CASE DIGESTS: LABOR RELATIONS 2008

1 DANDY V. QUIJANO, COMPLAINANT, VS. GEOBEL A. BARTOLABAC (LABOR

ARBITER, NLRC-NCR SOUTH), AND ALBERTO R. QUIMPO (COMMISSIONER,
NLRC-FIRST DIVISION), RESPONDENTS.

FACTS:
On 19 March 2002, complainant Dandy Quijano filed before this Court a verified
complaint written in Pilipino against herein respondents Atty. Geobel A. Bartolabac
(Bartolabac), Labor Arbiter of the National Labor Relations Commission (NLRC), and
Commissioner Alberto R. Quimpo (Quimpo) of the same Commission for violating
Canon 1 and Rule 1.01 of the Code of Professional Responsibility.
According to complainant, respondents violated his constitutional right to due process in
failing to execute the final and executory judgment of this Court in G.R. No. 126561
entitled Quijano v. Mercury Drug Corporation.
The antecedent facts are as follows:
Complainant was dismissed from service by the Mercury Drug Corporation
(corporation). He filed a complaint for illegal dismissal before the NLRC. Eventually, the
case was elevated to this Court. On 8 July 1998, the Court promulgated its Decision in
favor of herein complainant ordering, among others, his reinstatement. The
corporations motion for reconsideration was denied by this Court in its Resolution dated
5 July 1999.
Complainant relates that he filed with respondent Labor Arbiter Bartolabac a motion for
execution on 9 December 1998 but despite the final resolution of his case, Bartolabac
issued an order that in effect changed the tenor of the final judgment. While the decision
of this Court had mandated complainants reinstatement, Bartolabac instead awarded
back wages and separation pay.
Pursuant to the Resolution of this Court, Bartolabac issued an alias writ of execution on
18 February 2000. However, respondent Bartolabac allegedly again unilaterally issued
another order dated 5 April 2000, amending his previous order and assigning the
complainant to the position of self-service attendant of the corporation instead of his
original position of warehouseman. Subsequently, respondent Commissioner Quimpo
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overturned the above order of Bartolabac and directed the payment of separation pay
rather than reinstatement to a substantially similar position as ordered by this Court.

ISSUE:
Whether or not respondents are liable for their acts in deviating from the final and
executory judgment of this Court in G.R. No. 126561.
HELD:
The Court is unyielding in its adjudication that complainant must be reinstated to his
former position as warehouseman or to a substantially equivalent position.
Clearly, the Court is unwilling to accept the corporation and respondent labor arbiters
reason that reinstatement is no longer feasible because the position of warehouseman
had already been abolished and there is no substantially equivalent position in the
corporation.
Both respondents labor arbiter and commissioner do not have any latitude to depart
from the Courts ruling. The Decision in G.R. No. 126561 is final and executory and may
no longer be amended. It is incumbent upon respondents to order the execution of the
judgment and implement the same to the letter. Respondents have no discretion on this
matter, much less any authority to change the order of the Court. The acts of
respondent cannot be regarded as acceptable discretionary performance of their
functions as labor arbiter and commissioner of the NLRC, respectively, for they do not
have any discretion in executing a final decision. The implementation of the final and
executory decision is mandatory.
As held in Siy v. National Labor Relations Commission and Embang:
Once the case is decided with finality, the controversy is settled and the matter is laid to
rest. The prevailing party is entitled to enjoy the fruits of his victory while the other party
is obliged to respect the courts verdict and to comply with it. We reiterate our
pronouncement in Salicdan v. Court of Appeals:
Well-settled is the principle that a decision that has acquired finality becomes immutable
and unalterable and may no longer be modified in any respect even if the modification is
meant to correct erroneous conclusions of fact or law and whether it will be made by the
court that rendered it or by the highest court of the land.
Again, we are unceasing in emphasizing that the decision in the labor case has become
final and executory since 1999. There can be no justification for the overturning of the
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Courts reinstatement order by the NLRC First Division and full satisfaction of the
monetary award of only three (3) years after the finality of the judgment.
The Court is not wont to compel the corporation to instantly restore the position of
warehouseman if it has been already abolished. Indeed, the Court granted that
complainant could be reinstated to a substantially equivalent or similar position as a
viable alternative for the corporation to carry out.
WHEREFORE, premises considered, the Court finds respondents liable for violating
Canon 1 and Rule 1.01 of the Code of Professional Responsibility. Respondents Labor
Arbiter Geobel A. Bartolabac and Commissioner Alberto R. Quimpo are hereby
SUSPENDED from the practice of law for a period of THREE (3) months.

2. REYNALDO CANO CHUA, DOING BUSINESS UNDER THE NAME & STYLE
PRIME MOVER CONSTRUCTION DEVELOPMENT, VS COURT OF APPEALS,
SOCIAL SECURITY COMMISSION, SOCIAL SECURITY SYSTEM, ANDRES
PAGUIO, PABLO CANALE, RUEL PANGAN, AURELIO PAGUIO, ROLANDO
TRINIDAD, ROMEO TAPANG AND CARLOS MALIWAT
This is a petition for Motion for Reconsideration of the decision of the CA affirming the
order of the SSC which held that the private respondents were regular employees of the
petitioner ad ordered petitioner to pay SSS for its unpaid contributions, as well as
penalty for the delayed remittance.
Facts:
On August 20, 1985 private respondents Paguio, Canale, Pangan, Trinidad, Tapang
and Maliwat filed a petition with the SSC for SSS coverage and contributions against
Chua, owner of Prime Mover Construction Development, claiming that they were all
regular employees of the petitioner in his construction business.
They also alleged that they were dismissed without justifiable grounds and without
notice to them with the Ministry of Labor and Employment. They further alleged that
petitioner did not report them to the SSS for compulsory coverage in flagrant violation of
the Social Security Act.
Chua in his answer claimed that private respondents had no cause of action against him
and assuming that there was any, they were barred by prescription and laches. He also
claimed that private respondents were not regular employees but were project
employees whose work had been fixed for a specific project or undertaking which
completion is determined at the time of their engagement. He also concluded that the
said employees were not entitled to coverage under the SSA.
The SSS filed a petition in intervention and on February 1, 1995, the SSC issued its
Order which ruled in favor of private respondents, stating that the petitioner should pay
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the SSS and the unpaid SS/EC and contributions plus penalty for the delayed
remittance.
The SSC denied the Motion for Reconsideration filed by the petitioner for lack of merit.
The petitioner then filed a Motion for Review to the CA, claiming the same that the
private respondents are project employees whose period of employment are terminated
upon completion of the project and that no employer-employee relationship existed
between them. Thus, there no being employer-employee relationship, the private
respondents are not entitled to coverage under the SSA and that their length of service
did not change their status from project employees to regular employees. Petitioner also
questioned the failure to apply the rules on prescription of actions and of laches for filing
six to eight later after they were taken in by the petitioner.

The CA, citing Article 280 of the Labor Code declared that the private respondents were
all regular employees in relation to certain activities since they all worked either as
masons, carpenters and fine graders in the petioles various projects for at least one
year, and that their work was necessary desirable to petitioner's business which
involved the construction or roads and bridges. The CA rejected the claim of
prescription stating that the filing of private respondents claim was well within the twenty
year period provided by the SSA.
Petitioner then filed with the SC a Motion for Reconsideration.
Issue:
Whether or not the private respondents are regular employees and thus entitled to claim
for SSS.
Whether or not the private respondents claim to be covered by the SSS already
prescribed.

Held:
The SC affirmed the CA's decision and held that there is no dispute that private
respondents were employees of petitioner who became regular employees by their
being repeated re-hiring.
There is an employer-employee relationship existing between the parties having control
over the results of the work done by the private respondents as well as the means and
methods by which the same were accomplished. The private respondents are subject
are subject of the compulsory coverage under the SSS Law.
Their claim for the SSS coverage has not prescribed and not guilty of laches, their right
to claim would only prescribe after the period of 20 years.
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3.
KAPISANAN NG MGA MANGGAGAWA SA GOVERNMENT SERVICE
INSURANCE SYSTEM (KMG), PETITIONER, VS. COMMISSION ON AUDIT,
GUILLERMO N. CARAGUE, IN HIS CAPACITY AS CHAIRMAN, COMMISSION ON
AUDIT, RAUL C. FLORES , IN HIS CAPACITY AS COMMISSIONER,
COMMISSION ON AUDIT, AND THE RESIDENT AUDITOR OF THE
GOVERNMENT SERVICE INSURANCE SYSTEM, RESPONDENTS.
This is a petition for certiorari assailing the decision of the COA which affirmed the
disallowance of hazard pay benefits of the SIG personnel of GSIS.
Facts:
On January 25, 1993, the then Secretary of Health Juan M. Flavier informed Dr.
Orlando C. Misa, Vice-President and Medical Director of the GSIS--that the Medical
Services Group personnel were public health workers under RA 7305 (Magna Carta for
Public Health Workers).
On January 5, 1996, the then Secretary of Health Hilarion Ramiro, Jr. granted the
request for payment of hazard pay, subsistence and laundry allowance of five
departments of the GSIS: the Medical Service Group, the Medical Units of the branch
offices, the Employees Compensation Department and the Office of the Vice-PresidentSocial Insurance III. The GSIS BOT issued Resolution No. 52 granting them hazard
pay, subsistence and laundry allowance. Thereafter, the Sec. granted the remaining
units of the Social Insurance Group (SIG) for the entitlement to hazard pay.
On June 9, 1999, GSIS resident auditor issued a disallowance notice regarding
payment of hazard pay for the SIG personnel on the ground that they are not "healthrelated workers". On September 9, 1999 the resident auditor issued a notice of
disallowance for the payment of hazard pay from January 1999 to present.
Consequently, on October 29, 1999, GSIS Chief Legal Counsel requested
reconsideration of the latter notice of disallowance. The auditor maintained its position.
Petitioner KMG appealed the disallowance to the COA which affirmed the disallowance.
Its Motion for Reconsideration having been denied, the petitioner filed a petition for
certiorari before the SC.
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Issue:
Whether or not the SIG are entitled for hazard pay benefits.
Held:
The SC dismissed the petition for lack of merit and upheld the COA's decision and
resolution.
Under RA 7305 the term health workers mean--all persons who are engaged in health
and health-related work, and all persons employed in all hospitals, sanitaria, health
infirmaries, health centers, rural health units, barangay health stations, clinics and other
health-related establishments owned and operated by the Government or its political
subdivisions with original charters and shall include medical and, allied health
professionals, administrative and support personnel employed regardless of their
employment status.
The record reveals that the functions of the SIG personnel are not principally related to
health. The SIG personnel perform tasks for the processing of GSIS members' claims
for life insurance, retirement, disability and survivorship benefits. These functions are
not similar to those persons working in health-related establishments such as clinics or
medical departments of government corporations, medical corps and hospitals of the
AFP, and other specific health service units of government agencies. Undoubtedly, the
SIG personnel cannot be considered public health workers under RA 7305.
Even assuming that the SIG personnel may be considered public health workers, they
would still not be qualified to receive hazard pay benefits because the requirements for
the grant of hazard pay under RA 7305 are duly circumscribed which include
contaminated, strife-torn or isolated areas and the risks brought about their work
environment to their work are not so grave as to warrant their entitlement to such
benefit.

4. SIME DARBY EMPLOYEES ASSOCIATION, ET AL VS. NLRC

Facts:
On October 1995, Sime Darby Employees Association submitted its proposal to Sime
Darby Pilipinas, Inc. for the remaining two years of their existing CBA. The company
gave its counter-proposal but the parties failed to reach a mutual settlement. The
company declared in its letter to the union president a deadlock in negotiations. The
company sought intervention from the DOLE by filing a notice of CBA deadlock and
request for preventive mediation. The Union did not agreed on that thus objecting the
deadlock and filed its opposition to the Assumption of Jurisdiction/Certification to
Arbitration.
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The company filed a Notice of Lockout on June 21, 1995 on the ground of deadlock in
the collective bargaining negotiations and sent a Notice of Lockout Vote to the NCMB.
On the other hand, the union conducted its Strike Vote Referendum and filed its Strike
Vote Result Report to NCMB also on July 24, 1995. The company declared and
implemented a lockout against all the hourly employees of its tire factory on the ground
of sabotage and work slowdown. On September 1995, the union filed a complaint for
illegal lockout before the DOLE-NLRC.
The stockholders of the company approved the sale of the company's tire
manufacturing assets and business operation. They issued a Memorandum informing
all its employees of the plan to sell the tire manufacturing assets and operations. The
company filed with the DOLE a Closure and Sale of tire manufacturing operation. The
company individually served notices of termination to all the employees, including the
individual petitioners.
On account of the lockout, the employees were barred from entering the company
premises and were only allowed to enter to get their personal belongings and their
earned benefits. During that time the employees were to receive their separation pay
equivalent to 150% of the base rate for every year of credited service; they also signed
and executed individual quitclaims and releases. The company filed with the DOLE a
Notice of Termination of Employees covering all its employees in the tire manufacturing
and support operations effective December 15, 1995.
The company sold its tire manufacturing plant and facilities to Goodyear on April 24,
1996. Under a Memorandum of Agreement. They filed a Motion to Conduct Ocular
Inspection of the tire factory premises to establish that it was sold to Goodyear. The
motion was opposed by the union. The company then filed a motion for the return of the
separation pay received by the complainants, pending the resolution of the case.

The Labor Arbiter on August 25, 1998 issued an Order directing the parties to file their
respective memorandum. The union, without filing the memorandum ordered by the
Labor Arbiter, filed an Appeal Memorandum with a Petition for Injunction and/or
Temporary Restraining Order before the NLRC. The Labor Arbiter on October 29, 1998
rendered its decision in the consolidated cases, dismissing the same for lack of merit on
the petitioners complaints against the company for illegal lockout, illegal dismissal and
ULP.
The Labor Arbiter found the lockout valid and legal and justified by the incidents of
continued work slowdown, mass absences and consistent low production output, high
rate of waste and scrap tires and machine breakdown. The mass termination of all
employees was declared valid and authorized termination of employment due to closure
of establishment, the company having complied with the requirements in Article 283 of
the Labor Code.
The claim of ULP, the Labor Arbiter found no evidence to substantiate the same, and
that the record merely showed that the closure of and eventual cessation from business
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was justified by the circumstances in order to protect the company's investments and
assets. The Labor Arbiter ruled that the quitclaims and receipts signed by the petitioners
were voluntarily signed and that settlement was reached by the petitioners and the
company just and reasonable.
Petitioners appealed the Labor Arbiter's decision to the NLRC, but was dismissed for
lack of merit. The NLRC affirmed the Labor Arbiter's decision. The petitioner's Motion
for Reconsideration was also denied, prompting them to file a petition for certiorari with
the CA claiming grave abuse of the discretion on the part of the NLRC.
The CA denied the petition for lack of merit and affirmed the decision of the NLRC. The
court declared that the Labor Arbiter was not divested of its jurisdiction over the
consolidated cases when petitioners filed their appeal Memorandum Order which they
sought to appeal is interlocutory in nature. Thus the Labor Arbiter's decision has the
force and effect of a valid judgment. Petitioners sought reconsideration of the CA's
decision, but their motion was denied for lack of merit.
The petitioners, in their instant petition reiterate that they were dismissed right on the
day they were handed down their termination letters that as required by law they should
have been given a 30-day notice. They also contended that the Labor Arbiter lost
jurisdictional competence to issue its October 29, 1998, making said decision void. They
also alleged that the decisions of the CA and the NLRC lack evidentiary report.
Issue:
Whether or not the holding of formal hearing is discretionary with the Labor Arbiter.
Held:
The SC denied their petition. The finding of facts and conclusion of the NLRC are
generally accorded not only with great weight respect but even clothed with finality and
deemed binding on the court as long as they are supported with substantial evidence.
An interlocutory order is not appealable until the rendition of the judgment on the merits
for a contrary rule would delay the administration of justice and duly burden the courts.
It did not put an end to the issues of illegal lockout, ULP and illegal dismissal. Being
interlocutory in nature, said Order could not have been validly appealed such that it
would divest the Labor Arbiter of his jurisdiction over the consolidated cases. This being
the case the Labor Arbiter still had jurisdiction when it rendered its decision.

5. COMPUTER INNOVATIONS CENTER VS. NATIONAL LABOR RELATIONS

COMMISSION
FACTS:

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Private respondent Reynaldo Cario (Cario) was hired in September of 1995 by

petitioner Computer Innovations Center (CIC) as Instructor of Computer Technical
Course. He was promoted to Head of the Education Department of CIC in May of 1997.
On 26 March 1998, Cario received a call from petitioner Nelson Yu Quilos (Quilos) of
CIC, who advised Cario to resign from his position. Two days later, on 28 March 1998,
Quilos met Cario at the companys technicians laboratory and informed the latter that
his services with the company should cease by 31 March 1998. Aggrieved, Cario
lodged a complaint for illegal dismissal against CIC and Quilos with the National Labor
Relations Commission (NLRC) Regional Arbitration Branch in Davao City.
According to CIC, it received reports from its employees regarding Carios purported
unprofessional conduct, adverting to a general lack of interpersonal skills and
moonlighting activities which conflicted with the interest of CIC. It was alleged that
Cario had admitted to his moonlighting activities during the meeting of 28 March 1998,
and had refused a promotion offered by CIC conditioned on his termination of
involvement with other computer schools. Instead, as claimed by CIC, Cario
announced during the said meeting that he would resign from CIC, reporting for work
only until 31 March 1998.
On 29 August 1999, Labor Arbiter Newton R. Sancho rendered a Decision concluding
that Cario had been illegally dismissed, and ordering petitioners to pay the amount of
Two Hundred Twenty Thousand Six Hundred Sixty Six Pesos and Sixty Six Centavos
(P220,666.66) representing back wages, separation pay, and thirteenth (13th) month
pay.
A copy of the Decision was received by petitioners on 5 November 1999. On 15
November 1999, they filed a Notice of Appeal dated 12 November 1999 before the
NLRC Regional Arbitration Branch, Davao City, attaching thereto a Memorandum on
Appeal. The Memorandum on Appeal was also filed before the NLRC Fifth Division,
Cagayan de Oro City. They also posted a bond of Ten Thousand Pesos (P10,000.00), a
sum that is evidently nowhere near the sum of the award made by the Labor Arbiter.
However, in their Memorandum of Appeal, petitioners had requested a reduction of the
cash or surety bond to Ten Thousand Pesos (P10,000.00). The cited ground for the
reduction of the appeal bond was the purportedly great possibility of the reversal of the
Labor Arbiters Decision in light of the serious errors in the findings of fact and
application of law as well as the harshness and unfounded nature of the award.
In a Resolution dated 29 June 2000, the NLRC Fifth Division denied the motion for
reduction of appeal bond and dismissed the appeal on the ground of "non-perfection."
The NLRC ruled that "the mere perception [that] the appealed decision would be
reversed on appeal [did] not justify the reduction of the required appeal bond." The
NLRC mistakenly noted that petitioners had not even posted the desired reduced bond.
Petitioners moved for reconsideration, citing among others, that they had posted the
reduced bond of Ten Thousand Pesos (P10,000.00). The NLRC, while acknowledging
the filing of the reduced bond, still denied the motion for reconsideration, noting that the
appeal could only be perfected once petitioners had posted the appeal bond equivalent
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to the monetary award. The NLRC pithily noted that "the posting by the [petitioners] of
the cash bond of P10,000.00 means nothing, as it is lesser [than] that what was
required by them."
The dismissal of the appeal was elevated to the Court of Appeals by way of petition for
certiorari. The Court of Appeals Seventh Division promptly rendered a Decision dated
19 September 2001 affirming the NLRC. The appellate court found no fault on the part
of the NLRC in denying the appeal, as the statutory requirement pertaining to the
appeal bond had not been met. The appellate court further noted that petitioners could
have exhibited good faith in attempting to comply with the dictates of the law by filing a
motion for leave to admit belated additional bond after the initial resolution denying their
appeal, yet this was not done by petitioners.

