January 2010 Philippine Supreme

Court Decisions on Labor Law

and Procedure
Labor Law
Acceptance of Benets! render moot claim under other policies" As in the case of Capili
v. National Labor Relations Commission #2$% SC&A '$(), a claim for benet under the
company*s retirement plan becomes moot when the employee accepts retirement
benets on the basis of Article 2+$ of the Labor Code" By ,uson*s acceptance of her
retirement benets throu-h a compromise a-reement entered into with her employer!
she is deemed to ha.e opted to retire under Article 2+$" Korean Air Co., Ltd and Suk
Kyoo Kim v. Adelina A.S. Yuson, G.R. No. 17!"#, $une 1", %1.
Appro.al for company*s early retirement pro-ram/ mana-ement prero-ati.e" Appro.al
of applications for the early retirement pro-ram 012&P34 is within the employer*s
mana-ement prero-ati.es" 5he e6ercise of mana-ement prero-ati.e is .alid as lon- as
it is not done in a malicious! harsh! oppressi.e! .indicti.e! or wanton manner" 7n the
present case! the Court sees no bad faith on the part of the employer" 5he 21 Au-ust
2001 memorandum clearly states that petitioner! on its discretion! was o8erin- 2&P to
its employees" 5he memorandum also states that the reason for the 2&P was to
pre.ent further losses" Petitioner did not abuse its discretion when it e6cluded
respondent in the 2&P because the latter is already about to retire" 5o allow respondent
to a.ail of the 2&P would ha.e been contrary to the purpose of the pro-ram" Korean Air
Co., Ltd and Suk Kyoo Kim v. Adelina A.S. Yuson, G.R. No. 17!"#, $une 1", %1.
A-ency/ principle of apparent authority" 5here is ample e.idence that the hospital held
out to the patient that the doctor was its a-ent" 5he two factors that determined
apparent authority in this case were9 rst! the hospital*s implied manifestation to the
patient which led the latter to conclude that the doctor was the hospital*s a-ent/ and
second! the patient*s reliance upon the conduct of the hospital and the doctor!
consistent with ordinary care and prudence"
7t is of record that the hospital re:uired a 1consent for hospital care3 to be si-ned
preparatory to the sur-ery of the patient" 5he form reads9 1&ermission is 'ereby (iven
to t'e medi)al, nursin( and laboratory sta* o+ t'e ,edi)al City General -ospital to
per+orm su)' dia(nosti) pro)edures and to administer su)' medi)ations and treatments
as may be deemed ne)essary or advisable by t'e p'ysi)ians o+ t'is 'ospital +or and
durin( t'e )on.nement o+ ///.3
By such statement! the hospital .irtually reinforced the public impression that the
doctor was a physician of its hospital! rather than one independently practicin- in it/
that the medications and treatments he prescribed were necessary and desirable/ and
that the hospital sta8 was prepared to carry them out" &ro+essional Servi)es, 0n). vs.
1'e Court o+ Appeals, et al.2Natividad 3substituted by 'er )'ildren ,ar)elino A(ana 000,
4nri5ue A(ana, $r. 4mma A(ana6Andaya, $esus A(ana and Raymund A(ana and 4rri5ue
A(ana7 vs. 1'e Court o+ Appeals and $uan 8uentes ,i(uel Ampil vs. Natividad and
4nri5ue A(ana, G.R. Nos. 1%"%#72G.R. No. 1%"9"72G.R. No. 1%7:#, 8ebruary %, %1.
Cancellation of union re-istration" Art" 2%;0c4 of the Labor Code re:uires the mandatory
minimum 20< membership of ran=>and>le employees in the employees* union" 5wenty
percent 020<4 of 112 ran=>and>le employees in 2a-le &id-e would re:uire a union
membership of at least 22 employees 0112 6 20' ? 22";4" @hen the 2&2A led its
application for re-istration on December 1B! 200'! there were clearly %0 union
members" 5hus! when the certicate of re-istration was -ranted! there is no dispute
that the Anion complied with the mandatory 20< membership re:uirement"
Accordin-ly! the retraction of si6 union members who later se.ered and withdrew their
union membership cannot cause the cancellation of the union*s re-istration"
Besides! it cannot be ar-ued that the aCda.its of retraction retroacted to the time of
the application for union re-istration or e.en way bac= to the or-aniDational meetin-"
Before their withdrawal! the si6 employees in :uestion were bona de union members"
5hey ne.er disputed aC6in- their si-natures beside their handwritten names durin- the
or-aniDational meetin-s" @hile they alle-ed that they did not =now what they were
si-nin-! their aCda.its of retraction were not re>aCrmed durin- the hearin-s of the
instant case renderin- them of little! if any! e.identiary .alue" 7n any case! e.en with
the withdrawal of si6 union members! the union would still be compliant with the
mandatory membership re:uirement under Art" 2%;0c4 since the remainin- 2; union
members constitute more than the 20< membership re:uirement of 22
employees" 4a(le Rid(e Gold ; Country Club vs. Court o+ Appeals, et al., G.R. No.
17<#<#, ,ar)' 1<, %1 .
CBA/ co.era-e" As re-ular employees! petitioners fall within the co.era-e of the
bar-ainin- unit and are therefore entitled to CBA benets as a matter of law and
contract" Ander the terms of the CBA! petitioners are members of the appropriate
bar-ainin- unit because they are re-ular ran=>and>le employees and do not belon- to
any of the e6cluded cate-ories" Eost importantly! the labor arbiter*s decision of January
1$! 2002 F aCrmed all the way to the CA F ruled a-ainst the company*s submission that
they are independent contractors" 5hus! as re-ular ran=>and>le employees! they fall
within the CBA co.era-e" And! under the CBA*s e6press terms! they are entitled to its
benets"
CBA co.era-e is not only a :uestion of fact! but of law and contract" 5he factual issue is
whether the petitioners are re-ular ran=>and>le employees of the company" 5he
tribunals below uniformly answered this :uestion in the aCrmati.e" Grom this factual
ndin- Hows le-al e8ects touchin- on the terms and conditions of the petitioners*
re-ular employment" 8arley 8ula)'e, et al. vs. A=S6C=N =road)astin( Corporation, G.R.
No. 1<!<1, $anuary %1, %1.
Cessation of operations/ nancial assistance" Based on Article 2+%! in case of cessation
of operations! the employer is only re:uired to pay his employees a separation pay of
one month pay or at least one>half month pay for e.ery year of ser.ice! whiche.er is
hi-her" 5hat is all that the law re:uires"
7n the case at bar! petitioner paid respondents the followin-9 0a4 separation pay
computed at 1'0< of their -ross monthly pay per year of ser.ice/ and 0b4 cash
e:ui.alent of earned and accrued .acation and sic= lea.es" Clearly! petitioner had -one
o.er and abo.e the re:uirements of the law" Despite this! howe.er! the Labor Arbiter
ordered petitioner to pay respondents an additional amount! e:ui.alent to one month*s
salary! as a form of nancial assistance"
5he award of nancial assistance is bereft of le-al basis and ser.es to penaliDe
petitioner who had complied with the re:uirements of the law" 5he Court also point out
that petitioner may! as it has done! -rant on a .oluntary and e/ (ratia basis! any
amount more than what is re:uired by the law! but to insist that more nancial
assistance be -i.en is certainly somethin- that the Court cannot countenance"
Eoreo.er! any award of additional nancial assistance to respondents would put them
at an ad.anta-e and in a better position than the rest of their co>employees who
similarly lost their employment because of petitioner*s decision to cease its
operations" Solid=ank Corporation vs. National Labor Relations Commission, et al., G.R.
No. 1":#:1, ,ar)' !, %1 .
Compensable illness" Since )'ole)ystolit'iasis or -allstone has been e6cluded as a
compensable illness under the applicable standard contract for Gilipino seafarers that
binds the seafarer and the .essel*s forei-n owner! it was an error for the CA to treat
such illness as 1wor=>related3 and! therefore! compensable" 5he standard contract
precisely did not consider -allstone as compensable illness because the parties a-reed!
presumably based on medical science! that such aIiction is not caused by wor=in- on
board ocean>-oin- .essels"
Jor is there any e.idence to pro.e that the nature of the seafarer*s wor= on board a
ship a--ra.ated his illness" Jo one =nows if he had -allstone at the time he boarded
the .essel" By the nature of this illness! it is hi-hly probable that he already had it when
he boarded his assi-ned ship althou-h it went undia-nosed because he had yet to
e6perience its symptoms" =andila S'ippin(, 0n). et al. vs. ,ar)os C. Abalos, G.R. No.
1771, 8ebruary %%, %1 .
Compensable illness/ wor= related" Eelanoma is not listed as an occupational disease
under Anne6 1A3 of the &ules on 2mployees Compensation" Kence! respondent has the
burden of pro.in-! by substantial e.idence! the causal relationship between her illness
and her wor=in- conditions"Substantial e.idence means such rele.ant e.idence as a
reasonable mind mi-ht accept to support a conclusion"
5he Court in this case a-reed with the petitioner and the 2CC that respondent was not
able to positi.ely pro.e that her ailment was caused by her employment and that the
ris= of contractin- the disease was increased by her wor=in- conditions" @hile the law
re:uires only a reasonable wor=>connection and not a direct causal relation! respondent
still failed to show that her illness was really brou-ht about by the wound she sustained
durin- the super.ised -ardenin- acti.ity in school" 5he CA accepted the alle-ation that
the mole appeared ri-ht on the spot where respondent sustained the inLury without any
further proof that the mole appeared because of the inLury" 5he CA further ruled that
1the ris= of ac:uirin- the said ailment increased by the nature of #respondent*s) wor= in
-oin- to school and in returnin- to her residence durin- school days 6 6 6"3 Kowe.er!
the CA failed to consider that in a tropical country li=e the Philippines! e6posure to
sunli-ht is common" Anli=e farmers! shermen or life-uards! it was not shown that
respondent had chronic lon->term e6posure to the sun considered necessary for the
de.elopment of melanoma" 5hus! the Court did not nd the ris= of contractin- the
disease to ha.e been hei-htened by respondent*s e6posure to sunli-ht in -oin- to wor=
and returnin- to her residence" Government Servi)e 0nsuran)e System vs. Rosalinda A.
=ernadas, G.R. No. 1"97!1, 8ebruary 11, %1
Compensable illness" Jurisprudence pro.ides that to establish compensability of a non>
occupational disease! reasonable proof of wor=>connection and not direct causal relation
is re:uired" Probability! not the ultimate de-ree of certainty! is the test of proof in
compensation proceedin-s"
7n this case! the Court sustained the Labor Arbiter and the JL&C in -rantin- total and
permanent disability benets in fa.or of Millamater! as it was suCciently shown that his
ha.in- contracted colon cancer was! at the .ery least! a--ra.ated by his wor=in-
conditions! ta=in- into consideration his dietary pro.isions on board! his a-e! and his Lob
as Chief 2n-ineer! who was primarily in char-e of the technical and mechanical
operations of the .essels to ensure .oya-e safety" Leonis Navi(ation Co., 0n). and
>orld ,arine &anama, S.A. vs. Catalino ?. @illamater, et al., G.R. No. 17#1"#, ,ar)' !,
%1 .
Compensable illness/ entitlement" Gor disability to be compensable under Section 20
0B4 of the 2000 PN2A>S2C! two elements must concur9 014 the inLury or illness must be
wor=>related/ and 024 the wor=>related inLury or illness must ha.e e6isted durin- the
term of the seafarer*s employment contract" 7n other words! to be entitled to
compensation and benets under this pro.ision! it is not suCcient to establish that the
seafarer*s illness or inLury has rendered him permanently or partially disabled/ it must
also be shown that there is a causal connection between the seafarer*s illness or inLury
and the wor= for which he had been contracted"
5he 2000 PN2A>S2C denes 1wor=>related inLury3 as 1inLury0ies4 resultin- in disability or
death arisin- out of and in the course of employment3 and 1wor=>related illness3 as
1any sic=ness resultin- to disability or death as a result of an occupational disease listed
under Section %2>A of this contract with the conditions set therein satised"3
Ander Section 20 0B4! para-raphs 024 and 0%4 of the 2000 PN2A>S2C! it is the company>
desi-nated physician who is entrusted with the tas= of assessin- the seaman*s
disability"
@hile it is true that medical reports issued by the company>desi-nated physicians do
not bind the courts! the Court*s e6amination of Dr" Nn->Sal.ador*s 7nitial Eedical &eport
ha.e led it to a-ree with her ndin-s" Dr" Nn->Sal.ador was able to suCciently e6plain
her basis in concludin- that the respondent*s illness was not wor=>related9 she found the
respondent not to ha.e been e6posed to any carcino-enic fumes! or to any .iral
infection in his wor=place" Ker ndin-s were arri.ed at after the respondent was made
to under-o a physical! neurolo-ical and laboratory e6amination! ta=in- into
consideration his past medical history! family history! and social history" 7n addition! the
respondent was e.aluated by a specialist! a sur-eon and an oncolo-ist" 5he series of
tests and e.aluations show that Dr" Nn->Sal.ador*s ndin-s were not arri.ed at
arbitrarily/ neither were they biased in the company*s fa.or"
5he respondent! on the other hand! did not adduce proof to show a reasonable
connection between his wor= as an assistant house=eepin- mana-er and his lymphoma"
5here was no showin- how the demands and nature of his Lob .is>O>.is the ship*s
wor=in- conditions increased the ris= of contractin- lymphoma" 5he non>wor=
relatedness of the respondent*s illness is reinforced by the fact that under the
7mplementin- &ules and &e-ulations of the Labor Code 02CC &ules4! lymphoma is
considered occupational only when contracted by operatin- room personnel due to
e6posure to anesthetics" 5he records do not show that the respondent*s wor= as an
assistant house=eepin- mana-er e6posed him to anesthetics"
Accordin-ly! the Court held that the respondent is not entitled to total and permanent
disability benets on account of his failure to refute the company>desi-nated physician*s
ndin-s that9 014 his illness was not wor=>related/ and 024 he was t to resume sea
duties" ,a(saysay ,aritime Corporation and2or Cruise S'ips Caterin( Servi)es
0nternational N.@. vs. National Labor Relations Commissions, et al., G.R. No. 1<"1<,
,ar)' %%, %1 .
Cost of li.in- allowance" CNLA is not in the nature of an allowance intended to
reimburse e6penses incurred by oCcials and employees of the -o.ernment in the
performance of their oCcial functions" 7t is not payment in consideration of the
fulllment of oCcial duty" As dened! cost of li.in- refers to 1the le.el of prices relatin-
to a ran-e of e.eryday items3 or 1the cost of purchasin- those -oods and ser.ices
which are included in an accepted standard le.el of consumption"3 Based on this
premise! CNLA is a benet intended to co.er increases in the cost of li.in-" 5hus! it is
and should be inte-rated into the standardiDed salary rates"
7n the present case! the Court is not persuaded that the continued -rant of CNLA to the
uniformed personnel to the e6clusion of other national -o.ernment oCcials run afoul
the e:ual protection clause of the Constitution" 5he fundamental ri-ht of e:ual
protection of the laws is not absolute! but is subLect to reasonable classication" 7f the
-roupin-s are characteriDed by substantial distinctions that ma=e real di8erences! one
class may be treated and re-ulated di8erently from another" 5he classication must
also be -ermane to the purpose of the law and must apply to all those belon-in- to the
same class"
5he Court found .alid reasons to treat the uniformed personnel di8erently from other
national -o.ernment oCcials" Bein- in char-e of the actual defense of the State and
the maintenance of internal peace and order! they are e6pected to be stationed .irtually
anywhere in the country" 5hey are li=ely to be assi-ned to a .ariety of low! moderate!
and hi-h>cost areas" Since their basic pay does not .ary based on location! the
continued -rant of CNLA is intended to help them o8set the e8ects of li.in- in hi-her
cost areas" @i)toria C. GutierreA, et al. vs. Bepartment o+ =ud(et and ,ana(ement, et
al.24strellita C. Amponin, et al. vs. Commission on Audit, et al.2Au(usto R. Nieves, et al.
vs. Bepartment o+ =ud(et and ,ana(ement, et al.2Kapisanan n( m(a ,an((a(aCa sa
=ureau o+ A(ri)ultural Statisti) 3K,=7, et al. vs. Bepartment o+ =ud(et and
,ana(ement, et al.2National -ousin( Aut'ority vs. 4pi+anio &. Re)ana, et al.2 0nsuran)e
Commission DE)ers and 4mployees, et al. vs. Bepartment o+ =ud(et and ,ana(ement,
et al.28iber 0ndustry Bevelopment Aut'ority 4mployees Asso)iation 380BA4A7,et al. vs.
Bepartment o+ =ud(et and ,ana(ement, et al.2=ureau o+ Animal 0ndustry 4mployees
Asso)iation 3=A04A7, et al. vs. Bepartment o+ =ud(et and ,ana(ement, et al.2ReF
Re5uest o+ Sandi(anbayan +or aut'ority to use t'eir savin(s to pay t'eir Cola
Bi*erential +rom $uly 1, 1#<# to ,ar)' 1", 1###, G.R. No. 1:!%""2G.R. No. 1:#72G.R.
No. 1:#%#2G.R. No. 17<92G.R. No. 17%71!2G.R. No. 17!11#2G.R. No. 17"9772G.R.
No. 177##2A.,. No. "696%6S=. ,ar)' 1<, %1 .
Constructi.e dismissal" 7n constructi.e dismissal cases! the employer has the burden of
pro.in- that its conduct and action or the transfer of an employee are for .alid and
le-itimate -rounds such as -enuine business necessity" Particularly! for a transfer not
to be considered a constructi.e dismissal! the employer must be able to show that such
transfer is not unreasonable! incon.enient! or preLudicial to the employee" Gailure of the
employer to o.ercome this burden of proof taints the employee*s transfer as a
constructi.e dismissal"
7n the present case! the employer failed to dischar-e this burden" 5he combination of
harsh actions ta=en by the ban= rendered the employment condition of the employee
hostile and unbearable for the followin- reasons9 Girst! there is no showin- of any
ur-ency or -enuine business necessity to transfer the employee to the Ea=ati Kead
NCce" 5he ban=*s stated reason that the employee had to under-o branch head
trainin- because of his -ross ineCciency was not supported by any proof that the
employee had a record of -ross ineCciency" Second! the employee*s transfer from
Duma-uete to Ea=ati City is clearly unreasonable! incon.enient and oppressi.e! since
the respondent and his family are residents of Duma-uete City" 5hird! the employer
failed to present any .alid reason why it had to re:uire the employee to -o to the Ea=ati
Kead NCce to under-o branch head trainin- when it could ha.e Lust easily re:uired the
latter to underta=e the same trainin- in the M7SE7J area" Ginally! there was nothin- in
the order of transfer indicatin- the position which the employee would occupy after his
trainin-/ thus! the employee was e8ecti.ely placed in a 1Hoatin-3 status" 5he ban=*s
contention that the employee was assi-ned to a sensiti.e position in the DAKN 5as=
Gorce is suspect when considered with the fact that he was made to under-o branch
head trainin- which is totally di8erent from a position that entails reconcilin- boo=
entries of all branches of the former" &econcilin- boo= entries is essentially an
accountin- tas="
5he test of constructi.e dismissal is whether a reasonable person in the employee*s
position would ha.e felt compelled to -i.e up his position under the circumstances"
Based on the factual considerations in the present case! the Court held that the hostile
and unreasonable wor=in- conditions of the ban= Lustied the ndin- of the JL&C and
the CA that the employee was constructi.ely dismissed" &'ilippine @eterans =ank vs.
National Labor Relations Commission, et al., G.R. No. 1<<<<%, ,ar)' !, %1 .
Disability benets/ entitlement" 5he seafarer! upon si-n>o8 from his .essel! must report
to the company>desi-nated physician within three wor=in- days from arri.al for
dia-nosis and treatment" Applyin- Section 200B4! para-raph 0%4 of the 2000 Amended
Standard 5erms and Conditions Po.ernin- the 2mployment of Gilipino Seafarers on
Board Ncean>Poin- Messels! petitioner is re:uired to under-o post>employment medical
e6amination by a company>desi-nated physician within three wor=in- days from arri.al!
e6cept when he is physically incapacitated to do so! in which case! a written notice to
the a-ency within the same period would suCce" 7n ,aunlad 1ransport, 0n). v. ,ani(o,
$r"! #P"&" Jo"1(1;1(! 1% June 200+! ''; SC&A ;;(! ;'B) this Court e6plicitly declared
that it is mandatory for a claimant to be e6amined by a company>desi-nated physician
within three days from his repatriation" 5he une6plained omission of this re:uirement
will bar the lin- of a claim for disability benets" Ale/ C. Cootau)o vs. ,,S &'il.
,aritime Servi)es, 0n). ,s. ,ary C. ,a5uilan, and2or ,,S Co. Ltd., G.R. No. 1<97%%,
,ar)' 1:, %1.
Dismissal/ due process" 5he essence of due process is the opportunity to be heard/ it is
the denial of this opportunity that constitutes .iolation of due process of law" 5he
employee was -i.en the opportunity to be heard when a proper notice of in.esti-ation
was sent to him! althou-h the notice did not reach him for reasons outside the
employer*s control" 5he employee was not also totally unheard on the matter as he was
able to e6plain his side throu-h the two 024 e6planation letters he submitted" 5hese
letters are clear indications that he intimately =new of the matter for which he was
bein- in.esti-ated" 7f he was denied due process at all! the denial was with respect to
the char-es of e6tortion! tardiness and absenteeism! which are -rounds in.o=ed
separately from loss of trust and condence" 5hese -rounds were not serious
considerations in the dismissal that followed! and therefore! were not considered by the
Court as material to the present case" =ibiana 8arms and ,ills, 0n). vs. Arturo Lado, G.R.
No. 1:7<"1, 8ebruary %, %1 .
Dismissal/ due process" 7n an unlawful dismissal case! the employer has the burden of
pro.in- the lawful cause sustainin- the dismissal of the employee" 5he employer must
aCrmati.ely show rationally ade:uate e.idence that the dismissal was for a Lustiable
cause" 5he employee*s beha.ior constituted Lust cause" Kowe.er! the company cannot
deny that it failed to obser.e due process" 5he law re:uires that the employer must
furnish the wor=er sou-ht to be dismissed with two written notices before termination of
employment can be le-ally e8ected9 014 notice which apprises the employee of the
particular acts or omissions for which his dismissal is sou-ht/ and 024 the subse:uent
notice which informs the employee of the employer*s decision to dismiss him" Miolation
of the employee*s ri-ht to statutory due process! e.en if the dismissal was for a Lust
cause! warrants the payment of indemnity in the form of nominal dama-es" 5his
indemnity is not intended to penaliDe the employer but to .indicate or reco-niDe the
employee*s ri-ht to statutory due process! which was .iolated by the employer in the
present case" -ilton -eavy 45uipment Corporation and &eter Lim vs. Ananias By, G.R.
No. 1"9<", 8ebruary %, %1 .
Dismissal/ due process" Gailure to obser.e due process in the termination of
employment for a Lust cause does not in.alidate the dismissal but ma=es the company
liable for non>compliance with the procedural re:uirements of due process" 5he .iolation
of the employee*s ri-ht to statutory due process warrants the payment of nominal
dama-es! the amount of which is addressed to the sound discretion of the court! ta=in-
into account the rele.ant circumstances" 7n the instant case! considerin- that the
company already su8ered nancially because of poor sales performance under the
employee*s watch! it is proper to reduce the amount of nominal dama-es awarded to
petitioner to 5hirty 5housand Pesos 0P%0!000"004" 5he amount of nominal dama-es
awarded is not intended to enrich the employee! but to deter employers from future
.iolations of the statutory due process ri-hts of employees" Rolando &. An)'eta vs.
Bestiny 8inan)ial &lans, 0n). and Arsenio =artolome,G.R. No. 17#7%, 8ebruary 1", %1
Dismissal/ due process" 7n the dismissal of employees! it has been consistently held that
the twin re:uirements of notice and hearin- are essential elements of due process" 5he
employer must furnish the wor=er with two written notices before termination of
employment can be le-ally e8ected9 014 a notice apprisin- the employee of the
particular acts or omissions for which his dismissal is sou-ht! and 024 a subse:uent
notice informin- the employee of the employer*s decision to dismiss him" @ith re-ard
to the re:uirement of a hearin-! the essence of due process lies simply in an
opportunity to be heard! and not that an actual hearin- should always and
indispensably be held"
Li=ewise! there is no re:uirement that the notices of dismissal themsel.es be couched in
the form and lan-ua-e of Ludicial or :uasi>Ludicial decisions" @hat is re:uired is for the
employer to conduct a formal in.esti-ation process! with notices duly ser.ed on the
employees informin- them of the fact of in.esti-ation! and subse:uently! if warranted! a
separate notice of dismissal" 5hrou-h the formal in.esti-atory process! the employee
must be accorded the ri-ht to present his or her side! which must be considered and
wei-hed by the employer" 5he employee must be suCciently apprised of the nature of
the char-e! so as to be able to intelli-ently defend himself or herself a-ainst the
char-e" >il+redo ,. =aron, et al. vs. National Labor Relations Commission, et al., P"&"
Jo" 1+22BB! Gebruary 22! 2010 .
Dismissal/ -ross ne-lect of duties" Article 2+2 0b4 imposes a strin-ent condition before
an employer may terminate an employment due to -ross and habitual ne-lect by the
employee of his duties" 5o sustain a termination of employment based on this pro.ision
of law! the ne-li-ence must not only be -ross but also habitual"
7n the present case! the employer asserts that the employees failed to re-ularly
underta=e a monthly physical in.entory of the outlet*s merchandise" 5he Court was not
persuaded as it found that in.entory preparation and reportin- did not fall on the
employees* shoulders since they were to 1assist the #stoc=) cler=3 only" Kulas 0deas ;
Creations, et al. vs. $uliet Al)oseba, et al., G.R. No. 1<1%!, 8ebruary 1<, %1 .
Dismissal/ loss of trust and condence" 7n 8un(o v. Lourdes S)'ool o+ ,andaluyon(! we
restated the -uidelines for the application of loss of trust and condence as a Lust cause
for dismissal of an employee from the ser.ice! thus9 1a4 loss of condence should not be
simulated/ b4 it should not be used as subterfu-e for causes which are improper! ille-al
or unLustied/ c4 it may not be arbitrarily asserted in the face of o.erwhelmin- e.idence
to the contrary/ and d4 it must be -enuine! not a mere afterthou-ht to Lustify earlier
action ta=en in bad faith"3 7n the present case! the employee! who was a
warehouseman! held a position of trust and condence and was -i.en access to and
authority o.er company property with clear tas=s and -uidelines laid down .ery early in
his employment" Li=e any business entity! the company has e.ery ri-ht to protect itself
from actual threats to the .iability of its operations" 5he employee! cau-ht red>handed
in a scheme to spirit o8 unpaid company sac=s! not only .iolated his duciary duty as
custodian of company property resultin- in the company*s loss of trust and condence
in him/ he had also become a threat to the .iability of company operations" 5o rule that
he should be reinstated would be oppressi.e to the company" 5he law! in protectin- the
ri-hts of the employee! authoriDes neither the oppression nor the self>destruction of the
employer" =ibiana 8arms and ,ills, 0n). vs. Arturo Lado, G.R. No. 1:7<"1, 8ebruary %,
%1 .
Dismissal/ loss of trust and condence" 5he doctrine of loss of condence re:uires the
concurrence of the followin-9 014 loss of condence should not be simulated/ 024 it
should not be used as a subterfu-e for causes which are improper! ille-al! or unLustied/
0%4 it may not be arbitrarily asserted in the face of o.erwhelmin- e.idence to the
contrary/ 0;4 it must be -enuine! not a mere afterthou-ht to Lustify an earlier action
ta=en in bad faith/ and 0'4 the employee in.ol.ed holds a position of trust and
condence" Loss of condence! as a Lust cause for termination of employment! is
premised on the fact that the employee concerned holds a position of responsibility!
trust and condence" Ke must be in.ested with condence on delicate matters! such as
the custody! handlin-! care! and protection of the employer*s property andQor funds" 7n
order to constitute a Lust cause for dismissal! the act complained of must be 1wor=>
related3 such as would show the employee concerned to be unt to continue wor=in-
for the employer"
5he subLect employee in this case is a mana-erial employee holdin- a hi-hly sensiti.e
position" Bein- the Kead of the Ear=etin- Proup of the company! he
was in char-e! amon- others! of the o.er>all production and sales performance of the
company" 5hus! as aptly pointed out by the CA! his performance was practically the
lifeblood of the corporation! because its earnin-s depended on the sales of the
mar=etin- -roup! which he used to head" 5he position held by the employee re:uired
the hi-hest de-ree of trust and condence of his employer in the former*s e6ercise of
mana-erial discretion insofar as the conduct of the latter*s business was concerned" 5he
employee*s inability to perform the functions of his oCce to the satisfaction of his
employer and the former*s poor Lud-ment as mar=etin- head caused the company hu-e
nancial losses" 7f these were not timely addressed and corrected! the company could
ha.e collapsed! to the detriment of its policy holders! stoc=holders! employees! and the
public in -eneral" Rolando &. An)'eta vs. Bestiny 8inan)ial &lans, 0n). and Arsenio
=artolome, G.R. No. 17#7%, 8ebruary 1", %1
Dismissal/ loss of trust and condence" 5he Court found con.incin- e.idence that a
pattern of concealment and dishonesty marred the purchase of paper materials for the
@omen*s Journal*s special proLect! with the employee playin- the principal and most
acti.e role" 5here is no :uestion that the employee failed to ma=e a reasonable can.ass
of the prices of the paper materials re:uired by a company*s special proLect! resultin- in
substantial losses to the company" 5hat a rush Lob was in.ol.ed! is no e6cuse as
can.assin- could be done e.en in a day*s time as shown by the audit department*s
can.ass" 5hat the employee was responsible for concealment and omissions also
appears clear to us/ he failed! under dubious circumstances! to seasonably disclose to
his employer material information with nancial impact on the purchase transaction"
5hus! the Court cannot but conclude that substantial e.idence e6ists Lustifyin- the
employee*s dismissal for a Lust cause F loss of trust and condence" Gor loss of trust
and condence to be a -round for dismissal! the law re:uires only that there be at least
some basis to Lustify the dismissal" 5he fact that the employee had been with the
company for 2' years cannot chan-e the conclusion that he had become a liability to
the company whose interests he miserably failed to protect" &'ilippine $ournalist,
0n). vs. LeoAar Bela CruA y =alobal, P"&" Jo" 1+$120! Gebruary 1(! 2010 .
Dismissal/ Lust cause/ loss of trust and condence" Loss of trust and condence! as a
cause for termination of employment! is premised on the fact that the employee
concerned holds a position of responsibility or of trust and condence" As such! he must
be in.ested with condence on delicate matters! such as custody! handlin- or care and
protection of the property and assets of the employer" And! in order to constitute a Lust
cause for dismissal! the act complained of must be wor=>related and must show that the
employee is unt to continue to wor= for the employer" 7n the instant case! the
petitioners>employees of Promm>Pem ha.e not been shown to be occupyin- positions
of responsibility or of trust and condence" Jeither is there any e.idence to show that
they are unt to continue to wor= as merchandisers for Promm>Pem" $oeb Aliviado, et
al. vs. &ro)ter ; Gamble &'ilippines, 0n)., et al., G.R. No. 1":", ,ar)' #, %1 .
Dismissal/ Lust cause/ misconduct" Eisconduct has been dened as improper or wron-
conduct/ the trans-ression of some established and denite rule of action! a forbidden
act! a dereliction of duty! unlawful in character implyin- wron-ful intent and not mere
error of Lud-ment" 5he misconduct to be serious must be of such -ra.e and a--ra.ated
character and not merely tri.ial and unimportant" 5o be a Lust cause for dismissal! such
misconduct 0a4 must be serious/ 0b4 must relate to the performance of the employee*s
duties/ and 0c4 must show that the employee has become unt to continue wor=in- for
the employer" 7n other words! in order to constitute serious misconduct which will
warrant the dismissal of an employee under para-raph 0a4 of Article 2+2 of the Labor
Code! it is not suCcient that the act or conduct complained of has .iolated some
established rules or policies" 7t is e:ually important and re:uired that the act or conduct
must ha.e been performed with wron-ful intent" 7n the instant case! petitioners>
employees of Promm>Pem may ha.e committed an error of Lud-ment in claimin- to be
employees of PRP! but it cannot be said that they were moti.ated by any wron-ful
intent in doin- so" As such! the Court found them -uilty of simple misconduct only! for
assailin- the inte-rity of Promm>Pem as a le-itimate and independent promotion rm"
A misconduct which is not serious or -ra.e! as that e6istin- in the instant case! cannot
be a .alid basis for dismissin- an employee" $oeb Aliviado, et al. vs. &ro)ter ; Gamble
&'ilippines, 0n)., et al., G.R. No. 1":", ,ar)' #, %1 .
Dismissal/ Lust cause/ union security clause" 7n terminatin- the employment of an
employee by enforcin- the union security clause! the employer is re:uired only to
determine and pro.e that9 014 the union security clause is applicable/ 024 the union is
re:uestin- for the enforcement of the union security pro.ision in the CBA/ and 0%4 there
is suCcient e.idence to support the decision of the union to e6pel the employee from
the union" 5hese re:uisites constitute Lust cause for terminatin- an employee based on
the union security pro.ision of the CBA"
7t is the third re:uisite that appears to be lac=in- in this case" 7t is apparent from the
identical termination letters that PEC terminated Casio! et al"! by relyin- upon the
resolutions of the union! which made no mention at all of the e.idence supportin- the
decision of the union to e6pel Casio! et al" from the union" PEC ne.er alle-ed nor
attempted to pro.e that the company actually loo=ed into the e.idence of the union for
e6pellin- Casio! et al" and made a determination on the suCciency thereof" @ithout
such a determination! PEC cannot claim that it had terminated the employment of
Casio! et al" for Lust cause" 5he failure of PEC to ma=e a determination of the suCciency
of e.idence supportin- the decision of the union constitutes non>obser.ance by PEC of
procedural due process in the dismissal of employees" General ,illin( Corporation vs.
4rnesto Casio, et al. and @ir(ilio &ino, et al., G.R. No. 19#::%, ,ar)' 1, %1 .
Dismissal/ re:uirements" Ander the Labor Code! the re:uirements for the lawful
dismissal of an employee are two>fold! consistin- of substanti.e and procedural
aspects" Jot only must the dismissal be for a Lust or authoriDed cause/ the basic
re:uirements of procedural due process F notice and hearin- F must li=ewise be
obser.ed before an employee may be dismissed" 5he burden of proof rests on the
employer to show that the employee*s dismissal has met these due process
re:uirements" 5he case of the employer must stand or fall on its own merits and not on
the wea=ness of the employee*s defense" =ibiana 8arms and ,ills, 0n). vs. Arturo
Lado, G.R. No. 1:7<"1, 8ebruary %, %1 .
Dismissal/ separation pay" Ander Article 2$B of the Labor Code! an ille-ally dismissed
employee 1shall be entitled to reinstatement without loss of seniority ri-hts and other
pri.ile-es and to his full bac=wa-es! inclusi.e of allowances! and to his other benets or
their monetary e:ui.alent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement"3 7n addition to full bac=wa-es! the Court
has also repeatedly ruled that in cases where reinstatement is no lon-er feasible due to
strained relations! then separation pay may be awarded instead of reinstatement" 7n ,t.
Carmel Colle(e v. Resuena, the Court reiterated that the separation pay! as an
alternati.e to reinstatement! should be e:ui.alent to one 014 month salary for e.ery
year of ser.ice" Sar(asso Constru)tion and Bevelopment Corporation vs. National Labor
Relations Commission 39t' Bivision7 and Gor(onio ,on()al, G.R. No. 1"911<, 8ebruary
#, %1 .
Dismissal/ serious misconduct" Eisconduct has been dened as improper or wron-
conduct" 7t is the trans-ression of some established and denite rule of action! a
forbidden act! a dereliction of duty! willful in character! and implies wron-ful intent and
not mere error of Lud-ment" 5he misconduct to be serious must be of such -ra.e and
a--ra.ated character and not merely tri.ial and unimportant" Such misconduct!
howe.er serious! must ne.ertheless be in connection with the employee*s wor= to
constitute Lust cause for his separation"
7n the present case! the Court found substantial e.idence to pro.e that a serious
misconduct has been committed to Lustify termination from employment" 5he Certied
Public Accountant and Corporate Ginance Eana-er of the company submitted a report
dated Gebruary 1B! 2000 statin- that in spite of mana-ement*s memorandum! the =eys
to the oCce and lin- cabinets were not surrendered" 7t was li=ewise stated in the
report that petitioner @ilfredo Baron pulled out some records without allowin- a
representati.e from the internal audit team to inspect them" Ke noticed @ilfredo Baron
deletin- some les from the computer! which could no lon-er be retrie.ed" Eoreo.er! a
member of the audit team saw Cynthia Junatas 0another petitioner4 carryin- some
documents! includin- a Daily Collection &eport" @hen as=ed to present the documents
for inspection! Junatas refused and tore the document"
7n addition! the audit team disco.ered that ES7 incurred an in.entory shorta-e of Nne
Eillion 5hirty 5housand 5wo Kundred Gifty>2i-ht Pesos and 5wenty>Nne Centa.os
0P1!0%0!2'+"214" 7t found that @ilfredo Baron! the operations mana-er! in conspiracy
with the other petitioners! orchestrated massi.e irre-ularities and -rand scale fraud!
which could no lon-er be documented because of theft of company documents and
deletion of computer les" Anmista=ably! the unauthoriDed ta=in- of company
documents and les! failure to pay unremitted collections! failure to surrender =eys to
the lin- cabinets despite earlier instructions! concealment of shorta-es! and failure to
record in.entory transactions pursuant to a fraudulent scheme are acts of -ra.e
misconduct! which are suCcient causes for dismissal from employment" >il+redo ,.
=aron, et al. vs. National Labor Relations Commission, et al., P"&" Jo"
1+22BB! Gebruary 22! 2010 .
Dismissal/ fraud and serious misconduct . 7n this case! the Court found that Pastoril was
as acti.ely in.ol.ed as 2scoto and Nmela in the sale of the 5oyota 5own Ace that
resulted in a loss to the company" All three participated in ma=in- the company belie.e
that A:uino bou-ht the 5oyota 5own Ace for P1B0!000"00 when in fact! A:uino paid
P200!000"00 for the .ehicle" 5hus! Pastoril acted in concert with 2scoto and Nmela in
the transaction that defrauded their employer in the amount of P10!000"00" Pastoril
prepared and issued the deed of sale indicatin- that the .ehicle was sold for
P1B0!000"00! althou-h she =new that the buyer was bein- char-ed P200!000"00 for the
.ehicle" 2scoto! Nmela and Pastoril helped themsel.es to the price di8erence and tried
to silence &odri-ueD 0who -ot wind of the anomaly4 by -i.in- him P1!000"00 and
passin- the P10!000"00 price di8erence o8 as the appro.ed discount A:uino as=ed for"
5he Court held that there was a conspiracy between and amon- the three employees!
where e.ery participant had made si-nicant contributory acts" >'ite Biamond 1radin(
Corporation and2or $erry ?y vs. National Labor Relations Commission, et al., G.R. No.
1<"1#. ,ar)' %#, %1 .
Dismissal/ bac=wa-es" Article 2$B of the Labor Code pro.ides that 1an employee who is
unLustly dismissed from wor= shall be entitled to reinstatement without loss of seniority
ri-hts and other pri.ile-es and to his full bac=wa-es! inclusi.e of allowances! and to his
other benets or their monetary e:ui.alent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement"3
5hus! a number of cases holds that an ille-ally dismissed employee is entitled to two
reliefs9 bac=wa-es and reinstatement" 5he two reliefs are separate and distinct" 7n
instances where reinstatement is no lon-er feasible because of strained relations
between the employee and the employer! separation pay is -ranted" 7n e8ect! an
ille-ally dismissed employee is entitled to either reinstatement! if .iable! or separation
pay if reinstatement is no lon-er .iable! and bac=wa-es"
5he normal conse:uences of respondents* ille-al dismissal! then! are reinstatement
without loss of seniority ri-hts! and payment of bac=wa-es computed from the time
compensation was withheld up to the date of actual reinstatement" @here
reinstatement is no lon-er .iable as an option! separation pay e:ui.alent to one 014
month salary for e.ery year of ser.ice should be awarded as an alternati.e" 5he
payment of separation pay is in addition to the payment of bac=wa-es"
Since reinstatement is no lon-er feasible in the present case! the award of separation
pay in lieu of reinstatement is in order" Petitioner*s prayer for the award
of bac=wa-es is meritorious! it! and the award of separation pay not bein- mutually
e6clusi.e" 8erdinand A. &an(ilinan vs. >ellmade ,anu+a)turin( Corporation, G.R. No.
1<7:, April 7, %1"
Dismissal/ bac=wa-es" &eprimand bein- the appropriate imposable penalty for
respondent*s actuations from the .ery be-innin-! the Court nds that respondent was
unfairly denied from reportin- for wor= and earnin- his =eep! thus! entitlin- him to the
payment of bac=wa-es"
5he Court is not unmindful of our pre.ious pronouncements in similar cases in.ol.in-
suspension or dismissal from ser.ice! wherein the penalty imposed was reduced! but
the award of bac=wa-es was denied"
Pi.en the circumstances of the case! howe.er! where the proper penalty should only be
a reprimand! the Court nds the aforementioned cases to be inapplicable herein" Nn this
note! the Court deems it proper to distin-uish between the penalties of dismissal or
suspension and reprimand and their respecti.e e8ects on the -rant or award
of bac=wa-es" @hen an employee is dismissed or suspended it is but lo-ical that since
he is barred from reportin- to wor= the same ne-ates his ri-ht to be paid bac=wa-es"
Ke has no opportunity to wor= durin- the period he was dismissed or suspended and!
therefore! he has no salary to e6pect" Kowe.er! the same does not hold true for an
employee who is reprimanded" A reprimand usually carries a warnin- that a repetition of
the same or similar act will be dealt with more se.erely" Ander normal circumstances!
an employee who is reprimanded is ne.er pre.ented from reportin- to wor=" Ke
continues to wor= despite the warnin-" 5hus! in the case at bar! since respondent*s
penalty should only be a reprimand! the Court deems it proper and e:uitable to aCrm
the Court of Appeals* 0CA*s4 award of bac=wa-es"
7n two instances! the Court -ranted the award of bac=wa-es durin- the period the
employees were pre.ented from reportin- to wor= despite concludin- that the
employee concerned .iolated reasonable oCce rules and re-ulations and imposin- the
penalty of reprimand"
7n $a)into v. Court o+ Appeals #P"&" Jo" 12;';0! Jo.ember 1;! 1BB$! 2+1 SC&A ('$)! the
Court awarded petitioner Jacinto bac=wa-es after ndin- that she was only culpable of
.iolatin- reasonable oCce rules and re-ulations for not ha.in- as=ed permission from
school authorities to lea.e the school premises and see= medical attention and for not
lin- an application for sic= lea.e for appro.al by the school authorities"
Also! in =an(alisan v. Court o+ Appeals #P"&" 12;($+! July %1! 1BB$! 2$( SC&A (1B! (%%)!
after aCrmin- the ndin-s that one of the petitioners! &odolfo Eariano! is only liable for
his .iolation of reasonable oCce rules and re-ulations for attendin- the wa=e and
internment of his -randmother without the benet of an appro.ed lea.e of absence and
the imposition of the penalty of reprimand! the Court still -ranted him bac=wa-es"
Consistent with the Court*s rulin-s in =an(alisan and $a)into! the -rant of bac=wa-es to
respondent is but proper" 7t is to be stressed that when imposin- penalties! it must not
only be made within the parameters of the law! but it should also satisfy the basic
tenets of e:uity! Lustice! and fairplay" National &oCer Corporation vs.
Alan Dlandes)a, G.R. No. 1719!9, April %!, %1.
Dismissal/ dishonesty" 7n &'ilippine Amusement and Gamin( Corporation
v. RilloroAa #P"&" Jo" 1;11;1! June 2'! 2001)! dishonesty is dened as the disposition to
lie! cheat! decei.e! or defraud/ untrustworthiness/ lac= of inte-rity/ lac= of honesty!
probity or inte-rity in principle/ lac= of fairness and strai-htforwardness/ disposition to
defraud! decei.e or betray"
7t is not disputed that respondent too= se.eral materials and supplies from petitioner*s
warehouse without the appro.ed @&S" Kowe.er! this should not be construed as
dishonesty on the part of respondent that would warrant his dismissal from the ser.ice
for the followin- reasons9 Girst! the withdrawals of the supplies were duly recorded in
the security -uard*s lo-boo=" 7f respondent intended to defraud petitioner! he could
ha.e easily ta=en items from the warehouse without ha.in- them recorded as he was
then the Super.isin- Property NCcer who had free access to the supplies" Second! ri-ht
after withdrawin- the items! respondent replaced them on his own initiati.e! without
anyone instructin- him to do so" 5his act ne-ates his intent to defraud petitioner" 5hird!
there is no clear showin- that respondent misappropriated or con.erted the items for
his own personal use or benet" Gourth! the Praft 7n.esti-ation NCcer of the NCce of
the Nmbudsman! in its &esolution dated Gebruary '! 1BBB! in NEB>1>B+>2011! dismissed
a complaint for :ualied theft led by 5eodulo M" Lar-o! Section Chief! Power Peneration
Proup of petitioner a-ainst respondent as there was no competent and suCcient
e.idence on record to show that there was intent to -ain on the part of the respondent!
considerin- that the materials and supplies ta=en by him were used in fencin- the
watershed and reser.ation area of petitioner company" Li=ewise! there was no basis to
char-e him for mal.ersation of public property as there was no misappropriation of the
supplies for his personal use and that the same were for -eneral purpose and not for
any specic use"
Jonetheless! althou-h the respondent did not commit an o.ert act of dishonesty! he is
not e6onerated from liability" 7t was an established company procedure that before
materials can be ta=en out from the warehouse! the issuance of a @&S is an
indispensable re:uirement" 7n fact! there was e.en a warnin- posted at the door of the
property oCce that states9
1BA@AL EAPLABAS JP PAE75 N EAPSA&PA JP PASNL7JA JP @ALAJP AP&ABADNJP
@&S"3 Bein- the Super.isin- Property NCcer! respondent =nows fully well that ta=in-
items from the warehouse without the re:uired @&S is a-ainst the company rules and
re-ulations" 7t is the paramount duty of respondent to protect the properties in the
warehouse and to ensure that none shall be ta=en away without proper documentation"
5he Eachia.ellian principle that 1the end Lusties the means3 has no place in
-o.ernment ser.ice! which thri.es on the rule of law! consistency and stability"
&espondent! by ta=in- the said properties without the appro.ed @&S! .iolated
reasonable oCce rules and re-ulations as pro.ided in Section '2 0C4! 0%4! &ule 7M of Ci.il
Ser.ice Commission Eemorandum Circular Jo" 1B! series of 1BBB 0Aniform &ules on
Administrati.e Cases in the Ci.il Ser.ice4" Since this is respondent*s rst o8ense in his
more than 1( years of ser.ice! the appropriate penalty to be imposed a-ainst him is
reprimand" National &oCer Corporation vs. Alan Dlandes)a, G.R. No. 1719!9, April %!,
%1.
Dismissal/ lost of trust and condence" 5o terminate the ser.ices of an employee for loss
of trust and condence! two re:uisites must concur9 014 the employee concerned must
be holdin- a position of trust and condence and 024 there must be an act that would
Lustify the loss of trust and condence"
7n the present case! respondent failed to Lustify its loss of trust and condence
on Consolacion e.en as it imputed to him! .ia Jotice of Gormal 7n.esti-ation of April 1;!
200%! non>compliance with 0a4 established non>written procedures and standards/ 0b4
established written procedures and standards! and 0c4 .erbal orders andQor instructions"
5hese alle-ed acts of non>compliance are too -eneral and can encompass Lust about
any malfeasance" Jowhere in the Jotice was there a detailed narration of the facts and
circumstances that would ser.e as bases to terminate Consolacion! thus lea.in- to
surmise what those procedures! standards and orders were" Anabel =enGamin, et al.
vs. Amellar Corporation., G.R. No. 1<!!<!, April :, %1"
Dismissal/ mana-ement prero-ati.e" &espondent*s ri-ht of mana-ement prero-ati.e
was e6ercised in -ood faith" &espondent presented e.idence of the low .olume of sales
and orders for the production of industrial paper in 1BBB! which ine.itably resulted to
the company*s decision to streamline its operations" 5his fact was corroborated by
respondent*s MP>5issue Eanufacturin- Director and was not disputed by petitioner"
26ercisin- its mana-ement prero-ati.e and sound business Lud-ment! respondent
decided to cut down on operational costs by shuttin- down one of its paper mill" As held
in 0nternational -arvester ,a)leod, 0n). v. 0ntermediate Appellate Court #2%% Phil"
(''!(''>((( 01B+$4) the determination of the need to phase out a particular
department and conse:uent reduction of personnel and reor-aniDation as a labor and
cost sa.in- de.ice is a reco-niDed mana-ement prero-ati.e which the courts will not
-enerally interfere with"
7n this case! shuttin- down Paper Eill Jo" ; was undoubtedly a business Lud-ment
arri.ed at in the face of the low demand for the production of industrial paper at the
time" Despite an apparent reason to implement a retrenchment pro-ram as a cost>
cuttin- measure! respondent! did not dismiss the wor=ers a8ected by the closure of
Paper Eill Jo" ; outri-ht but -a.e them an option to be transferred to posts of e:ual
ran= and pay" &etrenchment was -i.en only as an option in case the a8ected employee
did not want to be transferred" 5he Court .iewed this as an indication of -ood faith on
respondent*s part since it e6hausted other possible measures before retrenchment"
Besides! the employer*s prero-ati.e to brin- down labor costs by retrenchment must be
e6ercised essentially as a measure of last resort! after less drastic means ha.e been
tried and found wantin-" Pi.in- the wor=ers an option to be transferred without any
diminution in ran= and pay belie petitioner*s alle-ation that the streamlinin- scheme
was implemented as a ploy to ease out employees" Apparently! respondent
implemented its streamlinin- or reor-aniDation plan in -ood faith! not in an arbitrary
manner and without .iolatin- the tenurial ri-hts of its employees" Bannie
,. &antoGa vs. SCA -y(iene &rodu)ts Corporation, G.R. No. 1"!::9, April %!, %1.
Dismissal/ retrenchment" 5he CA committed no re.ersible error in aCrmin-
the JL&C rulin- that 5alam was .alidly dismissed on the -round of retrenchment" 5he
Supreme Court came to this conclusion based on the followin- considerations9
Girst! the decision to retrench had a basis/ it was not simulated nor resorted to for the
purpose of -ettin- rid of employees" 5he decision was upon the recommendation of the
company*s e6ternal auditor" Second! the cost>cuttin- measure recommended in.ol.ed
reduction of 5SG7*s payroll e6pense account which! as the auditor found! ma=es up ;1<
of the company*s total operatin- e6penses" 5hird! 5alam was dismissed due to a cause
authoriDed by law F retrenchment to pre.ent losses" At the time of 5alam*s
dismissal! 5SG7*s nancial condition! as found by the e6ternal auditor! showed that it was
not Lust e6pectin- losses! it already su8ered a net income loss of P2!;$;!;1+"00 and
retained earnin-s decit of P$!;2;!2'0"00 for the period endin- December %1! 2002"
Gourth! 5SG7 resorted to other measures to abate its losses" 7t claimed that durin- the
crises period! it used as an oCce a small>room 0a mere cubicle4 with only a two>person
support sta8 in the persons of Prapilon and Kermle/ it reduced the salaries of its
employees by as much as %0<" 5his submission by the company is substantiated by
the schedule of Nperatin- 26penses for the year ended December %1! 2002 and
September %0! 2002" A :uic= -lance at the schedule readily shows a reduction of 5SG7*s
operatin- e6penses across the board" 5he schedule indicates a substantial decrease in
operatin- e6penses! from P'!$%%!$%'"00 in September 2002 to P1!(B+!''2"%( as of the
end of December 2002" 8ran)is Ray 1alam vs. National Labor Relations Commission,
9t' Bivision, Cebu City, et al., G.R. No. 17:9, April ", %1"
Dismissal/ serious misconduct" 5he ndin-s of the CA and Jational Labor &elations
Commission 0JL&C4 establish the followin-9 014 A-ad*s re:uest for withdrawal of the 1B0
cylinders of LPP as stated in a Eemorandum dated 12 Gebruary 1BB2 cannot be -i.en
credence since the Eemorandum pertains to the replacement of the scrap materials
due to Boy Bato consistin- of %!000 =ilo-rams of blac= iron plates and not to the subLect
LPP cylinders/ 024 A-ad did not obser.e Calte6*s rules and re-ulations when he
transferred the said cylinders to Eillanes* compound without the &E&D form as re:uired
under Calte6*s Gield Accountin- Eanual/ 0%4 A-ad -a.e specic instructions
to Eillanes to sell the cylinders without biddin- to third parties in .iolation of company
rules/ 0;4 A-ad failed to submit the periodic in.entory report of the LPP cylinders to the
accountin- department/ 0'4 A-ad did not remit the proceeds of the sale of the LPP
cylinders/ and 0(4 e.en if considered as scrap materials! the LPP cylinders still had
monetary .alue which A-ad cannot appropriate for himself without Calte6*s consent"
Considerin- these ndin-s! it is clear that A-ad committed a serious infraction
amountin- to theft of company property" 5his act is a=in to serious misconduct or willful
disobedience by the employee of the lawful orders of his employer in connection with
his wor=! a Lust cause for termination of employment reco-niDed under Article 2+20a4 of
the Labor Code"
Eisconduct has been dened as a trans-ression of some established and denite rule of
action! a forbidden act! a dereliction of duty! willful in character! and implies wron-ful
intent and not mere error in Lud-ment" 5o be serious! the misconduct must be of such
-ra.e and a--ra.ated character" Calte/ 3&'ilippines7, 0n)., et. al. vs. -ermie
G. Abad, et. al., G.R. No. 1"!::9, April %!, %1.
Due Process/ termination" 5he records belie Amular*s claim of denial of procedural due
process" Ke chose not to present his side at the administrati.e hearin-" 7n fact! he
a.oided the in.esti-ation into the char-es a-ainst him by lin- his ille-al dismissal
complaint ahead of the scheduled in.esti-ation" 5hese facts show that the employee
was -i.en the opportunity to be heard and he cannot now come to the Court protestin-
that he was denied this opportunity" 5o belabor a point the Court has repeatedly made
in employee dismissal cases! the essence of due process is simply an opportunity to be
heard/ it is the denial of this opportunity that constitutes .iolation of due process of
law" 1e)'nol 4i('t &'ilippines Corporation vs. National Labor Relations
Commission, et al.,G.R. No. 1<7":. April 1!, %1.
Dismissal/ theft/ de-ree of e.idence" 5he lon->standin- rule is that the e6istence of a
conspiracy must be pro.ed by clear! direct and con.incin- e.idence" 7n 8ernandeA v.
National Labor Relations Commission! 5he Court e6pounded on the de-ree of e.idence
re:uired to establish the e6istence of a conspiracy in this wise9 1@hile it is true that in
conspiracy! direct proof is not essential! it must howe.er! be shown that it e6ists as
clearly as the commission of the o8ense itself" 5here must at least be ade:uate proof
that the malefactors had come to an a-reement concernin- the commission of a felony
and decided to commit it" 6 6 6 Gor conspiracy to e6ist! it is essential that there must
be conscious desi-n to commit an o8ense" Conspiracy is not the product of ne-li-ence
but of intentionality on the part of the cohorts"3
Merily! there was a dearth of e.idence directly lin=in- the employee to the commission
of the crime of theft! as his mere act of loadin- the dump truc= with a--re-ates did not
show that he =new of the other person*s plan to deli.er the load to a place other than
the company*s construction site" 5he only conclusion! therefore! is that the company
had ille-ally dismissed the employee in the present case" Sar(asso Constru)tion and
Bevelopment Corporation vs. National Labor Relations Commission 39t' Bivision7 and
Gor(onio ,on()al, G.R. No. 1"911<, 8ebruary #, %1 .
2mployer>employee relationship/ control test" 5his Court still employs the 1control test3
to determine the e6istence of an employer>employee relationship between hospital and
doctor" 7n Calamba ,edi)al Center, 0n). v. National Labor Relations Commission, et
al., the Court held that9 1Ander the 1control test3! an employment relationship e6ists
between a physician and a hospital if the hospital controls both the means and the
details of the process by which the physician is to accomplish his tas=" 6 6 6 5hat
petitioner e6ercised control o.er respondents -ains li-ht from the undisputed fact that
in the emer-ency room! the operatin- room! or any department or ward for that matter!
the doctor*s wor= is monitored throu-h the hospital*s nursin- super.isors! char-e nurses
and orderlies" @ithout the appro.al or consent of the hospital or its medical director! no
operations can be underta=en in those areas" Gor the control test to apply! it is not
essential for the employer to actually super.ise the performance by the employee of his
duties! it bein- enou-h that it has the ri-ht to wield the power"3 &ro+essional Servi)es,
0n). vs. 1'e Court o+ Appeals, et al.2Natividad 3substituted by 'er )'ildren ,ar)elino
A(ana 000, 4nri5ue A(ana, $r. 4mma A(ana6Andaya, $esus A(ana and Raymund A(ana
and 4rri5ue A(ana7 vs. 1'e Court o+ Appeals and $uan 8uentes ,i(uel Ampil vs.
