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Labor Law

Doctrines/ Principles Definitions


Doctrine of “Strained Relations In a plethora of cases, the Supreme Court
has been consistent in its holding that the
existence of strained relations between
the employer and the illegally dismissed
employee may effectively bar
reinstatement of the latter. (Cabatulan vs.
Buat, G. R. No. 147142, Feb. 14, 2005).
No strained relations should arise from a
valid and legal act of asserting one’s right;
otherwise, an employee who asserts his
right could be easily separated from the
service by merely paying his separation
pay on the pretext that his relationship
with his employer had already become
strained.
This doctrine should not be used so
indiscriminately as to bar the
reinstatement of illegally dismissed
workers, especially when they themselves
have not indicated any aversion to
returning to work. It is only normal to
expect a certain degree of antipathy and
hostility to arise from a litigation between
parties, but not in every instance does
such an atmosphere of antagonism exist as
to adversely affect the efficiency and
productivity of the employee concerned.
Agabon doctrine it was held that if a probationary
employee was dismissed for just cause but
without affording him the required notice,
the doctrinal ruling in the leading case of
Agabon vs. NLRC
Doctrine of loss of trust and confidence With respect to rank-and-file personnel,
loss of trust and confidence as ground for
valid dismissal requires proof of
involvement in the alleged events in
question, and that mere uncorroborated
assertions and accusations by the
employer will not be sufficient. But as
regards a managerial employee, the mere
existence of a basis for believing that such
employee has breached the trust of his
employer would suffice for his dismissal.
Hence, in the case of managerial
employees, proof beyond reasonable doubt
is not required, it being sufficient that
there is some basis for such loss of
confidence, such as when the employer has
reasonable ground to believe that the
employee concerned is responsible for the
purported misconduct, and the nature of
his participation therein renders him
unworthy of the trust and confidence
demanded by his position.
While generally, the doctrine of loss of
trust and confidence may only be invoked
against managerial employees, there are
instances when the doctrine may also be
successfully invoked against rank-and-file
employees who, by reason of the nature of
their positions, are reposed with trust and
confidence.

For example, as held in Coca-Cola Bottlers


Philippines, Inc. vs. NLRC, [172 SCRA 751
(1989)], route salesmen are rank-and-file
employees but they are highly
individualistic personnel who roam around
selling products, deal with customers and
are entrusted with large assets and funds
and property of the employer. There is a
high degree of trust and confidence
reposed on them, and when such
confidence is breached, the employer may
take proper disciplinary action on them.

DOCTRINES of Cases DESCRIPTIONS

Labadan vs. Forest Hills While in cases of illegal dismissal, the employer
bears the burden of proving that the dismissal is
Academy for a valid or authorized cause, the employee must
first establish by substantial evidence the fact of
dismissal.—While in cases of illegal dismissal, the
employer bears the burden of proving that the
dismissal is for a valid or authorized cause, the
employee must first establish by substantial
evidence the fact of dismissal.

The provision that a worker is entitled to twice his


regular rate if he is required to work on a holiday
implies that the provision entitling a worker to his
regular rate on holidays applies even if he does
not work

People vs. Panis Presumption that the individual or entity is


engaged in recruitment and placement whenever
two or more persons are involved; Number of
persons, not an essential ingredient of the act of
recruitment and placement of workers.—As we see
it, 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.

C.F. Sharp Crew Management, The conduct of preparatory interviews is a


recruitment activity.—Article 13(b) of the Labor
Inc. vs. Espanol, Jr., 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.

C.F. Sharp Crew Management, It is the lack of the necessary license or authority,
not the fact of payment, that renders the
Inc. vs. Espanol, Jr., recruitment activity of LCL unlawful.

The essence of due process lies in the reasonable


opportunity afforded a party to be heard and to
submit any evidence in support of its defense;
What is vital is not the opportunity to cross-
examine an adverse witness, but an opportunity to
be heard

Judicial review of labor cases does not go beyond


the evaluation of the sufficiency of the evidence
upon which the labor officials’ findings rest.