ISSUE:
Whether or not an appeal can be deemed perfected notwithstanding the filing of a
reduced bond.
HELD:
No. By explicit provision of law, an appeal is perfected only upon the posting of a cash
or surety bond. The requirement for posting the surety bond is jurisdictional and cannot
be trifled with. The word "only" makes it perfectly clear that the lawmakers intended the
posting of a cash or surety bond by the employer to be the exclusive means by which
an employers appeal may be perfected. As evinced by the language of Article 223, the
posting of such bond is required before the NLRC can acquire jurisdiction over the
employees appeal. Petitioners concede this point, yet in the next breath invoke the
doctrine that "the dismissal of an appeal on purely technical ground is frowned upon."
Invocation of this rule as a means of argument against the strict imposition of the cash
bond requirement is off-base, considering Article 223.
It is clear from both the Labor Code and the NLRC Rules of Procedure that there is
legislative and administrative intent to strictly apply the appeal bond requirement, and
the Court should give utmost regard to this intention. There is a concession to the
employer, in excluding damages and attorneys fees from the computation of the appeal
bond. Not even the filing of a motion to reduce bond is deemed to stay the period for
requiring an appeal. Nothing in the Labor Code or the NLRC Rules of Procedure
authorizes the posting of a bond that is less than the monetary award in the judgment,
or would deem such insufficient postage as sufficient to perfect the appeal.
On the other hand, Article 223 indubitably requires that the appeal be perfected only
upon the posting of the cash or surety bond which is equivalent to the monetary award
in the judgment appealed from. The clear intent of both statutory and procedural law is

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to require the employer to post a cash or surety bond securing the full amount of the
monetary award within the ten (10)-day reglementary period.
We have indeed held that the requirement for posting the surety bond is not merely
procedural but jurisdictional and cannot be trifled with. Non-compliance with such legal
requirements is fatal and has the effect of rendering the judgment final and executory.
The petitioners cannot be allowed to seek refuge in a liberal application of rules for their
act of negligence.
WHEREFORE, the PETITION is DENIED.

7. SAMEER OVERSEAS PLACEMENT AGENCY, INC., PETITIONER, VS. NOE

LEVANTINO, IDG HUMAN RESOURCES, INC., (FORMERLY IDG TRADING AND
GENERAL SERVICES, INC.), RESPONDENTS.

Facts:
A complaint for illegal dismissal, underpayment of wages, and illegal deductions
was filed by respondent Noe Levantino (Levantino) against the petitioner. He was hired
and deployed by Sameer for and in behalf of its foreign principal, Arabian Fal Co., on 20
July 1994,[2] Levantino's contract provided that his office employment was for twelve
(12) months and fixed his basic monthly salary at Two Hundred Seventy-Seven US
Dollars (US$277.00). However, upon his arrival at the job site on 21 July 1994,
Levantino was made to sign another contract of employment, this time with the basic
monthly salary of Six Hundred Seventy-Nine Saudi Rial (SR679.00), plus One Hundred
Eighty Saudi Rial (SR180.00) as food allowance. Levantino was terminated by the
foreign employer and subsequently repatriated to the Philippines. He filed complaint
with the POEA. Sameer filed a third-party complaint against IDG Human Resources,
Inc. (IDG), alleging that IDG should be held liable for the claims of Levantino since
Sameer's accreditation for foreign principal, Arabian Fal Co., had already been
transferred to IDG pursuant to an affidavit of assumption of responsibility and
quitclaims. The Labor Arbiter ruled that Levantino was terminated for just or authorized
cause, the employee having been unable to rebut the allegations raised against him of
poor habits, disobedience of superiors, and low productivity. He concluded, however,
that Levantino was not paid his basic salary in accordance with his POEA approved
contract of employment of Two Hundred Seventy-Seven US Dollars (US$277.00), and
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illegal deductions were made by the foreign employer from the basic monthly salary for
the food allowance. Thus, the Labor Arbiter held that Levantino was entitled to a wage
differential of Five Hundred Seventy-Five US Dollars and Sixty Cents (US$575.60), and
attorney's fees of Fifty-Seven US Dollars and Fifty-Six Cents (US$57.56). The Labor
Arbiter likewise held that Sameer and IDG were jointly and severally liable to pay
Levantino. Petitioner filed its notice of appeal and a memorandum of appeal on 27
October 1997, along with a motion for extension of time to file a surety-appeal bond,
alleging that it was still arranging for the issuance of such with the bonding company. It
was only on 3 November 1997 that it filed the appeal bond. NLRC dismissed the appeal
for failure to perfect it within the ten (10)-day reglementary period. CA affirmed the
dismissal by the NLRC; hence, the present petition.
ISSUE:
Whether or not the appeal was perfected
HELD:
Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be under oath with proof
of payment of the required appeal fee and the posting of a cash or surety bond as
provided in Section 5 of this Rule; shall be accompanied by a memorandum of appeal
which shall state the grounds relied upon and the arguments in support thereof; the
relief prayed for; and a statement of the date when the appellant received the appealed
decision, order or award and proof of service on the other party of such appeal. A mere
notice of appeal without complying with the other requisite afore stated shall not stop
the running of the period for perfecting an appeal. Section 6. Bond. In case the
decision of the Labor Arbiter, the Regional Director or his duly authorized Hearing
Officer involves a monetary award, an appeal by the employer shall be perfected only
upon the posting of a cash or surety bond, which shall be in effect until final disposition
of the case, issued by a reputable bonding company duly accredited by the Commission
or the Supreme Court in an amount equivalent to the monetary award, exclusive of
damages and attorney's fees. The employer, his counsel, as well as the bonding
company, shall submit a joint declaration under oath attesting that the surety bond
posted is genuine. The Commission may, in justifiable cases and upon Motion of the
Appellant, reduce the amount of the bond. The filing of the motion to reduce bond shall
not stop the running of the period to perfect appeal. Had Sameer been inclined to
diligently comply with the requisites of appeal, as plainly stated in the Labor Code.
There is nothing in the said period that suggests innate difficulty in obtaining the said
bond. In fact, Sameer, who submitted the bond only on 3 November 1998, probably
incurred further delay in submitting the appeal bond due to the early November
holidays, though such fact is of no moment considering that these holidays came only
after the lapse of the reglementary period. Nor should have there been eminent difficulty
in obtaining the said bond, considering that the amount of the monetary judgment, Six
Hundred Thirty-Three U.S. Dollars and Sixteen Cents (US$633.16), is relatively
miniscule. It is not even expected that Sameer itself expends from its own funds the
entire amount of the monetary judgment for the appeal bond. . . . The mandatory filing
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of a bond for the perfection of an appeal is evident from the afore quoted provision that
the appeal may be perfected only upon the posting of cash or surety bond. It is not an
excuse that the over P2 million award is too much for a small business enterprise, like
the petitioner company, to shoulder. The law does not require its outright payment, but
only the posting of a bond to ensure that the award will be eventually paid should the
appeal fail. What petitioners have to pay is a moderate and reasonable sum for the
premium for such bond. Cost against the petitioner.

8. OSCAR G. SAPITAN ET AL VS. JOBLINE BICOL EXPRESS

Facts:
Petitioners are regular employees of the respondent as driver, conductor and
mechanics and a member of existing CBA. They alleged that all of them were underpaid
and most of them, particularly those who travel the Bicol-Manila-Bicol route were not
given overtime and night differential pay. Sometime beginning the year 2000, the
company started constructively dismissing [petitioners]. This was done by not allowing
[them] to perform their duties and function or simply by not admitting them to their work
by stating that they should just return some other time. Tired of being treated in the
same manner and for failure on the part of [JB Line] to give them their work despite no
cessation of operations and for non-payment of their salaries, wage adjustments and
other benefits, [petitioners were] left with no recourse except to file the instant case to
force respondent [JB Line] to reinstate them in their jobs and [pay] their benefits.
Respondent claimed that no record will show that letter of suspension were sent to
them. Their claim for alleged constructive dismissal is baseless considering the absence
of any documentary evidence relative thereto and their failure to present testimonial
evidence to prove that respondent [JB Line] violated the essential elements for
constructive dismissal. Their failure to work regularly was due to economic crises that
necessitated the reduction of trips for drivers and conductors and shortened workdays
for office personnel and maintenance crew. The measures taken by respondent to
prevent losses and possible closure of the business were management prerogative and
were not resorted to as a ploy to constructively dismissed they can also resume duties
anytime depending on the availability of buses and passengers.
Labor Arbiter ruled that there is constructive dismissal and petitioners should be
reinstated. Respondent JB Line appealed the arbiter's decision (accompanied by a
P200,000 supersedeas bond) to the NLRC. Finding that the bond posted was not
equivalent to the monetary judgment, the NLRC ordered respondent JB Line to post an
additional bond, otherwise, its appeal would be dismissed for non-perfection. The latter
failed, hence, the NLRC denied its appeal. Respondent elevated the same to CA which
reversed the decision. Hence, this petition.
Issue

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1. Whether or not the filing of supersedeas bond would suffice the procedural
requirement in
appeal.
2. Whether or not petitioners should be reinstated.

HELD:
In some cases, the requirement to post a supersedeas bond for the perfection of an
appeal was relaxed but this was justified by substantial compliance. In this case,
however, no similar reason existed to excuse respondent JB Line from complying with
the requirement. The bond posted by respondent JB Line was not even close to half of
the amount required by the NLRC. Petitioners were no longer entitled to separation pay
on the ground alone that respondent JB Line had ceased to operate due to serious
losses. Assuming such closure indeed took place, respondent JB Line was still not off
the hook. Under the law, in case of closure of business due to serious financial losses, it
is imperative for the employer to send a notice of closure to the employees and to the
Department of Labor and Employment (DOLE). Article 283 of the Labor Code, as
amended, provides:
ARTICLE 283: Closure of establishment and reduction of personnel. The employer
may also terminate the employment of any employee due to 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 notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended date
thereof. xxx
The records are devoid of proof that respondent JB Line ever furnished the DOLE or
petitioners with such notice. Moreover, even if we were to grant that respondent JB Line
was on the brink of closing down at that time, the reduction of petitioners' workload
and/or the "floating" of their employment were still not warranted. Petitioners' plight had
persisted for months which only meant that they were already constructively dismissed.
An employee is constructively dismissed when his working days are substantially cut for
more than six months due to the employer's financial losses.
ART. 283 is the only instance wherein reinstatement cannot be warranted due to
closure and serious financial losses of the employer.

14. DEL MONTE PHILS., INC. AND WARFREDO BALANDRA, PETITIONERS VS

MARIANO SALDIVAR, NENE TIMBAL ET.AL., RESPONDENTS
Facts:
Page 14

The Associated Labor Union (ALU) is the exclusive bargaining agent of the
plantation workers of petitoner. Respondent Timba, along with four other employees
were charged by ALU for disloyalty to the Union, particularly for encouraging defections
to rival Union, National Federation of Labor (NFL). Timbal filed an answer before the
Disloyalty Board, denying the allegations in the complaint and the averments in Artajo's
affidavit. She noted that the allegations against her were purportedly committed nearly 2
years earlier; and that Artajo's act was motivated by hate and revenge owing to the filing
of the aforementioned civil action. The Disloyalty Board recommended the expulsion of
Timbal from membership in ALU and likewise dismissal from DMPI in accordance with
the Union Security Clause in the existing CBA between ALU and DMPI. The Labor
Arbiter affirmed that all five were illegally dismissed and ordered Del Monte to reinstate
them to their former position and to pay their full backwages and other
allowances..NLRC reversed the Labor Arbiter's decision. Court of Appeals ruled that
only Timbal was illegally dismissed and that DMPI failed to observe procedural due
process.
Issue: Whether or not Timbal was illegally dismissed?
Held: In the matter at bar, the Labor Arbiter who is the proximate trier of facts, and the
Court of Appeals oth appreciated that the testimony of Artajo against Timbal could not
be given credence. This is due to the prior animosity between the two engendered by
the pending civil complaint filed by Timbal's husband against Artajo. Considering that
the civil complaint was filed 6days prior to the execution of Artajo's affidavit, it would be
plainly injudicious to presume that Artajo possessed an unbiased state of mind. Such
circumtance was considered by the Labor Arbiter and the Court of Appeals, as they
rendered favorably to Timbal. No credible disputation was offered by NLRC to the claim
that Artajo was biased against Timbal; hence, the Supreme Court adjudge the findings
of the Labor Arbiter and the CA as more cogent on that points. The dismissal for cause
of employees must be justified by substantial evedence, as appreciated by an impartial
trier of facts. The petition is denied and the decision the Court if Appeals is affirmed.

19. HERMONIAS L. LIGANZA VS. RBL SHIPYARD CORPORATION, ET AL.

Facts:
Petitioner after working as a carpenter for respondent since August 1991, petitioner's
employment was terminated on 30 October 1999. Petitioner filed a complaint against
the respondent for illegal dismissal, alleging that on said date he was verbally informed
that he was already terminated from employment and barred from entering the
premises. On the same occasion, he was told to look for another job. Thus, he claimed
that he was unceremoniously terminated from employment without any valid or
authorized cause. On the other hand, respondent insisted that petitioner was a mere
project employee who was terminated upon completion of the project for which he was
hired.
Page 15

Issue: whether or not the petitioner is a project employee and whether his termination
was illegal.

HELD: Decision in favor of the Petitioner.

There are doubts in the pieces of evidence on record that petitioner is a project
employee, or that he was terminated for just cause and these doubts shall be resolved
in favor of petitioner, in line with the policy of the law to afford protection to labor and
construe doubts in favor of labor.
The employer must affirmatively show rationally adequate evidence that the dismissal
was for a justifiable cause. The respondent failed to show clear, valid and legal cause
for the termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination was for a valid
or authorized cause, the Court has no recourse but to grant the petition.

Finally, the Court reiterates that:

The decision unduly burdens an employer by imposing a duty to re-hire a project

employee even after completion of the project for which he was hired. The import of the
decision is not to impose a positive and sweeping obligation upon the employer to rehire project employees. The decision merely accomplishes a judicial recognition of the
employment status of a project or work pool employee in accordance with what is fait
accompli, i.e., the continuous re-hiring by the employer of project or work pool
employees who perform tasks necessary or desirable to the employer's usual business
or trade. Petitioner, as carpenter, was tasked to "make and repair cabinet, flooring,
quarters, ceiling, windows, doors, kitchen and other parts of the vessel that needs to be
repaired." As such, petitioner's work was necessary or desirable to respondent's
business. However, unlike in Sandoval where the complaining employees were hired for
only one project lasting for three (3) months at most; in this case the petitioner was
employed by respondent continuously from 1991 to 1999. Assuming, without granting
that petitioner was initially hired for specific projects or undertakings, the repeated rehiring and continuing need for his services for over eight (8) years have undeniably
made him a regular employee.

21. LOPEZ ET AL VS. MWSS

Page 16

FACTS:
In 1997, MWSS entered into a Concession Agreement with Manila Water
Service, Inc. and Benpress-Lyonnaise, wherein the collection of bills was transferred to
said private concessionaires, effectively terminating the contracts of service between
petitioners and MWSS. Regular employees of the MWSS, except those who had retired
or opted to remain with the latter, were absorbed by the concessionaires. Regular
employees of the MWSS were paid their retirement benefits, but not petitioners.
Instead, they were refused said benefits, MWSS relying on a resolution of the Civil
Service Commission (CSC) that contract-collectors of the MWSS are not its employees
and therefore not entitled to the benefits due regular government employees.

Petitioners filed a complaint with the CSC. In its Resolution dated 1 July
1999,the CSC denied their claims, stating that petitioners were engaged by MWSS
through a contract of service, which explicitly provides that a bill collector-contractor is
not an MWSS employee. Moreover, it found that petitioners were unable to show that
they have contractual appointments duly attested by the CSC. In addition, the CSC
stated that petitioners, not being permanent employees of MWSS and not included in
the list submitted to the concessionaire, are not entitled to severance pay. Petitioners
claims for retirement benefits and terminal leave pay were likewise denied. Thereafter
the petitioner filed for a Motion for Reconsideration which was later on Denied.

Petitioners filed a petition for with the Court of Appeals. Affirming and generally
reiterating the ruling of the CSC, the Court of Appeals held that the Agreement entered
into by petitioners and MWSS was clear and unambiguous, and should be read and
interpreted according to its literal sense. Hence, as per the terms of the agreement,
petitioners were not MWSS employees. The Court of Appeals held that no other
evidence was adduced by petitioners to substantiate their claim that their papers were
forwarded to the CSC for attestation and approval. It added that in any event, as early
as 26 June 1996, the CSC specifically stated that contract collectors are not MWSS
employees and therefore not entitled to severance pay. Thereafter, an appeal was
made to the Supreme Court.