Natividad and 4nri5ue A(ana, G.R. Nos. 1%"%#72G.R. No. 1%"9"72G.R. No. 1%7:#,
8ebruary %, %1.
2mployer employee relationship . 5he elements to determine the e6istence of an
employment relationship are9 014 selection and en-a-ement of the employee/ 024 the
payment of wa-es/ 0%4 the power of dismissal/ and 0;4 the employer*s power to control
the employee*s conduct" 7n lin- a complaint for ille-al dismissal! it is incumbent
upon Abue.a to pro.e the relationship by substantial e.idence"
7n this re-ard! Abue.a claims that he has wor=ed with respondent hacienda for more
than a year already and that he was allowed to stay inside the hacienda" As such! he is
a re-ular employee entitled to monetary claims" Kowe.er! petitioners ha.e not
presented competent proof that respondents en-a-ed the ser.ices of Abue.a/ that
respondents paid his wa-es or that respondents could dictate what his conduct should
be while at wor=" 7n other words! Abue.a*s alle-ations did not establish that his
relationship with respondents had the attributes of an employer>employee relationship
based on the four>fold test" Abue.a was not able to dischar-e the burden of pro.in- the
e6istence of an employer>employee relationship" Eoreo.er! Abue.a was not able to
refute respondents* assertion that he hires other men to perform weedin- Lob in the
hacienda and that he is not e6clusi.ely wor=in- for respondents" Romeo =asay, et al. vs.
-a)ienda Consolation, et al., G.R. No. 17::!%, April 1#, %1.
2mployee benets/ permanent disability benets" 7n accordance with the a.owed policy
of the State to -i.e ma6imum aid and full protection to labor! the Court applied the
Labor Code concept of permanent total disability to Gilipino seafarers" 5he Court
held that the notion of disability is intimately related to the wor=er*s capacity to earn"
@hat is compensated is not the employee*s inLury or illness but his inability to wor=
resultin- in the impairment of his earnin- capacity/ hence! disability should be
understood less on its medical si-nicance but more on the loss of earnin- capacity"
7n the present case! petitioner was able to secure a 1t to wor=3 certication from a
doctor only after more than .e months from the time he was medically repatriated due
to a ndin- that his disability is considered permanent and total" Si-nicantly!
petitioner remained unemployed e.en after he led on Gebruary 2(! 2002 his complaint
to reco.er permanent total disability compensation and despite the Au-ust %1! 200'
Decision of the JL&C which was aCrmed by the Court of Appeals! orderin- respondents
to 1allow complainant to resume sea duty"3
5hat petitioner was not li=ely to fully reco.er from his disability is mirrored by the Labor
Arbiter*s ndin- that his illness would possibly recur once he resumes his sea
duties" 5his could .ery well be the reason why petitioner was not re>deployed by
respondents" Petitioner*s disability bein- then permanent and total! he is 1entitled to
100< compensation! i"e"! AST+0!000 for oCcers!3 as stipulated in par" 20"1"$ of the
parties* CBA" RiAaldy ,. Huitoriano vs. $ebsens ,aritime, 0n).2,a. 1'eresa Gutay and2or
Atle $ebsens ,ana(ement A2S, G.R. No. 17#<"<, $anuary %1, %1.

2mployee benet/ bonus" By denition! a 1bonus3 is a -ratuity or act of liberality of the
-i.er" 7t is somethin- -i.en in addition to what is ordinarily recei.ed by or strictly due
the recipient" A bonus is -ranted and paid to an employee for his industry and loyalty
which contributed to the success of the employer*s business and made possible the
realiDation of prots" A bonus is also -ranted by an enli-htened employer to spur the
employee to -reater e8orts for the success of the business and realiDation of bi--er
prots"
Penerally! a bonus is not a demandable and enforceable obli-ation" Gor a bonus to be
enforceable! it must ha.e been promised by the employer and e6pressly a-reed upon
by the parties" Pi.en that the bonus in this case is inte-rated in the CBA! the same
parta=es the nature of a demandable obli-ation" Merily! by .irtue of its incorporation in
the CBA! the Christmas bonus due to respondent Association has become more than
Lust an act of -enerosity on the part of the petitioner but a contractual obli-ation it has
underta=en"
All -i.en! business losses are a feeble -round for petitioner to repudiate its obli-ation
under the CBA" 5he rule is settled that any benet and supplement bein- enLoyed by
the employees cannot be reduced! diminished! discontinued or eliminated by the
employer" 5he principle of non>diminution of benets is founded on the constitutional
mandate to protect the ri-hts of wor=ers and to promote their welfare and to a8ord
labor full protection" Kence! absent any proof that the employer*s consent was .itiated
by fraud! mista=e or duress! it is presumed that it entered into the CBA .oluntarily and
had full =nowled-e of the contents thereof and was aware of its commitments under the
contract" Lepanto Cerami)s, 0n). vs. Lepanto Cerami)s 4mployees Asso)iation, G.R. No.
1<<"", ,ar)' %, %1 .
2mployee/ monetary award" 5he law and the rules are consistent in statin- that the
employment permit must be ac:uired prior to employment" 5he Labor Code states9
1Any alien see=in- admission to the Philippines for employment purposes and any
domestic or forei-n employer who desires to en-a-e an alien for employment in the
Philippines shall obtain an employment permit from the Department of Labor"3 Section
;! &ule U7M! Boo= 1 of the 7mplementin- &ules and &e-ulations pro.ides9 1Jo alien
see=in- employment! whether as a resident or non>resident! may enter the Philippines
without rst securin- an employment permit from the Einistry" 7f an alien enters the
country under a non>wor=in- .isa and wishes to be employed thereafter! he may only
be allowed to be employed upon presentation of a duly appro.ed employment permit"3
Palera wor=ed in the Philippines without a proper wor= permit but now wants to claim
employee*s benets under Philippine labor laws" She cannot come to this Court with
unclean hands" 5o -rant Palera*s prayer is to sanction the .iolation of the Philippine
labor laws re:uirin- aliens to secure wor= permits before their employment" >&&
,arketin( Communi)ations, 0n). et al. vs. $o)elyn ,. Galera2$o)elyn ,. Galera @s. >&&
,arketin( Communi)ations, 0n). et al., G.R. No. 1"#%72G.R. No. 1"#%!#, ,ar)' %:,
%1 .
2mployee/ reco.ery of personal contributions" Eay a -o.ernment employee! dismissed
from the ser.ice for cause! be allowed to reco.er the personal contributions he paid to
the Po.ernment Ser.ice 7nsurance System 0PS7S4V 5he answer is yes"
Section 110d4 of Commonwealth Act Jo" 1+(! as amended! pro.ides9 1Apon dismissal for
cause or on .oluntary separation! he shall be entitled only to his own premiums and
.oluntary deposits! if any! plus interest of three per centum per annum! compounded
monthly"3 5his pro.ision continues to -o.ern cases of employees dismissed for cause
and their claims for the return of their personal contributions"
Also! it should be remembered that the PS7S laws are in the nature of social le-islation!
to be liberally construed in fa.or of the -o.ernment employees" 5he money! subLect of
the employee*s re:uest! consists of personal contributions made by him! premiums paid
in anticipation of benets e6pected upon retirement" 5he occurrence of a
contin-ency! i.e.! his dismissal from the ser.ice prior to reachin- retirement a-e! should
not depri.e him of the money that belon-s to him from the outset" 5o allow forfeiture of
these personal contributions in fa.or of the PS7S would condone undue
enrichment" Carmelita Lledo vs. Atty. Cesar @. Lledo, =ran)' Clerk o+ Court, Re(ional
1rial Court, =ran)' #9, HueAon City, A.,. No. &6#:611"7, 8ebruary #, %1 .
2mployee e6penses/ in>ser.ice trainin-"
7n the present case! Article UU7! Section ( of the CBA pro.ides that 1All e/penses o+
se)urity (uards in se)urin( 2reneCin( t'eir li)enses s'all be +or t'eir personal a))ount"3
A readin- of the pro.ision would re.eal that it encompasses all possible e6penses a
security -uard would pay or incur in order to secure or renew his license" 7n>ser.ice
trainin- bein- a re:uirement for the renewal of a security -uard*s license! e6penses
incurred therefore are claimed to be for the security -uard*s personal account" Kowe.er!
the 1BB; &e.ised &ules and &e-ulations 7mplementin- the Pri.ate Security A-ency Law
0&epublic Act Jo" ';+$4 pro.ides that it shall be the primary responsibility of the
operators of pri.ate security a-ency and company security forces to maintain and
up-rade the standards of eCciency! discipline! performance and competence of their
personnel" 7t further pro.ides that 1#5)o maintain andQor up-rade the standard of
eCciency! discipline and competence of security -uards and detecti.es! company
security force and pri.ate security a-encies upon prior authority shall conduct>in>ser.ice
trainin- W 1'e )ost o+ trainin( s'all be pro6rated amon( t'e parti)ipatin(
a(en)ies2private )ompanies"3
Since it is the primary responsibility of operators of company security forces to maintain
and up-rade the standards of eCciency! discipline! performance and competence of
their personnel! it follows that the e6penses to be incurred therein shall be for the
account of the company" Gurther! the intent of the law to impose upon the employer the
obli-ation to pay for the cost of its employees* trainin- is manifested in the
aforementioned pro.ision of law" @hile the law mandates pro>ratin- of e6penses
because it would be impracticable and unfair to impose the burden of e6penses su8ered
by all participants on only one participatin- a-ency or company! if there is no
centraliDation! there can be no pro>ratin-! and therefore! the company that has its own
security forces must shoulder the entire cost for such trainin-" 7f the intent of the law
were to impose upon indi.idual employees the cost of trainin-! the pro.ision on the pro>
ratin- of e6penses would not ha.e found print in the law" Prior to the si-nin- of the
CBA! it was the company pro.idin- for the in>ser.ice trainin- of the -uards" 5hus!
implicit from the company*s actuations was its ac=nowled-ment of its le-ally mandated
responsibility to shoulder the e6penses for in>ser.ice trainin-" &NCC SkyCay 1raE)
,ana(ement and Se)urity Bivision >orkers Dr(aniAation 3&S1,S>BD7, represented by
its &resident, Rene Soriano vs. &NCC SkyCay Corporation7, G.R. No. 171%!1, 8ebruary
17, %1
2mployee .s" corporate oCcer" Corporate oCcers are -i.en such character either by
the Corporation Code or by the corporation*s by>laws" Ander Section 2' of the
Corporation Code! the corporate oCcers are the president! secretary! treasurer and such
other oCcers as may be pro.ided in the by>laws" Nther oCcers are sometimes created
by the charter or by>laws of a corporation! or the board of directors may be empowered
under the by>laws of a corporation to create additional oCces as may be necessary"
An e6amination of @PP*s by>laws resulted in a ndin- that Palera*s appointment as a
corporate oCcer 0Mice>President with the operational title of Eana-in- Director of
Eindshare4 durin- a special meetin- of @PP*s Board of Directors is an appointment to a
non>e6istent corporate oCce" @PP*s by>laws pro.ided for only one Mice>President" At
the time of Palera*s appointment on %1 December 1BBB! @PP already had one Mice>
President in the person of @ebster" Palera cannot be said to be a director of @PP also
because all .e directorship positions pro.ided in the by>laws are already occupied"
Ginally! @PP cannot rely on its Amended By>Laws to support its ar-ument that Palera is
a corporate oCcer" 5he Amended By>Laws pro.ided for more than one Mice>President
and for two additional directors" 2.en thou-h @PP*s stoc=holders .oted for the
amendment on %1 Eay 2000! the S2C appro.ed the amendments only on 1( Gebruary
2001" Palera was dismissed on 1; December 2000" @PP! Steedman! @ebster! and
Lansan- did not present any e.idence that Palera*s dismissal too= e8ect with the action
of @PP*s Board of Directors"
Additionally! the followin- pro.isions in her employment contract are con.incin-
indicators that Palera was an employee and not a corporate oCcer9 014 it mandates
where and how often she is to perform her wor=/ 024 the wa-es she recei.es are
completely controlled by @PP/ 0%4 she is subLect to the re-ular disciplinary procedures of
@PP/ 0;4 section 1; thereof clearly states that she is a permanent employee X not a
Mice>President or a member of the Board of Directors/ 0'4 the intellectual property ri-hts
created or disco.ered by petitioner durin- her employment shall automatically belon-
to pri.ate respondent @PP #Ander the 7ntellectual Property Code! this condition pre.ails
if the creator of the wor= subLect to the laws of patent or copyri-ht is an employee of
the one entitled to the patent or copyri-ht)/ and 0(4 the disciplinary procedure states
that her ri-ht of redress is throu-h Eindshare*s Chief 26ecuti.e NCcer for the Asia>
Pacic" 5his last circumstance implies that she was not e.en under the disciplinary
control of @PP*s Board of Directors! and therefore! she could not ha.e been a @PP
corporate oCcer as only the @PP Board of Directors could appoint and terminate its own
corporate oCcer" >&& ,arketin( Communi)ations, 0n). et al. vs. $o)elyn ,.
Galera2$o)elyn ,. Galera vs. >&& ,arketin( Communi)ations, 0n). et al., G.R. No.
1"#%72G.R. No. 1"#%!#, ,ar)' %:, %1 .
7lle-al dismissal/ bac=wa-es" 5he basis for the payment of bac=wa-es is di8erent from
that for the award of separation pay" Separation pay is -ranted where reinstatement is
no lon-er ad.isable because of strained relations between the employee and the
employer" Bac=wa-es represent compensation that should ha.e been earned but were
not collected because of the unLust dismissal" 5he basis for computin- bac=wa-es is
usually the len-th of the employee*s ser.ice while that for separation pay is the actual
period when the employee was unlawfully pre.ented from wor=in-"
As to how both awards should be computed! ,a)asero v. Sout'ern 0ndustrial Gases
&'ilippines IG.R. No. 17<:%9, $anuary !, %#J instructs that the award of separation
pay is inconsistent with a ndin- that there was no ille-al dismissal! for under Article
2$B of the Labor Code and as held in a catena of cases! an employee who is dismissed
without Lust cause and without due process is entitled to bac=wa-es and reinstatement
or payment of separation pay in lieu thereof" 5hus! an ille-ally dismissed employee is
entitled to two reliefs9 bac=wa-es and reinstatement" 5he two reliefs pro.ided are
separate and distinct" Golden A)e =uilders and Arnold ?. AAur vs. $ose A. 1alde,G.R. No.
1<7%, ,ay :, %1.
7lle-al dismissal/ doctrine of strained relations" Ander the do)trine o+ strained relations!
the payment of separation pay is considered an acceptable alternati.e to reinstatement
when the latter option is no lon-er desirable or .iable" Nn one hand! such payment
liberates the employee from what could be a hi-hly oppressi.e wor= en.ironment" Nn
the other hand! it releases the employer from the -rossly unpalatable obli-ation of
maintainin- in its employ a wor=er it could no lon-er trust"
Strained relations must be demonstrated as a fact! howe.er! to be ade:uately
supported by e.idenceX substantial e.idence to show that the relationship between the
employer and the employee is indeed strained as a necessary conse:uence of the
Ludicial contro.ersy"
7n the present case! the Labor Arbiter found that actual animosity e6isted between
petitioner ADul and respondent as a result of the lin- of the ille-al dismissal case" Such
ndin-! especially when aCrmed by the appellate court as in the case at bar! is bindin-
upon the Court! consistent with the pre.ailin- rules that the Court will not try facts anew
and that ndin-s of facts of :uasi>Ludicial bodies are accorded -reat respect! e.en
nality" Golden A)e =uilders and Arnold ?. AAul vs. $ose A. 1alde, G.R. No. 1<7%, ,ay
:, %1.
7lle-al dismissal/ separation pay" 7n instances where reinstatement is no lon-er feasible
because of strained relations between the employee and the employer! separation pay
is -ranted" 7n e8ect! an ille-ally dismissed employee is entitled to either reinstatement!
if .iable! or separation pay if reinstatement is no lon-er .iable! and bac=wa-es" 5he
normal conse:uences of respondents* ille-al dismissal! then! are reinstatement without
loss of seniority ri-hts! and payment of bac=wa-es computed from the time
compensation was withheld up to the date of actual reinstatement" @here
reinstatement is no lon-er .iable as an option! separation pay e:ui.alent to one 014
month salary for e.ery year of ser.ice should be awarded as an alternati.e" 5he
payment of separation pay is in addition to payment of bac=wa-es"
5he accepted doctrine is that separation pay may a.ail in lieu of reinstatement if
reinstatement is no lon-er practical or in the best interest of the parties" Separation pay
in lieu of reinstatement may li=ewise be awarded if the employee decides not to be
reinstated" Golden A)e =uilders and Arnold ?. AAur vs. $ose A. 1alde, G.R. No. 1<7%,
,ay :, %1.
7lle-al dismissal" Ander &epublic Act Jo" ($1'! employees who are ille-ally dismissed
are entitled to full bac=wa-es! inclusi.e of allowances and other benets or their
monetary e:ui.alent! computed from the time their actual compensation was withheld
from them up to the time of their actual reinstatement but if reinstatement is no lon-er
possible! the bac=wa-es shall be computed from the time of their ille-al termination up
to the nality of the decision"
5he employees in this case are entitled to bac=wa-es and separation pay! considerin-
that reinstatement is no lon-er possible because the positions they pre.iously occupied
are no lon-er e6istin-" General ,illin( Corporation vs. 4rnesto Casio, et al. and @ir(ilio
&ino, et al., G.R. No. 19#::%, ,ar)' 1, %1.
7lle-al dismissal" @PP*s dismissal of Palera lac=ed both substanti.e and procedural due
process" Apart from Steedman*s letter dated 1' December 2000 to Palera! @PP failed
to pro.e any Lust or authoriDed cause for Palera*s dismissal" 5he law also re:uires that
the employer must furnish the wor=er sou-ht to be dismissed with two written notices
before termination of employment can be le-ally e8ected9 014 notice which apprises the
employee of the particular acts or omissions for which his dismissal is sou-ht/ and 024
the subse:uent notice which informs the employee of the employer*s decision to
dismiss him" Gailure to comply with these re:uirements taints the dismissal with
ille-ality" @PP*s acts clearly show that Palera*s dismissal did not comply with the two>
notice rule" >&& ,arketin( Communi)ations, 0n). et al. vs. $o)elyn ,. Galera2$o)elyn ,.
Galera @s. >&& ,arketin( Communi)ations, 0n). et al., G.R. No. 1"#%72G.R. No.
1"#%!#, ,ar)' %:, %1.
7lle-al dismissal/ abandonment" Petitioner was! for .e times! notied in writin- by
respondent to resume teachin- for the second semester of school year 200%>200;
followin- the ser.ice of her suspension durin- the rst semester" She was ad.ised that
a teachin- load had already been prepared for her" &espondent ne.er replied to those
notices" Petitioner*s Lustication for her failure to respond to the notices was that her
acceptance of the o8er could be construed as a wai.er of her claims" 5he Court held
that petitioner*s Lustication is not a .alid e6cuse"
Petitioner contends that her lin- of a complaint for ille-al dismissal was a
manifestation of her desire to return to her Lob and ne-ated any intention to se.er the
employer>employee relationship" Petitioner for-ets that her complaint for 1ille-al
dismissal3 which she led on June '! 200% spran-! not from her dismissal on December
(! 200% due to abandonment! but from her suspension durin- the rst semester of
school year 200%>200;" @hile the lin- of a complaint with a prayer for reinstatement
ne-ates an intention to se.er the employer>employee relationship! the same
contemplates an action ta=en subse:uent to dismissal and not after an employee! by all
indications! abandoned her Lob" 4van(eline C. Cobarrubias vs. Saint Louis ?niversity,
0n)., G.R. No. 17"717, ,ar)' 17, %1.
7lle-al dismissal/ monetary awards" Clearly! the law intends the award of bac=wa-es
and similar benets to accumulate past the date of the Labor Arbiter*s decision until the
dismissed employee is actually reinstated" But if! as in this case! reinstatement is no
lon-er possible! this Court has consistently ruled that bac=wa-es shall be computed
from the time of ille-al dismissal until the date the decision becomes nal"
Separation pay! on the other hand! is e:ui.alent to one month pay for e.ery year of
ser.ice! a fraction of si6 months to be considered as one whole year" Kere that would
be-in from January %1! 1BB; when petitioner Belen be-an his ser.ice" 5echnically the
computation of his separation pay would end on the day he was dismissed on Au-ust
20! 1BBB when he supposedly ceased to render ser.ice and his wa-es ended" But! since
Belen was entitled to collect bac=wa-es until the Lud-ment for ille-al dismissal in his
fa.or became nal! here on September 22! 200+! the computation of his separation pay
should also end on that date"
Gurther! since the monetary awards remained unpaid e.en after it became nal on
September 22! 200+ because of issues raised respectin- the correct computation of
such awards! it is but fair that respondent Ja.ellana be re:uired to pay 12< interest per
annum on those awards from September 22! 200+ until they are paid" 5he 12< interest
is proper because the Court treats monetary claims in labor cases the e:ui.alent of a
forbearance of credit" 7t matters not that the amounts of the claims were still in
:uestion on September 22! 200+" @hat is decisi.e is that the order to pay the
monetary awards had lon- become nal" Baniel &. $avellana, $r. vs. Albino =elen2Albino
=elen @s. Baniel &. $avellana, $r. and $avellana 8arms, 0n)., G.R. No. 1<1#1!2G.R. No.
1<%1:<, ,ar)' :, %1 .
7lle-al dismissal . Contrary to the CA*s perception! the Court nds a wor=>connection
in Amular*s and Ducay*s assault on EendoDa" As the CA itself noted! the underlyin-
reason why Amular and Ducay confronted EendoDa was to :uestion him about his
report to De Leon F 5echnol*s PCD assistant super.isor F re-ardin- the duo*s
:uestionable wor= beha.ior" 5he moti.ation behind the confrontation was rooted on
wor=place dynamics as EendoDa! Amular and Ducay interacted with one another in the
performance of their duties"
Ander these circumstances! Amular undoubtedly committed misconduct or e6hibited
improper beha.ior that constituted a .alid cause for his dismissal under the law and
Lurisprudential standards" 5he circumstances of his misdeed rendered him unt to
continue wor=in- for 5echnol" 5hus! Amular was not ille-ally dismissed/ he was
dismissed for cause" 1e)'nol 4i('t &'ilippines Corporation vs. National Labor Relations
Commission, et al., G.R. No. 1<7":. April 1!, %1.
7lle-al Dismissal . 7f the school were to apply the probationary standards 0as in fact it
says it did in the present case4! these standards must not only be reasonable but must
ha.e also been communicated to the teachers at the start of the probationary period! or
at the .ery least! at the start of the period of application of the said standards" 5hese
terms! in addition to those e6pressly pro.ided by the Labor Code! would ser.e as the
Lust cause for the termination of the probationary contract" As e6plained abo.e! the
details of this ndin- of Lust cause must be communicated to the a8ected teachers as a
matter of due process"
AEACC! by its submissions! admits that it did not renew the petitioners* contracts
because they failed to pass the Performance Appraisal System for 5eachers 0PAS54 and
other re:uirements for re-ulariDation that the school implements to maintain its hi-h
academic standards" 5he e.idence is unclear on the e6act terms of the standards!
althou-h the school also admits that these were standards under the Puidelines on the
7mplementation of AEACC Gaculty Plantilla put in place at the start of school year 2000>
2001"
@hile the Court can -rant that the standards were duly communicated to the petitioners
and could be applied be-innin- the 1
st
trimester of the school year 2000>2001! -larin-
and .ery basic -aps in the school*s e.idence still e6ist" 5he e6act terms of the
standards were ne.er introduced as e.idence/ neither does the e.idence show how
these standards were applied to the petitioners" @ithout these pieces of e.idence
0e8ecti.ely! the ndin- of Lust cause for the non>renewal of the petitioners* contracts4!
the Court has nothin- to consider and pass upon as .alid or in.alid for each of the
petitioners" 7ne.itably! the non>renewal 0or e8ecti.ely! the termination of employment
of employees on probationary status4 lac=s the supportin- ndin- of Lust cause that the
law re:uires and! hence! is ille-al" Yolanda ,. ,er)ado, et al. vs. Ama Computer
Colle(e, &araKa5ue City, G.R. No. 1<!:7%, April 1!, %1.
7lle-al dismissal" 5he Court is not unmindful of the rule in labor cases that the employer
has the burden of pro.in- that the termination was for a .alid or authoriDed cause/
howe.er! it is li=ewise incumbent upon the employees that they should rst establish by
competent e.idence the fact of their dismissal from employment" 5he one who alle-es a
fact has the burden of pro.in- it and the proof should be clear! positi.e and con.incin-"
7n this case! aside from mere alle-ations! no e.idence was pro8ered by the petitioners
that they were dismissed from employment" 5he records are bereft of any indication
that petitioners were pre.ented from returnin- to wor= or otherwise depri.ed of any
wor= assi-nment by respondents"
7n Abad v. Roselle Cinema #P"&" Jo" 1;1%$1! Earch 2;! 200(! ;+' SC&A 2(2! 2$2), the
Court ruled that the substantial e.idence pro8ered by the employer that it had not
terminated the employee should not be i-nored on the prete6t that the employee would
not ha.e led the complaint for ille-al dismissal if he had not really been dismissed" 5he
Court held that such non se5uitur reasonin- cannot ta=e the place of the e.idence of
both the employer and the employee" Romeo =asay, et al. vs. -a)ienda
Consolation, et al., G.R. No. 17::!%, April 1#, %1.
7lle-al Dismissal" 5he Court .iews with appro.al the obser.ation of the CA and
the JL&C that the employer cannot Lustify the defense of abandonment as it failed to
pro.e that indeed the employee had abandoned her wor=" 7t did not e.en bother to
send a letter to her last =nown address re:uirin- her to report for wor= and e6plain her
alle-ed continued absences"
5he ratiocination of the JL&C on this score merits the Court*s imprimatur! .iD9 5he law
clearly spells out the manner by which an unLustied refusal to return to wor= by an
employee may be established" 5hus! respondent should ha.e -i.en complainant a
notice with warnin- concernin- her alle-ed absences 0Section 2! &ule U7M! Boo= M!
7mplementin- &ules and &e-ulations of the Labor Code4" 5he notice re:uirement
actually consists of two parts to be separately ser.ed on the employee to wit9 014 notice
to apprise the employee of his absences with a warnin- concernin- a possible
se.erance of employment in the e.ent of an unLustied e6cuse therefor! and 024
subse:uent notice of the decision to dismiss in the e.ent of an employee*s refusal to
pay heed to such warnin-" Nnly after complyin- with those re:uirements can it be
reasonably concluded that the employee actually abandoned his Lob" 7n the present
case! more than two 024 months had already lapsed since the employee alle-edly
started to absent herself when she instituted her action for ille-al dismissal" Durin- the
said period of time! no action was ta=en by the company re-ardin- the employee*s
alle-ed absences! somethin- which is :uite peculiar had her employment not been
se.ered at all" Accordin-ly! the Court found no merit in the company*s defense of
abandonment in .iew of an utter lac= of e.idence to support the same" Kence! the
employee*s char-e of ille-al dismissal stands uncontro.erted" Biversi.ed Se)urity, 0n).
vs. Ali)ia @. =autista. G.R. No. 1:%%!9, April 1:, %1.
ProLect employee" 5he test for distin-uishin- a 1proLect employee3 from a 1re-ular
employee3 is whether or not he has been assi-ned to carry out a 1specic proLect or
underta=in-!3 with the duration and scope of his en-a-ement specied at the time his
ser.ice is contracted" Kere! it is not disputed that petitioner company contracted
respondent 5rinidad*s ser.ice by specic proLects with the duration of his wor= clearly
set out in his employment contracts" Ke remained a proLect employee re-ardless of the
number of years and the .arious proLects he wor=ed for the company"
Penerally! len-th of ser.ice pro.ides a fair yardstic= for determinin- when an employee
initially hired on a temporary basis becomes a permanent one! entitled to the security
and benets of re-ulariDation" But this standard will not be fair! if applied to the
construction industry! simply because construction rms cannot -uarantee wor= and
fundin- for its payrolls beyond the life of each proLect" And -ettin- proLects is not a
matter of course" Construction companies ha.e no control o.er the decisions and
resources of proLect proponents or owners" 5here is no construction company that does
not wish it has such control but the reality! understood by construction wor=ers! is that
wor= depended on decisions and de.elopments o.er which construction companies
ha.e no say"
7n this case! respondent 5rinidad*s series of employments with petitioner company were
co>terminous with its proLects" @hen its Boni Serrano>Satipunan 7nterchan-e ProLect
was nished in December 200;! 5rinidad*s employment ended with it" Ke was not
dismissed" Kis employment contract simply ended with the proLect for which he had
si-ned up" Kis employment history belies the claim that he continuously wor=ed for the
company" 7nter.als or -aps separated one contract from another" >illiam Constru)tion
Corp. and2or 1eresita ?y and >illiam ?y vs. $or(e R. 1rinidad, G.R. No. 1<!%:, ,ar)'
1%, %1 .
&einstatement/ reimbursement" An employee cannot be compelled to reimburse the
salaries and wa-es he recei.ed durin- the pendency of his appeal! notwithstandin- the
re.ersal by the JL&C of the LA*s order of reinstatement" 5he pertinent law on the
matter is not concerned with the wisdom or propriety of the LA*s order of reinstatement!
for if it was! then it should ha.e pro.ided that the pendency of an appeal should stay its
e6ecution" After all! a decision cannot be deemed irrefra-able unless it attains
nality" Colle(e o+ t'e 0mma)ulate Con)ep)ion vs. National Labor Relations Commission
and Atty. ,arius 8. Carlos, &'.B, G.R. No. 1"7:"!, ,ar)' %%, %1 .
Labor Code/ interpretation . Another basic principle is that e6pressed in Article ; of the
Labor Code F that all doubts in the interpretation and implementation of the Labor Code
should be interpreted in fa.or of the wor=in-man" 5his principle has been e6tended by
Lurisprudence to co.er doubts in the e.idence presented by the employer and the
employee" 5he petitioner has! at .ery least! shown serious doubts about the merits of
the company*s case! particularly in the appreciation of the clinchin- e.idence on which
the JL&C and CA decisions were based" 7n such contest of e.idence! the Court
applied Article ; as basis to rule in fa.or of the employee" 7n this case! the Court held
that petitioner was constructi.ely dismissed -i.en the hostile and discriminatory
wor=in- en.ironment he found himself in! particularly e.idenced by the escalatin- acts
of unfairness a-ainst him that culminated in the appointment of another K&D mana-er
without any prior notice to him" @here no less than the company*s chief corporate
oCcer was a-ainst him! petitioner had no alternati.e but to resi-n from his
employment"
5he Court also -a.e si-nicance to the fact that petitioner sou-ht almost immediate
oCcial recourse to contest his separation from ser.ice throu-h a complaint for ille-al
dismissal! and held that this is not the act of one who .oluntarily resi-ned/ his
immediate lin- of a complaint characteriDes him as one who deeply felt that he had
been wron-ed" ,anolo A. &eKaLor vs. Dutdoor Clot'in( ,anu+a)turin( Corporation, et
al., G.R. No. 177119, $anuary %1, %1.
Labor only contractin-" 7ndeed! it is mana-ement prero-ati.e to farm out any of its
acti.ities! re-ardless of whether such acti.ity is peripheral or core in nature" Kowe.er!
in order for such outsourcin- to be .alid! it must be made to an independent contractor
because the current labor rules e6pressly prohibit labor>only contractin-" 5here is labor>
only contractin- when the contractor or sub>contractor merely recruits! supplies or
places wor=ers to perform a Lob! wor= or ser.ice for a principal! and any of the followin-
elements are present9 0i4 the contractor or subcontractor does not ha.e substantial
capital or in.estment which relates to the Lob! wor= or ser.ice to be performed and the
employees recruited! supplied or placed by such contractor or subcontractor are
performin- acti.ities which are directly related to the main business of the principal/ or
0ii4 the contractor does not e6ercise the ri-ht to control o.er the performance of the
wor= of the contractual employee"
7n the instant case! the nancial statements of Promm>Pem show that it has authoriDed
capital stoc= of P1 million and a paid>in capital! or capital a.ailable for operations! of
P'00!000"00 as of 1BB0" 7t also has lon- term assets worth P;%2!+B'"2+ and current
assets of P$1B!0;2"%2" Promm>Pem has also pro.en that it maintained its own
warehouse and oCce space with a Hoor area of +$0 s:uare meters" 7t also had under its
name three re-istered .ehicles! which were used for its promotionalQmerchandisin-
business" Promm>Pem also has other clients aside from PRP" Ander the circumstances!
we nd that Promm>Pem has substantial in.estment! which relates to the wor= to be
performed" Ander these circumstances! Promm>Pem cannot be considered a labor>only
contractor"
Nn the other hand! the Articles of 7ncorporation of SAPS show that it has a paid>in
capital of only P%1!2'0"00" 5here is no other e.idence to pro.e how much its wor=in-
capital and assets are" Gurthermore! there is no showin- of substantial in.estment in
tools! e:uipment or other assets"
SAPS* lac= of substantial capital is hi-hli-hted by the records which show that its payroll
for its merchandisers alone for one month would already total P;;!'(1"00" 7t had (>
month contracts with PRP" ,et SAPS failed to show that it could complete the (>month
contracts usin- its own capital and in.estment" 7ts capital is not e.en suCcient for one
month*s payroll" SAPS failed to show that its paid>in capital of P%1!2'0"00 is suCcient
for the period re:uired for it to -enerate re.enues to sustain its operations
independently" Substantial capital refers to capitaliDation used in the performance or
completion of the Lob! wor= or ser.ice contracted out" 7n the present case! SAPS has
failed to show substantial capital"
Gurthermore! the employees in this case performed merchandisin- and promotion of the
products of PRP! which are acti.ities that the Court has considered directly related to
the manufacturin- business of PRP" Considerin- that SAPS has no substantial capital or
in.estment and the wor=ers it recruited are performin- acti.ities which are directly
related to the principal business of PRP! we nd that SAPS is en-a-ed in 1labor>only
contractin-3" $oeb Aliviado, et al. vs. &ro)ter ; Gamble &'ilippines, 0n)., et al., G.R. No.
1":", ,ar)' #, %1 .
Dismissal pursuant to union security clause/ separate notice and harin- re:uired" PEC
ille-ally dismissed Casio! et al" because not only did PEC fail to ma=e a determination
of the suCciency of e.idence to support the union*s decision to e6pel Casio! et al"! it
also failed to accord the e6pelled union members procedural due process! i"e"! notice
and hearin-! prior to the termination of their employment"
PEC! by its own admission! did not conduct a separate and independent in.esti-ation to
determine the suCciency of the e.idence supportin- the union*s e6pulsion of Casio! et
al" 7t simply acceded to the union*s demand" Conse:uently! PEC cannot insist that it
has no liability for the payment of bac=wa-es and dama-es to Casio! et al"! and that the
liability for such payment should fall only upon the union oCcers and board members
who e6pelled Casio! et al" PEC completely missed the point that the e6pulsion of Casio!
et al" by the union and the termination of employment of the same employees by PEC!
althou-h related! are two separate and distinct acts" Despite a closed shop pro.ision in
the CBA! law and Lurisprudence impose upon PEC the obli-ation to accord Casio! et al"
substanti.e and procedural due process before complyin- with the union*s demand to
dismiss the e6pelled union members from ser.ice" 5he failure of PEC to carry out this
obli-ation ma=es it liable for ille-al dismissal of Casio! et al" General ,illin( Corporation
vs. 4rnesto Casio, et al. and @ir(ilio &ino, et al., G.R. No. 19#::%, ,ar)' 1, %1 .

. Eana-ement prero-ati.es/ contract of perpetual employment" 5he Court cannot
countenance the employee*s claim that a contract of perpetual employment was e.er
constituted" @hile the Constitution reco-niDes the primacy of labor! it also reco-niDes
the critical role of pri.ate enterprise in nation>buildin- and the prero-ati.es of
mana-ement" A contract of perpetual employment depri.es mana-ement of its
prero-ati.e to decide whom to hire! re and promote! and renders inutile the basic
precepts of labor relations" @hile mana-ement may .alidly wai.e it prero-ati.es! such
wai.er should not be contrary to law! public order! public policy! morals or -ood
customs" An absolute and un:ualied employment for life in the mold of petitioner*s
concept of perpetual employment is contrary to public policy and -ood customs! as it
unLustly forbids the employer from terminatin- the ser.ices of an employee despite the
e6istence of a Lust or .alid cause" 7t li=ewise compels the employer to retain an
employee despite the attainment of the statutory retirement a-e! e.en if the employee
has became a 1non>performin- asset3 or! worse! a liability to the employer" Ronilo
Sorreda vs. Cambrid(e 4le)troni)s Corporation, G.R. No. 17%#%7, 8ebruary 11, %1.
Yuitclaim/ elements" 7t is true that the law loo=s with disfa.or on :uitclaims and
releases by employees who ha.e been in.ei-led or pressured into si-nin- them by
unscrupulous employers see=in- to e.ade their le-al responsibilities and frustrate Lust
claims of employees" 7n certain cases! howe.er! the Court has -i.en e8ect to :uitclaims
e6ecuted by employees if the employer is able to pro.e the followin- re:uisites! to wit9
014 the employee e6ecutes a deed of :uitclaim .oluntarily/ 024 there is no fraud or deceit
on the part of any of the parties/ 0%4 the consideration of the :uitclaim is credible and
reasonable/ and 0;4 the contract is not contrary to law! public order! public policy!
morals or -ood customs! or preLudicial to a third person with a ri-ht reco-niDed by
law" Goodri)' ,anu+a)turin( Corporation ; ,r. Nilo C'ua Goy vs. 4merlina Ativo, et
al., G.R. No. 1<<%, 8ebruary 1, %1.
Yuitclaim/ .alidity" 7n the case at bar! both the Labor Arbiter and the JL&C ruled that the
employees e6ecuted their :uitclaims without any coercion from the company followin-
their .oluntary resi-nation from the company" 5he contents of the :uitclaim documents
are simple! clear and une:ui.ocal" 5he records of the case are bereft of any substantial
e.idence to show that the employees did not =now that they were relin:uishin- their
ri-ht short of what they had e6pected to recei.e and contrary to what they ha.e so
declared" Put di8erently! at the time they were si-nin- their :uitclaims! respondents
honestly belie.ed that the amounts recei.ed by them were fair and reasonable
settlements of the amounts! which they would ha.e recei.ed had they refused to
.oluntarily resi-n from the said company" Goodri)' ,anu+a)turin( Corporation ; ,r.
Nilo C'ua Goy vs. 4merlina Ativo, et al., G.R. No. 1<<%, 8ebruary 1, %1.
Macation lea.e/ schedulin-" Althou-h the preferred .acation lea.e schedule of
employees should be -i.en priority! they cannot demand! as a matter of ri-ht! for their
re:uest to be automatically -ranted by the company" 7f the employees were -i.en the
e6clusi.e ri-ht to schedule their .acation lea.e then said ri-ht should ha.e been
incorporated in the CBA" 7n the absence of such ri-ht and in .iew of the mandatory
pro.ision in the CBA -i.in- the company the ri-ht to schedule the .acation lea.e of its
employees! the CBA pre.ails"
7n the -rant of .acation lea.e pri.ile-es to an employee! the employer is -i.en the
leeway to impose conditions on the entitlement to and commutation of the same! as the
-rant of .acation lea.e is not a standard of law! but a prero-ati.e of mana-ement" 7t is
a mere concession or act of -race of the employer and not a matter of ri-ht on the part
of the employee" 7t is! therefore! well within the power and authority of an employer to
impose certain conditions! as it deems t! on the -rant of .acation lea.es! such as
ha.in- the option to schedule the same" &NCC SkyCay 1raE) ,ana(ement and Se)urity
Bivision >orkers Dr(aniAation 3&S1,S>BD7, represented by its &resident, Rene Soriano
vs. &NCC SkyCay Corporation7, G.R. No. 171%!1, 8ebruary 17, %1
Pre.enti.e Suspension/ Process" @hat the &ules re:uire is that the employer act on the
suspended wor=er*s status of employment within the %0>day period by concludin- the
in.esti-ation either by absol.in- him of the char-es! or metin- the correspondin-
penalty if liable! or ultimately dismissin- him" 7f the suspension e6ceeds the %0>day
period without any correspondin- action on the part of the employer! the employer
must reinstate the employee or e6tend the period of suspension! pro.ided the
employee*s wa-es and benets are paid in the interim"
7n the present case! petitioner company had until Eay 20! 2002 to act on 5aroy*s case"
7t did by terminatin- him throu-h a notice dated Eay 10! 2002! hence! the %0>day
re:uirement was not .iolated e.en if the termination notice was recei.ed only on June
;! 2002! absent any showin- that the delayed ser.ice of the notice on 5aroy was
attributable to Penesis 5ransport" Genesis 1ransport Servi)e, 0n). et al.
vs. ?nyon n( ,alayan( ,an((a(aCa n( Genesis 3?,,G17, et al., G.R. No. 1<%119,
April :, %1"
Pre.enti.e Suspension/ Process" @hat the &ules re:uire is that the employer act on the
suspended wor=er*s status of employment within the %0>day period by concludin- the
in.esti-ation either by absol.in- him of the char-es! or metin- the correspondin-
penalty if liable! or ultimately dismissin- him" 7f the suspension e6ceeds the %0>day
period without any correspondin- action on the part of the employer! the employer
must reinstate the employee or e6tend the period of suspension! pro.ided the
employee*s wa-es and benets are paid in the interim"
7n the present case! petitioner company had until Eay 20! 2002 to act on 5aroy*s case"
7t did by terminatin- him throu-h a notice dated Eay 10! 2002! hence! the %0>day
re:uirement was not .iolated e.en if the termination notice was recei.ed only on June
;! 2002! absent any showin- that the delayed ser.ice of the notice on 5aroy was
attributable to Penesis 5ransport" Genesis 1ransport Servi)e, 0n). et al.
vs. ?nyon n( ,alayan( ,an((a(aCa n( Genesis 3?,,G17, et al., G.R. No. 1<%119,
April :, %1"
ProLect employee" 5he test for distin-uishin- a 1proLect employee3 from a 1re-ular
employee3 is whether or not he has been assi-ned to carry out a 1specic proLect or
underta=in-!3 with the duration and scope of his en-a-ement specied at the time his
ser.ice is contracted" Kere! it is not disputed that petitioner company contracted
respondent 5rinidad*s ser.ice by specic proLects with the duration of his wor= clearly
set out in his employment contracts" Ke remained a proLect employee re-ardless of the
number of years and the .arious proLects he wor=ed for the company"
Penerally! len-th of ser.ice pro.ides a fair yardstic= for determinin- when an employee
initially hired on a temporary basis becomes a permanent one! entitled to the security
and benets of re-ulariDation" But this standard will not be fair! if applied to the
construction industry! simply because construction rms cannot -uarantee wor= and
fundin- for its payrolls beyond the life of each proLect" And -ettin- proLects is not a
matter of course" Construction companies ha.e no control o.er the decisions and
resources of proLect proponents or owners" 5here is no construction company that does
not wish it has such control but the reality! understood by construction wor=ers! is that
wor= depended on decisions and de.elopments o.er which construction companies
ha.e no say"
7n this case! respondent 5rinidad*s series of employments with petitioner company were
co>terminous with its proLects" @hen its Boni Serrano>Satipunan 7nterchan-e ProLect
was nished in December 200;! 5rinidad*s employment ended with it" Ke was not
dismissed" Kis employment contract simply ended with the proLect for which he had
si-ned up" Kis employment history belies the claim that he continuously wor=ed for the
company" 7nter.als or -aps separated one contract from another" >illiam Constru)tion
Corp. and2or 1eresita ?y and >illiam ?y vs. $or(e R. 1rinidad, G.R. No. 1<!%:, ,ar)'
1%, %1 .
&einstatement/ reimbursement" An employee cannot be compelled to reimburse the
salaries and wa-es he recei.ed durin- the pendency of his appeal! notwithstandin- the
re.ersal by the JL&C of the LA*s order of reinstatement" 5he pertinent law on the
matter is not concerned with the wisdom or propriety of the LA*s order of reinstatement!
for if it was! then it should ha.e pro.ided that the pendency of an appeal should stay its
e6ecution" After all! a decision cannot be deemed irrefra-able unless it attains
nality" Colle(e o+ t'e 0mma)ulate Con)ep)ion vs. National Labor Relations Commission
and Atty. ,arius 8. Carlos, &'.B, G.R. No. 1"7:"!, ,ar)' %%, %1 .
Separation pay/ termination for cause" Separation pay is only warranted when the
cause for termination is not attributable to the employee*s fault! such as those pro.ided
in Articles 2+% and 2+; of the Labor Code! as well as in cases of ille-al dismissal in
which reinstatement is no lon-er feasible" 7t is not allowed when an employee is
dismissed for Lust cause! such as serious misconduct"
Jurisprudence has classied theft of company property as a serious misconduct and
denied the award of separation pay to the errin- employee" 7n this case! the Court saw
no reason why this same rule should not be similarly applied in the case of Capor" She
attempted to steal the property of her lon->time employer" Gor committin- such
misconduct! she is denitely not entitled to an award of separation pay"
Capor*s ar-ument that despite the ndin- of theft! she should still be -ranted
separation pay in li-ht of her lon- years of ser.ice with the Company did not persuade
the Court" 7ndeed! len-th of ser.ice and a pre.iously clean employment record cannot
simply erase the -ra.ity of the betrayal e6hibited by a malfeasant employee" Len-th of
ser.ice is not a bar-ainin- chip that can simply be stac=ed a-ainst the employer" After
all! an employer>employee relationship is symbiotic where both parties benet from
mutual loyalty and dedicated ser.ice" 7f an employer had treated his employee well!
has accorded him fairness and ade:uate compensation as determined by law! it is only
fair to e6pect a lon->time employee to return such fairness with at least some respect
and honesty" 5hus! it may be said that betrayal by a lon->time employee is more
insultin- and odious for a fair employer" @hile we sympathiDe with Capor*s pli-ht! bein-
of retirement a-e and ha.in- ser.ed petitioners for %B years! we cannot award any
nancial assistance in her fa.or because it is not only a-ainst the law but also a
retro-ressi.e public policy" Reno 8oods, 0n)., and2or @i)ente K'u vs. Na(kakaisan(
Lakas n( ,an((a(aCa 3NL,7 M Katipunan on be'al+ o+ its member, Nenita Capor, G.R.
No. 1"91", ,ar)' 1:, %1
Suspension/ lea.e without prior authority" @hile it is true that the union and its
members ha.e been -ranted union lea.e pri.ile-es under the CBA! the -rant cannot be
considered separately from the other pro.isions of the CBA! particularly the pro.ision on
mana-ement prero-ati.es where the CBA reser.ed for the company the full and
complete authority in mana-in- and runnin- its business" 5he Court! in the present
case! saw nothin- in the lan-ua-e of the union lea.e pro.ision that remo.es from the
company the ri-ht to prescribe reasonable rules and re-ulations to -o.ern the manner
of a.ailin- of union lea.es! particularly the prero-ati.e to re:uire its prior appro.al" 7n
fact! prior notice is e6pressly re:uired under the CBA so that the company can
appropriately respond to the re:uest for lea.e" 7n this sense! the rule re:uirin- prior
appro.al only made e6press what is implied from the terms of the CBA"
Despite mana-ement*s disappro.al of his re:uested lea.e! the employee still went on
lea.e! in open disre-ard of his superior*s orders" 5his rendered the employee open to
the char-e of insubordination! separately from his absence without oCcial
lea.e" ,alayan 4mployees Asso)iation688> and Rodol+o ,an(alino vs. ,alayan
0nsuran)e Company, 0n)., G.R. No. 1<1!:7, 8ebruary %, %1.
&epresentation and 5ransportation Allowance/ entitlement" Statutory law! as
implemented by administrati.e issuances and interpreted in decisions! has consistently
treated &A5A as distinct from salary" Anli=e salary! which is paid for ser.ices rendered!
&A5A belon-s to a bas=et of allowances to defray e6penses deemed una.oidable in the
dischar-e of oCce" Kence! &A5A is paid only to certain oCcials who! by the nature of
their oCces! incur representation and transportation e6penses"
At any rate! the denial of &A5A must be -rounded on rele.ant and specic pro.ision of
law" By insistin- that! as re:uisite for her receipt of &A5A! respondent must dischar-e
her oCce as Bacnotan*s treasurer while on reassi-nment at the La Anion treasurer*s
oCce! the DBE e8ecti.ely punishes respondent for accedin- to her reassi-nment"
Surely! the law could not ha.e intended to place local -o.ernment oCcials li=e
respondent in the diCcult position of ha.in- to choose between disobeyin- a
reassi-nment order or =eepin- an allowance" Bepartment o+ =ud(et and ,ana(ement
3B=,7 vs. Dlivia B. Leones, G.R. No. 1"#7%", ,ar)' 1<, %1 .
&einstatement" Pi.en the period that has lapsed and the ine.itable chan-e of
circumstances that must ha.e ta=en place in the interim in the academic world and
at AEACC! which chan-es ine.itably a8ect current school operations! the Court holds
that F in lieu of reinstatement F the petitioners should be paid separation pay computed
on a trimestral basis from the time of separation from ser.ice up to the end of the
complete trimester precedin- the nality of this Decision" 5he separation pay shall be in
addition to the other awards! properly recomputed! that the LA ori-inally
decreed" Yolanda ,. ,er)ado, et al. vs. Ama Computer Colle(e, &araKa5ue City, G.R.
No. 1<!:7%, April 1!, %1.
&elease! @ai.er and Yuitclaim . 5alam was not an unlettered employee/ he was an
information technolo-y consultant and must ha.e been fully aware of the conse:uences
of what he was enterin- into" 5he :uitclaim was a .oluntary act as there is no showin-
that he was coerced into e6ecutin- the instrument/ he recei.ed a .aluable consideration
for his less than two years of ser.ice with the company" 5hus! from all indications! the
release and :uitclaim was a .alid and bindin- underta=in- that should ha.e been
reco-niDed by the labor authorities and the CA"
@hile the law frowns upon releases and :uitclaims e6ecuted by employees who are
in.ei-led or pressured into si-nin- them by unscrupulous employers see=in- to e.ade
their le-al responsibilities! a le-itimate wai.er representin- a .oluntary settlement of a
laborer*s claims should be respected by the courts as the law between the parties" 7n
the Court*s .iew! 5alam*s release and :uitclaim fall into the cate-ory of le-itimate
wai.ers as dened by the Court"
@ith 5alam*s .oluntary e6ecution of the release and :uitclaim! the Court found the lin-
of the ille-al dismissal case tainted with bad faith" Jeither can 5SG7 be made to answer
for failure to a8ord 5alam procedural due process" 5he release and :uitclaim! in the
Court*s mind! erased whate.er inrmities there mi-ht ha.e been in the notice of
termination as 5alam had already .oluntarily accepted his dismissal throu-h the release
and :uitclaim" As such! the written notice became academic/ the notice! after all! is
merely a protecti.e measure put in place by law and ser.es no useful purpose after
protection has been assured" 5he Court thus nds no basis for the conclusion
that 5SG7 .iolated procedural due process and should pay nominal dama-es" 8ran)is
Ray 1alam vs. National Labor Relations Commission, 9t' Bivision, Cebu City, et al., G.R.
No. 17:9, April ", %1"
&esi-nation of 2mployee" @hile the letter states that PeZaHor*s resi-nation was
irre.ocable! it does not necessarily si-nify that it was also .oluntarily e6ecuted"
Precisely because of the attendant hostile and discriminatory wor=in-
en.ironment! PeZaHor decided to permanently se.er his ties with Nutdoor Clothin-"
5his falls s:uarely within the concept of constructi.e dismissal that Lurisprudence
denes! amon- others! as in.oluntarily resi-nation due to the harsh! hostile! and
unfa.orable conditions set by the employer" 7t arises when a clear discrimination!
insensibility! or disdain by an employer e6ists and has become unbearable to the
employee" 5he -au-e for constructi.e dismissal is whether a reasonable person in the
employee*s position would feel compelled to -i.e up his employment under the
pre.ailin- circumstances" @ith the appointment of Buenaobra to the position he then
still occupied! PeZaHor felt that he was bein- eased out and this perception made him
decide to lea.e the company"
5he fact of lin- a resi-nation letter alone does not shift the burden of pro.in- that the
employee*s dismissal was for a Lust and .alid cause from the employer to the
employee" 7n ,ora v. Aves)o #P"&" Jo" 1$$;1;! Jo.ember 1;! 200+! '$1 SC&A 22()!
the Court ruled that should the employer interpose the defense of resi-nation! it is still
incumbent upon the employer to pro.e that the employee .oluntarily resi-ned" ,anolo
A. &eKaLor vs. Dutdoor Clot'in( ,anu+a)turin( Corp., et al., G.R. No. 177119, April 1!,
%1.
Earch 2010 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on April 2(! 2010 by Leslie C" Dy [ Posted in Labor Law [ 5a--ed compensable
illness! constructi.e dismissal!estoppel! ille-al dismissal! Lurisdiction! labor>only
contractin-! parties! PN2A! proLect employee [
Kere are selected Earch 2010 rulin-s of the Supreme Court of the Philippines on labor
law and procedure9
Labor law
April 2010 Philippine Supreme Court
Decisions on Labor Law and Procedure
.
Sec 2+
Posted on Eay 1B! 2010 by Leslie C" Dy [ Posted in Labor Law
[ 5a--ed bac=wa-es! certiorari! dishonesty! due process!ille-al dismissal! loss of trust and
condence! misconduct! reinstatement! res Ludicata! resi-nation! retrenchment! serious
misconduct! suspension! wai.er [
Kere are selected April 2010 rulin-s of the Supreme Court of the Philippines on labor law
and procedure9
Labor Law
&einstatement" Pi.en the period that has lapsed and the ine.itable chan-e of
circumstances that must ha.e ta=en place in the interim in the academic world and
at AEACC! which chan-es ine.itably a8ect current school operations! the Court holds
that F in lieu of reinstatement F the petitioners should be paid separation pay computed
on a trimestral basis from the time of separation from ser.ice up to the end of the
complete trimester precedin- the nality of this Decision" 5he separation pay shall be in
addition to the other awards! properly recomputed! that the LA ori-inally
decreed" Yolanda ,. ,er)ado, et al. vs. Ama Computer Colle(e, &araKa5ue City, G.R.
No. 1<!:7%, April 1!, %1.
Eay 2010 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on June 22! 2010 by Leslie C" Dy [ Posted in Labor Law [ 5a--ed bac=wa-es! ille-al
dismissal! Lud-ment [
Kere are selected Eay 2010 rulin-s of the Supreme Court of the Philippines on labor law
and procedure9
Labor law
June 2010 Philippine Supreme Court
Decisions on Labor Law and Procedure
Constructi.e dismissal/ denition/ transfer as mana-ement prero-ati.e. Constructi.e
dismissal is dened as a :uittin- because continued employment is rendered
impossible! unreasonable or unli=ely! or when there is a demotion in ran= or a
diminution of pay" 7t e6ists when an act of clear discrimination! insensibility or disdain by
an employer has become so unbearable to the employee lea.in- him with no option but
to fore-o with his continued employment"
Kere! there was no diminution of petitioner*s salary and other benets" 5here was no
e.idence that she was harassed or discriminated upon! or that respondents made it
diCcult for her to continue with her other duties" Absent any e.idence of bad faith! it is
within the e6ercise of respondents* mana-ement prero-ati.e to transfer some of
petitioner*s duties! if! in their Lud-ment! this would be more benecial to the
corporation" 4strella @elas)o vs. 1ransit Automotive Supply, 0n). and Antonio de
Bios, G.R. No. 171!%7, $une 1<, %1.
Constructi.e dismissal/ o8>detailin-/ resi-nation/ notice re:uirement . 5he company
e.idently placed petitioner on Hoatin- status after bein- relie.ed of her position" But!
as the Court has repeatedly ruled! such act of 1o8>detailin-3 does not amount to a
dismissal so lon- as the Hoatin- status does not continue beyond a reasonable time" 7n
this case! the employee*s Hoatin- status ran up to more than si6 months as of Au-ust
1(! 2002" Gor this reason! the company may be considered to ha.e constructi.ely
dismissed the employee from wor= as of that date" Kence! petitioner*s purported
resi-nation on Nctober 1'! 2002 could not ha.e been le-ally possible"
5he company claims that it -a.e petitioner notices on Au-ust 2%! 2002 and September
2! 2002! as=in- her to e6plain her failure to report for wor= and informin- her that the
company would treat such failure as lac= of interest in her continued employment" But
these notices cannot possibly ta=e the place of the notices re:uired by law as they
came more than si6 months after the company placed her on Hoatin- status! at which
time! the employee is already deemed to ha.e been constructi.ely dismissed her from
wor=" 4lsa S. ,ali6on v. 45uitable General Servi)es 0n)., G.R. No. 1<:%"#, $une %#,
%1.
