioner demanded commissions from the company's
job contractors. The CA observed that it could not have been possible that Balais and Niguidula
(who had previous altercations with the petitioner), and Samarita (who did not previously know
Quiogue) all committed perjury to execute respondent Quiogue's scheme of removing the
petitioner from the company.
The petitioner moved but failed to secure a reconsideration of the CA Decision; hence, he came
to us through the present petition.
The petitioner submits that the CA erred when it acted as a trial court and interfered without
sufficient basis with the NLRC's findings. Citing our ruling in Cosmos Bottling Corporation v. NLRC,
et al.,[14] he points out that factual findings of the NLRC, particularly when they coincide with
those of the Labor Arbiter, are accorded respect and finality and should not be disturbed if they
are supported by substantial evidence.
The petitioner points out, too, that Rule 65 of the Rules of Court finds full application only when
an administrative tribunal has acted with grave abuse of discretion amounting to lack of or in
excess of jurisdiction, or when such finding is not supported by the evidence. He argues that the
respondent company failed to raise any jurisdictional question of jurisdiction or grave abuse of
discretion before the CA. What the respondent company effectively sought from the CA, citing our
ruling in Flores v. NLRC,[15] was a judicial re-evaluation of the adequacy or inadequacy of the
evidence on record - an improper exercise of power outside the scope of the extraordinary writ of
certiorari.
The petitioner further argues that the CA erred when it substituted its judgment for that of the
Labor Arbiter and the NLRC who were the "triers of facts" who had the opportunity to review the
evidence extensively.
The petitioner theorizes that his termination from employment was a hatchet job maliciously
concocted by the respondents, with Quiogue at the helm. He had offended Quiogue when he
questioned the latter's award of the fire exit contract to Samarita; as a result, Quiogue fabricated
charges against him, using his underlings Niguidula and Balais. He particularly questions the
charge that he conspired with his fellow managers (such as Niguidula, Pacaldo and even
Personnel Manager Mandap) in December 1995, and asks why his investigation and the
supporting evidence came only in May 1996.
The petitioner likewise cites Aying's change of statement as evidence that the respondents'
charges have been concoctions. He belies that he slandered and challenged Niguidula to a fight;
it was in fact Niguidula who had defamed him. He stresses that he complained in writing to
respondent Quiogue about the incident immediately after it happened, copy furnished B. P.
Mandap, F. A. Domingo and R. M. Moreno, the Personnel Manager, Head of Human Relations
and President of the company, respectively. He likewise reported the matter to the police and to
the barangay covering the workplace, and lodged a complaint for grave oral defamation against
Niguidula before the Makati Prosecutor's Office. His co-employee, Ronalisa Rosana, corroborated
all these allegations. He points out that Niguidula never reported the incident to Quiogue or to
anyone for that matter, thus, proving the falsity of his (Niguidula's) complaint.
Finally, the petitioner draws attention to Quiogue's failure to act on his complaint against Niguidula,
only to resurrect it under the Notice of Violation served on him on May 16, 1996.[16] This time,
however, Niguidula was already the victim. As to the notice of violation itself, the petitioner laments
that although he was given 48 hours to explain, Quiogue, in bad faith, immediately filed complaints
for estafa and qualified theft against him. Mandap even went to his residence and warned his wife
not to file charges against the company, or else, Quiogue would file cases against him in the
regular courts.
The respondents submit that the CA correctly ruled as the NLRC committed grave abuse of
discretion when it flip-flopped in its factual findings. They further stress that the positive testimonies
of Balais, Pacaldo, and Samarita should be given credence over the negative testimony of the
petitioner. Even granting that the testimony of Niguidula was tainted with malice and bad faith, the
affidavit of Balais should stand because no evidence supports the petitioner's claim that Balais
also had altercations with him before he (Balais) executed his two affidavits.
With respect to the testimony of Samarita, the respondents point out that Samarita stated in no
uncertain terms that he was forced to increase his quotation for the construction of the company
fire exits from P70,091.00 to P87,000.00 because the petitioner had asked for commissions. The
petitioner failed to rebut this. They brush aside the insinuation that Samarita and Pacaldo suffer
from bias as the petitioner failed to show by evidence that their personal interests led them to favor
the company.
The respondents lastly maintain that petitioner's claim - that Quiogue orchestrated the petitioner's
dismissal after he (the petitioner) questioned Quiogue's award of a contract to Samarita
Enterprises for a questionable price - is not supported by evidence. They reiterate the gravity of
the charges the petitioner faces; they constitute serious misconduct and fraud or willful breach of
trust reposed in him by his employer and are just causes for termination of employment under
Article 282 of the Labor Code, as well as serious breaches of company rules and the trust reposed
in him by the respondent company.
Ruling: As a rule, and as recently held in Rudy A. Palecpec, Jr. v. Hon. Corazon C. Davis, et al.[17]
(a 2007 case), this Court is not a trier of facts and can review a Rule 45 petition only on questions
of law. We wade, however, into questions of facts when there are substantial conflicts in the factual
findings of the CA, on the one hand, and the trial court or government agency concerned, on the
other. This is precisely the situation that we have before us since the NLRC and the CA have
diametrically opposed factual findings leading to differing conclusions. Hence, we are left with no
option but to undertake a review of the facts in this Rule 45 case.
We find the petition meritorious. To our mind, the CA erred in the appreciation of the evidence
surrounding petitioner's termination from employment. The cited grounds are at best doubtful
under the proven surrounding circumstances, and should have been interpreted in the petitioner's
favor pursuant to Article 4 of the Labor Code.
1. The petitioner had not stayed long in the company and had not even passed his probationary
period when the acts charged allegedly took place.[18] This fact carries several significant
implications. First, being new, his natural motivation was to make an early positive impression on
his employer. Thus, it is believable that as building administrator, he diligently, zealously, and
faithfully performed his tasks, working in excess of eight hours per day to maintain the company
buildings and facilities in excellent shape; he even lent the company his personal tools and
equipment to facilitate urgent repairs and maintenance work on company properties.[19] Second,
because of his natural motivation as a new employee and his lack of awareness of the dynamics
of relationships within the company, he must have been telling the truth when he said that he
objected to the way the contract for the installation of fire escapes was awarded to Samarita. Third,
his being new somehow rendered doubtful the charge that he had already encouraged solicitation
of commission from suppliers, especially if considered with the timing of the charges against him
and the turnaround of witness Aying's testimony.
2. The relationships within the company at the time the charges were filed showed that he was a
stranger who might not have known the dynamics of company inter-relationships and might have
stepped on the wrong toes in the course of performing his duties.
Respondent Quiogue was the Executive Vice-President of the company,[20] a very powerful
official with a lot of say in company operations. Since Samarita was doing the fabrication of steel
balusters for Quiogue's home in New Manila, Quezon City,[21] there is a lot of hidden dynamics
in their relationship and it is not surprising that Samarita testified against the petitioner. Both
Samarita and Quioque have motives to resent the petitioner's comments about the irregular award
of a contract to Samarita.
Mandap, as Personnel Manager, is a subordinate of Quiogue. The proposal to secure
commissions from company suppliers reportedly took place in a very public gathering - a drinking
session - in his house. Why Mandap did not take immediate action when he knew of the alleged
plan as early as December 1995 was never explained although the petitioner raised the issue
squarely.[22] The time gap - from December 1995 to May 1996 - is an incredibly long time under
the evidence available and can be accounted for only by the fact that there was no intention to
terminate the services of the petitioner in December; the motivation and the scheme to do this
came only sometime in April - May 1996 as the discussions below will show.
Niguidula, as Purchasing Manager, occupies a position that deals with supplies and suppliers. He,
not the petitioner, is one who might be expected to be in the middle of all the actions regarding
supply deals. He would not welcome a new and over-zealous building administrator since the
building facilities generate the need for supplies and the building administrator is the end-user who
can see how supplies are procured and used. It is significant that Niguidula and the petitioner had
a dispute regarding the accounting of company items and had a near-fight that "interrupted the
normal flow of activities in the company."[23]
Pacaldo, a Purchasing Officer and a subordinate of Niguidula, under usual conditions would side
with Niguidula. He and Niguidula, not the petitioner, occupy the positions critical in the purchase
of supplies for the company and were the people who could exact commissions from suppliers.
Balais is an air-con maintenance man whom petitioner reprimanded for unauthorized overtime
work on an air-conditioning unit; for failure to monitor a newly overhauled compressor unit contrary
to standard practice; and for over-pricing his purchases; and thus, Balais had every reason to
testify against the petitioner.[24]
As already mentioned, Aying - the contractor who had earlier testified against the petitioner -
recanted his earlier statement that petitioner asked for commissions from him.[25] Aying, in his
second statement, exonerated the petitioner.[26] This turnaround by itself is significant, more so
if considered with other circumstances,[27] particularly the possibility that the charges might have
been orchestrated owing to the confluence of the people who were allied against the petitioner,
their respective motivations and the timing of events.
3. The timing of the filing of charges was, as the petitioner pointed out, unusual. Indeed, if the
proposal to solicit commissions had transpired in December, the charges were quite late when
they came in May. Interestingly, it was in April 1996 that the petitioner questioned the soundness
of respondent Quiogue's decision to award the fabrication and installation of six (6) units of fire
escape to Samarita Enterprises without observing company procedure of requiring at least three
quotations from suppliers and contractors.[28] The petitioner reprimanded air-con maintenance
man Balais sometime in the first week of May 1996 for unnecessary overtime work and the two
had a verbal altercation, an incident that the petitioner reported to Quiogue.[29] On May 9, 1996,
petitioner also had an altercation with Niguidula, the company's Purchasing Manager, who verbally
assaulted, slandered, and challenged him to a fight, another incident which he likewise reported
to Quiogue and to the Makati Police.[30] All these strangely coincided with the time the charges
were filed. The respondents never successfully accounted for the coincidences.
All these considerations, to our mind, render the cited causes for the petitioner's dismissal tenuous
as the evidence supporting these grounds come from highly suspect sources: they come either
from people who harbor resentment against the petitioner; those whose positions have inherent
conflict points with that of the petitioner; or from people with business dealings with the company.
Thus, it was not surprising for the NLRC to observe:
From the above, the Commission believes that the Motion for Reconsideration should be granted.
Respondents' charges against complainant were never substantiated by any evidence other than
the barefaced allegations in the affidavits of respondents' witnesses who are employees of the
company and who had an altercation with complainant prior to the execution of their affidavits and
charges. The other witnesses are contractors having business deals with respondent company
and in fact, Jose Aying has made a turn around and denied the complainant has been asking
commission from him.
Under the circumstances, we join the NLRC in concluding that the employer failed to prove a just
cause for the termination of the petitioner's employment - a burden the company, as employer,
carries under the Labor Code[31] - and the CA erred when it saw grave abuse of discretion in the
NLRC's ruling. The evidentiary situation, at the very least, brings to the fore the dictum we stated
in Prangan v. NLRC[32] and in Nicario v. NLRC[33] that "if doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be tilted in favor of the
latter. It is a time-honored rule 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."
WHEREFORE, premises considered, we hereby GRANT the petition. Accordingly, we REVERSE
and SET ASIDE the Decision and Resolution of the CA promulgated on May 25, 2004 and August
30, 2004, respectively, and REINSTATE in all respects the Resolution of the National Labor
Relations Commission dated September 20, 2002. Costs against the respondents.
SO ORDERED.
MANOLO A. PENAFLOR, Petitioner, versus OUTDOOR CLOTHING MANUFACTURING
CORPORATION, NATHANIEL T. SYFU, President, MEDYLENE M. DEMOGENA, Finance
Manager, and PAUL U. LEE, Chairman, Respondents
G.R. No. 177114 | 2010-01-21
Petitioner Manolo A. Peñaflor (Peñaflor) seeks the reversal of the Court of Appeals (CA)
decision[1] dated December 29, 2006 and its resolution[2] dated March 14, 2007, through the
present petition for review on certiorari filed under Rule 45 of the Rules of Court. The assailed
CA decision affirmed the September 24, 2002 decision[3] of the National Labor Relations
Commission (NLRC) that in turn reversed the August 15, 2001 decision[4] of the Labor
Arbiter.[5]
Facts: Peñaflor was hired on September 2, 1999 as probationary Human Resource Department
(HRD) Manager of respondent Outdoor Clothing Manufacturing Corporation (Outdoor Clothing or
the company). As HRD head, Peñaflor was expected to (1) secure and maintain the right quality
and quantity of people needed by the company; (2) maintain the harmonious relationship
between the employees and management in a role that supports organizational goals and
individual aspirations; and (3) represent the company in labor cases or proceedings. Two staff
members were assigned to work with him to assist him in undertaking these functions.
Peñaflor claimed that his relationship with Outdoor Clothing went well during the first few months
of his employment; he designed and created the company's Policy Manual, Personnel
Handbook, Job Expectations, and Organizational Set-Up during this period. His woes began
when the company's Vice President for Operations, Edgar Lee (Lee), left the company after a
big fight between Lee and Chief Corporate Officer Nathaniel Syfu (Syfu). Because of his close
association with Lee, Peñaflor claimed that he was among those who bore Syfu's ire.
When Outdoor Clothing began undertaking its alleged downsizing program due to negative
business returns, Peñaflor alleged that his department had been singled out. On the pretext of
retrenchment, Peñaflor's two staff members were dismissed, leaving him as the only member of
Outdoor Clothing's HRD and compelling him to perform all personnel-related work. He worked
as a one-man department, carrying out all clerical, administrative and liaison work; he personally
went to various government offices to process the company's papers.
When an Outdoor Clothing employee, Lynn Padilla (Padilla), suffered injuries in a bombing
incident, the company required Peñaflor 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,
Peñaflor considered himself to be on official business, but was surprised when the company
deducted six days' salary corresponding to the time he assisted Padilla. According to Finance
Manager Medylene Demogena (Demogena), he failed to submit his trip ticket, but Peñaflor
belied this claim as a trip ticket was required only when a company vehicle was used and he did
not use any company vehicle when he attended to his off-premises work.[6]
After Peñaflor returned from his field work on March 13, 2000, his officemates informed him that
while he was away, Syfu had appointed Nathaniel Buenaobra (Buenaobra) as the new HRD
Manager. This information was confirmed by Syfu's memorandum of March 10, 2000 to the
entire office stating that Buenaobra was the concurrent HRD and Accounting Manager.[7]
Peñaflor was surprised by the news; he also felt betrayed and discouraged. He tried to talk to
Syfu to clarify the matter, but was unable to do so. Peñaflor claimed that under these
circumstances, he had no option but to resign. He submitted a letter to Syfu declaring his
irrevocable resignation from his employment with Outdoor Clothing effective at the close of office
hours on March 15, 2000.[8]
Peñaflor then filed a complaint for illegal dismissal with the labor arbiter, claiming that he had
been constructively dismissed. He included in his complaint a prayer for reinstatement and
payment of backwages, illegally deducted salaries, damages, attorney's fees, and other
monetary claims.
Outdoor Clothing denied Peñaflor's allegation of constructive dismissal. It posited instead that
Peñaflor had voluntarily resigned from his work. Contrary to Peñaflor's statement that he had
been dismissed from employment upon Syfu's appointment of Buenaobra as the new HRD
Manager on March 10, 2000, Peñaflor had in fact continued working for the company until his
resignation on March 15, 2000. The company cited as evidence the security report that Peñaflor
himself prepared and signed on March 13, 2000.[9]
Outdoor Clothing disclaimed liability for any of Peñaflor's monetary claims. Since Peñaflor had
voluntarily resigned, Outdoor Clothing alleged that he was not entitled to any backwages and
damages. The company likewise denied making any illegal deduction from Peñaflor's salary;
while deductions were made, they were due to Peñaflor's failure to report for work during the
dates the company questioned. As a probationary employee, he was not yet entitled to any
leave credit that would offset his absences.
In his August 15, 2001 decision, the labor arbiter found that Peñaflor had been illegally
dismissed.[10] Outdoor Clothing was consequently ordered to reinstate Peñaflor to his former or
to an equivalent position, and to pay him his illegally deducted salary for six days, proportionate
13th month pay, attorney's fees, moral and exemplary damages.
Outdoor Clothing appealed the labor arbiter's decision with the NLRC. It insisted that Peñaflor
had not been constructively dismissed, claiming that Peñaflor tendered his resignation on March
1, 2000 because he saw no future with the corporation due to its dire financial standing. Syfu
alleged that he was compelled to appoint Buenaobra as concurrent HRD Manager through a
memorandum dated March 1, 2000 to cover the position that Peñaflor would soon vacate.[11]
The appointment was also made to address the personnel matters that had to be taken cared of
while Peñaflor was on unauthorized leave. Incidentally, Outdoor Clothing alleged that Peñaflor
had already been given two notices, on March 6 and 11, 2000 (absence without official leave
memoranda or the AWOL memoranda), for his unauthorized absences. In a memorandum dated
March 3, 2000 addressed to Syfu, Buenaobra accepted the appointment.[12]
Peñaflor contested Syfu's March 1, 2000 memorandum, Buenaobra's March 3, 2000
memorandum, and the AWOL memoranda, claiming these pieces of evidence were fabricated
and were never presented before the labor arbiter. He pointed out that nothing in this resignation
letter indicated that it was submitted to and received by Syfu on March 1, 2000. He claimed that
it was submitted on March 15, 2000, the same date he made his resignation effective. The
AWOL memoranda could not be relied on, as he was never furnished copies of these. Moreover,
he could not be on prolonged absence without official leave, as his residence was just a few
meters away from the office.
The NLRC apparently found Outdoor Clothing's submitted memoranda sufficient to overturn the
labor arbiter's decision.[13] It characterized Peñaflor's resignation as a response, not to the
allegedly degrading and hostile treatment that he was subjected to by Syfu, but to Outdoor
Clothing's downward financial spiral. Buenaobra's appointment was made only after Peñaflor
had submitted his resignation letter, and this was made to cover the vacancy Peñaflor's
resignation would create. Thus, Peñaflor was not eased out from his position as HRD manager.
No malice likewise was present in the company's decision to dismiss Peñaflor's two staff
members; the company simply exercised its management prerogative to address the financial
problems it faced. Peñaflor, in fact, drafted the dismissal letters of his staff members. In the
absence of any illegal dismissal, no basis existed for the monetary awards the labor arbiter
granted.
Peñaflor anchored his certiorari petition with the CA on the claim that the NLRC decision was
tainted with grave abuse of discretion, although he essentially adopted the same arguments he
presented before the labor arbiter and the NLRC.
In a decision dated December 29, 2006,[14] the CA affirmed the NLRC's decision, stating that
Peñaflor failed to present sufficient evidence supporting his claim that he had been
constructively dismissed. The CA ruled that Peñaflor's resignation was knowingly and voluntarily
made. Accordingly, it dismissed Peñaflor's certiorari petition. It likewise denied the motion for
reconsideration that Peñaflor subsequently filed.[15] Faced with these CA actions, Peñaflor filed
with us the present petition for review on certiorari.
THE PARTIES' ARGUMENTS
Peñaflor insists that, contrary to the findings of the NLRC and the CA, he had been
constructively dismissed from his employment with Outdoor Clothing. He alleges that the
dismissal of his two staff members, the demeaning liaison work he had to perform as HRD
Manager, the salary deduction for his alleged unauthorized absences, and the appointment of
Buenaobra as the new HRD manager even before he tendered his resignation, were clear acts
of discrimination that made his continued employment with the Outdoor Clothing unbearable. He
was thus forced to resign.
Outdoor Clothing claims that Peñaflor voluntarily resigned from his work and his contrary
allegations were all unsubstantiated. The HRD was not singled out for retrenchment, but was
simply the first to lose its staff members because the company had to downsize. Thus, all HRD
work had to be performed by Peñaflor. Instead of being grateful that he was not among those
immediately dismissed due to the company's retrenchment program, Peñaflor unreasonably felt
humiliated in performing work that logically fell under his department; insisted on having a full
staff complement; absented himself from work without official leave; and demanded payment for
his unauthorized absences.
THE ISSUE and THE COURT'S RULING
The Court finds the petition meritorious.
A preliminary contentious issue is Outdoor Clothing's argument that we should dismiss the
petition outright because it raises questions of facts, not the legal questions that should be
raised in a Rule 45 petition.[16]
We see no merit in this argument as the rule that a Rule 45 petition deals only with legal issues
is not an absolute rule; it admits of exceptions. In the labor law setting, we wade into factual
issues when conflict of factual findings exists among the labor arbiter, the NLRC, and the CA.
This is the exact situation that obtains in the present case since the labor arbiter found facts
supporting the conclusion that there had been constructive dismissal, while the NLRC's and the
CA's factual findings contradicted the labor arbiter's findings.[17] Under this situation, the
conflicting factual findings below are not binding on us, and we retain the authority to pass on
the evidence presented and draw conclusions therefrom.[18]
The petition turns on the question of whether Peñaflor's undisputed resignation was a voluntary
or a forced one, in the latter case making it a constructive dismissal equivalent to an illegal
dismissal. A critical fact necessary in resolving this issue is whether Peñaflor filed his letter of
resignation before or after the appointment of Buenaobra as the new/concurrent HRD manager.
This question also gives rise to the side issue of when Buenaobra's appointment was made. If
the resignation letter was submitted before Syfu's appointment of Buenaobra as new HRD
manager, little support exists for Peñaflor'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 Peñaflor's resignation. On the other hand, if the
resignation letter was submitted after the appointment of Buenaobra, then factual basis exists
indicating that Peñaflor had been constructively dismissed as his resignation was a response to
the unacceptable appointment of another person to a position he still occupied.
The question of when Peñaflor submitted his resignation letter arises because this letter -
undisputably made - was undated. Despite Peñaflor's claim of having impressive intellectual and
academic credentials,[19] his resignation letter, for some reason, was undated. Thus, the parties
have directly opposing claims on the matter. Peñaflor claims that he wrote and filed the letter on
the same date he made his resignation effective - March 15, 2000. Outdoor Clothing, on the
other hand, contends that the letter was submitted on March 1, 2000, for which reason Syfu
issued a memorandum of the same date appointing Buenaobra as the concurrent HRD
manager; Syfu's memorandum cited Peñaflor's intention to resign so he could devote his time to
teaching. The company further cites in support of its case Buenaobra's March 3, 2000
memorandum accepting his appointment. Another piece of evidence is the Syfu memorandum of
March 10, 2000, which informed the office of the appointment of Buenaobra as the concurrent
Head of HRD - the position that Peñaflor occupied. Two other memoranda are alleged to exist,
namely, the AWOL memoranda of March 6 and 11, 2000, allegedly sent to Penaflor.
Several reasons arising directly from these pieces of evidence lead us to conclude that Peñaflor
did indeed submit his resignation letter on March, 15, 2000, i.e., on the same day that it was
submitted.
First, we regard the Syfu memorandum of March 1, 2000 and the memorandum of Buenaobra of
March 3, 2000 accepting the position of HRD Head to be highly suspect. In our view, these
memoranda, while dated, do not constitute conclusive evidence of their dates of preparation and
communication. Surprisingly, Peñaflor was never informed about these memoranda when they
directly concerned him, particularly the turnover of responsibilities to Buenaobra if indeed
Peñaflor had resigned on March 1, 2000 and a smooth turnover to Buenaobra was intended.