ISSUE: Whether or not 1) the petitioner are employees of the MWSS 2) the latter has
power to dismiss the latter 3) if they are entitled to the benefits provided for under the
Labor Code of the Philippines

HELD:

Page 17

The Court has invariably affirmed that it will not hesitate to tilt the scales of justice to the
labor class for no less than the Constitution dictates that the State . . . shall protect the
rights of workers and promote their welfare. It is committed to this policy and has
always been quick to rise to defense in the rights of labor, as in this case.

Protection to labor, it has been said, extends to all of laborlocal and overseas,
organized and unorganized, in the public and private sectors. Besides, there is no
reason not to apply this principle in favor of workers in the government. The
government, including government-owned and controlled corporations, as employers,
should set the example in upholding the rights and interests of the working class.

For purposes of determining the existence of employer-employee relationship, the Court

has consistently adhered to the four-fold test, namely: (1) whether the alleged employer
has the power of selection and engagement of an employee; (2) whether he has control
of the employee with respect to the means and methods by which work is to be
accomplished; (3) whether he has the power to dismiss; and (4) whether the employee
was paid wages.Of the four, the control test is the most important element.

A review of the circumstances surrounding the case reveals that petitioners are
employees of MWSS. Despite the obvious attempt of MWSS to categorize petitioners
as mere service providers, not employees, by entering into contracts for services, its
actuations show that they are its employees, pure and simple. MWSS wielded its power
of selection when it contracted with the individual petitioners, undertaking separate
contracts or agreements. The same goes true for the power to dismiss. Although
termed as causes for termination of the Agreement, a review of the same shows that
the grounds indicated therein can similarly be grounds for termination of employment.

On the other hand, relevant and appropriate is the definition of wages in the Labor
Code, namely, that it is the remuneration, however designated, for work done or to be
done, or for services rendered or to be rendered. The commissions due petitioners
were based on the bills collected as per the schedule indicated in the Agreement.
Significantly, MWSS granted petitioners benefits usually given to employees, to wit:
COLA, meal, emergency, and traveling allowances, hazard pay, cash gift, and other
bonuses. In an unabashed bid to claim credit for itself, MWSS professes that these
additional benefits were its acts of benevolence and generosity. We are not impressed.

Other manifestations of control are evident from the records. The power to transfer or
reassign employees is a management prerogative exclusively enjoyed by employers. In
this case, MWSS had free reign over the transfer of bill collectors from one branch to
Page 18

another. MWSS also monitored the performance of the petitioners and determined their
efficiency.

Even the four-fold test will show that petitioner is the employer of private respondents.
The elements to determine the existence of an employment relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employers power to control the employees conduct. The most
important element is the employers control of the employees conduct, not only as to
the result of the work to be done, but also as to the means and methods to accomplish
it.
Petitioners are indeed regular employees of the MWSS. The primary standard of
determining regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual business or trade of the
employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its
entirety. Likewise, the repeated and continuing need for the performance of the job has
been deemed sufficient evidence of the necessity, if not indispensability of the activity to
the business. Some of the petitioners had rendered more than two decades of service
to the MWSS. The continuous and repeated rehiring of these bill collectors indicate the
necessity and desirability of their services, as well as the importance of the role of bill
collectors in the MWSS.
MWSS committed itself to pay severance and terminal leave pay to its regular
employees. The guidelines thereof states that regular employees who have rendered at
least a year of service and not eligible for retirement are entitled to severance pay
equivalent to one (1) month basic pay for every full year of service. In view of the
Courts finding that petitioners were employees of MWSS, the corresponding severance
pay, in accordance with the guidelines, should be given to them. Terminal leave pay
are likewise due petitioners, provided they meet the requirements therefore.

22. NS TRANSPORT EMPLOYEES ASSN. VS. NS TRANSPORT SERVICES, INC.

Facts:

In April of 1997, NSTEA, the union filed a petition for certification election for the
rank and file employees of NS Transport Services Inc., a public utility transport
corporation. The petition was denied by the Department of Labor and Employment
(DOLE) prompting the union to appeal to the DOLE Secretary. The union filed for a
Notice of Strike before the National Conciliation and Mediation Board (NCMB), alleging
Page 19

illegal dismissal of its officers and members, as well as discrimination and coercion of
employees. However, despite the mediation conducted by the MCMB, the parties failed
to amicably settle their differences, thus the union pushed thru with its strike. The DOLE
Secretary, upon the companys petition, assumed jurisdiction over the dispute and
issued a Return- to- Work Order and certified the dispute to the NLRC for compulsory
arbitration. Likewise, upon motion of the company, the DOLE Secretary deputized
police authorities to assist in the peaceful and orderly enforcement of the DOLEs
orders. Thereafter, the company filed a complaint for declaration of illegality of strike
and damages before the NLRC, alleging that while mediation was in progress, the
Union staged a strike, the Union members resorted to threats, intimidation and coercion
upon their co-employees. They also allegedly blocked the ingress and egress of the
company and caused damage to company property. On the other hand, the Union
sought to hold the company for contempt for allegedly refusing to accept its returning
members. The cases were then consolidated by the NLRC.

The NLRC held that the strike staged by the union was legal and ordered the
reinstatement of the individual complainants with full back wages. The Court of Appeals
ruled in favour of the company and remanded the case to the NLRC for further
proceedings.

Issue: Whether the companys right to due process was violated.

Held:
It is well settled that the essence of due process in administrative proceedings is
the opportunity to explain ones side or a chance to seek reconsideration of the action or
ruling complained of. In labor cases, it has been held that due process is simply an
opportunity to be heard and not that an actual hearing should always and indispensably
be held since a formal type or trial type hearing is not at all times and in all instances
essential to due process the requirements of which are satisfied where the parties are
afforded fair and reasonable opportunity to explain their side of controversy.

The holding of an adversarial trial is discretionary on the labor arbiter and the
parties cannot demand it as a matter of right. Indeed, a formal hearing is not necessary
in labor cases. However, when such formal hearing is allowed but a party is not
informed thereof, as a consequence of which he is unable to attend the same; such
failure to attend should not be taken against him. As the labor arbiter allowed the
holding of a formal hearing, he must accord the parties the opportunity to participate
therein and allow the formal hearing to proceed its natural course, if due process and
the elements of fair play are to be observed. In the instant case, the labor arbiter has
granted his imprimatur on the holding of a formal hearing as agreed upon by the parties.
In fact, the hearing has commenced and petitioners were given the chance to exercise
Page 20

the same privilege, since the case was submitted for decision even before it was able to
adduce its evidence during the formal hearing.

The law, in protecting the rights of the employee, authorizes neither oppression
nor self-destruction of the employer. Contrary to petitioners claim, remand of the case
to the NLRC is proper since the company has yet to present its evidence during the
formal hearing. It is true that both parties have been provided the opportunity to prove
their cases through the pleadings submitted before the NLRC; however only the
petitioners were given the chance to present its side in the formal hearing. The factual
issues raised in the consolidated cases could still be affected by the additional evidence
to be presented by the company. Equity demands that the company must be equally
allowed to adduce its evidence, if the NLRC is to come up with a rational and impartial
decision.

The petition was denied and the ruling of the Court of Appeals affirmed.

23. GENUINO VS. NLRC

Facts:
Genuino was employed by Citibank in January 1992 as Treasury Sales Division
Head with the rank of Assistant Vice- President. On August 23, 1993, Citibank sent
Genuino a letter charging her with knowledge and involvement in transactions which
were irregular or event fraudulent. In the same letter, Genuino was informed she was
under preventive suspension. On September 27, 1993, Citibank informed Genuino of
the result of their investigation. It found that Genuino, together with Santos personally
and actively participated through the use of facilities of Genuinos family corporation,
Global Pacific in the diversion of bank clients funds to products of other companies
that yielded higher interests than Citibank offers. And that Genuino and Santos realized
substantial financial gains, all in violation of existing company policy and Corporation
Code under which carries penal sanction. In view of the foregoing circumstances,
Genuinos employment was terminated by Citibank on grounds of (1) serious
misconduct, (2) wilful breach of the trust reposed upon her by the bank, and (3)
commission of a crime against the bank.

Genuino filed before the Labor Arbiter a Complaint against Citibank for illegal
suspension and illegal dismissal with damages and prayer for temporary restraining
order and/or writ of preliminary injunction. The Labor Arbiter rendered a Decision finding
the dismissal of Genuino to be without just cause. The NLRC reversed the decision of
Page 21

the Labor Arbiter. The Court of Appeals then promulgated its decision denying due
course to and dismissing the petitions.

Issue: Whether or not the dismissal of Genuino is for a just cause and in accordance
with due process.

Held: The dismissal was for a just cause but lacked due process.

The requirements of twin notices must be met. The two-notice requirement of the Labor
Code is an essential part of the due process. The first notice informing the employee of
the charges should neither be pro-forma nor vague. It should set out clearly what the
employee is being held liable for. The employee should be afforded ample opportunity
to be heard and not mere opportunity. Ample opportunity to be heard is especially
accorded the employees sought to be dismissed after they are specifically informed of
the charges in order to give them an opportunity to refute such accusations leveled
against them. Since the notice of charges given to Genuino is inadequate, the dismissal
could not be in accordance with due process. While the Court held that Citibank failed
to observe procedural due process, it never the less found Genuinos dismissal justified.

While the bank gave genuine an opportunity to deny the truth of the allegations in
writing and participate in the administrative investigation, the fact remains that the
charges were too general to enable Genuino to intelligently and adequately prepare her
defense.

Article 282(c) of the Labor Code provides that an employer may terminate an
employment for fraud or willful breach of the trust reposed in him/her employer or duly
authorized representative. In order to constitute as just cause for dismissal, loss of
confidence should relate to acts inimical to interests of the employer. Also, the act
complained of should have arisen from the performance of the employees duties. For
loss of trust and confidence to be a valid ground for an employees dismissal, it must be
substantial and not arbitrary, and must be founded on clearly established facts sufficient
to warrant the employees separation from work. As Assistant Vice-President of
Citibanks Treasury Department, Genuino was tasked to solicit investments, and peso
and dollar deposits for, and keep them in Citibank; and to sell and push for the sale of
Citibanks financial products, such as MBS, for the account and benefit of Citibank. She
held the position of trust and confidence. There is no way she could deny any
knowledge of the Banks policies nor her understanding of these policies as reflected in
the survey done by the bank. She could not likewise feign ignorance of the businesses
of Citibank, and of Global and Torrance. Assuming that Citibank did not engage in the
Page 22

same securities dealt with by Global and Torrance; nevertheless, it is to the interests of
Citibank to retain its clients and continue investing in Citibank. Curiously, Genuino did
not just dissuade the depositors from withdrawing their money from Citibank but was
even instrumental in the transfers of moneys from Citibank to a competing bank through
Global and Torrance, the corporations being controlled by her.

Ordinarily, the employer is required to reinstate the employee during the pendency of
the appeal pursuant to Art.223, par. 3 of the Labor Code. If the decision of the Labor
Arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid
then the employer has the right to require the dismissed employee on payroll
reinstatement to refund the salaries received while the case was pending appeal, or it
can be deducted from the accrued benefits that the dismissed employee was entitled to
receive from his employer under existing laws, collective bargaining agreement
provisions, and company practices. However, if the employee was reinstated to work
during the pendency of the appeal, then the employee is entitled to the compensation
received for actual services rendered without the need of refund.

Considering that Genuino was not reinstated to work or placed on payroll reinstatement,
and her dismissal is based on a just cause, then she is not entitled to be paid the
salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC decision.

24. GSIS VS. FONTARES GR NO. 149571 FEB. 21, 2007

Facts:
Respondent first joined government service as Storekeeper I at the Archives
Division of Records Management and Archives Office, Department of Education,
Culture and Sports in Manila on March 16, 1987. In March 1989, he was promoted to
the position of Archivist I. On December 1, 1994, he transferred to the Maritime Industry
Authority as Maritime Industry Development Specialist II. The records of the case
further reveal that respondent was confined at the Chinese General Hospital from
January 8 to 10, 1998 due to Rheumatic Valvular Disease. On account of his ailment,
respondent filed with the petitioner a claim for compensation benefits under PD 626, as
amended. Finding his ailment compensable, he was awarded Temporary Total
Disability (TTD) benefits from Jan. 8 to 10, 1998. However, respondents claim for
compensation benefits on account of his Rheumatic Heart Disease was denied on the
ground that the said ailment is not work-connected. Dissatisfied with the decision,
respondent requested for the elevation of his case to ECC for review, which also denied
the claim. The CA set aside the decision and declared the illness Rheumatic Heart
Disease compensable and directing the payment of the claim therefore.

Page 23

Issue: Whether the respondent is entitled to compensation benefits under the existing
law due to the condition of Rheumatic heart Disease.

Held:
There is no dispute that Rheumatic Heart Disease is not included under the P.D. 626 as
amended, as an occupational disease. Hence, under P.D. 626 as amended, the
employee must demonstrate through substantial evidence (1) that the risk of contracting
the disease was increased by the claimants working conditions, and (2) the causal
relation between the ailment and working conditions. The respondent failed that his
work conditions has predisposing factors that caused Rheumatic Fever which in turn,
led to Rheumatic Heart Disease, the subject ailment. Exposure to toxic chemicals and
biological hazards does not by itself constitute the cause of respondents ailment.
Moreover, respondent failed to present evidence that he never contracted Rheumatic
Fever which could have led to Rheumatic Heart Disease.
It is well-settled under the Employees Compensation Law that when the claimed
contingency is not the direct result of the covered employees employment, as in the
instant case, and the claimant failed to show proof that the risk of contracting the
disease was increased by the covered employees employment
and working
conditions, the claim for compensations benefits cannot prosper. Since there is no
causal relation between the respondents ailment , Valvular Heart Disease, and his
employment and working conditions; nor are there indications that the nature of his work
had increased the risk of contracting the said disease, the petitioner is correct in
denying respondents application for compensation benefits under P.D. 626, as
amended.

The petition was granted. The Decision and Resolution of the Court of Appeals were
reversed and set aside. The decision of the Employees Compensation Commission was
affirmed.

25. PEOPLE OF THE PHILIPPINES VERSUS CHARLIE COMILA AND

AIDA COMILA
Facts:
Page 24

On April 5, 1999, in the Regional Trial Court (RTC) of Baguio City, an

Information1 for Illegal Recruitment committed in large scale by a syndicate, as defined
and penalized under Article 13(6) in relation to Articles 38(b), 34 and 39 of Presidential
Decree No. 442, otherwise known as the New Labor Code, as amended, was filed
against Charlie Comila, Aida Comila and one Indira Ram Singh Lastra.
On the charge of illegal recruitment, this appellant argues that "she was merely trying to
help the applicants to process their papers, believing that Indira Ram Sighn Lastra and
Erlinda Ramos would really send the applicants to Italy." With respect to co-appellant
Charlie Comila, the defense submits that the prosecution "miserably failed to prove his
participation in the illegal recruitment and estafa." The trial and appellate courts found
both appellants guilty beyond moral certainty of doubt of the crimes charged against
them. Hence the appeal.
Issue: Whether or not illegal recruitment was committed in large scale by a syndicate
Held:
The Supreme Court is fully convinced that both the trial and appellate courts committed
no error in finding both appellants guilty beyond moral certainty of doubt of the crimes
charged against them. Through the respective testimonies of its witnesses, the
prosecution has satisfactorily established that both appellants were then engaged in
unlawful recruitment and placement activities. The crime of illegal recruitment is
committed when, among other things, a person who, without being duly authorized
according to law represents or gives the distinct impression that he or she has the
power or the ability to provide work abroad convincing those to whom the representation
is made or to whom the impression is given to thereupon part with their money in order
to be assured of that employment.

In fact, even if there is no consideration involved, appellant will still be deemed as

having engaged in recruitment activities, since it was sufficiently demonstrated that she
promised overseas employment to private complainants. To be engaged in the practice
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.
As regards appellant Charlie Comila, it is inconceivable for him to feign ignorance of the
illegal recruitment activities of his wife Aida, and of his lack of participation therein.
Again, we quote with approval what the trial court has said in its decision.

26. GOVERNMENT SERVICE

INSURANCE SYSTEM (GSIS),
VERSUS
NATIONAL LABOR RELATIONS COMMISSION, LANTING SECURITY AND
WATCHMAN AGENCY, TOMAS LANTING, DANIEL FANILA ET AL
Facts:
Page 25

Tomas Lanting, doing business under the name and style of Lanting Security and
Watchman Agency (LSWA) entered into a Security Service Contract to provide security
guards to the properties of the Government Service Insurance System (GSIS) at the
contract rate of P3,000.00 per guard per month.
During the effectivity of the contract, LSWA requested the GSIS for an upward
adjustment of the contract rate in view of Section 7 of Wage Order No. 1 and Section 3
of Wage Order No. 2, which were issued by the Regional Tripartite Wages and
Productivity Board-NCR pursuant to Republic Act No. 6727, otherwise known as the
Wage Rationalization Act. On March 15, 1993, GSIS terminated the Security Service
Contract with LSWA.
On March 7, 1994, complainants filed separate complaints against LSWA for
underpayment of wages and non-payment of labor standard benefits from March 1991
to March 15, 1993. Virgilio Soriano also complained of illegal dismissal.
In its Position Paper, LSWA alleged that complainants were estopped from claiming that
they were underpaid because they were informed that the pay and benefits given to
them were based on the contract rate of P103.00 per eight hours of work or about
P3,100.00 per month. On August 9, 1994, LSWA filed a Third-Party Complaint against
GSIS for underpayment of complainants' wages.
In its Position Paper, GSIS alleged that the Third-Party Complaint states no cause of
action against it; that LSWA obligated itself in the Security Service Contract to be solely
liable for the enforcement of and compliance with all existing labor laws, rules and
regulations; that the GSIS Board of Trustees approved the upward adjustment on a
month-to-month basis, at P4,200 per guard per month, effective January 8, 1991 to May
31, 1991, under Board Resolution No. 207 dated May 24, 1991, which was incorporated
in the Security Service Contract; that GSIS fully paid the services of the security guards
as agreed upon in the Security Service Contract.
The Labor Arbiter held LSWA and GSIS jointly and severally liable for the payment of
complainants' money claims, pursuant to Articles 106 and 107 of the Labor Code. The
NLRC held the GSIS solely liable for payment of complainants' money claims. Hence,
the present petition.