Death benets/ entitlement . 7n order to a.ail of death benets! the death of the
employee should occur durin- the term of the employment contract" Gor emphasis! we
reiterate that the death of a seaman durin- the term of employment contract ma=es the
employer liable to his heirs for death benets! but if the seaman dies after his contract
of employment has e6pired! his beneciaries are not entitled to the death
benets" Sout'eastern S'ippin(, Sout'eastern S'ippin( Group, Ltd. vs. 8ederi)o ?.
Navarra, $r.! G.R. No. 1"7"7<, $une %%, %1"
Death benets/ post>medical e6amination/ inad.ertence of employer" 7n the cases of
Philippines"! 7nc" ." Joa:uin #;%$ SC&A (0+) and &i.era ." @allem Earitime Ser.ices! 7nc.
#;$; SC&A $1;)! the Supreme Court stressed the importance of a post>employment
medical e6amination or its e:ui.alent for the award of death benets to seafarers
andQor their representati.es in compliance with PN2A Eemorandum Circular Jo" 0''>B(
and Department Nrder Jo" %%! Series of 1BB(! which pro.ide that the seafarer must
report to his employer for a post>employment medical e6amination within three wor=in-
days from the date of arri.al! otherwise! benets under the PN2A standard employment
contract would be nullied" Kowe.er! in the present case! the absence of a post>
employment medical e6amination cannot be used to defeat respondent*s claim since
the failure to subLect the seafarer to this re:uirement was not due to the seafarer*s fault
but to the inad.ertence or deliberate refusal of petitioners" 0nterorient ,aritime
4nterprises, 0n). et al. v. Leonora S. Remo, G.R. No. 1<111%, $une %#, %1.
Dismissal/ breach of trust/ lac= of loss not a defense" 5he acts of the employee re.ealed
a mind that was willin- to disre-ard ban= rules and re-ulations when other branch
oCcers concurred" Ker defense that the ban= su8ered no loss is of no moment" 5he
focal point is that she betrayed the trust of the ban=" Kence! the ban= ri-htfully
terminated the ser.ices of the employee for willful breach of the trust that it reposed in
her" LuAviminda A. An( vs. &'ilippine National =ank! G.R. No. 17<7"%, $une 1", %1"
Dismissal/ burden of proof" 7n termination cases! the burden of proof rests upon the
employer to show that the dismissal of the employee is for Lust cause and failure to do
so would mean that the dismissal is not Lustied" 5his is in consonance with the
-uarantee of security of tenure in the Constitution! and elaborated in the Labor Code" A
dismissed employee is not re:uired to pro.e his innocence to the char-es le.eled
a-ainst him by his employer" 5he determination of the e6istence and suCciency of a
Lust cause must be e6ercised with fairness and in -ood faith and after obser.in- due
process" Lima Land, 0n)., Leandro $avier, Sylvia Bu5ue and &remy Ann =eloy vs. ,arlyn
Cuavas! P .R. No. 1"#:%!, $une 1", %1"
Dismissal/ e6ercised with compassion and understandin-/ doubts resol.ed in fa.or of
employee" @hile an employer has its own interest to protect! and pursuant thereto! it
may terminate a mana-erial employee for a Lust cause! such prero-ati.e to dismiss or
lay o8 an employee must be e6ercised without abuse of discretion" 7ts implementation
should be tempered with compassion and understandin-" 5he employer should bear in
mind that! in the e6ercise of the said prero-ati.e! what is at sta=e is not only the
employee*s position! but his .ery li.elihood! his .ery breadbas=et" 7ndeed! the
consistent rule is that if doubts e6ist between the e.idence presented by the employer
and the employee! the scales of Lustice must be tilted in fa.or of the latter" 5he
employer must aCrmati.ely show rationally ade:uate e.idence that the dismissal was
for Lustiable cause" 5hus! when the breach of trust or loss of condence alle-ed is not
borne by clearly established facts! as in this case! such dismissal on the cited -rounds
cannot be allowed" Lima Land, 0n)., Leandro $avier, Sylvia Bu5ue and &remy Ann =eloy
vs. ,arlyn Cuavas! P .R. No. 1"#:%!, $une 1", %1"
Dismissal/ -ross ne-lect of duty/ duty to family is no defense" Dr" 2stampa*s defense is
not acceptable" A person*s duty to his family is not incompatible with his Lob>related
commitment to come to the rescue of .ictims of disasters" Disasters do not stri=e e.ery
day" Besides! =nowin- that his Lob as senior medical health oCcer entailed the
commitment to ma=e a measure of personal sacrice! he had the choice to resi-n from
it when he realiDed that he did not ha.e the will and the heart to respond" Br. 4dilberto
4stampa, $r. vs. Government o+ Bavao! G.R. No. 1#"<1, $une %1, %1.
Dismissal/ loss of condence not entitled to separation pay . 7t is si-nicant to stress that
for there to be a .alid dismissal based on loss of trust and condence! the breach of
trust must be willful! meanin- it must be done intentionally! =nowin-ly! and purposely!
without Lustiable e6cuse" 5he basic premise for dismissal on the -round of loss of
condence is that the employee concerned holds a position of trust and condence" 7t
is the breach of this trust that results in the employer*s loss of condence in the
employee"
7n the case of Aromin v. NLRC #''% SC&A 2$%)! the assistant .ice>president of BP7 was
.alidly dismissed for loss of trust and condence" 5he Court disallowed the payment of
separation pay on the -round that he was found -uilty of willful betrayal of trust! a
serious o8ense a=in to dishonesty"=ank o+ t'e &'ilippine 0slands and =&0 8amily =ank vs.
-on. National Labor Relations Commission 31st Bivision7 and ,a. Rosario N.
Arambulo! G.R. No. 17#<1. $une 1<, %1"
Dismissal/ loss of trust and condence/ mana-erial employees" Loss of trust and
condence! as a Lust cause for termination of employment! is premised on the fact that
an employee concerned holds a position where -reater trust is placed by mana-ement
and from whom -reater delity to duty is correspondin-ly e6pected" 5his includes
mana-erial personnel entrusted with condence on delicate matters! such as the
custody! handlin-! or care and protection of the employer*s property" 5he betrayal of
this trust is the essence of the o8ense for which an employee is penaliDed"
7t must be noted! howe.er! that in a plethora of cases! the Supreme Court has
distin-uished the treatment of mana-erial employees from that of ran=>and>le
personnel! insofar as the application of the doctrine of loss of trust and condence is
concerned" 5hus! with respect to ran=>and>le personnel! loss of trust and condence!
as -round for .alid dismissal! re:uires proof of in.ol.ement in the alle-ed e.ents in
:uestion! and that mere uncorroborated assertions and accusations by the employer will
not be suCcient" But as re-ards a mana-erial employee! the mere e6istence of a basis
for belie.in- that such employee has breached the trust of his employer would suCce
for his dismissal" Kence! in the case of mana-erial employees! proof beyond reasonable
doubt is not re:uired! it bein- suCcient that there is some basis for such loss of
condence! such as when the employer has reasonable -round to belie.e that the
employee concerned is responsible for the purported misconduct! and the nature of his
participation therein renders him unworthy of the trust and condence demanded of his
position" Lima Land, 0n)., Leandro $avier, Sylvia Bu5ue and &remy Ann =eloy vs. ,arlyn
Cuavas! P .R. No. 1"#:%!, $une 1", %1"
Dismissal/ mere ne-li-ence or carelessness not suCcient -round for loss of condence"
&espondent*s ne-li-ence or carelessness in her duties! howe.er! are not Lustiable
-rounds for petitioners* loss of trust and condence in her! especially in the absence of
any malicious intent or fraud on respondent*s part" Loss of trust and condence stems
from a breach of trust founded on a dishonest! deceitful or fraudulent act" 7n the case at
bar! respondent did not commit any act which was dishonest or deceitful" She did not
use her authority as the Ginance and Administration Eana-er to misappropriate
company property nor did she abuse the trust reposed in her by petitioners with respect
to her responsibility to implement company rules" 5he most that can be attributed to
respondent is that she was remiss in the performance of her duties" 5his! thou-h! does
not constitute dishonest or deceitful conduct which would Lustify the conclusion of loss
of trust and condence" Lima Land, 0n)., Leandro $avier, Sylvia Bu5ue and &remy Ann
=eloy vs. ,arlyn Cuavas! P .R. No. 1"#:%!, $une 1", %1"
Dismissal for Lust cause! separation pay allowed in e6ceptional cases" @hile as a -eneral
rule! an employee who has been dismissed for any of the Lust causes enumerated under
Article 2+2 of the Labor Code is not entitled to separation pay! the Court has allowed in
numerous cases the -rant of separation pay or some other nancial assistance to an
employee dismissed for Lust causes on the basis of e:uity"
7n the leadin- case of &'ilippine Lon( Bistan)e 1elep'one Co. v. NLRC #1(; SC&A ($1)
the Court stated that separation pay shall be allowed as a measure of social Lustice only
in those instances where the employee is .alidly dismissed for causes other than
serious misconduct or those reHectin- on his moral character" 7n -rantin- separation
pay to respondent! the JL&C and Court of Appeals both adhered to this Lurisprudential
precept and cleared respondent of bad faith" =ank o+ t'e &'ilippine 0slands and =&0
8amily =ank vs. -on. National Labor Relations Commission 31st Bivision7 and ,a.
Rosario N. Arambulo! G.R. No. 17#<1, $une 1<, %1"
2mployee benet/ total disability construed" 7t has been held that disability is intimately
related to one*s earnin- capacity" 7t should be understood less on its medical
si-nicance but more on the loss of earnin- capacity" 5otal disability does not mean
absolute helplessness" 7n disability compensation! it is not the inLury! which is
compensated! but rather the incapacity to wor= resultin- in the impairment of one*s
earnin- capacity" 5hus! permanent disability is the inability of a wor=er to perform his
Lob for more than 120 days! re-ardless of whether or not he loses the use of any part of
his body" Driental S'ip ,ana(ement Co., 0n). vs. Romy =. =astol, G.R. No. 1<"%<#, $une
%#, %1.
2mployer>2mployee &elationship/ a-ents of insurance companies/ e6ception to the
7nsular case/ Nur rulin- in the rst 0nsular )ase I0nsular 0nsuran)e v. NLRC, 17# SCRA
9:#J case did not foreclose the possibility of an insurance a-ent becomin- an employee
of an insurance company/ if e.idence e6ists showin- that the company promul-ated
rules or re-ulations that e8ecti.ely controlled or restricted an insurance a-ent*s choice
of methods or the methods themsel.es in sellin- insurance! an employer>employee
relationship would be present" 5he e6istence of an employer>employee relationship is
thus determined on a case>to>case basis dependin- on the e.idence on record"Gre(orio
@. 1on(ko v. 1'e ,anu+a)turers Li+e 0nsuran)e Co. 3&'ils7 and Renato A. @er(el Be
Bios, G.R. No. 1"7"%%, $une %#, %1.
Jature of employer/ pri.atiDation/ entitlement to benets. Althou-h the transformation
of the PJB from a -o.ernment>owned corporation to a pri.ate one did not result in a
brea= in its life as Luridical person! the same idea of continuity cannot be said of its
employees" Section 2$ of Presidential Proclamation '0 pro.ided for the automatic
termination of employer>employee relationship upon pri.atiDation of a -o.ernment>
owned and controlled corporation" Gurther! such pri.atiDation cannot depri.e the
-o.ernment employees in.ol.ed of their accrued benets or compensation"
As for possible benets accruin- after pri.atiDation! the same should be deemed
-o.erned by the Labor Code since the PJB that rehired the employee has become a
pri.ate corporation" Ander the Nmnibus &ules 7mplementin- the Labor Code! Boo= M7!
&ule 7! Section $! the employee*s separation from wor= for a Lust cause does not entitle
her to termination pay" LuAviminda A. An( vs. &'ilippine National =ank! G.R. No.
17<7"%, $une 1", %1"
Jature of employer/ pri.atiDation no defense/ continuity of o8ense . 5he o8ense for
which petitioner was remo.ed too= place when the -o.ernment still owned PJB and she
was then a -o.ernment employee" But while PJB be-an as a -o.ernment corporation!
it did not mean that its corporate bein- ceased and was subse:uently reestablished
when it was pri.atiDed" 7t remained the same corporate entity before! durin-! and after
the chan-e o.er with no brea= in its life as a corporation" Conse:uently! the o8enses
that were committed a-ainst the ban= before its pri.atiDation continued to be o8enses
a-ainst the ban= after the pri.atiDation" LuAviminda A. An( vs. &'ilippine National
=ank! G.R. No. 17<7"%, $une 1", %1"
Prescription of labor claims/ o.erseas contract wor=ers" 5he employment of seafarers!
includin- claims for death benets! is -o.erned by the contracts they si-n e.ery time
they are hired or rehired/ and as lon- as the stipulations therein are not contrary to law!
morals! public order or public policy! they ha.e the force of law between the parties"
7n Cadalin v. &D4ANs Administrator #2%+ SC&A $21! $(;) we held that Article 2B1 of the
Labor Code co.ers all money claims from employer>employee relationship" 17t is not
limited to money claims reco.erable under the Labor Code! but applies also to claims of
o.erseas contract wor=ers3"
Article 2B1 of the Labor Code is the law -o.ernin- prescription of money claims of
seafarers! a class of o.erseas contract wor=ers" 5his law pre.ails o.er Section 2+ of the
Standard 2mployment Contract for Seafarers! which pro.ides for claims to be brou-ht
only within one year from the date of the seafarer*s return to the point of hire" 5hus! for
the -uidance of all! Section 2+ of the Standard 2mployment Contract for Seafarers!
insofar as it limits the prescripti.e period for the lin- of money claims by seafarers! is
hereby declared null and .oid" 5he applicable pro.ision is Article 2B1 of the Labor Code!
it bein- more fa.orable to the seafarers and more in accord with the State*s declared
policy to a8ord full protection to labor! which pro.ides for a three>year prescripti.e
period" Sout'eastern S'ippin(, Sout'eastern S'ippin( Group, Ltd. vs. 8ederi)o ?.
Navarra, $r.! G.R. No. 1"7"7<, $une %%, %1"
Yuitclaims/ -eneral rule/ re:uirements for .alidity/ instances when it was annulled" As a
rule! :uitclaims! wai.ers! or releases are loo=ed upon with disfa.or and are lar-ely
ine8ecti.e to bar claims for the measure of a wor=er*s le-al ri-hts" 5o be .alid! a Deed
of &elease! @ai.er andQor Yuitclaim must meet the followin- re:uirements9 014 that
there was no fraud or deceit on the part of any of the parties/ 024 that the consideration
for the :uitclaim is credible and reasonable/ and 0%4 that the contract is not contrary to
law! public order! public policy! morals or -ood customs! or preLudicial to a third person
with a ri-ht reco-niDed by law"
Courts ha.e stepped in to annul :uestionable transactions! especially where there is
clear proof that a wai.er! for instance! was obtained from an unsuspectin- or a -ullible
person/ or where the a-reement or settlement was unconscionable on its face" A
:uitclaim is ine8ecti.e in barrin- reco.ery of the full measure of a wor=er*s ri-hts! and
the acceptance of benets therefrom does not amount to estoppel" Eoreo.er! a
:uitclaim in which the consideration is scandalously low and ine:uitable cannot be an
obstacle to the pursuit of a wor=er*s le-itimate claim" 0nterorient ,aritime 4nterprises,
0n). et al. v. Leonora S. Remo, G.R. No. 1<111%, $une %#, %1.
&etirement benets/ does not include allowances" 26ecuti.e Nrder Jo" $'( temporary
measure/ statutory construction" Section ( of 26ecuti.e Nrder Jo" $'( 012"N" $'(34!
which pro.ides for the computation of retirement proceeds includin- allowances! does
not pro.ide for a permanent retirement plan! as a-ainst the prohibition of Section 2+!
Subsection 0b4 of Commonwealth Act Jo" 1+( 01C"A" 1+(34! as amended" 5he 2"N" $'(
should be read adLunct to its mandate of reor-aniDin- the Philippine 7nternational
5radin- Corporation" 5he increased benet under 2"N" $'( was clearly meant as an
incenti.e for employees who retire! resi-n or are separated from ser.ice durin- or as a
conse:uence of the reor-aniDation" As a temporary measure! it cannot be interpreted
as an e6ception to the -eneral prohibition a-ainst separate or supplementary insurance
andQor retirement or pension plans under C"A" 1+(! as amended"
7n reconcilin- 2"N" $'( with C"A"1+(! as amended! uppermost in the mind of the Court is
the fact that the best method of interpretation is that which ma=es laws consistent with
other laws which are to be harmoniDed rather than ha.in- one considered repealed in
fa.or of the other" &'ilippine 0nternational 1radin( Corporation vs. Commission on
Audit! G.R. No. 1<!:17, $une %%, %1"
&esi-nation/ burden of proof" 5he rule in termination cases is that the employer bears
the burden of pro.in- that he dismissed his employee for a Lust cause" And! when the
employer claims that the employee resi-ned from wor=! the burden is on the employer
to pro.e that he did so willin-ly" @hether that is the case would lar-ely depend on the
circumstances surroundin- such alle-ed resi-nation" 5hose circumstances must be
consistent with the employee*s intent to -i.e up wor="4lsa S. ,ali6on v. 45uitable
General Servi)es 0n)., G.R. No. 1<:%"#, $une %#, %1.
Solidary liability of employers/ proof of bad faith. Based on ,A, Realty Bevelopment
Corporation v. NLRC #2;; SC&A $B$), for corporate oCcers to be held solidarily liable in
labor disputes there must be e.idence of bad faith or malice" Huerubin L. Alba and
RiAalinda B. Be GuAman vs. Robert L. Yupan()o, G.R. No. 1<<%!!, $une %#, %1"
"
July 2010 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on Au-ust 2$! 2010 by Leslie C" Dy [ Posted in Labor Law [ 5a--ed due process! employee
benets! employer>employee relationship! ille-al dismissal! intra>union dispute! Lurisdiction! labor>only
contractin-! JL&C! redundancy!retirement! retrenchment! suspension [
Kere are selected July 2010 rulin-s of the Supreme Court of the Philippines on labor law
and procedure9
Labor Law
Assumption of Lurisdiction by Secretary of Labor/ authority to decide on le-ality of
dismissals arisin- from stri=e" 5he assumption of Lurisdiction powers -ranted to the
Labor Secretary under Article 2(%0-4 is not limited to the -rounds cited in the notice of
stri=e or loc=out that may ha.e preceded the stri=e or loc=out/ nor is it limited to the
incidents of the stri=e or loc=out that in the meanwhile may ha.e ta=en place" As the
term 1assume Lurisdiction3 connotes! the intent of the law is to -i.e the Labor Secretary
full authority to resol.e all matters within the dispute that -a.e rise to or which arose
out of the stri=e or loc=out! includin- cases o.er which the labor arbiter has e6clusi.e
Lurisdiction"
7n the present case! what the Labor Secretary refused to rule upon was the dismissal
from employment of employees who .iolated the return to wor= order and participated
in ille-al acts durin- a stri=e" 5his was an issue that arose from the stri=e and was! in
fact! submitted to the Labor Secretary! throu-h the union*s motion for the issuance of
an order for immediate reinstatement of the dismissed oCcers and the company*s
opposition to the motion" 5he dismissal issue was properly brou-ht before the Labor
Secretary and he was mista=en in rulin- that the matter is le-ally within the e6clusi.e
Lurisdiction of the labor arbiter to decide" =a(on( &a(kakaisa n( ,an((a(aCa n(
1riump' 0nternational, et al. vs. Se)retary o+ Bepartment o+ Labor and 4mployment, et
al.21riump' 0nternational 3p'ils.7, 0n). vs. =a(on( &a(kakaisa n( ,an((a(aCa n(
1riump' 0nternational, et al., G.R. No. 1"791, $uly :, %1.
Bar-ainin- deadloc=/ award/ ndin-s of Secretary of Labor" Anless there is a clear
showin- of -ra.e abuse of discretion! the Court cannot! and will not! interfere with the
e6pertise of the Secretary of Labor" 5he award -ranted by the Labor Secretary in
resol.in- the bar-ainin- deadloc=! drawn as they were from a close e6amination of the
submissions of the parties! do not indicate any le-al error! much less any -ra.e abuse
of discretion! and should not be disturbed" =a(on( &a(kakaisa n( ,an((a(aCa n(
1riump' 0nternational, et al. vs. Se)retary o+ Bepartment o+ Labor and 4mployment, et
al.21riump' 0nternational 3p'ils.7, 0n). vs. =a(on( &a(kakaisa n( ,an((a(aCa n(
1riump' 0nternational, et al., G.R. No. 1"791, $uly :, %1.
Dismissal of employees/ Lust cause" 5heft committed by an employee is a .alid reason
for his dismissal by the employer" Althou-h as a rule this Court leans o.er bac=wards to
help wor=ers and employees continue with their employment or to miti-ate the
penalties imposed on them! acts of dishonesty in the handlin- of company property!
petitioner*s income in this case! are a di8erent matter" ,ariba(o =lueCater =ea)'
Resort, 0n). vs. Nito Bual, G.R. No. 1<"", $uly %, %1.
Dismissal of employees/ re:uirements" 5he .alidity of an employee*s dismissal from
ser.ice hin-es on the satisfaction of the two substanti.e re:uirements for a lawful
termination" 5hese are! .rst! whether the employee was accorded due process the
basic components of which are the opportunity to be heard and to defend himself" 5his
is the procedural aspect" And se)ond! whether the dismissal is for any of the causes
pro.ided in the Labor Code of the Philippines" 5his constitutes the substanti.e
aspect" 4re)tor Advertisin( Si(n Group, 0n). and Ar)' $imy C. Amoroto vs. 4/pedito
Cloma, G.R. No. 1"7%1<, $uly %, %1.
Dismissal of employees/ procedural due process" Gurnishin- the employee with a
suspension order prior to his notice of termination does not satisfy the re:uirement of a
rst notice" 7t implies that the employer has already decided! for the reasons stated
therein! to suspend the employee from wor= in the company! and the wordin- of the
order in the present case -i.es no indication that the employee is bein- -i.en an
opportunity to submit his defense or e6planation" 4re)tor Advertisin( Si(n Group, 0n).
and Ar)' $imy C. Amoroto vs. 4/pedito Cloma, G.R. No. 1"7%1<, $uly %, %1.
Dismissal of employees/ procedural due process" 7n order to .alidly dismiss an
employee! he must be accorded both substanti.e and procedural due process by the
employer" Procedural due process re:uires that the employee be -i.en a notice of the
char-e a-ainst him! an ample opportunity to be heard! and a notice of termination"
2.en if the aforesaid procedure is conducted after the lin- of the ille-al dismissal case!
the le-ality of the dismissal! as to its procedural aspect! will be upheld pro.ided that the
employer is able to show that compliance with these re:uirements was not a mere
afterthou-ht" NeC &uerto Commer)ial and Ri)'ard Lim vs. Rodel LopeA and 8eli/
Gavan,G.R. No. 1"####, $uly %", %1.
2mployee benets/ 1%th month pay/ denition of basic salary" 5he term 1basic salary3
of an employee for the purpose of computin- the thirteenth>month pay was interpreted
to include all remuneration or earnin-s paid by the employer for ser.ices rendered! but
does not include allowances and monetary benets which are not inte-rated as part of
the re-ular or basic salary! such as the cash e:ui.alent of unused .acation and sic=
lea.e credits! o.ertime! premium! ni-ht di8erential and holiday pay! and cost>of>li.in-
allowances" Kowe.er! these salary>related benets should be included as part of the
basic salary in the computation of the thirteenth>month pay if! by indi.idual or collecti.e
a-reement! company practice or policy! the same are treated as part of the basic salary
of the employees" Central AAu)arera Be 1arla) vs. Central AAu)arera Be 1arla) Labor
?nion6NL?, G.R. No. 1<<#9#, $uly %", %1
2mployee benets/ 1%th month pay/ company policy or practice" 5he practice of
petitioner in -i.in- 1%
th
>month pay based on the employees* -ross annual earnin-s
which included the basic monthly salary! premium pay for wor= on rest days and special
holidays! ni-ht shift di8erential pay and holiday pay continued for almost thirty 0%04
years and has ripened into a company policy or practice which cannot be unilaterally
withdrawn" 5he petitioner cannot claim that the practice arose from an erroneous
application of the law since no doubtful or diCcult :uestion of law is in.ol.ed in this
case" 5he -uidelines set by the law are not diCcult to decipher" Central AAu)arera Be
1arla) vs. Central AAu)arera Be 1arla) Labor ?nion6NL?, G.R. No. 1<<#9#, $uly %", %1
2mployee benets/ death benets" Gor the death of a seafarer to be compensable under
the 1BB( PN2A Standard 2mployment Contract! the death must occur durin- the term of
his contract of employment" 7n this case! the seaman died 2 years after he was
repatriated to the Philippines due to medical reasons! hence the claimants are not
entitled to recei.e death benets under the contract" 5he decedent*s heirs claimed that
the death should be compensable since the nature of his wor= as a seaman tri--ered
the illnesses that e.entually led to his death" Kowe.er! the Court noted that thou-h the
immediate cause of the seaman*s death was pneumonia! the underlyin- cause of death
was ad.anced K7M 0A7DS4" Since the claimants failed to pro.e that the decedent
ac:uired K7M durin- his 2>month employment aboard the respondents* .essel! their
claim for death benets was denied" Lydia 4s)ar)'a vs. Leonis Navi(ation Co., 0n)., et
al., G.R. No. 1<%79, $uly :, %1.
2mployees/ -o.ernment a-ency" 5he Armed Gorces of the Philippines Commissary and
26chan-e Ser.ices 0AGPC2S4 is a -o.ernment a-ency performin- proprietary functions"
By clear implication of law! all AGPC2S personnel should therefore be classied as
-o.ernment employees and any complaint for ille-al dismissal in.ol.in- such
employees should be led with the CSC and not the JL&C" Such fact cannot be ne-ated
by the failure of AGPC2S to follow appropriate ci.il ser.ice rules in the hirin-!
appointment! discipline and dismissal of employees" Jeither can it be denied by the fact
that AGPC2S chose to enroll its employees in the SSS instead of the PS7S" Such
considerations cannot be used a-ainst the CSC to depri.e it of its Lurisdiction" Kence!
the Labor Arbiter*s decision in the ille-al dismissal case led by AGPC2S employees is a
total nullity for ha.in- been rendered without Lurisdiction" ,a(dalena -idal(o, et al. vs.
Republi) o+ t'e &'ilippines, G.R. No. 17#7#!, $uly :, %1.
2mployer>employee relationship/ e.idence" Any doubt arisin- from the e.aluation of
e.idence as between the employer and the employee must be resol.ed in fa.or of the
latter" 7t is settled Lurisprudence that the burden of pro.in- payment of monetary claims
rests on the employer" 7t was entirely within the company*s power to present personnel
les! payrolls! remittances! and other similar documents which would ha.e pro.en
payment of respondent*s money claims as these documents should necessarily be in its
possession/ hence! failure to present such e.idence must be ta=en a-ainst it" Bansart
Se)urity 8or)e ; Allied Servi)es Company and Banilo A. Sarte vs. ,s. $ean D.
=a(oy, G.R. No. 1"<9#:, $uly %, %1.
Po.ernment a-encies/ reor-aniDation" A reor-aniDation is .alid pro.ided it is done in
-ood faith" As a -eneral rule! the test of -ood faith lies in whether the purpose of the
reor-aniDation is for economy or to ma=e the bureaucracy more eCcient" &emo.al from
oCce as a result of reor-aniDation must! thus! pass the test of -ood faith" A demotion in
oCce is tantamount to remo.al if no cause is shown for it" Conse:uently! before a
demotion may be e8ected pursuant to a reor-aniDation! the obser.ance of the rules
on bona .de abolition of public oCce is essential"@ir(inia B. =autista vs. Civil Servi)e
Commission and BevNt. =ank o+ t'e &'ilippines, G.R. No. 1<:%1:, $uly %%, %1.
Po.ernment a-encies/ reor-aniDation/ personal liability of local oCcial" 5he &5C of CadiD
declared .oid a resolution that reor-aniDed the city -o.ernment and e8ecti.ely pur-ed
the city -o.ernment of CadiD of all employees who opposed the mayor politically or
disa-reed with him in his policies" 5he &5C ordered the payment of moral dama-es to
the wor=ers! but it was not clear if the payment was to be made by the city -o.ernment
or by Eayor Malera! in his personal capacity" 5he Court held that Marela is personally
liable to pay moral dama-es" Settled is the principle that a public oCcial may be liable
in his personal capacity for whate.er dama-e he may ha.e caused by his act done with
malice and in bad faith or beyond the scope of his authority or Lurisdiction" 7n the
complaint! the employees stated that! 1due to the ille-al acts of the Defendant!
Plainti8s su8ered mental torture and an-uish! sleepless ni-hts! wounded feelin-s!
besmirched reputation and social humiliation"3 5he State can ne.er be the author of
ille-al acts" 5he complaint merely identied Marela as the mayor of CadiD City" 7t did not
cate-orically state that Marela was bein- sued in his oCcial capacity" 5he identication
and mention of Marela as the mayor of CadiD City did not automatically transform the
action into one a-ainst Marela in his oCcial capacity" 5he alle-ations in the complaint
determine the nature of the cause of action" 4duardo @alera vs. ,a. Baisy RevaleA, G.R.
No. 1717:, $uly %#, %1.
7lle-al dismissal/ burden of proof/ lin- of complaint not suCcient to dispro.e
abandonment" 7n ille-al dismissal cases! the employer bears the burden of pro.in- that
the termination was for a .alid or authoriDed cause" Kowe.er! before the employer is
as=ed to pro.e that the dismissal was le-al! the employee must rst establish by
substantial e.idence the fact of his dismissal from ser.ice" Lo-ically! if there is no
dismissal! then there can be no :uestion as to its le-ality or ille-ality"
Ander normal circumstances! an employee*s act of lin- an ille-al dismissal complaint
a-ainst his employer is inconsistent with abandonment" Kowe.er! the courts should not
use that one act to conclude that an employee was constructi.ely dismissed when
substantial e.idence pro.es otherwise" 7n this case! substantial e.idence pro.es that
Pul-ar was not constructi.ely dismissed! and that he had abandoned his duties in order
to a.oid an in.esti-ation bein- conducted by his employer" &'ilippine Rural
Re)onstru)tion vs. @ir(ilio &ul(ar, G.R. No. 1"#%%7. $uly :, %1.
7lle-al dismissal/ misrepresentation of cause is an act of bad faith" 5he complainant! &io
&emo! was dismissed from ser.ice on the -round of retrenchment" Kowe.er! the records
show that Sentinel hired a replacement soon after &emo*s dismissal! pro.in- that
Sentinel*s nancial distress was not as serious as it claimed! and that retrenchment was
not the real reason for &emo*s dismissal" Sentinel concealed its true intention and
committed misrepresentation when it claimed that &emo*s dismissal was due to serious
nancial losses" 5his act of misrepresentation is an act of acti.e bad faith that fatally
tainted &emo*s dismissal and rendered it ille-al" Sentinel 0nte(rated Servi)es, 0n). vs.
Rio $ose Remo, G.R. No. 1<<%%!, $uly :, %1.
7lle-al dismissal/ relief a.ailable to employee" An ille-ally dismissed employee is entitled
to reinstatement without loss of seniority ri-hts and other pri.ile-es and to full
bac=wa-es! inclusi.e of allowances! and to her other benets or their monetary
e:ui.alent! computed from the time the compensation was withheld up to the time of
actual reinstatement" @here reinstatement is no lon-er feasible! separation pay
e:ui.alent to at least one month salary or one month salary for e.ery year of ser.ice!
whiche.er is hi-her! a fraction of at least si6 months bein- considered as one whole
year! should be awarded to respondent" An award for moral and e6emplary dama-es
cannot be Lustied unless the employer had acted in bad faith" 5he award of moral and
e6emplary dama-es cannot be Lustied solely upon the premise that the employer
dismissed his employee without authoriDed cause and due process" Lambert
&aCnbrokers and $eCelry )orporation and Lambert Lim vs. -elen =inamira, G.R. No.
179"9. $uly 1%, %1.
Labor>only contractin-" Despite the fact that the ser.ice contracts contain stipulations
which are earmar=s of independent contractorship! they do not ma=e it le-ally so" 5he
lan-ua-e of a contract is neither determinati.e nor conclusi.e of the relationship
between the parties" 5he parties cannot dictate! by a declaration in a contract! the
character of the contractor*s business as a labor>only contractor or a le-itimate Lob
contractor! which should be determined by the criteria set by statute" Kere! a closer
loo= at AEPCN*s actual status and participation re-ardin- the employment of the
complainants clearly belie the contents of the written ser.ice contract" San ,i(uel
Corporation vs. @i)ente Semillan, et al., G.R. No. 1"9%:7, $uly :, %1.
Labor>only contractin-/ e.idence" A Certicate of &e-istration as an 7ndependent
Contractor is not conclusi.e e.idence of such status" 7n distin-uishin- between
permissible Lob contractin- and prohibited labor>only contractin-! the totality of the
facts and the surroundin- circumstances of the case are to be considered" San ,i(uel
Corporation vs. @i)ente Semillan, et al., G.R. No. 1"9%:7, $uly :, %1.
Liability of oCcers for ille-al dismissal" Corporate oCcers are only solidarily liable with
the corporation for the ille-al termination of ser.ices of employees if they acted with
malice or bad faith" 7n &'ilippine Ameri)an Li+e and General 0nsuran)e v. GramaGe! bad
faith is dened as a state of mind aCrmati.ely operatin- with furti.e desi-n or with
some moti.e of self>interest or ill will or for ulterior purpose" 7t implies a conscious and
intentional desi-n to do a wron-ful act for a dishonest purpose or moral obli:uity" 5he
lac= of authoriDed or Lust cause to terminate one*s employment and the failure to
obser.e due process do not ipso +a)to mean that the corporate oCcer acted with malice
or bad faith" 5here must be independent proof of malice or bad faith which is lac=in- in
the present case" Lambert &aCnbrokers and $eCelry )orporation and Lambert Lim vs.
-elen =inamira, G.R. No. 179"9. $uly 1%, %1.
Pre.enti.e suspension" Pre.enti.e suspension is Lustied where the employee*s
continued employment poses a serious and imminent threat to the life or property of
the employer or of the employee*s co>wor=ers" @ithout this =ind of threat! pre.enti.e
suspension is not proper" $ose &. Arti.)io vs. National Labor Relations Commission, R&
Guardians Se)urity A(en)y, 0n). $uan @i)tor K. Laurilla, Alberto A(uirre, and Antonio A.
Andres, G.R. No. 17%#<<, $uly %", %1
Public employees/ demotion" 5here is demotion when an employee is appointed to a
position that results in a diminution in duties! responsibilities! status or ran= which may
or may not in.ol.e a reduction in salary" @here an employee is appointed to a position
with the same duties and responsibilities with a ran= and salary hi-her than those he
enLoyed in his pre.ious position! there is no demotion and the appointment is
.alid" @ir(inia B. =autista vs. Civil Servi)e Commission and Bevt. =ank o+ t'e
&'ilippines, G.R. No. 1<:%1:, $uly %%, %1.
Public employees/ down-radin- of employees" 5he summary reallocation of Po*s
position to a lower de-ree resultin- in the correspondin- down-radin- of his salary
infrin-ed the policy of non>diminution of pay which the Court reco-niDed and applied
in &'ilippine &orts Aut'ority v. Commission on Audit! as well as in the subse:uent sister
cases in.ol.in- benets of -o.ernment employees" &unnin- throu-h the -amut of
these cases is the holdin- that the a8ected -o.ernment employees shall continue to
recei.e benets they were enLoyin- as incumbents upon the e8ecti.ity of &A ($'+"
&ele.ant to the critical issue at hand is Sec" 1' 0b4 of PD B+' which! as amended by Sec"
1% 0a4 of &A ($'+! pertinently reads9 Sec" 1%" &ay Redu)tion X 7f an employee is moved
+rom a 'i('er to a loCer )lass, 'e s'all not su*er a redu)tion in salary9 Pro.ided! 5hat
such mo.ement is not the result of a disciplinary action or .oluntary demotion" GonAalo
S. Go, $r. vs. CA and DE)e o+ t'e &resident, G.R. No. 17%%7. $uly %#, %1
&edundancy/ denition/ re:uisites" &edundancy e6ists when the ser.ice capability of the
wor=force is in e6cess of what is reasonably needed to meet the demands of the
enterprise" A redundant position is one rendered superHuous by any number of factors!
such as o.er hirin- of wor=ers! decreased .olume of business! droppin- of a particular
product line pre.iously manufactured by the company! or phasin- out of a ser.ice
acti.ity pre.iously underta=en by the business" Ander these conditions! the employer
has no le-al obli-ation to =eep in its payroll more employees than are necessary for the
operation of its business"
Gor a .alid implementation of a redundancy pro-ram! the employer must comply with
the followin- re:uisites9 014 written notice ser.ed on both the employees and the DNL2
at least one month prior to the intended date of termination of employment/ 024
payment of separation pay e:ui.alent to at least one month pay for e.ery year of
ser.ice/ 0%4 -ood faith in abolishin- the redundant positions/ and 0;4 fair and reasonable
criteria in ascertainin- what positions are to be declared redundant and accordin-ly
abolished" Lambert &aCnbrokers and $eCelry )orporation and Lambert Lim vs. -elen
=inamira, G.R. No. 179"9. $uly 1%, %1.
&etirement/ retirement a-e" 5he retirement a-e is primarily determined by the e6istin-
a-reement or employment contract" Absent such an a-reement! the retirement a-e
under Article 2+$ of the Labor Code will apply" Amelia R. Dbusan vs. &'ilippine National
=ank, G.R. No. 1<117<, $uly %", %1.
&etirement/ retirement plan" &etirement plans allowin- employers to retire employees
who ha.e not yet reached the compulsory retirement a-e of (' years are not per
se repu-nant to the constitutional -uaranty of security of tenure" By its e6press
lan-ua-e! the Labor Code permits employers and employees to 6 the applicable
retirement a-e at (0 years or below! pro.ided that the employees* retirement benets
under any CBA and other a-reements shall not be less than those pro.ided by
law" Amelia R. Dbusan vs. &'ilippine National =ank, G.R. No. 1<117<, $uly %", %1.
&etrenchment/ denition/ re:uisites" &etrenchment is the termination of employment
initiated by the employer throu-h no fault of and without preLudice to the employees" 7t
is resorted to durin- periods of business recession! industrial depression! seasonal
Huctuations! or durin- lulls occasioned by lac= of orders! shorta-e of materials!
con.ersion of the plant to a new production pro-ram! or automation" 7t is a
mana-ement prero-ati.e resorted to a.oid or minimiDe business losses"
5o e8ect a .alid retrenchment! the followin- elements must be present9 014 the
retrenchment is reasonably necessary and li=ely to pre.ent business losses which! if
already incurred! are not merely de minimis! but substantial! serious and real! or only if
e6pected! are reasonably imminent as percei.ed obLecti.ely and in -ood faith by the
employer/ 024 the employer ser.es written notice both to the employeeQs concerned and
the DNL2 at least one month before the intended date of retrenchment/ 0%4 the
employer pays the retrenched employee separation pay in an amount prescribed by
law/ 0;4 the employer e6ercises its prero-ati.e to retrench in -ood faith/ and 0'4 the
employer uses fair and reasonable criteria in ascertainin- who would be retrenched or
retained" Lambert &aCnbrokers and $eCelry )orporation and Lambert Lim vs. -elen
=inamira, G.R. No. 179"9. $uly 1%, %1
&etrenchment/ decrease in income is not business loss" A sharp drop in income
from P1million to only P(('!000"00 is not the =ind of business losses contemplated by
the Labor Code that would Lustify a .alid retrenchment" A mere decline in -ross income
cannot in any manner be considered as serious business losses" 7t should be substantial!
sustained and real" Lambert &aCnbrokers and $eCelry )orporation and Lambert Lim vs.
-elen =inamira, G.R. No. 179"9. $uly 1%, %1.
Separation pay/ as e:uitable relief" Ka.in- determined that the imposition of pre.enti.e
suspension was proper and that the complainant was not ille-ally dismissed! the Court
found no basis to -rant bac=wa-es" Kowe.er! -i.en the attendant circumstances of the
case X that complainant had been wor=in- with the company for a period of si6teen
01(4 years without any pre.ious dero-atory record F the Court held that the ends of
social and compassionate Lustice would be ser.ed if the employee is -i.en some
e:uitable relief in the form of separation pay" $ose &. Arti.)io vs. National Labor
Relations Commission, R& Guardians Se)urity A(en)y, 0n). $uan vi)tor K. Laurilla, Alberto
A(uirre, and Antonio A. Andres, G.R. No. 17%#<<, $uly %", %1
Au-ust 2010 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on September 1(! 2010 by Leslie C" Dy [ Posted in Labor Law
[ 5a--ed abandonment! bac=wa-es! breach of trust!burden of proof! dama-es! employee
benets! ille-al dismissal! ille-al stri=e! labor>only contractin-! loss of trust and
condence! mer-er! ne-li-ence! JL&C! probationary employment! proLect
employee! rehabilitation! reinstatement!retirement! security of tenure! serious misconduct! union [
Kere are selected Au-ust 2010 rulin-s of the Supreme Court of the Philippines on labor
law and procedure9
Labor Law
Dismissal/ abandonment" 5ime and a-ain! the Supreme Court has held that
abandonment is totally inconsistent with the immediate lin- of a complaint for ille-al
dismissal! more so if the same is accompanied by a prayer for reinstatement" 7n the
present case! howe.er! petitioner led his complaint more than one year after his
alle-ed termination from employment" Eoreo.er! petitioner did not as= for
reinstatement in the complaint form! which he personally lled up and led with the
JL&C" 5he prayer for reinstatement is made only in the Position Paper that was later
prepared by his counsel" 5his is an indication that petitioner ne.er had the intention or
desire to return to his Lob" 4lpidio Calipay vs. National Labor Relations Commission, et
al., G.R. No. 1""911, Au(ust !, %1.
Dismissal/ burden of proof" 7n termination cases! the employer has the burden of
pro.in-! by substantial e.idence that the dismissal is for Lust cause" 7f the employer fails
to dischar-e the burden of proof! the dismissal is deemed ille-al" 7n the present case!
BCP7 failed to dischar-e its burden when it failed to present any e.idence of the alle-ed
st-ht! aside from a sin-le statement! which was refuted by statements made by other
witnesses and was found to be incredible by both the Labor Arbiter and the JL&C" Ale/
Guran(o vs. =est C'emi)als and &lasti), 0n)., et al., G.R. No. 179:#!, Au(ust %:, %1.
Dismissal/ burden of proof" 5he law mandates that the burden of pro.in- the .alidity of
the termination of employment rests with the employer" Gailure to dischar-e this
e.identiary burden would necessarily mean that the dismissal was not Lustied and!
therefore! ille-al" Ansubstantiated suspicions! accusations! and conclusions of
employers do not pro.ide for le-al Lustication for dismissin- employees" 7n case of
doubt! such cases should be resol.ed in fa.or of labor! pursuant to the social Lustice
policy of labor laws and the Constitution" Century Cannin( Corporation, Ri)ardo 1. &o, $r.,
et al. vs. @i)ente Randy R. Ramil, G.R. No. 171"!, Au(ust <, %1.
Dismissal/ due process" 7n termination proceedin-s of employees! procedural due
process consists of the twin re:uirements of notice and hearin-" 5he employer must
furnish the employee with two written notices before the termination of employment
can be e8ected9 014 the rst apprises the employee of the particular acts or omissions
for which his dismissal is sou-ht/ and 024 the second informs the employee of the
employer*s decision to dismiss him" 5he re:uirement of a hearin- is complied with as
lon- as there was an opportunity to be heard! and not necessarily that an actual hearin-
was conducted" &'arma)ia and ?pGo'n, 0n)., et al. vs. Ri)ardo &. Albayda, $r., G.R. No.
17%7%9, Au(ust %!, %1.
Dismissal/ due process" 5he Labor Code reco-niDes the ri-ht to due process of all
wor=ers! without distinction as to the cause of their termination! e.en if the cause was
their supposed in.ol.ement in stri=e>related .iolence" 7n the present case! PK7ECN sent
a letter to the a8ected union membersQoCcers! directin- them to e6plain within 2;
hours why they should not be dismissed for the ille-al acts they committed durin- the
stri=e/ three days later! the union membersQoCcers were informed of their dismissal
from employment" @e do not nd this company procedure to be suCcient compliance
with due process" 7t does not appear from the e.idence that the union oCcers were
specically informed of the char-es a-ainst them" Also! the short inter.al of time
between the rst and second notice shows that a mere to=en reco-nition of the due
process re:uirements was made! indicatin- the company*s intent to dismiss the union
members in.ol.ed! without any meanin-ful resort to the -uarantees accorded them by
law" &-0,CD 0ndustries, 0n). vs. &-0,CD 0ndustries Labor Asso)iation 3&0LA7, et al., G.R.
No. 17<!, Au(ust 11, %1.
Dismissal/ employee*s past infractions" A pre.ious o8ense may be used as .alid
Lustication for dismissal from wor= only if the past infractions are related to the
subse:uent o8ense upon which the basis of termination is decreed" 5he respondent*s
pre.ious incidents of tardiness in reportin- for wor= were entirely separate and distinct
from his latest alle-ed infraction of for-ery" Kence! the same could no lon-er be utiliDed
as an added Lustication for his dismissal" Besides! respondent had already been
sanctioned for his prior infractions" 5o consider these o8enses as Lustication for his
dismissal would be penaliDin- respondent twice for the same o8ense" Century Cannin(
Corporation, Ri)ardo 1. &o, $r., et al. vs. @i)ente Randy R. Ramil, G.R. No. 171"!,
Au(ust <, %1.
Dismissal/ fen- shui/ breach of trust and condence" 5he Court nds that the
complainant*s alle-ations are more credible and that she was dismissed from her
employment because the Gen- Shui master found that complainant*s Chinese \odiac
Si-n was a mismatch to that of respondents" 5his is not a Lust and .alid cause for an
employee*s dismissal"
7n contrast! respondent*s pleadin-s and e.idence su8er from se.eral inconsistencies
and the aCda.its presented by respondents only pertain to petty matters that are not
suCcient to support respondent*s alle-ed loss of trust and condence" 5o be a .alid
cause for termination of employment! the act or acts constitutin- breach of trust must
ha.e been done intentionally! =nowin-ly! and purposely/ and they must be founded on
clearly established facts" >ens'a Spa Center, in). and2or Ou P'i $ie ,vs. Loreta 1.
Yun(, G.R. No. 1<:1%%, Au(ust 1", %1.
Dismissal/ -ross ne-li-ence and loss of condence" Pross ne-li-ence connotes 1want of
care in the performance of one*s duties"3 Petitioner*s failure on % separate occasions to
re:uire clients to si-n the re:uisite documents constituted -ross ne-li-ence"
Gurthermore! it has been held that if the employees are cashiers! mana(ers!
super.isors! salesmen or other personnel occupyin- positions of responsibility! the
employer*s loss of trust and condence in said employees may Lustify the termination of
their employment" As the Ban=*s Personal Ban=in- Eana-er! petitioner*s failure to
comply with basic ban=in- policies and procedures were inimical to the interests of the
ban=! ma=in- his dismissal based on loss of condence Lustied" $esus 4. By)o)o, $r.vs.
45uitable &C0 =ank 3noC =an)o de Dro7, Rene =unaventura and Siles Samalea, G.R. No.
1<<%71, Au(ust 1", %1.
Dismissal/ loss of trust and condence" 2mployers are allowed a wider latitude of
discretion in terminatin- the ser.ices of employees who perform functions which by
their nature re:uire the employers* full trust and condence and the mere e6istence of
basis for belie.in- that the employee has breached the trust of the employer is
suCcient" Kowe.er! this does not mean that the said basis may be arbitrary and
unfounded" Loss of trust and condence! to be a .alid cause for dismissal! must be
based on a willful breach of trust and founded on clearly established facts" 5he basis for
the dismissal must be clearly and con.incin-ly established" 7t must rest on substantial
-rounds and not on the employer*s arbitrariness! whim! caprice or suspicion/ otherwise!
the employee would eternally remain at the mercy of the employer" Century Cannin(
Corporation, Ri)ardo 1. &o, $r., et al. vs. @i)ente Randy R. Ramil, G.R. No. 171"!,
Au(ust <, %1.
Dismissal/ probationary employment" 5hou-h the acts char-ed a-ainst de Castro too=
place when he was still under probationary employment! the records show that de
Castro was dismissed on the ninth month of his employment with LBJ7" By then! he was
already a re-ular employee by operation of law" As a re-ular employee! de Castro was
entitled to security of tenure and his ille-al dismissal from LBJ7 Lustied the awards of
separation pay! bac=wa-es! and dama-es Carlos Be Castro vs. Liberty =road)astin(
NetCork, 0n). and 4d(ardo Hui(ue, G.R. No. 1":1:!. Au(ust %:, %1"
Dismissal/ proLect employees/ dama-es" Prior or ad.ance notice of termination is not
part of procedural due process if the termination of a proLect employee is brou-ht about
by the completion of the contract or phase thereof" 5his is because completion of the
wor= or proLect automatically terminates the employment! in which case! the employer
is! under the law! only obli-ed to render a report to the DNL2" 5herefore! failin- to -i.e
proLect employees ad.ance notice of their termination is not a .iolation of procedural
due process and cannot be the basis for the payment of nominal dama-es" B.,.
ConsunGi, 0n). vs. Antonio Gobres, et al., G.R. No. 1"#17, Au(ust <, %1.
Dismissal/ separation pay and bac=wa-es" 5he awards of separation pay and bac=wa-es
are not mutually e6clusi.e and both may be -i.en to the respondent" 5he normal
conse:uences of a ndin- that an employee has been ille-ally dismissed are! rstly!
that the employee becomes entitled to reinstatement to his former position without loss
of seniority ri-hts and! secondly! the payment of bac=wa-es correspondin- to the period
from his ille-al dismissal up to actual reinstatement" 5hese are two separate and
distinct remedies -ranted to the employee and the inappropriateness or non>a.ailability
of one does not carry with it the inappropriateness or non>a.ailability of the other" Ander
the doctrine of strained relations! the payment of separation pay has been considered
an acceptable alternati.e to reinstatement when the latter option is no lon-er desirable
or .iable" 5he -rant of separation pay is a proper substitute only for reinstatement/ it
cannot be an ade:uate substitute for both reinstatement and bac=wa-es" Century
Cannin( Corporation, Ri)ardo 1. &o, $r., et al. vs. @i)ente Randy R. Ramil, G.R. No.
171"!, Au(ust <, %1.
Dismissal/ serious misconduct" Eisconduct is dened as 1the trans-ression of some
established and denite rule of action! a forbidden act! a dereliction of duty! willful in
character! and implies wron-ful intent and not mere error in Lud-ment"3 Gor serious
misconduct to Lustify dismissal under the law! 10a4 it must be serious! 0b4 must relate to
the performance of the employee*s duties/ and 0c4 must show that the employee has
become unt to continue wor=in- for the employer"3
7t is noteworthy that prior to this incident! there had been se.eral cases of theft and
.andalism in.ol.in- both respondent company*s property and personal belon-in-s of
other employees" 7n order to address this issue of losses! respondent company issued
two memoranda implementin- an intensi.e inspection procedure and remindin- all
employees that those who will be cau-ht stealin- and performin- acts of .andalism will
be dealt with in accordance with the company*s Code of Conduct" Despite these
reminders! complainant too= the pac=in- tape and was cau-ht durin- the routine
inspection" All these circumstances point to the conclusion that it was not Lust an error
of Lud-ment! but a deliberate act of theft of company property" Na(kakaisan( Lakas n(
,an((a(aCa sa Kei'in 3NL,K6DLAL0A6K,?7 and -elen @alenAuela vs. Kei'in &'ilippines
Corporation, G.R. No. 17111:, Au(ust #, %1"
Dismissal/ union security" 7n terminatin- the employment of an employee by enforcin-
the union security clause! the employer needs to determine and pro.e that9 014 the
union security clause is applicable/ 024 the union is re:uestin- for the enforcement of
the union security pro.ision in the CBA/ and 0%4 there is suCcient e.idence to support
the decision of the union to e6pel the employee from the union" 5hese re:uisites
constitute Lust cause for terminatin- an employee based on the union security pro.ision
of the CBA"
5he petitioner failed to satisfy the third re:uirement since nothin- in the records would
show that respondents failed to maintain their membership in -ood standin- in the
union" Si-nicantly! petitioner*s act of dismissin- respondents stemmed from the
latter*s act of si-nin- an authoriDation letter to le a petition for certication election as
they si-ned it outside the freedom period" 5he mere si-nin- of an authoriDation letter
before the freedom period is not suCcient -round to terminate the employment of
respondents inasmuch as the petition itself was actually led durin- the freedom period"
5he court emphasiDes anew that the employer is bound to e6ercise caution in
terminatin- the ser.ices of his employees especially so when it is made upon the
re:uest of a labor union pursuant to the Collecti.e Bar-ainin- A-reement" &i)op
Resour)es 0n)orporated 3&R07 vs. Ana)leto L. 1aKe)a, et al., G.R. No. 1"<%<, Au(ust #,
%1.
Dimissal/ use of ille-al dru-s" 5he law is clear that dru- tests shall be performed only by
authoriDed dru- testin- centers" 7n this case! Sulpicio Lines failed to pro.e that S"E"
LaDo Clinic is an accredited dru- testin- center nor did it deny the complainant*s
alle-ation that S"E" LaDo Clinic was not accredited" Also! only a screenin- test was
conducted to determine if the complainant was -uilty of usin- ille-al dru-s" Sulpi)io
Lines did not )on.rm t'e positive result o+ t'e s)reenin( test Cit' a )on.rmatory test as
re:uired by &"A" B1('" Kence! Sulpicio Lines failed to indubitably pro.e that Jaca-ue
was -uilty of usin- ille-al dru-s and failed to clearly show that it had a .alid and le-al
cause for terminatin- Jaca-ue*s employment" @hen the alle-ed .alid cause for the
termination of employment is not clearly pro.en! as in this case! the law considers the
matter a case of ille-al dismissal" $e*rey Na)a(ue vs. Sulpi)io Lines, 0n)., G.R. No.
17%:<#, Au(ust <, %1.
Dismissal/ .alidity" 5he company did not adduce any e.idence to pro.e that SiaDar*s
dismissal had been for a Lust or authoriDed cause! as in fact it had been its consistent
stand that it did not terminate him and that he :uit on his own" But -i.en the ndin-s of
the Court that the company had indeed dismissed SiaDar and that such dismissal has
remained une6plained! there can be no other conclusion but that the dismissal was
ille-al" A(ri)ultural and 0ndustrial Supplies Corporation, et al. vs. $ueber &. SiaAar, et
al., G.R. No. 177#7, Au(ust %:, %1.
Due process/ decision rendered without due process" 5he .iolation of a party*s ri-ht to
due process raises a serious Lurisdictional issue that cannot be -lossed o.er or
disre-arded at will" @here the denial of the fundamental ri-ht to due process is
apparent! a decision rendered in disre-ard of that ri-ht is .oid for lac= of Lurisdiction"
5his rule is e:ually true in :uasi>Ludicial and administrati.e proceedin-s! for the
constitutional -uarantee that no man shall be depri.ed of life! liberty! or property
without due process is un:ualied by the type of proceedin-s 0whether Ludicial or
administrati.e4 where he stands to lose the same" >inston 8. Gar)ia vs. ,ario 0. ,olina,
et al.2>inston 8. Gar)ia @s. ,ario 0. ,olina, et al., G.R. No. 1:7!<!2G.R. No. 1791!7,
Au(ust 1, %1.
2mployee/ e.aluation and promotion" 5he fact that employees were re>classied from
Job Prade Le.el 1 to Job Prade Le.el 2 as a result of a Lob e.aluation pro-ram does not
automatically entail a promotion or -rant them an increase in salary" Nf primordial
consideration is not the nomenclature or title -i.en to the employee! but the nature of
his functions" @hat transpired in this case was only a promotion in nomenclature" 5he
employees continued to occupy the same positions they were occupyin- prior to the Lob
e.aluation" Eoreo.er! their Lob titles remained the same and they were not -i.en
additional duties and responsibilities" SCA -y(iene &rodu)ts Corporation 4mployees
Asso)iation688> vs. SCA -y(iene &rodu)ts Corporation, G.R. No. 1<%<77, Au(ust #,
%1.