Even the recipients of these communications do not appear to have signed for and dated their
receipt. The AWOL memoranda, to be sure, should have been presented with proof of service if
they were to have any binding effect on Peñaflor.
Second,we find it surprising that these pieces of evidence pointing to a March 1, 2000
resignation - specifically, Syfu's March 1, 2000 memorandum to Buenaobra about Penaflor's
resignation and Buenaobra's own acknowledgment and acceptance - were only presented to the
NLRC on appeal, not before the labor arbiter. The matter was not even mentioned in the
company's position paper filed with the labor arbiter.[20] While the presentation of evidence at
the NLRC level on appeal is not unheard of in labor cases,[21] still sufficient explanation must be
adduced to explain why this irregular practice should be allowed. In the present case, Outdoor
Clothing totally failed to explain the reason for its omission. This failure, to us, is significant, as
these were the clinching pieces of evidence that allowed the NLRC to justify the reversal of the
labor arbiter's decision.
Third, the circumstances and other evidence surrounding Peñaflor's resignation support his
claim that he was practically compelled to resign from the company.
Foremost among these is the memorandum of March 10, 2000 signed by Syfu informing the
whole office ("To: All concerned") about the designation of Buenaobra as concurrent Accounting
and HRD Manager. In contrast with the suspect memoranda we discussed above, this
memorandum properly bore signatures acknowledging receipt and dates of receipt by at least
five company officials, among them the readable signature of Demogene and one Agbayani;
three of them acknowledged receipt on March 13, 2000, showing that indeed it was only on that
day that the appointment of Buenaobra to the HRD position was disclosed. This evidence is fully
consistent with Peñaflor's position that it was only in the afternoon of March 13, 2000 that he
was told, informally at that, that Buenaobra had taken over his position. It explains as well why
as late as March 13, 2000, Peñaflor still prepared and signed a security report,[22] and is fully
consistent with his position that on that day he was still working on the excuse letter of certain
sales personnel of the company.[23]
We note that the company only belatedly questioned the motivation that Peñaflor cited for his
discriminatory treatment, i.e., that he was caught in the bitter fight between Syfu and Lee, then
Vice President for Operations, that led the latter to leave the company.[24] After Lee left,
Peñaflor alleged that those identified with Lee were singled out for adverse treatment, citing in
this regard the downsizing of HRD that occurred on or about this time and which resulted in his
one-man HRD operation. We say this downsizing was only "alleged" as the company totally
failed - despite Penaflor's claim of discriminatory practice - to adduce evidence showing that
there had indeed been a legitimate downsizing. Other than its bare claim that it was facing
severe financial problems, Outdoor Clothing never presented any evidence to prove both the
reasons for its alleged downsizing and the fact of such downsizing. No evidence was ever
offered to rebut Peñaflor's claim that his staff members were dismissed to make his life as HRD
Head difficult. To be sure, Peñaflor's participation in the termination of his staff members'
employment cannot be used against him, as the termination of employment was a management
decision that Peñaflor, at his level, could not have effectively contested without putting his own
job on the line.
Peñaflor's own service with the company deserves close scrutiny. He started working for the
company on September 2, 1999 so that by March 1, 2000, his probationary period would have
ended and he would have become a regular employee. We find it highly unlikely that Peñaflor
would resign on March 1, 2000 and would then simply leave given his undisputed record of
having successfully worked within his probationary period on the company's Policy Manual,
Personnel Handbook, Job Expectations, and Organizational Set-up. It does not appear sound
and logical to us that an employee would tender his resignation on the very same day he was
entitled by law to be considered a regular employee, especially when a downsizing was taking
place and he could have availed of its benefits if he would be separated from the service as a
regular employee. It was strange, too, that he would submit his resignation on March 1, 2000
and keep completely quiet about this development until its effective date on March 15, 2000. In
the usual course, the turnover alone of responsibilities and work loads to the successor in a
small company would have prevented the matter from being completely under wraps for 10 days
before any announcement was ever made. That Peñaflor was caught by surprise by the turnover
of his post to Buenaobra is in fact indicated by the company's own evidence that Peñaflor still
submitted a security report on March 13, 2000. On the whole, Peñaflor's record with the
company is not that of a company official who would simply and voluntarily tender a precipitate
resignation on the excuse that he would devote his time to teaching - a lame excuse at best
considering that March is the month the semester usually ends and is two or three months away
from the start of another school year.
In our view, it is more consistent with human experience that Peñaflor 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.
The first is the settled rule that in employee termination disputes, the employer bears the burden
of proving that the employee's dismissal was for just and valid cause.[25] That Peñaflor did
indeed file a letter of resignation does not help the company's case as, other than the fact of
resignation, the company must still prove that the employee voluntarily resigned.[26] 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
reaction to circumstances leaving him no alternative but to resign.[27] In sum, the evidence does
not support the existence of voluntariness in Peñaflor's resignation.
Another basic principle is that expressed in Article 4 of the Labor Code - that all doubts in the
interpretation and implementation of the Labor Code should be interpreted in favor of the
workingman. This principle has been extended by jurisprudence to cover doubts in the evidence
presented by the employer and the employee.[28] As shown above, Peñaflor has, at very least,
shown serious doubts about the merits of the company's case, particularly in the appreciation of
the clinching evidence on which the NLRC and CA decisions were based. In such contest of
evidence, the cited Article 4 compels us to rule in Peñaflor's favor. Thus, we find that Peñaflor
was constructively dismissed given the hostile and discriminatory working environment he found
himself in, particularly evidenced by the escalating acts of unfairness against him that
culminated in the appointment of another HRD manager without any prior notice to him. Where
no less than the company's chief corporate officer was against him, Peñaflor had no alternative
but to resign from his employment.[29]
Last but not the least, we have repeatedly given significance in abandonment and constructive
dismissal cases to the employee's reaction to the termination of his employment and have asked
the question: is the complaint against the employer merely a convenient afterthought
subsequent to an abandonment or a voluntary resignation? We find from the records that
Peñaflor sought almost immediate official recourse to contest his separation from service
through a complaint for illegal dismissal.[30] 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.
WHEREFORE, we GRANT the petitioner's 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.
Costs against the respondents.
SO ORDERED.
FEM’S ELEGANCE LODGING HOUSE vs. The Honorable LEON P. MURILLO G.R. Nos.
117442-43, January 11, 1995
FACTS:
Petitioner filed a Motion to dismiss for failure of private respondents to file their position paper
within the agreed period and also filed a Motion to Expunge private respondents’ Position Paper
from the records of the case.
The Labor Arbiter denied 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 alterius.
ISSUE:
Whether or not the Labor Arbiter’s acceptance of the position paper beyond reglementary period
constitutes grave abuse of discretion.
HELD:
No, it is not constitutive of grave abuse of discretion. 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 (Ranara v. National Labor
Relations commission, 212 SCRA 631 [1992]).
The failure to submit a position paper on time is not one 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 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 (Aquino v. National Labor Relations Commission, 206 SCRA 118 [1992]).
Villavert vs ECC G.R No. L-48605
FACTS: The petitioner in the case is Domna Villavert. She is the mother of the late Marcelino
Villavert who died of acute hemorrhagic pancreatitis and was employed as a Code verifier in the
Philippine Constabulary. Domna filed a claim for income benefits for the death of her son under
P.D No. 626 as amended with the Government Service Insurance System. The GSIS denied the
said claim on the ground that acute hemorrhagic pancreatitis is not an occupational disease. The
petitioner appealed to the Employees Compensation Commission which affirmed the decision of
the respondent. The ECC and GSIS denied the claim of the petitioner on the ground that the
petitioner did not present evidence that the illness of Marcelino was caused or aggravated by the
nature of his duties as employee of the Philippine Constabulary.
ISSUE: WON the claim for death benefits by the petitioner should be granted.
HELD: The Supreme Court set aside the decision of the Employees’ Compensation
Commission and ordered the GSIS to pay the petitioner death benefits in the amount of 6000
pesos.
The court held that It was clear that Marcelino N. Villavert died of acute hemorrhagic pancreatitis
which was directly caused or aggravated by the duties of he performed as code verifier,
computer operator and clerk typist of the Philippine Constabulary. There is no evidence at all
whether Marcelino had a “bout of alcoholic intoxication” shortly before he died. Article 4 of the
Labor Code of the Philippines, as amended, states that "All doubts in the
implementation and interpretation of this Code, including its implementing rules and regul
ations shall be resolved in favor of labor.”
RUTH JIMENEZ, petitioner, vs. EMPLOYEES' COMPENSATION COMMISSION and
GOVERNMENT SERVICE INSURANCE SYSTEM, respondents.
G.R. No. L-58176 | 1984-03-23
This is a petition to review the decision of respondent Employees Compensation Commission
(ECC) dated August 20, 1981 (Annex "A", Decision, pp. 10-12, rec.) in ECC Case No. 1587,
which affirmed the decision of respondent Government Service Insurance System (GSIS),
denying petitioner's claim for death benefits under Presidential Decree No. 626, as amended.
The undisputed facts are as follows:
Petitioner is the widow of the late Alfredo Jimenez, who joined the government service in June,
1969 as a constable in the Philippine Constabulary (p. 2, rec.)
After rendering service for one year, he was promoted to the rank of constable second class. On
December 16, 1974, he was again promoted to the rank of sergeant (p. 26, rec.)
Sometime in April, 1976, he and his wife boarded a bus from Tuguegarao, Cagayan, to Anulung,
Cagayan. While on their way, Sgt. Jimenez, who was seated on the left side of the bus, fell down
from the bus because of the sudden stop of the vehicle. As a result, he was confined at the
Cagayan Provincial Hospital for about one (1) week, and thereafter, released (comment of
respondent ECC, pp. 25-36, rec.). He was again confined for further treatment from November
7, 1978 to May 16, 1979 at the AFP Medical Center in Quezon City.
While on duty with the 111th PC Company, Tuguegarao, Cagayan, he was assigned as security
to one Dr. Emilio Cordero of Anulung, Cagayan (ECC rec., Proceedings of the PC Regional
Board, June 6, 1980). In compliance with his duty, he always accompanied the doctor wherever
the latter went (p. 26, rec.)
On November 7, 1978, 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, 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" (p. 27, rec.)
His condition improved somewhat after treatment and he was released on May 16, 1979. 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.
On May 12, 1980, he died in his house at Anulung, Cagayan, at about 9:00 o'clock in the
evening. He was barely 35 years old at the time of his death.
The cause of death, as found by the doctors, is "bronchogenic carcinoma" which is a malignant
tumor of the lungs.
On June 6, 1980, 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" (ECC rec., Proceedings of the PC Regional Board, June 6,
1980).
The Board recommended "that all benefits due to or become due subject EP be paid and settled
to his legal heirs" (ECC rec., Proceedings of the PC Regional Board, June 6, 1980). Thus, as
per records of the GSIS, petitioner was paid benefits due to her deceased husband under
Republic Act No. 610 (Comment of respondent ECC, p. 27, rec.)
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" (Letter of denial by the GSIS dated July 14, 1980, ECC rec.)
The said decision was affirmed by respondent Employees Compensation Commission in its
decision dated August 21, 1981, stating among others:
xxx xxx xxx
"After an exhausted (sic) study of the evidences (sic) on record and the applicable law on the
case, we conclude that the law has been properly applied by the respondent System. . . .
"Bronchogenic carcinoma, medical authorities disclose, is the most common form of malignancy
in males reaching a peak between the fifth and seventh decades and accounting for one in four
male cancer deaths. The sex incidence is at least 5 to 1, male to female. Extensive statistical
analysis by medical authorities have confirmed the relationship between lung cancer and
cigarette smoking. Other factors that may have potential roles are exposure to ionizing radiation,
exposure to chromates, metallic iron and iron oxides, arsenic, nickel, beryllium and asbestos
(Harrison's Principles of Internal Medicine by Wintrobe, et al., 7th Edition, p. 1322).
"Although Presidential Decree No. 626, as amended, was envisioned to give relief to
workingmen, who sustain an injury or contract an ailment in the course of employment and that
to best attain its lofty objective, a liberal interpretation of the law should pervade in its
implementation, this precept, however, may not be invoked as not even a slight causal link
between the development of the ailment and the decedent's (sic) duties and working conditions
as a PC sergeant could be deduced from the records of this case. The respondent System's
ruling that appellant's claim does not fall within the beneficiant provisions of Presidential Decree
No. 626, as amended, and therefore the same should be denied, is in full harmony with the law
and the facts obtaining herein.
. . ." (Decision, pp. 10-12, rec.)
On September 28, 1981, petitioner, assisted by counsel, filed the instant petition, the only
pertinent issue being whether or not her husband's death from bronchogenic carcinoma is
compensable under the law.
The petitioner contends that her husband's death is compensable and that respondent
Commission erred in not taking into consideration the uncontroverted circumstance that when
the deceased entered into the Philippine Constabulary, he was found to be physically and
mentally healthy. She farther contends that as a soldier, her husband's work has always been in
the field where exposure to the elements, dust and dirt, fatigue and lack of sleep and rest was
the rule rather than the exception. The nature of work of a soldier being to protect life and
property of citizens, he was subject to call at any time of day or night. Furthermore, he was even
assigned as security to one Emilio Cordero and always accompanied the latter wherever he
went. Exposed to these circumstances for several years, the deceased's physical constitution
began to deteriorate, which eventually resulted to his death from bronchogenic carcinoma
(Petition, pp. 2-9, rec.)
On the other hand, respondent Commission maintains that while the deceased soldier may have
been exposed to elements of dust and dirt and condition of lack of rest and continued fatigue by
virtue of his duties to protect the life and property of the citizens, such conditions have no causal
relation to his contraction of bronchogenic carcinoma. It is also the opinion of the respondent
that since there is evidence of the deceased to be a smoker, "the late Sgt. Jimenez may have
indulged heavily in smoking and drinking, not merely 'occasionally'. And it has been
demonstrated medically that the more cigarettes a person smokes, the greater the risk of
developing lung cancer" (Memorandum, p. 62, rec.). In short, the respondent alleges that the
deceased was responsible to a large degree for his having contracted bronchogenic carcinoma
that led to his demise.
WE find the petitioner's claim meritorious.
Primary carcinoma of the lung is the most common fatal cancer and its frequency is increasing
(The Merck Manual, 13th Edition, p. 647). Admittedly, cancer of the lungs (bronchogenic
carcinoma) is one of those borderline cases where a study of the circumstances of the case is
mandated to fully appreciate whether the nature of the work of the deceased increased the
possibility of contracting such an ailment. In the case of Laron vs. Workmen's Compensation
Commission (73 SCRA 90), WE held, citing Schmidt's Attorney's Dictionary of Medicine, 165
Sup. 143; Beerman vs. Public Service Coordinated Transport, 191 A 297, 299; Words and
Phrases, 6 Permanent Edition 61, "The English word 'cancer' means 'crab', in the medical
sense, it refers to a malignant, usually fatal, tumor or growth." Findings of fact by the respondent
points out that bronchogenic carcinoma is a malignant tumor of the lungs. WE have ruled in the
case of Dator vs. Employees Compensation Commission (111 SCRA 634, L-57416, January 30,
1982) that "(U)ntil now, the cause of cancer is not known." Indeed, the respondent has provided
an opening through which petitioner can pursue and did pursue the possibility that the
deceased's ailment could have been caused by the working conditions while employed with the
Philippine Constabulary.
Respondents maintain that the deceased was a smoker and the logical conclusion is that the
cause of the fatal lung cancer could only be smoking which cannot in any way be justified as
work-connected. However, medical authorities support the conclusion that up to now, the
etiology or cause of cancer of the lungs is still largely unknown as provided for in the following:
"Although the etiology of cancer in humans cannot yet be explained at the molecular level, it is
clear that genetic composition of the host is important in cancer induction. Related immunologic
factors may predispose the host to a putative carcinogen. There is some evidence that viruses
may play a role in the neoplastic process. In addition, both environmental and therapeutic agents
have been identified of carcinogens" (Harrison, Principles of Internal Medicine, 9th Edition, 1980,
p. 1584).
"Considerable attention has been directed to the potential role of air pollution exposure to
ionizing radiation and numerous occupational hazards, including exposure to chromates,
metallic iron and iron oxides, arsenic, nickel, beryllium and asbestos" (Harrison, Ibid, p. 1259).
"The lungs are the site of origin of primary benign and malignant tumors and receive metastases
from many other organs and tissues. Specific causes have not been established but a strong
dose-related statistical association exists between cigarette smoking and squamous cell and
undifferentiated small (oat) cell bronchogenic carcinomas. There is suggestive evidence that
prolonged exposure to air pollution promotes lung neoplasms" (The Merck Manual, 13th Edition,
p. 647).
"What emerges from such concepts is the belief that cancers in man do not appear suddenly 'out
of the blue'. . . . Moreover, there need not be a single etiology or pathogenesis. Many influences
may be at work during the evolution of the lesion and many pathways may be involved. Indeed,
the term cancer may embrace a multiplicity of diseases of diverse origins" (Robbins, Pathologic
Basis of Disease, 2nd Edition, 1979, p. 185, emphasis supplied).
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 (Evening Post, December 16, 1983, p. 3, cols. 2-3).
The theory of increased risk is applicable in the instant case. WE had the occasion to interpret
the theory of increased risk in the case of Cristobal vs. Employees Compensation Commission
(103 SCRA, 336-337, L-49280, February 26, 1981):
"To establish compensability under the said theory, the claimant must show proof of work-
connection. Impliedly, the degree of proof required is merely substantial evidence, which means
'such relevant evidence to support a decision' (Ang Tibay v. The Court of Industrial Relations
and National Labor Union, Inc., 69 Phil. 635) or clear and convincing evidence. In this
connection, it must be pointed out that the strict rules of evidence are not applicable in claims for
compensation. Respondents however insist on evidence which would establish direct causal
relation between the disease rectal cancer and the employment of the deceased. Such a strict
requirement which even medical experts cannot support considering the uncertainty of the
nature of the disease would negate the principle of the liberality in the matter of evidence,
Apparently, what the law merely requires is a reasonable work-connection and not a direct
causal relation. This kind of interpretation gives meaning and substance to the liberal and
compassionate spirit of the law as embodied in Article 4 of the new Labor Code which states that
'all doubts in the implementation of the provisions of this Code, including its implementing rules
and regulations shall be resolved in favor of labor.'
". . . As the agents charged by the law to implement the social justice guarantee secured by both
1935 and 1973 Constitutions, respondents should adopt a more liberal attitude in deciding
claims for compensation especially when there is some basis in the facts inferring a work-
connection. This should not be confused with the presumption of compensability and theory of
aggravation under the Workmen's Compensation Act. While these doctrines may have been
abandoned under the New Labor Code (the constitutionality of such abrogation may still be
challenged), it is significant that the liberality of the law, in general, still subsists. . . ." (emphasis
supplied)
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.
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.
WE held in the case of San Valentin vs. Employees Compensation Commission (118 SCRA
160) that:
"xxx xxx xxx
"In compensation cases. strict rules of evidence are not applicable. A reasonable work-
connection is all that is required or that the risk of contracting the disease is increased by the
working conditions."
In the case of Dator vs. Employees Compensation Commission
(L-57416, January 30, 1982), WE held the death of Wenifreda Dator, a librarian for 15 years,
caused by bronchogenic carcinoma compensable. Being a librarian, "she was exposed to duty
books and other deleterious substances in the library under unsanitary conditions" (Ibid., 632).
WE do not see any reason to depart from the ruling in the said case, considering that a soldier's
duties and environment are more hazardous.
This is in line with the avowed policy of the State as mandated by the Constitution (Article II,
Section 9) and restated in the new Labor Code (Article 4), to give maximum aid and protection to
labor.
WHEREFORE, THE DECISION APPEALED FROM IS HEREBY SET ASIDE AND THE
GOVERNMENT SERVICE INSURANCE SYSTEM IS HEREBY ORDERED.
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.
C. RULES AND REGULATIONS (ART. 5 LC): RULE MAKING AUTHORITY/ RULE MAKING
POWER TO PROMULGATE IMPLEMENTING RULES AND REGULATIONS
Philippine Association of Service Exporters, Inc. (PASEI) vs. Torres (1992)
G.R. No. 101279 | 1992-08-06
Subject: The DOLE and POEA Secretary have the power to restrict and regulate recruitment
and placement activities; The recruitment and deployment business is affected with public
interest; Administrative rules and regulations must be published
Facts: DOLE Secretary Ruben D. Torres issued Department Order No. 16, temporarily
suspending the recruitment by private employment agencies of Filipino domestic helpers going
to Hong Kong because of the abuses suffered by Filipino housemaids in Hong Kong. The DOLE
itself, through the POEA took over the business of deploying such Hong Kong-bound workers.
Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30 and 37,
providing guidelines on the Government processing and deployment of Filipino domestic helpers
to Hong Kong and the accreditation of Hong Kong recruitment agencies intending to hire Filipino
domestic helpers.
PASEI, a recruitment agency, filed a petition for prohibition to annul the DOLE and POEA
circulars and to prohibit their implementation. It argued that the POEA and DOLE acted with
grave abuse of discretion and in excess of their rule-making authority. It assailed that these
circulars are not only contrary to the Constitution but are also unreasonable, unfair and
oppressive. And it argued that that the requirements of publication and filing with the Office of
the National Administrative Register were not complied with.
Held:
The DOLE and POEA Secretary have the power to restrict and regulate recruitment and
placement activities
1. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate
recruitment and placement activities. And is also authorized to issue orders and promulgate
rules and regulations to carry out the objectives and implement the provisions of this title.
2. On the other hand, the POEA inherited from the defunct Bureau of Employment Services the
power and duty to establish and maintain a registration and/or licensing system to regulate
private sector participation in the recruitment and placement of workers, locally and overseas.
(See Art. 15 of the Labor Code)
3. The POEA also assumed from the defunct Overseas Employment Development Board the
power and duty to recruit and place workers for overseas employment of Filipino contract
workers on a government to government arrangement and in such other sectors as policy may
dictate. (See Art. 17, Labor Code)
4. The POEA also took over from the National Seamen Board the duty to regulate and supervise
the activities of agents or representatives of shipping companies in the hiring of seamen for
overseas employment and secure the best possible terms of employment for contract seamen
workers and secure compliance therewith. (Se Art. 20 of the Labor Code)
The recruitment and deployment business is affected with public interest
5. The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not
unconstitutional, unreasonable and oppressive. The power to restrict and regulate conferred
under Art. 36 of the Labor Code involve a grant of police power.
6. The Administrative Order merely restricted the scope of PASEI’s business operations by
excluding from it recruitment and deployment of domestic helpers for Hong Kong till after the
establishment of the "mechanisms" that will enhance the protection of Filipino domestic helpers
going to Hong Kong.

7. The administrative issuances intended to curtail rampant violations of the rule against
excessive collections of placement and other charges committed by private employment
agencies against domestic helpers to Hongkong. They are reasonable, valid and justified under
the general welfare clause of the Constitution, since the recruitment and deployment business is
affected with public interest.