Issue: Whether or not GSIS is solitarily liable to pay respondents salary differential
Held:
The petition is bereft of merit. In this case, the GSIS cannot evade liability by claiming
that it had fully paid complainants' salaries by incorporating in the Security Service
Contract the salary rate increases mandated by Wage Order Nos. 1 and 2 by increasing
the contract price from P3,000.00 to P3,176.07 per guard per month effective November
1, 1990 to January 7, 1991, and P4,200.00 effective January 8, 1991 to May 31, 1991.
Thus, the Court does not agree with the GSIS's claim that a double burden would be
Page 26

imposed upon the latter because it would be paying twice for complainants' services.
Such fears are unfounded. Under Article 1217 of the Civil Code, if the GSIS should pay
the money claims of complainants, it has the right to recover from LSWA whatever
amount it has paid in accordance with the terms of the service contract between the
LSWA and the GSIS.
Joint and solidary liability is simply meant to assure aggrieved workers of
immediate and sufficient payment of what is due them. This is in line with the policy of
the State to protect and alleviate the plight of the working class. The joint and solidary
liability of LSWA and the GSIS to pay complainants' salary differentials shall be without
prejudice to the GSIS's right of reimbursement from LSWA.

27. TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION (TMPCWA),

VERSUS (NLRC-2ND DIVISION)
Facts:
Toyota Motor Philippines Corporation Workers Association (Union) and its dismissed
officers and members seek to set aside the Decision of the Court of Appeals which
affirmed the Decision and Resolution of the National Labor Relations Commission
(NLRC), declaring illegal the strikes staged by the Union and upholding the dismissal of
the 227 Union officers and members.
On the other hand, in the related cases docketed as G.R. Nos. 158798-99,
Toyota Motor Philippines Corporation (Toyota) prays for the recall of the award of
severance compensation to the 227 dismissed employees, which was granted.
In view of the fact that the parties are petitioner/s and respondent/s and vice-versa
in the four (4) interrelated cases, they will be referred to as simply the Union and Toyota
hereafter.
ISSUE:
(1)
WHETHER THE MASS ACTIONS COMMITTED BY THE UNION ON
DIFFERENT OCCASIONS ARE ILLEGAL STRIKES; AND
(2)
WHETHER SEPARATION PAY SHOULD BE AWARDED TO THE UNION
MEMBERS WHO PARTICIPATED IN THE ILLEGAL STRIKES.
HELD:
We rule that the protest actions undertaken by the Union officials and members
on February 21 to 23, 2001 are not valid and proper exercises of their right to assemble
and ask government for redress of their complaints, but are illegal strikes in breach of
the Labor Code. The Unions position is weakened by the lack of permit from the City of
Manila to hold rallies. Shrouded as demonstrations, they were in reality temporary
stoppages of work perpetrated through the concerted action of the employees who
Page 27

deliberately failed to report for work on the convenient excuse that they will hold a rally
at the BLR and DOLE offices in Intramuros, Manila, on February 21 to 23, 2001. The
purported reason for these protest actions was to safeguard their rights against any
abuse which the med-arbiter may commit against their cause. However, the Union failed
to advance convincing proof that the med-arbiter was biased against them. The acts of
the med-arbiter in the performance of his duties are presumed regular. Sans ample
evidence to the contrary, the Union was unable to justify the February 2001 mass
actions. What comes to the fore is that the decision not to work for two days was
designed and calculated to cripple the manufacturing arm of Toyota. It becomes
obvious that the real and ultimate goal of the Union is to coerce Toyota to finally
acknowledge the Union as the sole bargaining agent of the company. This is not a legal
and valid exercise of the right of assembly and to demand redress of grievance.
It is obvious that the February 21 to 23, 2001 concerted actions were undertaken
without satisfying the prerequisites for a valid strike under Art. 263 of the Labor Code.
The Union failed to comply with the following requirements: (1) a notice of strike filed
with the DOLE 30 days before the intended date of strike, or 15 days in case of unfair
labor practice; (2) strike vote approved by a majority of the total union membership in
the bargaining unit concerned obtained by secret ballot in a meeting called for that
purpose; and (3) notice given to the DOLE of the results of the voting at least seven
days before the intended strike. These requirements are mandatory and the failure of a
union to comply with them renders the strike illegal. The evident intention of the law in
requiring the strike notice and the strike-vote report is to reasonably regulate the right to
strike, which is essential to the attainment of legitimate policy objectives embodied in
the law. As they failed to conform to the law, the strikes on February 21, 22, and 23,
2001 were illegal.
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. Based on existing jurisprudence, the award of separation pay to
the Union officials and members in the instant petitions cannot be sustained.
28. MT. CARMEL COLLEGE VS. JOCELYN RESUENA, ET AL.
Facts:
In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court,
petitioner is not appealing the judgment itself but the manner of execution of the same.
Petitioner Mt. Carmel College is a private educational institution. It is administered by
the Carmelite Fathers at New Escalante, Negros Occidental. Respondents were
Page 28

employees of petitioner. Respondents, together with several faculty members, nonacademic personnel, and other students, participated in a protest action against
petitioner. Thereafter, petitioners Director, Rev. Fr. Modesto E. Malandac, issued a
Memorandum to each of the respondents. The Memorandum directed respondents to
explain in writing why they should not be dismissed for loss of trust and confidence for
joining the protest action against the school administration. Petitioner maintained that
respondents were occupying positions of highly confidential nature. After a hearing
conducted by petitioners Fact-Finding Committee and submission of its Report on 25
April 1998, recommending dismissal or suspension of respondents, petitioner issued
written notices of termination to respondents on 7 May 1998. Respondents were
terminated by petitioner on 15 May 1998. Respondents charged petitioner with illegal
dismissal and claimed 13th month pay, separation pay, damages and attorneys fees.
Labor Arbiter Drilon found that they were not illegally dismissed but ordered that
they be awarded 13th month pay, separation pay and attorneys fees in the amount of
P334,875.47. Upon appeal to the NLRC, the NLRC reversed the findings of the Labor
Arbiter ruling that the termination of respondents was illegal and ordering the payment
of backwages of respondents from 15 May 1998 up to 25 May 1999. It further directed
the reinstatement of respondents or payment of separation pay, with backwages. This
was affirmed by the Court of Appeals.

ISSUE: (1) whether reinstatement in the instant case is self-executory and does not
need a writ of execution for its enforcement; and (2) whether the continuing award of
backwages is proper.

An order for reinstatement must be specifically declared and cannot be

presumed; like back wages, it is a separate and distinct relief given to an illegally
dismissed employee. There being no specific order for reinstatement and the order
being for complainants separation, there can be no basis for the award of salaries/back
wages during the pendency of appeal.
This Court had declared in the aforesaid case that reinstatement during appeal is
warranted only when the Labor Arbiter himself rules that the dismissed employee
should be reinstated. But this was precisely because on appeal to the NLRC, it found
that there was no illegal dismissal; thus, neither reinstatement nor back wages may be
awarded. an illegally dismissed employee is entitled to two reliefs: back wages and
reinstatement. The two reliefs provided are separate and distinct. In instances where
reinstatement is no longer feasible because of strained relations between the employee
and the employer, separation pay is granted. In effect, an illegally dismissed employee
is entitled to either reinstatement, if viable, or separation pay if reinstatement is no
longer viable, and back wages.
Page 29

The normal consequences of respondents illegal dismissal, then, are

reinstatement without loss of seniority rights, and payment of back wages computed
from the time compensation was withheld up to the date of actual reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent to one (1)
month salary for every year of service should be awarded as an alternative. The
payment of separation pay is in addition to payment of back wages.

29. CALTEX (PHILS.), INC. (NOW CHEVRON PHILIPPINES, INC.) VERSUS NLRC
AND ROMEO T. STO. TOMAS
Facts:
Romeo T. Sto Tomas (private respondent) was a regular employee of petitioner since
February 2, 1984. He was a Senior Accounting Analyst receiving a monthly salary of
P29,860.00 at the time of his termination on July 31, 1997. Petitioner, through a letter
dated June 30, 1997, notified private respondent of his termination effective July 31,
1997 due to the redundancy of his position and awarded him a separation package.
Respondent filed with the Labor Arbiter a complaint for illegal dismissal against
petitioner. The LA found that private respondent's dismissal from the service on the
ground of redundancy was done in good faith and a valid exercise of management
prerogative; that redundancy did not deter the employer to hire additional workers when
it is deemed best for proper management; and that there is no need for petitioner to
conduct an impartial investigation or hearing since private respondents dismissal was
not related to his blameworthy act or omission. While the LA found that petitioner failed
to give notice to DOLE one month before the intended date of private respondents
termination, the LA ruled that non-compliance with the procedural requirement will not
per se make the termination illegal and held that requirement of procedural process was
not totally disregarded.

Respondent filed his appeal with the National Labor Relations Commission. The
NLRC expounded that although Article 283 of the Labor Code authorizes termination
due to redundancy, there must be factual basis; that the records did not disclose any
evidence to show basis for respondents termination; that neither did petitioner send
notice to DOLE one month prior to respondents dismissal.

Issues: The issues for resolution are (1) whether private respondents termination on
the ground of redundancy was valid, and (2) whether petitioner gave a written notice to
DOLE as required under Article 283 of the Labor Code.
Held:
Page 30

The CA correctly dismissed herein petitioners petition for certiorari. The NLRC did not
commit grave abuse of discretion in finding that respondent was illegally dismissed.
We have held that the employer must comply with the following requisites to
ensure the validity of the implementation of a redundancy program: 1) a written notice
served on both the employees and the Department of Labor and Employment (DOLE)
at least one month prior to the intended date of retrenchment; 2) payment of separation
pay equivalent to at least one month pay or at least one month pay for every year of
service, whichever is higher; 3) good faith in abolishing the redundant positions; and 4)
fair and reasonable criteria in ascertaining what positions are to be declared redundant
and accordingly abolished.
As we ruled, redundancy exists where the services of
an employee are in excess of what is reasonably demanded by the actual requirement
of the enterprise. It is the burden of petitioner, as employer, to prove the factual and
legal basis for the dismissal of its employees on the ground of redundancy.

30. ROQUE S. DUTERTE VERSUS KINGSWOOD TRADING CO., INC., FILEMON

LIM AND NATIONAL LABOR RELATIONS COMMISSION
Facts:
Petitioner was hired as truck/trailer driver by respondent Kingswood Trading
Company, Inc. (KTC) of which co-respondent Filemon Lim is the President. On
November 8, 1998, petitioner had his first heart attack and was confined for two weeks
at the Philippine Heart Center (PHC). This was confirmed by respondent KTC which
admitted that petitioner was declared on sick leave with corresponding notification. A
month later, petitioner returned to work armed with a medical certificate signed by his
attending physician at the PHC, attesting to petitioners fitness to work. However, said
certificate was not honored by the respondents who refused to allow petitioner to work.
In February 1999, petitioner suffered a second heart attack and was again confined at
the PHC. Upon release, he stayed home and spent time to recuperate.
In June 1999, petitioner attempted to report back to work but was told to look for
another job because he was unfit. Respondents refused to declare petitioner fit to work
unless physically examined by the company physician. On November 11, 1999,
petitioner filed against his employer a complaint for illegal dismissal and damages. The
labor arbiter found for the petitioner. However, while categorically declaring that
petitioners dismissal was illegal, the labor arbiter, instead of applying Article 279 [5] of
the Labor Code on illegal dismissals, applied Article 284 on Disease as ground for
termination on the rationale that since the respondents admitted that petitioner could not
be allowed back to work because of the latters disease, the case fell within the ambit of
Article 284. On respondents appeal, the NLRC, in its Resolution of April 24, 2002, set
aside the labor arbiters decision, ruling that Article 284 of the Labor Code has no
application to this case, there being no illegal dismissal to speak of. The CA upheld
the NLRC Resolution, saying that the Commission committed no grave abuse of

Page 31

discretion in holding that petitioner was not illegally dismissed and could not be granted
any relief.
Issue:
Would the dismissal of an employee on the ground of disease under the said
Article 284 still require the employer to present a certification from a competent public
health authority that the disease is of such a nature that it could not be cured within a
period of six months even with proper medical treatment?
Held:
The Court disagrees with the NLRC and CA. The law is unequivocal: the employer,
before it can legally dismiss its employee on the ground of disease, must adduce a
certification from a competent public authority that the disease of which its employee is
suffering is of such nature or at such a stage that it cannot be cured within a period of
six months even with proper treatment. Here, the record does not contain the required
certification. And when the respondents asked the petitioner to look for another job
because he was unfit to work, such unilateral declaration, even if backed up by the
findings of its company doctors, did not meet the quantum requirement mandated by the
law, i.e., there must be a certification by a competent public authority. All told, we rule
and so hold that petitioners dismissal did not comply with both the substantive and
procedural aspects of due process. Clearly, his dismissal is tainted with invalidity.

31. GSIS VS. VALLAR

Facts:
From 1991 to 1996, former Judge Teotimo Vallar presided over the Municipal
Circuit Trial Court (MCTC) of Catarman-Sagay, Camiguin Province. During his tenure,
Judge Vallar suffered chronic obstructive pulmonary disease (COPD). On July 4, 1996,
Judge Vallar passed away at the age of sixty-six (66). The cause of death was
bronchopneumonia secondary to paraplegia: neuromyelitis. His surviving spouse,
Victoriousa Vallar, convinced that her husbands ailment was work-related, filed a claim
for death benefits with the Government Service Insurance System (GSIS) pursuant to
Presidential Decree (P.D.) No. 626, as amended. However, the GSIS, in its Decision
dated December 18, 2001, denied her claim for lack of substantial evidence to prove
that the cause of his death was work-connected. On appeal by Victoriousa, the
Employees Compensation Commission (ECC) rendered a Decision affirming the GSIS
judgment. The Court of Appeals rendered its Decision reversing that of the ECC and
awarded full benefits pursuant to the provisions of Presidential Decree No. 626, as
amended.
Issue: Whether the Court of Appeals erred in holding that the diseases which caused
the demise of Judge Vallar are compensable under the law.
Page 32

Held:
Section 1 of P.D. No. 626, as amended, defines a compensable sickness as any
illness definitely accepted as an occupational disease listed by the Commission or
any illness caused by employment subject to proof by the employee that the risk of
contracting the same is increased by his working conditions. Under the Amended
Rules on Employee Compensation, for the sickness and the resulting disability or death
to be compensable, the claimant must prove that: (a) the sickness must be the result
of an occupational disease listed under Annex A of the Rules with the conditions set
therein satisfied, or (b) it must be shown that the risk of contracting the disease is
increased by the working conditions. It is true that neuromyelitis optica or Davics
disease, a disorder of the spinal cord, is not listed as an occupational disease in Annex
A of the Amended Rules on Employee Compensation. However, this will not bar a
claim for benefits under the law if the complainant can adduce substantial evidence that
the risk of contracting the illness is increased or aggravated by the working conditions to
which the employee is exposed to. Judge Vallar evidently did his best to live up to these
exacting standards. He worked long hours and burned the midnight oil reading records
of cases, transcripts of stenographic notes, law books, legal periodicals and other legal
materials. Often, he had to work at home and even during weekends. His daily
routine certainly subjected him to visual fatigue, stress and strain. These severely
strenuous working conditions contributed to the weakening of his immune system and
caused him to contract neuromyelitis. Thus, his health failed and eventually, he died.
The Decision of the Court of Appeals (Second Division) was AFFIRMED. Petitioner
GSIS was ordered to pay respondent Victoriousa B. Vallar, upon notice, the full benefits
she is entitled to under P.D. No. 626, as amended.

32. PIONEER INTERNATIONAL, LTD VS. HON. TEOFILO GUADIZ, JR., IN HIS
CAPACITY AS PRESIDING JUDGE OF REGIONAL TRIAL COURT, BRANCH 147,
MAKATI CITY, AND ANTONIO D. TODARO
G.R. No. 156848 October 11, 2007
Facts:
PIL is a corporation duly organized under Australian laws, while PCPI and PPHI
are corporations duly organized under Philippine laws. PIL is engaged in the ready-mix
and concrete aggregates business and has established a presence worldwide. PIL
established PPHI as the holding company of the stocks of its operating company in the
Philippines, PCPI. McDonald is the Chief Executive Officer of PILs Hong Kong office
while Klepzig is the President and Managing Director of PPHI and PCPI. For his part,
Todaro further alleged that he was the managing director of Betonval Readyconcrete,
Inc. (Betonval) from June 1975 up to his resignation in February 1996.
Page 33

Before Todaro filed his complaint, there were several meetings and exchanges of letters
between Todaro and the officers of Pioneer Concrete (Hong Kong) Limited, Pioneer
Concrete Group HK, PPHI, and PIL. According to Todaro, PIL contacted him in May
1996 and asked if he could join it in establishing a pre-mixed concrete plant and in
overseeing its operations in the Philippines. Todaro confirmed his availability and
expressed interest in joining PIL. Todaro met with several of PILs representatives and
even gave PIL the names of three of his subordinates in Betonval whom he would like
to join him in PIL. Todaro sent a letter accepting the proposal of PIONEER INTL. as a
consultant for three (3) months on the condition that after three (3) months consultancy,
he should be employed by PIONEER INTL., on a permanent basis, as its Managing
Director or CEO in the Philippines. McDonald, under the letterhead of Pioneer Concrete
Group HK, replied to Todaro stating his confirmation of the offer to engage Todaro as a
consultant to Pioneer International Ltd. Should Pioneer proceed with an investment in
the Philippines, then Pioneer would offer him a position to manage the premixed
concrete operations. Todaro confirmed McDonalds package concerning the
consultancy and reiterated his desire to be the manager of Pioneers Philippine
business venture. Klepzig sent another letter, under the letterhead of PPHI, to Todaro
dated 18 September 1997. Klepzigs message reads:
It has not proven possible for this company to meet with your expectations regarding the
conditions of your providing Pioneer with consultancy services. This, and your refusal
to consider my terms of offer of permanent employment, leave me no alternative but to
withdraw these offers of employment with this company.
The letter dated 20 October 1997 of K.M. Folwell (Folwell), PILs Executive General
Manager of Australia and Asia, to Todaro confirmed the contents of Klepzigs letter.