2mployee/ security of tenure" A wor=er*s security of tenure is -uaranteed by the
Constitution and the Labor Code" Ander the security of tenure -uarantee! a wor=er can
only be terminated from his employment for cause and after due process" Gor a .alid
termination by the employer9 014 the dismissal must be for a .alid cause as pro.ided in
Article 2+2! or for any of the authoriDed causes under Articles 2+% and 2+; of the Labor
Code/ and 024 the employee must be a8orded an opportunity to be heard and to defend
himself" A Lust and .alid cause for an employee*s dismissal must be supported by
substantial e.idence! and before the employee can be dismissed! he must be -i.en
proper notice of such causeQs and an ade:uate opportunity to be heard" 7n the process!
the employer bears the burden of pro.in- that the dismissal of an employee was for a
.alid cause" 7ts failure to dischar-e this burden renders the dismissal unLustied and!
therefore! ille-al" >ens'a Spa Center, 0n). and2or Ou P'i $ie vs. Loreta 1. Yun(, G.R. No.
1<:1%%, Au(ust 1", %1.
2mployee benet/ time of death" 5he death should be deemed compensable under the
2CC since Kenry was on his way bac= to Eanila in order to be on time and be ready for
wor= the ne6t day when his accidental death occurred" Ke should already be deemed en
route to the performance of his duty at the time of the accident" 7t should be noted that
Kenry*s superior allowed him to tra.el to La Anion to .isit his ailin- mother on the
condition that that he return the ne6t day" Ander these facts! Kenry was in the course of
complyin- with his superior*s order when he met his fatal accident" 5o be sure! he was
not in an actual re-htin- or accident situation when he died! but returnin- to wor= as
instructed by his superior is no less e:ui.alent to compensable performance of duty
under Section 1! &ule 777 of the 2CC &ules" Government Servi)e 0nsuran)e System vs.
8eli)itas Parate, as substituted by 'er 'eirs, namely ,elanie Parate, et al., G.R. No.
17<97, Au(ust !, %1.
7lle-al dismissal/ e8ect of rehabilitation proceedin-s" 5he e6istence of the Stay Nrder F
which would -enerally authoriDe the suspension of Ludicial proceedin-s F could not ha.e
a8ected the Court*s action on the present case due to the petitioner*s failure to raise
the pendency of the rehabilitation proceedin-s in its memorandum to the Court" At any
rate! a stay order simply suspends all actions for claims a-ainst a corporation
under-oin- rehabilitation/ it does not wor= to oust a court of its Lurisdiction o.er a case
properly led before it" 5hus! the Court*s rulin- on the principal issue of the case stands"
Je.ertheless! with LBJ7*s manifestation that it is still under-oin- rehabilitation! the
Court resol.es to suspend the e6ecution of our Decision until the termination of the
rehabilitation proceedin-s" Carlos Be Castro vs. Liberty =road)astin( NetCork, 0n). and
4d(ardo Hui(ue, G.R. No. 1":1:!. Au(ust %:, %1"
Job contractin-" 7n permissible Lob contractin-! the principal a-rees to put out or farm
out with a contractor or subcontractor the performance or completion of a specic Lob!
wor= or ser.ice within a denite or predetermined period! re-ardless of whether such
Lob! wor= or ser.ice is to be performed or completed within or outside the premises of
the principal" 5he test is whether the independent contractor has contracted to do the
wor= accordin- to his own methods and without bein- subLect to the principal*s control
e6cept only as to the results! he has substantial capital! and he has assured the
contractual employees entitlement to all labor and occupational safety and health
standards! free e6ercise of the ri-ht to self>or-aniDation! security of tenure! and social
and welfare benets" Spi) nN Span Servi)es Corp. vs. Gloria &aGe, et al., G.R. No. 179<9,
Au(ust %:, %1"
Eana-ement prero-ati.e/ transfer of employees" Jurisprudence reco-niDes the e6ercise
of mana-ement prero-ati.e to transfer or assi-n employees from one oCce or area of
operation to another! pro.ided there is no demotion in ran= or diminution of salary!
benets! and other pri.ile-es! and the action is not moti.ated by discrimination! made
in bad faith! or e8ected as a form of punishment or demotion without suCcient cause"
5o determine the .alidity of the transfer of employees! the employer must show that the
transfer is not unreasonable! incon.enient! or preLudicial to the employee/ nor does it
in.ol.e a demotion in ran= or a diminution of his salaries! pri.ile-es and other benets"
Should the employer fail to o.ercome this burden of proof! the employee*s transfer shall
be tantamount to constructi.e dismissal" &'arma)ia and ?pGo'n, 0n)., et al. vs. Ri)ardo
&. Albayda, $r., G.R. No. 17%7%9, Au(ust %!, %1.
Eer-er/ employee terms and conditions" 5hat BP7 is the same entity as G2B5C after the
mer-er is but a le-al ction intended as a tool to adLudicate ri-hts and obli-ations
between and amon- the mer-ed corporations and the persons that deal with them"
Althou-h in a mer-er it is as if there is no chan-e in the personality of the employer!
there is in reality a chan-e in the situation of the employee" Nnce an G2B5C employee is
absorbed! there are presumably chan-es in his condition of employment e.en if his
pre.ious tenure and salary rate is reco-niDed by BP7" 7t is reasonable to assume that BP7
would ha.e di8erent rules and re-ulations and company practices than G2B5C and it is
incumbent upon the former G2B5C employees to obey these new" Jot the least of these
chan-es is the fact that prior to the mer-er G2B5C employees were employees of an
unor-aniDed establishment and after the mer-er they became employees of a unioniDed
company that had an e6istin- CBA with the certied union" 5hus! althou-h in a sense
BP7 is continuin- G2B5C*s employment of these absorbed employees! BP7*s employment
of these absorbed employees will not be under e6actly the same terms and conditions
as stated in the latter*s employment contracts with G2B5C" =ank o+ t'e &'ilippine
0slands vs. =&0 4mployees ?nion6Bavao C'apter68ederation o+ ?nions in =&0
?nibank, G.R. No. 1"9!1, Au(ust 1, %1.
&einstatement of employee/ doctrine of strained relations" Ander the doctrine of
strained relations! the payment of separation pay has been considered an acceptable
alternati.e to reinstatement when the latter option is no lon-er desirable or .iable" Nn
the one hand! such payment liberates the employee from what could be a hi-hly
oppressi.e wor= en.ironment" Nn the other! the payment releases the employer from
the -rossly unpalatable obli-ation of maintainin- in its employ a wor=er it could no
lon-er trust" >ens'a Spa Center, 0n). and2or Ou P'i $ie vs. Loreta 1. Yun(,G.R. No.
1<:1%%, Au(ust 1", %1.
&etirement pay/ applicability to employees on commission basis" 2.en if the petitioner
as bus conductor was paid on commission basis! he falls within the co.era-e of &"A"
$(;1 and its implementin- rules" 5hus! his retirement pay should include the cash
e:ui.alent of '>days S7L and 1Q12 of 1%th month pay" 5he JL&C*s reliance on the case
of R ; 4 1ransport, 0n). as a basis for rulin- that bus conductors are not co.ered by the
law on S7L and 1%
th
month pay is erroneous since that in.ol.ed a ta6i dri.er who was
paid accordin- to the 1boundary system"3 5here is a di8erence between dri.ers paid
under the 1boundary system3 and conductors who are paid on commission basis" 7n
practice! ta6i dri.ers do not recei.e 6ed wa-es and retain only those sums in e6cess of
the 1boundary3 or fee they pay to the owners or operators of the .ehicles" Conductors!
on the other hand! are paid a certain percenta-e of the bus* earnin-s for the
day" Rodol+o $. Serrano vs. Severino Santos 1ransit and2or Severino Santos, G.R. No.
1<7"#<, Au(ust #, %1.
Separation pay" 7n those instances where an employee has been .alidly dismissed for
causes other than serious misconduct or those reHectin- on his moral character!
separation pay may still be -ranted after -i.in- considerable wei-ht to his lon- years of
employment" 7n this case! e:uity considerations dictate that respondent*s tenure be
computed from 1B$+! the year when respondent started wor=in- for ApLohn! and not
only from 1BB(! when the mer-er of Pharmacia and ApLohn too= place" &'arma)ia and
?pGo'n, 0n)., et al. vs. Ri)ardo p. Albayda, $r., G.R. No. 17%7%9, Au(ust %!, %1.
Stri=e/ .alidity of stri=e" Despite the .alidity of the purpose of a stri=e and the union*s
compliance with the procedural re:uirements! a stri=e may still be held ille-al where the
means employed are ille-al" @hile the stri=e had not been marred by actual .iolence
and patent intimidation! the pic=etin- that respondent P7LA oCcers and members
undertoo= as part of their stri=e acti.ities e8ecti.ely bloc=ed the free in-ress to and
e-ress from PK7ECN*s premises! thus pre.entin- non>stri=in- employees and company
.ehicles from enterin- the PK7ECN compound" 7n this manner! the pic=eters .iolated
Article 2(;0e4 of the Labor Code and tainted the stri=e with ille-ality" &-0,CD 0ndustries,
0n). vs. &-0,CD 0ndustries Labor Asso)iation 3&0LA7, et al., G.R. No. 17<!, Au(ust 11,
%1.
Anion/ eli-ibility of condential employees to Loin" Condential employees are dened
as those who 014 assist or act in a condential capacity! 024 to persons who formulate!
determine! and e8ectuate mana-ement policies in the eld of labor relations" 5he two
criteria are cumulati.e! and both must be met if an employee is to be considered a
condential employee F that is! the condential relationship must e6ist between the
employee and his super.isor! and the super.isor must handle the prescribed
responsibilities relatin- to labor relations. 7n the present case! there is no showin- that
the secretariesQcler=s and chec=ers assisted or acted in a condential capacity to
mana-erial employees and obtained condential information relatin- to labor relations
policies" And e.en assumin- that they had e6posure to internal business operations of
the company! as respondent claims! this is not per se -round for their e6clusion in the
bar-ainin- unit of the ran=>and>le employees" 1unay na &a(kakaisa n( ,an((a(aCa
sa Asia =reCery vs. Asia =reCery, 0n)., G.R. No. 1"%%:, Au(ust !, %1.
Anion/ liability for in.alid stri=e" 5he e8ects of ille-al stri=es! outlined in Article 2(; of
the Labor Code! ma=e a distinction between participatin- wor=ers and union oCcers"
5he ser.ices of an ordinary stri=in- wor=er cannot be terminated for mere participation
in an ille-al stri=e/ proof must be adduced showin- that he or she committed ille-al acts
durin- the stri=e" 5he ser.ices of a participatin- union oCcer! on the other hand! may
be terminated! not only when he actually commits an ille-al act durin- a stri=e! but also
if he =nowin-ly participates in an ille-al stri=e"&-0,CD 0ndustries, 0n). vs. &-0,CD
0ndustries Labor Asso)iation 3&0LA7, et al., G.R. No. 17<!, Au(ust 11, %1.
Anion shop/ e8ect of mer-er" All employees in the bar-ainin- unit co.ered by a Anion
Shop Clause in their CBA with mana-ement are subLect to its terms" Kowe.er! under law
and Lurisprudence! the followin- =inds of employees are e6empted from its co.era-e!
namely! 014 employees who at the time the union shop a-reement ta=es e8ect are bona
de members of a reli-ious or-aniDation which prohibits its members from Loinin- labor
unions on reli-ious -rounds/ 024 employees already in the ser.ice and already members
of a union other than the maLority at the time the union shop a-reement too= e8ect/ 0%4
condential employees who are e6cluded from the ran= and le bar-ainin- unit/ and 0;4
employees e6cluded from the union shop by e6press terms of the a-reement" 7n the
absence of any of these reco-niDed e6ceptions! there is no basis to conclude that the
terms and conditions of employment under a .alid CBA in force in the sur.i.in-
corporation should not be made to apply to the absorbed employees" =ank o+ t'e
&'ilippine 0slands vs. =&0 4mployees ?nion6Bavao C'apter68ederation o+ ?nions in =&0
?nibank, G.R. No. 1"9!1, Au(ust 1, %1.
Nctober 2010 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Jo.ember 22! 2010 by Leslie C" Dy [ Posted in Labor Law
[ 5a--ed appeal! bac=wa-es! dama-es! employer>employee relationship! e.idence! ille-al
dismissal! Lurisdiction! labor>only contractin-! loss of condence! ne-li-ence!probationary
employment! redundancy! reinstatement! retirement! separa! serious misconduct [
Kere are selected Nctober 2010 rulin-s of the Supreme Court of the Philippine on labor
law and procedure9
Compensable illness" &espondent is entitled to sic=ness wa-es because the shootin-
pain in his ri-ht foot is an inLury which he su8ered durin- the course of his employment"
5his is in consonance with the Standard 5erms and Conditions Po.ernin- the
2mployment of Gilipino Seafarers Nn Board Ncean>Poin- Messels of the Department of
Labor and 2mployment" Applyin- the said pro.isions of this standard contract!
respondent is entitled to recei.e sic=ness wa-es co.erin- the ma6imum period of 120
days" Eoreo.er! petitioners .iolated the contract when it failed to pro.ide continuous
treatment for respondent in accordance with the recommendation of their company
physician" Because of this failure! respondent was forced to see= immediate medical
attention at his own e6pense" 5hus! he is also entitled to reimbursement of his medical
e6penses" @arorient S'ippin( Co., 0n)., et al. vs. Gil 8lores, G.R. No. 1"1#!9, D)tober ",
%1
Compensable illness" Gor an inLury or illness to be duly compensated under the terms of
the Philippine N.erseas 2mployment Administration>Standard 2mployment Contract
0PN2A>S2C4! there must be a showin- that the inLury or illness and the ensuin- disability
occurred durin- the e8ecti.ity of the employment contract" Eoreo.er! all of these
conditions must be satised X 1"4 5he seafarer*s wor= must in.ol.e the ris=s described
in the PN2A>S2C/ 2"4 5he disease was contracted as a result of the seafarer*s e6posure
to the described ris=s/ %"4 5he disease was contracted within a period of e6posure and
under such other factors necessary to contract it/ and ;"4 5here was no notorious
ne-li-ence on the part of the seafarer" Specically! with respect to mental diseases! the
PN2A>S2C re:uires that it must be due to traumatic inLury to the head which did not
occur in this case" 7n fact! respondent claimed that he became depressed due to the
fre:uent .erbal abuse he recei.ed from his Perman superiors" Kowe.er! he failed to
show concrete proof that! if indeed he was subLected to abuse! it directly resulted in his
depression" &'ilippine 1ransmarine Carriers, 0n)., Global Navi(ation, Ltd. vs.. Silvino A.
NaAam, G.R. No. 1#<9. D)tober 11, %1.
Constructi.e dismissal/ transfer" 7t is mana-ement prero-ati.e to transfer or assi-n
employees from one oCce or area of operation to another" Kowe.er! the employer must
show that the transfer is not unreasonable! incon.enient or preLudicial to the employee!
or that it does not in.ol.e a demotion in ran= or a diminution of his salaries! pri.ile-es
and other benets" Should the employer fail to o.ercome this burden! the employee*s
transfer shall be tantamount to constructi.e dismissal" 7n the instant case! Del Millar*s
demotion is readily apparent in his new desi-nation as a mere Sta8 Assistant to the
Corporate Purchasin- and Eaterials Control Eana-er from bein- 5ransportation Ser.ices
Eana-er" 5he two posts are not of the same wei-ht in terms of duties and
responsibilities" Eoreo.er! while Del Millar*s transfer did not result in the reduction of his
salary! there was a diminution in his benets because as a mere Sta8 Assistant! he
could no lon-er enLoy the use of a company car! -asoline allowance! and annual forei-n
tra.el! which he pre.iously enLoyed as 5ransportation Ser.ices Eana-er" 5hus! Del Millar
was clearly constructi.ely dismissed"Co)a Cola =ottlers &'ilippines, 0n). vs. An(el ?. Bel
@illar, G.R. No. 1"!#1, D)tober ", %1.
Dismissal/ closure of business" Petitioner terminated the employment of respondents on
the -round of closure or cessation of operation of the establishment which is an
authoriDed cause for termination under Article 2+% of the Labor Code" @hile it is true
that a chan-e of ownership in a business concern is not proscribed by law! the sale or
disposition must be moti.ated by -ood faith as a condition for e6emption from liability"
7n the instant case! howe.er! there was! in fact! no chan-e of ownership" Petitioner did
not present any documentary e.idence to support its claim that it sold the same to ALPS
5ransportation" Nn the contrary! it continuously operates under the same name!
franchises and routes and under the same circumstances as before the alle-ed sale"
5hus! no actual sale transpired and! as such! there is no closure or cessation of business
that can ser.e as an authoriDed cause for the dismissal of respondents" &eKa+ran)ia
1ours and 1ravel 1ransport, 0n). vs. $oselito &. Sarmiento and Ri)ardo S. Catimban(, G.R.
No. 17<!#7, D)tober %, %1.
Dismissal/ constructi.e dismissal" 5here is constructi.e dismissal if an act of clear
discrimination! insensibility! or disdain by an employer becomes so unbearable on the
part of the employee that it would foreclose any choice by him e6cept to fore-o his
employment" 7t also e6ists where there is cessation of wor= because continued
employment is rendered impossible! unreasonable or unli=ely! such as when an o8er
in.ol.es a demotion in ran= and a diminution in pay" 7n the present case! what made it
impossible! unreasonable or unli=ely for respondent to continue wor=in- for SKS was the
unlawful withholdin- of his salary" Ke then lost no time in submittin- his resi-nation
letter and e.entually lin- a complaint for ille-al dismissal Lust a few days after his
salary was withheld" 5hese circumstances are inconsistent with .oluntary resi-nation
and bolster the ndin- of constructi.e dismissal" S-S &er+orated ,aterials, 0n)., et al.
vs. ,anuel 8. BiaA, G.R. No. 1<:<19, D)tober 1!, %1.
Dismissal/ corporate oCcer" 7t is not the nature of the ser.ices performed! but on the
manner of creation of the oCce that distin-uishes corporate oCcers who may be ousted
from oCce at will and ordinary corporate employees who may only be terminated for
Lust cause" Ander Section 2' of the Corporation Code! a position must be e6pressly
mentioned in the By>Laws in order to be considered as a corporate oCce" 5hus! the
creation of an oCce pursuant to a By>Law pro.ision -i.in- a president the power to
create an oCce does not :ualify as a By>Law position" 7n the present case! the position
of Mice President for Ginance and Administration which respondent held was merely
created by Eatlin-*s President pursuant to the company*s By>Laws" 7t is not a corporate
oCce or By>Law position! and therefore! respondent was not a corporate oCcer who
could be ousted from oCce at will" ,atlin( 0ndustrial and Commer)ial Corp., et al. vs.
Ri)ardo R. Coros, G.R. No. 1:7<%, D)tober 1!, %1.
Dismissal/ -ross and habitual ne-lect" Ander Article 2+2 0b4 of the Labor Code! an
employer may terminate an employee for -ross and habitual ne-lect of duties" Pross
ne-li-ence connotes want of care in the performance of one*s duties" Kabitual ne-lect
implies repeated failure to perform one*s duties for a period of time! dependin- upon
the circumstances" A sin-le or isolated act of ne-li-ence does not constitute a Lust
cause for the dismissal of the employee" Assumin- ar-uendo that respondent was
ne-li-ent! althou-h the Court found otherwise! the lapse or inaction could only be
re-arded as a sin-le or isolated act of ne-li-ence that cannot be cate-oriDed as habitual
and! hence! not a Lust cause for his dismissal" St. LukeNs ,edi)al Center, 0n). and Robert
Kuan vs. 4strelito NaAario, G.R. No. 1:%1"", D)tober %, %1.
Dismissal/ loss of condence" Loss of condence as a Lust cause for termination of
employment is premised on the fact that the employee concerned holds a position of
trust and condence" 5his situation holds where a person is entrusted with condence
on delicate matters! such as the custody! handlin-! or care and protection of the
employer*s property" Kowe.er! in order to constitute a Lust cause for dismissal! the act
complained of must be 1wor=>related3 such as would show the employee concerned to
be unt to continue wor=in- for the employer" 7n the instant case! the &esolution of the
PAL Board of Directors! underscored respondent*s acts of mismana-ement and -ross
incompetence which resulted in hu-e nancial losses for petitioner" As a -eneral rule!
employers are allowed wider latitude of discretion in terminatin- the employment of
mana-erial personnel or those who! while not of similar ran=! perform functions which
by their nature re:uire the employer*s full trust and condence" 5his must be
distin-uished from the case of ordinary ran= and le employees! whose termination on
the basis of these same -rounds re:uires a hi-her proof of in.ol.ement in the e.ents in
:uestion" &'ilippine Airlines, 0n). vs. National Labor Relations Commission and Aida ,.
HuiGano, G.R. No. 1%!%#9, D)tober %, %1
Dismissal/ probationary employee" Althou-h respondent was a probationary employee!
he is nonetheless entitled to security of tenure" Section % 024 Article 1% of the
Constitution -uarantees that ri-ht" 7n usin- the e6pression 1all wor=ers!3 the
Constitution puts no distinction between a probationary and a permanent or re-ular
employee" 5his means that probationary employees cannot be dismissed e6cept for
cause or for failure to :ualify as re-ular employees 0i"e"! to meet the performance
standards set by the company to be eli-ible for re-ular employment4" S-S &er+orated
,aterials, 0n)., et al. vs. ,anuel 8. BiaA, G.R. No. 1<:<19, D)tober 1!, %1.
Dismissal/ re:uirement" 7n dismissin- an employee! the employer must furnish him with
two written notices9 the rst notice apprises the employee of the particular acts or
omissions for which his dismissal is sou-ht! and the second is a subse:uent notice!
which informs the employee of the employer*s decision to dismiss him" An
administrati.e hearin- must li=ewise be held in order to -i.e the employee a further
opportunity to be heard" Petitioner hospital failed to comply with the rule on twin notice
and hearin- as it merely re:uired respondent to -i.e his written e6planation and!
thereafter! ordered his dismissal" St. LukeNs ,edi)al Center, 0n). and Robert Kuan vs.
4strelito NaAario, G.R. No. 1:%1"", D)tober %, %1.
Dismissal/ serious misconduct" Serious misconduct as a .alid cause for the dismissal of
an employee is dened simply as improper or wron-ful conduct" 7t is a trans-ression of
some established and denite rule of action! a forbidden act! a dereliction of duty! willful
in character! and implies wron-ful intent and not mere error of Lud-ment" 5o be serious!
the misconduct must be of such -ra.e and a--ra.ated character and not merely tri.ial
or unimportant" Eoreo.er! it must be related to the performance of the employee*s
duties such as would show him to be unt to continue wor=in- for the employer" Nn the
other hand! moral turpitude has been dened as 1e.erythin- which is done contrary to
Lustice! modesty! or -ood morals/ an act of baseness! .ileness or depra.ity in the
pri.ate and social duties which a man owes his fellowmen! or to society in -eneral!
contrary to Lustice! honesty! modesty! or -ood morals" 7n the case at bar! the
trans-ressions imputed to pri.ate respondent ha.e ne.er been rmly established as
deliberate and willful acts" At the .ery most! they can only be characteriDed as
unintentional! albeit maLor! lapses in professional Lud-ment" &'ilippine Airlines, 0n). vs.
National Labor Relations Commission and Aida ,. HuiGano, G.R. No. 1%!%#9, D)tober
%, %1.
2mployer>employee relationship" 5hat complainants were employees of S7P is clear from
the fact that S7P paid their salary" @hen complainants char-ed S7P of underpayment!
S7P e.en interposed the defense of free board and lod-in- -i.en to complainants"
Gurthermore! the 7Ds issued to complainants bear the si-nature of AleLandro C" Pablo!
proprietor of S7P" Li=ewise! the memoranda issued to complainants re-ardin- their
absences without lea.e were si-ned by Pablo" All these clearly show that S7P is the
employer of complainants" Althou-h PEPC en-a-ed the ser.ices of S7P to operate a
canteen! S7P and its proprietors could not be considered as labor>only contractors or
mere a-ents of PEPC because they e6ercised the essential elements of an employment
relationship with the complainants such as hirin-! payment of wa-es and the power of
control"S.0.&. 8ood -ouse and ,r. and ,rs. AleGandro &ablo @s. Restituto =atolina, et
al., G.R. No. 1#%97!, D)tober 11, %1.
2mployer>employee relationship/ test" 5he elements to determine the e6istence of an
employment relationship are9 0a4 the selection and en-a-ement of the employee/ 0b4
the payment of wa-es/ 0c4 the power of dismissal/ and 0d4 the employer*s power to
control the employee*s conduct" 5he most important of these elements is the
employer*s control of the employee*s conduct! not only as to the result of the wor= to be
done! but also as to the means and methods to accomplish it" 7t should be remembered
that the control test merely calls for the e6istence of the ri-ht to control! and not
necessarily the e6ercise thereof" Based on this four>fold test! Eanila @ater emer-es as
the employer of respondent collectors" &espondent bill collectors were indi.idually hired
by the contractor! but were under the direct control and super.ision of Eanila @ater"
5his control is manifested in the fact that respondent bill collectors reported daily to the
branch oCces of Eanila @ater to remit their collections with the specied monthly
tar-ets and comply with the collection reportin- procedures prescribed by the latter"
Accordin-ly! respondent bill collectors are employees of petitioner Eanila @ater" ,anila
>ater Company, 0n). vs. $ose $. Balumpines, et al., G.R. No. 17::1, D)tober 9, %1.
2.identiary doubts construed in fa.or of labor" Althou-h it cannot be determined with
certainty whether respondent wor=ed for the entire period from Jo.ember 1( to
Jo.ember %0! 200'! the consistent rule is that if doubt e6ists between the e.idence
presented by the employer and that by the employee! the scales of Lustice must be
tilted in fa.or of the latter in line with the policy mandated by Articles 2 and % of the
Labor Code to a8ord protection to labor and construe doubts in fa.or of labor" 7n .iew of
petitioners* failure to satisfy their burden of proof! respondent is presumed to ha.e
wor=ed durin- the period in :uestion and is! accordin-ly! entitled to his salary"
5herefore! the withholdin- of respondent*s salary by petitioners is contrary to Article
11( of the Labor Code and! thus! unlawful" S-S &er+orated ,aterials, 0n)., et al. vs.
,anuel 8. BiaA, G.R. No. 1<:<19, D)tober 1!, %1.
7lle-al dismissal/ full bac=wa-es and reinstatement" Ander &epublic Act Jo" ($1'!
employees who are ille-ally dismissed are entitled to full bac=wa-es! inclusi.e of
allowances and other benets or their monetary e:ui.alent! computed from the time
their actual compensation was withheld from them up to the time of their actual
reinstatement" 7f reinstatement is no lon-er possible! the bac=wa-es shall be computed
from the time of their ille-al termination up to the nality of the decision" Co)a Cola
=ottlers &'ilippines, 0n). vs. An(el ?. Bel @illar, G.R. No. 1"!#1, D)tober ", %1.
7lle-al dismissal/ moral and e6emplary dama-es" Award of moral and e6emplary
dama-es for an ille-ally dismissed employee is proper where the employee had been
harassed and arbitrarily terminated by the employer" Eoral dama-es may be awarded
to compensate one for inLuries such as mental an-uish! besmirched reputation!
wounded feelin-s! and social humiliation occasioned by the employer*s unreasonable
dismissal of the employee" 5he award of such dama-es is based not on the Labor Code
but on the Ci.il Code" 5hese dama-es! howe.er! are not intended to enrich the ille-ally
dismissed employee" 5hus! the Court found it proper to reduce the award of moral
dama-es from P'00!000 to P100!000"00 and e6emplary dama-es from P'00!000 to
P'0!000"00" 5he reduced amounts are deemed suCcient to assua-e the su8erin-s
e6perienced by Del Millar and to set an e6ample for the public -ood" Co)a Cola =ottlers
&'ilippines, 0n). vs. An(el ?. Bel @illar, G.R. No. 1"!#1, D)tober ", %1.
7lle-al dismissal/ reinstatement and full bac=wa-es" Probationary employees who are
unLustly dismissed durin- the probationary period are entitled to reinstatement and
payment of full bac=wa-es and other benets and pri.ile-es from the time they were
dismissed up to their actual reinstatement" &espondent is! thus! entitled to
reinstatement without loss of seniority ri-hts and other pri.ile-es as well as to full
bac=wa-es! inclusi.e of allowances and other benets or their monetary e:ui.alent
computed from the time his compensation was withheld up to the time of actual
reinstatement" S-S &er+orated ,aterials, 0n)., et al. vs. ,anuel 8. BiaA, G.R. No. 1<:<19,
D)tober 1!, %1.
7lle-al dismissal/ reinstatement and payment of bac=wa-es" Petitioners* lac= of Lust
cause and non>compliance with the procedural re:uisites in terminatin- respondent*s
employment renders them -uilty of ille-al dismissal" Conse:uently! under Article 2$B of
the Labor Code! as amended! respondent is entitled to reinstatement to his former
position without loss of seniority ri-hts and payment of bac=wa-es inclusi.e of
allowances and other benets! or their monetary e:ui.alent computed from the time
the compensation was not paid up to the time of actual reinstatement" St. LukeNs
,edi)al Center, 0n). and Robert Kuan vs. 4strelito NaAario, G.R. No. 1:%1"", D)tober %,
%1.
7lle-al dismissal/ separation pay in lieu of reinstatement" 7f reinstatement pro.es
impracticable! and hardly in the best interest of the parties! perhaps due to the lapse of
time since the employee*s dismissal! or if the employee decides not to be reinstated!
respondent should be awarded separation pay in lieu of reinstatement" 7n the present
case! since reinstatement is no lon-er feasible due to the lon- passa-e of time!
petitioners are re:uired to pay respondent his separation pay e:ui.alent to one 014
month*s pay for e.ery year of ser.ice" Petitioners are thus ordered to pay respondent
his bac=wa-es and separation pay" 5he awards of separation pay and bac=wa-es are
not mutually e6clusi.e and both may be -i.en to respondent" St. LukeNs ,edi)al Center,
0n). and Robert Kuan vs. 4strelito NaAario, G.R. No. 1:%1"", D)tober %, %1.
Job contractin-/ conditions" Job contractin- is permissible only if the followin- conditions
are met9 14 the contractor carries on an independent business and underta=es the
contract wor= on his own account under his own responsibility accordin- to his own
manner and method! free from the control and direction of his employer or principal in
all matters connected with the performance of the wor= e6cept as to the results thereof/
and 24 the contractor has substantial capital or in.estment in the form of tools!
e:uipment! machineries! wor= premises! and other materials which are necessary in the
conduct of the business" 1Substantial capital or in.estment3 refers to capital stoc=s and
subscribed capitaliDation in the case of corporations! tools! e:uipment! implements!
machineries! and wor= premises! actually and directly used by the contractor or
subcontractor in the performance or completion of the Lob! wor=! or ser.ice contracted
out" 5he 1ri-ht to control3 refers to the ri-ht reser.ed to the person for whom the
ser.ices of the contractual wor=ers are performed! to determine not only the end to be
achie.ed! but also the manner and means to be used in reachin- that end" ,anila >ater
Company, 0n). vs. $ose $. Balumpines, et al., G.R. No. 17::1, D)tober 9, %1.
Jurisdiction/ dismissal" Pursuant to Article 21$ 0a4 2 of the Labor Code! as amended! the
ille-al dismissal of an oCcer or other employee of a pri.ate employer is properly
co-niDable by the labor arbiter" Kowe.er! where the complaint for ille-al dismissal
concerns a corporate oCcer! the contro.ersy is considered an intra>corporate dispute
and falls under the Lurisdiction of the Securities and 26chan-e Commission 0S2C4" 5his
Lurisdiction of the S2C! howe.er! was transferred to the &5C! pursuant to &A Jo" +$BB
which became e8ecti.e on Au-ust +! 2000" Considerin- that the respondent*s complaint
for ille-al dismissal was commenced on Au-ust 10! 2000! the appropriate Lurisdiction lie
with the &5C should it turn out that the respondent was a corporate! not a re-ular!
oCcer of Eatlin-" ,atlin( 0ndustrial and Commer)ial Corp., et al. vs. Ri)ardo R.
Coros, G.R. No. 1:7<%, D)tober 1!, %1.
Jurisdiction/ labor dispute .s" intra>corporate dispute" Pi.en Locsin*s status as a
corporate oCcer! the &5C! not the Labor Arbiter or the JL&C! has Lurisdiction to hear the
le-ality of the termination of his relationship with Jissan" 7n a number of cases it has
been held that a corporate oCcer*s dismissal is always a corporate act! or an intra>
corporate contro.ersy so that the &5C should e6ercise Lurisdiction" Locsin was
undeniably Chairman and President! and was elected to these positions by the Jissan
board pursuant to its By>laws" As such! he was a corporate oCcer! not an employee"
2.en as 26ecuti.e Mice>PresidentQ5reasurer! Locsin already acted as a corporate oCcer
because the position of 26ecuti.e Mice>PresidentQ5reasurer is pro.ided for in Jissan*s By>
Laws" Arsenio P. Lo)sin vs. Nissan Lease &'ils. 0n). and Luis =anson, G.R. No. 1<::"7,
D)tober %, %1.
Labor>only contractin-/ elements" 5he Labor Code e6pressly prohibits 1labor>only3
contractin- which refers to an arran-ement where the contractor or subcontractor
merely recruits! supplies! or places wor=ers to perform a Lob! wor=! or ser.ice for a
principal! and any of the followin- elements are present9 0i4 the contractor or
subcontractor does not ha.e substantial capital or in.estment which relates to the Lob!
wor=! or ser.ice to be performed and the employees recruited! supplied! or placed by
such contractor or subcontractor are performin- acti.ities which are directly related to
the main business of the principal/ or 0ii4 the contractor does not e6ercise the ri-ht to
control the performance of the wor= of the contractual employee" Asin- the abo.e
criteria! it is clear that GCCS7 is a labor>only contractor while the principal Eanila @ater
is the real employer" GCCS7 does not ha.e substantial capital or in.estment to :ualify as
an independent contractor as shown by the fact that althou-h it has an authoriDed
capital stoc= of P;00!000"00! only P100!000"00 of which is actually paid>up" Also! it was
Eanila @ater that pro.ided the e:uipment and ser.ice .ehicles needed in the
performance of the contracted ser.ice" ,anila >ater Company, 0n). vs. $ose $.
Balumpines, et al., G.R. No. 17::1, D)tober 9, %1.
Loss of condence/ distinction between mana-erial personnel and ran= and employees "
As a -eneral rule! employers are allowed wider latitude of discretion in terminatin- the
employment of mana-erial personnel or those who! while not of similar ran=! perform
functions which by their nature re:uire the employer*s full trust and condence" 5his
must be distin-uished from the case of ordinary ran= and le employees! whose
termination on the basis of these same -rounds re:uires a hi-her proof of in.ol.ement
in the e.ents in :uestion/ mere uncorroborated assertions and accusations by the
employer will not suCce" Leandro ,. Al)antara vs. 1'e &'ilippine Commer)ial and
0nternational =ank, G.R. No. 1:1!9#, D)tober %, %1.
Eotion to dismiss/ appeal" Petitioner Locsin*s submission that the JCLP7 improperly
ele.ated the Labor Arbiter*s denial of the Eotion to Dismiss to the CA is correct" A
denial of a motion to dismiss is an interlocutory order and hence! cannot be appealed
until a nal Lud-ment on the merits of the case is rendered" As a -eneral rule! an
a--rie.ed party*s proper recourse to the denial is to le his position paper! interpose
the -rounds relied upon in the motion to dismiss F such as lac= of Lurisdiction in the
present case F before the labor arbiter! and acti.ely participate in the proceedin-s"
5hereafter! the labor arbiter*s decision can be appealed to the JL&C! not to the CA"
5his JL&C rule is similar to the -eneral rule obser.ed in ci.il procedure" Ander the &ules
of Court! the only other recourse of the a--rie.ed party is to le an appropriate special
ci.il action under &ule (' but only when there is no appeal! or any plain! speedy! and
ade:uate remedy in the ordinary course of law" 7n the labor law settin-! a plain! speedy
and ade:uate remedy in the form of the correcti.e power of the JL&C is still open to the
a--rie.ed party when a labor arbiter denies a motion to dismiss" Arsenio P. Lo)sin vs.
Nissan Lease &'ils. 0n). and Luis =anson, G.R. No. 1<::"7, D)tober %, %1.
Petition/ failure to attach documents" Gailure to attach all pleadin-s and documents! by
itself! is not a suCcient -round to dismiss a petition" 5he courts may liberally construe
procedural rules in order to meet and ad.ance the cause of substantial Lustice"
Procedural lapses will be o.erloo=ed when they do not in.ol.e public policy! when they
arose from an honest mista=e or unforeseen accident! and when they ha.e not
preLudiced the ad.erse party or depri.ed the court of its authority" 5hese conditions are
present in the instant case" Gurthermore! after petitioner*s receipt of the Court of
Appeals &esolution dismissin- his petition for failure to attach documents! he led a
Eotion for &econsideration alon- with the documents deemed by the Court of Appeals
as lac=in- in his ori-inal petition" Such subse:uent submission should be deemed
substantial compliance as supported by Lurisprudence" 7n these cases! the reasons
behind the failure of the petitioners to comply with the re:uired attachments were no
lon-er scrutiniDed" Clearly! the Court of Appeals erred in dismissin- petitioner*s special
ci.il action for certiorari despite subse:uent substantial compliance with the rules on
procedure" Leandro ,. Al)antara vs. 1'e &'ilippine Commer)ial and 0nternational
=ank, G.R. No. 1:1!9#, D)tober %, %1.
Pri.ate recruitment a-encies/ solidary liability" &epublic Act Jo" +0;2 pro.ides for the
Loint and solidary liability of pri.ate recruitment a-encies with their forei-n principals in
any and all money claims a-ainst them" Such pro.ision is automatically incorporated by
law in the contract for o.erseas employment and is a condition precedent for its
appro.al" 5his is to a8ord the NG@s immediate and suCcient payment of what is due
them" Eoreo.er! such obli-ation is not coterminous with the a-reement between the
local a-ent and its forei-n principal so that if either or both of the parties decide to end
the a-reement! the responsibilities of such parties towards the contracted employees
under the a-reement do not at all end! but the same e6tends up to and until the
e6piration of the employment contracts of the employees recruited and employed
pursuant to the said recruitment a-reement" 5hus! to allow petitioners to simply in.o=e
the immunity from suit of its forei-n principal or to wait for the Ludicial determination of
the forei-n principal*s liability before petitioner can be held liable renders the law on
Loint and solidary liability inutile" A1C0 Dverseas Corporation, et al. vs. ,a. $ose+a
4)'in, G.R. No. 17<::1. D)tober 11, %1
&edundancy" &edundancy is one of the authoriDed causes for the dismissal of an
employee under Article 2+% of the Labor Code" &edundancy! e6ists where the ser.ices
of an employee are in e6cess of what is reasonably demanded by the actual
re:uirements of the enterprise" Such superHuity may be due to o.erhirin- of wor=ers!
decreased .olume of business! or droppin- of a particular product line or ser.ice acti.ity
pre.iously manufactured or underta=en by the enterprise" 5he determination of
redundancy is an e6ercise of business Lud-ment of the employer the soundness of which
is not subLect to discretionary re.iew of the Labor Arbiter and the JL&C! pro.ided there
is no .iolation of law and no showin- that it was prompted by an arbitrary or malicious
act" 5hus! a company must not merely declare that it has become o.ermanned! it must
also produce ade:uate proof of such redundancy" Coca>Cola failed to o.ercome this
burden in the instant case" 7nstead! it o8ered proof of Del Millar*s poor performance
which is irrele.ant in relation to the issue on redundancy" Co)a Cola =ottlers
&'ilippines, 0n). vs. An(el ?. Bel @illar, G.R. No. 1"!#1, D)tober ", %1.
&einstatement/ doctrine of strained relations" Ander the doctrine of strained relations!
the payment of separation pay is considered an acceptable alternati.e to reinstatement
when the latter option is no lon-er desirable or .iable" Payment liberates the employee
from what could be a hi-hly oppressi.e wor= en.ironment! and at the same time
releases the employer from the obli-ation of =eepin- in its employ a wor=er it no lon-er
trusts" 7n the instant case! respondent*s reinstatement is no lon-er feasible as
anta-onism has caused a se.ere strain in his wor=in- relationship with petitioners"
5herefore! a more e:uitable disposition would be an award of separation pay e:ui.alent
to at least one month pay! in addition to his full bac=wa-es! allowances and other
benets" S-S &er+orated ,aterials, 0n)., et al. vs. ,anuel 8. BiaA, G.R. No. 1<:<19,
D)tober 1!, %1.
&elease and :uitclaim/ .alidity" Yuitclaims e6ecuted by the employees are commonly
frowned upon as contrary to public policy" 5hus! for :uitclaims to be .alid the followin-
re:uisites must be complied with9 0a4 that there was no fraud or deceit on the part of
any of the parties/ 0b4 that the consideration of the :uitclaim is credible and reasonable/
and 0c4 that the contract is not contrary to law! public order! public policy! morals or
-ood customs! or preLudicial to a third person with a ri-ht reco-niDed by law" @arorient
S'ippin( Co., 0n)., et al. vs. Gil 8lores, G.R. No. 1"1#!9, D)tober ", %1
&etirement/ compulsory" Article 2+$ of the Labor Code! as amended by &"A" Jo" $(;1!
pe-s the a-e for compulsory retirement at (' years! while the minimum a-e for optional
retirement is set at (0 years" An employer is! howe.er! free to impose a retirement a-e
earlier than the fore-oin- mandates pro.ided that the prero-ati.e is e6ercised pursuant
to a mutually instituted early retirement plan" 7n the present case! not e.en an iota of
.oluntary ac:uiescence to AJ7P&NE*s early retirement a-e option is attributable to
petitioner" AJ7P&NE*s 2mployees* Jon>Contributory &etirement Plan was unilaterally
and compulsorily imposed on them" Petitioner was forced to participate in the plan! and
the only way she could ha.e reLected the same was to resi-n or lose her Lob" Such
passi.e ac:uiescence on the part of employees cannot e:uate to .oluntary acceptance
which must be e6plicit! .oluntary! free! and uncompelled" Ka.in- terminated petitioner
merely on the basis of a pro.ision in the retirement plan which was not freely assented
to by her! AJ7P&NE is -uilty of ille-al dismissal" Lourdes A. Cer)ado vs. ?niprom,
0n)., G.R. No. 1<<1:9. D)tober 1!, %1.
&ule on appeal from denial of motion to dismiss/ e6ception" As a -eneral rule! a Labor
Arbiter*s denial of the Eotion to Dismiss on the -round of lac= of Lurisdiction is
appealable to the JL&C and not to the CA by way of &ule ('" Kowe.er! we ta=e
e6ception to this -eneral rule in the present case because a strict implementation of
these rules would cause substantial inLustice to JCLP7" After all! the parties ha.e
suCciently .entilated their positions on the disputed employer>employee relationship
and ha.e! in fact! submitted the matter for the CA*s consideration" Eoreo.er! the CA
correctly ruled that Locsin was a corporate oCcer! not an employee and therefore
Lurisdiction lies with the &5C and not the Labor Arbiter" Arsenio P. Lo)sin vs. Nissan
Lease &'ils. 0n). and Luis =anson,G.R. No. 1<::"7, D)tober %, %1.
Seaman as a contractual employee/ disability claims" A seaman is a contractual and not
a re-ular employee" 5hus! in claims of seamen for compensation and disability benets!
the Court cannot Lust disre-ard the pro.isions of the PN2A Standard 2mployment
Contract 0PN2A S2C4" 7n order to claim disability benets under the PN2A S2C! it is the
]company>desi-nated* physician who must proclaim that the seaman su8ered a
permanent disability! due to either inLury or illness! durin- the term of the latter*s
employment" 7n this case! the ndin-s of respondents* desi-nated physician that
petitioner has been su8erin- from brief psychotic disorder and that it is not wor=>related
must be respected" @hile it is true that labor contracts are impressed with public
interest and the pro.isions of the PN2A S2C must be construed lo-ically and liberally in
fa.or of Gilipino seamen in the pursuit of their employment on board ocean>-oin-
.essels! the rule is that Lustice is! in e.ery case! only for the deser.in-/ it is to be
dispensed with in the li-ht of established facts! the applicable law! and e6istin-
Lurisprudence" 4d(ardo ,. &an(aniban vs. 1ara 1radin( S'ip ,ana(ement 0n). and
S'inline SBN =-B, G.R. No. 1<7!%, D)tober 1<, %1
Separation pay/ e:uity" 7n e6ceptional cases! this Court has -ranted separation pay to a
le-ally dismissed employee as an act of 1social Lustice3 or based on 1e:uity"3 7n both
instances! it is re:uired that the dismissal 014 was not for serious misconduct/ and 024
does not reHect on the moral character of the employee or would in.ol.e moral
turpitude" 5here should be no :uestion that where it comes to such .alid but not
ini:uitous causes as failure to comply with wor= standards! the -rant of separation pay
to the dismissed employee may be both Lust and compassionate! particularly if he has
wor=ed for some time with the company" &'ilippine Airlines, 0n). vs. National Labor
Relations Commission and Aida ,. HuiGano, G.R. No. 1%!%#9, D)tober %, %1.
5ermination/ loss of condence" Loss of condence as a Lust cause for termination of
employment applies when the employee concerned holds a position of trust and
condence" Kowe.er! in order to constitute a Lust cause for dismissal! the act
complained of must be 1wor=>related3 such as would show the employee concerned to
be unt to continue wor=in- for the employer" Petitioner! who! as Branch Eana-er of the
respondent ban= undoubtedly held a position of trust and condence! admitted that he
personally processed the two Certicates of 5ime Deposit 0C5Ds4 at issue! despite his
=nowled-e that they were unfunded" By doin- so! he e6posed his employer to -reat
ris=" Eoreo.er! by issuin- those C5Ds! he was in e8ect certifyin- the e6istence of time
deposits in his branch that were actually ctitious" 5hus! it can be said that his ob.ious
la6ity or ne-li-ence in the issuance of the said C5Ds was e.en tainted with dishonesty"
&espondent ban= was thus Lustied in terminatin- petitioner*s employment on the
-round of loss of trust and condence" Leandro ,. Al)antara vs. 1'e &'ilippine
Commer)ial and 0nternational =ank, G.R. No. 1:1!9#, D)tober %, %1.
5ermination/ procedural due process" Jotice and hearin- constitute the essential
elements of due process in the dismissal of employees" 5he employer must furnish the
employee with two written notices before termination of employment can be le-ally
e8ected" @ith re-ard to the re:uirement of a hearin-! the essence of due process lies
simply in an opportunity to be heard/ an actual trial>type hearin- is not indispensable" 7n
this case! respondent acted in accordance with procedural due process when it -a.e
petitioner considerable leeway with re-ard to the submission of his written e6planation
by allowin- multiple e6tensions of time to submit the same and by furnishin- him the
documents used in respondent*s in.esti-ation" 2.en assumin- that petitioner was not
fully heard durin- the employer*s in.esti-ation! it was his fault because of his mis-uided
insistence on ha.in- a trial>type hearin-" Leandro ,. Al)antara vs. 1'e &'ilippine
Commer)ial and 0nternational =ank, G.R. No. 1:1!9#, D)tober %, %1.
5ermination/ solidary liability of corporate directors and oCcers" Corporate directors and
oCcers are only solidarily liable with the corporation for termination of employment of
corporate employees if such is e8ected with malice or in bad faith" Bad faith does not
connote bad Lud-ment or ne-li-ence/ it imports dishonest purpose or some moral
obli:uity and conscious doin- of wron-/ it means breach of =nown duty throu-h some
moti.e or interest or ill will/ it parta=es of the nature of fraud" 5o sustain such a ndin-!
there should be e.idence on record that an oCcer or director acted maliciously or in bad
faith in terminatin- the employee" 7n the instant case! petitioners withheld respondent*s
salary in the sincere belief that respondent did not wor= for the period in :uestion" 5hus!
althou-h they unlawfully withheld respondent*s salary! it cannot be concluded that such
was made in bad faith" Accordin-ly! corporate oCcers! Kartmannshenn and
Schumacher! cannot be held personally liable for the corporate obli-ations of SKS" S-S
&er+orated ,aterials, 0n)., et al. vs. ,anuel 8. BiaA, G.R. No. 1<:<19, D)tober 1!, %1.
@a-es/ deduction by employer" 5he free board and lod-in- S7P furnished the employees
cannot operate as a set>o8 for the underpayment of their wa-es" 7t was held in EabeDa
." Jational Labor &elations Commission that the employer cannot simply deduct from
the employee*s wa-es the .alue of the board and lod-in- without satisfyin- the
followin- re:uirements9 014 proof that such facilities are customarily furnished by the
trade/ 024 .oluntary acceptance in writin- by the employees of the deductible facilities/
and 0%4 proof of the fair and reasonable .alue of the facilities char-ed" 7t is clear from
the records that S7P failed to comply with these re:uirements"S.0.&. 8ood -ouse and ,r.
and ,rs. AleGandro &ablo @s. Restituto =atolina, et al., G.R. No. 1#%97!, D)tober 11,
%1.
@a-es! withholdin-" Eana-ement prero-ati.e does not include the ri-ht to temporarily
withhold wa-es without the consent of the employee" Such an interpretation would be
contrary to Article 11( of the Labor Code! which pro.ides that it shall be unlawful for
any person! directly or indirectly! to withhold any amount from the wa-es of a wor=er or
induce him to -i.e up any part of his wa-es by force! stealth! intimidation! threat or by
any other means without the wor=er*s consent" @ithholdin- of wa-es is allowed only in
the form of wa-e deductions under the circumstances pro.ided in Article 11% of the
Labor Code such as9 0a4 7n cases where the wor=er is insured with his consent by the
employer! and the deduction is to recompense the employer for the amount paid by him
as premium on the insurance/ 0b4 Gor union dues! in cases where the ri-ht of the wor=er
or his union to chec=>o8 has been reco-niDed by the employer or authoriDed in writin-
by the indi.idual wor=er concerned/ and 0c4 7n cases where the employer is authoriDed
by law or re-ulations issued by the Secretary of Labor" 7n the present case! the
withholdin- of complainant*s wa-es does not fall under the e6ceptions pro.ided in
Article 11% and is thus unlawful" S-S &er+orated ,aterials, 0n)., et al. vs. ,anuel 8.
BiaA, G.R. No. 1<:<19, D)tober 1!, %1.
@or=>related illness/ substantial e.idence" @or=in- conditions cannot be accepted to
ha.e caused or at least increased the ris= of contractin- the disease F in this case! brief
psychotic disorder> in the absence of substantial e.idence" 5he e.idence must be real
and substantial! and not merely apparent" 7n sum! petitioner failed to establish by
substantial e.idence that his brief psychotic disorder was caused by the nature of his
wor= as oiler of the company>owned .essel" 7n fact! he failed to elaborate on the nature
of his Lob as oiler of respondent company" 5he Court! therefore! has diCculty in ndin-
any lin= between his position as oiler and his illness" Petitioner points out that his 1brief
psychotic disorder3 which was caused by a family problem is wor=>related simply
because had it been a land>based employment! petitioner would ha.e easily -one home
and attended to the needs of his family" 5his is not the 1wor=>related3 instance
contemplated by the pro.isions of the employment contract in order to be entitled to
the benets" Ntherwise! e.ery seaman would automatically be entitled to compensation
because the nature of his wor= is not land>based" 4d(ardo ,. &an(aniban vs. 1ara
1radin( S'ip ,ana(ement 0n). and S'inline SBN =-B, G.R. No. 1<7!%, D)tober 1<,
%1.
@rit of habeas data/ labor disputes" &espondent :uestions her transfer and! throu-h the
e6traordinary remedy of habeas data! see=s the disclosure of the reasons behind it"
Kowe.er! since her real obLecti.e is to be spared from complyin- with E2&ALCN*s
Eemorandum directin- her reassi-nment! respondent should instead lod-e her
complaint with the JL&C and the Labor Arbiters which ha.e Lurisdiction o.er such
concerns" 5he writ of habeas data is a remedy a.ailable only to a person whose ri-ht to
pri.acy in life! liberty or security is .iolated or threatened by an unlawful act or omission
of a public oCcial or employee or of a pri.ate indi.idual or entity en-a-ed in the
-atherin-! collectin- or storin- of data or information re-ardin- the person! family!
home and correspondence of the a--rie.ed party" Petitioners* refusal to disclose the
contents of reports which form the basis of respondent*s transfer does not amount to a
.iolation of her ri-ht to pri.acy",anila 4le)tri) Company, Ale/ander S. Beyto and Ruben
A. Sapitula vs. Rosario GopeA Lim, G.R. No. 1<97"#, D)tober :, %1"
Jo.ember 2010 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on December 1%! 2010 by Leslie C" Dy [ Posted in Labor Law [ 5a--ed appeal! compensable
illness! constructi.e dismissal! employer>employee relationship! e.idence! forum shoppin-! ille-al
dismissal! ille-al stri=e! Lurisdiction! labor>only contractin-! reinstatement! retirement! unfair labor
practice [
Kere are selected Jo.ember 2010 rulin-s of the Supreme Court of the Philippines on
labor law and procedure9
Appeal/ determination of date of lin-" Ander Section %! &ule 1% of the &ules of Court!
where the lin- of pleadin-s! appearances! motions! notices! orders! Lud-ments! and all
other papers with the courtQtribunal is made by re-istered mail! the date of mailin-! as
shown by the post oCce stamp on the en.elope or the re-istry receipt! shall be
considered as the date of lin-" 5hus! the date of lin- is determinable from two
sources9 from the post oCce stamp on the en.elope or from the re-istry receipt! either
of which may suCce to pro.e the timeliness of the lin- of the pleadin-s" 7f the date
stamped on one is earlier than the other! the former may be accepted as the date of
lin-" 7n this case! to pro.e that it mailed the notice of appeal and appeal memorandum
on Nctober 2$! 1BB$! instead of Nctober 2+! 1BB$! as shown by the stamped date on
the en.elope! petitioner presented &e-istry &eceipt Jo" %;'+1 bearin- the earlier
date" Government Servi)e 0nsuran)e System vs. National Labor Relations Commission
3NLRC7, Bionisio =anlasan, et al., G.R. No. 1<9:, November 17, %1.
Appeal/ led out of time/ e6ceptional cases" An appeal must be perfected within the
statutory or re-lementary period" 5his is not only mandatory! but also Lurisdictional"
Gailure to perfect the appeal on time renders the assailed decision nal and e6ecutory
and depri.es the appellate court or body of the le-al authority to alter the nal
Lud-ment! much less entertain the appeal" Kowe.er! in e6ceptional cases! a belated
appeal may be -i.en due course if -reater inLustice will be .isited upon the party should
the appeal be denied" 5his is to ser.e the -reater principles of substantial Lustice and
e:uity" 5echnical rules are not bindin- in labor cases and are not to be applied strictly if
the result would be detrimental to the wor=in- man" 7n the instant case! e.en if the
appeal was led one day late! the same should ha.e been entertained by the JL&C"
Povernment Servi)e 0nsuran)e System vs. National Labor Relations Commission 3NLRC7,
Bionisio =anlasan, et al., G.R. No. 1<9:, November 17, %1.
Compensable illness/ wor=>relatedness" Prantin- ar-uendo that petitioner*s illness was
not pre>e6istin-! he still had to show that his illness not only occurred durin- the term of
his contract but also that it resulted from a wor=>related inLury or illness! or at the .ery
least a--ra.ated by the conditions of the wor= for which he was contracted for"
Petitioner failed to dischar-e this burden! howe.er" 5hat the e6act and denite cause of
petitioner*s illness is un=nown cannot be used to Lustify -rant of disability benets!
absent proof that there is any reasonable connection between wor= actually performed
by petitioner and his illness" $erry ,. 8ran)is)o, vs. =a'ia S'ippin( Servi)es, 0n). and2or
Cynt'ia C. ,endoAa, and 8red Dlsen Cruise Lines, Ltd., G.R. No. 1#:9:, November %%,
%1.
Dismissal/ ille-al stri=e/ distinction between union oCcers and mere members" 5he
liabilities of indi.iduals who participate in an ille-al stri=e must be determined under
Article 2(; 0a4 of the Labor Code which ma=es a distinction between union oCcers and
mere members" 5he law -rants the employer the option of declarin- a union oCcer
who =nowin-ly participated in an ille-al stri=e as ha.in- lost his employment" Kowe.er!
a wor=er merely participatin- in an ille-al stri=e may not be terminated from
employment if he does not commit ille-al acts durin- a stri=e" Kence! with respect to
respondents who are union oCcers! their termination by petitioners is .alid" Bein- fully
aware that the proceedin-s before the Secretary of Labor were still pendin- as in fact
they led a motion for reconsideration! they cannot in.o=e -ood faith as a defense" Gor
the rest of the indi.idual respondents who are union members! they cannot be
terminated for mere participation in the ille-al stri=e" Solid =ank Corp. 4rnesto ?.
Gamier, et al. and Solid =ank Corp., et al. vs. Solid =ank ?nion and its Bismissed
DE)ers and ,embers, et al. G.R. No. 1:#9" and G.R. No. 1:#9"1, November 1:, %1.