Administrative rules and regulations must be published
8. The circulars 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.
9. Administrative rules and regulations must also be published if their purpose is to enforce or
implement existing law pursuant also to a valid delegation. Interpretative regulations and those
merely internal in nature 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. (See Tañada vs. Tuvera)
SHELL PHILIPPINES, INC., plaintiff-appellee, vs. CENTRAL BANK OF THE
PHILIPPINES, defendant-appellant.
G.R. No. L-51353 June 27, 1988
This case comes to us on a Court of Appeals resolution certifying the controversy as one which
involves a pure question of law. The resolution states the factual background of the case.
Facts: On May 1, 1970, Congress approved the Act imposing a stabilization tax on
consignments abroad (RA 6125). Section 1 of the statute, in part, provided as follows:
Section 1. 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 of the following schedule:
a. In the case of logs, copra, centrifugal sugar, and copper ore and concentrates;
Ten per centum of the F.O.B. peso proceeds of exports received on or after the date of
effectivity of this Act to June thirty, nineteen hundred seventy-one;
Eight per centum of the F.O.B. peso proceeds of exports received from July first, nineteen
hundred seventy-one to June thirty, nineteen hundred seventy-two.
xxx xxx xxx
"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."
In August, 1970, the Central Bank, through its Circular No. 309 provided that:
The stabilization tax shall begin to apply on January 1st following the calendar year during which
such export products shall have reached the aggregate F.O.B. value of more than US $5 million,
and the applicable tax rates shall be the rates prescribed in Schedule (b) of Section 1 of
Republic Act No. 6125 for the fiscal year following the reaching of the said aggregate value.
During 1971, appellee Shell, Philippines, Inc. exported seria residues, a by-product of petroleum
refining, to an extent reaching $5 million. On January 7, 1972, the Monetary Board issued its
Resolution No. 47 "subjecting petroleum pitch and other petroleum residues" 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.
On September 14, 1972, appellee filed suit against the Central Bank before the Court of First
Instance of Manila, praying that Monetary Board Resolution No. 47 be declared null and void,
and that Central Bank be ordered to refund the stabilization tax it paid during the first semester
of 1972. Its position was that, pursuant to the provisions of RA 6125, it had to pay the
stabilization tax only from July 1, 1972.
The lower court sustained appellee, and it declared Monetary Board Resolution No. 47 as void
and it ordered refund of the stabilization tax paid by appellee during the period January 1 to
June 30, 1972. Central Bank has appealed from the judgment. (Rollo, pp. 47-49)
The trial court opined:
Note that the law mentions both calendar year and fiscal year. 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. In using these two
terms, it is the considered opinion of this Court that they should be taken in the meaning where
they are commonly and usually understood. So that when an export product reaches an
aggregate F.O.B. value of more than $5,000,000.00 in a calendar year it becomes subject to the
rates of tax in force during the fiscal year following its reaching the said aggregate value.
The statute is clear and free from ambiguity so that an interpretation even becomes unnecessary
... . (Brief for Defendant-Appellant, pp. 34-35)
The Central Bank appeals from the above cited decision alleging that the trial court erred in
regarding the deliberations of the Senate on the stabilization tax in favor of Shell Philippines, Inc.
and in failing to consider the authority granted to the appellant to promulgate rules and
regulations in the implementation of the stabilization tax law.
It should be mentioned, however, that on July 1, 1973, Presidential Decree No. 230 took effect.
This law entitled
Amending the Tariff and Customs Code, creating Title III in Book — I Export Tariff," expressly
repealed Section 1 of Republic Act No. 6125 and transferred the assessment and collection of
the export duty from the Central Bank to the Bureau of Customs by ordering the Commissioner
of Customs to promulgate rules and regulations necessary for the implementation of the decree,
subject to the approval of the Secretary of Finance (Section 2 of the Decree).
Notwithstanding this fact, the issue raised must be resolved on the merits as an affirmative relief
was granted to the appellee.
First, the petitioner's allegation that the trial court gave undue weight to the deliberations of the
Senate on the stabilization tax law is not supported by either the records or the decision itself. It
is clear in the decision that the trial court found no ambiguity in the provision of law governing
the dispute and accordingly applied it in its ordinary sense. The cited Senate deliberations
merely corroborated the fact that the tax commences on the following fiscal year after the
aggregate value is reached. However, even if the lower court was influenced by the Senate
deliberations, we see nothing wrong in courts' examining and following the intent of the
legislature when an act of Congress has to be interpreted.
Second, 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, we reiterate
the principle that this authority is limited only to carrying into effect what the law being
implemented provides.
In People v. Maceren (79 SCRA 450, 458 and 460), this Court ruled that:
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, 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).
xxx xxx xxx
... 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).
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)
Considering the foregoing, we rule that 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."
We note that under the same provision of law the tax accrues when the aggregate annual F.O.B.
value of the export product has exceeded five million United States dollars during any calendar
year. The imposition of the tax is only deferred until the "fiscal year following its reaching the
said aggregate value." It is only then that the rates in force are ascertained.
In this case, there is no question that in 1971, the appellee exported seria residue with an F.O.B.
value of more than five million US dollars. The appellee's objection lies in the collection of the
tax thereon as of January 1972 rather than in July 1972.
It is, therefore, undeniable that 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.
We 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.
WHEREFORE, in view of the foregoing, the assailed decision is hereby AFFIRMED but
MODIFIED to the effect that the tax refund granted by the trial court is ordered retained by or
reverted to, as the case may be, the Central Bank.
SO ORDERED.
IBAA EMPLOYEES UNION V. INCIONG G.R. NO. L-52415 OCTOBER 23, 1984
Petitioner: Insular Bank of Asia and America Employees’ Union (IBAAEU)
Respondents: Hon. Amado G. Inciong, Deputy Minister, Ministry of Labor and Insular Bank of
Asia and America
Facts: The petitioner, Insular Bank of Asia and America Employees’ Union filed a complaint for
payment of the holiday pay against the respondent bank, Insular Bank of Asia and America which
the court decided in favor of the petitioner. Without appeal, such was complied with by the
respondent bank in accordance with Article 208 of the Labor Code which states: (a) Every worker
shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than 10 workers… A few months later, PD 850 was
promulgated to amend the Labor Code by indicating that persons with a right to a holiday pay
should get a rate of twice their regular rate. Subsequently, the Department of Labor promulgated
the rules and regulations for the new law.
The said section states: 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 Such was further
interpreted through Policy Instruction No. 9 by the Secretary of Labor by stating that the ten paid
legal holidays is only intended to benefit the principally daily employees, however, monthly paid
employees if such ten legal holidays are not yet included in the payment of wages shall be
benefited, such policy further added that, “The new determining rule is this: if the monthly paid
employee is receiving not less than P34p, the maximum monthly minimum wage, and his monthly
pay is uniform to January to December, he is presumed to be already paid the ten paid legal
holidays. However, if such deductions are made from his monthly salary on account of holidays in
months where they occur, then he is still entitled to the ten paid legal holidays.” By reason of such
interpretation, the respondent bank followed the rule and stopped the payment of holiday pay to
its employees. The petitioner filed a motion for a writ of execution to enforce the arbiter’s decision,
which the respondent bank opposed by reason of the new law contending that it repeals or
modifies the said judgment and law corresponding to it.
Issue: Whether or not the respondent correctly applied the newly promulgated law, and if such law
may modify and amend a previous final judgment.
Decision: The interpretation of the then, Secretary of Labor in the newly amended law was
incorrect; it was not an interpretation, but an amendment of the law. The Secretary of Labor
distinguished monthly paid employees with and without the incorporation of holiday pays which
should not be the case, as the law pertains to specific types of employees on the basis of rank
and industry. In such case when there is confusion, the Art. 4 of the Labor Code must always be
enforced, which means that in case of doubt, such must be construed in favor of labor.
Furthermore, a final judgment has no retroactive effect. Such respondent bank did not appeal to
the judgment of the lower court, implying that such is willfully complied with, without any intention
to violate it. The final judgment in this case is, aside from partially executed, already out of the
jurisdiction of the courts, as it is not their duty to modify or amend a judgment upon its execution.
D. Applicability and Non-applicability of the Labor Code (Art. 6)
1. Lasco v. UN Revolving Fund for Natural Resources Exploration, GR 109095-109107
2. Republic v. CA, GR 87676
3. PNOC-Energy Dev. Corp. V. NLRC, GR 100947
4. Juco v. NLRC & NHC, GR 98107
Lasco v. UN Revolving Fund for Natural Resources Exploration, GR 109095-109107
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. Petitioners
are the complainants for illegal dismissal and damages. Private respondent alleged that
respondent Labor Arbiter had no jurisdiction over its personality since it enjoyed diplomatic
immunity.
Issue: WON specialized agencies enjoy diplomatic immunity
Held: YES. Petition is dismissed. This is not to say that petitioner have no recourse. Section 31 of
the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations
states that ³each specialized agency shall make a provision for appropriate modes of settlement
of (a) disputes arising out of contracts or other disputes of private character to which the
specialized agency is a party.´ Private respondent is not engaged in a commercial venture in the
Philippines. Its presence is by virtue of a joint project entered into by the Philippine Government
and the United Nations for mineral exploration in Dinagat Island.
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.
FACTS
National Parks Development Committee (NPDC) was originally created in 1963 under Executive
Order No. 30, as the Executive Committee for the development of Quezon Memorial, Luneta and
other national parks. The Committee was registered with the SEC as a non-stock and non-profit
corporation.
However, in 1987, due to failure to comply with SEC requirements (i.e. to submit General
Information Sheet and Financial Statements from 1981 to 1987; to register its Corporate Books;
and to operate for a continuous period for at least 5 years since 1967) NPDC was attached to the
Ministry of Tourism. Pursuant thereto, Civil Service Commission notified NPDC that all
appointments and other personnel actions shall be submitted to the former.
The Rizal Park Supervisory Employees Association was organized, and it affiliated with the Trade
Union of the Philippines and Allied Service (TUPAS, for brevity) under Certificate No. 1206.
However, NPDC entered into a separate CBA with NPDCEA (TUPAS Local Chapter No. 967),
and NPDCSA (TUPAS Chapter No. 1206) for a period of two (2) years. Pursuant thereto, these
unions staged a strike alleging unfair labor practices by NPDC.
Contention of the NPDC: The strike is illegal on ground that the strikers, being government
employees, the strikers have no right to strike, although they may form a union.
Ruling of the Trial Court and CA: Complaint is dismissed for lack of jurisdiction, to wit: (1) there
exists an employer-employee relationship between NPDC and the strikers; (2) the acts
complained of falls under par 5, Art. 217, in relation to Art. 265 of the Labor Code. Hence, the case
properly falls under the jurisdiction of DOLE. On appeal, CA affirmed the decision of the trial court.
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.
HELD
The NPDC is an agency of the government, not a government-owned or controlled corporation.
Since NPDC is a government agency, its employees are covered by civil service rules and
regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec.
14, Executive Order No. 180).
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 Dev. Corp. V. NLRC, GR 100947
Facts: In November, 1987, while holding the position of Geothermal Construction Secretary,
Engineering and Construction Department, at Tongonan Geothermal Project, Ormoc City, Manuel
S. Pineda decided to run for councilor of the Municipality of Kananga, Leyte, in the local elections
scheduled in January, 1988, and filed the corresponding certificate of candidacy for the position.
Objection to Pineda’s being a candidate while retaining his job in the PNOC-EDC was shortly
thereafter registered by Mayor Arturo Cornejos of Kananga, Leyte.
Section 66 of the Election Code provides among others that officers and employees of GOCCs
are considered as ipso facto resigned upon the filing of their certificate of candidacy.
It was the argument of Pineda that PNOC-EDC was not created through a special law, it is not
covered by the Civil Service Law and, therefore, not contemplated under Section 66 of the Election
Code.
Issue: Whether or not an employee in a government- owned or controlled corporation without an
original charter falls within the scope of Section 66 of the Omnibus Election Code.
Held: Yes. If a corporation’s capital stock is owned by the Government, or it is operated and
managed by officers charged with the mission of fulfilling the public objectives for which it has
been organized, it is a government-owned or controlled corporation even if organized under the
Corporation Code and not under a special statute. Employees thereof, even if not covered by the
Civil Service but by the Labor Code, are nonetheless “employees in government-owned or
controlled corporation,” and come within the letter of Section 66 of the Omnibus Election Code,
declaring them ipso facto resigned from their office upon the filing of their certificate of candidacy.
Juco v. NLRC & NHC, GR 98107
FACTS:
Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing
Corporation (NHC) from November 16, 1970 to May 14, 1975 when he was separated from the
service for having been implicated in a crime of theft and/or malversation of public funds.
On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the
Department of Labor.
The Labor Arbiter rendered a decision on September 17, 1977 dismissing the complaint for lack
of jurisdiction.
The petitioner then elevated the case to the NLRC which rendered a decision on December 28,
1982, reversing the decision of the Labor Arbiter.
Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court which
rendered a decision on January 17, 1985 reinstating the decision of the Labor Arbiter and setting
aside the decision of NLRC.
On January 6, 1989, the petitioner filed with the Civil Services Commission a complaint for illegal
dismissal, with preliminary mandatory injunction.
On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the ground
that the Civil Service Commission has no jurisdiction over the case.
On April 11, 1989, the Civil Service Commission issued an order dismissing the complaint for lack
of jurisdiction.
On April 28, 1989, petitioner filed with respondent NLRC a compliant for illegal dismissal with
preliminary mandatory injunction against respondent NHC.
On May 21, 1990, respondent NLRC through Labor Arbiter Manuel R. Caday ruled that petitioners
was illegally dismissed from his employment by respondent as there was evidence in the record
that the criminal case filed against him was purely fabricated, prompting the trial court to dismiss
the charges against him.
On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1981, the
NLRC promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday on
the ground of lack of jurisdiction.
ISSUES:
(1) Whether or not public respondent NLRC committed grave abuse of discretion in holding that
petitioner is not governed by the Labor Code.
RULING:
(1) The NLRC erred in dismissing petitioner’s complaint for lack of jurisdiction.
Although we had earlier ruled in National Housing Corporation Vs. Juco, that employees of
government-owned and/or controlled corporations, whether created by special law or formed as
subsidiaries under the General Corporation Law, are governed by the Civil Service Law and not
by the Labor Code, this ruling has been supplanted by the 1987 Constitution which now provides:
The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charter. (Article
IX-B, Section 2(1).
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,
respondent NHC’s relations with its personnel are governed by the Labor Code and come under
the jurisdiction of the National Labor Relations Commission.
WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March 14, 1991 is
hereby REVERSED and the decision of the Labor Arbiter dated May 21, 1990 is REINSTATED.
----------------------------
BOOK ONE / PRE-EMPLOYMENT
1. Recruitment and Placement of Workers
A. Definition
a. Recruitment and Placement
1. People v. Panis, GR L-58674-77
People v. Panis, GR L-58674-77
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 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 proviso was intended neither to impose a condition on the basic rule nor to provide an
exception thereto but merely to create a presumption. The presumption is that the individual or
entity is engaged in recruitment and placement whenever he or it is dealing with two or more
persons to whom, in consideration of a fee, an offer or promise of employment is made in the
course of the “canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of)
workers. ”
The number of persons dealt with is not an essential ingredient of the act of recruitment and
placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute
recruitment and placement even if only one prospective worker is involved. The proviso merely
lays down a rule of evidence that 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 that presumption.
----------------------------
C. Licensing
1. Hellenic Phil. Shipping, Inc. v. Siete, GR 84082
 he has remedies available in this country even if the culpable employer is beyond the reach of our
Hellenic Phil. Shipping, Inc. v. Siete, GR 84082 courts.

FACTS: We are not persuaded that the NLRC committed grave abuse of discretion in reversing the findings
Capt. Epifanio Siete, was employed on May 22, 1985, as Master of M/V Houda G by Sultan of the POEA sustaining the petitioner and dismissing the private respondent's complaint. On the
Shipping Co., Ltd., through its crewing agent, the herein petitioner. He boarded the vessel on May contrary, we agree that the private respondent was illegally dismissed because, first, he was not
24, 1985, at Cyprus. From there, it sailed on June 1, 1985, to El Ferrol, Spain, where it loaded accorded a fair investigation as required by law, and second, because the grounds invoked for his
cargo that it subsequently discharged at Tripoli, Lebanon, from June 25-29, 1985. It then separation have not been proved by the petitioner.
proceeded back to Cyprus, arriving there on June 30, 1985.
WHEREFORE, the challenged decision as above modified is AFFIRMED and the petition
On July 8, 1985, Capt. Wilfredo Lim boarded the vessel and advised Siete that he had instructions DISMISSED, with costs against the petitioner. The temporary restraining order dated August 3,
from the owners to take over its command. These instructions were confirmed by a telex sent[1] 1988, is LIFTED.
by Sultan Shipping to Siete on July 10, 1985. Neither Lim nor the telex indicated the reason for
his relief. The private respondent claims this information was also withheld from him by the ----------------------------
petitioner upon his repatriation to Manila.
II. Illegal Recruitment
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. The petitioner alleged Xx
in its answer that the complainant had been dismissed because of his failure to comply with the B. Simple Illegal Recruitment
instruction of Sultan Shipping to erase the timber load line on the vessel and for his negligence in i. Elements of Simple Illegal Recruitment
the discharge of the cargo at Tripoli that endangered the vessel and the stevedores. Siete denied ii. Illegal recruitment committed by Non-Licensee
these averments in his reply dated September 23, 1985, and reiterated that he had not earlier 1. Delia Romero v. People, GR 171644
been informed of the cause of his dismissal and repatriation, either in Cyprus or later in Manila. 2. People v. Melissa Chua and Clarita NG Chua, GR 187052
iii. Illegal recruitment v. Estafa
After considering the position papers and documentary evidence of the parties, Administrator
Tomas D. Achacoso of the Philippine Overseas Employment Administration (POEA) dismissed Case Study:
the complaint, holding that there was valid cause for Siete's removal.[2] The decision placed much 1. Darwin v. CA, GR 125044
value on the various communications presented by the petitioner to show that Siete was indeed 2. Edgardo Panganiban v. Tara Trading Ship Management, GR 187032
guilty of the charges that justified his separation. 3. People v. Lapiz, 391 SCRA 131
4. People v. Logan, 361 SCRA 581
The private respondent appealed to the NLRC, contending that the records presented by the 5. People v. Chua, GR 128280
petitioner were prepared long after his dismissal and were especially suspect because they came 6. People v. Merris, GR 11745-50 & 7447
from persons in the employ of Sultan Shipping. He insisted that he was dismissed without even 7. Millares v. NLRC, 385 SCRA 306
being informed of the charges against him or given an opportunity to refute them. He added that, 8. Gu-Miro v. Adorable, GR 160952
even assuming he was negligent in the unloading of the cargo at Tripoli, this shortcoming did not 9. Rovago v. Esso Eastern Maritime LTD, GR 158324
warrant such a severe penalty as his dismissal. 10. OSM Shipping Phils, Inc v. NLRC, GR 138193
11. Trans Action Overseas Corporation v. Secretary of Labor, GR 109583
NLRC reversed the POEA Administrator, holding that the dismissal violated due process and that 12. Catan v. NLRC, GR 77279
the documents submitted by the petitioner were hearsay, self-serving, and not verified. Hence the 13. Royal Crown Internationale v. NLRC, GR 78085
petition. 14. People v. Calonzo, GR 115150-55
15. Salazar v. Achacoso and Marquez, GR 81510
ISSUE: Whether private employment agencies are jointly and severally liable with the foreign- 16. People v. S. Angeles, GR 132376
based employer for any violation of the recruitment agreement or the contract of employment.
Delia Romero v. People, GR 171644
HELD: YES
The Court reiterates the ruling that private employment agencies are jointly and severally liable FACTS: Petition for Review on Certiorari of petitioner DELIA D. ROMERO assailing the Decision
with the foreign-based employer for any violation of the recruitment agreement or the contract of and Resolution of the Court of Appeals (CA) affirming the Decision of the Regional Trial Court
employment.[8] As a requirement for the issuance to it of a license to operate a private recruiting (RTC) of Dagupan City, finding petitioner guilty beyond reasonable doubt of the crime of Illegal
agency, a verified undertaking was made by the petitioner that it would "assume joint and solidary Recruitment as defined in paragraph (a) of Article 38 of Presidential Decree No. 2018[1].
liability with the employer for all claims and liabilities which (might) arise in connection with the
implementation of the contract of employment." It cannot now contend that as a mere crewing Sometime in August 2000, ARTURO SIAPNO went to petitioner's stall. He was convinced by the
agent it cannot be made to answer for the liabilities of Sultan Shipping. 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
The reason for the above-mentioned requirement is obvious. Were the rule otherwise, employees needed through relatives help then petitioner processed Arturo's papers and contacted Jonney
with legitimate demands against the employer would be helpless to enforce them because the Erez Mokra. Jonney instructed Arturo to attend a briefing in Dau, Mabalacat, Pampanga.
latter has no office or properties in this jurisdiction. Violation of the employment contract would Afterwards, Arturo left for Israel sometime in September 2000. He was able to work and receive
remain unredressed. It was precisely to correct this difficulty that the recruiting agent is now US$800.00 salary per month. After three months of stay in Israel, he was caught by the
required, as a condition for the issuance to it of a license to operate, to assure the employee that 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 Jonney Erez Mokra 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[2].
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 Presidential Decree (P.D.) No.
2018, are hereby AFFIRMED with the MODIFICATION on the penalty to be imposed.
People v. Melissa Chua and Clarita NG Chua, GR 187052
FACTS: Private complainants Alberto A. Aglanao, Rey P. Tajadao, Billy R. Danan and Roylan
Ursulum filed a complaint for illegal dismissal in large scale against Melissa Chua alleging that the
latter offered them a job as factory workers in Taiwan for deployment within a month. She required
each of them on separate occasions to undergo medical examination and pay a placement fee of
P 80,000 each. Chua assured each of them that whoever pays the application fee the earliest can
leave sooner. After completing payment, they followed-up their applications. However, they
learned that Chua was not licensed to recruit workers for overseas employment.
Chua denied having recruited private complainants for overseas employment and interposed the
defense that she was only a cashier at Golden Gate Office and that she has no knowledge of
whether the agency was licensed to recruit workers during her tenure as it has been delisted. The
RTC of Manila found Chua guilty of illegal recruitment in large scale, which was affirmed by the
CA.
ISSUE: Is Melissa Chua liable for illegal recruitment in large scale?
LAW: Sections 6 and 7 of Republic Act R.A. No. 8042.
RULING: Yes. Melissa Chua is liable for illegal recruitment in large scale.
In order to hold a person liable for illegal recruitment, the following elements must concur:
(1) the offender undertakes any of the activities within the meaning of "recruitment and placement"
under Article 13(b) of the Labor Code, or any of the prohibited practices enumerated under Article
34 of the Labor Code (now Section 6 of Republic Act No. 8042); and
(2) the offender has no valid license or authority required by law to enable him to lawfully engage
in recruitment and placement of workers.
In the case of illegal recruitment in large scale, a third element is added: that the offender commits
any of the acts of recruitment and placement against three or more persons, individually or as a
group.