PIL filed, by special appearance, a motion to dismiss Todaros complaint. PILs

co-defendants, PCPI, PPHI, and Klepzig, filed a separate motion to dismiss. PIL
asserted that the trial court has no jurisdiction over PIL because PIL is a foreign
corporation not doing business in the Philippines. PIL also questioned the service of
summons on it. Assuming arguendo that Klepzig is PILs agent in the Philippines, it was
not Klepzig but De Leon who received the summons for PIL. PIL further stated that the
National Labor Relations Commission (NLRC), and not the trial court, has jurisdiction
over the subject matter of the action. It claimed that assuming that the trial court has
jurisdiction over the subject matter of the action, the complaint should be dismissed on
the ground of forum non-conveniens. Finally, PIL maintained that the complaint does
not state a cause of action because there was no perfected contract, and no personal
judgment could be rendered by the trial court against PIL because PIL is a foreign
corporation not doing business in the Philippines and there was improper service of
summons on PIL.

Issues:
Page 34

A.
[The trial court] did not and cannot acquire jurisdiction over the person of [PIL]
considering that: [PIL] is a foreign corporation not doing business in the Philippines.
Moreover, the complaint does not contain appropriate allegations of ultimate facts
showing that [PIL] is doing or
transacting business in the Philippines. Assuming
arguendo that jurisdiction may be acquired over
the person of [PIL], [the trial
court] still failed to acquire jurisdiction since summons was improperly served on [PIL].
B.
[Todaro] does not have a cause of action and the complaint fails to state a cause
of action. Jurisprudence is settled in that in resolving a motion to dismiss, a court can
consider all the pleadings filed in the case, including annexes, motions and all evidence
on record.
C.
[The trial court] did not and cannot acquire jurisdiction over the subject matter of
the complaint since the allegations contained therein indubitably show that [Todaro]
bases his claims on an alleged breach of an employment contract. Thus, exclusive
jurisdiction is vested with the [NLRC].
D.
Pursuant to the principle of forum non-conveniens, [the trial court] committed
grave abuse of discretion when it took cognizance of the case.

Held:

The doctrine of forum non-conveniens requires an examination of the

truthfulness of the allegations in the complaint. Section 1, Rule 16 of the 1997 Rules of
Civil Procedure does not mention forum non-conveniens as a ground for filing a motion
to dismiss. The propriety of dismissing a case based on forum non-conveniens requires
a factual determination; hence, it is more properly considered a matter of defense.
While it is within the discretion of the trial court to abstain from assuming jurisdiction on
this ground, the trial court should do so only after vital facts are established to determine
whether special circumstances require the courts desistance.

PIL was doing business in the Philippines when it negotiated Todaros employment with
PPHI. This is in accordance to Section 3(d) of Republic Act No. 7042, Foreign
Investments Act of 1991. PILs alleged acts in actively negotiating to employ Todaro to
run its pre-mixed concrete operations in the Philippines, which acts are hypothetically
admitted in PILs motion to dismiss, are not mere acts of a passive investor in a
domestic corporation. Such are managerial and operational acts in directing and
establishing commercial operations in the Philippines.
Page 35

When summons is served on a foreign juridical entity, there are three prescribed ways:
(1) service on its resident agent designated in accordance with law for that purpose, (2)
service on the government official designated by law to receive summons if the
corporation does not have a resident agent, and (3) service on any of the corporations
officers or agents within the Philippines. However, summons was not served personally
on Klepzig as agent of PIL. Instead, summons was served on De Leon, Klepzigs
Executive Assistant. In this instance, De Leon was not PILs agent but a mere
employee of Klepzig. In effect, the sheriff resorted to substituted service. For symmetry,
the rule on substituted service of summons on a natural person was applied and it was
held that no reason was given to justify the service of PILs summons on De Leon. PIL
transacted business in the Philippines and Klepzig was its agent within the Philippines.
However, there was improper service of summons on PIL since summons was not
served personally on Klepzig.

Todaros employment in the Philippines would not be with PIL but with PPHI as stated in
the letter of Folwell. Assuming the existence of the employment agreement, the
employer-employee relationship would be between PPHI and Todaro, not between PIL
and Todaro.
PILs liability for the non-implementation of the alleged employment
agreement is a civil dispute properly belonging to the regular courts. Todaros causes
of action as stated in his complaint are, in addition to breach of contract, based on
violation of Articles 19 and 21 of the New Civil Code for the clear and evident bad
faith and malice on the part of defendants. The NLRCs jurisdiction is limited to those
enumerated under Article 217 of the Labor Code.

WHEREFORE, the petition was PARTIALLY GRANTED. The Decision dated 27

September 2001 and the Resolution dated 14 January 2003 of the appellate court were
AFFIRMED with the MODIFICATION that there was improper service of summons on
Pioneer International, Ltd. The case was remanded to the trial court for proper service
of summons and trial. No costs.

36. SMC VS. LAYOC

Facts:
Respondents were among the Supervisory Security Guards of the Beer Division
of the San Miguel Corporation, a domestic corporation duly organized and existing
under and by virtue of the laws of the Republic of the Philippines with offices at No. 40
San Miguel Avenue, Mandaluyong City. They started working as guards with the
petitioner San Miguel Corporation assigned to the Beer Division on different dates
until such time that they were promoted as supervising security guards. From the
Page 36

commencement of their employment, the private respondents were required to punch

their time cards for purposes of determining the time they would come in and out of the
companys work place. Corollary, the private respondents were availing the benefits for
overtime, holiday and night premium duty through time card punching. However, in the
early 1990s, the San Miguel Corporation embarked on a Decentralization Program
aimed at enabling the separate divisions of the San Miguel Corporation to pursue a
more efficient and effective management of their respective operations. As a result of
the Decentralization Program, the Beer Division of the San Miguel Corporation
implemented a no time card policy whereby the Supervisory I and II composing of the
supervising security guards of the Beer Division were no longer required to punch their
time cards. Consequently, without prior consultation with the private respondents, the
time cards were ordered confiscated and the latter were no longer allowed to render
overtime work.
However, in lieu of the overtime pay and the premium pay, the personnel of the Beer
Division of the petitioner San Miguel Corporation affected by the No Time Card Policy
were given a 10% across-the-board increase on their basic pay while the supervisors
who were assigned in the night shift (6:00 p.m. to 6:00 a.m.) were given night shift
allowance ranging from P2,000.00 to P2,500.00 a month.
Respondents filed a complaint for unfair labor practice, violation of Article 100 of the
Labor Code of the Philippines, and violation of the equal protection clause and due
process of law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code of
the Philippines. Respondents prayed for actual damages for two years (1993-1994),
moral damages, exemplary damages, and overtime, holiday, and night premium pay.
Respondents stated that the Beer Division of SMC maliciously and fraudulently refused
payment of their overtime, holiday, and night premium pay from because of the no time
card policy. Moreover, petitioners had no written authority to stop respondents from
punching their time cards because the alleged memorandum authorizing such stoppage
did not include supervisory security guards. Thus, the respondents suffered a
diminution of benefits, making petitioners liable for non-payment of overtime, holiday,
and night premium pay.

The Labor Arbiter ruled that rendering services beyond the regular eight-hour work day
has become company practice. Moreover, petitioners failed to show good faith in the
exercise of their management prerogative in altering company practice because
petitioners changed the terms and conditions of employment from hours of work
rendered to result only with respect to respondents and not with other supervisors in
other departments. The NLRC affirmed with modification the ruling of Arbiter Canizares
that respondents suffered a diminution of benefits as a result of the adoption of the no
time card policy. The NLRC cited a well-established rule that employees have a
vested right over existing benefits voluntarily granted to them by their employer, who
may not unilaterally withdraw, eliminate, or diminish such benefits. In the present case,
there was a company practice which allowed the enjoyment of substantial additional
remuneration. Furthermore, there is no rule excluding managerial employees from the
Page 37

coverage of the principle of non-diminution of benefits. The appellate court ruled that
while the implementation of the no time card policy was a valid exercise of
management prerogative, the rendering of overtime work by respondents was a longaccepted practice in SMC which could not be peremptorily withdrawn without running
afoul with the principles of justice and equity. The appellate court affirmed the deletion
of the award of actual, moral, and exemplary damages. With the exception of Layoc,
respondents did not present proof of previous earnings from overtime work and were
not awarded with actual damages. Moreover, the appellate court did not find that the
implementation of the no time card policy caused any physical suffering, moral shock,
social humiliation, besmirched reputation, and similar injury to respondents to justify the
award of moral and exemplary damages.

Issue: Whether the circumstances in the present case constitute an exception to the
rule that supervisory employees are not entitled to overtime pay.

Held:
Article 82 of the Labor Code states that the provisions of the Labor Code on working
conditions and rest periods shall not apply to managerial employees. The other
provisions in the Title include normal hours of work (Article 83), hours worked (Article
84), meal periods (Article 85), night shift differential (Article 86), overtime work (Article
87), undertime not offset by overtime (Article 88), emergency overtime work (Article
89), and computation of additional compensation (Article 90). It is thus clear that,
generally, managerial employees such as respondents are not entitled to overtime pay
for services rendered in excess of eight hours a day. Respondents failed to show that
the circumstances of the present case constitute an exception to this general rule.

First, respondents assert that Article 100 of the Labor Code prohibits the elimination or
diminution of benefits. However, contrary to the nature of benefits, petitioners did not
freely give the payment for overtime work to respondents. Petitioners paid respondents
overtime pay as compensation for services rendered in addition to the regular work
hours. Respondents rendered overtime work only when their services were needed
after their regular working hours and only upon the instructions of their superiors. Aside
from their allegations, respondents were not able to present anything to prove that
petitioners were obliged to permit respondents to render overtime work and give them
the corresponding overtime pay. Even if petitioners did not institute a no time card
policy, respondents could not demand overtime pay from petitioners if respondents did
not render overtime work. The requirement of rendering additional service differentiates
overtime pay from benefits such as thirteenth month pay or yearly merit increase. These
benefits do not require any additional service from their beneficiaries. Thus, overtime
pay does not fall within the definition of benefits under Article 100 of the Labor Code.
Page 38

Given the discretion granted to the various divisions of SMC in the management and
operation of their respective businesses and in the formulation and implementation of
policies affecting their operations and their personnel, the no time card policy affecting
all of the supervisory employees of the Beer Division is a valid exercise of management
prerogative. The no time card policy undoubtedly caused pecuniary loss to
respondents. However, petitioners granted to respondents and other supervisory
employees a 10% across-the-board increase in pay and night shift allowance, in
addition to their yearly merit increase in basic salary, to cushion the impact of the loss.
So long as a companys management prerogatives are 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 or under valid
agreements, the Court will uphold them.

WHEREFORE, the petition is GRANTED. The Decision dated 29 August 2001 of the
Court of Appeals in CA-G.R. SP No. 55838 ordering petitioners San Miguel Corporation,
Andres Soriano III, Francisco C. Eizmendi, Jr., and Faustino F. Galang to pay
Numeriano Layoc, Jr. overtime pay and the other respondents nominal damages is
SET ASIDE. The complaint of respondents is DISMISSED.

41. LOLITA LOPEZ, PETITIONER, VS. BODEGA CITY (VIDEO-DISCO KITCHEN

OF THE PHILIPPINES) AND/OR ANDRES C. TORRES-YAP, RESPONDENTS.
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court assailing the July 18, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. SP
No. 66861, dismissing the petition for certiorari filed before it and affirming the Decision
of the National Labor Relations Commission (NLRC) in NLRC-NCR Case No. 00-0301729-95; and its Resolution dated October 16, 2002,2 denying petitioner's Motion for
Reconsideration. The NLRC Decision set aside the Decision of the Labor Arbiter finding
that Lolita Lopez (petitioner) was illegally dismissed by Bodega City and/or Andres C.
Torres-Yap (respondents).
FACTS
1 Respondent Bodega City (Bodega City) is a corporation, while respondent Andres C.
Torres-Yap (Yap) is its owner/ manager of Bodega City. Petitioner was the "lady
keeper" of Bodega City tasked with manning its ladies' comfort room.
2 Bodega alleged that Lopez have acted in a hostile manner against a lady customer
who informed the management that she saw petitioner sleeping while on duty.

Page 39

3 Petitioner Lopez filed with NLRC, a complaint for illegal dismissal contending that she
was dismissed from her employment without cause and due process.
4 In their answer, respondents Bodega contended that no employer-employee
relationship by virtue of a concessionaire agreement she entered into with respondents.
5 The complaint was dismissed by the Labor Arbiter for lack of merit. However, on
appeal, the NLRC set aside the order of dismissal and remanded the case for further
proceedings. Upon remand, the case was assigned to a different Labor Arbiter.
Thereafter, hearings were conducted and the parties were required to submit
memoranda and other supporting documents.
6 The Judgment finds that Lopez was an employee of respondents and that the latter
illegally dismissed her.3
7 Respondents(Bodega) filed an appeal with the NLRC. On March 22, 2001, the NLRC
issued a Resolution, the dispositive portion of which reads as follows: WHEREFORE,
premises duly considered, the Decision appealed from is hereby ordered SET ASIDE
and VACATED, and in its stead, a new one entered DISMISSING the above-entitled
case for lack of merit.4
8 Petitioner (LOPEZ_filed an MR of the above-quoted NLRC Resolution, but the NLRC
denied the same.
9 Aggrieved, petitioner filed a Petition for Certiorari with the CA. The the CA
promulgated the presently assailed Decision dismissing her special civil action for
certiorari.
10 Petitioner moved for reconsideration but her motion was denied.
11 Hence, herein petition based on the following grounds:(RULE 45)
1.Petitioner contends that it was wrong for the CA to conclude that even if she did
not sign the document evidencing the concessionaire agreement, she impliedly
accepted and thus bound herself to the terms and conditions contained in the said
agreement when she continued to perform the task which was allegedly specified
therein for a considerable length of time.
2. Petitioner claims that the concessionaire agreement was only offered to her
during her tenth year of service and after she organized a union and filed a complaint
against respondents. Prior to all these, petitioner asserts that her job as a "lady keeper"
was a task assigned to her as an employee of respondents.
Petitioner Lopez further argues her EVIDENCES

Page 40

(1)
receipt of a special allowance - from respondents is a clear evidence that she
was an employee of the latter, as the amount she received was equivalent to the
minimum wage at that time.
(2)
her identification card(EVIDENCE 2) clearly shows that she was not a
concessionaire but an employee of respondents Moreover, petitioner submits that the
fact
(3)
that she was required to follow rules and regulations prescribing appropriate
conduct while she was in the premises of Bodega City is clear evidence of the existence
of an employer-employee relationship between her and petitioners.
12 On the other hand, respondents Bodega contend that the present petition was filed
for the sole purpose of delaying the proceedings of the case; the grounds relied upon in
the instant petition are matters that have been exhaustively discussed by the NLRC and
the CA;
Respondent Bodegas evidence to rebut
[1] concessionaire contract for a period of three years is evidence of her implied
acceptance of such proposal;
[2] Lopez failed to present evidence to prove her allegation that the subject
concessionaire agreement was only proposed to her in her 10th year of employment
with respondent company and after she organized a union and filed a labor complaint
against respondents; petitioner failed to present competent documentary and
testimonial evidence to prove her contention that she was an employee of respondents
since 1985.
ISSUES : Whether or not Lopez is an employee of respondents.
HELD
To ascertain the existence of an employer-employee relationship, jurisprudence has
invariably applied the four-fold test, namely: (1) the manner of selection and
engagement; (2) the payment of wages; (3) the presence or absence of the power of
dismissal; and (4) the presence or absence of the power of control. Of these four, the
last one is the most important. The so-called "control test" is commonly regarded as the
most crucial and determinative indicator of the presence or absence of an employeremployee relationship.
To prove the element of payment of wages, petitioner presented a petty cash voucher
showing that she received an allowance for five (5) days.18 The CA did not err when it
held that a solitary petty cash voucher did not prove that petitioner had been receiving
salary from respondents or that she had been respondents' employee for 10 years.
Indeed, if petitioner was really an employee of respondents for that length of time, she
Page 41

should have been able to present salary vouchers or pay slips and not just a single
petty cash voucher. The Court agrees with respondents that petitioner could have easily
shown other pieces of evidence such as a contract of employment, SSS or Medicare
forms, or certificates of withholding tax on compensation income; or she could have
presented witnesses to prove her contention that she was an employee of respondents.
Petitioner failed to do so.
The only evidence presented by petitioner as proof of her alleged employment are her
ID card and one petty cash voucher for a five-day allowance which were disputed by
respondents.
To prove the element of control, there is nothing in the agreement which specifies the
methods by which petitioner should achieve these results. Thus, petitioner was not
dismissed by respondents. Instead, as shown by the letter of Yap to her their
contractual relationship was terminated by reason of respondents' termination of the
subject concessionaire agreement.