Santiago vs. CF Sharp Crew A distinction must be made between the perfection
of the employment contract and the
Management, Inc. commencement of the employer-employee
relationship. The perfection of the contract, which
in this case coincided with the date of execution
thereof, occurred when petitioner and respondent
agreed on the object and the cause, as well as the
rest of the terms and conditions therein. The
commencement of the employer employee
relationship, as earlier discussed, would have
taken place had petitioner been actually deployed
from the point of hire.

Neither the manning agent nor the employer can


simply prevent a seafarer from being deployed
without a valid reason; Respondent unilaterally
and unreasonably reneged on its obligation to
deploy petitioner and must therefore answer for
the actual damages he suffered.

The fact that the Philippine Overseas Employment


Administration (POEA) Rules are silent as to the
payment of damages to the affected seafarer does
not mean that the seafarer is precluded from
claiming the same

Seafarers are considered contractual employees


and cannot be considered as regular employees
under the Labor Code.

Ambraque International Dismissal of worker that he allegedly exhibited


disagreeable conduct when he was abroad, is a
Placement & Services vs. NLRC sweeping statement and without any elaboration
by the employer; Absence of details surrounding
the charge of disagreeable conduct of the worker
casts veracity on the charge

Interorient Maritime Even if the termination of the employment


contract is duly effected in a foreign country, still
Enterprises, Inc. vs. NLRC the responsibility of the foreign employer to see to
it that the worker is duly repatriated to the point
of hiring subsists

The foreign employer may not be obligated by its


contract to provide a companion for a returning
employee but it cannot deny that it is expressly
tasked by its agreement to assure the safe return
of said worker

De Jesus vs. National Labor The rule is that an ailment contracted by a worker
even prior to his employment, does not detract
Relations Commission from the compensability of the disease.

A worker’s misrepresentation cannot be made the


basis by his employer for the denial of his claims
under the contract where he passed the required
pre-medical examination and was declared fit to
work.

Settled is the rule that in termination cases, the


burden of proof rests upon the employer to show
that the dismissal is for a just and valid cause. The
case of the employer must stand or fall on its own
merits and not on the weakness of the employee’s
defense.

Seagull Shipmanagement and Under the contract, compensability of the illness


or death of seamen need not depend on whether
Transport, Inc. vs. NLRC the illness was work connected or not; It is
sufficient that the illness occurred during the term
of the employment contract.

It is not necessary, in order to recover


compensation, that the employee must have been
in perfect health at the time he contracted the
disease; If the disease is the proximate cause of
the employee’s death for which compensation is
sought, the previous physical condition of the
employee is unimportant, and recovery may be
had for said death, independently of any pre-
existing disease.

Prudential Shipping and The death of a seaman during the term of


employment makes the employer liable to his
Management Corporation vs. heirs for death compensation benefits, but if the
Sta. Rita seaman dies after the termination of his contract
of employment, his beneficiaries are not entitled
to the death benefits

Prieto vs. National Labor The factual findings of administrative bodies are
as a rule binding on this Court, but this is true
Relations Commission only when they do not come under the established
exceptions. One of these is where the findings of
the POEA and the NLRC are contrary to each other,
as in this case, and there is a necessity to
determine which of them should be preferred as
more conformable to the established facts.

JMM Promotion and A profession, trade or calling is a property right


within the meaning of our constitutional
Management, Inc. vs. Court of guarantees.—A profession, trade or calling is a
Appeals property right within the meaning of our
constitutional guarantees. One cannot be deprived
of the right to work and the right to make a living
because these rights are property rights, the
arbitrary and unwarranted deprivation of which
normally constitutes an actionable wrong.

Cadalin vs. POEA's Article 291 of the Labor Code applies to money
claims arising from employer-employee relations,
Administrator including those arising from application of foreign
laws providing for greater employee benefits.—
Section 7-a of the Eight-Hour Labor Law provides
the prescriptive period for filing “actions to
enforce any cause of action under said law.” On
the other hand, Article 291 of the Labor Code of
the Philippines provides the prescriptive period
for filing “money claims arising from employer-
employee relations.”