All three elements are present in the case at bar. Chua engaged in recruitment when she
represented to private complainants that she could send them to Taiwan as factory workers upon
submission of the required documents and payment of the placement fee. The four private
complainants positively identified appellant as the person who promised them employment as
factory workers in Taiwan. Chua cannot escape liability by conveniently limiting her participation
as a cashier of Golden Gate. The provisions of Article 13(b) of the Labor Code and Section 6 of
R.A. No. 8042 are unequivocal that illegal recruitment may or may not be for profit. It is immaterial,
therefore, whether Chua remitted the placement fees to "the agency’s treasurer" or appropriated
them. The same provision likewise provides that the persons criminally liable for illegal recruitment
are the principals, accomplices and accessories. Just the same, therefore, appellant can be held
liable as a principal by direct participation since she personally undertook the recruitment of private
complainants without a license or authority to do so.
Darwin v CA, GR 125044
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.
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:
...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 34 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.
WHEREFORE, the appeal is hereby granted and the decision of the CA is REVERSED and SET
ASIDE. Appellant is hereby ACQUITTED on ground of reasonably doubt. The accused is ordered
immediately released from her confinement.
Edgardo Panganiban v. Tara Trading Ship Management, GR 187032
FACTS:
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”[6] 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.[7]
Petitioner was referred by respondents to the Metropolitan Medical Center where he was
diagnosed to be suffering from “brief psychotic disorder.”[8]
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.[9]
Hence, petitioner filed a Complaint against respondents praying for the payment of US$60,000.00
as 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, on the other hand, 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.
On September 17, 2007, the LA ruled in favor of the petitioner. Respondents appealed to the
NLRC. On March 25, 2008, the NLRC affirmed the decision of the LA.
Complainant is thus considered to be totally and permanently disabled as he is no longer capable
of earning wages in the same kind of work, or work of similar nature that he was trained for or
accustomed to perform. He is now incapacitated to work, hence, his earning capacity is impaired.
Jurisprudence has declared that disability should not be understood more on its medical
significance but on loss of earning capacity.
On October 29, 2008, the CA reversed the decision of the NLRC.
It is basic that a contract is the law between the parties. Obligations arising from contracts have
the force of law between the contracting parties and should be complied with in good faith. Unless
the stipulations in a contract are contrary to law, morals, good customs, public order or public
policy, the same are binding as between the parties.
A seafarer is a contractual, not a regular employee, and his employment is contractually fixed for
a certain period of time. His employment, including claims for death or illness compensations, is
governed by the contract he signs every time he is hired, and is not rooted from the provisions of
the Labor Code.
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 latters employment. It is a
cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no
doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control.
There is no ambiguity in the wording of the Standard Employment Contract the only qualification
prescribed for the physician entrusted with the task of assessing the seamans disability is that he
be company-designated.
ISSUE: Whether Edgardo Panganiban is entitled to disability benefits.
RULING: NO. The Court denies the petition.
It need not be overemphasized that in the absence of substantial evidence, working conditions
cannot be accepted to have caused or at least increased the risk of contracting the disease, in this
case, brief psychotic disorder. Substantial evidence is more than a mere scintilla. The evidence
must be real and substantial, and not merely apparent; for the duty to prove work-causation or
work-aggravation imposed by law is real and not merely apparent.
Even in case of death of a seafarer, the grant of benefits in favor of the heirs of the deceased is
not automatic. As in the case of Rivera v. Wallem Maritime Services, Inc.,[25] without a post-
medical examination or its equivalent to show that the disease for which the seaman died was
contracted during his employment or that his working conditions increased the risk of contracting
the ailment, the employer/s cannot be made liable for death compensation.
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.
Lastly, it appears premature at this time to consider petitioner’s disability as permanent and total
because the severity of his ailment has not been established with finality to render him already
incapable of performing the work of a seafarer. In fact, the medical expert termed his condition as
brief psychotic disorder. The Court also takes note, as the CA correctly did, that petitioner did not
finish his treatment with the company-designated physician, hence, there is no final evaluation yet
on petitioner.
People v. Lapiz, 391 SCRA 131
Facts:
Complainants are husband and wife, residents of Baguio City, selling fish and vegetables in a
rented stall in said City. They closed shop for reasons of attending to the demands of the promised
jobs for them in Japan. Both categorically identified Jane Am-amlao (or Jean Am-amlaw), their co-
vendor in Baguio City Market, as the person who approached them and assured them that she
knew a legal recruiter, an ex-POEA employee, who had the capacity to send them both abroad.
Jane Am-amlaw (or Am-amlaw for brevity) recruited complainants and personally accompanied
them on March 24, 1998 to meet the person she earlier referred to, or Aida de Leon (or Alma de
Leon), in the latters apartment at No. 7280 J. Victor St., Pio del Pilar, Makati.
Angel Mateo was introduced as their contact person for Japan-bound workers. In said meeting,
Mateo represented himself as having the capacity to send people abroad and showed
complainants various documents to convince them of his legitimate recruitment operations.
Complainants handed Mateo P15,000.00 which Mateo required them to pay for their processing
fees.
Complainants were able to positively identify Mateo in court as the contact person of de Leon and
who collected from them, from March 24, 1998 to June 23, 1998, sums of money for the alleged
necessary expenses relative to the promised jobs awaiting them in Japan in the total amount of
P158,600.00.Complainants likewise categorically identified Mateo as the same person whose
authorization was needed for the recovery of P40,000.00 of the P45,000.00 they gave Mateo who
in turn deposited it to Sampaguita Travel Agency under his own name.
Complainants likewise positively identified appellant Vicenta Vicky Lapis (Lapis for brevity) in
Court as the person introduced to them by Mateo as his wife on April 29, 1998 at Maxs Restaurant
in Makati when Lapis required complainants to pay P49,240.00 for their plane tickets and travel
taxes. Lapis is, in fact, only the live-in partner of Mateo. Lapis told complainants that she was
helping to speed up the process[ing] of their papers relative to the promised jobs awaiting them in
Japan. Complainants met again Lapis, who was with Mateo on May 2, 1998 at the Makati
Restaurant, annex of Maxs Restaurant, when Lapis assured them that Mateo could really send
them abroad and even wrote in a piece of paper appellants address at Phase I, Lot 14, Blk 13
Mary Cris Subd., Imus, Cavite. On May 17, 1998, complainants once more met Lapis who was
with Mateo, de Leon and de Leons husband in Baguio City at the house of Priscilla Marreos
daughter. Both appellants updated complainant as to the status of their paper and reiterated their
promise that complainants would soon be leaving for Japan, then collected from complainants
unreceipted amount of P20,000.00. Complainants met again with Lapis, who was again with
Mateo, on May 19, 1998 at the Sampaguita Travel Agency. Mateo extracted P45,000.00 from
complainants and deposited it under his name. On that occasion, Perpetua wanted to ask from
the Sampaguita Travel Agencys employees where to pay the P45,000.00 but failed to do so
because Lapis took her attention away from asking while Mateo asked Melchor to hand over to
him said sum.
Priscilla Marreo is the sister of Melchor who loaned complainants part of the P158,000.00 which
appellants extracted from complainant[s]. Thus, she made herself present in most of the meetings
between complainants and appellants together with the two other accused where she witnessed
the assurances and promises made by appellants relative to complainants immediate departure
for Japan and their corresponding demands of sums of money. The testimony of Priscilla
underscored the testimony of complainants showing that Am-amlaw, de Leon, Lapis and Mateo
indeed corroborated and confederated in the commission of illegal recruitment.
The trial court held that the evidence for the prosecution sufficiently established the criminal liability
of appellants for the crimes charged.
Issues:
I The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
violations of Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995)
committed by a syndicate and Article 315 paragraph 2(a) of the Revised Penal Code.
II The court a quo gravely erred in finding accused-appellant Vicenta Medina Lapis guilty beyond
reasonable doubt of illegal recruitment and estafa.
III The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
illegal recruitment committed by a syndicate.
IV The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
the crime of estafa defined and penalized under Article 315 par. 2(a) of the Revised Penal Code
as amended.
Held:
First Issue: 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.
Under Article 13(b), 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. In
the simplest terms, illegal recruitment is committed by persons who, without authority from the
government, give the impression that they have the power to send workers abroad for employment
purposes.
The case records reveal that appellants did in fact engage in recruitment and placement activities
by promising complainants employment in Japan. Undisputed is the fact that the former did not
have any valid authority or license to engage in recruitment and placement activities. Moreover,
the pieces of testimonial and documentary evidence presented by the prosecution clearly show
that, in consideration of their promise of foreign employment, they indeed received various
amounts of money from complainants totalling P158,600.
Where appellants made misrepresentations concerning their purported power and authority to
recruit for overseas employment, and in the process, collected from complainants various amounts
in the guise of placement fees, the former clearly committed acts constitutive of illegal recruitment.
In fact, this Court held that illegal recruiters need not even expressly represent themselves to the
victims as persons who have the ability to send workers abroad. It is enough that these recruiters
give the impression that they have the ability to enlist workers for job placement abroad in order
to induce the latter to tender payment of fees.
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. Their scheme was to lure complainants to Manila and to divest them of their hard-
earned money on the pretext of guaranteed employment abroad. The prosecution evidence shows
that complainants were convinced by Jane Am-amlaw to go to Manila to meet someone who could
find employment for them abroad. Upon reaching the city, they were introduced to Aida de Leon
and Angel Mateo; Mateo claimed to have the contacts, the resources and the capacity to employ
them overseas. After that initial meeting, complainants made several payments to him, supposedly
for the processing requirements of their deployment to Japan. Later on, they met Vicenta Medina
Lapis who volunteered her assistance in the processing of their employment papers and assured
them that Mateo could easily send them abroad.

The individual actuations of all four (4) accused were directed at a singular criminal purpose -- to
delude complainants into believing that they would be employed abroad. The nature and the extent
of the formers interactions among themselves as well as with the latter clearly show unity of action
towards a common undertaking. Certainly, complainants would not have gone to Manila to meet
Aida de Leon and Angel Mateo without the prodding of Am-amlaw. They would not have made
various payments for their travel and employment papers without the fraudulent representations
of Mateo De Leon. Moreover, they would not have complied with further instructions and demands
of Mateo without the repeated assurances made by Lapis.
Even assuming that the individual acts of the accused were not necessarily indispensable to the
commission of the offense, conspiracy would have still been present. Their actions, when viewed
in relation to one another, showed a unity of purpose towards a common criminal enterprise and
a concurrence in their resolve to commit it.
In People v. Gamboa, the Court had occasion to discuss the nature of conspiracy in the context
of illegal recruitment as follows:
Conspiracy to defraud aspiring overseas contract workers was evident from the acts of the
malefactors whose conduct before, during and after the commission of the crime clearly indicated
that they were one in purpose and united in execution. Direct proof of previous agreement to
commit a crime is not necessary as it may be deduced from the mode and manner in which the
offense was perpetrated or inferred from the acts of the accused pointing to a joint purpose and
design, concerted action and community of interest. As such, all the accused, including accused-
appellant, are equally guilty of the crime of illegal recruitment since in a conspiracy the act of one
is the act of all. (Emphasis supplied)
To establish conspiracy, it is not essential that there be actual proof that all the conspirators took
a direct part in every act. It is sufficient that they acted in concert pursuant to the same objective.
Conspiracy is present when one concurs with the criminal design of another, indicated by the
performance of an overt act leading to the crime committed.
In a number of cases, this Court has affirmed the trial courts finding that victims of illegal
recruitment are entitled to legal interest on the amount to be recovered as indemnity, from the time
of the filing of the information until fully paid.
Second Issue: 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.
During almost all of their meetings, complainants paid various amounts of money to appellants
only after hearing the feigned assurances proffered by the latter regarding the formers
employment prospects in Japan. Even as early as their first meeting in the house of Aida de Leon,
the payment by complainants of the initial amount of P15,000 was immediately preceded by an
onslaught of promises. These enticing, albeit empty, promises were made by Angel Mateo, who
even showed them documents purportedly evincing his connections with various foreign
companies. Equally important, they relied on such misrepresentations, which convinced them to
pay the initial amount as processing fees.
False statements that convinced complainants of the authenticity of the transaction were made
prior to their payment of the various fees. Indubitably, 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.
Third Issue: Liability as Co-conspirator
Lapis not only knew of the conspiracy, but she also offered her assistance in the processing of the
employment requirements of complainants. Contrary to her claim that she was merely an
unknowing spectator in the underhanded transactions, she deliberately inveigled them into
pursuing the promise of foreign employment.
People v. Logan, 361 SCRA 581
FACTS: The appellant, Mercy Logan y Calderon, was charged with three (3) counts of the crime
of estafa, as defined and penalized under Article 315 of the Revised Penal Code, in three (3)
separate information which, save for the names of the private complainants and amounts involved.
On the other hand, the information charging the appellant Mercy Logan y Calderon with the crime
of illegal recruitment in large scale, under Article 38(b) in relation to Article 39(a) of the Labor Code
of the Philippines, without first securing the required license or authority from the Department of
Labor and Employment.
1. Rodrigo Acorda -------P65,000.00
2. Orlando Velasco -------P145,000.00
3. Florante Casia ---------P100,000.00
Upon being arraigned on October 1, 1996, the appellant, assisted by counsel of her choice,
entered separate pleas of "Not guilty" to each of the Informations in the instant criminal cases.
Thereafter, joint trial on the merits ensued.
Appellant Mercy Logan denied that she swindled the private complainants of their money nor
promised them any overseas employment. Appellant disclosed that she maintained a dance studio
at 180-D Monterey Street, 15th Avenue, Cubao, Quezon City that was available only to females,
and that a certain Gloria de Leon used to refer women to the appellant who wished to practice
dancing in her studio. Appellant claimed that the private complainants merely vented their anger
on her after Gloria de Leon whose services were earlier engaged by them, absconded without
fulfilling her undertaking to provide them overseas employment for a fee.
ISSUE: Whether Logan is guilty of large scale illegal recruitment and estafa.
RULING: YES
The essential elements of the crime of illegal recruitment in large scale which is punishable
with life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00) under Article
39(a) of the Labor Code, as amended, are as follows: 1) the accused engages in the recruitment
and placement of workers, as defined under Article 13(b)23 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.24
It has been established that the three (3) private complainants met with the appellant on separate
occasions in her office at 180-D Monterey Street, 15th Avenue, Cubao, Quezon City to apply for
overseas employment. On the said occasions, 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.
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.31 The acts of the appellant of deliberately misrepresenting herself to the private
complainants as having the necessary authority or license to recruit applicants for overseas
employment so that she could as she did collect money from them allegedly for processing fees
and travel documents only to renege on her promise to get them overseas employment and for
failure to return the money she collected from the private complainants, despite several demands,
clearly amount to estafa punishable under Article 315, paragraph 2(a), of the Revised Penal Code.
Consequently, in the light of these established facts, the appellant is guilty beyond reasonable
doubt of the crimes of three (3) counts of estafa and one count of illegal recruitment in large scale.
Under Article 39(a) of the Labor Code, the appellant should suffer, in the case of illegal recruitment
in large scale, the penalty of life imprisonment and a fine of One Hundred Thousand Pesos
(P100,000.00). In addition, she is liable to indemnify the private complainants in the amounts which
they respectively paid to her.
People v. Chua, GR 128280
FACTS:
Accused Alicia Chua has appealed from the decision[1] of the Regional Trial Court, Manila, Branch
V finding her guilty beyond reasonable doubt of illegal recruitment committed in large scale and
sentencing her to life imprisonment and a fine of P100,000.00, and eight (8) counts of estafa
sentencing her to various penalties therefor.
In September 1992, accused Chua received a facsimile message from Harmony Electronics
Company in Taiwan.[14] The message was written in Chinese characters except for the names of
To-ong Zenon Tumenlaco and Tercenio Domingo Fornaliza. Harmony asked her to call up To-ong
and Tercenio and tell them that they were needed in Taiwan. Accused Chua contacted To-ong
and told him the message.[15]
In October 1992, To-ong and Tercenio went to the office of accused Chua, and the latter told them
that she could send them to Taiwan upon payment of a placement fee of P15,000.00 each. She
also asked them to secure NBI clearances and medical certificates.[16] On October 29, 1992,
Tercenio, together with private complainant Lonito Baluis, went back to the office of accused Chua
and submitted the requirements. Tercenio and Lonito Baluis paid P15,000.00 each for which they
were issued a receipt bearing the name Man Tai Trading and General Services with accused
Chuas signature.[17]
Accused Chua assured Tercenio and Lonito Baluis that they would be able to leave for Taiwan
soon. Three months passed, but they were not deployed. Tercenio became apprehensive and told
accused Chua that he would withdraw his application and ask for refund of the placement fee.
Accused Chua repeatedly promised that she would give back the money to him, but she never
did. After a few more months, Tercenio could not anymore locate accused Chua.[18]
Accused Chua used the same modus operandi on the other private complainants. After requiring
each complainant to pay a placement fee of P15,000.00 each, to secure NBI clearances and to
undergo medical examinations, she would go in hiding.
In time, complainants inquired from the Philippine Overseas Employment Agency (POEA) about
accused Chuas activities. The POEA issued a certification that accused Chua was not licensed to
recruit persons/workers for overseas employment.
In her brief, accused-appellant anchors her defense on the approval of her application for a license
to recruit on April 13, 1993, which, according to her, rendered her a genuine holder of authority.
She also claimed that she was denied her constitutional right to compulsory process.[22]
On the other hand, the Solicitor General contends that appellant was a non-licensee and had no
authority to recruit anyone for overseas employment, and that she failed to proffer any compelling
reason to justify her request for the production of POEA records.
ISSUE: Whether Chua is guilty of Illegal Recruitment and Estafa.
RULING: YES
Appellant interposes the defense that the approval of her application for a service contractors
authority on April 13, 1993 should be given a retroactive effect as to make all her previous
recruitment activities valid. However, this issue was not raised in the trial court. She cannot now
be allowed to raise it for the first time on appeal without offending basic rules of fair play, justice
and due process.
The records show that the license was not issued due to her failure to comply with post-licensing
requirements.[25] It is the issuance of the license which makes the holder thereof authorized to
perform recruitment activities. The law specifically provides that every license shall be valid for at
least two (2) years from the date of issuance unless sooner cancelled or revoked by the Secretary.
WHEREFORE, the Court AFFIRMS the appealed decision in toto, with costs against appellant.
People v. LEONIDA MERIS y PADILLA, GR 11745-50 & 7447
FACTS OF THE CASE
Leonida Meris was convicted of six (6) counts of estafa and one count of illegal recruitment for
defrauding the six (6) complainants, Meris’ townmates in Pampanga and relatives in large scale
in the amount of P30,000.00 each for five complainants and one complainant for P20,000.00 for
alleged overseas employment which did not materialize.
Meris, who voluntarily appeared in court, pleaded not guilty to the charges and actively participated
in her defense. She interposed the defense of denial claiming that she merely introduced
complainants to Julie Micua, her recruiter in Manila, with whom complainants transacted with for
their employment abroad upon payment of placement fees denied having represented herself as
having the capacity to deploy workers abroad.
Evidence for the prosecution, however, disclosed, that complainants would not have known Julie
Micua were if not for appellant who even accompanied them to Manila to see Julie Micua. It was
appellant and her husband who received almost all the payments of complainants and who issued
receipts signed by Julie Micua. Certification from the POEA showed that Meris and Julie Micua
were not licensed to recruit workers for overseas employment.
In this appeal, appellant assailed the lack of jurisdiction of the trial court over his person because
of the warrantless arrest and its findings of fact.
ISSUE: Whether or not Meris committed the crimes large-scale illegal recruitment and estafa.
RULING Yes.
RATIO DECIDENDI
The prosecution undoubtedly proved that Meris, without license or authority, engaged in
recruitment and placement activities. This was done in collaboration with Julie Micua, when they
promised complainants’ employment in Hong Kong. Art. 13, par. (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.”
Although Meris was not an employee of the alleged illegal recruiter Julie Micua, the evidence show
that she was the one who approached complainants and prodded them to seek employment
abroad. It was through her that they met Julia Micua. This is clearly an act of referral. Worse,
accused-appellant declared that she was capable of placing them in jobs overseas. Suffice it to
say that complainants’ recruitment would not have been consummated were it not for the direct
participation of accused-appellant in the recruitment process.
Millares v. NLRC, 385 SCRA 306
Facts
Douglas Millares was employed by ESSO International through its local manning agency, Trans-
Global, in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he
occupied until he opted to retire in 1989.
In 1989, petitioner Millares filed a leave of absence and applied for optional retirement plan under
the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already rendered more
than twenty years of continuous service.
Esso International denied Millares’ request for optional retirement on the following grounds, to wit:
(1) he was employed on a contractual basis; (2) his contract of enlistment (COE) did not provide
for retirement before the age of sixty years; and (3) he did not comply with the requirement for
claiming benefits under the CEIP, i.e., to submit a written advice to the company of his intention
to terminate his employment within thirty days from his last disembarkation date.
Subsequently, after failing to return to work after the expiration of his leave of absence, Millares
was dropped from the roster of crew members effective September 1, 1989.
On the other hand, petitioner Lagda was employed by Esso International as wiper/oiler in 1969.
He was promoted as Chief Engineer in 1980, a position he continued to occupy until his last COE
expired in 1989.
In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional early retirement
plan in view of his twenty years continuous service in the company.
Trans-global similarly denied Lagda’s request for availment of the optional early retirement
scheme on the same grounds upon which Millares request was denied.
Unable to return for contractual sea service after his leave of absence expire, Lagda was also
dropped from the roster of crew members effective September 1, 1989.
Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment of employee
benefits against private respondents Esso International and Trans-Global before the POEA.
The POEA rendered a decision dismissing the complaint for lack of merit. On appeal, NLRC
affirmed the decision of the POEA dismissing the complaint.
NLRC rationcinated that Millares and Lagda, as seamen and overseas contract workers are not
covered by the term “regular employment” as defined under Article 280 of the Labor Code. The
POEA, which is tasked with protecting the rights of the Filipino workers for overseas employment
to fair and equitable recruitment and employment practices and to ensure their welfare, prescribes
a standard employment contract for seamen on board ocean-going vessels for a fixed period but
in no case to exceed twelve months
. terminated due to the installation of labor saving devices which made his services redundant.
Issue: Whether or not seafarers are considered regular employees under Article 280 of the Labor
Code.
Ruling: NO.
It is for the mutual interest of both the seafarer and the employer why the employment
status must be contractual only or for a certain period of time.
Quoting Brent School Inc. v. Zamora, 1990, and Pablo Coyoca v. NLRC, 1995, the Supreme Court
ruled that 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. 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.
As ruled in Brent case, 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.
And as stated in the Coyoca case, 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. And in no case should the contract of
seamen be longer than 12 months.
Moreover, the Court held that it is an accepted maritime industry practice that employment of
seafarers are for a fixed period only. Constrained by the nature of their employment which is quite
peculiar and unique in itself, it is for the mutual interest of both the seafarer and the employer why
the employment status must be contractual only or for a certain period of time. Seafarers spend
most of their time at sea and understandably, they can not stay for a long and an indefinite period
of time at sea. Limited access to shore society during the employment will have an adverse impact
on the seafarer. The national, cultural and lingual diversity among the crew during the COE is a
reality that necessitates the limitation of its period.