42. C.F. SHARP CREW MANAGEMENT, INC., PETITIONER, VS. HON.

UNDERSECRETARY JOSE M. ESPANOL, JR., HON. SECRETARY LEONARDO A.
QUISUMBING
AND
RIZAL
INTERNATIONAL
SHIPPING
SERVICES,
RESPONDENTS.
The petitioner C.F. Sharp Crew Management, Inc. (C.F. Sharp) appeals by certiorari the
April 30, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 53747 and the
November 5, 2002 Resolution2 denying its reconsideration.
PARTIES
Louis Cruise Lines (LCL), a foreign corporation duly organized and existing under the
laws of Cyprus, entered into a Crewing Agreement3 with
Papadopolous Shipping, Ltd. (PAPASHIP). PAPASHIP in turn appointed private
respondent
Rizal International Shipping Services (Rizal) as manning agency in the Philippines,
recruiting Filipino seamen for LCLs vessel.
FACTS
Page 42

1 LCL terminated the Crewing Agreement with PAPASHIP to take effect on December
31, 1996. It then appointed C.F. Sharp as crewing agent in the Philippines. C.F. Sharp
requested for accreditation as the new manning agency of LCL with the (POEA), but
Rizal objected on the ground that its accreditation still existed and would only expire on
December 31, 1996.
2 Pending approval of the accreditation, two(2) principals of LCL arrived in the
Philippines and conducted a series of interviews for seafarers at C.F. Sharps office.
Rizal reported LCLs recruitment activities to the POEA on December 9, 1996, and
requested an ocular inspection of C.F. Sharps premises.
3 On December 17, 1996, POEA representatives conducted an inspection and found
the two(2) principals C.F. Sharp interviewing and recruiting .The Inspection Report5
signed by Corazon Aquino of the POEA and countersigned by Mr. Reynaldo Banawis of
C.F. Sharp was thereafter submitted to the POEA.
4. On January 2, 1997, Rizal filed a complaint6 for illegal recruitment, cancellation or
revocation of license, and blacklisting against LCL and C.F. Sharp with the POEA
5.For its part, C.F. Sharp admitted that the two principals conducted interviews at C.F.
Sharps office, but denied that they were for recruitment and selection purposes but for
LCLs ex-crew members who had various complaints against Rizal. It belittled the
inspection report of the POEA inspection team claiming that it simply stated that
interviews and recruitment were undertaken, without reference to who were conducting
the interview and for what vessels.8
6. The POEA Administrator was not persuaded and found C.F. Sharp liable for illegal
recruitment and ordered suspended for a period of six (6) months or in lieu thereof, it is
ordered to pay a fine of P50,000.00 for violation of Art. 29 of the Labor Code, as
amended in relation to Sec. 6(b), Rule II, Book II of the Rules and Regulations
Governing Overseas Employment in accordance with the schedule of penalties. Further,
the respondent CF Sharp is as it is hereby ordered suspended for another period of
[eighteen] (18) months or to pay the fine of P180,000.00 for committing 9 counts of
violation of Article 29 of the Labor Code as amended in relation to Sec. 2(k), Rule I,
Book VI of the Rules and Regulations governing Overseas Employment.
7 C.F. Sharp elevated the Administrators ruling to the Department of Labor and
Employment (DOLE), but the AFFIRMED the decision.
8. A supersedeas bond was posted by the CF Sharp for payment of the fines as
imposed above should the CF Sharp opt to pay the fine instead of undergoing
suspension of its license. However, the suspension shall remain in force until such fine
is paid, or in the event that the petitioner-appellant further appeals this Order.
9. C.F. Sharps motion for reconsideration having been denied on February 5, 1999 by
the then Undersecretary, Jose M. Espanol, Jr.,
Page 43

10. It elevated the case to this Court on petition for certiorari, DOLE Resolution, this
Court referred the petition to the CA.
11. The CA denied C.F. Sharps petition for certiorari,17 holding that C.F. Sharp was
already estopped from assailing the Secretary of Labors ruling because it had
manifested its option to have the cash bond posted answer for the alternative fines
imposed upon it. By paying the adjudged fines, C.F. Sharp effectively executed the
judgment, The CA also agreed with the POEA Administrator and the Secretary of Labor
that LCL, along with C.F. Sharp, undertook recruitment activities without authority..
Finally, it affirmed both labor officials finding that C.F. Sharp violated Article 29 of the
Labor Code and Section 2(k), Rule I, Book VI of the POEA Rules when it appointed
Henry Desiderio as agent, without prior approval from the POEA. Thus, the appellate
court declared that the Secretary of Labor acted well within his discretion in holding C.F.
Sharp liable for illegal recruitment.
12 C.F. Sharp filed a motion for reconsideration,18 but the CA denied it on November
25, 2002.19
Issue: Whether or not C.F. Sharp is liable for illegal recruitment.

HELD
C.F. Sharp denies committing illegal recruitment activities in December 1996. It posits
that the interviews undertaken by the LCL principals do not amount to illegal recruitment
under Section 6 of Republic Act No. 8042 or the Migrants Workers Act. Further, it
contends that the interviews conducted were not for selection and recruitment purposes,
but were in connection with the seamens past employment with Rizal, specifically, their
complaints for non-remittance of SSS premiums, withholding of wages, illegal exactions
from medical examinations and delayed allotments. It claims that it was only upon
approval of its application for accreditation that the employment contracts were entered
into and actual deployment of the seamen was made. C.F. Sharp, thus, concludes that
it cannot be held liable for illegal recruitment.
Article 13(b) of the Labor Code defines recruitment and placement as:
any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad whether for profit or not: Provided, That any person or
entity which in any manner, offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and placement.
On the basis of this definition and contrary to what C.F. Sharp wants to portray - the
conduct of preparatory interviews is a recruitment activity.
Page 44

This Office cannot conceive of a good reason why LCL should be interested at the time
in unearthing alleged violations committed by Rizal Shipping whose representative
status as manning agency was to be terminated in just a few weeks thereafter,
spending valuable time and money in the process. They stood to gain nothing from such
taxing exercise involving several hundreds of ex-crew members, which could be
handled by government agencies like the POEA, NLRC, SSS. The observation of the
POEA Administrator that the complaints of the crewmen were filed only after Rizal
Shipping filed its complaints with the POEA merely to bolster the defense of CF Sharp,
is telling and was just an afterthought.

43. BMG RECORDS (PHILS.), INC. AND JOSE YAP, JR., PETITIONERS,
VS. AIDA C.. APARECIO AND NATIONAL LABOR RELATIONS COMMISSION,
RESPONDENTS.
Facts:
Aida Aparecio worked for BMG records as one of the promo girls in its Cebu Branch.
Later on, Aparecio filed a complaint against BMG and its Branch Manager, Jose Yap,
Jr., co-petitioner herein, for illegal dismissal and non-payment of overtime pay, holiday
pay, premium pay for rest day, 13 th month pay, service incentive leave, and separation
pay. The labor arbiter dismissed Aparecio's complaint. Since the letter of resignation
showed no signs that it was made through duress or compulsion, it was concluded that
the severance of her employment in BMG was brought about by her resignation and not
by the illegal dismissal supposedly committed by the latter. Upon appeal, however, the
NLRC found that Aparecio was illegally dismissed from service. A motion for
reconsideration of the Decision was filed by petitioners. he NLRC, however, resolved to
deny the motion. On appeal, the CA affirmed in toto the judgment of the NLRC.
Petitioners' motion for reconsideration was subsequently denied.
Issue: Whether or not respondent Aparecio was illegally dismissed by BMG.

Held:
No, the severance of her employment was brought about by her submission of
resignation letter to herein petitioner.
Page 45

Also, resignation is the voluntary act of an employee who is in a situation where one
believes that personal reasons cannot be sacrificed in favor of the exigency of the
service, and one has no other choice but to dissociate oneself from employment. It is a
formal pronouncement or relinquishment of an office, with the intention of relinquishing
the office accompanied by the act of relinquishment. As the intent to relinquish must
concur with the overt act of relinquishment, the acts of the employee before and after
the alleged resignation must be considered in determining whether in fact, he or she
intended to sever from his or her employment.

44. VICENTE ALMARIO VS. PAL

Facts:
Vicente Almario worked for Pal as Systems Engineer and later on as First
Officer. Upon promotion, Almario underwent an additional training. After eight monts of
service, he tendered his resignation.
On February 11, 1997, PAL filed a Complaint against Almario before the Makati
Regional Trial Court (RTC), for reimbursement of P851,107 worth of training costs,
attorneys fees equivalent to 20% of the said amount, and costs of litigation.
The RTC dismissed the complaint of PAL and ordered them to pay Almario damages.
On appeal by both parties, the Court of Appeals, by Decision dated March 31, 2005,
reversed the trial courts decision. It found Almario liable under the CBA between PAL
and ALPAP and, in any event, under Article 22 of the Civil Code.
Issue: Whether or not Almario, who resigned after only eight months of service, should
reimburse the training cost to PAL.

Held:
Yes, PAL invested for the training of Almario to enable him to acquire a higher level of
skill, proficiency, or technical competence so that he could efficiently discharge the
position of A-300 officer.
Also, the CBA is the law between the contracting parties. Hence, it should be complied
with both the employee and the employer.

45. PALISOC VS. EASWAYS MARINE, INC.

Facts:
Page 46

Mars Palisoc filed an action before the Arbitration Branch of the NLRC against
respondents and Capt. Terencio.
The Labor Arbiter ruled in favor of Palisoc and ordered Easways Marine, Inc. and its
President to pay disability benefits, medical reimbursement to the former.
Respondents appealed to the NLRC and it modified the decision of the Labor Arbiter.
Petitioner filed a motion for reconsideration but the NLRC denied the same for lack of
merit. Thereafter, petitioner filed a petition for certiorari before the CA. The CA
dismissed the petition.

Issue: Whether or not petitioner is entitled to disability benefits.

Held:
Yes, petitioners inability to work for more than 120 days determines his entitlement to
permanent disability benefits.
Also, the concept of permanent disability in the Labor Code (192 [c] [1]) applies also to
seafarers.

46. PIER AND ARRASTRE & STEVEDORING SERVICES ET AL. VS. BOCLOT

Facts:
Petitioner Pier 8 Arrastre and Stevedoring Services, Inc. (PASSI) is a domestic
corporation engaged in the business of providing arrastre and stevedoring services at
Pier 8 in the Manila North Harbor.
Respondent Jeff B. Boclot was hired by PASSI to perform the functions of a
stevedore. Thereafter, the Philippine Ports Authority (PPA) seized the facilities and took
over the operations of PASSI through its Special Takeover Unit, absorbing PASSI
workers as well as their relievers.
Respondent filed a Complaint with the Labor Arbiter of the NLRC, claiming
regularization; payment of service incentive leave and 13th month pays; moral,
exemplary and actual damages; and attorneys fees. Respondent alleged that he was
hired by PASSI in October 1999 and was issued company ID No. 304, a PPA Pass and
Page 47

SSS documents. In fact, respondent contended that he became a regular employee by

April 2000, since it was his sixth continuous month in service in PASSIs regular course
of business.
However, petitioners alleged that respondent was hired as a mere reliever stevedore
and could thus not become a regular employee.
Labor Arbiter Felipe P. Pati ruled for petitioners and dismissed respondents complaint
contending that Articles 280 and 281 of the Labor Code were inapplicable, on the
contention that the aforementioned articles speak of probationary employees and
casual employees while respondent, as a reliever, is neither a probationary employee
nor a casual employee.
The NLRC predicated its findings that respondent is a regular employee of petitioners
on the reasonable connection between the activity performed by the employee in
relation to the usual business or trade of the employer. It was elevated before the Court
of Appeals but it was affirmed. Hence, Petition for review under Rule 45

Issue: WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT

PRIVATE RESPONDENT JEFF BOCLOT IS A REGULAR EMPLOYEE OF
PETITIONER PIER 8 ARRASTRE & STEVEDORING SERVICES, INC. BECAUSE HE
PERFORMED TASKS WHICH ARE USUALLY NECESSARY AND DESIRABLE TO
THE MAIN BUSINESS OF PETITIONER CORPORATION

Held:
Under the 1987 Philippine Constitution, the State affords full protection to labor, local
and overseas, organized and unorganized; and the promotion of full employment and
equality of employment opportunities for all. The State affirms labor as a primary social
economic force and guarantees that it shall protect the rights of workers and promote
their welfare.
Article 280. Regular and Casual Employment. - The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the 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 services to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
Page 48

service, whether such service is continuous or broken, shall be considered a regular

employee with respect to the activity in which he is employed and his employment shall
continue while such actually exist.
The primary standard, therefore, of determining a regular employment is the
reasonable connection between the particular activity performed by the employee in
relation to the usual business or trade of the employer. The test is whether the former is
usually necessary or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work performed and its
relation to the scheme of the particular business or trade in its entirety. Also, if the
employee has been performing the job for at least one year, even if the performance is
not continuous or merely intermittent, the law deems the repeated and continuing need
for its performance as sufficient evidence of the necessity if not indispensability of that
activity to the business. Hence, the employment is also considered regular, but only
with respect to such activity and while such activity exists.

47. CACERES VS. UNIVERSAL ROBINA SUGAR MILLING CORP. ET AL.

Facts:
Universal Robina Sugar Milling Corporation (respondent) is a corporation
engaged in the cane sugar milling business. Pedy Caseres (petitioner Caseres) started
working for respondent in 1989, while Andito Pael (petitioner Pael) in 1993. At the start
of their respective employments, they were made to sign a Contract of Employment for
Specific Project or Undertaking. Petitioners' contracts were renewed from time to time,
until May 1999 when they were informed that their contracts will not be renewed
anymore.
Petitioners filed a complaint for illegal dismissal, regularization, incentive leave pay,
13th month pay, damages and attorneys fees.
In a Decision dated August 24, 1999, the Labor Arbiter (LA) dismissed the
complaint for not being substantiated with clear and convincing evidence.
The National Labor Relations Commission (NLRC) affirmed the LA's dismissal, and the
Court of Appeals (CA) dismissed the petition filed before it.

Issue: WHETHER OR NOT THE PETITIONERS ARE SEASONAL/PROJECT/TERM

EMPLOYEES NOT REGULAR EMPLOYEES OF RESPONDENTS
Page 49

Held:
ART. 280. Regular and Casual Employees. The provision of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the 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 services to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment shall
continue while such actually exists.
Petitioners' repeated and successive re-employment on the basis of a contract of
employment for more than one year cannot and does not make them regular
employees. Length of service is not the controlling determinant of the employment
tenure of a project employee
The fact that petitioners were constantly re-hired does not ipso facto establish that they
became regular employees. Their respective contracts with respondent show that there
were intervals in their employment. In petitioner Caseres's case, while his employment
lasted from August 1989 to May 1999, the duration of his employment ranged from one
day to several months at a time, and such successive employments were not
continuous. With regard to petitioner Pael, his employment never lasted for more than a
month at a time. These support the conclusion that they were indeed project
employees, and since their work depended on the availability of such contracts or
projects, necessarily the employment of respondents work force was not permanent but
co-terminous with the projects to which they were assigned and from whose payrolls
they were paid
Moreover, even if petitioners were repeatedly and successively re-hired, still it did not
qualify them as regular employees, as length of service is not the controlling
determinant of the employment tenure of a project employee, but whether the
employment has been fixed for a specific project or undertaking, its completion has
been determined at the time of the engagement of the employee. Further, the proviso
in Article 280, stating that an employee who has rendered service for at least one (1)
year shall be considered a regular employee, pertains to casual employees and not to
project employees.

48. JOHN F. MCLEOD, PETITIONER, VS. NATIONAL LABOR RELATIONS

COMMISSION (FIRST DIVISION), FILIPINAS SYNTHETIC FIBER CORPORATION
Page 50

(FILSYN), FAR EASTERN TEXTILE MILLS, INC., STA. ROSA TEXTILES, INC.,
(PEGGY MILLS, INC..), PATRICIO L. LIM, AND ERIC HU, RESPONDENTS.
Facts:
John F.. McLeod filed a complaint for retirement benefits, vacation and sick leave
benefits, non-payment of unused airline tickets, holiday pay, underpayment of salary
and 13th month pay, moral and exemplary damages, attorneys fees plus interest
against Filipinas Synthetic Corporation (Filsyn), Far Eastern Textile Mills, Inc., Sta.
Rosa Textiles, Inc., Patricio Lim and Eric Hu.
The Labor Arbiter decided in favor of herein petitioner and held all respondents as
jointly and solidarily liable for complainants money claims.
Filipinas Synthetic Fiber Corporation (Filsyn), Far Eastern Textile Mills, Inc. (FETMI),
Sta. Rosa Textiles, Inc. (SRTI), Patricio L. Lim (Patricio), and Eric Hu appealed to the
NLRC. The NLRC reversed and set aside the decision of Labor Arbiter and ordered
respondent Peggy Mills, Inc. to pay complainant his retirement pay equivalent to 22.5
days for every year of service for his twelve (12) years of service from 1980 to 1992
based on a salary rate of P50,495.00 a month.
John F. McLeod (McLeod) filed a motion for reconsideration which the NLRC denied in
its Resolution of 30 June 1999. McLeod thus filed a petition for certiorari before the
Court of Appeals assailing the decision and resolution of the NLRC.
The CA affirmed with modification the decision of the NLRC that respondent Patricio
Lim is jointly and solidarily liable with Peggy Mills, Inc., to pay the following amounts to
petitioner John F. McLeod.
Issue: Whether an employer-employee relationship exists between the private
respondents and the petitioner?
Held:
No, McLeod failed to present evidence to support his allegation of employer-employee
relationship between him and any of Filsyn, SRTI, and FETMI. Personal liability of
corporate directors, trustees or officers attaches only when (1) they assent to a patently
unlawful act of the corporation, or when they are guilty of bad faith or gross negligence
in directing its affairs, or when there is a conflict of interest resulting in damages to the
corporation, its stockholders or other persons; (2) they consent to the issuance of
watered down stocks or when, having knowledge of such issuance, do not forthwith file
with the corporate secretary their written objection; (3) they agree to hold themselves
personally and solidarily liable with the corporation; or (4) they are made by specific
provision of law personally answerable for their corporate action.
Considering that McLeod failed to prove any of the foregoing exceptions in the present
case, McLeod cannot hold Patricio solidarily liable with PMI.

Page 51

55. LINGKOD MANGGAGAWA SA RUBBERWORLD, ADIDAS-ANGLO, ITS

OFFICERS AND MEMBERS AS REPRESENTED BY SONIA ESPERANZA,
PETITIONERS, VS. RUBBERWORLD (PHILS.) INC. AND ANTONIO YANG, LAYA
MANANGHAYA SALGADO & CO., CPAS (IN ITS CAPACITY AS LIQUIDATOR OF
RUBBERWORLD (PHILS., INC.), RESPONDENTS.
FACTS:

Herein petitioner union, the Lingkod Manggagawa Sa Rubberworld, Adidas-Anglo

(Lingkod, for brevity), filed a complaint against Rubberworld for unfair labor practice
(ULP), illegal shutdown, and non-payment of salaries and separation pay.
While the aforementioned complaint was pending with Labor Arbiter Dinopol,
Rubberworld filed with the SEC a Petition for Declaration of a State of Suspension of
Payments with Proposed Rehabilitation Plan. With the creation of the Management
Committee, all actions for claims against Rubberworld Philippines, Inc. pending before
any court, tribunal, office, board, body, Commission or sheriff are hereby deemed
SUSPENDED.
Notwithstanding the SEC's aforementioned suspension order and despite
Rubberworld's submission of a Motion to Suspend Proceedings, Labor Arbiter Dinopol
went ahead with the ULP case and rendered his decision thereon declaring respondent
Rubberworld Phils., Inc. to have committed unfair labor practice
A writ of execution was issued by the NLRC in favor of the petitioner union with a copy
thereof served on the respondent corporation. Faced with this dilemma, Rubberworld
filed with the Court an Urgent Omnibus Motion to declare null and void the
execution/garnishment made pursuant to the same writ.
ISSUE:
Whether the writ of execution issued by the NRLC will lie in this case?
HELD:
Given the factual milieu obtaining in this case, it cannot be said that the decision of the
Labor Arbiter, or the decision/dismissal order and writ of execution issued by the NLRC,
could ever attain final and executory status. The Labor Arbiter completely disregarded
and violated Section 6(c) of Presidential Decree 902-A, as amended, which
categorically mandates the suspension of all actions for claims against a corporation
placed under a management committee by the SEC. Thus, the proceedings before the
Labor Arbiter and the order and writ subsequently issued by the NLRC are all null and
void for having been undertaken or issued in violation of the SEC suspension Order. As
such, the Labor Arbiters decision, including the dismissal by the NLRC of Rubberworls
appeal, could not have achieved a final and executory status.