Nitto Enterprises vs. National Where the apprenticeship agreement has no force
and effect, the worker hired as apprentice should
Labor Relations Commission be considered as a regular employee

The twin requirements of due process, substantive


and procedural, must be complied with before
valid dismissal exists, otherwise the dismissal
becomes void.

Bisig Manggagawa sa Tryco vs. National Labor While the law is solicitous of the welfare of
employees, it must also protect the right of an
Relations Commission 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.

Management’s prerogative of transferring and


reassigning employees from one area of operation
to another in order to meet the requirements of
the business is, therefore, generally not
constitutive of constructive dismissal.

Bisig Manggagawa sa Tryco vs. National Labor Employer must show that the transfer is not
Relations Commission unreasonable, inconvenient, or prejudicial to the
employee, nor does it involve a demotion in rank
or a diminution of his salaries, privileges and
other benefits

Linton Commercial Co., Inc. vs. Hellera The validity of the reduction of working hours
upheld in Philippine Graphic Arts, Inc. vs. NLRC,
166 SCRA 118 (1988); The Bureau of Working
Conditions of the DOLE released a bulletin
providing for in determining when an employer
can validly reduce the regular number of working
days

Permitting reduction of work and pay at the


slightest indication of losses would be contrary to
the State’s policy to afford protection to labor and
provide full employment.

Management prerogative must be exercised in


good faith and with due regard to the rights of
labor.—Management has the prerogative to come
up with measures to ensure profitability or loss
minimization. However, such privilege is not
absolute. Management prerogative must be
exercised in good faith and with due regard to the
rights of labor.

Perpetual Help Credit Cooperative, Inc. vs. In determining the existence of an employer-
Faburada employee relationship, the following elements are
considered: (1) the selection and engagement of
the worker or the power to hire; (2) the power to
dismiss; (3) the payment of wages by whatever
means; and (4) the power to control the worker’s
conduct, with the latter assuming primacy in the
overall consideration. No particular form of proof
is required to prove the existence of an employer-
employee relationship. Any competent and
relevant evidence may show the relationship.

Three Kinds of Employees; Words and Phrases;


“Regular Employees, “Project Employees,” and
“Casual Employees,” Explained.—Necessarily, this
leads us to the issue of whether or not private
respondents are regular employees. Article 280 of
the Labor Code provides for three kinds of
employees: (1) regular employees or those who
have been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer; (2) project
employees or those whose employment has been
fixed for a specific project or undertaking, the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the
employment is for the duration of the season; and
(3) casual employees or those who are neither
regular nor project employees. The employees
who are deemed regular are: (a) those who have
been engaged to perform activities which are
usually necessary or desirable in the usual trade
or business of the employer; and (b) those casual
employees who have rendered at least one (1) year
of service, whether such service is continuous or
broken, with respect to the activity in which they
are employed.

One’s regularity of employment is not determined


by the number of hours one works but by the
nature and by the length of time one has been in
that particular job

Regular employees or workers are entitled to


security of tenure and their services may be
terminated only for a valid cause, with observance
of due process; The valid causes are categorized
into two groups—the just causes under Article 282
of the Labor Code and the authorized causes under
Articles 283 and 284.

Honda Phils., Inc. vs. Samahan ng Malayang Where the CBA is clear and unambiguous, it
Manggagawa sa Honda becomes the law between the parties and
compliance therewith is mandated by the express
policy of the law.—A collective bargaining
agreement refers to the negotiated contract
between a legitimate labor organization and the
employer concerning wages, hours of work and all
other terms and conditions of employment in a
bargaining unit.

Excluded from the computation of “basic salary”


payments for sick, vacation and maternity leaves,
night differentials, regular holiday pay and
premiums for work done on rest days and special
holidays.

13th month pay primarily given to alleviate the


plight of workers and to help them cope with the
exorbitant increases in the cost of living

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