Gu-Miro v. Adorable, GR 160952
MARCIAL GU-MIRO, petitioner, vs. ROLANDO C. ADORABLE and BERGESEN D.Y. MANILA
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. A Certification dated April 14, 1998 was issued by Bergesen D.Y. Philippines,
Inc.s President and General Manager Rolando C. Adorable showing that petitioner served in the
company on board its vessels starting 1988.[2] The case before us involves an employment
contract signed by petitioner to commence service on board the M/V HEROS, which stipulated a
monthly salary of US$929.00 for a period of eight (8) months. It also provided for overtime pay of
US$495.00 per month and vacation leave with pay in the amount of US$201.00 per month
equivalent to six and a half days.[3] The contract of employment was signed on March 18, 1996
and petitioner commenced work on April 15, 1996.
Record shows that respondent company traditionally gives an incentive bonus termed as Re-
employment Bonus to employees who decide to rejoin the company after the expiration of their
employment contracts. After the expiration of petitioners contract in December 1996, the same
was renewed by respondent company until September 9, 1997, as stated in the Certification
issued by Bergesen D.Y. Philippines, Inc. In September 1997, petitioners services were
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.

Thus, in June 1999 petitioner filed a complaint with the NLRC, Regional Arbitration Branch of
Cebu, for payment of the incentive bonus from April 15, 1996 to September 15, 1997, 10% of the
basic wage, unclaimed payment for incentive bonus from September 1993 to June 1994, non-
remittance of provident fund from July 1992 to June 1994, moral and exemplary damages as well
as attorneys fees. On December 29, 1999, the complaint was provisionally dismissed by the NLRC
due to the failure of petitioner to file the required position paper. Petitioner re-filed the complaint
on March 2, 2000 accordingly. Labor Arbiter dismissed the case for lack of merit.
Petitioner appealed to the NLRC, which set aside the Labor Arbiters decision and ordered
respondents to pay petitioner the amount of US$594.56.
ISSUE: Whether the petitioner is a regular employee and should be awarded backwages and
separation pay.
RULING: NO
The second and third grounds raised in this petition are related, based on petitioners allegation
that he should be considered a regular employee of respondent company, having been employed
onboard the latters different vessels for the span of 10 years. Hence, petitioner claims that he is
entitled to backwages or at the very least separation pay, invoking our decision in Millares, et al.
v. NLRC[12] where it was held that the repeated re-hiring of a Chief Engineer of a shipping
company for 20 years is sufficient evidence of the necessity and indispensability of the employees
service to the employers business or trade. Hence, applying the express provision of Article 280
of the Labor Code,[13] such an employee should be considered as a regular employee. Petitioners
argument is not well-taken.
Clearly, petitioner cannot be considered as a regular employee notwithstanding that the work he
performs is necessary and desirable in the business of respondent company. As expounded in
the above-mentioned Millares Resolution, an exception is made in the situation of seafarers. The
exigencies of their work necessitates that they be employed on a contractual basis.
Thus, even with the continued re-hiring by respondent company of petitioner to serve as Radio
Officer onboard Bergesens different vessels, this should be interpreted not as a basis for
regularization but rather a series of contract renewals sanctioned under the doctrine set down by
the second Millares case. If at all, petitioner was preferred because of practical considerations
namely, his experience and qualifications. However, this does not alter the status of his
employment from being contractual.
With respect to the claim for backwages and separation pay, it is now well-settled that the award
of backwages and separation pay in lieu of reinstatement are reliefs that are awarded to an
employee who is unjustly dismissed.[16] In the instant case, petitioner was separated from his
employment due to the termination of an impliedly renewed contract with respondent company.
Hence, there is no illegal or unjust dismissal.
Petitioners claim that he be declared a regular employee and awarded backwages and separation
pay is DENIED for lack of merit.
Rovago v. Esso Eastern Maritime LTD, GR 158324
FACTS: The respondent Esso is a foreign company based in Singapore and engaged in maritime
commerce. It is represented in the Philippines by its manning agent and co-respondent Trans-
Global, a corporation organized under the Philippine laws. Roberto Ravago was hired by Trans-
Global to work as a seaman on board various Esso vessels. On February 13, 1970, Ravago
commenced his duty as S/N wiper on board the Esso Bataan under a contract that lasted until
February 10, 1971. Thereafter, he was assigned to work in different Esso vessels where he was
designated diverse tasks, such as oiler, then assistant engineer. He was employed under a total
of 34 separate and unconnected contracts, each for a fixed period, by three different companies,
namely, Esso Tankers, Inc. (ETI), EEM and Esso International Shipping (Bahamas) Co., Ltd.
(EIS), Singapore Branch. Ravago worked with Esso vessels until August 22, 1992, a period
spanning more than 22 years.
Shortly after completing his latest contract with Esso, Ravago was granted a vacation leave with
pay. Preparatory to his embarkation under a new contract, he was ordered to report for a Medical
Pre-Employment Examination, which, according to the records, he passed. He, likewise, attended
a Pre-Departure Orientation Seminar conducted by the Capt. I.P. Estaniel Training Center, a
division of Trans-Global.
One night, a stray bullet hit Ravago on the left leg while he was waiting for a bus ride in Cubao,
Quezon City. He fractured his left proximal tibia and was hospitalized at the Philippine Orthopedic
Hospital. Ravago’s wife, Lolita, informed the petitioners of the incident for purposes of availing
medical benefits. As a result of his injury, Ravago’s doctor opined that he would not be able to
cope with the job of a seaman and suggested that he be given a desk job. For this reason, the
company physician found him to have lost his dexterity, making him unfit to work once again as a
seaman. Consequently, instead of rehiring Ravago, Esso paid him his Career Employment
Incentive Plan (CEIP) as of and his final tax refund. However, Ravago filed a complaint for illegal
dismissal with prayer for reinstatement, backwages, damages and attorney’s fees against Trans-
Global and Esso with the POEA Adjudication Office.
Respondents 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. This fact was further validated by the company doctor and Ravago’s attending
physician. They averred that Ravago was a contractual employee and was hired under 34
separate contracts by different companies.
Ravago insisted that he was fit to resume pre-injury activities and that 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.
ISSUE: Whether or not petitioner Ravago is a regular employee of respondent Esso.
HELD: Petition is denied.
The SC held that seafarers are contractual, not regular, employees. Seamen and overseas
contract workers are not covered by the term “regular employment” as defined in Article 280 of the
Labor Code.
It is clear from the foregoing that seafarers are contractual employees whose terms of employment
are fixed for a certain period of time. A fixed term is an essential and natural appurtenance of
seamens employment contracts to which, whatever the nature of the engagement, the concept of
regular employment under Article 280 of the Labor Code does not find application. The contract
entered into by a seafarer with his employer sets in detail the nature of his job, the amount of his
wage and, foremost, the duration of his employment. Only a satisfactory showing that both parties
dealt with each other on more or less equal terms with no dominance exercised by the employer
over the seafarer is necessary to sustain the validity of the employment contract. In the absence
of duress, as it is in this case, the contract constitutes the law between the parties.
Clearly, petitioner cannot be considered as a regular employee notwithstanding that the work he
performs is necessary and desirable in the business of respondent company. As expounded in
the above-mentioned Millares Resolution, an exception is made in the situation of seafarers. The
exigencies of their work necessitates that they be employed on a contractual basis.
Thus, even with the continued re-hiring by respondent company of petitioner to serve as Radio
Officer onboard Bergesens different vessels, this should be interpreted not as a basis for
regularization but rather a series of contract renewals sanctioned under the doctrine set down by
the second Millares case. If at all, petitioner was preferred because of practical considerations
namely, his experience and qualifications. However, this does not alter the status of his
employment from being contractual.
OSM Shipping Phils, Inc v. NLRC, GR 138193
Facts:
 A complaint for illegal dismissal and non-payment of salaries, overtime pay and vacation pay
was filed by Fermin Guerrero against OSM Shipping Phils. Guerrero was hired by petitioner,
in behalf of its principal Phil. Carrier Shipping Agency (PS-SLC) to board its vessel MV
Princess Hoa as Master Mariner for a contract of 10 months.
 He boarded the ship on July 21, 1994. Almost 7 months later, he was forced to disembark the
ship because he was never paid any compensation for his work since he boarded the ship
and as such, he could not even buy his basic necessities.
 OSM story:
o Concorde Pacific, the American company which owns the MV Princess Hoa,
appointed Phil. Carrier Shipping Agency Services Co. (PC-SASCO) as ship
manager, one of whose responsibilities was the selection or determination of
qualifications of Filipino Seamen.
o On the same date, OSM entered into a Crew Agreement with PC -SASCO
for the purpose of processing the documents of crew members of the
vessel.
o The initial plan was to use the vessel for overseas trade. But Concorde
changed its plans for the vessel and decided to use it instead for coastwide
trade, thus the vessel never left the Philippines. It had the vessel converted
to Philippine registry by way of bareboat chartering it out to another entity
named PS-SLC.
o To do this, Concorde, through its representative had to terminate is crew
agreement with PS-SASCO. Consequently, the latter terminated its crew
agreement with OSM.
o PS-SLC, the bareboat charterer, is now the disponent owner/employer of the
crew and is thus responsible for the payment of the complainant’s wages.
 Labor Arbiter rendered its decision in favor of Guerrero, ordering OSM and PS-SASCO to
jointly and severally pay Guerrero’s claims. NLRC affirmed with modification.
 OSM filed with the CA a petition to set aside the NLRC judgment. This was dismissed because
petitioner did not comply with the requirements of Sec. 3 Rule 46 of the ROC by failing to
attach a duplicate original or certified true copy of the LA’s decision. They only attached a
mere machine copy.
 Hence this petition.
Issue:
1) Procedural – WON CA was correct in dismissing the petition for failure to comply with
the said requirement? – NO
2) Substantive – WON OSM is jointly liable with PC-SASCO, as its agent. - YES
Held:
1) Sec. 3 rule 46 of the ROC requires that a duplicate original or certified true copy of only
the questioned decision should be attached to the petition and not all supporting
papers. Since the LA’s decision was not questioned ruling, a machine copy of it would
suffice. The duplicate original of the questioned decision of the NLRC should be
attached, and this was complied with. However, even if petitioner’s procedural
contention was correct, this Court still ruled for Guerrero on the merits. To remand this
case to the CA would further delay the recovery of wages.
2) On behalf of its principal, OSM does not deny hiring Guerrero as master mariner.
Petitioner was the legitimate manning agent of PS-SASCO and it was allowed to recruit,
hire and deploy seamen on board the vessel.
a. It argues that since Guerrero was never deployed overseas, his employment
contract became ineffective because its object was allegedly absent. –
Employment contract like any contract is perfected upon the concurrence of
essential elements such as consent of the parties, object certain (subject
matter of the contract) and the cause of the obligation. Contrary to
petitioner’s contention, the object of the contract was the rendition of
service by Guerrero on board the vessel. The non-deployment overseas
of the ship did not affect the validity of the perfected employment
contract.
b. OSM also contends that there was a novation of the contract when Concorde
decided to use the ship for coastwide trade. – A contract cannot be novated
solely by the will of one party.
3) Joint and solidary liability is meant to assure aggrieved workers of immediate and
sufficient payment of what is due them.
Decision of NLRC affirmed.
Trans Action Overseas Corporation v. Secretary of Labor, GR 109583
FACTS:
A group of individuals sought employment as domestic helpers and paid placement fee ranging
from P1,000 to P14,000 but Transaction Overseas Corporation failed to deploy them. Their
demands for refund proved unavailing, thus they were constrained to institute complaints against
petitioner for violation of Art. 32 and 34(a) of the Labor Code, as amended.
Petitioner denied having received the amounts allegedly collected from respondents and averred
that the company’s employee whose only duty was to pre-screen and interview applicants and
was not authorized to collect fees from the applicants. Petitioner maintains that it even warned
respondents not to give any money to unauthorized individuals.
ISSUES: Whether or not the Secretary of Labor and Employment has Jurisdiction to cancel or
revoke the license of a private fee-charging employment agency.
HELD: ART. 35. Suspension and/or Cancellation of License or Authority. - The Minister of Labor
shall have the power to suspend or cancel any license or authority to recruit employees for
overseas employment for violation of rules and regulations issued by the Ministry of Labor, the
Overseas Employment Development Board, and the National Seamen Board, or for violation of
the provisions of this and other applicable laws, General Orders and Letters of Instructions.
Yes, the power to suspend or cancel any license or authority to recruit employees for overseas
employment is vested upon the secretary of Labor and Employment under Art.35 of the Labor
Code as amended. This is in connection in the case of Eastern Assurance and Surety Corp. v.
Secretary of Labor. The Secretary of Labor has also the authority conferred by Section 36, not
only to restrict and regulate the recruitment and placement of activities of all agencies, but also to
promulgate rules and regulations to carry out the objectives and implement the provisions
governing said activities.
In view of the Courts disposition on the matter, we rule 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.
As regards petitioners alternative argument that the non-filing of the 1987 POEA Schedule of
Penalties with the UP Law Center rendered it ineffective and, hence, cannot be utilized as basis
for penalizing them, we agree with Secretary Confesors explanation.
Under the circumstances, the license of the respondent agency was cancelled on the authority of
Article 35 of the Labor Code, as amended, and not pursuant to the 1987 POEA Revised Rules on
Schedule of Penalties. The instant petition is hereby DISMISSED.
Catan v. NLRC, GR 77279
MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY v.
THE NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION and FRANCISCO D. REYES
FACTS
Petitioner, a duly licensed recruitment agency, recruited private respondent to work in Saudi
Arabia as a steelman.
The term of the contract provides for 1 year and with automatic renewal. It was renewed when
private respondent was not repatriated by his Saudi employer but instead was assigned to work
as a crusher plant operator and crushed his ankle by the machine he was operating. After the
expiration of the renewed term, private respondent returned to the Philippines, had his ankle
operated and incurred expenses.
After, he returned to Saudi Arabia to resume his work and was repatriated. Upon his return, he
had his ankle treated for which he incurred further expenses.
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, private respondent
filed a claim, against petitioner with respondent Philippine Overseas Employment Administration.
The POEA rendered judgment in favor of private respondent.
On appeal, respondent NLRC affirmed the decision. Not satisfied with the resolution of the POEA,
petitioner instituted the instant special civil action for certiorari, alleging grave abuse of discretion
on the part of the NLRC.
ISSUE: Whether the employer should compensate the employee if he is injured or permanently
disabled in the course of employment. YES
RULING:
1. The court said that there is no merit in petitioner’s contention.
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.
2. Even if indeed petitioner and the Saudi principal had already severed their 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:
3. Petitioner contends that even if it is liable for disability benefits, the NLRC gravely abused its
discretion when it affirmed the award of medical expenses when the said expenses were the
consequence of private respondent's negligence in returning to work in Saudi Arabia when he
knew that he was not yet medically fit to do so.
4. The court said that there’s No evidence introduced to prove that private respondent was not
medically fit to work when he returned to Saudi Arabia. Nowhere does it say it the medical
certificate issued by the camp doctor that he was not medically fit to work.
The petition is DISMISSED for lack of merits.
Royal Crown Internationale v. NLRC, GR 78085
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, docketed as POEA Case no. (L) 84- 04-40.
Petitioner filed a motion for reconsideration but the NLRC denied it for lack of merit. Hence
petitioner filed a petition for review.
ISSUES:
1. Whether or not petitioner as a private employment agency may be held jointly and
severally liable with the foreign-based employer for any claim which may arise in
connection with the implementation of the employment contracts of the employees
recruited and deployed abroad.
2. Whether or not sufficient evidence was presented by petitioner to establish the
termination of private respondent’s employment for justified valid cause.
HELD:
1. Yes, for petitioner voluntarily assumed solidarity liability under various contractual
undertakings it submitted to the Bureau of Employment services. Under Sec.2 (e) Rule V Book 1,
Rules to Implement the Labor Code (1976), 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 license and the implementation of the contracts of
employment with the workers it 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 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 Sec. 10 (a)(2), Rule
V Book 1, Rules to Implement the Labor Code (1976). It was required as well to post such cash
and surety bonds as determined by the Secretary of Labor to gurantee compliance with prescribed
recruitment procedure, rules and regulations and terms and conditions of employment as
appropriate [Section 1 of Pres. Dec. 1412 (1978) amending Article 31 of the Labor Code].
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.
2. No, the NLRC upheld the POEA finding that the petitioner’s evidence was insufficient
to prove termination of employment for just and valid cause. When termination cases involve a
Filipino worker recruited and deployed for overseas employment, the burden naturally devolves
upon both the foreign base employer and the employment agency or recruitment entity which
recruited the workers for the latter is not the only agent of the former, but is also solidarity liable
with its foreign principal for any claims or liabilities arising from the dismissal of the worker. (Art.277
of the Labor Code).
People v. Calonzo, GR 115150-55
FACTS: Reydante Calonzo told Bernardo Miranda, Danilo de los Reyes, Elmer Clamor, Belarmino
Torregrosa, and Hazel de Paula that he can help them find work in Italy if they can pay him
P120,000.00 as processing fee. Although all of them were able to pay the processing fee that
Calonzo asked for, the latter was not able to send them to Italy. When they tried to verify from the
POEA whether Calonzo is licensed or authorized to recruit, they found out that Calonzo was not.
Thus, they charged Calonzo with Illegal Recruitment.
For his part, Calonzo admits being engaged in the consultancy business through his RAC
Business Agency but denies any involvement in recruitment activities. He denies knowing the
complainants except Danilo de los Reyes and Belarmino Torregrosa who once visited him in his
office. While he disclaims the receipts presented by the prosecution as official receipts of his RAC
Business Agency he admits that the signatures thereon were similar to his.
Accused-appellant in this appeal assails his conviction by the trial court. He claims that the court
below erred in disregarding the testimony of Nenita Mercado, an employee of the Philippine
Overseas Employment Administration (POEA), who categorically stated that their records
indicated that Calonzo never processed complainants' applications for employment abroad. He
concludes from that fact alone that he cannot be deemed to have engaged in the recruitment of
workers for employment abroad.
As regards the estafa cases, accused-appellant contends that the court a quo erred in giving
credence to the testimonies of prosecution witnesses considering that the amounts claimed to
have been collected by him did not correspond to the amounts indicated in the receipts presented
by the complaining witnesses.
ISSUE: Whether Calonzo is guilty of estafa and illegal recruitment.
RULING YES;
In the case before us, we are 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. In Crim. Cases Nos. 98850, 98851, 98852 and
98854 the amount defrauded of each complainant was P120,000.00. In consonance with Art. 315
of the Revised Penal Code, the imposable penalty is prision correccional in its maximum period
to prision mayor in its minimum period.
The judgment of the court a quo finding accused-appellant REYDANTE CALONZO Y AMBROSIO
guilty of Illegal Recruitment in Large Scale and of Estafa, corresponding penalties imposed by the
court a quo is AFFIRMED.
Salazar v. Achacoso and Marquez, GR 81510
FACTS: This concerns the validity of the power of the Secretary of Labor to issue warrants of
arrest and seizure under Article 38 of the Labor Code, prohibiting illegal recruitment.
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 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: May the Philippine Overseas Employment Administration (or the Secretary of Labor)
validly issue warrants of search and seizure (or arrest) under Article 38 of the Labor Code? NO
HELD: PETITION GRANTED. it is only a judge who may issue warrants of search and arrest.
Neither may it be done by a mere prosecuting body.
We reiterate 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, we declare
Article 38, paragraph (c), of the Labor Code, unconstitutional and of no force and effect.
Moreover, the search and seizure order in question, assuming, ex gratia argumenti, that it was
validly issued, is clearly in the nature of a general warrant. We have held that a warrant must
identify clearly the things to be seized, otherwise, it is null and void
For the guidance of the bench and the bar, we reaffirm the following principles:
1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no other, who
may issue warrants of arrest and search:
2. The 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.
People v. S. Angeles, GR 132376
FACTS: Accused-appellant Samina Angeles y Calma was charged with four (4) counts of estafa
and one (1) count of illegal recruitment.
That sometime during the month of September 1994 in the City of Manila, Philippines, the said
accused, representing herself to have the capacity to contract, enlist and transport Filipino workers
for employment abroad, did then and there willfully and unlawfully for a fee, recruit and promise
employment/job placement abroad to the following persons:
1. Marceliano T. Tolosa
2. Precila P. Olpindo
3. Vilma S. Brina
4. Maria Tolosa de Sardea y Tablada
Without first having secured the required license or authority from the Department of Labor and
Employment.
In her defense, accused-appellant averred that, contrary to the prosecution's allegations, she
never represented to the complainants that she can provide them with work abroad. She insisted
that she was a marketing consultant and an international trade fair organizer. In June 1994, she
went to Paris, France to organize a trade fair. There she met Priscilla Agoncillo, a domestic helper,
and they became friends. Priscilla asked her to assist her siblings, Maria and Marceliano,
particularly in the processing of their travel documents for France. Accused-appellant told Priscilla
that she can only help in the processing of travel documents and nothing more. It was Priscilla
who promised employment to Maria and Marceliano. She received money from complainants not
in the form of placement fees but for the cost of tickets, hotel accommodations and other travel
requirements.
The five (5) cases were consolidated and tried jointly by the Regional Trial Court of Manila, Branch
50. - After trial on the merits, the trial court found accused-appellant guilty of illegal recruitment
and four (4) counts of estafa and correspondingly sentenced her.
Accused-appellant is now before us on appeal, arguing that the prosecution failed to prove her
guilt for estafa and illegal recruitment by proof beyond reasonable doubt.
ISSUE: Whether Accused-appellant is guilty of (1) estafa and (2) illegal recruitment.
RULING: YES. NO.
Article 13(b), of the Labor Code provides, thus:
(b) 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.
To prove illegal recruitment, it must be shown that the accused-appellant 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.[4] 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 the case at bar, accused-appellant alleges that she never promised nor offered any job to the
complainants. Hence, accused-appellant Samina Angeles cannot be lawfully convicted of illegal
recruitment.
For Illegal Recruitment, accused-appellant Samina Angeles is ACQUITTED for failure of the
prosecution to prove her guilt beyond reasonable doubt.
Anent the four charges of estafa, under Article 315, paragraph 2(a) of the Revised Penal Code,
the elements of estafa are: (1) the accused has defrauded another by abuse of confidence or by
means of deceit and (2) damage or prejudice capable of pecuniary estimation is caused to the
offended party or third person. Clearly, these elements are present in this case. CONVICTED.
----------------------------
C. Illegal Recruitment considered a crime involving Economic sabotage (Art. 38 LC)
i. Syndicated
1. People v. Goce, 247 SCRA 780 (1995)
2. People v. Avendano, 216 SCRA 187
3. People v. Badoza, 215 SCRA 33
ii. In Large Scale or Qualified
1. People v. Tan Tiong Meng, GR 120835-40
2. People v. Sadiosa, GR 107084
3. People v. Bautista, 241 SCRA 216
4. People v. Coronacion, 237 SCRA 227
5. People v. Comia, GR 109761
People v. Goce, 247 SCRA 780 (1995)
FACTS: On January 12, 1988, an information for illegal recruitment committed by a syndicate and
in large scale, punishable under Articles 38 and 39 of the Labor Code (Presidential Decree No.
442) as amended by Section 1(b) of Presidential Decree No. 2018, was filed against spouses Dan
and Loma Goce and herein accused-appellant Nelly Agustin in the Regional Trial Court of Manila,
Branch 5.