Page 52

Acts executed against the provisions of mandatory or prohibitory laws shall be void,
except when the law itself authorizes their validity.The Labor Arbiter's decision in this
case is void ab initio, and therefore, non-existent. A void judgment is in effect no
judgment at all. No rights are divested by it nor obtained from it. Being worthless in
itself, all proceedings upon which the judgment is founded are equally worthless. It
neither binds nor bars anyone. All acts performed under it and all claims flowing out of it
are void. In other words, a void judgment is regarded as a nullity, and the situation is the
same as it would be if there were no judgment. It accordingly leaves the party-litigants in
the same position they were in before the trial.

56. NORSK HYDRO (PHILS.), INC. AND HANS T. NEVERDAL, PETITIONERS,

VS. BENJAMIN S. ROSALES, JR., RESPONDENT.
FACTS:
Rosales filed before the Labor Arbiter a complaint for illegal dismissal against Norsk
Hydro. He claimed that there was no evidence showing that he defrauded the company.
He also claimed that he was not given opportunity to go over the records incriminating
him and that the investigation was hastily terminated.
For their part, petitioners Norsk Hydro and Neverdal maintained that Rosales was
dismissed for a just cause, having connived with the real estate brokers to overprice the
properties and profited from it to the gross disadvantage of the company. They
contended that Rosales was given time to explain. They had set a hearing, yet Rosales
failed to answer the charges against him.
The Labor Arbiter dismissed the complaint. It held that the company was justified in
terminating Rosales employment on the ground of loss of trust and confidence. The
Labor Arbiter found Abecias sworn statement sufficient basis for the company to lose
its trust and confidence on Rosales. Moreover, the Labor Arbiter found nothing irregular
in the manner Rosales was dismissed.
Rosales appealed to the NLRC, which affirmed the decision of the Labor Arbiter. The
NLRC ruled that the issue of whether there was overpricing is secondary only to the
issue of whether Rosales breached the trust and confidence reposed upon him by his
employer.
Undaunted, Rosales filed a petition for certiorari before the Court of Appeals ascribing
grave abuse of discretion on the part of the NLRC because (1) there was no legal basis
for his dismissal; and (2) his right to due process was violated.
The Court of Appeals reversed the decision of the NLRC and declared that Rosales was
illegally dismissed. The Court of Appeals held that Norsk Hydro failed to prove with
substantial evidence that Rosales participated in the alleged overpricing nor had it
shown the extent of his participation. According to the Court of Appeals, the company
should not have relied on the affidavit of Abecia, who was not a representative of any of
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the owners and that, without being cross-examined, his affidavit was hearsay. It ruled
that Norsk Hydro did not observe due process because it did not furnish Rosales or his
counsel with the documents for him to prepare intelligent answers to the charges
against him.
ISSUE:
Whether the respondent employee was legally dismissed by the petitioner?
HELD:
Law and jurisprudence have long recognized the right of employers to dismiss
employees by reason of loss of trust and confidence, especially in cases of employees
occupying positions of responsibility, on the premise that an employee concerned holds
a position of trust and confidence.
It should also be stressed that proof beyond reasonable doubt is not needed to justify
the loss of trust and confidence on the responsible officer. It is sufficient that there be
some basis for the same, or that the employer has reasonable ground to believe that
the employee is responsible for the misconduct, and his participation therein renders
him unworthy of trust and confidence demanded of his position. Article 282(c) of the
Labor Code states, however, that the loss of trust and confidence must be based on
willful breach of the trust reposed in the employee by his employer. Ordinary breach will
not suffice; it must be willful. Such breach is willful if it is done intentionally, knowingly,
and purposely, without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. More specifically the loss of trust must be
founded on clearly established facts.

57. COCA COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA, MANAGER,

PETITIONERS, VS. DR. DEAN N. CLIMACO, RESPONDENT.
FACTS:
Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner CocaCola Bottlers Phils., Inc. by virtue of a Retainer Agreement. Respondent inquired from
the management of petitioner company whether it was agreeable to recognizing him as
a regular employee. The management refused to do so.
Respondent filed a Complaint before the NLRC, seeking recognition as a regular
employee of petitioner company and prayed for the payment of all benefits of a regular
employee, including 13th Month Pay, Cost of Living Allowance, Holiday Pay, Service
Incentive Leave Pay, and Christmas Bonus.
While the complaint was pending before the Labor Arbiter, respondent received a letter
from petitioner company concluding their retainership agreement effective thirty (30)
days from receipt thereof. This prompted respondent to file a complaint for illegal
dismissal against petitioner company with the NLRC.
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The Labor Arbiter found that petitioner company lacked the power of control over
respondents performance of his duties, and recognized as valid the Retainer
Agreement between the parties. Thus, the Labor Arbiter dismissed respondents
complaint in the first case.
Respondent appealed both decisions to the NLRC. The NLRC dismissed the appeal in
both cases for lack of merit. It declared that no employer-employee relationship existed
between petitioner company and respondent based on the provisions of the Retainer
Agreement which contract governed respondents employment.
The Court of Appeals ruled that an employer-employee relationship existed between
petitioner company and respondent after applying the four-fold test: (1) the power to hire
the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
employers power to control the employee with respect to the means and methods by
which the work is to be accomplished. The Retainer Agreement executed by and
between the parties, when read together with the Comprehensive Medical Plan which
was made an integral part of the retainer agreements, coupled with the actual services
rendered by the petitioner, would show that all the elements of the above test are
present.

ISSUE: Whether or not there exists an employer-employee relationship between the

parties. The resolution of the main issue will determine whether the termination of
respondents employment is illegal.
HELD:
The Court, in determining the existence of an employer-employee relationship, has
invariably adhered to the four-fold test: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to
control the employees conduct, or the so-called "control test," considered to be the
most important element.
The Court agrees with the finding of the Labor Arbiter and the NLRC that the
circumstances of this case show that no employer-employee relationship exists
between the parties. The Labor Arbiter and the NLRC correctly found that petitioner
company lacked the power of control over the performance by respondent of his duties.
The Labor Arbiter reasoned that the Comprehensive Medical Plan, which contains the
respondents objectives, duties and obligations, does not tell respondent "how to
conduct his physical examination, how to immunize, or how to diagnose and treat his
patients, employees of [petitioner] company,
Likewise, the allegation of complainant that since he is on call at anytime of the day and
night makes him a regular employee is off-tangent. Complainant does not dispute the
fact that outside of the two (2) hours that he is required to be at respondent companys
premises, he is not at all further required to just sit around in the premises and wait for
an emergency to occur so as to enable him from using such hours for his own benefit
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and advantage. In fact, complainant maintains his own private clinic attending to his
private practice in the city, where he services his patients, bills them accordingly -- and
if it is an employee of respondent company who is attended to by him for special
treatment that needs hospitalization or operation, this is subject to a special billing. More
often than not, an employee is required to stay in the employers workplace or
proximately close thereto that he cannot utilize his time effectively and gainfully for his
own purpose

58. FABELA VS. SAN MIGUEL CORPORATION

Facts:
Petitioners, along with Joselito de Lara and John Alovera, were hired by
respondent San Miguel Corporation (SMC) as "Relief Salesmen" for the Greater Manila
Area (GMA) under separate but almost similarly worded "Contracts of Employment With
Fixed Period." After having entered into successive contracts of the same nature with
SMC, the services of petitioners, as well as de Lara and Alovera, were terminated after
SMC no longer agreed to forge another contract with them. Respondent SMC and its
co-respondent Arman Hicarte, who was its Human Resources Manager, claimed that
the hiring of petitioners was not intended to be permanent, as the same was merely
occasioned by the need to fill in a vacuum arising from SMCs gradual transition to a
new system of selling and delivering its products. Respondents explained that SMC
previously operated under the "Route System," but began implementing in 1993 the
"Pre-Selling System" in which the salesmen under the earlier system would be replaced
by Accounts Specialists which called for upgraded qualifications. The Office of the
Labor Arbiter ordered that the respondents be reinstated Marcelo Dela Cruz, Norlito
Fabela, Henry Maliwanag, Rogelio Lasat, Manuel Delos Santos and Rommel Quines to
their former positions with full backwages from the time their salaries were withheld until
they are actually reinstated. As of this date, their backwages has reached the sum of
P562,336.64. (See attached computation). The complaints of Jun Alovera and Joselito
De Lara must be dismissed for lack of merit. The Decision of the Labor Arbiter was
affirmed on appeal by the NLRC. The Court of Appeals reversed the decision of the
Labor Arbiter and of the NLRC.

Issue: Whether or not the petitioners were illegally dismissed.

Held:

Yes. Respondents contention that there are fixed periods stated in the contracts of
employment does not lie. Brent instructs that a contract of employment stipulating a
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fixed-term, even if clear as regards the existence of a period, is invalid if it can be shown
that the same was executed with the intention of circumventing security of tenure, and
should thus be ignored. And so does Paguio v. NLRC,17 thus:
x x x A stipulation [for a fixed-term] in an agreement can be ignored as and when it is
utilized to deprive the employee of his security of tenure. The sheer inequality that
characterizes employer-employee relations, where the scales generally tip against the
employee, often scarcely provides him real and better options. As Brent pronounces, a
fixed-term employment is valid only under certain circumstances, such as when the
employee himself insists upon the period, or where the nature of the engagement is
such that, without being seasonal or for a specific project, a definite date of termination
is a sine qua non. The Supreme court upheld the decision of the Labor Arbiter and the
NLRC.

59. PANUNCILLO VS. CAP PHILIPPINES, INC.

Facts:

In order to secure the education of her son, petitioner procured an educational plan (the
plan) from respondent which she had fully paid but which she later sold to Josefina
Pernes (Josefina) for P37,000. Before the actual transfer of the plan could be effected,
however, petitioner pledged it for P50,000 to John Chua who, however, sold it to Benito
Bonghanoy. Bonghanoy in turn sold the plan to Gaudioso R. Uy for P60,000. Having
gotten wind of the transactions subsequent to her purchase of the plan, Josefina, by
letter of February 10, 1999,4 informed respondent that petitioner had "swindled" her but
that she was willing to settle the case amicably as long as petitioner pay the amount
involved and the interest. Acting on Josefinas letter, the Integrated Internal Audit
Operations (IIAO) of respondent required petitioner to explain in writing why the plan
had not been transferred to Josefina and was instead sold to another. Respondent
thereupon terminated the services of petitioner by Memorandum. Petitioner thus filed a
complaint14 for illegal dismissal, 13th month pay, service incentive leave pay, damages
and attorneys fees against respondent. The Labor Arbiter, while finding that the
dismissal was for a valid cause, found the same too harsh. He thus ordered the
reinstatement of petitioner to a position one rank lower than her previous position. On
appeal, the National Labor Relations Commission (NLRC), by Decision of October 29,
Page 57

2001, reversed that of the Labor Arbiter, it finding that petitioners dismissal was illegal
and accordingly ordering her reinstatement to her former position.

Issue: Whether or not the petitioner was illegally dismissed.

Held:

Yes. By petitioners repeated violation of Section 8.4 of respondents Code of Discipline,

she violated the trust and confidence of respondent and its customers. To allow her to
continue with her employment puts respondent under the risk of being embroiled in
unnecessary lawsuits from customers similarly situated as Josefina, et al. Clearly,
respondent exercised its management prerogative when it dismissed petitioner. Before
terminating the services of an employee, the law requires two written notices: (1) one to
apprise him of the particular acts or omissions for which his dismissal is sought; and (2)
the other to inform him of his employers decision to dismiss him. As to the requirement
of a hearing, the essence of due process lies in an opportunity to be heard, and not
always and indispensably in an actual hearing.
60. PIDO VS. NATIONAL LABOR RELATIONS COMMISSION
Facts:
Federito B. Pido (petitioner) was hired by Cherubim Security and General Services, Inc.
(respondent) as a security guard. Petitioner had an altercation with Richard Alcantara
(Alcantara) of the ASF, arising from a statement of Alcantara that petitioners security
license for his .38 caliber revolver service firearm and duty detail order had already
expired. On even date, Alcantara filed a complaintfor Gross Misconduct, claiming that
when he directed petitioner to present his security license, petitioner angrily and on top
of his voice questioned his authority. And Alcantara recommended that petitioner be
relieved from his post, and that immediate disciplinary action against him be taken.On
January 23, 2000, petitioner reported for work at the Ayala Center but he was not
allowed to stay in the premises, a Recall Order having been issued by respondent
through its Operations Manager. Petitioner thus filed a case. The Labor Arbiter ruled
that petitioners suspension for more than nine months had ripened into constructive
termination, on account of which he ordered the payment of separation pay equivalent
to one month salary of P8,000 for every year of service, or for the total amount of
P32,000. Both parties appealed to the National Labor Relations Commission (NLRC).
The NLRC modified the decision of the Labor Arbiter. While it found that petitioner was
indeed constructively dismissed, it set aside the award of separation pay, given
respondents willingness to assign petitioner to another post which he declined. On the
same ground, the NLRC denied petitioners claim for backwages. It merely ordered his
reinstatement.
Page 58

Issue: Whether or not the petitioner was constructively dismissed?

Held:
Yes. The Appellate court sustained the findings of the Labor Arbiter and the NLRC that
while a security guard, like petitioner, may be lawfully placed on a "floating status," the
same should continue only for six months, otherwise the security agency could be liable
for constructive dismissal. A floating status requires the dire exigency of the employer's
bona fide suspension of operation of a business or undertaking. In security services,
this happens when the security agencys clients which do not renew their contracts are
more than those that do and the new ones that the agency gets. Also, in instances
when contracts for security services stipulate that the client may request the agency for
the replacement of the guards assigned to it even for want of cause, the replaced
security guard may be placed on temporary "off-detail" if there are no available posts
under respondents existing contracts.
When a security guard is placed on a "floating status," he does not receive any salary or
financial benefit provided by law. Due to the grim economic consequences to the
employee, the employer should bear the burden of proving that there are no posts
available to which the employee temporarily out of work can be assigned. This,
respondent failed to discharge. The assailed issuances of the Court of Appeals are
AFFIRMED with MODIFICATION in that respondent, CHERUBIM SECURITY AND
GENERAL SERVICES, INC., is further ordered to reinstate petitioner, FEDERITO B.
PIDO, and pay him back wages.

61. VICTORY LINER, INC VS. PABLO M. RACE

Facts:
Respondent was employed by the petitioner as a bus driver. As a requisite for his hiring,
the respondent deposited a cash bond in the amount of P10,000.00 to the petitioner.
Respondent was assigned to the Alaminos, Pangasinan - Cubao, Quezon City, route on
the evening schedule. On the night of 24 August 1994, respondent drove his assigned
bus from Alaminos, Pangasinan, destined to Cubao, Quezon City. While traversing
Moncada, Tarlac, the bus he was driving was bumped by a Dagupan-bound bus. As a
consequence thereof, respondent suffered a fractured left leg and was rushed to the
Country Medical and Trauma Center in Tarlac City where he was operated on and
confined from 24 August 1994 up to 10 October 1994. One month after his release from
the said hospital, the respondent was confined again for further treatment of his
fractured left leg at the Specialist Group Hospital in Dagupan City. His confinement
therein lasted a month. Petitioner shouldered the doctors professional fee and the
Page 59

operation, medication and hospital expenses of the respondent in the aforestated

hospitals.
In January 1998, the respondent, still limping heavily, went to the petitioners office to
report for work. He was, however, informed by the petitioner that he was considered
resigned from his job. During their meeting, Montes told him that he was deemed to
have resigned from his work and to accept a consideration of P50,000.00. Respondent
rejected the explanation and offer. Thereafter, before Christmas of 1998, he again
conversed with Montes who reiterated to him that he was regarded as resigned but
raised the consideration therein to P100,000.00. Respondent rebuffed the increased
offer. On 30 June 1999, respondent, through his counsel, sent a letter to the petitioner
demanding employment-related money claims. There being no response from the
petitioner.
Labor Arbiter Nambi rendered his Decision dismissing the complaint of respondent for
lack of merit. He stated that the prescriptive period for filing an illegal dismissal case is
four years from the dismissal of the employee concerned. Since the respondent stated
in his complaint that he was dismissed from work on 24 August 1994 and he filed the
complaint only on 1 September 1999, Labor Arbiter Nambi concluded that respondents
cause of action against petitioner had already prescribed. He also noted that
respondent committed several labor-related offenses against the petitioner which may
be considered as just causes for the termination of his employment under Article 282 of
the Labor Code.
Issue: Whether respondent is entitled to money claims in relation to its prescriptive
period and if he was dismissed legally.
Held:
The petition is PARTLY GRANTED insofar as it prays for the non-reinstatement of
respondent.
Rationale:
The four-year prescriptive period shall commence to run only upon the accrual of a
cause of action of the worker. It is settled that in illegal dismissal cases, the cause of
action accrues from the time the employment of the worker was unjustly terminated.
Thus, the four-year prescriptive period shall be counted and computed from the date of
the employees dismissal up to the date of the filing of complaint for unlawful termination
of employment.
Employer-employee relationship between the petitioner and respondent cannot be
deemed to have been extinguished on 10 November 1994. It should be borne in mind
that there are four tests in determining the existence of employer-employee relationship:
(1) the manner of selection and engagement; (2) the payment of wages; (3) the
presence or absence of the power of dismissal; and (4) the presence or absence of the
power of control. The so-called "control test" is commonly regarded as the most crucial
and determinative indicator of the presence or absence of an employer-employee
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relationship. Under the control test, an employer-employee relationship exists where the
person for whom the services are performed reserves the right to control not only the
end achieved, but also the manner and means to be used in reaching that end.
The order for the reinstatement was contrary to law; that as a common carrier, it is
obliged under the law to observe extra-ordinary diligence in the conduct of its business;
that it will violate such obligation if it will reinstate the respondent as bus driver; that to
allow the respondent to drive a bus, despite the fact that the latter sustained a fractured
left leg and was still limping, would imperil the lives of the passengers and the property
of the petitioner; and that the award of back wages to the respondent was unjustified.
The Labor Code mandates that before an employer may legally dismiss an employee
from the service, the requirement of substantial and procedural due process must be
complied with. Under the requirement of substantial due process, the grounds for
termination of employment must be based on just or authorized causes. The following
are just causes for the termination of employment under Article 282 of the Labor Code:
(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.
Abandonment of work, or the deliberate and unjustified refusal of an employee to
resume his employment, may be a just cause for the termination of employment under
paragraph (b) of Article 282 of the Labor Code since it is a form of neglect of duty.
The petitioner insisted that respondent had already abandoned his work on 10
November 1994 and, thus, the latters employment was deemed terminated as of such
date. We, however, found that there was no abandonment of work on the part of the
respondent. Petitioner also alleged that respondent was guilty of insubordination as well
as gross and habitual neglect in the performance of his duties for reckless driving and
for being involved in several vehicular accidents.