Dismissal/ misconduct/ substantial e.idence" 5he -eneral rule is that where the ndin-s
of the administrati.e body are amply supported by substantial e.idence! such ndin-s
are accorded not only respect but also nality! and are bindin- on the Court" 5he
standard of substantial e.idence is satised when there is reasonable -round to belie.e
that a person is responsible for the misconduct complained of! e.en if such e.idence
mi-ht not be o.erwhelmin- or e.en preponderant" 7n the present case! the testimonies
of the witnesses! the statements durin- the preliminary in.esti-ation! and the ndin-s
of the PJP Crime Lab on its e6amination of the si-natures! amounted to substantial
e.idence that ade:uately supported the conclusion that petitioner Jacu was -uilty of
the acts complained of" Jacu was ri-htfully found -uilty of -ra.e misconduct!
dishonesty! and conduct preLudicial to the best interest of the ser.ice! and penaliDed
with dismissal" 0rene K. Na)u, Substituted =y =enGamin ,. Na)u, 4rvin K. Na)u, and
NeGie N. Be Sa(un vs. Civil Servi)e Commission and &'ilippine 4)onomi) Pone
Aut'ority, G.R. No. 1<77:%, November %!, %1.
2mployer>employee relationship" Penerally! in a business establishment! 7Ds are issued
to identify the holder as a bona de employee of the issuin- entity" @hile petitioner
5en- alle-ed that it was the maestros who hired the respondent wor=ers! it was his
company that issued to the respondent wor=ers 7Ds bearin- their names as employees
and 5en-*s si-nature as the employer" Gor the 1% years that the respondent wor=ers
wor=ed for 5en-! they recei.ed wa-es on a re-ular basis! in addition to their shares in
the sh cau-ht" Eore importantly! the element of control F which we ha.e ruled in a
number of cases to be a stron- indicator of the e6istence of an employer>employee
relationship F is present in this case" 5en- not only owned the tools and e:uipment! he
directed how the respondent wor=ers were to perform their Lob as chec=ers" Albert 1en(
vs. Al+redo S. &a'a(a), et al., G.R. No. 1"#79, November 17, %1.
Gorum shoppin-/ elements" By forum shoppin-! a party initiates two or more actions in
separate tribunals! -rounded on the same cause! hopin- that one or the other tribunal
would fa.orably dispose of the matter" 5he elements of forum shoppin- are9 014 identity
of parties! or at least such parties as would represent the same interest in both actions/
024 identity of ri-hts asserted and relief prayed for! the relief bein- founded on the same
facts/ and 0%4 identity of the two precedin- particulars such that any Lud-ment rendered
in the other action will! re-ardless of which party is successful! amount to res Ludicata in
the action under consideration" 7n the instant case! petitioner CAB2A>JGL merely raised
the fact of the pendency of two cases without demonstratin- any similarity in the
causes of action between the said cases and the present case" 7n the absence of such
e.idence to show that the issues in.ol.ed in these cases are the same! the Court cannot
-i.e credence to petitioner*s claim of forum shoppin-" Central AAu)arera Be =ais
4mployees ?nion6N8L, represented by its &resident, &ablito Sa(uran vs. Central
AAu)arera Be =ais, 0n)., represented by its &resident, Antonio Steven L. C'an, G.R. No.
1<"":, November 17, %1.
7lle-al stri=e" Ander Article 2(; 0a4 of the Labor Code! as amended! a stri=e that is
underta=en despite the issuance by the Secretary of Labor of an assumption order
andQor certication is ille-al" So is a declaration of a stri=e durin- the pendency of cases
in.ol.in- the same -rounds for the stri=e" 7n the present case! there is no dispute that
when respondents conducted their mass actions on April % to (! 2000! the proceedin-s
before the Secretary of Labor were still pendin- as both parties led motions for
reconsideration of the Earch 2;! 2000 Nrder" Clearly! respondents =nowin-ly .iolated
the aforesaid pro.ision by holdin- a stri=e in the -uise of mass demonstration" Solid
=ank Corp. 4rnesto ?. Gamier, et al. and Solid =ank Corp., et al. vs. Solid =ank ?nion
and its Bismissed DE)ers and ,embers, et al. G.R. No. 1:#9" and G.R. No. 1:#9"1,
November 1:, %1.
7lle-al stri=e/ proof of ille-al acts" 5o Lustify termination of a union member who
participated in an ille-al stri=e! there must be proof that he or she committed ille-al
acts durin- a stri=e" Substantial e.idence a.ailable under the attendant circumstances!
which may Lustify the imposition of the penalty of dismissal! may suCce" Petitioners
ha.e not adduced e.idence on such ille-al acts committed by each of the indi.idual
respondents who are union members" 5he dismissal of respondent>union members are
therefore unLustied in the absence of a clear showin- that they committed specic
ille-al acts durin- the mass actions and concerted wor= boycott" Solid =ank Corp.
4rnesto ?. Gamier, et al. and Solid =ank Corp., et al. vs. Solid =ank ?nion and its
Bismissed DE)ers and ,embers, et al. G.R. No. 1:#9" and G.R. No. 1:#9"1,
November 1:, %1.
7lle-al dismissal/ bac=wa-es" 5he award of bac=wa-es is a le-al conse:uence of a
ndin- of ille-al dismissal" Kowe.er! assumin- that respondent>union members ha.e
indeed reported bac= to wor= at the end of the concerted mass actions but were soon
terminated by petitioners who found their e6planation unsatisfactory! they are not
entitled to bac=wa-es in .iew of the ille-ality of the said stri=e" Ander the
circumstances! respondents* reinstatement without bac=wa-es suCces for the
appropriate relief" Solid =ank Corp. 4rnesto ?. Gamier, et al. and Solid =ank Corp., et al.
vs. Solid =ank ?nion and its Bismissed DE)ers and ,embers, et al. G.R. No. 1:#9"
and G.R. No. 1:#9"1, November 1:, %1.
7lle-al dismissal/ lac= of substanti.e due process" 5he dismissal of an employee! which
the employer must .alidate! has a two>fold re:uirement9 one is substanti.e! the other is
procedural" Jot only must the dismissal be for a Lust or an authoriDed cause! as pro.ided
by law/ the rudimentary re:uirements of due process F the opportunity to be heard and
to defend oneself F must be obser.ed as well" 5he employer has the burden of pro.in-
that the dismissal was for a Lust cause/ failure to show this! as in the present case!
would necessarily mean that the dismissal was unLustied and! therefore! ille-al" 5he
respondent wor=er*s alle-ation that 5en- summarily dismissed them on suspicion that
they were not reportin- to him the correct .olume of the sh cau-ht in each shin-
.oya-e was ne.er denied by 5en-" Ansubstantiated suspicion is not a Lust cause to
terminate one*s employment under Article 2+2 of the Labor Code" Albert 1en( vs.
Al+redo S. &a'a(a), et al., G.R. No. 1"#79, November 17, %1.
7lle-al dismissal/ separation pay in lieu of reinstatement" Since reinstatement is no
lon-er possible -i.en the lapse of considerable time from the occurrence of the stri=e!
not to mention the fact that Solidban= had lon- ceased its ban=in- operations! the
award of separation pay of one 014 month salary for each year of ser.ice! in lieu of
reinstatement! is in order" Solid Ban= Corp" 4rnesto ?. Gamier, et al. and Solid =ank
Corp., et al. vs. Solid =ank ?nion and its Bismissed DE)ers and ,embers, et al. G.R. No.
1:#9" and G.R. No. 1:#9"1, November 1:, %1.
7llness/ when deemed pre>e6istin- and not compensable" Petitioner*s illness already
e6isted when he commenced his fourth contract of employment with respondents!
hence! not compensable" Pi.en that the employment of a seafarer is -o.erned by the
contract he si-ns e.ery time he is rehired and his employment is terminated when his
contract e6pires! petitioner*s illness durin- his pre.ious contract with respondents is
deemed pre>e6istin- durin- his subse:uent contract" 5hat petitioner was subse:uently
rehired by respondents despite =nowled-e of his seiDure attac=s does not ma=e the
latter a -uarantor of his health" Jerry E" Grancisco! .s" Bahia Shippin- Ser.ices! 7nc"
andQor Cynthia C" EendoDa! and Gred Nlsen Cruise Lines! Ltd"! P"&" Jo" 1B0';'!
Jo.ember 22! 2010 "
7ndirect employer/ solidary liability" 5he fact that there is no actual and direct employer>
employee relationship between petitioner and respondents does not absol.e the former
from liability for the latter*s monetary claims" @hen petitioner contracted DJL
Security*s ser.ices! petitioner became an indirect employer of respondent security
-uards! pursuant to Article 10$ of the Labor Code" 5hus! after the contractor DJL
Security failed to pay respondents the correct wa-es and other monetary benets!
petitioner! as principal! became Lointly and se.erally liable! as pro.ided in Articles 10(
and 10B of the Labor Code" 7t should be understood! thou-h! that the solidary liability of
petitioner does not preclude the application of Article 121$ of the Ci.il Code on the ri-ht
of reimbursement from its co>debtor" Government Servi)e 0nsuran)e System vs.
National Labor Relations Commission 3NLRC7, Bionisio =anlasan, et al., G.R. No. 1<9:,
November 17, %1.
7ndirect employer/ solidary liability/ co.era-e" Petitioner*s liability as indirect employer
co.ers the payment of respondents* salary di8erential and 1%th month pay durin- the
time they wor=ed for petitioner" Petitioner*s liability! howe.er! cannot e6tend to the
payment of separation pay" An order to pay separation pay is in.ested with a puniti.e
character! such that an indirect employer should not be made liable without a ndin-
that it had conspired in the ille-al dismissal of the employees"Government Servi)e
0nsuran)e System vs. National Labor Relations Commission 3NLRC7, Bionisio =anlasan,
et al., G.R. No. 1<9:, November 17, %1.
7neCciency of employee/ condonation by employer" @hile it is ac=nowled-ed that
petitioner Pre-orio*s ser.ice record shows that his performance as a security -uard was
below par! respondent Pulf Pacic ne.er issued any memo citin- him for the alle-ed
repeated errors! ineCciency! and poor performance while on duty! and instead
continued to assi-n him to .arious posts" 5his amounts to condonation by Pulf Pacic of
whate.er infractions Pre-orio may ha.e committed" 2.en assumin- the reasons for
relie.in- Pre-orio of his position were true! it was incumbent upon Pulf Pacic to be
.i-ilant in its compliance with labor laws" Bebina G. SalvaloAa vs. National Labor
Relations Commission, Gul+ &a)i.) Se)urity A(en)y, 0n)., and An(el HuiAon, G.R. No.
1<%<", November %9, %1.
Jurisdiction/ Secretary of Labor" 7t is well>settled that the Secretary of Labor! in the
e6ercise of his power to assume Lurisdiction o.er a labor dispute under Art" 2(% 0-4 #11)
of the Labor Code! may resol.e all issues in.ol.ed in the contro.ersy includin- the
award of wa-e increases and benets" 7n the instant case! the fact that the award was
hi-her than that which was purportedly a-reed upon in the ENA between mana-ement
and the labor union is of no moment because the Secretary! in resol.in- the CBA
deadloc=! is not limited to considerin- the ENA as basis in computin- the wa-e
increases" Ke could! as he did! consider the nancial documents submitted by
respondent as well as the parties* bar-ainin- history and respondent*s nancial outloo=
and impro.ements as stated in its website" Cirtek 4mployees Labor ?nion68ederation o+
8ree >orkers vs. Cirtek 4le)troni)s, 0n)., G.R. No. 1#:1:, November 1:, %1.
Jurisdiction/ di.estment" 7t bears notin- that the lin- and submission of the ENA did
not ha.e the e8ect of di.estin- the Secretary of his Lurisdiction! or of automatically
disposin- the contro.ersy" 5hus! neither should the pro.isions of the ENA restrict the
Secretary*s leeway in decidin- the matters before him" Cirtek 4mployees Labor ?nion6
8ederation o+ 8ree >orkers vs. Cirtek 4le)troni)s, 0n).,G.R. No. 1#:1:, November 1:,
%1.
Labor>only contractin-" Section ' of the DN Jo" 1+>02! which implements Article 10( of
the Labor Code! pro.ides that! 3W labor>only contractin- shall refer to an arran-ement
where the contractor or subcontractor merely recruits! supplies or places wor=ers to
perform a Lob! wor= or ser.ice for a principal! and any of the followin- elements are
present9 0i45he contractor or subcontractor does not ha.e substantial capital or
in.estment which relates to the Lob! wor= or ser.ice to be performed and the employees
recruited! supplied or placed by such contractor or subcontractor are performin-
acti.ities which are directly related to the main business of the principal/ or 0ii45he
contractor does not e6ercise the ri-ht to control o.er the performance of the wor= of the
contractual employee" 7n the present case! 5en- admitted that he solely pro.ided the
capital and e:uipment! while the maestros supplied the wor=ers" Also! the power of
control o.er the respondent wor=ers was lod-ed not with the maestros but with 5en-"
Eoreo.er! they performed tas=s that were necessary and desirable in 5en-*s shin-
business" 5a=en to-ether! these incidents conrm the e6istence of a labor>only
contractin- which is prohibited in our Lurisdiction" Accordin-ly! a ndin- that the
maestros are labor>only contractors is e:ui.alent to a ndin- that an employer>
employee relationship e6ists between 5en- and the respondent wor=ers" Albert 1en( vs.
Al+redo S. &a'a(a), et al., G.R. No. 1"#79, November 17, %1
Eootness/ amicable settlement as nal satisfaction of Lud-ment award" 5he
1conditional3 settlement of the Lud-ment award insofar as it operates as a nal
satisfaction thereof renders the case moot and academic" 7n the case at bar! the
settlement -rants the petitioner the lu6ury of ha.in- other remedies a.ailable to it such
as its petition for certiorari pendin- before the appellate court! and an e.entual appeal
to the Court" Nn the other hand! respondent employee could no lon-er pursue other
claims! includin- interests that may accrue durin- the pendency of the case" 5he Labor
Arbiter and the appellate court may not thus be faulted for interpretin- petitioner*s
1conditional settlement3 to be tantamount to an amicable settlement of the case
resultin- in the mootness of the petition for certiorari" Career &'ilippines S'ip
,ana(ement, 0n)., vs. Geronimo ,adGus,G.R. No. 1<"1:<, November %%, %1.
Eotion for reconsideration" As amended! Article 2(% is now Article 2(2>A in which the
word 1unappealable3 from Article 2(% has been deleted" 5hus! althou-h Art" 2(2>A
ma=es the .oluntary arbitration award nal and e6ecutory after ten calendar days from
receipt of the copy of the award or decision by the parties! the decision may still be
reconsidered by the Moluntary Arbitrator on the basis of a motion for reconsideration
duly led durin- that period" 5he absence of a cate-orical lan-ua-e in Article 2(2>A
does not preclude the lin- of a motion for reconsideration of the MA*s decision within
the 10>day period" 5herefore! petitioners* alle-ation that the MA*s decision had become
nal and e6ecutory by the time the respondent wor=ers led an appeal with the CA fails"
7t is conse:uently ruled that the respondent wor=ers seasonably led a motion for
reconsideration of the MA*s Lud-ment! and the MA erred in denyin- the motion" Albert
1en( vs. Al+redo S. &a'a(a), et al.,G.R. No. 1"#79, November 17, %1.
N8>detail or Gloatin- status" 5emporary 1o8>detail3 or 1Hoatin- status3 is the period of
time when security -uards are in between assi-nments or when they are made to wait
after bein- relie.ed from a pre.ious post" 7t ta=es place when the security a-ency*s
clients decide not to renew their contracts with the a-ency" 7t also happens in instances
where contracts for security ser.ices stipulate that the client may re:uest the a-ency
for the replacement of the -uards assi-ned to it! such that the replaced security -uard
may be placed on temporary 1o8>detail3 if there are no a.ailable posts under the
a-ency*s e6istin- contracts" 7t does not constitute a dismissal! as the assi-nments
primarily depend on the contracts entered into by the security a-encies with third
parties! so lon- as such status does not continue beyond a reasonable time period"
=ebina G. SalvaloAa vs. National Labor Relations Commission, Gul+ &a)i.) Se)urity
A(en)y, 0n)., and An(el HuiAon, G.R. No. 1<%<", November %9, %1"
N8>detail or Gloatin- status/ when deemed constructi.e dismissal" @hen a 1Hoatin-
status3 lasts for more than si6 0(4 months! the employee may be considered to ha.e
been constructi.ely dismissed" 7n the present case! of the three instances when
petitioner Pre-orio was temporarily 1o8>detailed!3 the last two already ripened into
constructi.e dismissal" Althou-h it could ha.e been diCcult for respondent Pulf Pacic
to post Pre-orio -i.en his a-e and his ser.ice record! still the a-ency should not ha.e
allowed him to wait indenitely for an assi-nment if its clients were in truth less li=ely to
accept him" 7f! indeed! Pre-orio was undesirable as an employee! Pulf Pacic could
ha.e dismissed him for cause" 5he unreasonable len-th of time that Pre-orio was not
posted ine.itably resulted in his bein- constructi.ely dismissed from employment.
=ebina G. SalvaloAa vs. National Labor Relations Commission, Gul+ &a)i.) Se)urity
A(en)y, 0n)., and An(el HuiAon, G.R. No. 1<%<", November %9, %1.
Parol e.idence/ application in labor cases" 5he appellate court*s brushin- aside of the
1Paliwana-3 and the minutes of the meetin- because they were not .eried and
notariDed! thus .iolatin-! so the appellate court reasoned! the rules on parol e.idence!
does not lie" Li=e any other rule on e.idence! parol e.idence should not be strictly
applied in labor cases" Cirtek 4mployees Labor ?nion68ederation o+ 8ree >orkers vs.
Cirtek 4le)troni)s, 0n)., G.R. No. 1#:1:, November 1:, %1.
Petition/ ser.ice on counsel" Section 1! &ule (' in relation to Section %! &ule ;( of the
&ules of Court! clearly pro.ides that in a petition led ori-inally in the CA! the petitioner
is re:uired to ser.e a copy of the petition on the ad.erse party before its lin-" 7f the
ad.erse party appears by counsel! ser.ice shall be made on such counsel pursuant to
Section 2! &ule 1%" 5hus! in the instant case! petitioner CAB2A>JGL*s insistence that
ser.ice of the copy of the CA petition should ha.e been made to it! rather than to its
counsel! is una.ailin-" Central AAu)arera Be =ais 4mployees ?nion6N8L, represented by
its &resident, &ablito Sa(uran vs. Central AAu)arera Be =ais, 0n)., represented by its
&resident, Antonio Steven L. C'an, G.R. No. 1<"":, November 17, %1.
&einstatement/ when not -ranted" Petitioner Pre-orio*s position paper did not pray for
reinstatement! but only sou-ht payment of money claims" Li=ewise! the strained
relations between the parties ma=e reinstatement impracticable" @hat is more! e.en
durin- the time of the LA*s decision! reinstatement was no lon-er le-ally feasible since
Pre-orio was past the a-e :ualication for a security -uard license" Section '#%%) of
&"A" ';+$! enumeratin- the :ualications for a security -uard! pro.ides that the person
should not be less than 21 nor o.er '0 years of a-e" And as pre.iously mentioned! as
early as June 1%! 2002! Pre-orio was no lon-er in possession of a .alid license" 5hus!
separation pay should be paid in lieu of reinstatement" =ebina G. SalvaloAa vs. National
Labor Relations Commission, Gul+ &a)i.) Se)urity A(en)y, 0n)., and An(el HuiAon, G.R.
No. 1<%<", November %9, %1.
&etirement laws/ liberal construction" &etirement laws are liberally construed in fa.or of
the retiree because their obLecti.e is to pro.ide for the retiree*s sustenance and!
hopefully! e.en comfort! when he no lon-er has the capability to earn a li.elihood" 5he
liberal approach aims to achie.e the humanitarian purposes of the law in order that
eCciency! security! and well>bein- of -o.ernment employees may be enhanced"
7ndeed! retirement laws are administered in fa.or of the persons intended to be
beneted! and all doubts are resol.ed in their fa.or" 7n this case! as ad.erted to abo.e!
respondent was able to establish that he has a clear le-al ri-ht to the reinstatement of
his retirement benets" Government Servi)e 0nsuran)e System vs. 8ernando &. Be
Leon, G.R. No. 1<":", November 17, %1.
&etirement benet/ entitlement" &espondent*s dis:ualication from recei.in- retirement
benets under &"A" Jo" B10 does not mean that he is dis:ualied from recei.in- any
retirement benet under any other e6istin- retirement law" Prior to &"A" Jo" +2B1!
retirin- -o.ernment employees who were not entitled to the benets under &"A" Jo" B10
had the option to retire under either of two laws9 Commonwealth Act Jo" 1+(! as
amended! or P"D" Jo" 11;(" 7n his Comment! respondent implicitly indicated his
preference to retire under P"D" Jo" 11;(! since this law pro.ides for hi-her benets"
Because respondent had complied with the re:uirements under the said law at the time
of his retirement! a fact which PS7S does not dispute! he is entitled to recei.e the
benets pro.ided under the same law" Government Servi)e 0nsuran)e System vs.
8ernando &. Be Leon, G.R. No. 1<":", November 17, %1.
Stri=e/ denition" Article 212 of the Labor Code! as amended! denes stri=e as any
temporary stoppa-e of wor= by the concerted action of employees as a result of an
industrial or labor dispute" A labor dispute includes any contro.ersy or matter
concernin- terms and conditions of employment or the association or representation of
persons in ne-otiatin-! 6in-! maintainin-! chan-in- or arran-in- the terms and
conditions of employment! re-ardless of whether or not the disputants stand in the
pro6imate relation of employers and employees" 5he term 1stri=e3 shall also include
slowdowns! mass lea.es! sitdowns! attempts to dama-e! destroy or sabota-e plant
e:uipment and facilities and similar acti.ities" 7n the instant case! about $12 employees
absented themsel.es from wor= in a concerted fashion for three continuous days"
Considerin- that these mass actions stemmed from a bar-ainin- deadloc= and an order
of assumption of Lurisdiction had already been issued by the Secretary of Labor to a.ert
an impendin- stri=e! all the elements of stri=e are e.ident in the Anion>insti-ated mass
actions" Solid =ank Corp. 4rnesto ?. Gamier, et al. and Solid =ank Corp., et al. vs. Solid
=ank ?nion and its Bismissed DE)ers and ,embers, et al. G.R. No. 1:#9" and G.R.
No. 1:#9"1, November 1:, %1.
Anfair labor practice" Gor a char-e of unfair labor practice to prosper! it must be shown
that respondent CAB*s suspension of ne-otiation with CAB2A>JGL and its act of
concludin- a CBA with CAB2LA! another union in the bar-ainin- unit! were moti.ated by
ill will! 1bad faith! or fraud! or was oppressi.e to labor! or done in a manner contrary to
morals! -ood customs! or public policyW3 Kowe.er! the facts show that CAB belie.ed
that CAB2A>JGL was no lon-er the representati.e of the wor=ers" 7t Lust wanted to
foster industrial peace by bowin- to the wishes of the o.erwhelmin- maLority of its ran=
and le wor=ers and by ne-otiatin- and concludin- in -ood faith a CBA with CAB2LA"3
Such actions of CAB are nowhere tantamount to anti>unionism! the e.il sou-ht to be
punished in cases of unfair labor practices" Central AAu)arera Be =ais 4mployees ?nion6
N8L, represented by its &resident, &ablito Sa(uran vs. Central AAu)arera Be =ais, 0n).,
represented by its &resident, Antonio Steven L. C'an, G.R. No. 1<"":, November 17,
%1.
Anfair labor practice/ burden of proof" Basic is the principle that -ood faith is presumed
and he who alle-es bad faith has the duty to pro.e the same" By imputin- bad faith to
the actuations of CAB! CAB2A>JGL has the burden to present substantial e.idence to
pro.e the alle-ation of unfair labor practice" Apparently! CAB2A>JGL refers only to the
e6ecution of the supposed CBA between CAB and CAB2LA and the re:uest to suspend
the ne-otiations! to conclude that bad faith attended CAB*s actions" 5he Court is of the
.iew that CAB2A>JGL! in simply relyin- on the said circumstances! failed to substantiate
its claim of unfair labor practice to rebut the presumption of -ood faith"Central
AAu)arera Be =ais 4mployees ?nion6N8L, represented by its &resident, &ablito Sa(uran
vs. Central AAu)arera Be =ais, 0n)., represented by its &resident, Antonio Steven L.
C'an, G.R. No. 1<"":, November 17, %1.
December 2010 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on January 2;! 2011 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines > Law
[ 5a--ed certiorari!due process! e.idence! ille-al dismissal! Lurisdiction! labor>only contractin-! loss of
trust and condence! reinstatement [
Kere are selected December 2010 rulin-s of the Supreme Court of the Philippines on
labor law and procedure9
Dismissal/ due process/ trial>type hearin- is not essential. 5he essence of due process
is an opportunity to be heard or! as applied to administrati.e proceedin-s! an
opportunity to e6plain one*s side" &ecords show that Aboc was duly notied throu-h a
letter as=in- him to e6plain why his ser.ices should not be terminated" 7n fact! he
replied to the same by submittin- a written e6planation" Ke was li=ewise duly a8orded
ample opportunity to defend himself durin- a conference conducted" Aboc*s contention
that the conference he attended cannot substitute the hearin- mandated by the Labor
Code is bereft of merit" A formal trial>type hearin- is not at all times and in all instances
essential to due process" 7t is enou-h that the parties are -i.en a fair and reasonable
opportunity to e6plain their respecti.e sides of the contro.ersy and to present
supportin- e.idence on which a fair decision can be based" Antonio A. Abo) vs.
,etropolitan =ank And 1rust Company 2 ,etropolitan =ank And 1rust Company vs.
Antonio A. Abo), G.R. Nos. 17:9%69! and G.R. No. 17"9", Be)ember 1!, %1.
Dismissal/ due process/ trial>type hearin- is not essential. 7n dismissal cases! the
essence of due process is a fair and reasonable opportunity to be heard! or as applied to
administrati.e proceedin-s! an opportunity to e6plain one*s side" A formal or trial type
hearin- is not at all times and in all instances essential" Jeither is it necessary that the
witnesses be cross>e6amined" 7n the instant case! there was a proceedin- where the
respondent was apprised of the char-es a-ainst him as well as of his ri-hts" 5hereafter!
he was notied of the formal char-es a-ainst him and was re:uired to e6plain in writin-
why he should not be dismissed for serious misconduct" A formal hearin- was
conducted and subse:uently! respondent recei.ed a Jotice of 5ermination informin-
him that after a careful e.aluation! he was found liable as char-ed and dismissed from
the ser.ice due to -ross misconduct" Clearly! respondent was a8orded ample
opportunity to air his side and defend himself" Kence! there was due
process" &'ilippine Lon( Bistan)e 1elep'one Company, vs. 4usebio ,. -onrado, G.R.
No. 1<#!"", Be)ember <, %1.
Dismissal/ due process. &espondent harps on the fact that his dismissal was
preconcei.ed because there was already a decision to terminate him e.en before he
was -i.en the show cause memorandum" Contrary to respondent*s alle-ations! he was
-i.en more than enou-h opportunity to defend himself" 5he audit committee*s
conclusion to dismiss respondent from the ser.ice was merely recommendatory" 7t was
not conclusi.e upon the petitioner company" 5his is precisely the reason why the
petitioner still conducted further in.esti-ations" 5o reiterate! respondent was properly
informed of the char-es and had e.ery opportunity to rebut the accusations and present
his .ersion" &espondent was not denied due process of law for he was ade:uately
heard as the .ery essence of due process is the opportunity to be heard" 45uitable &C0
=ank 3NoC =an)o Be Dro ?nibank, 0n).7, vs. Castor A. Bompor, G.R. Nos. 1"!%#! ;
1"!%#7, Be)ember <, %1.
Dismissal/ loss of condence/ -uidelines for application. 5he Court has set the
-uidelines for the application of the doctrine of loss of condence as follows9 0a4 Loss of
condence should not be simulated/ 0b4 7t should not be used as a subterfu-e for causes
which are improper! ille-al or unLustied/ 0c4 7t may not be arbitrarily asserted in the
face of o.erwhelmin- e.idence to the contrary/ and 0d4 7t must be -enuine! not a mere
afterthou-ht to Lustify earlier action ta=en in bad faith" 7n the case at bar! no mention
was made re-ardin- petitioner*s alle-ed loss of trust and condence in respondent"
Jeither was there any e6planation nor discussion of the alle-ed sensiti.e and delicate
position of respondent re:uirin- the utmost trust of petitioner" Because of its subLecti.e
nature! the Court has been .ery scrutiniDin- in cases of dismissal based on loss of trust
and condence" 5hus! when the breach of trust or loss of condence is not clearly
established by facts! as in the instant case! such dismissal on the -round of loss and
condence cannot be countenanced" 1'e Co)a6Cola 4/port Corporation, vs. Clarita &.
Ga)ayan, G.R. No. 19#9!!, Be)ember 1:, %1.
Dismissal/ serious misconduct/ wron-ful intent re:uired. Gor misconduct or improper
beha.ior to be a Lust cause for dismissal! 0a4 it must be serious/ 0b4 must relate to the
performance of the employee*s duties/ and 0c4 must show that the employee has
become unt to continue wor=in- for the employer" 7n the present case! the alle-ed
infractions of respondent could hardly be considered serious misconduct" 7n order to
constitute serious misconduct which will warrant the dismissal of an employee! it is not
suCcient that the act or conduct complained of has .iolated some established rules or
policies" 7t is e:ually important and re:uired that the act or conduct must ha.e been
done with wron-ful intent" Such is! howe.er! lac=in- in the instant case" 1'e Co)a6Cola
4/port Corporation, vs. Clarita &. Ga)ayan, G.R. No. 19#9!!, Be)ember 1:, %1.
Dismissal/ substantial e.idence. 5he :uantum of proof re:uired in determinin- the
le-ality of an employee*s dismissal is only substantial e.idence" 7n a similar case! the
Court held that the standard of substantial e.idence is met where the employer! as in
this case! has reasonable -round to belie.e that the employee is responsible for the
misconduct and his participation in such misconduct ma=es him unworthy of the trust
and condence demanded by his position" 7n the present case! petitioner has suCciently
established that respondent solicited! collected and recei.ed the P1!'00"00 down
payment ille-ally from the spouses Eueda" 5a=en to-ether! the petitioner has
dischar-ed its burden of establishin- the serious misconduct committed by respondent"
Such misconduct ma=es him unworthy of the trust and condence demanded by his
position" &'ilippine Lon( Bistan)e 1elep'one Company, vs. 4usebio ,. -onrado, G.R.
No. 1<#!"", Be)ember <, %1.
Dismissal/ substantial e.idence. 5he burden of proof rests on the employer to show that
the dismissal was for a Lust cause or authoriDed cause" Dismissal due to serious
misconduct and loss of trust and condence must be supported by substantial e.idence
which is that amount of rele.ant e.idence as a reasonable mind mi-ht accept as
ade:uate to support a conclusion! e.en if other minds! e:ually reasonable! mi-ht
concei.ably opine otherwise" 7n the present case! e.idence clearly shows that the acts
of Aboc in helpin- or-aniDe the credit unions and in the operations thereof constituted
serious misconduct or breach of trust and condence" Kis participation in the credit
unions is hi-hly irre-ular and clearly in conHict with Eetroban=*s business" Aboc claimed
that he was only an 1unwillin- participant3 doin- a ministerial Lob" 5he in.esti-ation!
howe.er! showed otherwise" Antonio A. Abo) vs. ,etropolitan =ank And 1rust
Company 2 ,etropolitan =ank And 1rust Company vs. Antonio A. Abo), G.R. Nos.
17:9%69! and G.R. No. 17"9", Be)ember 1!, %1.
Dismissal/ two>notice rule. 5he re:uirements of procedural due process were complied
with when petitioner sent a memo to respondent informin- him of the specic char-es
and -i.in- him opportunity to air his side" Subse:uently! in a letter! respondent was
informed that on the basis of the results of the in.esti-ation conducted! his written
e6planation! the written e6planation of other employees as well as the audit report! the
mana-ement has decided to terminate him" 5he two>notice re:uirement! which
includes a written notice of the cause of dismissal to a8ord the employee ample
opportunity to be heard and defend himself! and written notice of the decision to
terminate him which states the reasons therefor! was thus complied with" 45uitable &C0
=ank 3NoC =an)o Be Dro ?nibank, 0n).7, vs. Castor A. Bompor, G.R. Nos. 1"!%#! ;
1"!%#7, Be)ember <, %1.
Dismissal/ willful disobedience. 5o Lustify willful disobedience or insubordination as a
.alid -round for termination! the employee*s assailed conduct must ha.e been willful or
characteriDed by a wron-ful or per.erse attitude and the order .iolated must ha.e been
reasonable! lawful! made =nown to the employee! and must pertain to the duties which
he had been en-a-ed to dischar-e" 7n the case at bar! while petitioner*s manual of
procedures does not absolutely prohibit the ne-otiation or acceptance of second>
endorsed chec=s for deposits! it e6pressly disallows the acceptance of chec=s endorsed
by corporations! societies! rms! etc" and chec=s with unusual endorsements" As shown
by the records! this e6plicit policy was trans-ressed by respondent intentionally and
willfully" &espondent was instructed by mana-ement to stop the trans-ression but he
did not stop" &espondent admittedly disobeyed not only his superiors* directi.es but
also simple ban= rules" 45uitable &C0 =ank 3NoC =an)o Be Dro ?nibank, 0n).7, vs. Castor
A. Bompor, G.R. Nos. 1"!%#! ; 1"!%#7, Be)ember <, %1.
Dismissal/ willful breach of trust. @illful breach of trust re:uires that the loss of
condence must not be simulated/ it should not be used as a subterfu-e for causes
which are ille-al! improper or unLustied/ it may not be arbitrarily asserted in the face of
o.erwhelmin- e.idence to the contrary/ it must be -enuine! not a mere afterthou-ht to
Lustify earlier action ta=en in bad faith/ and! the employee in.ol.ed holds a position of
trust and condence" &espondent! as ban= mana-er! has the duty to ensure that ban=
rules are strictly complied with to ser.e the best interest of the ban= as he holds a
position of trust and condence" Any ne-li-ence in the e6ercise of his responsibilities
can be suCcient -round for loss of trust and condence" As held in one case! the mere
e6istence of a basis for belie.in- that a mana-erial employee has breached the trust of
his employer would suCce for his dismissal" Proof beyond reasonable doubt is not
re:uired" 7n the case at bar! respondent*s wanton .iolation of ban= policies e:uates to
abuse of authority and! therefore! abuse of the trust reposed in him" Such is enou-h for
his dismissal from ser.ice" 45uitable &C0 =ank 3NoC =an)o Be Dro ?nibank, 0n).7, vs.
Castor A. Bompor, G.R. Nos. 1"!%#! ; 1"!%#7, Be)ember <, %1.
7lle-al dismissal/ reinstatement and bac=wa-es. Ander Article 2$B of the Labor Code! an
employee who is unLustly dismissed from wor= shall be entitled to reinstatement without
loss of seniority ri-hts and other pri.ile-es and to his full bac=wa-es! inclusi.e of
allowances! and to his other benets or their monetary e:ui.alent computed from the
time his compensation was withheld from him up to the time of his actual
reinstatement" &espondent is entitled to such award" 1'e Co)a6Cola 4/port Corporation,
vs. Clarita &. Ga)ayan, G.R. No. 19#9!!, Be)ember 1:, %1.
Job contractin-/ conditions. Permissible Lob contractin- or subcontractin- refers to an
arran-ement whereby a principal a-rees to farm out to the contractor the performance
of a specic wor=! or ser.ice within a predetermined period! re-ardless of whether such
wor=! or ser.ice is to be performed within or outside the premises of the principal" 5hus!
the followin- conditions must concur9 0a4 5he contractor carries on a distinct and
independent business and underta=es the contract wor= on his account under his own
responsibility accordin- to his own manner and method! free from the control and
direction of his principal in all matters connected with the performance of his wor=
e6cept as to the results thereof/ 0b4 5he contractor has substantial capital or
in.estment/ and 0c4 5he a-reement between the principal and the contractor assures
the contractual employees* entitlement to all labor and occupational safety and health
standards! free e6ercise of the ri-ht to self>or-aniDation! security of tenure! and social
welfare benets" 7n the case at bar! BES7 is en-a-ed in labor>only contractin- for LSC"
Girst! petitioners wor=ed at LSC*s premises! and nowhere else" 5here was no e.idence
that BES7 e6ercised control o.er them" Second! there is no proof that BES7 had
substantial capital" 5he e:uipment used by BES7 was merely rented from LSC" 5hird!
petitioners performed acti.ities which were directly related to the main business of LSC"
Lastly! BES7 had no other client e6cept for LSC" 4mmanuel =abas, Banilo 1. =ana(,
Arturo @. @illarin, Sr., 4dCin $avier, Sandi =ermeo, Re/ Allesa, ,a/imo Soriano, $r.,
Arsenio 4stor5ue, And 8eli/berto AnaGao, vs. LorenAo S'ippin( Corporation, G.R. No.
1<"#1, Be)ember 1:, %1.
Jurisdiction of Supreme Court/ errors of fact/ e6ceptions. 5he Court has stressed that its
Lurisdiction in a petition for re.iew on certiorari under &ule ;' of the &ules of Court is
limited to re.iewin- only errors of law! not of fact! unless the ndin-s of fact complained
of are de.oid of support by the e.idence on record! or the assailed Lud-ment is based
on the misapprehension of facts" 7n pre.ious rulin-s! the Court has declared that when
there is enou-h basis on which a proper e.aluation of the merits can be made! it may
dispense with the time>consumin- procedure in order to pre.ent further delays in the
disposition of the case" Kowe.er! in the case at bar! based on the nature of the two
remainin- issues which in.ol.e factual issues! and -i.en the inade:uacy of the records!
pleadin-s! and other e.idence a.ailable before the Court to properly resol.e those
:uestions! it is constrained to refrain from passin- upon them" Sout' Cotabato
Communi)ations Corporation and Gauvain $. =enAonan vs. -on. &atri)ia A. Sto. 1omas,
Se)retary D+ Labor And 4mployment, Rolando 8abri(ar, ,erlyn @elarde, @in)e Lambo),
8elipe Galindo, Leonardo ,i(uel, $ulius Rubin, 4del Roderos, ,erlyn Coliao And 4d(ar
$opson, G.R. No. 17!!%", Be)ember 1:, %1.
Labor>only contractin- and Lob contractin-/ how determined. 5he character of a
business! that is! whether as labor>only contractor or as Lob contractor! should be
determined in terms of the criteria set by statute" 7n one case the Court has e6plained
that despite the fact that the ser.ice contracts contain stipulations which are earmar=s
of independent contractorship! they do not ma=e it le-ally so" 5he lan-ua-e of a
contract is neither determinati.e nor conclusi.e of the relationship between the parties"
5he parties cannot dictate! by a declaration in a contract! the character of a business"
5hus! in distin-uishin- between the prohibited labor>only contractin- and permissible
Lob contractin-! the totality of the facts and the surroundin- circumstances of the case
are to be considered" 4mmanuel =abas, Banilo 1. =ana(, Arturo @. @illarin, Sr., 4dCin
$avier, Sandi =ermeo, Re/ Allesa, ,a/imo Soriano, $r., Arsenio 4stor5ue, And 8eli/berto
AnaGao, vs. LorenAo S'ippin( Corporation,G.R. No. 1<"#1, Be)ember 1:, %1.
Labor>only contractin-/ elements. Labor>only contractin-! a prohibited act! is an
arran-ement where the contractor or subcontractor merely recruits! supplies! or places
wor=ers to perform a Lob! wor=! or ser.ice for a principal" 7n labor>only contractin-! the
followin- elements are present9 0a4 the contractor or subcontractor does not ha.e
substantial capital or in.estment to actually perform the Lob! wor=! or ser.ice under its
own account and responsibility/ and 0b4 the employees recruited! supplied! or placed by
such contractor or subcontractor perform acti.ities which are directly related to the
main business of the principal" 4mmanuel =abas, Banilo 1. =ana(, Arturo @. @illarin, Sr.,
4dCin $avier, Sandi =ermeo, Re/ Allesa, ,a/imo Soriano, $r., Arsenio 4stor5ue, And
8eli/berto AnaGao, vs. LorenAo S'ippin( Corporation, G.R. No. 1<"#1, Be)ember 1:,
%1.
Labor>only contractin-/ wor=ers are re-ular employees of principal. 7ndubitably! BES7
can only be classied as a labor>only contractor" Conse:uently! the wor=ers that BES7
supplied to its principal LSC became re-ular employees of the latter" Ka.in- -ained
re-ular status! petitioners were entitled to security of tenure and could only be
dismissed for Lust or authoriDed causes and after they had been accorded due process"
5he termination of LSC*s A-reement with BES7 cannot be considered a Lust or an
authoriDed cause for petitioners* dismissal" 4mmanuel =abas, Banilo 1. =ana(, Arturo @.
@illarin, Sr., 4dCin $avier, Sandi =ermeo, Re/ Allesa, ,a/imo Soriano, $r., Arsenio
4stor5ue, And 8eli/berto AnaGao, vs. LorenAo S'ippin( Corporation, G.R. No. 1<"#1,
Be)ember 1:, %1.
Payroll reinstatement/ e8ect of re.ersal on appeal. Since Eetroban= chose payroll
reinstatement for Aboc! he then became a reinstated re-ular employee" 5his means
that he was restored to his pre.ious position as a re-ular employee without loss of
seniority ri-hts and other pri.ile-es appurtenant thereto" Kis payroll reinstatement put
him on e:ual footin- with the other re-ular employees insofar as entitlement to the
benets -i.en under the Collecti.e Bar-ainin- A-reement is concerned" 5he fact that
the decision of the LA was re.ersed on appeal has no controllin- si-nicance" 5he rule is
that e.en if the order of reinstatement of the LA is re.ersed on appeal! it is obli-atory
on the part of the employer to reinstate and pay the wa-es of the dismissed employee
durin- the period of appeal until nal re.ersal by the hi-her court" Antonio A. Abo) vs.
,etropolitan =ank And 1rust Company 2 ,etropolitan =ank And 1rust Company vs.
Antonio A. Abo), G.R. Nos. 17:9%69! and G.R. No. 17"9", Be)ember 1!, %1.
Petition for certiorari/ period for lin-/ retroacti.e application of amendments. By .irtue
of the latest amendment of Section ;! &ule (' of the 1BB$ &ules of Ci.il Procedure
introduced by Circular Jo" '(>2000! the (0>day period to le a petition for certiorari
should be rec=oned from the date of receipt of the notice of the denial of the motion for
reconsideration or new trial! if one was led" Bein- a curati.e statute! Circular Jo" '(>
2000 has been applied by Court retroacti.ely in a number of cases" Pi.en the abo.e!
respondent had a fresh (0>day period from the date she recei.ed a copy of the JL&C
&esolution denyin- her motion for reconsideration within which to le the petition for
certiorari" 5hus! the Court ruled that respondent seasonably led the petition within the
re-lementary period pro.ided" 1'e Co)a6Cola 4/port Corporation, vs. Clarita &.
Ga)ayan, G.R. No. 19#9!!, Be)ember 1:, %1.
&e-istration as independent contractor/ e8ect of. 5he CA erred in considerin- BES7*s
Certicate of &e-istration as suCcient proof that it is an independent contractor" 7n the
case of San Ei-uel Corporation ." Micente B" Semillano! et" al"! the Court has held that a
Certicate of &e-istration issued by the Department of Labor and 2mployment is not
conclusi.e e.idence of such status" 5he fact of re-istration simply pre.ents the le-al
presumption of bein- a mere labor>only contractor from arisin-" 4mmanuel =abas,
Banilo 1. =ana(, Arturo @. @illarin, Sr., 4dCin $avier, Sandi =ermeo, Re/ Allesa, ,a/imo
Soriano, $r., Arsenio 4stor5ue, And 8eli/berto AnaGao, vs. LorenAo S'ippin(
Corporation,G.R. No. 1<"#1, Be)ember 1:, %1.
&einstatement/ immediately e6ecutory pendin- appeal. Ander Article 22% of the Labor
Code! the decision of the Labor Arbiter reinstatin- a dismissed or separated employee!
insofar as the reinstatement aspect is concerned! shall be immediately e6ecutory
pendin- appeal" 5he employee shall either be admitted bac= to wor= under the same
terms and conditions pre.ailin- prior to his dismissal or separation or! at the option of
the employer! merely reinstated in the payroll" 5he postin- of a bond by the employer
shall not stay the e6ecution for reinstatement pro.ided herein" 7n the case at bench! it
cannot be denied that Eetroban= opted to reinstate Aboc in its payroll"Antonio A. Abo)
vs. ,etropolitan =ank And 1rust Company 2 ,etropolitan =ank And 1rust Company vs.
Antonio A. Abo), G.R. Nos. 17:9%69! and G.R. No. 17"9", Be)ember 1!, %1.
Separation pay as a measure of social Lustice/ when awarded. 7n se.eral instances the
Court has awarded separation pay as a measure of social Lustice" Kowe.er! the matter
has been claried in PLD5 Co" ." JL&C where the Court cate-orically declared that
separation pay shall be allowed as a measure of social Lustice only in those instances
where the employee is .alidly dismissed for cause other than serious misconduct" 7n
another case! the Court ruled that in addition to serious misconduct! separation pay
should not be conceded to an employee who was dismissed based on willful
disobedience" 7n the case at bar! it was established that the infractions committed by
the respondent constituted serious misconduct or willful disobedience resultin- to loss
of trust and condence" Clearly therefore! e.en based on e:uity and social Lustice!
respondent does not deser.e the award of separation pay" 45uitable &C0 =ank 3NoC
=an)o Be Dro ?nibank, 0n).7, vs. Castor A. Bompor, G.R. Nos. 1"!%#! ; 1"!%#7,
Be)ember <, %1.
5ermination/ -rounds. Ander the re:uirement of substantial due process! the -rounds
for termination of employment must be based on Lust or authoriDed causes" Article 2+2
of the Labor Code enumerates the Lust causes for the termination of employment! thus9
0a4 Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representati.e in connection with his wor=/ 0b4 Pross and habitual
ne-lect by the employee of his duties/ 0c4 Graud or willful breach by the employee of
the trust reposed in him by his employer or duly authoriDed representati.e/ 0d4
Commission of a crime or o8ense by the employee a-ainst the person of his employer
or any immediate member of his family or his duly authoriDed representati.e/ and 0e4
Nther causes analo-ous to the fore-oin-" 1'e Co)a6Cola 4/port Corporation, vs. Clarita
&. Ga)ayan, G.R. No. 19#9!!, Be)ember 1:, %1.
Merication and certication/ e8ect of failure to si-n. A petition satises the formal
re:uirements only with re-ard to those who si-ned the petition! but not the co>
petitioners who did not si-n nor authoriDe the other petitioners to si-n it on their behalf"
7n the case at bar! only se.en 0$4 of the nine petitioners si-ned the .erication and
certication a-ainst forum shoppin-" 5hus! the other petitioners who did not si-n cannot
be reco-niDed as petitioners and ha.e no le-al standin- before the Court" 5he petition
should be dismissed outri-ht with respect to such non>conformin-
petitioners" 4mmanuel =abas, Banilo 1. =ana(, Arturo @. @illarin, Sr., 4dCin $avier, Sandi
=ermeo, Re/ Allesa, ,a/imo Soriano, $r., Arsenio 4stor5ue, And 8eli/berto AnaGao, vs.
LorenAo S'ippin( Corporation,G.R. No. 1<"#1, Be)ember 1:, %1.
Merication and certication/ 1substantial compliance3 rule. 5he re:uirement of the
certication of non>forum shoppin- is rooted in the principle that a party>liti-ant shall
not be allowed to pursue simultaneous remedies in di8erent fora" Kowe.er! the Court
has rela6ed the rule under Lustiable circumstances! considerin- that! althou-h it is
obli-atory! it is not Lurisdictional" Jot bein- Lurisdictional! it can be rela6ed under the
rule of substantial compliance" 7n the case at bar! the Court holds that there has been
substantial compliance on the petitioners* part in consonance with our rulin- in one
case that the President of a petitioner>corporation is in a position to .erify the
truthfulness and correctness of the alle-ations in the petition" Petitioner BenDonan
clearly satises the aforementioned Lurisprudential re:uirement because he is the
President of petitioner>corporation" Eoreo.er! he is also named as co>respondent of
petitioner>corporation in the labor case which is the subLect matter of the special ci.il
action" Sout' Cotabato Communi)ations Corporation and Gauvain $. =enAonan vs.
-on. &atri)ia A. Sto. 1omas, Se)retary D+ Labor And 4mployment, Rolando 8abri(ar,
,erlyn @elarde, @in)e Lambo), 8elipe Galindo, Leonardo ,i(uel, $ulius Rubin, 4del
Roderos, ,erlyn Coliao And 4d(ar $opson, G.R. No. 17!!%", Be)ember 1:, %1.
Merication and certication/ who can si-n for the company without need of board
resolution" 7n pre.ious cases! the Court has held that the followin- can si-n the
.erication and certication a-ainst forum shoppin- without need of a board resolution9
014 the Chairperson of the Board of Directors! 024 the President of a corporation! 0%4 the
Peneral Eana-er or Actin- Peneral Eana-er! 0;4 Personnel NCcer! and 0'4 an
2mployment Specialist in a labor case" @hile the abo.e cases do not pro.ide a complete
listin- of authoriDed si-natories! the determination of the suCciency of the authority
was done on a case to case basis" 7n the fore-oin- cases the authority of said corporate
representati.es to si-n the .erication or certicate is Lustied in their bein- in a
position to .erify the truthfulness and correctness of the alle-ations in the petition"
Kowe.er! the better procedure is still to append a board resolution to the complaint or
petition to ob.iate :uestions re-ardin- the authority of the si-natory of the .erication
and certication" Sout' Cotabato Communi)ations Corporation and Gauvain $. =enAonan
vs. -on. &atri)ia A. Sto. 1omas, Se)retary D+ Labor And 4mployment, Rolando 8abri(ar,
,erlyn @elarde, @in)e Lambo), 8elipe Galindo, Leonardo ,i(uel, $ulius Rubin, 4del
Roderos, ,erlyn Coliao And 4d(ar $opson, G.R. No. 17!!%", Be)ember 1:, %1.
January 2011 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Gebruary 1+! 2011 by Leslie C" Dy [ Posted in Labor Law [ 5a--ed bac=wa-es! compensable
illness! complaint!constructi.e dismissal! due process! employee benets! employer>employee
relationship! ille-al dismissal! ille-al recruitment! Lurisdiction! JL&C [
Kere are selected January 2011 rulin-s of the Supreme Court of the Philippines on labor
law and procedure9
Apprenticeship a-reement/ .alidity" 5he apprenticeship a-reements did not indicate the
trade or occupation in which the apprentice would be trained/ neither was the
apprenticeship pro-ram appro.ed by the 5echnical 2ducation and S=ills De.elopment
Authority 052SDA4" 5hese were defecti.e as they were e6ecuted in .iolation of the law
and the rules" Eoreo.er! with the e6piration of the rst a-reement and the retention of
the employees! the employer! to all intents and purposes! reco-niDed the completion of
their trainin- and their ac:uisition of a re-ular employee status" 5o foist upon them the
second apprenticeship a-reement for a second s=ill which was not e.en mentioned in
the a-reement itself! is a .iolation of the Labor Code*s implementin- rules and is an act
manifestly unfair to the employees" Atlanta 0ndustries, 0n). and2or Robert C'an vs.
Aprilito R. Sebolino, et al., G.R. No. 1<7!%, $anuary %", %11.
Complaint/ reinstatement" Petitioners :uestion the order to reinstate respondents to
their former positions! considerin- that the issue of reinstatement was ne.er brou-ht up
before the Court of Appeals and respondents ne.er :uestioned the award of separation
pay to them" Section 2 0c4! &ule $ of the &ules of Court pro.ides that a pleadin- shall
specify the relief sou-ht! but may add a -eneral prayer for such further or other reliefs
as may be deemed Lust and e:uitable" Ander this rule! a court can -rant the relief
warranted by the alle-ation and the e.idence e.en if it is not specically sou-ht by the
inLured party/ the inclusion of a -eneral prayer may Lustify the -rant of a remedy
di8erent from or in addition to the specic remedy sou-ht! if the facts alle-ed in the
complaint and the e.idence introduced so warrant" 5he prayer in the complaint for other
reliefs e:uitable and Lust in the premises Lusties the -rant of a relief not otherwise
specically prayed for" 5herefore! the court may -rant relief warranted by the
alle-ations and the proof e.en if no such relief is prayed for" 7n the instant case! aside
from their specic prayer for reinstatement! respondents! in their separate complaints!
prayed for such reliefs which are deemed Lust and e:uitable" &rin)e 1ransport, 0n). and
,r. Renato Claros vs. Biosdado Gar)ia, et al., G.R. No. 1"7%#1, $anuary 1%, %11.
Collection of accrued wa-es/ two>fold test" After the Labor Arbiter*s decision is re.ersed
by a hi-her tribunal! the employee may be barred from collectin- the accrued wa-es! if
it is shown that the delay in enforcin- the reinstatement pendin- appeal was without
fault on the part of the employer" 5he two>fold test in determinin- whether an
employee is barred from reco.erin- his accrued wa-es re:uires that X 014 there must
be actual delay or that the order of reinstatement pendin- appeal was not e6ecuted
prior to its re.ersal/ and 024 the delay must not be due to the employer*s unLustied act
or omission" 7f the delay is due to the employer*s unLustied refusal! the employer may
still be re:uired to pay the salaries notwithstandin- the re.ersal of the Labor Arbiter*s
Decision" So)ial Se)urity System vs. 4+ren Capada, et al., G.R. No. 1"<:1, $anuary !1,
%11.
Disciplinary measures/ mana-ement prero-ati.e" 5he policy of suspendin- dri.ers
pendin- payment of arrears in their boundary obli-ations is reasonable" 7t is
ac=nowled-ed that an employer has free rein and enLoys a wide latitude of discretion to
re-ulate all aspects of employment! includin- the prero-ati.e to instill discipline on his
employees and to impose penalties! includin- dismissal! if warranted! upon errin-
employees" 5his is a mana-ement prero-ati.e" 7ndeed! the manner in which
mana-ement conducts its own a8airs to achie.e its purpose is within the
mana-ement*s discretion" 5he only limitation on the e6ercise of mana-ement
prero-ati.e is that the policies! rules! and re-ulations on wor=>related acti.ities of the
employees must always be fair and reasonable! and the correspondin- penalties! when
prescribed! commensurate to the o8ense in.ol.ed and to the de-ree of the
infraction" &rimo 4. Caon(, $r., et al. vs. Avelino Re(ualos, G.R. No. 17#9%<, $anuary %",
%11.
Dismissal/ constructi.e dismissal" &espondent was suspended for one year after bein-
char-ed with and found liable for A@NL" After ser.in- her suspension! respondent was
allowed to return to wor=" &espondent cannot be considered to ha.e been
constructi.ely dismissed by the petitioner durin- her period of suspension" Constructi.e
dismissal occurs when there is cessation of wor= because continued employment is
rendered impossible! unreasonable! or unli=ely as when there is a demotion in ran= or
diminution in pay or when a clear discrimination! insensibility! or disdain by an employer
becomes unbearable to the employee lea.in- the latter with no other option but to :uit"
7n this case! there was no cessation of employment relations between the parties" 7t is
unrefuted that respondent promptly resumed teachin- at the uni.ersity ri-ht after the
e6piration of the suspension period" 7n other words! respondent ne.er :uit" Kence! she
cannot claim to ha.e been left with no choice but to :uit! a crucial element in a ndin-
of constructi.e dismissal" 1'e ?niversity o+ t'e 0mma)ulate Con)eption, et al. vs. NLRC,
et al., G.R. No. 1<119", $anuary %", %11.
Dismissal/ due process" &espondent employee reported to the petitioner employer the
loss of cash which she placed inside the company loc=er" 7mmediately! petitioner
ordered that she be strip>searched by the company -uards" Kowe.er! the search on her
and her personal belon-in-s yielded nothin-" 5he petitioner also reported the matter to
the police and re:uested the Prosecutor*s NCce for an in:uest" &espondent was
constrained to spend two wee=s in Lail for failure to immediately post bail" 5he Court
ruled that petitioners failed to accord respondent substanti.e and procedural due
process" Article 2$$0b4 of the Labor Code mandates that subLect to the constitutional
ri-ht of wor=ers to security of tenure and their ri-ht to be protected a-ainst dismissal!
e6cept for Lust and authoriDed cause and without preLudice to the re:uirement of notice
under Article 2+% of the same Code! the employer shall furnish the wor=er! whose
employment is sou-ht to be terminated! a written notice containin- a statement of the
causes of termination! and shall a8ord the latter ample opportunity to be heard and to
defend himself with the assistance of a representati.e if he so desires! in accordance
with company rules and re-ulations pursuant to the -uidelines set by the Department of
Labor and 2mployment" 5he due process re:uirements under the Labor Code are
mandatory and may not be supplanted by police in.esti-ation or court proceedin-s" 5he
criminal aspect of the case is considered independent of the administrati.e aspect"
5hus! employers should not rely solely on the ndin-s of the Prosecutor*s NCce" 5hey
are mandated to conduct their own separate in.esti-ation! and to accord the employee
e.ery opportunity to defend himself" Robinsons Galleria2Robinsons Supermarket Corp.
and2or $ess ,anuel vs. 0rene R. Ran)'eA, G.R. No. 177#!7, $anuary 1#, %11.