That in or about and during the period comprised between May 1986 and June 25, 1987, both
dates inclusive, in the City of Manila, Philippines, the said accused, conspiring and confederating
together and helping one another, representing themselves to have the capacity to contract, enlist
and transport Filipino workers for employment abroad, did then and there willfully and unlawfully,
for a fee, recruit and promise employment/job placement abroad, to (1) Rolando Dalida y Piernas,
(2) Ernesto Alvarez y Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y Alvarez, (5)
Dionisio Masaya y de Guzman, (6) Dave Rivera y de Leon, (7) Lorenzo Alvarez y Velayo, and (8)
Nelson Trinidad y Santos, without first having secured the required license or authority from the
Department of Labor.
On January 21, 1987, a warrant of arrest was issued against the three accused but not one of
them was arrested. 2 Hence, on February 2, 1989, the trial court ordered the case archived but it
issued a standing warrant of arrest against the accused.
Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma Goce
were her neighbors at Tambo, Parañaque and that they were licensed recruiters and owners of
the Clover Placement Agency. Previously, the Goce couple was able to send her son, Reynaldo
Agustin, to Saudi Arabia. Agustin met the aforementioned complainants through Lorenzo Alvarez
who requested her to introduce them to the Goce couple, to which request she acceded. 18
Denying any participation in, the illegal recruitment and maintaining that the recruitment was
perpetrated only by the Goce couple, Agustin denied any knowledge of the receipts presented by
the prosecution. She insisted that the complainants included her in the complaint thinking that this
would compel her to reveal the whereabouts of the Goce spouses. She failed to do so because in
truth, so she claims, she does not know the present address of the couple. All she knew was that
they had left their residence in l987.
Herein appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the
Labor Code, as amended by Presidential Decree No. 2018, provides that any recruitment activity,
including the prohibited practices enumerated in Article 34 of said Code, undertaken by non-
licensees or non-holders of authority shall be deemed illegal and punishable under Article 39
thereof. The same article further provides that illegal recruitment shall be considered an offense
involving economic sabotage if any of these qualifying circumstances exist, namely, (a) when
illegal recruitment is committed by a syndicate, i.e., if it is carried out by a group of three or more
persons conspiring and/or confederating with one another; or (b) when illegal recruitment is
committed in large scale, i.e., if it is committed against three or more persons individually or as a
group.
ISSUE: Whether the accused-appellant (Agustin) are guilty of illegal recruitment.
RULING: YES
There is illegal recruitment when one gives the impression of having the ability to send a worker
abroad." 29 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.
At the outset, it should be made clear that all the accused in this case were not authorized to
engage in any recruitment activity, as evidenced by a certification issued by Cecilia E. Curso, Chief
of the Licensing and Regulation Office of the Philippine Overseas Employment Administration, on
November 10, 1987. Said certification states that Dan and Loma Goce and Nelly Agustin are
neither licensed nor authorized to recruit workers for overseas employment. 23 Appellant does not
dispute this. As a matter of fact her counsel agreed to stipulate that she was neither licensed nor
authorized to recruit applicants for overseas employment. Appellant, however, denies that she
was in any way guilty of illegal recruitment.
Despite Agustin's pretensions that she was but a neighbor of the Goce couple, the testimonies of
the prosecution witnesses paint a different picture. Rogelio Salado and Dionisio Masaya testified
that appellant represented herself as the manager of the Clover Placement Agency. Ramona
Salado was offered a job as a cutter/sewer by Agustin the first time they met, while Ernesto Alvarez
remembered that when he first met Agustin, the latter represented herself as "nagpapaalis
papunta sa Oman." 28 Indeed, Agustin played a pivotal role in the operations of the recruitment
agency, working together with the Goce couple.
WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto, with costs
against accused-appellant Nelly D. Agustin.
People v. Avendano, 216 SCRA 187
FACTS: Six (6) separate informations for Illegal Recruitment of some 38 workers were filed against
appellant Abelardo Avendaño y Crespo in the Regional Trial Court, Branch 170, at Malabon, Metro
Manila.
Upon arraignment, Avendaño pleaded not guilty to the six (6) informations. His co-accused,
Carmelito Soriano, Jr., Renato M. Soriano and Manuel Calanog have remained at large. The cases
were consolidated and jointly tried.
The accused (Abelardo C. Avendaño) is the Treasurer of MCBRAJ Agro-Industrial Development
Company (MAINDECO), with offices at 26 Sta. Cecilia St., Sto. Rosario Village, Malabon, Metro
Manila, which is also his residence. The company is not licensed nor authorized to recruit workers
for overseas employment. Carmelito Soriano, Jr. is the President of said Company. Manuel
Calanog is the personnel manager.
It appears that the receipts issued by the accused to the complainants show that the payments
made by them were in the form of trust deposit for one unit of share in the company. The receipts
were subsequently surrendered to the company in exchange of certificates of common share in
MCARM Agro-Industrial Development Corporation, making the complainants stockholders of the
corporation. However, Henry Camba refused to surrender his receipt in exchange for a certificate
of common share as he was insisting that the money he paid be returned to him. Moreover, while
some of the complainants paid P5,500.00, the receipts issued to them reflected only the amount
of P4,500.00 as the balance of P1,000.00 was allegedly for the processing of their passport and
physical examination. Some of the complainants underwent physical examination and made to
attend orientation seminars while waiting for their departure to Papua New Guinea. The
complainants finally got tired of waiting for the promised employment abroad and filed their
complaints against the accused.
Because the accused was sentenced to suffer the penalty of life imprisonment in three (3) of the
six (6) cases, he appealed to this Court.
ISSUE: Whether the accused is guilty of Illegal Recruitment committed in large scale.
RULING: YES
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. 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. (Article 38, paragraphs [a] and [b],
Labor Code). The penalty of life imprisonment and a fine of P100,000.00 shall be imposed if illegal
recruitment constitutes economic sabotage. Any person who is neither a licensee nor a holder of
authority found violating any provision of the Code shall suffer the penalty of imprisonment of not
less than four years nor more than eight years or a fine of not less than P20,000.00 nor more than
P100,000.00 or both such imprisonment and fine at the discretion of the court. If the offender is a
corporation, partnership, association or entity, the penalty shall be imposed upon the officer or
officers of the corporation, partnership, association or entity responsible for violation. (Article 39,
paragraphs [a], [c] and [d], Labor Code.)
WHEREFORE, as the trial court did not commit any reversible error in finding Avendaño guilty of
large scale illegal recruitment in Criminal Cases Nos. 6113, 6114 and 6125, and of simple illegal
recruitment in Criminal Cases Nos. 6131, 6143 and 6148, and as the penalties imposed are in
accordance with the law, the appealed decision is hereby AFFIRMED in toto.
People v. Bodozo, G.R. No. 96620, October 21, 1992, 215 SCRA 33.
FACTS:
Accused-appellants were charged before the Regional Trial Court with five (5) counts of Estafa
(docketed as Criminal Case No. 89-73609 to 89-73613) and a separate charge for Illegal
Recruitment (docketed as Criminal Case No. 89-73608).
On May 30, 1989, the Assistant Prosecutor filed the following information for illegal recruitment
against Joey Bodozo and Nimfa Bodozo.
When the accused Nimfa Bodozo was in Luna, La Union, she told the private complainants, who
are simple farmers, and at the time unemployed, that she was recruiting workers for employment
in Saudi Arabia and Singapore. The accused Nimfa Bodozo required the five (5) private
complainants to submit to her, in addition to their respective applications, NBI clearances and
medical certificates in connection with their applications. The private complainants Prudencio
Renon and Fernando Gagtan were told by the accused Nimfa Bodozo that their salary in Saudi
Arabia was US$200.00 a month, while the accused Nimfa Bodozo assured private complainants,
Angelino Obiacoro, Ludovico Gagtan and Domingo Obiacoro that they were going to be paid, by
their respective employers, in Singapore, the amount of Singapore 16.00 dollars a day. The private
complainants Prudencio Renon and Fernando Gagtan submitted passports, their NBI clearances
and medical certificates to the accused Nimfa Bodozo in their residence at Quirino Avenue, Manila.
Domingo Obiacoro, Angelino Obiacoro and Ludovico Gagtan likewise submitted to the accused
their NBI clearances and medical certificates as required by the accused. Moreover, the accused
demanded from the private complainant Prudencio Renon the amount of P19,000.00 in connection
with his application for employment abroad. Of the said amount, P15,000.00 was to be used by
the accused as processing fee for the application and papers of the private complainant for his
employment abroad. Prudencio Renon paid to the accused Nimfa Bodozo, on October 3, 1988,
the amount of P15,000.00 for which the said accused signed a Receipt. 5 The mother of Prudencio
Renon paid the balance of P4,000.00 to the same accused but the latter did not issue any receipt
for said amount.
TC finds both Accused guilty, beyond reasonable doubt, of the crime of illegal recruitment defined
in and penalized by Article 13 in relation to Article 38 of the Labor Code, as amended, and hereby
metes on each of them the penalty of LIFE IMPRISONMENT and hereby condemns each of them
"to pay" a fine of P100,000.00, without subsidiary imprisonment in case of insolvency. Hence the
instant appeal by the accused Joey Bodozo and Nimfa Bodozo.
ISSUE: Whether or not the guilt of the accused-appellants have been proven beyond reasonable
doubt.
RULING: YES
After a careful scrutiny of the evidence, We found no cause to disapprove the facts as stated
above and we adopt the same as Our findings of facts. In the absence of any substantial proof
that the trial court's decision was grounded entirely on speculations, surmises or conjectures, the
same must be accorded full consideration and respect. After all, the trial court is in a much better
position to observe and correctly appreciate the respective parties' evidence as they were
presented.
The crime of illegal recruitment has two elements:
1. The offender is a non-license or non-holder of authority to lawfully engage in the
recruitment and placement of workers; and
2. That the offender undertakes either any recruitment activities defined under Article
13(b), or any prohibited practices enumerated under Article 34 of the Labor Code.
In this case at bar, it is undisputed that accused-appellants Joey Bodozo and Nimfa Bodozo are
neither licensed nor authorized to recruit workers for overseas employment as shown by the
certification 14 issued by the Philippine Overseas Employment Administration (POEA).
Records show that private complainants are simple farmers, unemployed and natives of La Union,
who see employment abroad as a means to alleviate their living conditions, only to find out that
they have been the victims of illegal recruiters preying on poor workers. It has been held that "the
absence of evidence as to an improper motive actuating the principal witnesses of the prosecution
strongly tends to sustain no improper motive existed and their testimony is worthy full faith and
credit."
In the light of foregoing findings and for reasons indicated, We hold that the evidence was sufficient
to sustain the verdict finding the accused guilty of the crime of illegal recruitment as charged.
People v. Tan Tiong Meng, GR 120835-40
FACTS:
Six(6) complainants went to Borja’s house to meet accused, Tan Tiong Meng, allegedly a job
recruiter . Accused promised to complainants that they could get jobs as factory worker in Taiwan
with a monthly salary of P20K. Accused required them to submit their passports, bio-data and their
high school diploma as well as to pay P15K each for placement and processing fees. Accused
kept on promising to complainants that they would be able to leave, but the promises were never
fulfilled. When complainants knew that accused was not a licensed or authorized overseas
recruiter, they filed for complaints for illegal recruitment and estafa against accused.
Accused contend that he merely acted as a collector of money for the principal recruiter Borja who
made the representations that he(accused) could give the applicants jobs in Taiwan.
ISSUE: WON accused is guilty of the offense of illegal recruitment in large scale and 6 counts
of estafa.
HELD: YES.
Circumstances belie the version of accused: (1) Mascardo(one of the complainants) testified that
accused could no longer return the money because he had already sent it to his brother-in-law in
Taiwan; (2) all the receipts issued to complainants were signed by accused; (3) Accused admitted
that he and his wife are respondents in about 70 cases of estafa and illegal recruitment; (4)
complainants pointed to Tan and not Borja as the one who had represented to them that he could
give them jobs in Taiwan.
The accused’ 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
Labor Code and is deemed illegal and punishable under Art. 39 of the Labor Code.
The offense committed against the 6 complainants is illegal recruitment in large scale. Accused is
also guilty of 6 separate crimes of estafa. A person convicted for illegal recruitment under the
Labor Code can be convicted for violation of the RPC provisions on estafa provided the elements
are present: (1) the accused defrauded another by abuse of confidence or by means of deceit;
and (2) damage or prejudice capable of pecuniary estimation is caused to the offended party or
third person.
People v. Sadiosa, GR 107084
FACTS:
Accused-appellant Delia Sadiosa was charged with illegal recruitment in an information that reads:
That on or about and during the period comprise (sic) from January 1992 to March 1992, in Pasay
City, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above named
accused Delia Sadiosa y Cabenta, well knowing that she is not a duly licensed job recruiter, by
means of false representations and fraudulent allegations to the effect that she could secure
employment as domestic helpers abroad for Benilda Sabado y Domingo, Marcela Tabernero y
Manzano, Erly Tuliao y Sabado and Cely Navarro y Manzano, did then and there wilfully (sic),
unlawfully and feloniously recruit aforesaid persons and collected from them the amount of
P8,000.00 each, which amount were given to the accused by the aforesaid complainants upon
receipt of which, far from complying with her obligation aforestated, accused appropriated for
herself the said amount and failed to deploy complainants abroad.
Arsenia Conse went to Bayombong, Nueva Ecija in early 1992 where she met the four
complainants, Cely Navarro, Marcela Manzano, Erly Tuliao and Benilda Domingo. She enticed
the four to apply for overseas employment informing them that she had a cousin who could send
them to Kuwait as domestic helpers. Apparently convinced by Arsenia Conse, the four went with
her on February 5, 1992 to Manila. Upon arrival, they proceeded to Room 210, Diamond Building,
Libertad St., Pasay City where Arsenia Conse introduced the group to accused-appellant Delia
Sadiosa. The four then applied for work as domestic helpers.
On that occasion, accused-appellant assured the four that she could dispatch them to Kuwait[4]
and forthwith demanded P8,000.00 from each of them for processing fee and P1,000.00 for
passport (P1,500.00 from complainant Cely Navarro).[5] She assured the group that she would
facilitate the processing of all the necessary documents needed by them. She further promised
them that upon payment of the required fees, they would be able to leave for Kuwait immediately.
The trial court found accused-appellant guilty of illegal recruitment in large scale defined by Article
38 (b) and penalized under Article 39 (a) of the Labor Code, as amended by Presidential Decree
Nos. 1920 and 2018.
ISSUE: Whether accused is guilty of illegal recruitment in large scale.
RULING: YES
In the instant case, the information filed against accused-appellant sufficiently shows that it is for
the crime of illegal recruitment in large scale, as defined in Art. 38 (b) of the Labor Code and
penalized in Art. 39 of the same Code although it is designated as for illegal recruitment only.
Under the 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 (3) or more persons, individually or as a group.
All these elements are to be found in the information. 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.
The prosecution clearly established the fact that accused-appellant had no license to recruit from
the POEA. Yet, the latter entertained the four complainants when they applied, promised them
jobs as domestic helpers in Kuwait, and collected fees from them for processing travel documents
only to renege on her promise and fail to return the money she collected from complainants despite
several demands.
For engaging in recruitment of the four complainants without first obtaining the necessary license
from the POEA, accused-appellant, therefore, is guilty of illegal recruitment in large scale, an
offense involving economic sabotage. She should, accordingly, be punished with life imprisonment
and a fine of P100,000 under Article 39 (a) of the Labor Code, as amended.
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.

People v. Bautista, 241 SCRA 216
Facts:
Anita Bautista approached Romeo Paguio and offered job openings abroad. Bautista introduced
him to Rosa Abrero. Abrero informed him that the applicants could leave for Taiwan within a period
of one-month from the payment of placement fees. Bautista and Abrero also recruited Paguio’s
relatives- Remigio Fortes, Dominador Costales and Anastacio Amor.
Despite payment of the placement fees, the deployment never materialized. Paguio then required
Bautista to sign the "Acknowledgment Receipt," in which Bautista admitted having received
payment for processing and other expenses. From POEA, Paguio secured a certification attesting
that Bautista and Abrero are not licensed or authorized to recruit workers for overseas
employment. Paguio and his relatives filed four separate Informations against Bautista charging
her with the crimes of Illegal Recruitment In Large Scale and Estafa.
In her defense, Bautista denied she recruited complainants for employment abroad. She claimed
that she only introduced Abrero to Paguio since the latter asked her for someone who could help
his relatives work abroad. She also stressed that she did not receive the payment as stated in the
Acknowledgment Receipt but merely acknowledged that said sum was received by Abrero from
Paguio.
The lower court convicted Bautista with the crimes of Illegal Recruitment In Large Scale and estafa
and sentenced him to a prison term. The Court of Appeals affirmed the decision of the lower court
but modified the penalty imposed.
Held:
Conviction for illegal recruitment in large scale is proper when there are at least three (3) victims
1. It is settled that the essential elements of the crime of illegal recruitment in large scale are:
(a) 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;
(b) 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
(c) accused commits the same against three (3) or more persons, individually or a group.
2. In the instant case, Bautista actively participated in the recruitment process of complainants.
Complainants' recruitment was initiated by Bautista during her initial meeting with Paguio. Bautista
gave the impression to Paguio and the complainants that her cohort, Abrero, could send workers
for employment abroad. Bautista and Abrero both assured the departure of complainants to
Taiwan within one month from payment of the placement fee. Moreover, it was Bautista who
informed Paguio that complainants' scheduled trip to Taiwan was scheduled due to some
problems on their visas and travel documents.
3. Bautista’s close association with Abrero is further strengthened by the Acknowledgment Receipt
which was prepared by Paguio. The receipt shows that Bautista collected the payment for and in
behalf of Rosa Abrero.
4. It is uncontroverted that Bautista and Abrero are not authorized or licensed to engage in
recruitment activities. Despite the absence of such license or authority, Bautista participated in the
recruitment of complainants. Since there are at least three (3) victims in this case, Bautista is
correctly held criminally liable for illegal recruitment in large scale.
Estafa is committed when accused deceived the complainants of employment abroad
5. The elements of estafa are as follows:
(a) that the accused defrauded another (a) by abuse of confidence, or (b) by means of deceit; and
(b) that damage or prejudice capable of pecuniary estimation is caused by the offended party or
third party.
6. In the case at bench, the complainants were deceived by Bautista and Abrero into believing
that there were, indeed, jobs waiting for them in Taiwan. The assurances given by these two
women made complainants parted their money in exchange for the promised job.
People v. Coronacion, 237 SCRA 227
FACTS: Once again, the pernicious practice of illegal recruitment is the matter at hand. Nelia
Coronacion, Eduardo Aquino, and June Mendez were charged with the crime of illegal recruitment
in large scale and by a syndicate for falsely representing themselves to have the capacity to
contract, enlist and transport Filipino workers for employment abroad. We are now asked to
adjudge them guilty or not.
The narration by the People of the prosecution's evidence as found by the trial court concerning
the recruitment activities of herein accused-appellants is hereby adopted, it being fully supported
by the testimonies of the complaining witnesses.
The prosecution likewise proved through the unrebutted testimony of Orlino Regualos, Assistant
Chief of the Licensing Division of the Philippine Overseas Employment Administration (POEA),
that Nelia Coronacion and Eduardo Aquino do not have any license or authority from POEA to
recruit workers for overseas employment.6
Upon the other hand, the defense of accused-appellants rests on denial and alibi. Accused
Eduardo Aquino maintained that he had not knowledge of the transactions between the
complainants and his co-accused as he was always out of town, hence out of the office during the
weeks when the alleged transactions took place therein. On her part, accused Nelia Coronacion
claimed that she did not know anything about the said transactions, reasoning that she herself is
a victim of June Mendez' nefarious activities.
ISSUE: Whether the accused is guilty of illegal recruitment.
RULING: YES
Evidently, 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. 10
In the case at bench, the presence of the second and third elements is not disputed. The
appellants are neither licensees or holders of any authority from POEA to engage in recruitment
and placement activities as evidenced by a certification of the said agency dated September 8,
1987. 11 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.
Now, we resolve whether the first element of the offense of illegal recruitment, i.e., that the
appellants undertook any of the recruitment activities defined under Article 13(b) of the Labor
Code, as amended, or any of the prohibited activities defined under Article 34 of the same Code,
was successfully established by the prosecution.
To satisfy the first element, the prosecution presented the testimonies of the complainants clearly
pointing to the appellants as two of the three persons who promised them employment abroad
and who collected and received varying amounts from them. The appellants, on the other hand,
vigorously maintain that the lower court erred (a) in finding that there was conspiracy and (b) in
giving credence to the conflicting testimonies of the private complainants.
We find the submission untenable.
People v. Comia, GR 109761
FACTS:
For falsely representing herself to have the capacity and power to contract, enlist, and recruit
workers for employment abroad, Carmelita Puertollano Comia was charged with illegal recruitment
in large scale under paragraphs (a) and (b) of Article 38, in relation to paragraph (a) of Article 39,
of the Labor Code. The information 1 was filed with the Regional Trial Court of Makati, Metro
Manila, docketed therein as Criminal Case No. 91-6443, and assigned to Branch 141 of the said
court. After trial on the merits, the court promulgated on 4 February 1993 its decision 2 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 of P100,000.00.
The complaining victims of the illegal recruitment activities of the accused were Fe Dadap, Susana
Belloso, Marilyn Bibar, Sandra Cosart, and Remedios Asis. With the exception of Fe Dadap, who
withdrew her complaint because she had moved to the province with her two children, they 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.
The trial court accepted the version of the prosecution because the statements of the complaining
witnesses were positive and affirmative in nature and were worthy of credit than the mere
uncorroborated and self-serving denial of the accused. It further observed that the accused had
not shown any ill motive on the part of the complainants and that the accused's reference to a
certain Dr. Zenaida Andres as the employer and, therefore, the real recruiter does not inspire
belief.
The accused seasonably filed her notice of appeal which did not, however, indicate the court to
which she was appealing. 7 In its order of 23 February 1993, the trial court erroneously directed
the elevation of the records of the case to the Court of Appeals. Hence, this petition.
ISSUE: Whether the accused is liable for with illegal recruitment in large scale.
RULING: YES
Article 38 of the Labor Code provides in part as follows:
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.
(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered
an offense involving economic sabotage and shall be penalized in accordance with Article 39
hereof.
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.
Article 13(b) of the same Code defines recruitment as follows:
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.
It is clear from the foregoing provisions that there is illegal recruitment 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 presence of the second and third elements is beyond dispute. That the accused
is not authorized by the Philippine Overseas Employment Administration (POEA) to engage in the
recruitment and placement of workers is evidenced by a certification of the said agency dated 1
October 1991. In fact, to abbreviate the proceedings, the parties duly stipulated on the due
issuance, authenticity, and truth of the said certification. 13 There are no less than four
complainants who patiently endured the rigors of trial to denounce the accused and expose her
illegal recruitment activities.
WHEREFORE, the appealed decision of the Regional Trial Court of Makati, Metro Manila, in
Criminal Case No. 91-6443 is hereby AFFIRMED.