62. THELMA DUMPIT-MURILLO VS. COURT OF APPEALS

Facts:
On October 2, 1995, under Talent Contract No. NT95-1805,private respondent
Associated Broadcasting Company (ABC) hired petitioner Thelma Dumpit-Murillo as a
newscaster and co-anchor for Balitang-Balita, an early evening news program. The
contract was for a period of three months and was also renewed thereafter. Petitioners
services were engaged for the program Live on Five. On September 30, 1999, after
four years of repeated renewals, petitioners talent contract expired. Two weeks after
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the expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice
President for News and Public Affairs of ABC, informing the latter that she was still
interested in renewing her contract subject to a salary increase. Thereafter, petitioner
stopped reporting for work. On November 5, 1999, she wrote Mr. Javier another letter
stating that upon no response from the first letter she deem it as a constructive
dismissal of her services.
A month later, petitioner sent a demand letter to ABC, demanding: (a) reinstatement to
her former position; (b) payment of unpaid wages for services rendered from September
1 to October 20, 1999 and full back wages; (c) payment of 13th month pay,
vacation/sick/service incentive leaves and other monetary benefits due to a regular
employee starting March 31, 1996. ABC replied that a check covering petitioners talent
fees for September 16 to October 20, 1999 had been processed and prepared, but that
the other claims of petitioner had no basis in fact or in law.
On December 20, 1999, petitioner filed a complaint against ABC, Mr. Javier and Mr.
Edward Tan, for illegal constructive dismissal, nonpayment of salaries, overtime pay,
premium pay, separation pay, holiday pay, service incentive leave pay, vacation/sick
leaves and 13th month pay. She likewise demanded payment for moral, exemplary and
actual damages, as well as for attorneys fees.
The parties agreed to submit the case for resolution after settlement failed during the
mandatory conference/conciliation. On March 29, 2000, the Labor Arbiter dismissed the
complaint. On appeal, the NLRC reversed the Labor Arbiter in a Resolution dated
August 30, 2000. The NLRC held that an employer-employee relationship existed
between petitioner and ABC; that the subject talent contract was void; that the petitioner
was a regular employee illegally dismissed; and that she was entitled to reinstatement
and back wages or separation pay, aside from 13th month pay and service incentive
leave pay, moral and exemplary damages and attorneys fees.

Issue: Whether petitioner was a fixed term employee and therefore cannot be dismissed
without just cause.

Held:
The petitioner was a fixed-term employee, are REVERSED and SET ASIDE.
NLRC decision is AFFIRMED.

The

Rationale:
Petitioner avers however that an employer-employee relationship was created when the
private respondents started to merely renew the contracts repeatedly fifteen times or for
four consecutive years.

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The elements to determine the existence of an employment relationship are: (a) the
selection and engagement of the employee, (b) the payment of wages, (c) the power of
dismissal, and (d) the employers power to control. The most important element is the
employers control of the employees conduct, not only as to the result of the work to be
done, but also as to the means and methods to accomplish it.
Concerning regular employment, the law provides for two kinds of employees, namely:
(1) those who are engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer; and (2) those who have
rendered at least one year of service, whether continuous or broken, with respect to the
activity in which they are employed. In other words, regular status arises from either the
nature of work of the employee or the duration of his employment.
While this Court has recognized the validity of fixed-term employment contracts in a
number of cases, it has consistently emphasized that when the circumstances of a case
show that the periods were imposed to block the acquisition of security of tenure, they
should be struck down for being contrary to law, morals, good customs, public order or
public policy.
As a regular employee, petitioner is entitled to security of tenure and can be dismissed
only for just cause and after due compliance with procedural due process. Since private
respondents did not observe due process in constructively dismissing the petitioner, we
hold that there was an illegal dismissal.

63. LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG ALYANSAPINAGBUKLOD NG MANGGAGAWANG PROMO NG BURLINGAME VS.
BURLINGAME CORPORATION

Facts:

On January 17, 2000, the petitioner Lakas sa Industriya ng Kapatirang Haligi ng

Alyansa-Pinagbuklod ng Manggagawang Promo ng Burlingame (LIKHA-PMPB) filed a
petition for certification election before the Department of Labor and Employment
(DOLE). LIKHA-PMPB sought to represent all rank-and-file promo employees of
respondent numbering about 70 in all. The petitioner claimed that there was no existing
union in the aforementioned establishment representing the regular rank-and-file promo
employees. It prayed that it be voluntarily recognized by the respondent to be the
collective bargaining agent, or, in the alternative, that a certification/consent election be
held among said regular rank-and-file promo employees.

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The respondent filed a motion to dismiss the petition. It argued that there exists no
employer-employee relationship between it and the petitioners members. It further
alleged that the petitioners members are actually employees of F. Garil Manpower
Services (F. Garil), a duly licensed local employment agency. To prove such contention,
respondent presented a copy of its contract for manpower services with F. Garil.

On June 29, 2000, Med-Arbiter Renato D. Parungo dismissed4 the petition for lack of
employer-employee relationship, prompting the petitioner to file an appeal5 before the
Secretary of Labor and Employment.

On December 29, 2000, the Secretary of Labor and Employment ordered the immediate
conduct of a certification election.6

A motion for reconsideration of the said decision was filed by the respondent on
January 19, 2001, but the same was denied in the Resolution7 of February 19, 2002 of
the Secretary of Labor and Employment.

Respondent then filed a complaint with the Court of Appeals, which then reversed8 the
decision of the Secretary. The petitioner then filed a motion for reconsideration, which
the Court of Appeals denied.
Issue: Whether F. Garil is an independent contractor or a labor-only contractor.

Held:
WHEREFORE, the challenged Decision of the Court of Appeals dated August 29, 2003
and the Resolution dated March 15, 2004 denying the motion for reconsideration are
REVERSED and SET ASIDE. The decision of the Secretary of Labor and Employment
ordering the holding of a certification election among the rank-and-file promo employees
of Burlingame is reinstated.
Rationale:
Labor-only contracting is hereby declared prohibited. For this purpose, labor-only
contracting shall refer to an arrangement where the contractor or subcontractor merely
recruits, supplies or places workers to perform a job, work or service for a principal, and
any of the following elements are [is] present:
i) The contractor or sub-contractor does not have substantial capital or investment
which relates to the job, work or service to be performed and the employees recruited,
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supplied or placed by such contractor or subcontractor are performing activities which

are directly related to the main business of the principal; or
ii) The contractor does not exercise the right to control over the performance of the work
of the contractual employee.
The foregoing provisions shall be without prejudice to the application of Article 248(C) of
the Labor Code, as amended.
"Substantial capital or investment" refers to capital stocks and subscribed capitalization
in the case of corporations, tools, equipment, implements, machineries and work
premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, work or service contracted out.
The "right to control" shall refer to the right reserved to the person for whom the
services of the contractual workers are performed, to determine not only the end to be
achieved, but also the manner and means to be used in reaching that end.

68. GINA LEVISTE VS. SOCIAL SECURITY SYSTEM (SOLID MILLS, INC.),
Facts:

Petitioner is the widow of Ronald Leviste (decedent) who suffered Sudden

Cardiac Death[sic]. At the time of his death, the decedent was a Supervisor at Solid
Mills, Inc. (Solid Mills) at Sucat, Muntinlupa City, and a member of the Social Security
System (SSS).
Petitioner filed with the SSS a claim for death benefits under the Employees'
Compensation Law (P.D. No. 626). The SSS dismissed her claim based on the
following findings:
A cursory re-evaluation of the benefit claim records of your husband disclosed the
following:1) Mr. Ronald Leviste last reported for work on Sept. 9, 1999 on a day shift
and timed out at 4:00 p.m., as certified by his employer SOLID MILLS INC., located at
Sucat, Muntinlupa City. 2) That after his tour of duty at 4:00 p.m., he left the company
premises and immediately proceeded home to join his family at Brgy. Poblacion,
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Malvar, Batangas; 3) That at about 11:50 p.m. on the same date, he was rushed to a
hospital nearby his residence and was pronounced dead on arrival, the immediate
cause of which is CARDIAC SUDDEN DEATH.
From the facts aforementioned, it appears that the circumstances surrounding the death
of Ronald Leviste does not fall within the ambit of PD 626 which requires death or
injuries to be considered work related must satisfactorily comply [with] the following:
1) The employee is injured or dies at the place where his work requires him to be;
2) The employee is performing his official functions;
3) If the injury or death is sustained elsewhere the employee is executing an order for
his employer
In view therefore, SSS affirmed that the death Ronald Leviste is NOT work related and
thus, is not compensable under ECC.
Petitioner impugned the findings of the ECC pointing out that the ECC completely
glossed over evidence extant in the records that, due to the nature of his work, the
decedent was constantly exposed to harmful elements like fumes and heat, and that, at
work in the afternoon before he died, the decedent performed an extremely strenuous
activity of helping carry a 100-kilo air-conditioning compressor from the rooftop of the
three-storey administration building down several flights of stairs and out to a workshop
located 300 meters from the administration building.

Issue: Whether cardiac death is compensable under Employees' Compensation Law

(P.D. No. 626)
Held: Yes
By Resolution No. 432 approved on July 20, 1997, the ECC included cardiovascular diseases in the List of Occupational and Compensable Diseases (Annex A)
appended to the Amended Rules on Employees' Compensation. The significance of the
inclusion of cardio-vascular diseases in Annex A is that it relieved petitioner of the
burden of proving a causal relation between the sudden cardiac death of the deceased
member and the latter's work. Instead, Annex A established a presumption that
sudden cardiac death is work-related.
However, while the diseases listed in Annex A are presumed to be work-related,
not every death resulting therefrom automatically entitles a claimant to death benefits.
Annex A requires that, for the statutory presumption of causal relation to arise, it must
be established beforehand that the listed disease was contracted under certain working
conditions.

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Strict rules of evidence do not govern claims for workmen's compensation

for under P.D. No. 626; the degree of proof required is merely substantial evidence or
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion. Thus, it suffices that such claims be based on mere probability, not
certainty, of causal relation.
There is no question that the high-grade uncontested documentary evidence
presented by petitioner established with a reasonable probability - even certainty - that
the decedent succumbed to sudden cardiac death within twenty-four (24) hours from
undertaking backbreaking work and after manifesting signs of over-fatigue. His death
took place under the second condition, giving rise to the presumption that it was workrelated and therefore compensable.

69. EX-BATAAN VETERANS SECURITY AGENCY, INC., VS. THE SECRETARY

OF LABOR BIENVENIDO E. LAGUESMA

Facts:
Ex-Bataan Veterans Security Agency, Inc. (EBVSAI) is in the business of
providing security services while private respondents are EBVSAIs employees
assigned to the National Power Corporation at Ambuklao Hydro Electric Plant, Bokod,
Benguet (Ambuklao Plant). Private respondents instituted a complaint for underpayment
of wages against EBVSAI before the Regional Office of the Department of Labor and
Employment (DOLE). EX-BATAAN VETERANS SECURITY AGENCY is ORDERED to
pay the computed deficiencies owing to the affected employees.
EBVSAI filed a motion for reconsideration and alleged that the Regional Director
does not have jurisdiction over the subject matter of the case because the money claim
of each private respondent exceeded P5,000. EBVSAI pointed out that the Regional
Director should have endorsed the case to the Labor Arbiter.
Issue:
1. Whether the Secretary of Labor or his duly authorized representatives
acquired jurisdiction over EBVSAI; and
2. Whether the Secretary of Labor or his duly authorized representatives have
jurisdiction over the money claims of private respondents which exceed P5,000.

Held:
EBVSAI claims that the Regional Director did not acquire jurisdiction over
EBVSAI because he failed to comply with Section 11, Rule 14 of the 1997 Rules of Civil
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Procedure. EBVSAI points out that the notice of hearing was served at the Ambuklao
Plant, not at EBVSAIs main office in Makati, and that it was addressed to Leonardo
Castro, Jr., EBVSAIs Vice-President.
1. In this case, EBVSAI does not deny having received the notices of
hearing. In fact, on 29 March and 13 June 1996, Danilo Burgos and Edwina Manao,
detachment commander and bookkeeper of EBVSAI, respectively, appeared before the
Regional Director. They claimed that the 22 March 1996 notice of hearing was received
late and manifested that the notices should be sent to the Manila office. Thereafter, the
notices of hearing were sent to the Manila office. They were also informed of EBVSAIs
violations and were asked to present the employment records of the private
respondents for verification. They were, moreover, asked to submit, within 10 days,
proof of compliance or their position paper. The Regional Director validly acquired
jurisdiction over EBVSAI.
EBVSAI can no longer question the jurisdiction of the
Regional Director after receiving the notices of hearing and after appearing before the
Regional Director. EBVSAI maintains that under Articles 129 and 217(6) of the Labor
Code, the Labor Arbiter, not the Regional Director, has exclusive and original
jurisdiction over the case because the individual monetary claim of private respondents
exceeds P5,000. EBVSAI also argues that the case falls under the exception clause in
Article 128(b) of the Labor Code. EBVSAI asserts that the Regional Director should
have certified the case to the Arbitration Branch of the National Labor Relations
Commission (NLRC) for a full-blown hearing on the merits.
2. In this case, the Regional Director validly assumed jurisdiction over the
money claims of private respondents even if the claims exceeded P5,000 because such
jurisdiction was exercised in accordance with Article 128(b) of the Labor Code and the
case does not fall under the exception clause. In Allied Investigation Bureau, Inc. v.
Sec. of Labor, we ruled that while it is true that under Articles 129 and 217 of the Labor
Code, the Labor Arbiter has jurisdiction to hear and decide cases where the aggregate
money claims of each employee exceeds P5,000.00, said provisions of law do not
contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor
or his duly authorized representative. Rather, said powers are defined and set forth in
Article 128 of the Labor Code (as amended by R.A. No. 7730).
This was further affirmed in our ruling in Cirineo Bowling Plaza, Inc. v. Sensing, where
we sustained the jurisdiction of the DOLE Regional Director and held that the visitorial
and enforcement powers of the DOLE Regional Director to order and enforce
compliance with labor standard laws can be exercised even where the individual claim
exceeds P5,000. However, if the labor standards case is covered by the exception
clause in Article 128(b) of the Labor Code, then the Regional Director will have to
endorse the case to the appropriate Arbitration Branch of the NLRC.

71. AMA COMPUTER COLLEGE VS. ROLANDO A. AUSTRIA

Facts:
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Petitioner AMA Computer College, Paraaque (AMA) is an educational institution duly

organized under the laws of the Philippines. The rest of the petitioners are principal
officers of AMA. Respondent Rolando A. Austria (respondent) was hired by AMA on
probationary employment as a college dean on April 24, 2000. On August 22, 2000,
respondents appointment as dean was confirmed by AMAs Officer-in-Charge (OIC). In
view of this, he will be entitled to a transportation allowance of One Thousand Five
Hundred Sixty Pesos (P1,560.00). In the event that Mr. Austria gives up the Dean
position or fails to meet the standards of the (sic) based on the evaluation of his
immediate superior, he shall be considered for a faculty position and the appointee
agrees that he shall lose the transportation allowance he enjoys as Dean and be
entitled to his faculty rate.
Sometime in August 2000, respondent was charged with violating AMAs
Employees Conduct and Discipline provided in its Orientation Handbook. Thereafter,
respondent was placed on preventive suspension from September 8, 2000 to October
10, 2000. Notices of Investigation were sent to respondent. Eventually, on September
29, 2000, respondent was informed of his dismissal. Respondent filed a Complaint for
Illegal Dismissal, Illegal Suspension, Non-Payment of Salary and 13th Month Pay with
prayer for Damages and Attorney's Fees against AMA and the rest of the petitioners.
Respondent substantially refuted the charges of gross inefficiency, incompetence, and
leaking of test questions filed against him. The Labor Arbiter ruled that since respondent
can no longer be reinstated beyond September 17, 2000 as his designation as college
dean was only until such date, respondent should instead be paid his compensation and
transportation allowance for the period from September 8, 2000 to September 17, 2000,
or the salary and benefits withheld prior thereto.
Issue: 1. What is the nature of respondent's employment?
2. Was he unlawfully dismissed which therefore entitles him to benefit from such
employment?

Held:
1. The Court ruled that the nature of respondent's employment as dean is one
with a fixed term. We held that Article 280 of the Labor Code does not proscribe or
prohibit an employment contract with a fixed period. Even if the duties of the employee
consist of activities necessary or desirable in the usual business of the employer, the
parties are free to agree on a fixed period of time for the performance of such
activities. There is nothing essentially contradictory between a definite period of
employment and the nature of the employees duties.
2.
The resolution of the second question requires full cognizance of
respondents fixed term of employment and all the effects thereof. It is axiomatic that a
contract of employment for a definite period terminates on its own force at the end of
such period. The lack of notice of termination is of no consequence because when the
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contract specifies the length of its duration, it comes to an end upon the expiration of
such period.
The unanimous finding of the Labor Arbiter, the NLRC and the CA that
respondent adequately refuted all the charges against him assumes relevance only
insofar as respondents dismissal from the service was effected by petitioners before
expiration of the fixed period of employment. True, petitioners erred in dismissing the
respondent, acting on the mistaken belief that respondent was liable for the charges
leveled against him. But respondent also cannot claim entitlement to any benefit
flowing from such employment after September 17, 2000, because the employment,
which is the source of the benefits, had, by then, already ceased to exist.

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