Dismissal/ ne-lect of duty" Je-lect of duty! to be a -round for dismissal! must be both
-ross and habitual" Pross ne-li-ence connotes want of care in the performance of one*s
duties" Kabitual ne-lect implies repeated failure to perform one*s duties for a period of
time! dependin- upon the circumstances" A sin-le or isolated act of ne-li-ence does
not constitute a Lust cause for the dismissal of the employee" -ospital ,ana(ement
Servi)es M ,edi)al Center ,anila vs. -ospital ,ana(ement Servi)es, 0n). M ,edi)al
Center ,anila 4mployees Asso)iation6A8>., G.R. No. 17"%<7, $anuary !1, %11.
Dismissal/ ne-li-ence in patient mana-ement" Je-li-ence is dened as the failure to
e6ercise the standard of care that a reasonably prudent person would ha.e e6ercised in
a similar situation" 5he Court emphasiDes that the nature of the business of a hospital
re:uires a hi-her de-ree of caution and e6actin- standard of dili-ence in patient
mana-ement and health care as what is in.ol.ed are li.es of patients who see= ur-ent
medical assistance" An act or omission that falls short of the re:uired de-ree of care
and dili-ence amounts to serious misconduct which constitutes a suCcient -round for
dismissal" -ospital ,ana(ement Servi)es M ,edi)al Center ,anila vs. -ospital
,ana(ement Servi)es, 0n). M ,edi)al Center ,anila 4mployees Asso)iation6A8>., G.R.
No. 17"%<7, $anuary !1, %11.
2mployee benets/ compensable illness" 5he de-ree of proof re:uired under P"D" (2( is
merely substantial e.idence! which means such rele.ant e.idence as a reasonable mind
mi-ht accept as ade:uate to support a conclusion" Accordin-ly! the claimant must
show! at least by substantial e.idence that the de.elopment of the disease was brou-ht
about lar-ely by the conditions present in the nature of the Lob" @hat the law re:uires
is a reasonable wor= connection! not a direct causal relation" Ale/ander =. Gatus vs.
So)ial Se)urity System, G.R. No. 1797%:, $anuary %", %11.
2mployer>employee relationship/ Leepney dri.er" 7t is already settled that the
relationship betweenGeepney ownersQoperators and Geepney dri.ers under the boundary
system is that of employer>employee and not of lessor>lessee" 5he fact that the dri.ers
do not recei.e 6ed wa-es but only -et the amount in e6cess of the so>called
1boundary3 that they pay to the ownerQoperator is not suCcient to ne-ate the
relationship between them as employer and employee" &rimo 4. Caon(, $r., et al. vs.
Avelino Re(ualos, G.R. No. 17#9%<, $anuary %", %11.
2mployer>employee relationship/ primary element" Control o.er the performance of the
tas= of one pro.idin- ser.ice F both with respect to the means and manner! and the
results of the ser.ice F is the primary element in determinin- whether an employment
relationship e6ists" Petitioner asserts that his employer Eanulife*s control o.er him was
demonstrated 014 when it set the obLecti.es and sales tar-ets re-ardin- production!
recruitment and trainin- pro-rams/ and 024 when it prescribed the Code of Conduct for
A-ents and the Eanulife Ginancial Code of Conduct to -o.ern his acti.ities" Kowe.er!
the court ruled that all these appear to spea= of control by the insurance company o.er
its a-ents" 5here are built>in elements of control specic to an insurance a-ency!
which do not amount to the elements of control that characteriDe an employment
relationship -o.erned by the Labor Code" 5hey are! howe.er! controls aimed only at
specic results in underta=in- an insurance a-ency! and are! in fact! parameters set by
law in denin- an insurance a-ency and the attendant duties and responsibilities an
insurance a-ent must obser.e and underta=e" 5hey do not reach the le.el of control into
the means and manner of doin- an assi-ned tas= that in.ariably characteriDes an
employment relationship as dened by labor law" 5o reiterate! -uidelines indicati.e of
labor law 1control3 do not merely relate to the mutually desirable result intended by the
contractual relationship/ they must ha.e the nature of dictatin- the means and methods
to be employed in attainin- the result" Petitioner is an insurance a-ent not an
employee" Gre(orio @. 1on(ko vs. 1'e ,anu+a)turers Li+e 0nsuran)e Co. 3&'ils.7, 0n). and
Renato A. @er(el de Bios, G.R. No. 1"7"%%, $anuary %:, %11.
2mployer>employee relationship/ probationary employment" A probationary employee!
li=e a re-ular employee! enLoys security of tenure" Kowe.er! in cases of probationary
employment! aside from Lust or authoriDed causes of termination! an additional -round
is pro.ided under Article 2+1 of the Labor Code! i"e"! the probationary employee may
also be terminated for failure to :ualify as a re-ular employee in accordance with
reasonable standards made =nown by the employer to the employee at the time of the
en-a-ement" 5hus! the ser.ices of an employee who has been en-a-ed on
probationary basis may be terminated for any of the followin-9 014 a Lust or 024 an
authoriDed cause/ and 0%4 when he fails to :ualify as a re-ular employee in accordance
with reasonable standards prescribed by the employer" Robinsons Galleria2Robinsons
Supermarket Corp. and2or $ess ,anuel vs. 0rene R. Ran)'eA, G.R. No. 177#!7, $anuary
1#, %11.
2mployer>employee relationship/ re-ular employment" 5he respondent employees were
already renderin- ser.ice to the company when they were made to under-o
apprenticeship" 5he respondent were re-ular employees because they occupied
positions such as machine operator! scaleman and e6truder operator F tas=s that are
usually necessary and desirable in petitioner employer*s usual business or trade as
manufacturer of plastic buildin- materials" 5hese tas=s and their nature characteriDed
the respondents as re-ular employees under Article 2+0 of the Labor Code" 5hus! when
they were dismissed without Lust or authoriDed cause! without notice! and without the
opportunity to be heard! their dismissal was ille-al under the law" Atlanta 0ndustries, 0n).
and2or Robert C'an vs. Aprilito R. Sebolino, et al., G.R. No. 1<7!%, $anuary %", %11.
7lle-al dismissal/ strained relations" Article 2$B of the Labor Code pro.ides that an
employee who is unLustly dismissed from wor= shall be entitled to reinstatement without
loss of seniority ri-hts and other pri.ile-es! to full bac=wa-es! inclusi.e of allowances!
and to other benets or their monetary e:ui.alent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement"
Kowe.er! due to the strained relations of the parties! the payment of separation pay has
been considered an acceptable alternati.e to reinstatement! when the latter option is
no lon-er desirable or .iable" Nn the one hand! such payment liberates the employee
from what could be a hi-hly oppressi.e wor= en.ironment" Nn the other! the payment
releases the employer from the -rossly unpalatable obli-ation of maintainin- in its
employ a wor=er it could no lon-er trust" 5hus! as an ille-ally or constructi.ely
dismissed employee! respondent is entitled to9 014 either reinstatement! if .iable! or
separation pay! if reinstatement is no lon-er .iable/ and 024 bac=wa-es" 5hese two
reliefs are separate and distinct from each other and are awarded
conLuncti.ely" Robinsons Galleria2Robinsons Supermarket Corp. and2or $ess ,anuel vs.
0rene R. Ran)'eA,G.R. No. 177#!7, $anuary 1#, %11.
7lle-al recruitment/ elements" &ecruitment and placement refers to the act of
can.assin-! enlistin-! contractin-! transportin-! utiliDin-! hirin- or procurin- wor=ers!
and includes referrals! contract ser.ices! promisin- or ad.ertisin- for employment!
locally or abroad! whether for prot or not" @hen a person or entity! in any manner!
o8ers or promises for a fee employment to two or more persons! that person or entity
shall be deemed en-a-ed in recruitment and placement" Article %+0a4 of the Labor
Code! as amended! species that recruitment acti.ities underta=en by non>licensees or
non>holders of authority are deemed ille-al and punishable by law" And when the ille-al
recruitment is committed a-ainst three or more persons! indi.idually or as a -roup! then
it is deemed committed in lar-e scale and carries with it sti8er penalties as the same is
deemed a form of economic sabota-e" But to pro.e ille-al recruitment! it must be
shown that the accused! without bein- duly authoriDed by law! -a.e complainants the
distinct impression that he had the power or ability to send them abroad for wor=! such
that the latter were con.inced to part with their money in order to be employed" 7t is
important that there must at least be a promise or o8er of an employment from the
person posin- as a recruiter! whether locally or abroad" &eople o+ t'e &'ilippines vs.
1eresita Q1essieR Lao(o, G.R. No. 17"%"9, $anuary 1, %11.
7lle-al dismissal/ e6ecution of wai.er and :uitclaim" An employee*s e6ecution of a nal
settlement and receipt of amounts a-reed upon does not foreclose his ri-ht to pursue a
claim for ille-al dismissal" 5hus! an employee ille-ally retrenched is entitled to
reinstatement without loss of seniority ri-hts and pri.ile-es! as well as to payment of
full bac=wa-es from the time of her separation until actual reinstatement! less the
amount which heQshe recei.ed as retrenchment pay"=ernadet' Londonio and $oan
Cor)oro vs. =io Resear)', 0n). and >ilson Y. An(, G.R. No. 1#19:#, $anuary 17, %11.
Jurisdiction/ labor arbiter" Petitioner was remo.ed from his position as a mana-er
throu-h a Board &esolution" Petitioner led a complaint for ille-al dismissal before the
labor arbiter" &espondents claimed that petitioner is both a stoc=holder and a corporate
oCcer of respondent corporation! hence! his action a-ainst respondents is an intra>
corporate contro.ersy o.er which the Labor Arbiter has no Lurisdiction" 5he Court ruled
that this is not an intra>corporate contro.ersy but a labor case co-niDable by the labor
arbiter" 5o determine whether a case in.ol.es an intra>corporate contro.ersy that is to
be heard and decided by the branches of the &5C specically desi-nated by the Court to
try and decide such cases! two tests must be applied9 0a4 the status or relationship test!
and 024 the nature of the contro.ersy test" 5he rst test re:uires that the contro.ersy
arise out of intra>corporate or partnership relations amon- the stoc=holders! members
or associates of the corporation! partnership or association! between any or all of them
and the corporation! partnership or association of which they are stoc=holders!
members or associates/ between such corporation! partnership! or association and the
public or between such corporation! partnership! or association and the State insofar as
it concerns its franchise! license or permit to operate" 5he second test re:uires that the
dispute amon- the parties be intrinsically connected with the re-ulation of the
corporation" 5he Court in this case held that petitioner is not a corporate oCcer
because he was not .alidly appointed by the Board! thus! failin- the relationship test!
and that this is a case of employment termination which is a labor contro.ersy and not
an intra>corporate dispute! thus failin- the nature of the contro.ersy test" Renato Real
vs. San(u &'ilippines, 0n). et al.,G.R. No. 1"<7:7. $anuary 1#, %11.
Jurisdiction/ labor dispute" Article 21$ of the Labor Code states that unfair labor
practices and termination disputes fall within the ori-inal and e6clusi.e Lurisdiction of
the Labor Arbiter" As an e6ception! under Article 2(2 the Moluntary Arbitrator! upon
a-reement of the parties! shall also hear and decide all other labor disputes includin-
unfair labor practices and bar-ainin- deadloc=s" Gor the e6ception to apply! there must
be a-reement between the parties clearly conferrin- Lurisdiction to the .oluntary
arbitrator" Such a-reement may be stipulated in a collecti.e bar-ainin- a-reement"
Kowe.er! in the absence of a collecti.e bar-ainin- a-reement! it is enou-h that there is
e.idence on record showin- the parties ha.e a-reed to resort to .oluntary
arbitration" 1'e ?niversity o+ t'e 0mma)ulate Con)eption, et al. vs. NLRC, et al., G.R. No.
1<119", $anuary %", %11.
JL&C/ factual ndin-s" Gactual ndin-s of labor oCcials! who are deemed to ha.e
ac:uired e6pertise in matters within their Lurisdiction! are -enerally accorded not only
respect but e.en nality by the courts when supported by substantial e.idence! i.e"! the
amount of rele.ant e.idence which a reasonable mind mi-ht accept as ade:uate to
Lustify a conclusion" But these ndin-s are not infallible" @hen there is a showin- that
they were arri.ed at arbitrarily or in disre-ard of the e.idence on record! they may be
e6amined by the courts" 5he CA can -rant the petition for)ertiorari if it nds that the
JL&C! in its assailed decision or resolution! made a factual ndin- not supported by
substantial e.idence" 5hus! it is within the Lurisdiction of the CA to re.iew the ndin-s of
the JL&C" &rin)e 1ransport, 0n). and ,r. Renato Claros vs. Biosdado Gar)ia, et al., G.R.
No. 1"7%#1, $anuary 1%, %11.
Petition/ certicate of non>forum shoppin-" @hile the -eneral rule is that the certicate
of non>forum shoppin- must be si-ned by all the plainti8s in a case and the si-nature of
only one of them is insuCcient! the Court has stressed that the rules on forum
shoppin-! which were desi-ned to promote and facilitate the orderly administration of
Lustice! should not be interpreted with such absolute literalness as to sub.ert its own
ultimate and le-itimate obLecti.e" Strict compliance with the pro.ision re-ardin- the
certicate of non>forum shoppin- underscores its mandatory nature in that the
certication cannot be alto-ether dispensed with or its re:uirements completely
disre-arded" 7t does not! howe.er! prohibit substantial compliance therewith under
Lustiable circumstances! considerin- especially that althou-h it is obli-atory! it is not
Lurisdictional" 7n a number of cases! the Court has consistently held that when all the
petitioners share a common interest and in.o=e a common cause of action or defense!
the si-nature of only one of them in the certication a-ainst forum shoppin-
substantially complies with the rules" &rin)e 1ransport, 0n). and ,r. Renato Claros vs.
Biosdado Gar)ia, et al., G.R. No. 1"7%#1, $anuary 1%, %11.
Petition/ failure to attach documents" 5he respondent wor=ers sou-ht that the petition
be dismissed outri-ht for the petitioners* failure to attach to the petition a copy of the
Production and @or= Schedule and a copy of the compromise a-reement alle-edly
entered into X material portions of the record that should accompany and support the
petition! pursuant to Section ;! &ule ;' of the &ules of Court" 7n ,ariners &olyte)'ni)
Colle(es 8oundation, 0n). v. Arturo $. Gar)'itorena the Court held that the phrase 1of the
pleadin-s and other material portions of the record 666 as would support the alle-ation
of the petition clearly contemplates the e6ercise of discretion on the part of the
petitioner in the selection of documents that are deemed to be rele.ant to the petition"
5he crucial issue to consider then is whether or not the documents accompanyin- the
petition suCciently supported the alle-ations therein"3 5he failure to attach copy of the
subLect documents is not fatal as the challen-ed CA decision clearly summariDed the
labor tribunal*s rulin-s" Atlanta 0ndustries, 0n). and2or Robert C'an vs. Aprilito R.
Sebolino, et al., G.R. No. 1<7!%, $anuary %", %11.
Petition/ .erication" 5he .erication re:uirement is deemed substantially complied with
when some of the parties who undoubtedly ha.e suCcient =nowled-e and belief to
swear to the truth of the alle-ations in the petition had si-ned the same" Such
.erication is deemed a suCcient assurance that the matters alle-ed in the petition
ha.e been made in -ood faith or are true and correct! and not merely speculati.e" 7n
any case! the settled rule is that a pleadin- which is re:uired by the &ules of Court to be
.eried! may be -i.en due course e.en without a .erication if the circumstances
warrant the suspension of the rules in the interest of Lustice" 7ndeed! the absence of a
.erication is not Lurisdictional! but only a formal defect! which does not of itself Lustify
a court in refusin- to allow and act on a case" Kence! the failure of some of the
respondents to si-n the .erication attached to their Eemorandum of Appeal led with
the JL&C is not fatal to their cause of action" &rin)e 1ransport, 0n). and ,r. Renato
Claros vs. Biosdado Gar)ia, et al., G.R. No. 1"7%#1, $anuary 1%, %11.
&e-ional director/ re.iew of decision" Petitioner appealed an ad.erse decision to the
BL&" BL& Director inhibited himself from the case because he had been a former counsel
of respondent" 7n .iew of the inhibition! DNL2 Secretary too= co-niDance of the appeal"
Jurisdiction to re.iew the decision of the &e-ional Director lies with the BL&" Nnce
Lurisdiction is ac:uired by the court! it remains with it until the full termination of the
case" 5hus! Lurisdiction remained with the BL& despite the BL& Director*s inhibition"
@hen the DNL2 Secretary resol.ed the appeal! she merely stepped into the shoes of the
BL& Director and performed a function that the latter could not himself perform" She did
so pursuant to her power of super.ision and control o.er the BL&" 1'e -erita(e -otel
,anila, a)tin( t'rou(' its oCner, Grand &laAa -otel, Corp. vs. National ?nion o+ >orkers
in t'e -otel, Restaurant and Allied 0ndustries6-erita(e -otel ,anila Supervisors C'apter
3N?>-RA0N6--,SC7, G.R. No. 17<%#", $anuary 1%, %11.
Anion re-istration/ cancellation" 5he amendment introduced by &A B;+1 sou-ht to
stren-then the wor=ers* ri-ht to self>or-aniDation and enhance the Philippines*
compliance with its international obli-ations as embodied in the 7nternational Labour
Nr-aniDation 07LN4 Con.ention Jo" +$! pertainin- to the non>dissolution of wor=ers*
or-aniDations by administrati.e authority" 7LN Con.ention Jo" +$ pro.ides that 1wor=ers*
and employers* or-aniDations shall not be liable to be dissol.ed or suspended by
administrati.e authority"3 5he 7LN has e6pressed the opinion that the cancellation of
union re-istration by the re-istrar of labor unions! which in our case is the BL&! is
tantamount to dissolution of the or-aniDation by administrati.e authority when such
measure would -i.e rise to the loss of le-al personality of the union or loss of
ad.anta-es necessary for it to carry out its acti.ities! which is true in our Lurisdiction"
Althou-h the 7LN has allowed such measure to be ta=en! pro.ided that Ludicial
safe-uards are in place! i.e.! the ri-ht to appeal to a Ludicial body! it has nonetheless
reminded its members that dissolution of a union! and cancellation of re-istration for
that matter! in.ol.e serious conse:uences for occupational representation" 7t has!
therefore! deemed it preferable if such actions were to be ta=en only as a last resort and
after e6haustin- other possibilities with less serious e8ects on the or-aniDation" 7t is
undisputed that appellee failed to submit its annual nancial reports and list of
indi.idual members in accordance with Article 2%B of the Labor Code" Kowe.er! the
e6istence of this -round should not necessarily lead to the cancellation of union
re-istration" At any rate! the Court in this case too= note of the fact that on 1B Eay
2000! appellee had submitted its nancial statement for the years 1BB(>1BBB" @ith this
submission! appellee has substantially complied with its duty to submit its nancial
report for the said period" 1'e -erita(e -otel ,anila, a)tin( t'rou(' its oCner, Grand
&laAa -otel, Corp. vs. National ?nion o+ >orkers in t'e -otel, Restaurant and Allied
0ndustries6-erita(e -otel ,anila Supervisors C'apter 3N?>-RA0N6--,SC7, G.R. No.
17<%#", $anuary 1%, %11.
@a-es/ payment pendin- reinstatement" 2mployees are entitled to their accrued
salaries durin- the period between the Labor Arbiter*s order of reinstatement pendin-
appeal and the resolution of the Jational Labor &elations Commission 0JL&C4
o.erturnin- that of the Labor Arbiter" Ntherwise stated! e.en if the order of
reinstatement of the Labor Arbiter is re.ersed on appeal! the employer is still obli-ed to
reinstate and pay the wa-es of the employee durin- the period of appeal until re.ersal
by a hi-her court or tribunal" Nn the other hand! if the employee has been reinstated
durin- the appeal period and such reinstatement order is re.ersed with nality! the
employee is not re:uired to reimburse whate.er salary he recei.ed for he is entitled to
such! more so if he actually rendered ser.ices durin- the period" So)ial Se)urity System
vs. 4+ren Capada, et al.,G.R. No. 1"<:1, $anuary !1, %11.
Gebruary 2011 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Earch 1+! 2011 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines > Law
[ 5a--edabandonment! burden of proof! certiotari! constructi.e dismissal! due
process! e6ecution! ille-al dismissal! Lurisdiction!proLect
employee! :uitclaim! redundancy! retrenchment! unfair! union [
Kere are selected Gebruary 2011 rulin-s of the Supreme Court of the Philippines on
labor law and procedure9
Abandonment/ elements" &espondents led an ille-al dismissal case a-ainst the
petitioner>corporation" Gor its defense! petitioner>corporation alle-ed that the
respondents abandoned their wor= and were not dismissed! and that it sent letters
ad.isin- respondents to report for wor=! but they refused" 5he Court held that for
abandonment to e6ist! it is essential 0a4 that the employee must ha.e failed to report
for wor= or must ha.e been absent without .alid or Lustiable reason/ and 0b4 that there
must ha.e been a clear intention to se.er the employer>employee relationship
manifested by some o.ert acts" 5he employer has the burden of proof to show the
employee*s deliberate and unLustied refusal to resume his employment without any
intention of returnin-" Eere absence is not suCcient" 5here must be an une:ui.ocal
intent on the part of the employee to discontinue his employment" Based on the
e.idence presented! the reason why respondents failed to report for wor= was because
petitioner>corporation barred them from enterin- its construction sites" 7t is a settled
rule that failure to report for wor= after a notice to return to wor= has been ser.ed does
not necessarily constitute abandonment" 5he intent to discontinue the employment
must be shown by clear proof that it was deliberate and unLustied" Petitioner>
corporation failed to show o.ert acts committed by respondents from which it may be
deduced that they had no more intention to wor=" &espondents* lin- of the case for
ille-al dismissal barely four 0;4 days from their alle-ed abandonment is totally
inconsistent with the =nown concept of what constitutes abandonment" 4.G. ; 0.
Constru)tion Corporation and 4dsel Galeos v. Ananias &. Sato, et al., G.R. No. 1<%7,
8ebruary 1", %11.
Certication election/ petition for cancellation of union re-istration" &espondent union
led a petition for certication election" Petitioner mo.ed to dismiss the petition for
certication election alle-in- the pendency of a petition for cancellation of the union*s
re-istration" 5he DNL2 Secretary ruled in fa.or of the le-itimacy of the respondent as a
labor or-aniDation and ordered the immediate conduct of a certication election"
Pendin- appeal in the Court of Appeals! the petition for cancellation was -ranted and
became nal and e6ecutory" Petitioner ar-ued that the cancellation of the union*s
certicate of re-istration should retroact to the time of its issuance" 5hus! it claimed
that the union*s petition for certication election and its demand to enter into collecti.e
bar-ainin- a-reement with the petitioner should be dismissed due to respondent*s lac=
of le-al personality" 5he Court ruled that the pendency of a petition for cancellation of
union re-istration does not preclude collecti.e bar-ainin-! and that an order to hold a
certication election is proper despite the pendency of the petition for cancellation of
the union*s re-istration because at the time the respondent union led its petition! it
still had the le-al personality to perform such act absent an order cancellin- its
re-istration" Le(end 0nternational Resorts Limited v. Kilusan( ,an((a(aCa n(
Le(enda, G.R. No. 1"#7:9, 8ebruary %!, %11.
Certiorari under &ule ('/ re.iew of facts by the Court of Appeals" @hile it is true that
factual ndin-s made by :uasi>Ludicial and administrati.e tribunals! if supported by
substantial e.idence! are accorded -reat respect and e.en nality by the courts! this
-eneral rule admits of e6ceptions" @hen there is a showin- that a palpable and
demonstrable mista=e that needs rectication has been committed or when the factual
ndin-s were arri.ed at arbitrarily or in disre-ard of the e.idence on record! these
ndin-s may be e6amined by the courts" 7n the present case! the Court of Appeals
found itself unable to completely sustain the ndin-s of the JL&C thus! it was compelled
to re.iew the facts and e.idence and not limit itself to the issue of -ra.e abuse of
discretion" Nelson A. Culili v. 4astern 1ele)ommuni)ations &'ilippines, 0n)., et al. G.R.
No. 1":!<1, 8ebruary #, %11.
Construction 7ndustry/ proLect employees" Petitioner is a duly licensed labor contractor
en-a-ed in paintin- houses and buildin-s" &espondents! former painters of the
petitioner! led an ille-al dismissal case a-ainst petitioner" Petitioner alle-ed that the
respondents abandoned their Lob and were not dismissed by the petitioner" 5he Labor
Arbiter ruled that there was neither ille-al dismissal nor abandonment of Lob and that
the respondents should be reinstated but without any bac=wa-es" Nn appeal! petitioner
alle-ed that the reinstatement of respondents to their former positions! which were no
lon-er e6istin-! is impossible! hi-hly unfair and unLust" 7t further alle-ed that the proLect
they were wor=in- on at the time of their alle-ed dismissal was already completed"
Ka.in- completed their tas=s! their positions automatically ceased to e6ist" 5hus! there
were no more positions where they can be reinstated as painters" 5he Court ruled that
there are two types of employees in the construction industry" 5he rst is referred to as
proLect employees or those employed in connection with a particular construction
proLect or phase thereof and such employment is coterminous with each proLect or
phase of the proLect to which they are assi-ned" 5he second is =nown as non>proLect
employees or those employed without reference to any particular construction proLect
or phase of a proLect" &espondents belon-ed to the second type and are classied as
re-ular employees of petitioner" 7t is clear from the records of the case that when one
proLect is completed! respondents were automatically transferred to the ne6t proLect
awarded to petitioners" 5here was no employment a-reement -i.en to respondents
which clearly spelled out the duration of their employment and the specic wor= to be
performed and there is no proof that they were made aware of these terms and
conditions of their employment at the time of hirin-" 5hus! it is now too late for
petitioner to claim that respondents are proLect employees whose employment is
coterminous with each proLect or phase of the proLect to which they are assi-ned"
Jonetheless! assumin- that respondents were initially hired as proLect employees! a
proLect employee may ac:uire the status of a re-ular employee when the followin-
factors concur9 014 5here is a continuous rehirin- of proLect employees e.en after
cessation of a proLect/ and 024 5he tas=s performed by the alle-ed proLect employee are
.ital! necessary and indispensable to the usual business or trade of the employer" 7n this
case! the e.idence on record shows that respondents were employed and assi-ned
continuously to the .arious proLects of petitioners" As painters! they performed
acti.ities which were necessary and desirable in the usual business of petitioner! which
was en-a-ed in subcontractin- Lobs for paintin- of residential units! condominium and
commercial buildin-s" As re-ular employees! respondents are entitled to be reinstated
without loss of seniority ri-hts" 4/odus 0nternational Constru)tion Corporation, et al. v.
Guillermo =is)o)'o, et al., G.R. No. 1""1#, 8ebruary %!, %11.
Constructi.e Dismissal/ security -uards" &espondent was hired by petitioner! a security
a-ency! as a security -uard" Ke was assi-ned at the Philippine Keart Center until his
relief on January %0! 200(" &espondent was not -i.en any assi-nment thereafter" 5hus!
on Au-ust 2! 200(! he led a complaint for constructi.e dismissal and nonpayment of
1%
th
month pay! with prayer for dama-es a-ainst petitioner" 5o refute the claim!
petitioner alle-ed that respondent was not constructi.ely or ille-ally dismissed! but had
.oluntarily resi-ned" 5he Court held that respondent was constructi.ely dismissed" 7n
cases in.ol.in- security -uards! a relief and transfer order in itself does not se.er
employment relationship between a security -uard and his a-ency" An employee has
the ri-ht to security of tenure! but this does not -i.e him a .ested ri-ht to his position
as would depri.e the company of its prero-ati.e to chan-e his assi-nment or transfer
him where his ser.ice! as security -uard! will be most benecial to the client" 5emporary
1o8>detail3 or the period of time security -uards are made to wait until they are
transferred or assi-ned to a new post or client does not constitute constructi.e
dismissal! so lon- as such status does not continue beyond si6 months" 5heonus of
pro.in- that there is no post a.ailable to which the security -uard can be assi-ned rests
on the employer" 7n the instant case! the failure of petitioner to -i.e respondent a wor=
assi-nment beyond the reasonable si6>month period ma=es it liable for constructi.e
dismissal" NationCide Se)urity and Allied Servi)es, 0n). v. Ronald &. @alderama, G.R. No.
1<""19, 8ebruary %!, %11.
Constructi.e dismissal/ defense of abandonment" &espondent led an ille-al dismissal
case a-ainst the petitioner" Petitioner alle-ed that respondent abandoned his Lob and
was not dismissed" 5he Court held that respondent was ille-ally dismissed" 5he
Lurisprudential rule on abandonment is constant" 7t is a matter of intention and cannot
li-htly be presumed from certain e:ui.ocal acts" 5o constitute abandonment! two
elements must concur9 014 the failure to report for wor= or absence without .alid or
Lustiable reason/ and 024 a clear intent! manifested throu-h o.ert acts! to se.er the
employer>employee relationship" 7n this case! petitioner failed to establish clear
e.idence of respondent*s intention to abandon his employment" 26cept for petitioner*s
bare assertion that respondent did not report to the oCce for reassi-nment! no proof
was o8ered to pro.e that respondent intended to se.er the employer>employee
relationship" Besides! the fact that respondent led the instant complaint ne-ates any
intention on his part to forsa=e his wor=" 7t is a settled doctrine that the lin- of a
complaint for ille-al dismissal is inconsistent with the char-e of abandonment! for an
employee who ta=es steps to protest his dismissal cannot by lo-ic be said to ha.e
abandoned his wor=" NationCide Se)urity and Allied Servi)es, 0n). v. Ronald &.
@alderama, G.R. No. 1<""19, 8ebruary %!, %11.
Constructi.e dismissal/ defense of resi-nation" &espondent! a security -uard! led an
ille-al dismissal case a-ainst the petitioner" 5o refute the claim! petitioner alle-ed that
respondent was not constructi.ely or ille-ally dismissed! but had .oluntarily resi-ned"
Petitioner alle-ed that respondent*s resi-nation is e.ident from his withdrawal of his
cash and rearm bonds" &esi-nation is the .oluntary act of an employee who is in a
situation where one belie.es that personal reasons cannot be sacriced in fa.or of the
e6i-ency of the ser.ice! and one has no other choice but to dissociate oneself from
employment" 7t is a formal pronouncement or relin:uishment of an oCce" 5he intent to
relin:uish must concur with the o.ert act of relin:uishment" 5hus! the acts of the
employee before and after the alle-ed resi-nation must be considered in determinin-
whether! he or she! in fact! intended to se.er his or her employment" Should the
employer interpose the defense of resi-nation! it is incumbent upon the employer to
pro.e that the employee .oluntarily resi-ned" Nn this point! the Court held that
petitioner failed to dischar-e its burden" Eoreo.er! the lin- of a complaint belies
petitioner*s claim that respondent .oluntarily resi-ned" NationCide Se)urity and Allied
Servi)es, 0n). v. Ronald &. @alderama, G.R. No. 1<""19, 8ebruary %!, %11.
26ecution of Jud-ment/ properties co.ered" Premier Allied and Contractin- Ser.ices! 7nc"
0PACS74 and its President! the petitioner! were held liable to pay the respondents
separation pay and attorney*s fees" 5o e6ecute this Lud-ment! the JL&C sheri8 issued a
Jotice of Sale of a property with a 5C5 in the name of the petitioner and his wife" 5he
Court ruled that the Jotice of Sale is null and .oid" 5he power of the JL&C! or the
courts! to e6ecute its Lud-ment e6tends only to properties un:uestionably belon-in- to
the Lud-ment debtor alone" A sheri8! therefore! has no authority to attach the property
of any person e6cept that of the Lud-ment debtor" Li=ewise! there is no showin- that
the sheri8 e.er tried to e6ecute on the properties of the corporation" 5he 5C5 of the
property bears out that! indeed! it belon-s to petitioner and his wife" 5hus! e.en if we
consider petitioner as an a-ent of the corporation F and! therefore! not a stran-er to the
case F such that the pro.ision on third>party claims will not apply to him! the property
was re-istered not only in the name of petitioner but also of his wife" She stands to lose
the property subLect of e6ecution without e.er bein- a party to the case" 5his will be
tantamount to depri.ation of property without due process" &a5uito @. Ando v. Andresito
Y. Campo, et al., G.R. No. 1<97, 8ebruary 1", %11.
7lle-al dismissal/ burden of proof" &espondents led an ille-al dismissal case a-ainst
petitioner" Petitioner alle-ed that the respondents abandoned their wor= and were ne.er
dismissed by the petitioner" JL&C ruled that the respondents were not ille-ally
dismissed since they failed to present a written notice of termination" 5his was howe.er
re.ersed by the Court of Appeals" 5he Court held that a written notice of dismissal is not
a pre>re:uisite for a ndin- of ille-al dismissal" Petitioner failed to pro.e that
respondents were dismissed for a Lust or authoriDed cause" 7n an ille-al dismissal case!
the onus probandi rests on the employer to pro.e that the dismissal of an employee is
for a .alid cause" 4.G. ; 0. Constru)tion Corporation and 4dsel Galeos v. Ananias &. Sato,
et al., G.R. No. 1<%7, 8ebruary 1", %11.
7lle-al dismissal/ burden of proof" &espondents led an ille-al dismissal case a-ainst the
petitioners" Petitioners! in their defense! alle-ed that the respondents abandoned their
wor= and were not dismissed by the petitioners" Althou-h 7n cases of ille-al dismissal!
the employer bears the burden of proof to pro.e that the termination was for a .alid or
authoriDed cause! the employee must rst establish by substantial e.idence the fact
that he was dismissed" 7f there is no dismissal! then there can be no :uestion as to the
le-ality or ille-ality thereof" 7n the present case! the Court held that there was no
e.idence that respondents were dismissed or that they were pre.ented from returnin-
to their wor=" 7t was only respondents* unsubstantiated conclusion that they were
dismissed" As a matter of fact! respondents could not name the particular person who
e8ected their dismissal and under what particular circumstances" Absent any showin-
of an o.ert or positi.e act pro.in- that petitioners had dismissed respondents! the
latters* claim of ille-al dismissal cannot be sustained" 4/odus 0nternational Constru)tion
Corporation, et al. v. Guillermo =is)o)'o, et al., G.R. No. 1""1#, 8ebruary %!, %11.
7lle-al dismissal/ nal and e6ecutory Lud-ment" &espondent employee led an ille-al
dismissal case a-ainst the petitioner>company and 5om Eadula! its operations mana-er"
5he case was dismissed by the labor arbiter and the dismissal was aCrmed by JL&C" Nn
Au-ust 2B! 2002! the Court of Appeals re.ersed and set aside the JL&C decision and
resolution" 5he CA ordered the petitioner company to pay respondent separation pay!
moral and e6emplary dama-es! and attorney*s fees" 5he decision became nal and
e6ecutory on Gebruary 2$! 200;! and conse:uently a writ of e6ecution was issued"
Petitioner>company led a Eotion to Yuash @rit of 26ecution" 5he Labor Arbiter -ranted
the Eotion and e6onerated the petitioner company from payin- bac=wa-es and held
that it was petitioner Eadula who should be liable to pay bac=wa-es" &espondent then
led before the CA a Mery Ar-ent Eotion for Clarication of Jud-ment" Nn December 10!
200;! CA -ranted the Eotion and held that petitioner>company is solely liable for the
Lud-ment award" As a -eneral rule! nal and e6ecutory Lud-ments are immutable and
unalterable! e6cept under these reco-niDed e6ceptions! to wit9 0a4 clerical errors/
0b4 nun) pro tun) entries which cause no preLudice to any party/ and 0c4 .oid Lud-ments"
5he underlyin- reason for the rule is two>fold9 014 to a.oid delay in the administration of
Lustice and thus ma=e orderly the dischar-e of Ludicial business! and 024 to put Ludicial
contro.ersies to an end! at the ris= of occasional errors! inasmuch as contro.ersies
cannot be allowed to dra- on indenitely and the ri-hts and obli-ations of e.ery liti-ant
must not han- in suspense for an indenite period of time" @hat the CA rendered on
December 10! 200; was a nun) pro tun) order clarifyin- the decretal portion of its
Au-ust 2B! 2002 Decision" 5he obLect of a Lud-ment nun) pro tun) is not the renderin-
of a new Lud-ment and the ascertainment and determination of new ri-hts! but is one
placin- in proper form on the record! the Lud-ment that had been pre.iously rendered!
to ma=e it spea= the truth! so as to ma=e it show what the Ludicial action really was" 7t is
not to correct Ludicial errors! such as to render a Lud-ment anew in place of the one it
rendered! nor to supply nonaction by the court! howe.er erroneous the Lud-ment may
ha.e been" 8ilipinas &almoil &ro)essin(, 0n). and Bennis 1. @illareal v. $oel &. BeGapa,
represented by 'is Attorney6in68a)t ,yrna ,anAano, G.R. No. 1"7!!%, 8ebruary 7, %11.
7lle-al dismissal/ liability of corporate oCcers" Petitioner led a complaint a-ainst
respondent company and its oCcers for ille-al dismissal! unfair labor practice! and
money claims" Petitioner alle-ed that the oCcers should be held personally liable for the
acts of company which were tainted with bad faith and arbitrariness" As a -eneral rule!
a corporate oCcer cannot be held liable for acts done in his oCcial capacity because a
corporation! by le-al ction! has a personality separate and distinct from its oCcers!
stoc=holders! and members" 5o pierce this ctional .eil! it must be shown that the
corporate personality was used to perpetuate fraud or an ille-al act! or to e.ade an
e6istin- obli-ation! or to confuse a le-itimate issue" 7n ille-al dismissal cases! corporate
oCcers may be held solidarily liable with the corporation if the termination was done
with malice or bad faith" Eoral dama-es are awarded only where the dismissal was
attended by bad faith or fraud! or constituted an act oppressi.e to labor! or was done in
a manner contrary to morals! -ood customs or public policy" 26emplary dama-es may
a.ail if the dismissal was e8ected in a wanton! oppressi.e or male.olent manner" 7n the
present case! the Court held that petitioner failed to pro.e that his dismissal was
orchestrated by the indi.idual respondents and their acts were attended with bad faith
or were done oppressi.ely" Nelson A. Culili v. 4astern 1ele)ommuni)ations &'ilippines,
0n)., et al. G.R. No. 1":!<1, 8ebruary #, %11.
7lle-al dismissal/ redundancy" &espondent>company! due to business troubles and
losses! implemented a &i-ht>SiDin- Pro-ram which entailed a company>wide
reor-aniDation in.ol.in- the transfer! mer-er! absorption or abolition of certain
departments of the company" As a result! respondent>company terminated the ser.ices
of petitioner on account of redundancy" Petitioner led a complaint a-ainst respondent>
company and its oCcers for ille-al dismissal! unfair labor practice! and money claims"
5he Court ruled that petitioner was .alidly dismissed" 5here is redundancy when the
ser.ice capability of the wor=force is -reater than what is reasonably re:uired to meet
the demands of the business enterprise" A position becomes redundant when it is
rendered superHuous by any number of factors such as o.er>hirin- of wor=ers! decrease
in .olume of business! or droppin- a particular product line or ser.ice acti.ity pre.iously
manufactured or underta=en by the enterprise" 5he Court has been consistent in holdin-
that the determination of whether or not an employee*s ser.ices are still needed or
sustainable properly belon-s to the employer" Pro.ided there is no .iolation of law or a
showin- that the employer was prompted by an arbitrary or malicious act! the
soundness or wisdom of this e6ercise of business Lud-ment is not subLect to the
discretionary re.iew of the Labor Arbiter and the JL&C" Kowe.er! an employer cannot
simply declare that it has become o.ermanned and dismiss its employees without
producin- ade:uate proof to sustain its claim of redundancy" Amon- the re:uisites of a
.alid redundancy pro-ram are9 014 the -ood faith of the employer in abolishin- the
redundant position/ and 024 fair and reasonable criteria in ascertainin- what positions
are to be declared redundant! such as but not limited to9 preferred status! eCciency!
and seniority" 5he Court also held that the followin- e.idence may be pro8ered to
substantiate redundancy9 adoption of a new staCn- pattern! feasibility studiesQ proposal
on the .iability of the newly created positions! Lob description and the appro.al by the
mana-ement of the restructurin-" Nelson A. Culili v. 4astern 1ele)ommuni)ations
&'ilippines, 0n)., et al. G.R. No. 1":!<1, 8ebruary #, %11.
Labor Anion/ collateral attac= on le-al personality" " Petitioner mo.ed to dismiss the
petition for certication election led by respondent union by :uestionin- the .alidity of
the respondent*s union re-istration" 5he Court held that le-itimacy of the le-al
personality of respondent cannot be collaterally attac=ed in a petition for certication
election proceedin- but only throu-h a separate action instituted particularly for the
purpose of assailin- it" 5he 7mplementin- &ules stipulate that a labor or-aniDation shall
be deemed re-istered and .ested with le-al personality on the date of issuance of its
certicate of re-istration" Nnce a certicate of re-istration is issued to a union! its le-al
personality cannot be subLect to a collateral attac=" 7t may be :uestioned only in an
independent petition for cancellation in accordance with Section ' of &ule M! Boo= M of
the 7mplementin- &ules" Le(end 0nternational Resorts Limited v. Kilusan( ,an((a(aCa
n( Le(enda, G.R. No. 1"#7:9 , 8ebruary %!, %11.
Eoney claims/ burden of proof" &espondents alle-ed that petitioner>corporation failed to
pay them their full compensation" 5he Labor Arbiter -ranted their monetary claims but
the JL&C re.ersed the award considerin- that the petitioner>corporation submitted
copies of payrolls! which it anne6ed to its memorandum on appeal! showin- full
payment" 5he -eneral rule is that the burden rests on the employer to pro.e payment!
rather than on the employee to pro.e non>payment" 5he reason for the rule is that the
pertinent personnel les! payrolls! records! remittances! and other similar documents X
which will show that o.ertime! di8erentials! ser.ice incenti.e lea.e! and other claims of
the wor=er ha.e been paid X are not in the possession of the wor=er but in the custody
and absolute control of the employer" 7n this case! the submission by petitioner>
corporation of the time records and payrolls only when the case was on appeal before
the JL&C is contrary to the elementary precepts of Lustice and fair play" &espondents
were not -i.en the opportunity to chec= the authenticity and correctness of the
e.idence submitted on appeal" 5hus! the Supreme Court held that the monetary claims
of respondents should be -ranted" 7t is a time>honored principle that if doubts e6ist
between the e.idence presented by the employer and the employee! the scales of
Lustice must be tilted in fa.or of the latter" 7t is the rule in contro.ersies between a
laborer and his master that doubts reasonably arisin- from the e.idence! or in the
interpretation of a-reements and writin-! should be resol.ed in the former*s fa.or" 4.G.
; 0. Constru)tion Corporation and 4dsel Galeos v. Ananias &. Sato, et al., G.R. No.
1<%7 ,8ebruary 1", %11.
Jational Labor &elations Commission/ Lurisdiction" &espondents led an ille-al dismissal
case a-ainst Premier Allied and Contractin- Ser.ices! 7nc" 0PACS74 and its President! the
petitioner" PACS7 and the petitioner were held liable to pay the respondents separation
pay and attorney*s fees" 5o e6ecute this Lud-ment! JL&C sheri8 issued a Jotice of Sale
of a property with 5C5 in the name of the petitioner and his wife" Petitioner led an
action for prohibition and dama-es with prayer for the issuance of a temporary
restrainin- order 05&N4 before the &e-ional 5rial Court 0&5C4" 5he Court ruled that the
&5C lac=s Lurisdiction to resol.e the matter" 5he Court has lon- reco-niDed that re-ular
courts ha.e no Lurisdiction to hear and decide :uestions which arise from and are
incidental to the enforcement of decisions! orders! or awards rendered in labor cases by
appropriate oCcers and tribunals of the Department of Labor and 2mployment" 5o hold
otherwise is to sanction splittin- of Lurisdiction which is obno6ious to the orderly
administration of Lustice" 5he JL&C Eanual on the 26ecution of Jud-ment deals
specically with third>party claims in cases brou-ht before that body" 7t denes a third>
party claim as one where a person! not a party to the case! asserts title to or ri-ht to the
possession of the property le.ied upon" 7t also sets out the procedure for the lin- of a
third>party claim! to wit9 1such person shall ma=e an aCda.it of his title thereto or ri-ht
to the possession thereof! statin- the -rounds of such ri-ht or title and shall le the
same with the sheri8 and copies thereof ser.ed upon the Labor Arbiter or proper oCcer
issuin- the writ and upon the pre.ailin- party"3 7n the present case! there is no doubt
that petitioner*s complaint is a third>party claim within the co-niDance of the JL&C"
Petitioner may indeed be considered a 1third party3 in relation to the property subLect of
the e6ecution since there is no :uestion that the property belon-s to petitioner and his
wife! and not to the corporation" 7t can be said that the property belon-s to the conLu-al
partnership! and not to petitioner alone" At the .ery least! the Court can consider
petitioner*s wife to be a third party within the contemplation of the law" &a5uito @. Ando
v. Andresito Y. Campo, et al., G.R. No. 1<97, 8ebruary 1", %11.
Placement Gee/ proof of e6cessi.e collection" Petitioner led a complaint a-ainst
respondent for collection of e6cess placement fee dened in Article %;0a4 of the Labor
Code" Petitioner presented as her e.idence a promissory note reHectin- e6cessi.e fees
and testied as to the deductions made by her forei-n employer" Nn the other hand!
respondent presented an ac=nowled-ment receipt reHectin- collection of an amount
authoriDed by PN2A" 5he Court held that the pieces of e.idence presented by petitioner
are not substantial enou-h to show that the respondent collected from her more than
the allowable placement fee" 7n proceedin-s before administrati.e and :uasi>Ludicial
a-encies! the :uantum of e.idence re:uired to establish a fact is substantial e.idence!
or that le.el of rele.ant e.idence which a reasonable mind mi-ht accept as ade:uate to
Lustify a conclusion" 5he Court -a.e more credence to respondent*s e.idence consistin-
of the ac=nowled-ment receipt showin- the amount paid by petitioner and recei.ed by
respondent" A receipt is a written and si-ned ac=nowled-ment that money or -oods
ha.e been deli.ered" Althou-h a receipt is not conclusi.e e.idence! an e6hausti.e
re.iew of the records of the case fails to disclose any other e.idence suCcient and
stron- enou-h to o.erturn the ac=nowled-ment embodied in respondent*s receipt as to
the amount it actually recei.ed from petitioner" Ka.in- failed to adduce suCcient
rebuttal e.idence! petitioner is bound by the contents of the receipt issued by
respondent" 5he subLect receipt remains as the primary or best e.idence" 5he
promissory note presented by petitioner cannot be considered as ade:uate e.idence to
show the e6cessi.e placement fee" 7t must be emphasiDed that a promissory note is a
solemn ac=nowled-ment of a debt and a formal commitment to repay it on the date and
under the conditions a-reed upon by the borrower and the lender" A person who si-ns
such an instrument is bound to honor it as a le-itimate obli-ation duly assumed by him
throu-h the si-nature he aC6es thereto as a to=en of his -ood faith" 5he fact that
respondent is not a lendin- company does not preclude it from e6tendin- a loan to
petitioner for her personal use" As for the deductions purportedly made by petitioner*s
forei-n employer! the Court noted that there is no sin-le piece of document or receipt
showin- that deductions ha.e in fact been made! or is there any proof that these
deductions from the salary formed part of the subLect placement fee" 5o be sure! mere
-eneral alle-ations of payment of e6cessi.e placement fees cannot be -i.en merit as
the char-e of ille-al e6action is considered a -ra.e o8ense which could cause the
suspension or cancellation of the a-ency*s license" 5hey should be pro.en and
substantiated by clear! credible! and competent e.idence" Avelina 8. Sa(un v. Suna)e
0nternational ,ana(ement Servi)es, 0n)., G.R. No. 17#%9%, 8ebruary %!, %11.
Procedural due process/ notice re:uirements" Petitioner was dismissed by respondent>
company due to redundancy" Kowe.er! it failed to pro.ide the Department of Labor and
2mployment with a written notice re-ardin- petitioner*s termination" 5he notice of
termination was also not properly ser.ed on the petitioner" Gurther! a readin- of the
notice shows that respondent>company failed to properly inform the petitioner of the
-rounds for his termination" 5here are two aspects which characteriDe the concept of
due process under the Labor Code9 one is substanti.e X whether the termination of
employment was based on the pro.ision of the Labor Code or in accordance with the
pre.ailin- Lurisprudence/ the other is procedural X the manner in which the dismissal
was e8ected" 5here is a psycholo-ical e8ect or a sti-ma in immediately ndin- one*s
self laid o8 from wor=" 5his is why our labor laws ha.e pro.ided for procedural due
process" @hile employers ha.e the ri-ht to terminate employees it can no lon-er
sustain! our laws also reco-niDe the employee*s ri-ht to be properly informed of the
impendin- termination of his employment" 5hou-h the failure of respondent>company to
comply with the notice re:uirements under the Labor Code did not a8ect the .alidity of
the dismissal! petitioner is howe.er entitled to nominal dama-es in addition to his
separation pay" Nelson A. Culili v. 4astern 1ele)ommuni)ations &'ilippines, 0n)., et
al. G.R. No. 1":!<1, 8ebruary #, %11.
Yuitclaims/ .alidity" &espondents were terminated from employment due to
retrenchment implemented by petitioner" Apon their dismissal! the respondents si-ned
indi.idual 1&elease @ai.er and Yuitclaim"3 5he Court ruled that a wai.er or :uitclaim is
a .alid and bindin- a-reement between the parties! pro.ided that it constitutes a
credible and reasonable settlement! and that the one accomplishin- it has done so
.oluntarily and with a full understandin- of its import" 7n this case! the respondents
were suCciently apprised of their ri-hts under the wai.ers and :uitclaims that they
si-ned" 2ach document contained the si-natures of the union president and its counsel!
which pro.ed that respondents were duly assisted when they si-ned the wai.ers and
:uitclaims" Kence! the Court upheld the .alidity of the wai.ers and :uitclaims si-ned by
the respondents in this case" &lastimer 0ndustrial Corporation and 1eo Kee =in v. Natalia
C. Gopo, et al., G.R. No. 1<!!#, 8ebruary 1", %11.
&etrenchment/ notice re:uirements" Petitioner issued a Eemorandum informin- all its
employees of the decision of the company*s Board of Directors to downsiDe and
reor-aniDe its business operations due to the chan-e of its corporate structure"
Petitioner ser.ed the indi.idual notice of termination on its employees on Eay 1;! 200;
or %0 days before the e8ecti.e date of their termination on 1% June 200;! while it
submitted the notice of termination to the Department of Labor and 2mployment only
on 2( Eay 200;! short of the one>month prior notice re:uirement under Article 2+% of
the Labor Code" 5he Court held that petitioners* failure to comply with the one>month
notice to the DNL2 is only a procedural inrmity and does not render the retrenchment
ille-al" @hen the dismissal is for a Lust cause! the absence of proper notice will not
nullify the dismissal or render it ille-al or ine8ectual" 7nstead! the employer should
indemnify the employee for .iolation of his statutory ri-hts" &lastimer 0ndustrial
Corporation and 1eo Kee =in v. Natalia C. Gopo, et al., G.R. No. 1<!!#, 8ebruary 1",
%11.
&etrenchment/ notice re:uirements" 7n 200;! the petitioner had to retrench and
conse:uently terminate the employment of the respondents" &espondents :uestioned
the .alidity of the retrenchment! and alle-ed that thou-h petitioner*s nancial
statements in 2001 and 2002 reHected losses! it declared net income in 200%" 5he Court
ruled that the fact that there was a net income in 200% does mean that there was no
.alid reason for the retrenchment" &ecords showed that the net income
of P(!1+'!$0$"0' in 200% was not enou-h to allow petitioners to reco.er the loss
ofP'2!B0;!2B$"++ which it su8ered in 2002" Article 2+% of the Labor Code reco-niDes
retrenchment to pre.ent losses as a ri-ht of the mana-ement to meet clear and
continuin- economic threats or durin- periods of economic recession to pre.ent losses"
5here is no need for the employer to wait for substantial losses to materialiDe before
e6ercisin- ultimate and drastic option to pre.ent such losses" &lastimer 0ndustrial
Corporation and 1eo Kee =in v. Natalia C. Gopo, et al., G.R. No. 1<!!#, 8ebruary 1",
%11.
Anfair Labor Practice/ ri-ht to self>or-aniDe" &espondent>company implemented a
company>wide reor-aniDation which resulted in the abolition of petitioner*s position"
Petitioner alle-ed that he was ille-ally dismissed and that respondent>company is -uilty
of unfair labor practice because his functions were outsourced to labor>only contractors"
5he Supreme Court held unfair labor practice refers to acts that .iolate the wor=ers*
ri-ht to or-aniDe" 5he prohibited acts are related to the wor=ers* ri-ht to self>
or-aniDation and to the obser.ance of a CBA" 5hus! an employer may be held liable for
unfair labor practice only if it can be shown that his acts interfere with his employees*
ri-ht to self>or-aniDation" Since there is no showin- that the respondent company*s
implementation of the &i-ht>SiDin- Pro-ram was moti.ated by ill will! bad faith or
malice! or that it was aimed at interferin- with its employees* ri-ht to self>or-aniDation!
there is no unfair labor practice to spea= of in this case" Nelson A. Culili v. 4astern
1ele)ommuni)ations &'ilippines, 0n)., et al. G.R. No. 1":!<1, 8ebruary #, %11.
Earch 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on April 1;! 2011 by Leslie C" Dy [ Posted in Labor Law [
Kere are selected Earch 2011 rulin-s of the Supreme Court of the Philippines on labor
law and procedure9
Abandonment/ elements" &espondent employee was dismissed by petitioners on the
-round of alle-ed habitual absenteeism and abandonment of wor=" Jurisprudence
pro.ides for two essential re:uirements for abandonment of wor= to e6ist9 014 the failure
to report for wor= or absence without .alid or Lustiable reason! and 024 clear intention
to se.er the employer>employee relationship manifested by some o.ert acts should
both concur" Gurther! the employee*s deliberate and unLustied refusal to resume his
employment without any intention of returnin- should be established and pro.en by the
employer" 5he Court held that petitioners failed to pro.e that it was respondent
employee who .oluntarily refused to report bac= for wor= by his deance and refusal to
accept the memoranda and the notices of absences sent to him" Petitioners failed to
present e.idence that they sent these notices to respondent employee*s last =nown
address for the purpose of warnin- him that his continued failure to report would be
construed as abandonment of wor=" Eoreo.er! the fact that respondent employee
ne.er prayed for reinstatement and has sou-ht employment in another company which
is a competitor of petitioners cannot be construed as his o.ert acts of abandonin-
employment" Jeither can the delay of four months be ta=en as an indication that the
respondent employee*s lin- of a complaint for ille-al dismissal is a mere afterthou-ht"
&ecords show that respondent employee attempted to -et his separation pay and
alle-ed commissions from the company! but it was only after his re:uests went
unheeded that he resorted to Ludicial recourse" -arpoon ,arine Servi)es, 0n)., et al. v.
8ernan -. 8ran)is)o, GR No. 1"77:1, ,ar)' %, %11.
Corporate oCcer/ solidary liability" &espondent employee led an ille-al dismissal case
a-ainst the Petitioner Corporation and its President" 5hou-h the Court found that
&espondent was ille-ally dismissed! it held that the President of the Petitioner
Corporation should not be held solidarily liable with Petitioner Corporation" Nbli-ations
incurred by corporate oCcers! actin- as such corporate a-ents! are not theirs but the
direct accountabilities of the corporation they represent" 5hus! they should not be
-enerally held Lointly and solidarily liable with the corporation" 5he -eneral rule is
-rounded on the theory that a corporation has a le-al personality separate and distinct
from the persons comprisin- it" As e6ceptions to the -eneral rule! solidary liability may
be imposed9 014 @hen directors and trustees or! in appropriate cases! the oCcers of a
corporation F0a4 .ote for or assent to #patently) unlawful acts of the corporation/ 0b4
act in bad faith or with -ross ne-li-ence in directin- the corporate a8airs/ 0c4 are -uilty
of conHict of interest to the preLudice of the corporation! its stoc=holders or members!
and other persons/ 024 @hen the director or oCcer has consented to the issuance of
watered stoc= or who! ha.in- =nowled-e thereof! did not forthwith le with the
corporate secretary his written obLection thereto/ 0%4 @hen a director! trustee or oCcer
has contractually a-reed or stipulated to hold himself personally and solidarily liable
with the corporation/ 0;4 @hen a director! trustee or oCcer is made! by specic
pro.ision of law! personally liable for his corporate action" 5o warrant the piercin- of the
.eil of corporate ction! the oCcer*s bad faith or wron-doin- must be established
clearly and con.incin-ly as bad faith is ne.er presumed" -arpoon ,arine Servi)es, 0n).,
et al. v. 8ernan -. 8ran)is)o, GR No. 1"77:1, ,ar)' %, %11.