----------------------------
F. Liabilities
iii. Pre-termination of contract of migrant workers and Money Claims (Sec 10, RA 8042 as
amended by Sec 7, RA 10022)
1. Millares v. NLRC, GR 110524
2. Pentagon International Shipping Inc. v. Adelantar, GR 157373
3. Skippers United Pacific, Inc. v. Doza, GR 175558
4. Elizabeth M. Gagui v. Simeon Dejero and Teodoro R. Permejo, GR 196036
5. ATCI Overseas Corporation v. Echin, GR 178551
6. Serrano v. Gallant, GR 167614
7. Yap v. The Namarias, GR 79532
8. Sameer Overseas Placement Agency, Inc. v. Joyy C. Cabiles, GR 170139
Millares v. NLRC, GR 110524
Facts
Douglas Millares was employed by ESSO International through its local manning agency, Trans-
Global, in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he
occupied until he opted to retire in 1989.
In 1989, petitioner Millares filed a leave of absence and applied for optional retirement plan under
the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already rendered more
than twenty years of continuous service.
Esso International denied Millares’ request for optional retirement on the following grounds, to wit:
(1) he was employed on a contractual basis; (2) his contract of enlistment (COE) did not provide
for retirement before the age of sixty years; and (3) he did not comply with the requirement for
claiming benefits under the CEIP, i.e., to submit a written advice to the company of his intention
to terminate his employment within thirty days from his last disembarkation date.
Subsequently, after failing to return to work after the expiration of his leave of absence, Millares
was dropped from the roster of crew members effective September 1, 1989.
On the other hand, petitioner Lagda was employed by Esso International as wiper/oiler in 1969.
He was promoted as Chief Engineer in 1980, a position he continued to occupy until his last COE
expired in 1989.

In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional early retirement
plan in view of his twenty years continuous service in the company.
Trans-global similarly denied Lagda’s request for availment of the optional early retirement
scheme on the same grounds upon which Millares request was denied.
Unable to return for contractual sea service after his leave of absence expire, Lagda was also
dropped from the roster of crew members effective September 1, 1989.
Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment of employee
benefits against private respondents Esso International and Trans-Global before the POEA.
The POEA rendered a decision dismissing the complaint for lack of merit. On appeal, NLRC
affirmed the decision of the POEA dismissing the complaint.
NLRC rationcinated that Millares and Lagda, as seamen and overseas contract workers are not
covered by the term “regular employment” as defined under Article 280 of the Labor Code. The
POEA, which is tasked with protecting the rights of the Filipino workers for overseas employment
to fair and equitable recruitment and employment practices and to ensure their welfare, prescribes
a standard employment contract for seamen on board ocean-going vessels for a fixed period but
in no case to exceed twelve months
. the same date, he received a letter from his employer, stating that he was being terminated for
Issue: Whether or not seafarers are considered regular employees under Article 280 of the Labor
Code.
Ruling
It is for the mutual interest of both the seafarer and the employer why the employment
status must be contractual only or for a certain period of time.
Quoting Brent School Inc. v. Zamora, 1990, and Pablo Coyoca v. NLRC, 1995, the Supreme Court
ruled that 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. 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.
As ruled in Brent case, 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.
And as stated in the Coyoca case, 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. And in no case should the contract of
seamen be longer than 12 months.
Moreover, the Court held that it is an accepted maritime industry practice that employment of
seafarers are for a fixed period only. Constrained by the nature of their employment which is quite
peculiar and unique in itself, it is for the mutual interest of both the seafarer and the employer why
the employment status must be contractual only or for a certain period of time. Seafarers spend
most of their time at sea and understandably, they can not stay for a long and an indefinite period
of time at sea. Limited access to shore society during the employment will have an adverse impact
on the seafarer. The national, cultural and lingual diversity among the crew during the COE is a
reality that necessitates the limitation of its period.
Pentagon International Shipping Inc. v. Adelantar, GR 157373
FACTS:
On August 16, 1997, respondent William B. Adelantar was hired by Dubai Ports Authority of Jebel
Ali under an employment contract (first contract) which provided for an unlimited period of
employment with a monthly salary of five thousand five hundred dirhams (Dhs 5,500).
On September 3, 1997, Adelantar and petitioner Pentagon International Shipping, Inc. (Pentagon),
for and in behalf of Dubai Ports Authority of Jebel Ali, entered into a Philippine Overseas
Employment Administration (POEA) standard employment contract (second contract), this time
providing for a 12-month period with basic monthly salary of US$380.00 and fixed overtime pay of
US$152.00.
Upon completion of his probationary period on April 5, 1998, Adelantars basic salary was
increased to five thousand eight hundred ninety dirhams (Dhs 5,890), while his overtime pay was
increased to two thousand three hundred fifty-six dirhams (Dhs 2,356) effective April 1, 1998.
On June 11, 1998, however, the management barred Adelantar from entering the port due to a
previous dispute with his superior. He was asked to hand in his health and employment card. On
assaulting his superior officer, although he was promised employment in another company.
Adelantar was eventually repatriated after nine (9) months and seven (7) days of service. After
almost a year of waiting with no work forthcoming, Adelantar filed a complaint for illegal dismissal
with money claim against Pentagon International Shipping, Inc. with the NLRC, docketed as NLRC
NCR OFW (M) 99-05-0693.
The Labor Arbiter found that the dismissal of Adelantar was illegal. Consequently, he ordered
Pentagon to pay Adelantar the amount of Dhs 24,738.00 representing the latters three (3) months
basic salary inclusive of overtime pay. All other claims were denied for lack of merit.[3]
Adelantar appealed to the NLRC arguing that the Labor Arbiter erred in granting backwages of
only three (3) months and in not granting attorneys fees, moral and exemplary damages and
reinstatement.
The NLRC affirmed the Labor Arbiters 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. Thus, the
NLRC awarded backwages to Adelantar equivalent to three (3) months of his basic salary, but
exclusive of overtime pay.[4]
Aggrieved, Adelantar filed a petition for certiorari with the Court of Appeals.
The Court of Appeals awarded full backwages to respondent computed from the time of the
dismissal up to the finality of the decision. It ruled that Section 10 of R.A. No 8042 is not applicable
in this case because said provision only contemplates a fixed period of employment. Moreover,
Article 279 of the Labor Code should apply and not Section 10 of R.A. No. 8042, considering that
Adelantars first contract provided for an unlimited period of employment.
ISSUE: Whether the Court of Appeals properly used as basis Article 279 of the Labor Code in its
award for backwages to Adelantar.
RULING: As early as the case of Coyoca v. NLRC,[9] 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. We agree with the NLRC when it
observed thus:
It should be stressed that whatever status of employment or increased benefits that the
complainant may have gained while under the employ of Dubai Ports Authority, the undisputed
fact remains that prior to his deployment, he agreed to be hired under a 12-month POEA contract,
the duration of which is the basis for the determination of the extent of the respondents liability.
Besides, in Millares v. NLRC,[11] we held that:
. . . [I]t is clear that 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 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.
Petitioner Pentagon International Shipping, Inc. is ORDERED to pay private respondent William
B. Adelantar the amount equivalent to the unexpired portion of the September 3, 1997 POEA
Standard Contract of Employment plus ten percent (10%) of the award as attorneys fees.
Skippers United Pacific, Inc. v. Doza, GR 175558
Facts:
Petitioner deployed De Gracia, Lata and Aprosta to work on board the vessel MV Wisdom Star.
On December 3 1998, Skippers alleges that De Garcia smelling strongly of alcohol, went to the
cabin of Gabriel Oleszek, MV Wisdom Stars’ Master. Skippers claims that he was rude and
shouted noisily to the master. De Gracia left the master’s cabin after a few minutes and was heard
shouting very loudly somewhere down the corridors. The incident was evidenced by the Captain’s
Report sent on said date.
Furthermore, Skippers also claim that on January 22, 1999, Aprosta, De Gracia, Lata and Daza
arrived in the master’s cabin and demanded immediate repatriation because they were not
satisfied with the ship. De Gracia, et al. threatened that they may become crazy any moment and
demanded for all outstanding payments due to them. The incident is evidenced by a telex of
Cosmoship MV Wisdom to skippers but had conflicting dates.
De Gracia claims that Skippers failed to remit their respective allotments, compelling them to vent
their grievances with the Romanian Seafarers Union. On January 28, 1999, the Filipino seafarers
were unceremoniously discharged and immediately repatriated. Upon arrival in the Philippines,
they filed a complaint for illegal dismissal with the LA.
The LA dismissed the seafarers’ complaint as the seafarers’ demand for immediate repatriation
due to the dissatisfaction with the ship is considered a voluntary pre-termination of employment.
Such act was deemed akin to resignation recognized under Article 285 of the LC. The LA gave
credence to the telex of the master’s report that the seafarers indeed demanded immediate
repatriation.
The NLRC agreed with the LA’s decision.
The CA however reversed the LA’s and the NLRC’s decision. The Court deemed the telex
message as a self-serving document that does not satisfy the requirement of substantial evidence,
or that amount of relevant evidence which a reasonable mind might accept as adequate to justify
the conclusion that petitioners indeed voluntarily demanded their immediate repatriation.
Aggrieved, Skippers appeals the case with the Supreme Court.
Issue: Whether or not the seafarer’s demand for immediate repatriation can be considered an act
of voluntary resignation.
Held:
For a worker's dismissal to be considered valid, it must comply with both procedural and
substantive due process. The legality of the manner of dismissal constitutes procedural due
process, while the legality of the act of dismissal constitutes substantive due process.
Procedural due process in dismissal cases consists of the twin requirements of notice and hearing.
The employer must furnish the employee with two written notices before the termination of
employment can be effected: (1) the first notice apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (2) the second notice informs the employee of
the employer's decision to dismiss him. Before the issuance of the second notice, the requirement
of a hearing must be complied with by giving the worker an opportunity to be heard. It is not
necessary that an actual hearing be conducted.
Substantive due process, on the other hand, requires that dismissal by the employer be made
under a just or authorized cause under Articles 282 to 284 of the Labor Code.
In this case, there was no written notice furnished to De Gracia, et al., regarding the cause of their
dismissal. Cosmoship furnished a written notice (telex) to Skippers, the local manning agency,
claiming that De Gracia, et al., were repatriated because the latter voluntarily pre-terminated their
contracts. This telex was given credibility and weight by the Labor Arbiter and NLRC in deciding
that there was pre-termination of the employment contract "akin to resignation" and no illegal
dismissal. However, as correctly ruled by the CA, the telex message is "a biased and self-serving
document that does not satisfy the requirement of substantial evidence." If, indeed, De Gracia, et
al., voluntarily pre-terminated their contracts, then De Gracia, et al., should have submitted their
written resignations.
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, De Gracia, et al., were not even employed yet by the foreign principal.
Elizabeth M. Gagui v. Simeon Dejero and Teodoro R. Permejo, GR 196036
FACTS:
On 14 December 1993, respondents Simeon Dejero and Teodoro Permejo filed separate
Complaints for illegal dismissal, nonpayment of salaries and overtime pay, refund of transportation
expenses, damages, and attorney fees against PRO Agency Manila, Inc., and Abdul Rahman Al
Mahwes.
The Labor Arbiter Pedro Ramos rendered a decision ordering respondents Pro Agecy Manila Inc.,
and Abdul Rahman Al Mahwes to pay complainants. The LA also 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. Corporate Officers
and Directors as Judgment Debtor. It included petitioner as the Vice-
president/Stockholder/Director of PRO Agenct, Manila, Inc. The LA granted the motion.
A 2nd Alias Writ of Execution was issued, which resulted in the garnishment of petitioner bank
deposit in the amount of P85,430.48. Since, judgment remained unsatisfied, respondents sought
a 3rd alias writ of execution. The motion was granted resulting in the levying of two parcels of lot
owned by petitioner located in San Fernando Pampanga.
Petitioner filed a Motion to Quash 3rd Alias Writ of Execution. Petitioner alleged that apart from
not being made aware that she was impleaded as one of the parties to the case, the LA decision
did not hold her liable in any form whatsoever. Executive Labor Arbiter denied the motion.
Upon appeal, NLRC denied the appeal for lack of merit. 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. It 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.
The CA affirmed the NLRC decision. The two Motions for Reconsideration were denied.
ISSUE: 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?
HELD: The Petitioner may not be held jointly and severally liable.
LABOR LAW: liability of corporate officers
The pertinent portion of Section 10, R.A. 8042 reads as follows: 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.
In Sto. Tomas v. Salac, we had the opportunity to pass upon the constitutionality of this provision.
We have thus maintained: the Court has already held, pending adjudication of this case, that the
liability of corporate directors and officers is not automatic. To make them jointly and solidarily
liable with their company, there must be a finding that they were remiss in directing the affairs of
that company, such as sponsoring or tolerating the conduct of illegal activities.
Hence, for petitioner to be found jointly and solidarily liable, there must be a separate finding that
she was remiss in directing the affairs of the agency, resulting in the illegal dismissal of
respondents. Examination of the records would reveal that there was no finding of neglect on the
part of the petitioner in directing the affairs of the agency. In fact, respondents made no mention
of any instance when petitioner allegedly failed to manage the agency in accordance with law,
thereby contributing to their illegal dismissal.
Petition for review on certiorari is GRANTED.
ATCI Overseas Corporation vs. Echin (2010)
G.R. No. 178551 | 2010-10-11
Subject: Local recruitment agency solidarily liable with foreign principal for money claims of OFWs;
Obligations of local agent and foreign principal do not terminate even after the expiration of their
agreement, but continue for the full period of the employment contract of the worker recruited;
Processual presumption; Proof of foreign law; Joint and solidary liability as a corporate officer
Facts:
Josefina Echin (respondent) was hired by petitioner ATCI Overseas Corporation in behalf of its
principal, the Ministry of Public Health of Kuwait (the Ministry), for the position of medical
technologist under a two-year contract, denominated as a Memorandum of Agreement (MOA),
with a monthly salary of US$1,200.
Under the MOA, all newly-hired employees undergo a probationary period of one (1) year and are
covered by Kuwait's Civil Service Board Employment Contract No. 2.
Josefina was deployed on February 17, 2000 but was terminated from employment on February
11, 2001, she not having allegedly passed the probationary period. She returned to the Philippines
on March 17, 2001, shouldering her own air fare.
Josefina filed with the National Labor Relations Commission (NLRC) a complaint for illegal
dismissal against ATCI as the local recruitment agency, represented by Amalia Ikdal, and the
Ministry, as the foreign principal.
The Labor Arbiter (LA), finding that petitioners neither showed that there was just cause to warrant
Josefina's dismissal nor that she failed to qualify as a regular employee, held that Josefina was
illegally dismissed and accordingly ordered petitioners to pay her US$3,600.00, representing her
salary for the three months unexpired portion of her contract.
The NLRC affirmed the Labor Arbiter's decision. ATCI appealed to the Court of Appeals,
contending that their principal, the Ministry, being a foreign government agency, is immune from
suit and, as such, the immunity extended to them. Furthermore, respondent Echin was validly
dismissed for her failure to meet the performance rating within the one-year period as required
under Kuwait's Civil Service Laws.
The Court of Appeals affirmed the NLRC and LA decision. The CA 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.
As to Ikdal's liability, the CA held that under Sec. 10 of Republic Act No. 8042, the "Migrant and
Overseas Filipinos' Act of 1995," corporate officers, directors and partners of a recruitment agency
may themselves be jointly and solidarily liable with the recruitment agency for money claims and
damages awarded to overseas workers.
In the present petition, ATCI maintains that they should not be held liable because the employment
contract specifically stipulates that the employment shall be governed by the Civil Service Law
and Regulations of Kuwait. They thus conclude that it was patent error for the labor tribunals and
the appellate court to apply the Labor Code provisions governing probationary employment in
deciding the present case. Moreover, given that the foreign principal is a government agency
which is immune from suit, ATCI, being a mere agent, cannot likewise be held liable.
Held:
Local recruitment agency solidarily liable with foreign principal for money claims of OFWs
1. ATCI, as a private recruitment agency, cannot evade responsibility for the money claims of
Overseas Filipino workers (OFWs) which it deploys abroad by the mere expediency of claiming
that its foreign principal is a government agency clothed with immunity from suit, or that such
foreign principal's liability must first be established before it, as agent, can be held jointly and
solidarily liable.
2. In providing for the joint and solidary liability of private recruitment agencies with their foreign
principals, Republic Act No. 8042 precisely affords the OFWs with a recourse and assures them
of immediate and sufficient payment of what is due them. To allow petitioners to simply invoke the
immunity from suit of its foreign principal or to wait for the judicial determination of the foreign
principal's liability before petitioner can be held liable renders the law on joint and solidary liability
inutile.
Obligations of local agent and foreign principal do not terminate even after the expiration of their
agreement, but continue for the full period of the employment contract of the worker recruited
3. 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. Otherwise, this will render nugatory the very purpose for which
the law governing the employment of workers for foreign jobs abroad was enacted. (see Skippers
United Pacific v. Maguad)
Processual presumption
4. The contention that Philippine labor laws on probationary employment are not applicable since
it was expressly provided in respondent's employment contract, which she voluntarily entered into,
that the terms of her engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations, has not been substantiated.
5. The party invoking the application of a foreign law has the burden of proving the law. The
foreign law is treated as a question of fact to be properly pleaded and proved as the judge or labor
arbiter cannot take judicial notice of a foreign law. He is presumed to know only domestic or forum
law.
6. Under the International Law doctrine of presumed-identity approach or processual
presumption, 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, the Philippine courts will apply Philippine labor laws
in determining the issues presented before it.
Proof of foreign law
7. To prove a foreign law, the party invoking it must present a copy thereof and comply with
Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. The record of public documents referred to in paragraph (a) of
Section 19, when admissible for any purpose, may be evidenced by an official publication thereof
or by a copy attested by the officer having the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the certificate may be made
by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent
or by any officer in the foreign service of the Philippines stationed in the foreign country in which
the record is kept, and authenticated by the seal of his office.
SEC. 25. What attestation of copy must state. - Whenever a copy of a document or record is
attested for the purpose of the evidence, the attestation must state, in substance, that the copy is
a correct copy of the original, or a specific part thereof, as the case may be. The attestation must
be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.
8. To prove the Kuwaiti law, petitioners submitted the following: MOA between respondent and
the Ministry, as represented by ATCI, which provides that the employee is subject to a
probationary period of one (1) year and that the host country's Civil Service Laws and Regulations
apply; a translated copy (Arabic to English) of the termination letter to respondent stating that she
did not pass the probation terms, without specifying the grounds therefor, and a translated copy
of the certificate of termination, both of which documents were certified by Mr. Mustapha Alawi,
Head of the Department of Foreign Affairs-Office of Consular Affairs Inslamic Certification and
Translation Unit; and respondent's letter of reconsideration to the Ministry, wherein she noted that
in her first eight (8) months of employment, she was given a rating of "Excellent" albeit it changed
due to changes in her shift of work schedule.
9. These documents, whether taken singly or as a whole, do not sufficiently prove that respondent
was validly terminated as a probationary employee under Kuwaiti civil service laws. Instead of
submitting a copy of the pertinent Kuwaiti labor laws duly authenticated and translated by Embassy
officials thereat, as required under the Rules, what petitioners submitted were mere certifications
attesting only to the correctness of the translations of the MOA and the termination letter which
does not prove at all that Kuwaiti civil service laws differ from Philippine laws and that under such
Kuwaiti laws, respondent was validly terminated.
Joint and solidary liability as a corporate officer
10. Ikdal is likewise joint and solidary liable as a corporate officer under Section 10, R.A. 8042 on
money claims:
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 the 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 and underscoring supplied)
Serrano v. Gallant Maritime Services, Inc. (2009)
G.R. No. 167614 | 2009-03-24
Subject: The power of judicial review; The non-impairment clause is aligned with the general
principle that laws newly enacted have only a prospective operation; All private contracts must
yield to the police power of the State; Section 10 par 5 of R.A. No. 8042 is unconstitutional for it
violates the rights of OFWs to equal protection; No compelling state interest for the enforcement
of the subject clause; Salary is understood as the basic wage, exclusive of overtime, leave pay
and other bonuses
Facts:
Antonio Serrano was hired by Gallant Maritime Services and Marlow Navigation. But on the date
of his departure, Serrano was constrained to accept a downgraded employment contract for the
position of Second Officer, upon the assurance and representation of Gallant and Marlow that he
would be made Chief Officer.
Gallant and Marlow did not deliver on their promise. Hence, Serrano refused to stay on as Second
Officer and was repatriated to the Philippines.
Serrano’s employment contract was for a period of 12 months but at the time of his repatriation,
he had served only two months and seven days of his contract, leaving an unexpired portion of
nine months and twenty-three days. He filed with the Labor Arbiter a complaint for constructive
dismissal and for payment of salary for the whole unexpired portion of his contract.
The Labor Arbiter found that Serrano was illegally dismissed and awarded him a lump-sum
representing his salary for three months of the unexpired portion of his contract of employment.
Serrano appealed to the NLRC to question the constitutionality of the last paragraph of Section
10, R.A. No. 8042. Serrano claimed that the last clause of the law limited the OFWs entitlement in
case of illegal dismissal to their lump-sum salary either for the unexpired portion of their
employment contract “or for three months for every year of the unexpired term, whichever is less.”
He argued that it impairs the OFWs constitutional rights to negotiate in terms of their contract,
deprives them of equal protection and denies them due process.
The NLRC affirmed the decision but corrected the computation of the salary. The Court of Appeals
affirmed the NLRC ruling but did not rule on the constitutional issue raised by Serrano.
Held: The power of judicial review
1. For the Supreme Court to exercise its power of judicial review of the acts of its co-equals, such
as the Congress, the conditions must be obtained:
(1) that there is an actual case or controversy involving a conflict of rights susceptible of judicial
determination
(2) that the constitutional question is raised by a proper party ;
(3) the constitutional question is raised at the earliest opportunity; and
(3) that the constitutional question is the very lis mota of the case.
2. In the instant case, all the conditions are present. First, there exists an actual controversy
directly involving Serrano who is personally aggrieved that the labor tribunals and the CA
computed his monetary award based on the salary period of three months only as provided under
the subject clause. Second, the constitutional challenge is also timely. The requirement that a
constitutional issue be raised at the earliest opportunity entails the interposition of the issue in the
pleadings before a competent court. In this case, the issue is deemed seasonably raised at the
Court of Appeals which has the competence to resolve the constitutional issue. And third, the
monetary claim of Serrano to his lump-sum salary for the entire unexpired portion of his 12-month
employment contract strikes at the very core of the subject clause which is the constitutional issue.
The non-impairment clause is aligned with the general principle that laws newly enacted have only
a prospective operation
3. The non-impairment clause under Section 10, Article II is aligned with the general principle that
laws newly enacted have only a prospective operation and cannot affect acts or contracts already
perfected.
4. In this case, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment
contract between Serrano and Gallant Maritime in 1998. Hence, R.A. No. 8042, particularly the
subject clause, does not impair the employment contract of the parties. Rather, when the parties
executed their 1998 employment contract, they were deemed to have incorporated into it all the
provisions of R.A. No. 8042.