Labor or-aniDation/ collateral attac= on le-al personality" &espondent company
:uestioned the le-al personality of the petitioner union in a certication election
proceedin-" 5he Court ruled that the le-al personality of the petitioner union cannot be
collaterally attac=ed by respondent company" 26cept when it is re:uested to bar-ain
collecti.ely! an employer is a mere bystander to any petition for certication election/
such proceedin- is non>ad.ersarial and merely in.esti-ati.e! considerin- that its
purpose is to determine if the employees would li=e to be represented by a union and to
select the or-aniDation that will represent them in their collecti.e bar-ainin- with the
employer" 5he choice of their representati.e is the e6clusi.e concern of the employees/
the employer cannot ha.e any partisan interest therein/ it cannot interfere with! much
less oppose! the process by lin- a motion to dismiss or an appeal from it/ not e.en the
alle-ation that some employees participatin- in a petition for certication election are
actually mana-erial employees will -i.e an employer le-al personality to bloc= the
certication election" 5he employer*s only ri-ht in the proceedin- is to be notied or
informed thereof" Sama'an( ,an((a(aCa sa C'arter C'emi)al Solidarity o+ ?nions in
t'e &'ilippines +or 4mpoCerment and Re+orms IS,CC6S?&4RJ, Pa)arrias $erry @i)torio M
?nion &resident v. C'arter C'emi)al and Coatin( Corporation, G.R. No. 1"#717, ,ar)'
1", %11.
Labor or-aniDation/ membership of super.isory employees" Petitioner union led a
Petition for Certication 2lection amon- the re-ular ran=>and>le employees of the
respondent company" &espondent contends that petitioner union is not a le-itimate
labor or-aniDation because its composition is a mi6ture of super.isory and ran=>and>le
employees" 5he Court ruled that the inclusion of the super.isory employees in petitioner
union does not di.est it of its status as a le-itimate labor or-aniDation" After a labor
or-aniDation has been re-istered! it may e6ercise all the ri-hts and pri.ile-es of a
le-itimate labor or-aniDation" Any min-lin- between super.isory and ran=>and>le
employees in its membership cannot a8ect its le-itimacy for that is not amon- the
-rounds for cancellation of its re-istration! unless such min-lin- was brou-ht about by
misrepresentation! false statement or fraud under Article 2%B of the Labor
Code" Sama'an( ,an((a(aCa sa C'arter C'emi)al Solidarity o+ ?nions in t'e
&'ilippines +or 4mpoCerment and Re+orms IS,CC6S?&4RJ, Pa)arrias $erry @i)torio M
?nion &resident v. C'arter C'emi)al and Coatin( Corporation,G.R. No. 1"#717, ,ar)'
1", %11.
Labor or-aniDation/ re-istration" Petitioner union led a Petition for Certication 2lection
amon- the re-ular ran=>and>le employees of the respondent company" &espondent
company led an Answer with Eotion to Dismiss on the -round that petitioner union is
not a le-itimate labor or-aniDation because of its failure to comply with the
documentary re:uirements set by law! i"e" non>.erication of the charter certicate" 5he
Court ruled that it was not necessary for the charter certicate to be certied and
attested by the localQchapter oCcers" Considerin- that the charter certicate is
prepared and issued by the national union and not the localQchapter! it does not ma=e
sense to ha.e the localQchapter*s oCcers certify or attest to a document which they did
not prepare" 7n accordance with this rulin-! petitioner union*s charter certicate need
not be e6ecuted under oath" Conse:uently! it .alidly ac:uired the status of a le-itimate
labor or-aniDation upon submission of 014 its charter certicate! 024 the names of its
oCcers! their addresses! and its principal oCce! and 0%4 its constitution and by>lawsX
the last two re:uirements ha.in- been e6ecuted under oath by the proper union
oCcials" Sama'an( ,an((a(aCa sa C'arter C'emi)al Solidarity o+ ?nions in t'e
&'ilippines +or 4mpoCerment and Re+orms IS,CC6S?&4RJ, Pa)arrias $erry @i)torio M
?nion &resident v. C'arter C'emi)al and Coatin( Corporation, G.R. No. 1"#717, ,ar)'
1", %11.
&einstatement/ accrued bac=wa-es" 5he Labor Arbiter and the JL&C held that petitioner
employer ille-ally dismissed the respondent employee" Nn appeal! the Court of Appeals
re.ersed the decision and ruled that the dismissal was .alid" Kowe.er! the Court of
Appeals ordered petitioner employer to pay respondent employee her salary from the
date of the Labor Arbiter*s decision orderin- her reinstatement until the Court of
Appeals rendered its decision declarin- the dismissal .alid" Petitioner employer
:uestioned the order and refused to pay" 5he Court held that e.en if the order of
reinstatement of the Labor Arbiter is re.ersed on appeal! it is obli-atory on the part of
the employer to reinstate and pay the wa-es of the dismissed employee durin- the
period of appeal until re.ersal by the hi-her court" Nn the other hand! if the employee
has been reinstated durin- the appeal period and such reinstatement order is re.ersed
with nality! the employee is not re:uired to reimburse whate.er salary he recei.ed!
more so! if he actually rendered ser.ices durin- the period" 5he payment of such wa-es
cannot be deemed as unLust enrichment on respondent*s part" &.Aer, 0n)., et al. v.
Geraldine @elas)o, G.R. No. 1779"7, ,ar)' #, %11.
&einstatement/ immediately e6ecutory order" 5he Labor Arbiter held that petitioner
employer ille-ally dismissed the respondent employee" Pendin- its appeal! petitioner
employer failed to immediately admit respondent employee bac= to wor= despite of an
order of reinstatement" 5he Court held that that the pro.ision of Article 22% is clear that
an award by the Labor Arbiter for reinstatement shall be immediately e6ecutory e.en
pendin- appeal and the postin- of a bond by the employer shall not stay the e6ecution
for reinstatement" 5he le-islati.e intent is to ma=e an award of reinstatement
immediately enforceable! e.en pendin- appeal" 5o re:uire the application for and
issuance of a writ of e6ecution as prere:uisites for the e6ecution of a reinstatement
award would certainly betray the e6ecutory nature of a reinstatement order or award" 7n
the case at bar! petitioner employer did not immediately admit respondent employee
bac= to wor= which! accordin- to the law! should ha.e been done as soon as an order or
award of reinstatement is handed down by the Labor Arbiter without need for the
issuance of a writ of e6ecution" &.Aer, 0n)., et al. v. Geraldine @elas)o, G.R. No.
1779"7, ,ar)' #, %11.
&einstatement/ terms and conditions" Due to the order of reinstatement issued by the
Labor Arbiter! petitioner employer sent a letter to the respondent employee to report
bac= to wor= and assi-ned her to a new location" 5he Court held that such is not a bona
de reinstatement" Ander Article 22% of the Labor Code! an employee entitled to
reinstatement shall either be admitted bac= to wor= under the same terms and
conditions pre.ailin- prior to his dismissal or separation or! at the option of the
employer! merely reinstated in the payroll" 7t is established in Lurisprudence that
reinstatement means restoration to a state or condition from which one had been
remo.ed or separated" 5he person reinstated assumes the position he had occupied
prior to his dismissal" &einstatement presupposes that the pre.ious position from which
one had been remo.ed still e6ists! or that there is an unlled position which is
substantially e:ui.alent or of similar nature as the one pre.iously occupied by the
employee" Applyin- the fore-oin- principle! it cannot be said that petitioner employer
has a clear intent to reinstate respondent employee to her former position under the
same terms and conditions nor to a substantially e:ui.alent position" 5o be-in with! the
return>to>wor= order petitioner sent to respondent employee is silent with re-ard to the
position it wanted the respondent employee to assume" Eoreo.er! a transfer of wor=
assi-nment without any Lustication therefor! e.en if respondent employee would be
presumably doin- the same Lob with the same pay! cannot be deemed as faithful
compliance with the reinstatement order" &.Aer, 0n)., et al. v. Geraldine @elas)o, G.R.
No. 1779"7, ,ar)' #, %11.
5ermination by employer/ willful disobedience" Petitioner employer ordered the
respondent employee to prepare chec=s for payment of petitioner*s obli-ations"
&espondent did not immediately comply with the instruction since petitioner employer
has no suCcient funds to co.er the chec=s" Petitioner employer dismissed respondent
employee for willful disobedience" 5he Court held that respondent employee was
ille-ally dismissed" 5he o8ense of willful disobedience re:uires the concurrence of two
024 re:uisites9 014 the employee*s assailed conduct must ha.e been willful! that is
characteriDed by a wron-ful and per.erse attitude/ and 024 the order .iolated must ha.e
been reasonable! lawful! made =nown to the employee and must pertain to the duties
which he had been en-a-ed to dischar-e" 5hou-h there is nothin- unlawful in the
directi.e of petitioner employer to prepare chec=s in payment of petitioner*s
obli-ations! respondent employee*s initial reluctance to prepare the chec=s! althou-h
seemin-ly disrespectful and deant! was for honest and well intentioned reasons"
Protectin- the petitioner employer from liability under the Bouncin- Chec=s Law was
foremost in her mind" 7t was not wron-ful or willful" Jeither can it be considered an
obstinate deance of company authority" 5he Court ta=es into consideration that
respondent employee! despite her initial reluctance! e.entually did prepare the chec=s
on the same day she was tas=ed to do it" Lores Realty 4nterprises, 0n)., LorenAo Y.
Sumulon( 000 v. @ir(inia 4. &a)ia, G.R. No. 1711<#, ,ar)' #, %11.
@a-es/ facilities and supplements" &espondent employees alle-ed underpayment of
their wa-es" Petitioner employer claimed that the cost of food and lod-in- pro.ided by
petitioner to the respondent employees should be included in the computation of the
wa-es recei.ed by respondents" 5he Court ma=es a distinction between 1facilities3 and
1supplements"3 Supplements constitute e6tra remuneration or special pri.ile-es or
benets -i.en to or recei.ed by the laborers o.er and abo.e their ordinary earnin-s or
wa-es" Gacilities! on the other hand! are items of e6pense necessary for the laborer*s
and his family*s e6istence and subsistence so that by e6press pro.ision of law! they
form part of the wa-e and when furnished by the employer are deductible therefrom!
since if they are not so furnished! the laborer would spend and pay for them Lust the
same" 7n short! the benet or pri.ile-e -i.en to the employee which constitutes an e6tra
remuneration abo.e and o.er his basic or ordinary earnin- or wa-e is supplement/ and
when said benet or pri.ile-e is part of the laborers* basic wa-es! it is a facility" 5he
distinction lies not so much in the =ind of benet or item 0food! lod-in-! bonus or sic=
lea.e4 -i.en! but in the purpose for which it is -i.en" 7n the case at bench! the items
pro.ided were -i.en freely by petitioner employer for the purpose of maintainin- the
eCciency and health of its wor=ers while they were wor=in- at their respecti.e proLects"
5hus! the Court is of the .iew that the food and lod-in-! or the electricity and water
alle-edly consumed by respondents in this case were not facilities but supplements
which should not be included in the computation of wa-es recei.ed by respondent
employees" SLL 0nternational Cables Spe)ialist and Sonny L. La(on v. NLRC, Roldan
LopeA, et al., G.R. No. 17%1"1, ,ar)' %, %11.
@a-es/ proof of payment" 7n an ille-al dismissal case a-ainst the petitioner employer!
respondent employees alle-ed that they were underpaid" 7n their defense! petitioner
employer alle-ed that respondent employees actually recei.ed wa-es hi-her than the
prescribed minimum" 5he Court held that as a -eneral rule! a party who alle-ed
payment of wa-es as a defense has the burden of pro.in- it" Specically with respect to
labor cases! the burden of pro.in- payment of monetary claims rests on the employer!
the rationale bein- that the pertinent personnel les! payrolls! records! remittances and
other similar documents X which will show that o.ertime! di8erentials! ser.ice incenti.e
lea.e and other claims of wor=ers ha.e been paid X are not in the possession of the
wor=er but in the custody and absolute control of the employer" 7n this case! petitioner
employer! aside from bare alle-ations that respondent employees recei.ed wa-es
hi-her than the prescribed minimum! failed to present any e.idence! such as payroll or
payslips! to support their defense of payment" 5hus! petitioner employer utterly failed
to dischar-e the onus probandi" SLL 0nternational Cables Spe)ialist and Sonny L. La(on
v. NLRC, Roldan LopeA, et al., G.R. No. 17%1"1, ,ar)' %, %11.
@a-es/ .alue of facilities" Petitioner employer alle-ed that the cost of facilities must be
included in the computation of wa-es paid" 5he Court held that before the .alue of
facilities can be deducted from the employees* wa-es! the followin- re:uisites must all
be attendant9 .rst, proof must be shown that such facilities are customarily furnished by
the trade/ se)ond! the pro.ision of deductible facilities must be .oluntarily accepted in
writin- by the employee/ and .nally! facilities must be char-ed at reasonable .alue"
Eere a.ailment is not suCcient to allow deductions from employees* wa-es" 5hese
re:uirements! howe.er! ha.e not been met in this case" Petitioner employer failed to
present any company policy or -uideline showin- that pro.isions for meals and lod-in-
were part of the employee*s salaries" 7t also failed to pro.ide proof of the employees*
written authoriDation! much less show how they arri.ed at their .aluations" At any rate!
it is not e.en clear whether respondent employees actually enLoyed said facilities" SLL
0nternational Cables Spe)ialist and Sonny L. La(on v. NLRC, Roldan LopeA, et al., G.R.
No. 17%1"1, ,ar)' %, %11.
April 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on Eay 1B! 2011 by Leslie C" Dy [ Posted in Labor Law [ 5a--ed certiorari! ille-al dismissal! loss
of trust and condence [
Kere are selected April 2011 rulin-s of the Supreme Court of the Philippines on labor law
and procedure9
Dismissal/ breach of trust and condence" Petitioner was employed as Assistant Mice>
President of the Jewelry Department in respondent ban=" Kis employment was
terminated on the -round of willful breach of trust and condence" Jurisprudence
pro.ides for two re:uisites for dismissal on the -round of loss of trust and condence/
014 the employee concerned must be holdin- a position of trust and condence! and 024
there must be an act that would Lustify the loss of trust and condence" Loss of trust
and condence! to be a .alid cause for dismissal! must be based on a willful breach of
trust and founded on clearly established facts" 5he basis for the dismissal must be
clearly and con.incin-ly established but proof beyond reasonable doubt is not
necessary" Gurthermore! the burden of establishin- facts as bases for an employer*s loss
of condence is on the employer" 5he court held that the termination of petitioner was
without Lust cause and therefore ille-al" Althou-h the rst re:uisite was present! the
respondent failed to satisfy the second re:uisite" &espondent ban= was not able to
show any concrete proof that petitioner had participated in the appro.al of the
:uestioned accounts" 5he in.ocation by respondent of the loss of trust and condence
as -round for petitioner*s termination has therefore no basis at all" $ames =en L.
$erusalem v. Keppel ,onte =ank, et al., G.R. No. 1"#:"9. April ", %11.
Breach of 5rust and Condence/ duties of employee" Petitioner was employed as
Assistant Mice>President in respondent ban=" Kis employment was terminated on the
-round of willful breach of trust and condence for endorsin- M7SA card applicants who
later turned out to be impostors resultin- in nancial losses to respondent ban=" 5he
court held that petitioner was ille-ally dismissed" As pro.ided in Article 2+2 of the Labor
Code! an employer may terminate an employee*s employment for fraud or willful breach
of trust reposed in him" Kowe.er! in order to constitute a Lust cause for dismissal! the
act complained of must be ]wor=>related* such as would show the employee concerned
to be unt to continue wor=in- for the employer" 5he act of betrayal of trust! if any!
must ha.e been committed by the employee in connection with the performance of his
function or position" 5he court found that the element of ]wor=>connection* was not
present in this case since petitioner was assi-ned under the Jewelry department! and
therefore had nothin- to do with the appro.al of M7SA Cards! which was under a
di8erent department alto-ether" $ames =en L. $erusalem v. Keppel ,onte =ank, et
al., G.R. No. 1"#:"9. April ", %11.
Certiorari under &ule ;'/ :uestions of law and e6ceptions" 5he Labor Arbiter and the
JL&C found that respondent employer ne-lected to pay petitioner*s sic=ness allowance"
Kowe.er! on appeal! the Court of Appeals re.ersed such ndin-s and held that
petitioner already recei.ed his sic=ness allowance from respondent" Petitioner
:uestioned the rulin- of the Court of Appeals by lin- a petition for re.iew on certiorari
under &ule ;'" 5he Supreme Court held that! as a rule! only :uestions of law! not
:uestions of fact! may be raised in a petition for re.iew on )ertiorari under &ule ;'"
Kowe.er! this principle is subLect to reco-niDed e6ceptions" 7n the labor law settin-! the
Court will del.e into factual issues when conHict of factual ndin-s e6ists amon- the
labor arbiter! the JL&C! and the Court of Appeals" Considerin- that in the present case
there were di8erin- factual ndin-s on the part of the Court of Appeals! on one hand!
and the Labor Arbiter and the JL&C! on the other! the Supreme Court found it necessary
to ma=e an independent e.aluation of the e.idence on record" >il+redo Y. Anti5uina v.
,a(saysay ,aritime Corporation and2or ,asterbulk &te., Ltd., G.R. No. 1"<#%%. April
1!, %11.
&ules of Procedure/ liberal construction in fa.or of wor=in- class" Petitioner claimed
disability benets under a Collecti.e Bar-ainin- A-reement that the respondent
employer entered into with a forei-n union" 5he Court of Appeals refused to admit the
e.idence of petitioner showin- his membership in the union on the -round that it was
submitted only with the Eotion for &econsideration" 5he Supreme Court! in a-reein- to
e6amine the e.idence belatedly submitted by petitioner! pointed out that technical
rules of procedure shall be liberally construed in fa.or of the wor=in- class in
accordance with the demands of substantial Lustice" &ules of procedure and e.idence
should not be applied in a .ery ri-id and technical sense in labor cases in order that
technicalities would not stand in the way of e:uitably and completely resol.in- the
ri-hts and obli-ations of the parties" >il+redo Y. Anti5uina v. ,a(saysay ,aritime
Corporation and2or ,asterbulk &te., Ltd., G.R. No. 1"<#%%. April 1!, %11.
Disability Benets/ entitlement and burden of proof" Petitioner su8ered a fractured arm
while wor=in- on respondent*s .essel" Ke led a complaint for permanent disability
benets! amon- others" Petitioner claims that he is entitled to the hi-her amount of
disability benets under the Collecti.e Bar-ainin- A-reement which respondent entered
into with a union of which petitioner was a member" 5he Court of Appeals denied the
petitioner*s claim" 5he Supreme Court! in upholdin- the Court of Appeals! held that the
burden of proof rests upon the party who asserts the aCrmati.e of an issue" And in
labor cases! the :uantum of proof necessary is substantial e.idence! or such amount of
rele.ant e.idence which a reasonable mind mi-ht accept as ade:uate to Lustify a
conclusion" Petitioner had the duty to pro.e by substantial e.idence his own positi.e
assertions" Ke did not dischar-e this burden of proof when he submitted photocopied
portions of a di8erent CBA with a di8erent union" >il+redo Y. Anti5uina v. ,a(saysay
,aritime Corporation and2or ,asterbulk &te., Ltd., G.R. No. 1"<#%%. April 1!, %11.
Public oCce/ casual employees" &espondent was a casual teller who was dismissed from
ser.ice by petitioner without bein- formally char-ed" Nn appeal! the Ci.il Ser.ice
Commission 0CSC4 upheld the dismissal and reasoned that respondent was a casual
employee! and therefore her ser.ices may be terminated at any time! without need of a
Lust cause" Apon re.iew! both the Court of Appeals and the Supreme Court found that
respondent was ille-ally terminated" 5he Supreme Court reco-niDed its pronouncement
in a recent case that 12.en a casual or temporary employee enLoys security of tenure
and cannot be dismissed e6cept for cause enumerated in Sec" 22! &ule U7M of the
Nmnibus Ci.il Ser.ice &ules and &e-ulations and other pertinent laws"3 Kowe.er! the
Court also went on to state that! despite this new rulin- on casual employees! it is not
the intention of the Court to ma=e the status of a casual employee at par with that of a
re-ular employee! who enLoys permanence of employment" 5he rule is still that casual
employment will cease automatically at the end of the period unless renewed" Casual
employees may also be terminated anytime thou-h subLect to certain conditions or
:ualications with reference to the CSC Gorm Jo" 001" 5hus! they may be laid>
o8 anytime before the e6piration of the employment period pro.ided any of the
followin- occurs9 014 when their ser.ices are no lon-er needed/ 024 funds are no lon-er
a.ailable/ 0%4 the proLect has already been completedQnished/ or 0;4 their performance
are below par" &'ilippine C'arity SCeepstakes DE)e =oard o+ Bire)tors and Reynaldo &.
,artin v. ,arie $ean C. Lapid, G.R. No. 1#1#9. April 1%, %11.
Public oCce/ security of tenure" &espondent was a casual teller who! ha.in- been found
-uilty of ]Discourtesy in the Course of NCcial Duties* and of ]Pra.e Eisconduct*! was
dismissed from ser.ice by petitioner" Nn appeal! the Ci.il Ser.ice Commission 0CSC4
ruled that despite lapses in procedural due process committed by petitioner employer!
the dismissal was proper since respondent belon-ed to the cate-ory of a casual
employee which does not enLoy security of tenure" Kence! she may be separated from
ser.ice at any time! there bein- no need to show cause" 5he Court of Appeals disa-reed
and declared the dismissal ille-al" 5he Supreme Court aCrmed the ndin-s of the Court
of Appeals" 7n doin- so! the Court relied on Section %024! Article U777 of the Constitution
which -uarantees the ri-hts of all Corkers to security of tenure" 5he Court also
reco-niDed its pronouncement in a recent case that 12.en a casual or temporary
employee enLoys security of tenure and cannot be dismissed e6cept for cause
enumerated in Sec" 22! &ule U7M of the Nmnibus Ci.il Ser.ice &ules and &e-ulations and
other pertinent laws"3 &'ilippine C'arity SCeepstakes DE)e =oard o+ Bire)tors and
Reynaldo &. ,artin v. ,arie $ean C. Lapid, G.R. No. 1#1#9. April 1%, %11.
Dismissal/ due process" &espondent was dismissed from her post as casual teller" @hen
respondent appealed her dismissal to the Ci.il Ser.ice Commission 0CSC4! the latter
found that respondent was ne.er formally char-ed for the administrati.e o8enses for
which she was dismissed" Kowe.er! despite ndin- that procedural due process was not
complied with! the CSC ne.ertheless upheld the dismissal on the -round that bein- a
casual employee! respondent enLoyed no security of tenure and can be dismissed
anytime" 5he Court found that respondent was ille-ally terminated and ordered her
reinstatement" Casual employees are entitled to due process especially if they are to be
remo.ed for more serious causes or for causes other than the reasons mentioned in CSC
Gorm Jo" 001" 5his is pursuant to Section 2! Article 7U0B4 of the Constitution"
Gurthermore! Section ;( of the Ci.il Ser.ice Law pro.ides that Qno oE)er or employee
in t'e Civil Servi)e s'all be suspended or dismissed e/)ept +or )ause as provided by laC
a+ter due pro)ess.3 5he reason for this is that their termination from the ser.ice could
carry a penalty a8ectin- their ri-hts and future employment in the
-o.ernment" &'ilippine C'arity SCeepstakes DE)e =oard o+ Bire)tors and Reynaldo &.
,artin v. ,arie $ean C. Lapid, G.R. No. 1#1#9. April 1%, %11.
Eay 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on June 21! 2011 by Leslie C" Dy [ Posted in Constitutional Law! Labor Law
[ 5a--ed appeal! due process! e:ual protection! ille-al dismissal! resi-nation [
Kere are selected Eay 2011 rulin-s of the Supreme Court of the Philippines on labor law
and procedure9
Section 10! &epublic Act Jo" +0;2/ unconstitutional" Petitioner ,ap was employed as an
electrician for respondent*s .essel under a 12>month contract" Ke was found to be
ille-ally terminated with nine months remainin- on his contract term" 5he Court of
Appeals 0CA4 awarded petitioner salaries for three months as pro.ided under Section 10
of &epublic Act Jo" +0;2" Nn certiorari! the Supreme Court re.ersed the CA and
declared that petitioner was entitled to his salaries for the full une6pired portion of his
contract" 5he Court has pre.iously declared in Serrano v. Gallant ,aritime Servi)es, 0n).
3%#7 that the clause 1or +or t'ree mont's +or every year o+ t'e une/pired term,
C'i)'ever is less3 pro.ided in the 'th para-raph of Section 10 of &"A" Jo" +0;2 is
unconstitutional for bein- .iolati.e of the ri-hts of N.erseas Gilipino @or=ers 0NG@s4 to
e:ual protection of the laws" 5he subLect clause contains a suspect classication in that!
in the computation of the monetary benets of 6ed>term employees who are ille-ally
dischar-ed! it imposes a %>month cap on the claim of NG@s with an une6pired portion of
one year or more in their contracts! but none on the claims of other NG@s or local
wor=ers with 6ed>term employment" 5he subLect clause sin-les out one classication of
NG@s and burdens it with a peculiar disad.anta-e" Eoreo.er! the subLect clause does
not state or imply any deniti.e -o.ernmental purpose/ hence! the same .iolates not
Lust petitioner*s ri-ht to e:ual protection! but also his ri-ht to substanti.e due process
under Section 1! Article 777 of the Constitution" Claudio S. Yap vs. 1'enamaris S'ipNs
,ana(ement and 0ntermare ,aritime A(en)ies, 0n)., G.R. No. 17#:!%, ,ay !, %11
Doctrine of Nperati.e Gact/ applied as a matter of e:uity and fair play" Petitioner ,ap was
employed on respondent*s .essel under a 12>month contract" Apon ndin- that he was
ille-ally terminated! the Court of Appeals 0CA4 awarded petitioner salaries for three
months as pro.ided under Section 10 of &epublic Act Jo" +0;2 0&A +0;24" @hile the
case was pendin- in the Supreme Court! Section 10 of &A +0;2 was declared
unconstitutional" 7n decidin- to award petitioner his salaries for the entire une6pired
portion of his contract! the Supreme Court reLected the application of the operati.e fact
doctrine" As an e6ception to the -eneral rule! the doctrine applies only as a matter of
e:uity and fair play" 7t reco-niDes that the e6istence of a statute prior to a determination
of unconstitutionality is an operati.e fact and may ha.e conse:uences which cannot
always be i-nored" 5he doctrine is applicable when a declaration of unconstitutionality
will impose an undue burden on those who ha.e relied on the in.alid law" 5his case
should not be included in the aforementioned e6ception" After all! it was not the fault of
petitioner that he lost his Lob due to an act of ille-al dismissal committed by
respondents" 5o rule otherwise would be ini:uitous to petitioner and other NG@s! and
would! in e8ect! send a wron- si-nal that principalsQemployers and
recruitmentQmannin- a-encies may .iolate an NG@*s security of tenure which an
employment contract embodies and actually prot from such .iolation based on an
unconstitutional pro.ision of law" Claudio S. Yap vs. 1'enamaris S'ipNs ,ana(ement and
0ntermare ,aritime A(en)ies, 0n)., G.R. No. 17#:!%, ,ay !, %11.
Ei-rant wor=ers/ computation of salary award" Petitioner ,ap was employed as an
electrician for respondent*s .essel under a 12>month contract" Ke was found to be
ille-ally terminated with nine months remainin- on his contract term! and was declared
to be entitled to his salaries for the balance of his contract" &espondents claim that the
tan=er allowance should be e6cluded from the denition of the term 1salary"3 5he
Supreme Court! after e6aminin- the rele.ant clauses of the contract! reLected
respondent*s claim" 5he word salaries in Section 10 0'4 does not include o.ertime and
lea.e pay" Gor seafarers! DNL2 Department Nrder Jo" %%! series 1BB(! pro.ides a
Standard 2mployment Contract of Seafarers! in which salary is understood as the basic
wa-e! e/)lusive of o.ertime! lea.e pay and other bonuses" A close perusal of the
contract re.eals that the tan=er allowance of AST1%0"00 was not cate-oriDed as a bonus
but was rather encapsulated in the basic salary clause! hence! formin- part of the basic
salary of petitioner" 7f respondents intended it di8erently! the contract per se should
ha.e indicated that said allowance does not form part of the basic salary or! simply! the
contract should ha.e separated it from the basic salary clause" Claudio S. Yap vs.
1'enamaris S'ipNs ,ana(ement and 0ntermare ,aritime A(en)ies, 0n). G.R. No.
17#:!%, ,ay !, %11.
5ermination for Just Cause/ separation pay by way of nancial assistance" Petitioner
Juliet Apacible was employed as Assistant Area Sales Eana-er for respondent*s Cebu
operations" She was informed that she would be transferred to the Pasi- oCce on
account of the on-oin- reor-aniDation" Petitioner*s repeated refusal to comply with the
transfer order was treated by respondent as insubordination and -rounds for her
dismissal" 5he Labor Arbiter! the JL&C and the Court of Appeals all found that petitioner
was Lustly dismissed from employment" 5he JL&C awarded separation pay as nancial
assistance! howe.er! notin- that petitioner*s obstinacy was upon the ad.ice of her
counsel and! therefore! there was a modicum of -ood faith on her part" Nn appeal! the
Court of Appeals 0CA4 deleted the award of separation pay" 5he Supreme Court upheld
the CA and declared that the award of nancial assistance shall not be -i.en to .alidly
terminated employees! whose o8enses are ini:uitous or reHecti.e of some depra.ity in
their moral character" @hen the employee commits an act of dishonesty! depra.ity! or
ini:uity! the -rant of nancial assistance is misplaced compassion" 7n this case!
petitioner*s adamant refusal to transfer! coupled with her failure to heed the order for
her to return the company .ehicle assi-ned to her and! more importantly! allowin- her
counsel to write letters couched in harsh lan-ua-e to her superiors un:uestionably
show that she was -uilty of insubordination! hence! not entitled to the award of
separation pay" $uliet G. Apa)ible vs. ,ultimed 0ndustries, et al., G.R. No. 17<#!, ,ay
!, %11.
Appeal/ postin- of Appeal Bond/ Po.ernment*s e6emption from the same" &espondents
are super.isory and ran= and le employees of the DU@P>7li-an City radio station which
is owned by petitioner Banahaw Broadcastin- Corporation 0BBC4" &espondents led a
complaint for ille-al dismissal! unfair labor practice! and reimbursement of unpaid
Collecti.e Bar-ainin- A-reement 0CBA4 benets a-ainst petitioner" 5he Labor Arbiter
rendered a decision orderin- petitioner BBC to pay the money claims" Nn appeal to the
JL&C! petitioner BBC a.erred that since it is wholly owned by the &epublic of the
Philippines! it need not post an appeal bond" 5he JL&C dismissed the appeal of BBC for
non>perfection" 5he Court of Appeals aCrmed the JL&C" 5he Supreme Court! in
sustainin- the CA! held that as a -eneral rule! the -o.ernment and all the attached
a-encies with no le-al personality distinct from the former are e6empt from postin-
appeal bonds" 5he rationale is to protect the presumpti.e Lud-ment creditor a-ainst the
insol.ency of the presumpti.e Lud-ment debtor" @hen the State liti-ates! it is not
re:uired to put up an appeal bond because it is presumed to be always sol.ent" 5his
e6emption! howe.er! does not! as a -eneral rule! apply to -o.ernment>owned and
controlled corporations 0PNCCs4 for the reason that the latter has a personality distinct
from its shareholders" 7n this case! BBC! thou-h owned by the -o.ernment! is a
corporation with a personality distinct from the &epublic or any of its a-encies or
instrumentalities! and therefore do not parta=e in the latter*s e6emption from the
postin- of appeal bonds" =ana'aC =road)astin( Corporation vs. Cayetano &ACANa 000, et
al, G.R. No. 171"7!, ,ay !, %11.
Appeal/ postin- of appeal bond within the 10>day period is mandatory and Lurisdictional"
&espondents led a complaint for ille-al dismissal! unfair labor practice! and
reimbursement of unpaid Collecti.e Bar-ainin- A-reement 0CBA4 benets a-ainst
petitioner" 5he Labor Arbiter rendered a decision in fa.or of respondents and ordered
petitioner BBC to pay the money claims" Petitioner appealed to the JL&C! and without
postin- the appeal bond! led a Eotion for the &e>computation of the Eonetary Award in
order that the appeal bond may be reduced" 5he JL&C denied the motion and dismissed
the appeal of BBC for non>perfection" 5he Court of Appeals and the Supreme Court both
sustained the dismissal by the JL&C" 5he Eotion for the &e>computation of the
Eonetary Award led by BBC was tantamount to a motion for e6tension to perfect the
appeal! which is prohibited by the rules" 5he payment of the appeal bond within the
period pro.ided by law is an indispensable and Lurisdictional re:uisite and not a mere
technicality of law or procedure" Kence! the failure on the part of BBC to perfect the
appeal had the e8ect of renderin- the Lud-ment nal and e6ecutory" =ana'aC
=road)astin( Corporation vs. Cayetano &ACANa 000, et al, G.R. No. 171"7!, ,ay !,
%11.
Moluntary &esi-nation/ nancial assistance may be awarded on e:uity
considerations" Petitioner led a complaint for ille-al dismissal a-ainst respondent"
Gindin- instead that petitioner had .oluntarily resi-ned! the Labor Arbiter dismissed the
complaint a-ainst respondent! but ordered the latter to pay P1+!000"00 by way of
nancial assistance" Nn appeal! the JL&C found petitioner to be ille-ally dismissed" 5he
Court of Appeals reaCrmed the ndin-s of the LA but deleted the award of nancial
assistance! rulin- that the same may not be awarded in cases of .oluntary resi-nation"
5he Supreme Court! in upholdin- the award of nancial assistance! stated that while the
rule is that nancial assistance is allowed only in instances where the employee is
.alidly dismissed for causes other than serious misconduct or those reHectin- on his
moral character! there are instances when nancial assistance may be allowed as a
measure of social Lustice and as an e:uitable concession" 7n this case! petitioner! who
has ser.ed respondent for more than ei-ht years without committin- any infraction!
may be -ranted such nancial assistance on e:uity considerations" Rodol+o Luna
vs. Allado Constru)tion Company, 0n). and2or Ramon Allado, G.R. No. 17:%:1, ,ay !,
%11.
Jational Labor &elations Commission/ authority to re.iew is limited to issues specically
brou-ht before it on appeal" Petitioner led a complaint for ille-al dismissal a-ainst
respondent" Gindin- that petitioner had .oluntarily resi-ned! the Labor Arbiter dismissed
the complaint a-ainst respondent! but ordered the latter to pay P1+!000"00 by way of
nancial assistance" &espondents interposed an appeal with the Jational Labor
&elations Commission 0JL&C4! purely for the purpose of :uestionin- the .alidity of the
-rant of nancial assistance made by the Labor Arbiter" 7nstead! the JL&C ruled that
petitioner was ille-ally dismissed and was entitled to separation pay" 5he Court of
Appeals 0CA4 held that it was -ra.e abuse of discretion for the JL&C to rule on the issue
of ille-al dismissal when the only issue raised to it on appeal was the propriety of the
award of nancial assistance" 5he Supreme Court sustained the .iew of the CA!
reasonin- that Section ;0d4! &ule M7 of the 200' &e.ised &ules of Procedure of the JL&C
e6pressly pro.ides that! on appeal! the JL&C shall limit itself only to the specic issues
that were ele.ated for re.iew" 7n the case at bar! the JL&C e.idently went a-ainst its
own rules of procedure when it passed upon the issue of ille-al dismissal althou-h this
:uestion was not raised by respondents in their appeal" Rodol+o Luna vs.Allado
Constru)tion Company, 0n). and2or Ramon Allado, G.R. No. 17:%:1, ,ay !, %11.
June 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on July 10! 2011 by Leslie C" Dy [ Posted in Labor Law [ 5a--ed appeal! collecti.e bar-ainin-
a-reement! dama-es!Department of Labor and 2mployment! dismissal! independent
contractor! Lurisdiction! labor>only contractin-! loss of trust and condence! misconduct [
Kere are selected June 2011 rulin-s of the Supreme Court of the Philippines on labor law
and procedure9
Appeal/ decision of DNL2 Secretary" Gor petitioner*s refusal to comply with his
deployment assi-nment! respondent mannin- a-ency led a complaint a-ainst him for
breach of contract before the Philippine N.erseas 2mployment Administration 0PN2A4"
5he PN2A penaliDed petitioner with one year suspension from o.erseas deployment" 5he
suspension was reduced to si6 months by the Secretary of Labor" Petitioner appealed
the latter*s decision with the NCce of the President 0NP4" 5he Supreme Court ruled that
petitioner*s appeal was erroneous" 5he proper remedy to :uestion the decisions or
orders of the Secretary of Labor is .ia Petition for Certiorari under &ule ('" Appeals to
the NP in labor cases ha.e been eliminated! e6cept those in.ol.in- national interest
o.er which the President may assume Lurisdiction" 5he present case does not a8ect
national interest" Kence! petitioner*s appeal to the NP did not toll the runnin- of the
period and the assailed decision of the Secretary of Labor is deemed to ha.e attained
nality" ,i(uel Bela &ena =arairo vs. DE)e o+ t'e &resident and ,S1 ,arine Servi)es
3&'ils.7 0n)., G.R. No. 1<#!19. $une 1:, %11.
Appeal from decisions of labor arbiter/ bond re:uirement for perfection of appeal may
be rela6ed in meritorious cases" 5he postin- of a bond is indispensable to the perfection
of an appeal in cases in.ol.in- monetary awards from the decision of the labor arbiter"
Kowe.er! under Section (! &ule M7 of the JL&C*s &e.ised &ules of Procedure! the bond
may be reduced albeit only 014 on meritorious -rounds and 024 upon postin- of a partial
bond in a reasonable amount in relation to the monetary award" Gor this purpose! the
JL&C is not precluded from conductin- a preliminary determination of the employer*s
nancial capability to post the re:uired bond! without necessarily passin- upon the
merits" 7n the present case! the JL&C -ra.ely abused its discretion in denyin-
petitioner*s motion to reduce bond peremptorily without considerin- the e.idence
presented by petitioner showin- that it was under a state of recei.ership" Such
circumstance constitutes meritorious -rounds to reduce the bond" Eoreo.er! the
petitioner e6hibited its -ood faith by postin- a partial cash bond durin- the
re-lementary period" ?niversity &lans, 0n). vs. =elinda &. Solano, et al., G.R. No. 1791",
$une %%, %11
Certiorari/ substantial compliance" 5he three material dates which should be stated in
the petition for )ertiorari under &ule (' are the dates when the notice of Lud-ment was
recei.ed! when a motion for reconsideration was led and when the notice of the denial
of the motion for reconsideration was recei.ed" 5hese dates should be reHected in the
petition to enable the re.iewin- court to determine if the petition was led on time" 7n
the present case! the petition led with the Court of Appeals failed to state when
petitioner recei.ed the assailed JL&C Decision and when he led his partial motion for
reconsideration" Kowe.er! this omission is not at all fatal because these material dates
are reHected in petitioner*s Partial Eotion for &econsideration attached to the petition"
5he failure to state these two dates in the petition may be e6cused if the same are
e.ident from the records of the case" 5he Court further stated that the more important
material date which must be duly alle-ed in the petition is the date of receipt of the
resolution of denial of the motion for reconsideration" Since petitioner has duly complied
with this rule! there was substantial compliance with the re:uisite formalities" >illiam
4ndeliseo =arro(a vs. Bata Center Colle(e o+ t'e &'ilippines, et al., G.R. No.
1791:<. $une %7, %11
Collecti.e bar-ainin- a-reement/ duty of parties to maintain status :uo pendin-
rene-otiation" Article 2'% of the Labor Code mandates the parties to =eep the status
5uo and to continue in full force and e8ect the terms and conditions of the e6istin-
a-reement durin- the (0>day period prior to the e6piration of the old CBA andQor until a
new a-reement is reached by the parties" 5he law does not pro.ide for any e6ception
nor :ualication on which economic pro.isions of the e6istin- a-reement are to retain
its force and e8ect" Li=ewise! the law does not distin-uish between a CBA duly a-reed
upon by the parties and an imposed CBA li=e the one in the present case" Kence!
considerin- that no new CBA had been! in the meantime! a-reed upon by respondent
PEC and the Anion! the pro.isions of the imposed CBA continues to ha.e full force and
e8ect until a new CBA is entered into by the parties" General ,illin( Corporation6
0ndependent Labor ?nion IG,C60L?J vs. General ,illin( Corporation2General ,illin(
Corporation vs.General ,illin( Corporation60ndependent Labor ?nion IG,C60L?J, et
al., G.R. Nos. 1<!1%%21<!<<#, $une 1:, %11.
Dama-es/ fraud or bad faith for the award of moral dama-es" Eoral and e6emplary
dama-es are reco.erable where the dismissal of an employee was attended by bad
faith or fraud! or constituted an act oppressi.e to labor! or were done in a manner
contrary to morals! -ood customs or public policy" 7n the present case! PRP dismissed its
employees in a manner oppressi.e to labor" 5he sudden and peremptory barrin- of
petitioners from wor=! and from admission to the wor= place! after Lust a one>day .erbal
notice! and for no .alid cause! constitutes oppression and utter disre-ard of the ri-ht to
due process of the concerned petitioners" Kence! the Supreme Court held that an
award of moral dama-es is called for under the circumstances" $oeb ,. Aliviado, et al.
vs. &ro)ter and Gamble &'ils., 0n)., et al., G.R. No. 1":", $une ", %11.
Dismissal/ constructi.e dismissal" Petitioner was employed as an instructor of Data
Center Colle-e located in 7locos Jorte" @hen the colle-e proposed to transfer him to
Abra! he led a complaint alle-in- constructi.e dismissal since his re>assi-nment will
entail an indirect reduction of his salary or diminution of pay considerin- that no
additional allowance will be -i.en to co.er for board and lod-in- e6penses" Ke claims
that such additional allowance was -i.en in the past and therefore cannot be
discontinued and withdrawn without .iolatin- the prohibition a-ainst non>diminution of
benets" 5he Supreme Court aCrmed the ndin-s of the lower bodies and declared that
petitioner*s re>assi-nment did not amount to constructi.e dismissal" Constructi.e
dismissal is :uittin- because continued employment is rendered impossible!
unreasonable or unli=ely! or because of a demotion in ran= or a diminution of pay" 7t
e6ists when there is a clear act of discrimination! insensibility or disdain by an employer
which becomes unbearable for the employee to continue his employment" 7n the
present case! the colle-e*s ri-ht to transfer petitioner is based on contractual
stipulation! particularly the condition laid down in petitioner*s employment contract that
respondents ha.e the prero-ati.e to assi-n petitioner in any of its branches or tie>up
schools as the necessity demands" 7n any e.ent! it is mana-ement prero-ati.e for
employers to transfer employees on Lust and .alid -rounds such as -enuine business
necessity" Since respondents ha.e shown that it was e6periencin- some nancial
constraints at the time! the re>assi-nment was not tainted with bad faith" Gurthermore!
petitioner failed to present e.idence that respondents committed to pro.ide the
additional allowance or that they were consistently -rantin- such benet as to ha.e
ripened into a practice which cannot be peremptorily withdrawn" Kence! there is no
.iolation of the rule a-ainst diminution of pay" >illiam 4ndeliseo =arro(a vs. Bata
Center Colle(e o+ t'e &'ilippines, et al., G.R. No. 1791:<. $une %7, %11.
Dismissal/ elements for loss of trust or condence" Petitioners were employees of
Promm>Pem! a le-itimate independent contractor! and were hired to wor= as
merchandisers for respondent PRP" @hen petitioners led a claim a-ainst PRP for
re-ulariDation and other benets! it li=ewise attac=ed Promm>Pem as bein- merely a
labor>only contractor" 5he latter treated such mo.e as an act of disloyalty a-ainst
Promm>Pem and petitioners were dismissed on the -round of -ra.e misconduct and
breach of trust" 5he Supreme Court declared such termination ille-al for bein- without
.alid cause" Loss of trust and condence! as a cause for termination of employment! is
premised on the fact that the employee concerned holds a position of responsibility or
of trust and condence" As such! he must be in.ested with condence on delicate
matters! such as custody! handlin- or care and protection of the property and assets of
the employer" Eoreo.er! in order to constitute a Lust cause for dismissal! the act
complained of must be wor=>related and must show that the employee is unt to
continue to wor= for the employer" 7n the instant case! the petitioners ha.e not been
shown to be occupyin- positions of responsibility or of trust and condence" Jeither is
there any e.idence to show that they are unt to continue to wor= as merchandisers for
Promm>Pem" $oeb ,. Aliviado, et al. vs. &ro)ter and Gamble &'ils., 0n)., et al., G.R. No.
1":", $une ", %11.
Dismissal/ elements for serious misconduct" Petitioners were employees of Promm>Pem!
a le-itimate independent contractor" After se.eral years of wor=in- as merchandisers for
respondent PRP! petitioners led a claim a-ainst PRP for re-ulariDation and other
benets! and asserted incidentally that Promm>Pem was merely a labor>only contractor"
5he latter treated such mo.e as an act of disloyalty a-ainst Promm>Pem and petitioners
were dismissed on the -round of -ra.e misconduct and breach of trust" 5he Supreme
Court declared such termination ille-al for lac= of a .alid clause" 5o be a Lust cause for
dismissal! such misconduct 0a4 must be serious/ 0b4 must relate to the performance of
the employee*s duties/ and 0c4 must show that the employee has become unt to
continue wor=in- for the employer" 7n other words! in order to constitute serious
misconduct under Article 2+2 0a4 of the Labor Code! it is not suCcient that the act or
conduct complained of has .iolated some established rules or policies" 7t is e:ually
important and re:uired that the act or conduct must ha.e been performed with
wron-ful intent" 7n the instant case! petitioners may ha.e committed an error of
Lud-ment in claimin- to be employees of PRP! but it cannot be said that they were
moti.ated by any wron-ful intent in doin- so" As such! the court found them -uilty of
simple misconduct only which does not warrant a dismissal" $oeb ,. Aliviado, et al. vs.
&ro)ter and Gamble &'ils., 0n)., et al., G.R. No. 1":", $une ", %11.
Dismissal/ nancial assistance based on e:uity " 5he award of separation pay is
authoriDed under Article 2+% and 2+; of the Labor Code! and under Section ; 0b4! &ule 7!
Boo= M7 of the 7mplementin- &ules and &e-ulations where there is ille-al dismissal and
reinstatement is no lon-er feasible" By way of e6ception! the courts ha.e allowed -rants
of separation pay to stand as 1a measure of social Lustice3 where the employee is
.alidly dismissed for causes other than serious misconduct or those reHectin- on his
moral character" Kowe.er! there is no pro.ision in the Labor Code which -rants
separation pay to .oluntarily resi-nin- employees" 7n fact! the rule is that an employee
who .oluntarily resi-ns from employment is not entitled to separation pay! e6cept when
it is stipulated in the employment contract or collecti.e bar-ainin- a-reement 0CBA4! or
it is sanctioned by established employer practice or policy" 7n the present case! neither
the abo.ementioned pro.isions of the Labor Code nor the e6ceptions apply because
petitioner was not dismissed from his employment nor is there any e.idence to show
that payment of separation pay is stipulated in his employment contract or sanctioned
by established practice or policy of his employer" Je.ertheless! the Court noted that
petitioner ne.er had any dero-atory record durin- his lon- years of ser.ice with
respondent and that his employment was se.ered not by reason of any infraction on his
part but because of his failin- physical condition" Kence! as a measure of social and
compassionate Lustice and as an e:uitable concession! the Court -ranted separation
pay to petitioner by way of nancial assistance" Romeo @illaruel vs. Yeo -an Guan,
doin( business under t'e name and style Yu'ans 4nterprises, G.R. No. 1"#1#1, $une 1,
%11.
Dismissal/ separation pay due to disease" Petitioner was employed as a machine
operator until he stopped wor=in- when he su8ered from an illness" After his reco.ery!
petitioner was directed to report for wor= but he refused" 7nstead! he led a case with
the JL&C demandin- his separation pay" 5he JL&C awarded him separation benets
under Article 2+; of the Labor Code" Kowe.er! the Court of Appeals 0CA4 deleted such
award" Nn appeal! the Supreme Court stated that Article 2+; presupposes that it is the
employer who terminates the ser.ices of the employee found to be su8erin- from any
disease and whose continued employment is prohibited by law or is preLudicial to his
health as well as to the health of his co>employees" 7t does not contemplate a situation
where it is the employee who se.ers his or her employment ties" 5his is precisely the
reason why Section +! &ule 1! Boo= M7 of the Nmnibus &ules 7mplementin- the Labor
Code! directs that an employer shall not terminate the ser.ices of the employee unless
there is a certication by a competent public health authority that the disease is of such
nature or at such a sta-e that it cannot be cured within a period of si6 0(4 months e.en
with proper medical treatment" 7n the present case! petitioner was not terminated from
his employment and! instead! is deemed to ha.e resi-ned therefrom! and therefore he
is not entitled to separation pay under Article 2+; of the Labor Code"Romeo @illaruel vs.
Yeo -an Guan, doin( business under t'e name and style Yu'ans 4nterprises, G.R. No.
1"#1#1, $une 1, %11.
DNL2 assumption of Lurisdiction/ e8ects" A stri=e conducted after the Secretary of Labor
has assumed Lurisdiction o.er a labor dispute is ille-al and any union oCcer who
=nowin-ly participates in the stri=e may be declared as ha.in- lost his employment" 5he
present case in.ol.ed a slowdown stri=e" Anli=e other forms of stri=e! the employees
in.ol.ed in a slowdown do not wal= out of their Lobs to hurt the company" 5hey need
only to stop wor= or reduce the rate of their wor= while -enerally remainin- in their
assi-ned post" 5he Supreme Court upheld the ndin- that the union oCcers committed
ille-al acts that warranted their dismissal from wor= when they refused to wor= or
abandoned their wor= to Loin union assemblies after the Labor Secretary assumed
Lurisdiction o.er the labor dispute" Yolito 8adri5uelan, et al. vs. ,onterey 8oods
Corporation2,onterey 8oods Corporation v. =ukluran n( m(a ,an((a(aCa sa ,onterey6
0LA>, et al., G.R. No. 17<9#2G.R. No. 17<9!9, $une <, %11.
7ndependent Lob contractin-/ re:uired substantial capital" Petitioners assert that they
are employees of PRP and that Promm>Pem and SAPS are merely labor>only contractors
pro.idin- manpower ser.ices to PRP" 5here is 1labor>only3 contractin- where the
person supplyin- wor=ers to an employer does not ha.e substantial capital or
in.estment in the form of tools! e:uipment! machineries! wor= premises! amon- others!
and the wor=ers recruited and placed by such person are performin- acti.ities which are
directly related to the principal business of such employer" 7n the instant case! the
Supreme Court found that Promm>Pem has substantial in.estment which relates to the
wor= to be performed" 5he nancial statementsshow that it has authoriDed capital stoc=
of P1 million and a substantial amount of paid>in capital and other assets to support its
operations" Ander the circumstances! Promm>Pem cannot be considered a labor>only
contractor/ it is in fact a le-itimate independent contractor" Nn the other hand! the
nancial records of SAPS show that it has a paid>in capital of only P%1!2'0"00" 5here is
no other e.idence presented to show how much its wor=in- capital and assets are"
Gurthermore! there is no showin- of substantial in.estment in tools! e:uipment or other
assets" Considerin- that SAPS has no substantial capital or in.estment and the wor=ers
it recruited are performin- acti.ities which are directly related to the principal business
of PRP! SAPS is considered to be en-a-ed in 1labor>only contractin-3" $oeb ,. Aliviado,
et al. vs. &ro)ter and Gamble &'ils., 0n)., et al., G.R. No. 1":", $une ", %11.
Labor law/ labor>only contractin- ." independent Lob contractin-" 5he law allows
contractin- arran-ements for the performance of specic Lobs! wor=s or ser.ices!
re-ardless of whether such acti.ity is peripheral or core in nature" Kowe.er! in order for
such outsourcin- to be .alid! it must be made to an independent contractor because the
current labor rules e6pressly prohibit labor>only contractin-" 5here is labor>only
contractin- when the contractor or sub>contractor merely recruits! supplies or places
wor=ers to perform a Lob! wor= or ser.ice for a principaland any of the followin-
elements are present9 0i4 5he contractor or subcontractor does not ha.e substantial
capital or in.estment which relates to the Lob! wor= or ser.ice to be performed and the
employees recruited! supplied or placed by such contractor or subcontractor are
performin- acti.ities which are directly related to the main business of the principal/ or
0ii4 5he contractor does not e6ercise the ri-ht of control on the performance of the wor=
of the contractual employee" @here ]labor>only* contractin- e6ists! the law establishes
an employer>employee relationship between the employer and the employees of the
]labor>only* contractor" 5he statute establishes this relationship for a comprehensi.e
purpose9 to pre.ent a circum.ention of labor laws" 5he contractor is considered merely
an a-ent of the principal employer and the latter is responsible to the employees of the
labor>only contractor as if such employees had been directly employed by the principal
employer" 7n the present case! petitioners! who were recruited by Promm>Pem and
SAPS to wor= as merchandisers of respondent PRP! led a complaint a-ainst the latter
for re-ulariDation! ser.ice incenti.e lea.e pay and other benets on the -round that
they were employees of PRP" @ith respect to the contractor Promm>Pem! it was found
to be a le-itimate independent Lob contractor/ hence! there was no employer>employee
relationship between its wor=ers and PRP" Nn the other hand! SAPS was found to be
en-a-ed in labor>only contractin-" Conse:uently! the petitioners who ha.e been
recruited and supplied by SAPSare considered to be the employees of PRP" $oeb ,.
Aliviado, et al. vs. &ro)ter and Gamble &'ils., 0n)., et al., G.R. No. 1":", $une ", %11.
Labor stri=es/ liability of union oCcers and participatin- wor=ers" A distinction e6ists
between the ordinary wor=ers* liability for ille-al stri=e and that of the union oCcers
who participated in it" 5he ordinary wor=er cannot be terminated for merely
participatin- in the stri=e" 5here must be proof that he committed ille-al acts durin- its
conduct" Nn the other hand! a union oCcer can be terminated upon mere proof that he
=nowin-ly participated in the ille-al stri=e" Eoreo.er! the participatin- union oCcers
ha.e to be properly identied" 7n the present case! with respect to those union oCcers
whose identity and participation in the stri=e ha.in- been properly established! the
termination was le-al" Yolito 8adri5uelan, et al. vs. ,onterey 8oods
Corporation2,onterey 8oods Corporation v. =ukluran n( m(a ,an((a(aCa sa ,onterey6
0LA>, et al., G.R. No. 17<9#2G.R. No. 17<9!9, $une <, %11.
Secretary of Labor/ power to -i.e arbitral awards" 5he Secretary of Labor is empowered
to -i.e arbitral awards in the e6ercise of his authority to assume Lurisdiction o.er labor
disputes under Art" 2(% 0-4 of the Labor Code" 7n the present case! the Supreme Court
upheld the authority of the Secretary of Labor to impose arbitral awards hi-her than
what was supposedly a-reed upon in the Eemorandum of A-reement 0ENA4 between
the parties" 5he Court further stated that while an arbitral award cannot per se be
cate-oriDed as an a-reement .oluntarily entered into by the parties because it re:uires
the interference and imposin- power of the State thru the Secretary of Labor when he
assumes Lurisdiction! the award can be considered as an appro6imation of a collecti.e
bar-ainin- a-reement which would otherwise ha.e been entered into by the parties"
Kence! it has the force and e8ect of a .alid contract obli-ation between the
parties" Cirtek 4mployees Labor ?nion68ederation o+ 8ree Corkers vs. Cirtek 4le)troni)s,
0n)., G.R. No. 1#:1:. $une ", %11"
5ermination of employment/ resi-nation ." dismissal" Petitioner claims he was dismissed
on the -round of illness and was therefore entitled to separation benets under Article
2+; of the Labor Code" 5he Supreme Court 0SC4 disa-reed and instead found that
petitioner was the one who initiated the se.erance of his employment relations on the
-round that his health was failin-" 7n fact! he reLected respondent*s o8er for him to
return to wor=" 5he SC declared that this is tantamount to resi-nation" &esi-nation is
dened as the .oluntary act of an employee who nds himself in a situation where he
belie.es that personal reasons cannot be sacriced in fa.or of the e6i-ency of the
ser.ice and he has no other choice but to disassociate himself from his
employment"

Romeo @illaruel vs. Yeo -an Guan, doin( business under t'e name and
style Yu'ans 4nterprises, G.R. No. 1"#1#1, $une 1, %11.