All private contracts must yield to the police power of the State
5. The law was enacted in the exercise of the police power of the State to regulate a business,
profession or calling, particularly the recruitment and deployment of OFWs, 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 general welfare of the people are
generally applicable not only to future contracts but even to those already in existence. All private
contracts must yield to the superior and legitimate measures taken by the State to promote public
welfare.
5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for it violates the rights of OFWs
to equal protection
6. Section 18, Article II and Section 3, Article XIII of the Constitution accord all members of the
labor sector, without distinction as to place of deployment, full protection of their rights and welfare.
But these rights are not absolute but subject to the inherent power of Congress to incorporate a
system of classification into its legislation. However, 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.
7. There are three levels of scrutiny at which the Court reviews the constitutionality of a
classification embodied in a law:
a) the deferential or rational basis scrutiny in which the challenged classification needs only be
shown to be rationally related to serving a legitimate state interest;
b) the middle-tier or intermediate scrutiny in which the government must show that the challenged
classification serves an important state interest and that the classification is at least substantially
related to serving that interest; and
c) strict judicial scrutiny in which a legislative classification which impermissibly interferes with the
exercise of a fundamental right or operates to the peculiar disadvantage of a suspect class[ is
presumed unconstitutional, and the burden is upon the government to prove that the classification
is necessary to achieve a compelling state interest and that it is the least restrictive means to
protect such interest.
8. In the instant case, upon employing the standard of strict judicial scrutiny, the subject clause in
R.A. 8042 classifies OFWs into two categories. The first category includes OFWs with fixed-period
employment contracts of less than one year and 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 and in case of illegal dismissal,
they are entitled to monetary award equivalent to only 3 months of the unexpired portion of their
contracts.
9. The disparity in the treatment of these two groups becomes more aggravating because 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. This uniform system was applicable even
to local workers with fixed-term employment.
10. 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.
No compelling state interest for the enforcement of the subject clause

11. In the present case, there is no compelling state interest that the subject clause may possibly
serve. The rationale of the subject clause in the transcripts of the “Bicameral Conference
Committee Meetings on the Magna Carta on OCWs” has no discernible state interest that is sought
to be protected or advanced by the adoption of the subject clause.
11. The argument by the OSG that the purpose of the subject clause is to protect the employment
of OFWs by mitigating the solidary liability of placement agencies must be rejected. There can
never be a justification for any form of government action that alleviates the burden of one sector,
but imposes the same burden on another sector, especially when the favored sector is composed
of private businesses such as placement agencies, while the disadvantaged sector is composed
of OFWs whose protection no less than the Constitution commands. Resort to these administrative
measures is undoubtedly the less restrictive means of aiding local placement agencies in enforcing
the solidary liability of their foreign principals.
12. 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. Hence, Serrano is entitled to his salaries for the entire
unexpired period of nine months and 23 days of his employment contract.
Salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses
13. The word salaries in Section 10 (5) do not include overtime and leave pay. For seafarers,
DOLE Department Order No. 33 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. Hence, there is no basis for the automatic inclusion of overtime and holiday pay in the
computation of petitioner's monetary award unless there is evidence that he performed work
during those periods.
Yap v. Thenamaris, GR 179532
Facts:
Yap was employed as electrician of the vessel, M/T SEASCOUT... by Intermare Maritime
Agencies, Inc. in behalf of its principal, Vulture Shipping Limited. The contract of employment...
was for a duration of 12 months
Yap boarded M/T SEASCOUT and commenced his job as electrician. However... the vessel was
sold.
Yap, along with the other crewmembers, was informed... that the same was sold and will be
scrapped.
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's employment contract was validly terminated due to the sale of the vessel and no
arrangement was made for Yap's transfer to Thenamaris' other vessels.
Thus,... Yap... filed a complaint for Illegal Dismissal with Damages... before the Labor Arbiter (LA).
laimed that he was entitled to the salaries corresponding to the unexpired portion of his contract.
LA rendered a decision... in favor of petitioner... respondents sought recourse from the NLRC.
In its decision
, the NLRC affirmed the LA's findings
Respondents filed a Motion for Partial Reconsideration... the NLRC reversed its earlier
Decision, holding that "there can be no choice to grant only three (3) months salary for every year
of the unexpired term because there is no full year of unexpired term which this can be applied."
Hence -
CA affirmed the findings and ruling of the LA and the NLRC... petitioner posits that, assuming
said... provision of law is constitutional, the CA gravely abused its discretion when it reduced
petitioner's backwages from nine months to three months as his nine-month unexpired term
cannot accommodate the lesser relief of three months for every year of the unexpired term.[24]
Issues: 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
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.
Ruling:
the 5th paragraph of Section 10, R.A. No. 8042, is violative of Section 1,... Article III and Section
3,... Article XIII of the
Constitution to the extent that it gives an erring employer the option to pay an illegally dismissed
migrant worker only three months for every year of the unexpired term of his contract; that said
provision of law has long been a source of abuse by callous employers against... migrant workers
; and that said provision violates the equal protection clause under the Constitution because, while
illegally dismissed local workers are guaranteed under the Labor Code of reinstatement with full
backwages computed from the time compensation was withheld from... them up to their actual
reinstatement, migrant workers, by virtue of Section 10 of R.A. No. 8042, have to waive nine
months of their collectible backwages every time they have a year of unexpired term of contract
to reckon with.
The petition is impressed with merit
Veril... y, we have already declared in Serrano that the clause "or for three months for every year
of the unexpired term, whichever is less" provided in the 5th paragraph of Section 10 of R.A. No.
8042 is unconstitutional for being violative of... the rights of Overseas Filipino Workers (OFWs) to
equal protection of the laws. In an exhaustive discussion of the intricacies and ramifications of the
said clause, this Court, in Serrano, pertinently held:
The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of... one year or more in
their contracts, but none on the claims of other OFWs or local workers with fixed-term employment.
The subject clause singles out one classification of OFWs and burdens it with a peculiar
disadvantage.
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 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 doctrine is applicable when a declaration of unconstitutionality will impose an undue burden
on those who have relied on the invalid law.
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 OFW's
security of tenure which an employment contract embodies and actually profit from such violation
based on an unconstitutional... provision of law.
WHEREFORE, the Petition is GRANTED.
Sameer Overseas Placement Agency, Inc. v. Joyy C. Cabiles, GR 170139
Subject: Management prerogative to impose productivity and quality standards at work is balanced
with the employee's right to security of tenure; With respect to the rights of overseas Filipino
workers (OFWs), the principle of lex loci contractus governs; Overseas Filipino workers (OFWs)
may only be terminated for a just or authorized cause and after compliance with procedural due
process requirements; Just causes for termination; Inefficiency as a ground for termination,
requisites; Joy's dismissal was illegal for being without just cause and for failure to comply with
procedural due process; Illegally dismissed OFW, monetary claims; Entitlement to salaries for
unexpired portion of employment contract; Entitlement to refund of repatriation costs; Entitlement
to attorney's fees; Reinstated clause in RA 10022 is unconstitutional (for being violative of the
equal protection and due process clause); Legal interest applicable; Reimbursement of placement
fee — 12% interest per annum; Reimbursement of salary for the unexpired portion of the
employment contract — 6% interest per annum; Solidary liability of the foreign principal and the
employment agency
Facts:
Joy C. Cabiles applied for a quality control job in Taiwan with petitioner Sameer Overseas
Placement Agency, Inc., a recruitment and placement agency.
Joy was later asked to sign a one-year employment contract for a monthly salary of
NT$15,360.00.8 She alleged that petitioner 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. While her
employment contract stated that would work as quality control, in Taiwan, she was asked to work
as a cutter
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
Upon her return, Joy filed a complaint with the National Labor Relations Commission (NLRC)
against petitioner and Wacoal. She claimed that she was illegally dismissed and 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 exemplary damages.
Petitioner Sameer Agency alleged that Joy's termination was due to her inefficiency, negligence
in her duties, and her “failure to comply with the work requirements of her foreign employer.” The
agency also claimed that it did not ask for a placement fee of 70,000.00 and showed Official
Receipt No. 14860 bearing the amount of 20,360.00.23 Petitioner added that Wacoal's
accreditation with petitioner had already been transferred to the Pacific Manpower & Management
Services, Inc. as of August 6, 1997.24 Thus, petitioner asserts that it was already substituted by
Pacific Manpower.
The Labor Arbiter dismissed Joy’s complaint ruling that her complaint was based on mere
allegations.It also found no excess payment of placement fees.
The NLRC, however, declared that Joy was illegally dismissed. It found that Sameer Agency failed
to prove that there were just causes for termination. Furthermore, procedural due process was not
observed in terminating Joy. The NLRC awarded Joy only three months worth of salary in the
amount of NT$46,080, the reimbursement of the NT$3,000 withheld from her, and attorney’s fees
of NT$300.46
The Court of Appeals affirmed the decision of the NLRC but remanded the case to the NLRC to
address the validity of Sameer's allegations against Pacific.
Dissatisfied, Sameer Agency filed a petition with the Supreme Court.
Held:
Management prerogative to impose productivity and quality standards at work is balanced with
the employee's right to security of tenure
1. 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
2. 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.
With respect to the rights of overseas Filipino workers (OFWs), the principle of lex loci contractus
governs
3. 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.
4. The rule that lex loci contractus (the law of the place where the contract is made) governs in
this jurisdiction. There is no question that the contract of employment in this case was perfected
here in the Philippines. Therefore, the Labor Code, its implementing rules and regulations, and
other laws affecting labor apply in this case. (see Triple Eight Integrated Services, Inc. v. NLRC)
Overseas Filipino workers (OFWs) may only be terminated for a just or authorized cause and after
compliance with procedural due process requirements
5. Settled is the rule that the courts of the forum will not enforce any foreign claim obnoxious to
the forum’s public policy. Here in the Philippines, employment agreements are more than
contractual in nature. The Constitution itself, in Article XIII, Section 3, guarantees the special
protection of workers. This public policy should be borne in mind in this case because to allow
foreign employers to determine for and by themselves whether an overseas contract worker may
be dismissed on the ground of illness would encourage illegal or arbitrary pretermination of
employment contracts (see Triple Eight Integrated Services, Inc. v. NLRC)
6. 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.
Just causes for termination
7. Article 282 of the Labor Code enumerates the just causes of termination by the employer. Thus:
(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 representatives; and
(e) Other causes analogous to the foregoing.
Inefficiency as a ground for termination, requisites
8. Petitioner’s allegation that Joy was inefficient in her work and negligent in her duties may
constitute a just cause for termination under Article 282(b)
9. To show that dismissal resulting from inefficiency in work is valid, it must be shown that:
(a) the employer has set standards of conduct and workmanship against which the employee will
be judged;
(b) the standards of conduct and workmanship must have been communicated to the employee;
and
(c) the communication was made at a reasonable time prior to the employee’s performance
assessment.
10. This is similar to the law and jurisprudence on probationary employees, which allow
termination of the employee only when there is “just cause or when [the probationary employee]
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 [or her] engagement.” However, we do not see
why the application of that ruling should be limited to probationary employment. That rule is basic
to the idea of security of tenure and due process, which are guaranteed to all employees, whether
their employment is probationary or regular.
11. The pre-determined standards that the employer sets are the bases for determining the
probationary employee’s fitness, propriety, efficiency, and qualifications as a regular employee.
Due process requires that the probationary employee be informed of such standards at the time
of his or her engagement so he or she can adjust his or her character or workmanship accordingly.
12. Assessing an employee’s work performance does not stop after regularization. The employer,
on a regular basis, determines if an employee is still qualified and efficient, based on work
standards. Based on that determination, and after complying with the due process requirements
of notice and hearing, the employer may exercise its management prerogative of terminating the
employee found unqualified. The regular employee must constantly attempt to prove to his or her
employer that he or she meets all the standards for employment. This time, however, the
standards to be met are set for the purpose of retaining employment or promotion.
Joy's dismissal was illegal
(a) Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s
dismissal
13. The burden of proving that there is just cause for termination is on the employer. The employer
must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.
Failure to show that there was valid or just cause for termination would necessarily mean that the
dismissal was illegal.
14. In this case, petitioner merely alleged that Joy failed to comply with her foreign employer’s
work requirements and was inefficient in her work. No evidence was shown to support such
allegations. Petitioner did not even bother to specify what requirements were not met, what
efficiency standards were violated, or what particular acts of respondent constituted inefficiency.
15. There was also no showing that Joy was sufficiently informed of the standards against which
her work efficiency and performance were judged. The parties’ conflict as to the position held by
Joy showed that even the matter as basic as the job title was not clear.
(b) The employer, Wacoal, failed to accord her due process of law
16. The employer is required to give the charged employee at least two written notices before
termination. One of the written notices must inform the employee of the particular acts that may
cause his or her dismissal. The other notice must “inform the employee of the employer’s
decision.” Aside from the notice requirement, the employee must also be given “an opportunity to
be heard.”
17. Petitioner failed to comply with the twin notices and hearing requirements. Joy started working
on June 26, 1997. She was told that she was terminated on July 14, 1997 effective on the same
day and barely a month from her first workday. She was also repatriated on the same day that she
was informed of her termination. The abruptness of the termination negated any finding that she
was properly notified and given the opportunity to be heard. Her constitutional right to due process
of law was violated.
Illegally dismissed OFW, monetary claims
18. Joy Cabiles, having been illegally dismissed, is entitled to her salary for the unexpired portion
of the employment contract together with attorney’s fees and reimbursement of the amounts
withheld from her salary.
(a) Entitlement to salaries for unexpired portion of employment contract
19. The Court of Appeals affirmed the NLRC’s decision to award Joy NT$46,080.00 or the three-
month equivalent of her salary. The award should be increased to the amount equivalent to the
unexpired term of the employment contract.
20. Section 10 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995, states that overseas workers who were terminated without just, valid, or
authorized cause “shall be entitled to the full reimbursement of his placement fee with interest of
twelve (12%) per annum, plus his salaries for the unexpired portion of his employment contract or
for three (3) months for every year of the unexpired term, whichever is less.”
21. In Serrano vs. Gallant Maritime Services, Inc. (2009), the court ruled that the clause “or for
three (3) months for every year of the unexpired term, whichever is less” is unconstitutional for
violating the equal protection clause and substantive due process.
22. Notably, the clause “or for three (3) months for every year of the unexpired term, whichever
is less” was reinstated in Republic Act No. 8042 upon promulgation of Republic Act No. 10022 in
2010.
23. Republic Act No. 10022 was promulgated on March 8, 2010. This means that the
reinstatement of the clause in Republic Act No. 8042 was not yet in effect at the time of respondent
Joy’s termination from work in 1997. Republic Act No. 8042 before it was amended by Republic
Act No. 10022 governs this case.
(b) Entitlement to refund of repatriation costs
24. Section 15 of Republic Act No. 8042 states that “repatriation of the worker and the transport
of his [or her] personal belongings shall be the primary responsibility of the agency which recruited
or deployed the worker overseas.” The exception is when “termination of employment is due solely
to the fault of the worker,” which as we have established, is not the case
(c) Entitlement to attorney's fees
25. The Labor Code also entitles the employee to 10% of the amount of withheld wages as
attorney’s fees when the withholding is unlawful.
Reinstated clause in RA 10022 is unconstitutional (for being violative of the equal protection and
due process clause)
26. When a law or a provision of law is null because it is inconsistent with the Constitution, the
nullity cannot be cured by reincorporation or reenactment of the same or a similar law or provision.
A law or provision of law that was already declared unconstitutional remains as such unless
circumstances have so changed as to warrant a reverse conclusion.
27. We are not convinced that the situation has so changed so as to cause us to reverse binding
precedent. The new law puts our overseas workers in the same vulnerable position as they were
prior to Serrano.
28. We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that should be
recovered by an illegally dismissed overseas worker to three months is both a violation of due
process and the equal protection clauses of the Constitution.
29. The reinstated clause does not satisfy the requirement of reasonable classification. A
reasonable classification “(1) must rest on substantial distinctions; (2) must be germane to the
purposes of the law; (3) must not be limited to existing conditions only; and (4) must apply equally
to all members of the same class.”
30. The classifications made by the reinstated clause distinguished between fixed-period
overseas workers and fixed period local workers. It also distinguished between overseas workers
with employment contracts of less than one year and overseas workers with employment contracts
of at least one year. Within the class of overseas workers with at least one-year employment
contracts, there was a distinction between those with at least a year left in their contracts and
those with less than a year left in their contracts when they were illegally dismissed.
31. We noted in Serrano that before the passage of Republic Act No. 8042, the money claims of
illegally terminated overseas and local workers with fixed-term employment were computed in the
same manner. Their money claims were computed based on the “unexpired portions of their
contracts.”The adoption of the reinstated clause in Republic Act No. 8042 subjected the money
claims of illegally dismissed overseas workers with an unexpired term of at least a year to a cap
of three months worth of their salary.There was no such limitation on the money claims of illegally
terminated local workers with fixed-term employment.
32. Moreover, illegally dismissed overseas workers whose employment contracts had a term of
less than one year were granted the amount equivalent to the unexpired portion of their
employment contracts. Meanwhile, illegally dismissed overseas workers with employment terms
of at least a year were granted a cap equivalent to three months of their salary for the unexpired
portions of their contracts.
33. These classifications do not rest on any real or substantial distinctions that would justify
different treatments in terms of the computation of money claims resulting from illegal termination.
The rights violated when a fixed-period local worker is illegally terminated are neither greater than
nor less than the rights violated when a fixed-period overseas worker is illegally terminated. It is
state policy to protect the rights of workers without qualification as to the place of employment
34. The reinstated clause also violates due process rights. It is arbitrary as it deprives overseas
workers of their monetary claims without any discernable valid purpose.
Legal interest applicable
(a) Reimbursement of placement fee — 12% interest per annum
35. The Bangko Sentral ng Pilipinas Circular No. 799 of June 21, 2013 revised the interest rate
for loan or forbearance from 12% to 6% per annum in the absence of stipulation.
36. BSP Circular No. 799 is applicable only in loans and forbearance of money, goods, or credits,
and in judgments when there is no stipulation on the applicable interest rate. Further, it is only
applicable if the judgment did not become final and executory before July 1, 2013.
37. BSP Circular No. 799 is not applicable when there is a law that states otherwise. While the
Bangko Sentral ng Pilipinas has the power to set or limit interest rates, these interest rates do not
apply when the law provides that a different interest rate shall be applied. A Central Bank Circular
cannot repeal a law. Only a law can repeal another law.”
38. Section 10 of Republic Act No. 8042 provides that unlawfully terminated overseas workers
are entitled to the reimbursement of his or her placement fee with an interest of 12% per annum.
Since Bangko Sentral ng Pilipinas circulars cannot repeal Republic Act No. 8042, the issuance of
Circular No. 799 does not have the effect of changing the interest on awards for reimbursement
of placement fees from 12% to 6%. This is despite Section 1 of Circular No. 799, which provides
that the 6% interest rate applies even to judgments.
39. Moreover, laws are deemed incorporated in contracts. The contracting parties need not repeat
them. They do not even have to be referred to. Every contract, thus, contains not only what has
been explicitly stipulated, but the statutory provisions that have any bearing on the matter. There
is, therefore, an implied stipulation in contracts between the placement agency and the overseas
worker that in case the overseas worker is adjudged as entitled to reimbursement of his or her
placement fees, the amount shall be subject to a 12% interest per annum. This implied stipulation
has the effect of removing awards for reimbursement of placement fees from Circular No. 799’s
coverage.
(b) Reimbursement of salary for the unexpired portion of the employment contract — 6% interest
per annum
40. The same cannot be said for awards of salary for the unexpired portion of the employment
contract under Republic Act No. 8042. These awards are covered by Circular No. 799 because
the law does not provide for a specific interest rate that should apply.
41. In sum, if judgment did not become final and executory before July 1, 2013 and there was no
stipulation in the contract providing for a different interest rate, other money claims under Section
10 of Republic Act No. 8042 shall be subject to the 6% interest per annum in accordance with
Circular No. 799.
42. This means that respondent Joy is also entitled to an interest of 6% per annum on her money
claims from the finality of this judgment.
Solidary liability of the foreign principal and the employment agency
43. Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the foreign
employer and the local employment agency are jointly and severally liable for money claims
including claims arising out of an employer-employee relationship and/or damages. This section
also provides that the performance bond filed by the local agency shall be answerable for such
money claims or damages if they were awarded to the employee.
44. In overseas employment, the filing of money claims against the foreign employer is attended
by practical and legal complications. The distance of the foreign employer alone makes it difficult
for an overseas worker to reach it and make it liable for violations of the Labor Code. There are
also possible conflict of laws, jurisdictional issues, and procedural rules that may be raised to
frustrate an overseas worker’s attempt to advance his or her claims. The provision on joint and
several liability in the Migrant Workers and Overseas Filipinos Act of 1995 assures overseas
workers that their rights will not be frustrated with these complications.
employee by the Board of Special Inquiry of the Commission on Immigration and Deportation.
GMC requested that Cone’s employment permit be changed to a full-fledged coach, which was
contested by The Basketball Coaches Association of the Philippines. Alleging that GMC failed to
show that there is no competent person in the Philippines to do the coaching job. Secretary of
Labor cancelled Cone’s employment permit.
ISSUE:
Whether or not the Secretary of Labor act with grave abuse of discretion in revoking Cone’s Alien
Employment Permit?
HELD:
The Secretary of Labor did not act with grave abuse of discretion in revoking Cone’s Alien
Employment Permit. GMC’s claim that hiring of a foreign coach is an employer’s prerogative has
no legal basis. Under Section 40 of the Labor Code, an employer seeking employment of an alien
must first obtain an employment permit from the Department of labor. GMC’s right to choose whom
to employ is limited by the statutory requirement of an employment permit.
The Labor Code empowers the Labor Secretary to determine as to the availability of the
services of a “person in the Philippines who is competent, able and willing at the time of the
application to perform the services for which an alien is desired.”
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45. The fundamental effect of joint and several liability is that “each of the debtors is liable for the
entire obligation.” A final determination may, therefore, be achieved even if only one of the joint
and several debtors are impleaded in an action. Hence, in the case of overseas employment,
either the local agency or the foreign employer may be sued for all claims arising from the foreign
employer’s labor law violations. This way, the overseas workers are assured that someone — the
foreign employer’s local agent — may be made to answer for violations that the foreign employer
may have committed. By providing that the liability of the foreign employer may be “enforced to
the full extent” against the local agent, the overseas worker is assured of immediate and sufficient
payment of what is due them.

46. Corollary to the assurance of immediate recourse in law, the provision on joint and several
liability in the Migrant Workers and Overseas Filipinos Act of 1995 shifts the burden of going after
the foreign employer from the overseas worker to the local employment agency. However, it must
be emphasized that the local agency that is held to answer for the overseas worker’s money claims
is not left without remedy. The law does not preclude it from going after the foreign employer for
reimbursement of whatever payment it has made to the employee to answer for the money claims
against the foreign employer.

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III. Employment of Non-resident Aliens

D. Prohibition against transfer of employment (Art 41 LC)
1. General Milling Corp. v. Torres, GR 9366

General Milling Corporation vs. Torres

G.R No. 9366, April 22, 1991

FACTS:
Earl Timothy Cone is a US citizen, who was hired by General Milling as a sports consultant and
assistant coach. He possessed an alien employment permit which was changed to pre-arranged