Anions/ disaCliation" A local union may disaCliate at any time from its mother
federation! absent any showin- that the same is prohibited under its constitution or
rules" Such disaCliation! howe.er! does not result in it losin- its le-al personality" A
local union does not owe its e6istence to the federation with which it is aCliated" 7t is a
separate and distinct .oluntary association owin- its creation to the will of its members"
5he mere act of aCliation does not di.est the local union of its own personality! neither
does it -i.e the mother federation the license to act independently of the local union" 7t
only -i.es rise to a contract of a-ency where the former acts in representation of the
latter" 7n the present case! whether the GG@ went a-ainst the will of its principal 0the
member>employees4 by pursuin- the case despite the si-nin- of the ENA! is not for the
Court! nor for respondent employer to determine! but for the Anion and GG@ to resol.e
on their own pursuant to their principal>a-ent relationship" Eoreo.er! the issue of
disaCliation is an intra>union dispute which must be resol.ed in a di8erent forum in an
action at the instance of either or both the GG@ and the union or a ri.al labor
or-aniDation! but not the employer as in this case" Cirtek 4mployees Labor ?nion6
8ederation o+ 8ree Corkers vs. Cirtek 4le)troni)s, 0n)., G.R. No. 1#:1:. $une ", %11"
Au-ust 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on September 1'! 2011 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines >
Law [
Kere are selected Au-ust 2011 rulin-s of the Supreme Court of the Philippines on labor
law and procedure9
Labor relations/ appropriate bar-ainin- unit" An appropriate bar-ainin- unit is dened
as 1a -roup of employees of a -i.en employer! comprised of all or less than all of the
entire body of employees! which the collecti.e interest of all the employees! consistent
with e:uity to the employer! indicate to be best suited to ser.e the reciprocal ri-hts and
duties of the parties under the collecti.e bar-ainin- pro.isions of the law3" 5he test of
-roupin- is community or mutuality of interest" 7n this case! there should be only one
bar-ainin- unit for the employees in the Cabuyao! San Gernando! and Ntis plants of the
Ea-nolia Poultry Products in.ol.ed in 1dressed3 chic=en processin- and Ea-nolia
Poultry Garms en-a-ed in 1li.e3 chic=en operations" Certain factors! such as specic
line of wor=! wor=in- conditions! location of wor=! mode of compensation! and other
rele.ant conditions do not a8ect or impede their commonality of interest" Althou-h
they seem separate and distinct from each other! the specic tas=s of each di.ision are
actually interrelated and there e6ists mutuality of interests which warrants the
formation of a sin-le bar-ainin- unit" San ,i(uel 8oods, 0n). vs. San ,i(uel Corp.
Supervisors and 4/empt ?nion, G.R. No. 19"%". Au(ust 1, %11"
Labor or-aniDation/ condential employees" Condential employees are dened as
those who 014 assist or act in a condential capacity! in re-ard 024 to persons who
formulate! determine! and e8ectuate mana-ement policies in the eld of labor
relations" 5he two criteria are cumulati.e! and both must be met if an employee is to be
considered a condential employee" Condential employees! such as accountin-
personnel! should be e6cluded from the bar-ainin- unit! as their access to condential
information may become the source of undue ad.anta-e" Kowe.er! such fact does not
apply to the position of Payroll Easter 0as in this case4 and the whole -amut of
employees who has access to salary and compensation data" 5he CA correctly held that
the position of &ayroll ,aster does not in.ol.e dealin- with condential labor relations
information in the course of the performance of his functions" 7n other words! since the
nature of his wor= does not pertain to company rules and re-ulations and condential
labor relations! it follows that he cannot be e6cluded from the subLect bar-ainin-
unit" San ,i(uel 8oods, 0n). vs. San ,i(uel Corp. Supervisors and 4/empt ?nion, G.R.
No. 19"%". Au(ust 1, %11"
Labor or-aniDation/ ineli-ibility to Loin" Althou-h Article 2;' of the Labor Code limits the
ineli-ibility to Loin! form and assist any labor or-aniDation to mana-erial employees!
Lurisprudence has e6tended this prohibition to condential employees" 7n this re-ard!
the CA correctly ruled that the positions of Kuman &esource Assistant and Personnel
Assistant belon- to the cate-ory of condential employees and! hence! are e6cluded
from the bar-ainin- unit! considerin- their respecti.e positions and Lob descriptions" As
Kuman &esource Assistant! the scope of one*s wor= necessarily in.ol.es labor relations!
recruitment and selection of employees! access to employees* personal les and
compensation pac=a-e! and human resource mana-ement" As re-ards a Personnel
Assistant! one*s wor= includes the recordin- of minutes for mana-ement durin-
collecti.e bar-ainin- ne-otiations! assistance to mana-ement durin- -rie.ance
meetin-s and administrati.e in.esti-ations! and securin- le-al ad.ice for labor issues
from the petitioner*s team of lawyers! and implementation of company pro-rams"
5herefore! in the dischar-e of their functions! both -ain access to .ital labor relations
information which outri-htly dis:ualies them from union membership" San ,i(uel
8oods, 0n). vs. San ,i(uel Corp. Supervisors and 4/empt ?nion,G.R. No. 19"%". Au(ust
1, %11.
Certication election/ role of employers" 5he -eneral rule is that an employer has no
standin- to :uestion the process of certication election! since this is the sole concern
of the wor=ers" Law and policy demand that employers ta=e a strict! hands>o8 stance in
certication elections" 5he bar-ainin- representati.e of employees should be chosen
free from any e6traneous inHuence of mana-ement" 5he only e6ception is where the
employer itself has to le the petition pursuant to Article 2'+ of the Labor Code because
of a re:uest to bar-ain collecti.ely" San ,i(uel 8oods, 0n). vs.San ,i(uel Corp.
Supervisors and 4/empt ?nion, G.R. No. 19"%". Au(ust 1, %11.
Appeal of the decision of the labor arbiter/ postin- of bond" 5he postin- of a bond is
indispensable to the perfection of an appeal in cases in.ol.in- monetary awards from
the Decision of the Labor Arbiter" Kowe.er! the Supreme Court! considerin- the
substantial merits of the case! has on certain occasions rela6ed this rule on! and
e6cused the late postin- of! the appeal bond when there are stron- and compellin-
reasons for the liberality" 7n this case! the e6ception applies" 5he rule on the postin- of
an appeal bond cannot defeat the substanti.e ri-hts of respondents to be free from an
unwarranted burden of answerin- for an ille-al dismissal for which they were ne.er
responsible since no employer>employee relationship e6isted between the two" ,arti)io
Semblante and Bubri)k &ilar vs. Court o+ Appeals, G.R. No. 1#"9%". Au(ust 1:, %11.
2mployer>employee relationship/ four>fold test" Petitioners are not employees of
respondents! since their relationship failed to pass the four>fold test of employment9 014
the selection and en-a-ement of the employee/ 024 the payment of wa-es/ 0%4 the
power of dismissal/ and 0;4 the power to control the employee*s conduct! which is the
most important element" As found by both the JL&C and the CA! respondents had no
part in petitioners* selection and mana-ement/ petitioners* compensation was paid out
of the arriba 0which is a percenta-e deducted from the total bets4! not by petitioners/
and petitioners performed their functions as masiador and senten)iadorfree from the
direction and control of respondents" ,arti)io Semblante and Bubri)k &ilar vs. Court o+
Appeals, G.R. No. 1#"9%". Au(ust 1:, %11.
Labor/ ille-al recruitment in lar-e scale" 5o pro.e ille-al recruitment! it must be shown
that appellant -a.e complainants the distinct impression that she had the power or
ability to send complainants abroad for wor= such that the latter were con.inced to part
with their money in order to be employed" All ei-ht pri.ate complainants in this case
consistently declared that Nchoa o8ered and promised them employment o.erseas"
Eoreo.er! Nchoa can also be con.icted for ille-al recruitment based on Section ( of
&epublic Act Jo" +0;2! which clearly pro.ides that any person! whether or not a licensee
or holder of authority may be held liable for ille-al recruitment for certain acts as
enumerated in para-raphs 0a4 to 0m4" Amon- such acts is the 1failure to reimburse
e6penses incurred by the wor=er in connection with his documentation and processin-
for purposes of deployment! in cases where the deployment does not actually ta=e
place without the wor=er*s fault"3 7n this case! Nchoa recei.ed placement and medical
fees from pri.ate complainants and failed to reimburse the pri.ate complainants the
amounts they had paid when they were not able to lea.e for 5aiwan and Saudi Arabia!
throu-h no fault of their own" &eople o+ t'e &'ilippines vs. Rosario QRoseR D)'oa, G.R.
No. 17!7#%. Au(ust !1, %11.
7lle-al recruitment/ admissibility of PN2A certication" Section %(! &ule 1%0 of the
&e.ised &ules on 2.idence! states that a witness can testify only to those facts which he
=nows of or comes from his personal =nowled-e! that is! which are deri.ed from his
perception" 5his is =nown as the hearsay rule" 5he law! howe.er! pro.ides for specic
e6ceptions to the hearsay rule! and one of the e6ceptions refers to entries in oCcial
records made in the performance of duty by a public oCcer" Accordin-ly! in the case at
bar! althou-h Dir" Eateo was not presented in court or did not testify durin- the trial to
.erify the said certication! such certication is considered as prima +a)iee.idence of
the facts stated therein and is therefore presumed to be truthful! because Nchoa did not
present any plausible proof to rebut its truthfulness" &eople o+ t'e &'ilippines
vs. Rosario QRoseR D)'oa, G.R. No. 17!7#%. Au(ust !1, %11.
7lle-al recruitment and estafa/ may be char-ed separately" A person may be char-ed
and con.icted separately of ille-al recruitment under &epublic Act Jo" +0;2! in relation
to the Labor Code! and estafa under Article %1'! para-raph 20a4 of the &e.ised Penal
Code" 5he o8ense of ille-al recruitment is malum pro'ibitum! while estafa is malum in
se" 7n this case! therefore! Nchoa may also be char-ed and correspondin-ly held liable
for estafa since all the elements for the crime are present in Criminal Case Jos" B+>
$$%01! B+>$$%02! and B+>$$%0%" Nchoa*s deceit was e.ident in her false representation
to pri.ate complainants Pubat! Cesar! and A-ustin that she possessed the authority and
capability to send said pri.ate complainants to 5aiwanQSaudi Arabia for employment as
early as one to two wee=s from completion of the re:uirements! amon- which were the
payment of placement fees and submission of a medical e6amination report" &eople o+
t'e &'ilippines vs.Rosario QRoseR D)'oa, G.R. No. 17!7#%. Au(ust !1, %11.
Gloatin- status/ .alidity" 5he rule is settled that 1o8>detailin-3 is not e:ui.alent to
dismissal! so lon- as such status does not continue beyond a reasonable time and that
it is only when such a 1Hoatin- status3 lasts for more than si6 months that the employee
may be considered to ha.e been constructi.ely dismissed" A complaint for ille-al
dismissal led prior to the lapse of the si6>month period andQor the actual dismissal of
the employee is -enerally considered as prematurely led" 7n this case! the e.idence
adduced a 5uo clearly indicates that petitioners were not in bad faith when they placed
Leynes under Hoatin- status" Dis-runtled by JKP7*s countermandin- of her decision to
bar 2n-r" Cantuba from the ProLect! Leynes twice si-nied her intention to resi-n from
her position on 12 Gebruary 2002" 7n .iew of the sensiti.e nature of Leynes* position
and the critical sta-e of the ProLect*s business de.elopment! JKP7 was constrained to
hire 2n-r" Jose as Leynes* replacement as a remedial measure" Nippon -ousin( &'il.
0n)., et al. vs. ,aia' An(ela Leynes, G.R. No. 177<1", Au(ust !, %11.
Constructi.e dismissal/ burden of proof" Constructi.e dismissal e6ists where there is
cessation of wor= because continued employment is rendered impossible! unreasonable
or unli=ely! as an o8er in.ol.in- a demotion in ran= and a diminution in pay" 7n
constructi.e dismissal cases! the employer is! concededly! char-ed with the burden of
pro.in- that its conduct and action or the transfer of an employee are for .alid and
le-itimate -rounds such as -enuine business necessity" 5he Supreme Court found that
in this case! respondents ha.e more than amply dischar-ed this burden with proof of
the circumstances surroundin- 2n-r" Carlos* employment as Property Eana-er for the
ProLect and the conse:uent una.ailability of a similar position for Leynes" Nippon
-ousin( &'il. 0n)., et al. vs. ,aia' An(ela Leynes, G.R. No. 177<1", Au(ust !, %11.
Pleadin-/ .erication" Merication of a pleadin- is a formal! not Lurisdictional!
re:uirement intended to secure the assurance that the matters alle-ed in a pleadin- are
true and correct" 7t is deemed substantially complied with when one who has ample
=nowled-e to swear to the truth of the alle-ations in the complaint or petition si-ns the
.erication! and when matters alle-ed in the petition ha.e been made in -ood faith or
are true and correct" 7n this case! the Supreme Court found that the petition*s
.erication substantially complied with the re:uirements of the rules" 5he SPA
authoriDed Bello>Nna to represent Bello in the case from which the present petition with
the Supreme Court ori-inated" As the dau-hter of Bello! Bello>Nna is deemed to ha.e
suCcient =nowled-e to swear to the truth of the alle-ations in the petition! which are
matters of record in the lower tribunals and the appellate court" 8ran)is =ello,
represented 'erein by 'is dau('ter and attorney6in6+a)t, Geraldine =ello6Dna vs.
=oni+a)io Se)urity Servi)es, 0n). and Samuel 1omas, G.R. No. 1<<<", Au(ust !, %11.
Dismissal/ constructi.e dismissal" Case law denes constructi.e dismissal as a
cessation of wor= because continued employment has been rendered impossible!
unreasonable! or unli=ely! as when there is a demotion in ran= or diminution in pay! or
both! or when a clear discrimination! insensibility! or disdain by an employer becomes
unbearable to the employee" 7n this case! other than his bare and self>ser.in-
alle-ations! Bello has not o8ered any e.idence that he was promoted in a span of four
months since his employment as traCc marshal in July 2001 to a detachment
commander in Jo.ember 2001" At most! the BSS7 merely chan-ed his assi-nment or
transferred him to the post where his ser.ice would be most benecial to its clients" 5he
mana-ement*s prero-ati.e of transferrin- and reassi-nin- employees from one area of
operation to another in order to meet the re:uirements of the business is -enerally not
constituti.e of constructi.e dismissal" 5his was what e6actly occurred in this
case" 8ran)is =ello, represented 'erein by 'is dau('ter and attorney6in6+a)t, Geraldine
=ello6Dna vs. =oni+a)io Se)urity Servi)es, 0n). and Samuel 1omas,G.R. No. 1<<<",
Au(ust !, %11.
Procedural rules/ failure to attach duplicate ori-inal or certied true copy of the assailed
decision" 5he refusal of the Court of Appeals to consider the petition was the absence of
a duplicate ori-inal or certied true copy of the assailed JL&C decision! in .iolation of
Section %! &ule ;( of the &ules of Court 0in relation to Section 1! &ule ('4" 5he
company! howe.er! corrected the procedural lapse by attachin- a certied copy of the
JL&C decision to its motion for reconsideration" 5he Supreme Court found that the CA
precipitately denied the petition for )ertiorari based on an o.erly ri-id application of the
rules of procedure" 7n e8ect! it sacriced substance to form in a situation where the
petitioners* recourse was not patently fri.olous or meritless" 5hus! the case was
remanded to the JL&C for resolution of its appeal" $obel 4nterprises and2or ,r. =enedi)t
Lim vs. NLRC and 4ri) ,artineA, Sr., G.R. No. 1#9!1, Au(ust <, %11.
Appeal/ decision or resolution of JL&C" As was enunciated in the case of St. ,artin
8uneral -ome v. NLRC! the special ci.il action of )ertiorari under &ule (' of the &ules of
Ci.il Procedure! which is led before the CA! is the proper .ehicle for Ludicial re.iew of
decisions of the JL&C" 5he petition should be initially led before the Court of Appeals
in strict obser.ance of the doctrine on hierarchy of courts as the appropriate forum for
the relief desired" 5hus! respondent*s recourse to the CA was the proper remedy to
:uestion the resolution of the JL&C" Atok =i( >ed(e Company, 0n). vs. $esus &.
Gison, G.R. No. 1"#:1, Au(ust <, %11.
2mployer>employee relationship/ four>fold test" 5o ascertain the e6istence of an
employer>employee relationship Lurisprudence has in.ariably adhered to the four>fold
test! to wit9 014 the selection and en-a-ement of the employee/ 024 the payment of
wa-es/ 0%4 the power of dismissal/ and 0;4 the power to control the employee*s conduct!
or the so>called 1control test"3 Applyin- the aforementioned test! an employer>employee
relationship was found to be absent in the case at bar" Amon- other thin-s! respondent
was not re:uired to report e.eryday durin- re-ular oCce hours of petitioner"
&espondent*s monthly retainer fees were paid to him either at his residence or a local
restaurant" Eore importantly! petitioner did not prescribe the manner in which
respondent would accomplish any of the tas=s in which his e6pertise as a liaison oCcer
was needed/ respondent was left alone and -i.en the freedom to accomplish the tas=s
usin- his own means and method" Merily! the absence of the element of control on the
part of the petitioner en-enders a conclusion that he is not an employee of the
petitioner" Atok =i( >ed(e Company, 0n). vs. $esus &. Gison, G.R. No. 1"#:1, Au(ust <,
%11.
2mployment/ re-ular employee" Article 2+0 of the Labor Code! in which the lower court
used to buttress its ndin-s that respondent became a re-ular employee of the
petitioner! is not applicable in the case at bar" 5he Supreme Court has ruled that said
pro.ision is not the yardstic= for determinin- the e6istence of an employment
relationship because it merely distin-uishes between two =inds of employees! i.e.!
re-ular employees and casual employees! for purposes of determinin- the ri-ht of an
employee to certain benets! to Loin or form a union! or to security of tenure/ it does not
apply where the e6istence of an employment relationship is in dispute" 7t is! therefore!
erroneous on the part of the Court of Appeals to rely on Article 2+0 in determinin-
whether an employer>employee relationship e6ists between respondent and the
petitioner" 5herefore! despite the fact that petitioner made use of the ser.ices of
respondent as a part>time consultant on retainer basis for ele.en years! he still cannot
be considered as a re-ular employee of petitioner usin- only as basis Article 2+0 of the
Labor Code" Atok =i( >ed(e Company, 0n). vs. $esus &. Gison, G.R. No. 1"#:1, Au(ust
<, %11.
Claim of disability benets and sic=ness allowance/ reportin- re:uirements" Anent a
seafarer*s entitlement to compensation and benets for inLury and illness! Section 20>B
0%4 of 2000 PN2A>S2C pro.ides that in order for the seafarer to claim the said benets!
he must submit himself to a post>employment medical e6amination by a company>
desi-nated physician within three wor=in- days upon his return! e6cept when he is
physically incapacitated to do so! in which case! a written notice to the a-ency within
the same period is deemed as compliance" Gailure of the seafarer to comply with the
mandatory reportin- re:uirement shall result in his forfeiture of the ri-ht to claim the
abo.e benets" 7n this case! there was no dispute re-ardin- the fact that 2s-uerra had
alto-ether failed to comply with the mandatory reportin- re:uirement" 2s-uerra also
did not present any e.idence to pro.e Lustication for his inability to submit himself to a
post>employment medical e6amination by a company>desi-nated physician" Self>
ser.in- and unsubstantiated declarations are insuCcient to establish a case before
:uasi>Ludicial bodies where the :uantum of e.idence re:uired in establishin- a fact is
substantial e.idence" Coastal Sa+eCay ,arine Servi)es vs. 4s(uerra,G.R. No. 1<:!:%,
Au(ust 1, %11.
September 2011 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Nctober 1B! 2011 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines >
Law [
Kere are selected September 2011 rulin-s of the Supreme Court of the Philippines on
labor law and procedure9
2mployee/ probationary employee" 2mployment on probationary status of teachin-
personnel is not only -o.erned by the Labor Code but also by the Eanual of &e-ulations
for Pri.ate Schools" Section B1 of the Eanual of &e-ulations for Pri.ate Schools! states
that9 12.ery contract of employment shall specify the desi-nation! :ualication! salary
rate! the period and nature of ser.ice and its date of e8ecti.ity! and such other terms
and condition of employment as may be consistent with laws and rules! re-ulations and
standards of the school"3 5hus! it is important that the contract of probationary
employment specify the period or term of its e8ecti.ity" 7n this case! therefore! the
letters sent by petitioner Colle-e Dean Sr" &acadio! which were de.oid of specics!
cannot be considered as contracts" 5he closest they can resemble to are that of
informal correspondence amon- the said indi.iduals" As such! petitioner school has the
ri-ht not to renew the contracts of the respondents! the old ones ha.in- e6pired at the
end of their terms" Assumin-!ar(uendo, that the employment contracts between the
petitioner school and the respondent spouses were renewed! the SC found that there
was a .alid and Lust cause for their dismissal since petitioners ha.e repeatedly .iolated
se.eral departmental and instructional policies! such as the late submission of nal
-rades! failure to submit nal test :uestions to the Pro-ram Coordinator! the -i.in- of
tests in essay form instead of the multiple choice format as mandated by the school and
the hi-h number of students with failin- -rades in the classes that he handled" St. &aul
Colle(e HueAon City, et al. vs. Remi(io ,i)'ael A. An)'eta 00 and Cynt'ia A.
An)'eta, G.R. No. 1"##:. September 7, %11.
2mployee/ e6istence of employer>employee relationship" 5o determine the e6istence of
an employer>employee relationship! case law has consistently applied the four>fold test"
&espondents ar-ue that the element of control is lac=in- in this case! ma=in- petitioner>
referee an independent contractor and not an employee of respondents" 5he Supreme
Court a-reed as it found that there was no control o.er the means and methods by
which petitioner performs his wor= as a referee oCciatin- a PBA bas=etball -ame" 5he
contractual stipulations in the retainer contracts do not pertain to! much less dictate!
how and when petitioner will blow the whistle and ma=e calls" Nn the contrary! they
merely ser.e as rules of conduct or -uidelines in order to maintain the inte-rity of the
professional bas=etball lea-ue" Eoreo.er! the followin- circumstances indicate that
petitioner is an independent contractor9 014 the referees are re:uired to report for wor=
only when PBA -ames are scheduled! which is three times a wee= spread o.er an
a.era-e of only 10' playin- days a year! and they oCciate -ames at an a.era-e of two
hours per -ame/ and 024 the only deductions from the fees recei.ed by the referees are
withholdin- ta6es" 5here are no deductions for contributions to the Social Security
System! Philhealth or Pa->7bi-! which are the usual deductions from employees* salaries"
5hese undisputed circumstances buttress the fact that petitioner is an independent
contractor! and not an employee of respondents" $ose ,el =ernante vs. &'ilippine
=asketball Asso)iation, et al., G.R. No. 1#%<9. September 19, %11.
2mployee benets/ principle a-ainst diminution of benets" 5he issue in this case was
whether or not the chan-e in the scheme of distribution of the incremental proceeds
from tuition fee increase is a diminution of benet" 5he Court held that it was not"
Penerally! employees ha.e a .ested ri-ht o.er e6istin- benets .oluntarily -ranted to
them by their employer" 5he principle a-ainst diminution of benets! howe.er! is
applicable only if the -rant or benet is founded on an e6press policy or has ripened
into a practice o.er a lon- period of time which is consistent and deliberate" 7n other
words! the benet must be characteriDed by re-ularity and the .oluntary and deliberate
intent of the employer to -rant the benets o.er a si-nicant period of time" 7n the
case at bench! contrary to A22A*s claim! the distribution of the $0< incremental
proceeds based on e:ual sharin- scheme cannot be held to ha.e ripened into a
company practice since the practice has not been for a lon- period of time" 5he same
could not also ha.e ripened into a .ested ri-ht because such -rant was not a deliberate
and .oluntary act on the part of the petitioner" 5he Supreme Court held that the -rant
by an employer of benets throu-h an erroneous application of the law due to the
absence of clear administrati.e -uidelines is not considered a .oluntary act which
cannot be unilaterally discontinued" ?niversity o+ t'e 4ast vs. ?niversity o+ t'e 4ast
4mployeesN Asso)iation, G.R. No. 17#:#!. September 19, %11.
2mployment benets/ entitlement to .acation and sic= lea.e" BP7 contends that at the
time of Ay*s dismissal! she was no lon-er functionin- as a teller of the ban= but as a
low>counter sta8 and as such! Ay is not anymore entitled to the teller*s functional
allowance pursuant to company policy" BP7 further ar-ues that Ay is neither entitled to
the monetary con.ersion of .acation and sic= lea.es for failure to pro.e that she is
entitled to these benets at the time of her dismissal" 5he Supreme Court ruled that
Ay is entitled to the teller*s functional allowance but not to the monetary con.ersion of
.acation and sic= lea.es" Ay*s function as a teller at the time of her dismissal was
factually established and was ne.er impu-ned by the parties durin- the proceedin-s
held in the main case" Besides! BP7 did not present any e.idence to substantiate its
alle-ation that Ay was assi-ned as a low>counter sta8 at the time of her dismissal" 7t is
a hornboo= rule that he who alle-es must pro.e" As to the .acation and sic= lea.e cash
con.ersion benet! the Supreme Court held that entitlement to the same should be
necessarily pro.ed since this pri.ile-e is not statutory or mandatory in character but
only .oluntarily -ranted" As such! the e6istence of this benet as well as the
employee*s entitlement thereto cannot be presumed but should be pro.ed by the
employee" 7n this case! howe.er! the records failed to pro.e that Ay was recei.in- this
benet at the time of her dismissal on December 1;! 1BB'" =&0 4mployees ?nion6,etro
,anila, et al. vs. =ank o+ t'e &'ilippine 0slands2=ank o+ t'e &'ilippine 0slands vs. =&0
4mployees ?nion6,etro ,anila, et al., G.R. Nos. 17<"##217<7!:. September %1, %11.
5ermination/ constructi.e dismissal" 5he concept of constructi.e dismissal is
inapplicable to respondents in this case" Constructi.e dismissal occurs when there is
cessation of wor= because continued employment is rendered impossible! unreasonable!
or unli=ely as when there is a demotion in ran= or diminution in pay or when a clear
discrimination! insensibility! or disdain by an employer becomes unbearable to the
employee lea.in- the latter with no other option but to :uit" 5hat the respondents were
indeed not constructi.ely dismissed was found by the Supreme Court to be supported
by substantial e.idence" 8irst, respondents Domin-o and &emi-io! e.en while their
petition for )ertiorari was pendin- before the CA! remained employed at AJ7LAB" 7n
those instances! there was actually no dismissal to spea= of" Se)ond, the respondents*
positions were not abolished! unli=e its pro.incial depots where the employees therein
were considered redundant employees" 7n this case! their accountin- functions were
merely consolidated under the Ginance Di.ision of Anilab pursuant to its Shared Ser.ices
Policy 0SSP4" &espondents! who are accountin- employees! cannot refuse their
assi-nment to the Ginance Di.ision" 5he Supreme Court noted that it cannot accept the
proposition that when an employee opposes his employer*s decision to transfer him to
another wor= place! there bein- no bad faith or underhanded moti.es on the part of
either party! that the employee*s wishes should be made to pre.ail" ?nited
Laboratories, 0n). vs.$aime Bomin(o Substituted by 'is spouse Carmen)ita &unAalan
Bomin(o, et al., G.R. No. 1<"%#, September %1, %11.
5ermination/ loss of trust and condence" Loss of condence should ideally apply only
to9 014 cases in.ol.in- employees occupyin- positions of trust and condence! or 024
situations where the employee is routinely char-ed with the care and custody of the
employer*s money or property" As branch mana-er of the ban=! LopeD occupied a
1position of trust"3 Kis hold on his position and his stay in the ser.ice depend on the
employer*s trust and condence in him and on his mana-erial ser.ices" 7n this case! the
Supreme Court found that LopeD*s dismissal was Lustied" Ke betrayed the trust and
condence of the employer>ban= when he issued the subLect purchase orders without
authority and despite the e6press directi.e of the ban= to put the client*s application on
hold" 5he ban= had a -enuine concern o.er the -ranted loan applications as it found
throu-h its credit committee that KertD was a credit ris=" @hether the credit committee
was correct or not is immaterial as the ban=*s direct order left LopeD without any
authority to clear the loan application on his own" 4lmer LopeA vs. Keppel =ank
&'ilippines, 0n). et al., G.R. No. 17"<. September :, %11.
5ermination/ loss of trust and condence" Jumuad was found to ha.e willfully breached
her duties as to be unworthy of the trust and condence of Ki>Glyer" Girst! Jumuad was a
mana-erial employee/ she e6ecuted mana-ement policies and had the power to
discipline the employees of SGC branches in her area" She recommended actions on
employees to the head oCce" Accordin- to the Supreme Court! based on established
facts! the mere e6istence of the -rounds for the loss of trust and condence Lusties
petitioner*s dismissal" 7n the present case! the C2&*s reports of Ki>Glyer show that there
were anomalies committed in the SGC branches mana-ed by Jumuad" Nn the principle
of respondeat superior or command responsibility alone! Jumuad may be held liable for
ne-li-ence in the performance of her mana-erial duties" She may not ha.e been
directly in.ol.ed in causin- the cash shorta-es in SGC>Bohol! but her in.ol.ement in not
performin- her duty monitorin- and supportin- the day to day operations of the
branches and ensure that all the facilities and e:uipment at the restaurant were
properly maintained and ser.iced! could ha.e pre.ented the whole debacle from
occurrin-" &amela 8lorentina &. $umuad vs. -i68lyer 8ood, 0n). and2or $esus R.
,ontemayor, G.R. No. 1<7<<7. September 7, %11.
5ermination/ ille-al dismissal" 7n the case at bar! respondent security -uards were
relie.ed from their posts because they led with the Labor Arbiter a complaint a-ainst
their employer for money claims due to underpayment of wa-es" 5he Supreme Court
found that this was not a .alid cause for dismissal" 5he Labor Code enumerates se.eral
Lust and authoriDed causes for a .alid termination of employment" An employee
assertin- his ri-ht and as=in- for minimum wa-e is not amon- those causes" Alert
Se)urity and 0nvesti(ation A(en)y, 0n)., et al. vs. Saidali &asaCilan, et al., G.R. No.
1<%!#7. September 19, %11.
5ermination/ abandonment of wor=" Petitioners a.er that respondents were merely
transferred to a new post wherein the wa-es are adLusted to the current minimum wa-e
standards" 5hey maintain that the respondents .oluntarily abandoned their Lobs when
they failed to report for duty in the new location" Assumin- that this contention was
true! the Supreme Court held that there was no abandonment of wor=" Gor there to be
abandonment9 rst! there should be a failure of the employee to report for wor= without
a .alid or Lustiable reason! and second! there should be a showin- that the employee
intended to se.er the employer>employee relationship" 5he fact that petitioners led a
complaint for ille-al dismissal is indicati.e of their intention to remain employed with
pri.ate respondent" Nn the rst element of failure to report for wor=! in this case! there
was no showin- that respondents were notied of their new assi-nments" Prantin- that
the 1Duty Detail Nrders3 were indeed issued! they ser.ed no purpose unless the
intended recipients of the orders are informed of such" 5herefore! the Court held that
there was no abandonment of wor= in this case" Alert Se)urity and 0nvesti(ation
A(en)y, 0n)., et al. vs. Saidali &asaCilan, et al., G.R. No. 1<%!#7. September 19, %11.
5ermination/ -ross and habitual ne-lect" Je-lect of duty! to be a -round for dismissal!
must be both -ross and habitual" 7n this case! &espondent*s repeated failure to turn
o.er his tas= of preparin- the payroll of the petitioner*s employees to someone capable
of performin- the .ital tas=s which he could not e8ecti.ely perform or underta=e
because of his heart ailment or condition constitutes -ross ne-lect" Kowe.er! althou-h
the dismissal was le-al! respondent was still held to be entitled to a separation pay as a
measure of compassionate Lustice! considerin- his len-th of ser.ice and his poor
physical condition which was one of the reasons he led a lea.e of absence" As a
-eneral rule! an employee who has been dismissed for any of the Lust causes
enumerated under Article 2+2 of the Labor Code is not entitled to separation pay" By
way of e6ception! howe.er! the -rant of separation pay or some other nancial
assistance may be allowed to an employee dismissed for Lust causes on the basis of
e:uity" Nissan ,otors &'ils., 0n). vs. @i)torino An(elo, G.R. No. 1"91<1. September 19,
%11.
5ermination/ award of bac=wa-es" 5he base -ure in computin- the award of bac=
wa-es to an ille-ally dismissed employee is the employee*s basic salary plus re-ular
allowances and benets recei.ed at the time of dismissal! un:ualied by any wa-e and
benet increases -ranted in the interim" 5he full bac=wa-es! as referred to in the
body of the Earch %1! 200' Supreme Court decision pertains to 1bac=wa-es3 as dened
in &epublic Act Jo" ($1'" Ander said law! and as pro.ided in Lurisprudence! 1full
bac=wa-es3 means bac=wa-es without any deduction or :ualication! includin- benets
or their monetary e:ui.alent the employee is enLoyin- at the time of his dismissal"
Conse:uently! any benet or allowance o.er and abo.e that allowed and pro.ided by
said law is deemed e6cluded under the said Supreme Court Decision" =&0 4mployees
?nion6,etro ,anila, et al. vs. =ank o+ t'e &'ilippine 0slands2=ank o+ t'e &'ilippine
0slands vs. =&0 4mployees ?nion6,etro ,anila, et al., G.R. Nos. 17<"##217<7!:.
September %1, %11.
Jo.ember 2011 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on December 1(! 2011 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines >
Law [
Kere are selected Jo.ember 2011 rulin-s of the Supreme Court of the Philippines on
labor law and procedure9
Award of attorney*s fees/ concepts" 5here are two commonly accepted concepts of
attorney*s fees F the ordinary and e6traordinary" 7n its ordinary concept! an attorney*s
fee is the reasonable compensation paid to a lawyer by his client for the le-al ser.ices
the former renders/ compensation is paid for the cost andQor results of le-al ser.ices per
a-reement or as may be assessed" 7n its e6traordinary concept! attorney*s fees are
deemed indemnity for dama-es ordered by the court to be paid by the losin- party to
the winnin- party" 5his is payable not to t'e laCyer but to t'e )lient! unless the client
and his lawyer ha.e a-reed that the award shall accrue to the lawyer as additional or
part of his compensation" Article 111 of the Labor Code! as amended! contemplates the
e6traordinary concept of attorney*s fees" Althou-h an e6press ndin- of facts and law is
still necessary to pro.e the merit of the award! there need not be any showin- that the
employer acted maliciously or in bad faith when it withheld the wa-es" 5hus the SC
concluded that the CA erred in rulin- that a ndin- of the employer*s malice or bad faith
in withholdin- wa-es must precede an award of attorney*s fees under Article 111 of the
Labor Code" 5o reiterate! a plain showin- that the lawful wa-es were not paid without
Lustication is suCcient" Kaisa'an at Kapatiran n( m(a ,an((a(aCa at KaCani sa
,>C64ast Pone ?nion and 4duardo =orela, et). vs. ,anila >ater Company, 0n)., G.R.
No. 17917#. November 1", %11.
Award of attorney*s fees/ Article 111" Nne of the issues of this case in.ol.ed the e8ect
of the Eemorandum of A-reement pro.ision that attorney*s fees shall be deducted from
the amelioration allowance 0AA4 and CBA recei.ables" 7n this re-ard! the CA held that
the additional -rant of 10< attorney*s fees by the JL&C .iolates Article 111 of the Labor
Code! considerin- that the ENA between the parties already ensured the payment of
10< attorney*s fees deductible from the AA and CBA recei.ables of the Anion*s
members" 7n the present case! the Anion bound itself to pay 10< attorney*s fees to its
counsel under the ENA and also -a.e up the attorney*s fees awarded to the Anion*s
members in fa.or of their counsel" 5he award by the JL&C cannot be ta=en to mean an
additional -rant of attorney*s fees! in .iolation of the ten percent 010<4 limit under
Article 111 of the Labor Code since it rests on an entirely di8erent le-al obli-ation than
the one contracted under the ENA" Simply stated! the attorney*s fees contracted under
the ENA do not refer to the amount of attorney*s fees awarded by the JL&C/ the ENA
pro.ision on attorney*s fees does not ha.e any bearin- at all to the attorney*s fees
awarded by the JL&C under Article 111 of the Labor Code" Based on these
considerations! it is clear that the CA erred in rulin- that the LA*s award of attorney*s
fees .iolated the ma6imum limit of ten percent 010<4 6ed by Article 111 of the Labor
Code" Kaisa'an at Kapatiran n( m(a ,an((a(aCa at KaCani sa ,>C64ast Pone ?nion
and 4duardo =orela, et). vs. ,anila >ater Company, 0n)., G.R. No. 17917#. November
1", %11.
Disability benets/ compensable" 7n this case! respondent was dia-nosed with Central
&etinal Mein Ncclusion of his left eye" Central retinal .ein occlusion causes painless
.ision loss which is usually sudden! but it can also occur -radually o.er a period of days
to wee=s" 5his condition! despite numerous medical procedures underta=en! e.entually
led to a total loss of si-ht of respondent*s left eye" Loss of one bodily function falls
within the denition of disability which is essentially 1loss or impairment of a physical or
mental function resultin- from inLury or sic=ness"3 5he disputable presumption that a
particular inLury or illness that results in disability! or in some cases death! is wor=>
related stands in the absence of contrary e.idence" 7n the case at bench! the said
presumption was not o.erturned by the petitioners" Althou-h! the employer is not the
insurer of the health of his employees! he ta=es them as he nds them and assumes the
ris= of liability" Conse:uently! the Court concurred with the ndin- of the lower courts
that respondent*s disability is compensable" 8il6star ,aritime Corporation, et al. vs.
-anAiel D. Resete, G.R. No. 1#%"<". November %!, %11.
Disability benets/ total disability" A total disability does not re:uire that the employee
be completely disabled! or totally paralyDed" @hat is necessary is that the inLury must
be such that the employee cannot pursue his or her usual wor= and earn from it" Nn the
other hand! a total disability is considered permanent if it lasts continuously for more
than 120 days" @hat is crucial is whether the employee who su8ers from disability
could still perform his wor= notwithstandin- the disability he incurred" 2.idently!
respondent was not able to return to his Lob as a seafarer after his left eye was declared
le-ally blind" &ecords showed that the petitioners did not -i.e him a new o.erseas
assi-nment after his disability" 5his only pro.ed that his disability e8ecti.ely barred his
chances to be deployed abroad as an oCcer of an ocean>-oin- .essel" Kence! the
Supreme Court found it ttin- that respondent be entitled to permanent total disability
benets considerin- that he would not be able to resume his position as a maritime
oCcer! and the probability that he would be hired by other maritime employers would
be close to impossible" 8il6star ,aritime Corporation, et al. vs. -anAiel D. Resete, G.R.
No. 1#%"<". November %!, %11.
Dismissal/ -ross and habitual ne-lect of duties" Pross ne-li-ence connotes want of care
in the performance of one*s duties! while habitual ne-lect implies repeated failure to
perform one*s duties for a period of time! dependin- on the circumstances" 7n the case
at bench! Padao was accused of ha.in- presented a fraudulently positi.e e.aluation of
the business! credit standin-Qratin- and nancial capability of &eynaldo and LuD.illa
Baluma and ele.en other loan applicants" Some businesses were e.entually found not
to e6ist at all! while in other transactions! the nancial status of the borrowers
simply could not support the -rant of loans in the appro.ed amounts" Eoreo.er! Padao
o.er>appraised the collateral of spouses Pardito and Alma ALero! and that of spouses
7haba and &olly Pan-o" Padao*s repeated failure to dischar-e his duties as a credit
in.esti-ator of the ban= amounted to -ross and habitual ne-lect of duties under Article
2+2 0b4 of the Labor Code" Ke not only failed to perform what he was employed to do!
but also did so repetiti.ely and habitually! causin- millions of pesos in dama-e to PJB"
5hus! PJB acted within the bounds of the law by metin- out the penalty of dismissal!
which it deemed appropriate -i.en the circumstances" &'ilippine National =ank vs. Ban
&adao, G.R. Nos. 1<<9# and 1<719!. November 1", %11.
Dismissed employees/ separation pay" Padao is not entitled to nancial assistance" 5he
rule re-ardin- separation pay as a measure of social Lustice is that it shall be paid only
in those instances where the employee is .alidly dismissed for causes other than
serious misconduct! willful disobedience! -ross and habitual ne-lect of duty! fraud or
willful breach of trust! commission of a crime a-ainst the employer or his family! or
those reHectin- on his moral character" 7n this case! Padao was -uilty of -ross and
habitual ne-lect of duties" &'ilippine National =ank vs. Ban &adao, G.R. Nos. 1<<9#
and 1<719!. November 1", %11.
2mployment of seafarers" 5he employment of seafarers! includin- claims for death
benets! is -o.erned by the contracts they si-n e.ery time they are hired or rehired/
and as lon- as the stipulations therein are not contrary to law! morals! public order or
public policy! they ha.e the force of law between the parties" @hile the seafarer and his
employer are -o.erned by their mutual a-reement! the PN2A rules and re-ulations
re:uire that the PN2A Standard 2mployment Contract 0PN2A>S2C4 be inte-rated in
e.ery seafarer*s contract" 7n this case! considerin- that petitioner e6ecuted an o.erseas
employment contract with respondent company in Jo.ember 1BBB! the 1BB( PN2A>S2C
should -o.ern" 5he 2000 PN2A>S2C initially too= e8ect on June 2'! 2000" 5hereafter!
the Court issued the 5emporary &estrainin- Nrder 31RD7 which was later lifted on June '!
2002" 5hus! petitioner cannot simply rely on the disputable presumption pro.ision
mentioned in Section 20 0B40;4 of the 2000 PN2A>S2C which states that9 15hose
illnesses not listed in Section %2 of this Contract are disputably presumed as wor=
related"3 Gilbert HuiAora vs. Ben'olm CreC ,ana(ement 3&'ilippines7, 0n)., G.R. No.
1<:91%. November 1", %11.
2mployment of seafarers/ disability compensation" Prantin- that the pro.isions of the
2000 PN2A>S2C apply! the disputable presumption pro.ision in Section 20 0B4 does not
allow petitioner to Lust sit down and wait for respondent company to present e.idence
to o.ercome the disputable presumption of wor=>relatedness of the illness" Contrary to
his position! the seafarer still has to substantiate his claim in order to be entitled to
disability compensation" Ke has to pro.e that the illness he su8ered was wor=>related
and that it must ha.e e6isted durin- the term of his employment contract" Gor disability
to be compensable under Section 20 0B4 of the 2000 PN2A>S2C! two elements must
concur9 014 the inLury or illness must be wor=>related/ and 024 the wor=>related inLury or
illness must ha.e e6isted durin- the term of the seafarer*s employment contract" 7n
other words! to be entitled to compensation and benets under this pro.ision! it is not
suCcient to establish that the seafarer*s illness or inLury has rendered him permanently
or partially disabled/ it must also be shown that there is a causal connection between
the seafarer*s illness or inLury and the wor= for which he had been contracted"
Anfortunately for petitioner! he failed to pro.e that his .aricose .eins arose out of his
employment with respondent company" Gilbert HuiAora vs. Ben'olm CreC ,ana(ement
3&'ilippines7, 0n)., G.R. No. 1<:91%. November 1", %11.
2mployee*s compensation/ increased ris= theory" Gor a sic=ness or resultin- disability or
death to be compensable! the claimant must pro.e either 014 that the employee*s
sic=ness was the result of an occupational disease listed under Anne6 1A3 of the
Amended &ules on 2mployees* Compensation! or 024 that the ris= of contractin- the
disease was increased by his wor=in- conditions" Ander the increased ris= theory! there
must be a reasonable proof that the employee*s wor=in- condition increased his ris= of
contractin- the disease! or that there is a connection between his wor= and the cause of
the disease" 7n this case! since Besitan*s ailment! 2nd Sta-e &enal Disease secondary to
Chronic Plomerulonephritis is not amon- those listed under Anne6 1A!3 of the Amended
&ules on 2mployees* Compensation! he needs to show by substantial e.idence that his
ris= of contractin- the disease was increased by his wor=in- condition" Government
Servi)e 0nsuran)e System vs. ,anuel &. =esitan, G.R. No. 17<#1. November %!, %11.
2mployees*s Compensation/ proceedin-s/ :uantum of proof" Direct and clear e.idence!
is not necessary to pro.e a compensable claim" Strict rules of e.idence do not apply as
PD Jo" (2( only re:uires substantial e.idence" 5he SC found that Besitan has
suCciently pro.ed that his wor=in- condition increased his ris= of contractin-
Plomerulonephritis! which accordin- to PS7S may be caused by bacterial! .iral! and
parasitic infection" @hen Besitan entered the -o.ernment ser.ice in 1B$(! he was
-i.en a clean bill of health" 7n 200'! he was dia-nosed with 2nd Sta-e &enal Disease
secondary to Chronic Plomerulonephritis" 7t would appear therefore that the nature of
his wor= could ha.e increased his ris= of contractin- the disease" Kis fre:uent tra.els to
remote areas in the country could ha.e e6posed him to certain bacterial! .iral! and
parasitic infection! which in turn could ha.e caused his disease" Delayin- his urination
durin- his lon- trips to the pro.inces could ha.e also increased his ris= of contractin-
the disease" As a matter of fact! e.en the Ban= Physician of Ban-=o Sentral n- Pilipinas!
Dr" Pre-orio SuareD 77! a-reed that Besitan*s wor=in- condition could ha.e contributed to
the wea=enin- of his =idneys! which could ha.e caused the disease" 5his Eedical
Certicate is suCcient to pro.e that the wor=in- condition of Besitan increased his ris=
of contractin- Plomerulonephritis" 7n claims for compensation benets! a doctor*s
certication as to the nature of a claimant*s disability deser.es full credence because no
medical practitioner would issue certications indiscriminately" Government Servi)e
0nsuran)e System vs. ,anuel &. =esitan, G.R. No. 17<#1. November %!, %11.
7lle-al dismissal/ employer>employee relationship" 5he elements to determine the
e6istence of an employment relationship are9 0a4 the selection and en-a-ement of the
employee/ 0b4 the payment of wa-es/ 0c4 the power of dismissal/ and 0d4 the employer*s
power to control the employee*s conduct" 7n this case! the documentary e.idence
presented by respondent to pro.e that he was an employee of petitioner are as follows9
0a4 a document denominated as 1payroll3 0dated July %1! 2001 to Earch 1'!
20024 )erti.ed )orre)t by petitioner! which showed that respondent recei.ed a monthly
salary of P$!000"00 with the correspondin- deductions due to absences incurred by
respondent/ and 024 copies of petty cash .ouchers! showin- the amounts he recei.ed
and si-ned for in the payrolls" 5hese documents showed that petitioner hired
respondent as an employee and he was paid monthly wa-es of P$!000"00" Additionally!
as to the e6istence of the power of control! it is not essential for the employer to
actually super.ise the performance of duties of the employee" 7t is suCcient that the
former has a ri-ht to wield the power" 7n this case! petitioner e.en stated in his Position
Paper that it was a-reed that he would help and teach respondent how to use the studio
e:uipment" 7n such case! petitioner certainly had the power to chec= on the pro-ress
and wor= of respondent" Cesar C. Lirio, doin( business under t'e name and style o+
Celkor Ad Sonimi/ vs. >ilmer B. Genovia! G.R. No. 1"#7:7. November %!, %11.
7lle-al recruitment/ elements" 5he crime of ille-al recruitment is committed when two
elements concur! namely9 014 the o8ender has no .alid license or authority re:uired by
law to enable one to lawfully en-a-e in recruitment and placement of wor=ers/ and 024
he underta=es either any acti.ity within the meanin- of 1recruitment and placement3
dened under Article 1% 0b4! or any prohibited practices enumerated under Article %; of
the Labor Code" Girst! the petitioner was found not to ha.e been issued a license as
pro.en by the certication from the DNL2>Da-upan District NCce statin- that petitioner
has not been issued any license by the PN2A and neither is it a holder of an authority to
en-a-e in recruitment and placement acti.ities" Second! from the testimonies of the
pri.ate respondents! it is apparent that petitioner was able to con.ince the pri.ate
respondents to apply for wor= in 7srael after partin- with their money in e6chan-e for
the ser.ices she would render" 5he said act of the petitioner! without a doubt! falls
within the meanin- of recruitment and placement as dened in Article 1% 0b4 of the
Labor Code" Ginally! the Supreme Court noted that in ille-al recruitment cases! the
failure to present receipts for money that was paid in connection with the recruitment
process will not a8ect the stren-th of the e.idence presented by the prosecution as lon-
as the payment can be pro.ed throu-h clear and con.incin- testimonies of credible
witnesses" Belia B. Romero vs. &eople o+ t'e &'ilippines, Romulo &adlan and Aruturo
Siapno, G.R. No. 171"99. November %!, %11.
Probationary employment/ security of tenure" 7t is settled that e.en if probationary
employees do not enLoy permanent status! they are accorded the constitutional
protection of security of tenure" 5his means they may only be terminated for a Lust
cause or when they otherwise fail to :ualify as re-ular employees in accordance with
reasonable standards made =nown to them by the employer at the time of their
en-a-ement" 7n this case! the Lustication -i.en by the petitioners for Sy*s dismissal
was her alle-ed failure to :ualify by the company*s standard" Nther than the -eneral
alle-ation that said standards were made =nown to her at the time of her employment!
howe.er! no e.idence! documentary or otherwise! was presented to substantiate the
same" Jeither was there any performance e.aluation presented to pro.e that indeed
hers was unsatisfactory" Kence! for failure of the petitioners to support their claim of
unsatisfactory performance by Sy! the SC held that Sy*s employment was unLustly
terminated to pre.ent her from ac:uirin- a re-ular status in circum.ention of the law on
security of tenure" 1amsonNs 4nterprises, 0n)., et al. vs. Court o+ Appeals and Rosemarie
L. Sy, G.R. No. 1#%<<1. November 1", %11.
Probationary employment/ termination" 2.en on the assumption that Sy indeed failed
to meet the standards set by the petitioner>employer and made =nown to the former at
the time of her en-a-ement! still! the termination was Hawed for failure to -i.e the
re:uired notice to Sy" Section 2! &ule 7! Boo= M7 of the 7mplementin- &ules pro.ides
that9 17f the termination is brou-ht about by the completion of a contract or phase
thereof! or by failure of an employee to meet the standards of the employer in the case
of probationary employment! it shall be suCcient that a written notice is ser.ed the
employee! within a reasonable time from the e8ecti.e date of termination"3 1amsonNs
4nterprises, 0n)., et al. vs. Court o+ Appeals and Rosemarie L. Sy, G.R. No. 1#%<<1.
November 1", %11.
5ermination of employment/ when company tolerated .iolation of company policy" 5he
CA was correct in statin- that when the .iolation of company policy or breach of
company rules and re-ulations is tolerated by mana-ement! it cannot ser.e as a basis
for termination" 5his principle! howe.er! only applies when the breach or .iolation is
one which neither amounts to nor in.ol.es fraud or ille-al acti.ities" 7n such a case! one
cannot e.ade liability or culpability based on obedience to the corporate chain of
command" 7n this case! Padao! in aC6in- his si-nature on the fraudulent reports!
attested to the falsehoods contained therein" Eoreo.er! by doin- so! he repeatedly
failed to perform his duties as a credit in.esti-ator" 5hus! the termination of his
employment is Lustied" &'ilippine National =ank vs. Ban &adao, G.R. Nos. 1<<9# and
1<719!. November 1", %11.
January 2012 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Gebruary 1$! 2012 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases [
Kere are selected January 2012 rulin-s of the Supreme Court of the Philippines on labor
law and procedure9
Certiorari/ e8ect of receipt of award" 5he pre.ailin- party*s receipt of the full amount of
the Lud-ment award pursuant to a writ of e6ecution issued by the labor arbiter does not
close or terminate the case if such receipt is :ualied as without preLudice to the
outcome of the petition for )ertiorari pendin- with the Court of Appeals" 1imoteo -.
Sarona vs. National Labor Relations Commission, Royale Se)urity A(en)y, et al., G.R.
No. 1<:%<, $anuary 1<, %11.
Constructi.e dismissal/ chan-e in position" Constructi.e dismissal e6ists where there is
cessation of wor= because 1continued employment is rendered impossible!
unreasonable or unli=ely! as an o8er in.ol.in- a demotion in ran= or a diminution in
pay3 and other benets" Aptly called a dismissal in dis-uise of an act amountin- to
dismissal but made to appear as if it were not!constructi.e dismissal may! li=ewise! e6ist
if an act of clear discrimination! insensibility! or disdain by an employer becomes so
unbearable on the part of the employee that it could foreclose any choice by him e6cept
to fore-o his continued employment"7n cases of a transfer of an employee! the rule is
settled that the employer is char-ed with the burden of pro.in- that its conduct and
action are for .alid and le-itimate -rounds such as -enuine business necessity and that
the transfer is not unreasonable! incon.enient or preLudicial to the employee" 7f the
employer cannot o.ercome this burden of proof! the employee*s transfer shall be
tantamount to unlawful constructi.e dismissal"$onat'an @. ,orales vs. -arbour Centre
&ort 1erminal, 0n)., G.R. No. 179%<, $anuary %:, %11.
Contract/ no.ation" Jo.ation is the e6tin-uishment of an obli-ation by the substitution
or chan-e of the obli-ation by a subse:uent one which e6tin-uishes or modies the
rst! either by chan-in- the obLect or principal conditions! or! by substitutin- another in
place of the debtor! or by subro-atin- a third person in the ri-hts of the creditor" 7n
order for no.ation to ta=e place! the concurrence of the followin- re:uisites is
indispensable9 014 5here must be a pre.ious .alid obli-ation/ 024 5here must be an
a-reement of the parties concerned to a new contract/ 0%4 5here must be the
e6tin-uishment of the old contract/ and 0;4 5here must be the .alidity of the new
contract" 5he parties impliedly e6tin-uished the rst contract by a-reein- to enter into
the second contract" 5he records also re.eal that the 2
nd
contract e6tin-uished the rst
contract by chan-in- its obLect or principal" 5hese contracts were for o.erseas
employment aboard di8erent .essels" 5he rst contract was for employment aboard the
EM 1Stolt Aspiration3 while the second contract in.ol.ed wor=in- in another .essel! the
EM 1Stolt Pride"3 Petitioners and Eade:uillo! Jr" accepted the terms and conditions of the
second contract" Andoubtedly! he was still employed under the rst contract when he
ne-otiated with petitioners on the second contract" Since Eade:uillo was still employed
under the rst contract when he ne-otiated with petitioners on the second contract!
no.ation became an una.oidable conclusion" Stolt6Nielsen 1ransportation Group, 0n)., et
al. vs. Sulpe)io ,ode5uillo, G.R. No. 1779#<, $anuary 1<, %11.
2mployee/ money claims" Nn the issue of how the seafarer will be compensated by
reason of the unreasonable non>deployment! the Supreme Court decreed the
application of Section 10 of &epublic Act Jo" +0;2 0Ei-rant @or=ers Act4 which pro.ides
for money claims by reason of a contract in.ol.in- Gilipino wor=ers for o.erseas
deployment" 5he law pro.ides9
Sec" 10" ,oney Claims" F Jotwithstandin- any pro.ision of law to the contrary! the
Labor Arbiters of the Jational Labor &elations Commission 0JL&C4 shall ha.e the ori-inal
and e6clusi.e Lurisdiction to hear and decide! within ninety 0B04 calendar days after the
lin- of the complaint! the claims arisin- out of an employer>employee relationship or
by .irtue of any law or contract in.ol.in- Gilipino wor=ers for o.erseas deployment
includin- claims for actual! moral! e6emplary and other forms of dama-es" 6 6 6
0Anderscorin- supplied4
Gollowin- the law! the claim is still co-niDable by the labor arbiters of the JL&C under
the second phrase of the pro.ision" Applyin- the rules on actual dama-es! Article 21BB
of the Jew Ci.il Code pro.ides that one is entitled to an ade:uate compensation only
for such pecuniary loss su8ered by him as he has duly pro.ed" Stolt6Nielsen
1ransportation Group, 0n)., et al. vs. Sulpe)io ,ode5uillo, G.R. No. 1779#<, $anuary 1<,
%11.
2mployee/ pre.enti.e suspension/ penalty of suspension" Pre.enti.e suspension is a
disciplinary measure resorted to by the employer pendin- in.esti-ation of an alle-ed
malfeasance or misfeasance committed by an employee" 5he employer temporarily
bars the employee from wor=in- if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his co>wor=ers" Nn the
other hand! the penalty of suspension refers to the disciplinary action imposed on the
employee after an oCcial in.esti-ation or administrati.e hearin- is conducted" 5he
employer e6ercises its ri-ht to discipline errin- employees pursuant to company rules
and re-ulations" 7n the present case! Kenry Delada led a -rie.ance a-ainst Eanila
Pa.ilion Kotel 0EPK4" Gailin- to reach a settlement! Delada lod-ed a Complaint before
the Jational Conciliation and Eediation Board! which was e.entually referred to a panel
of .oluntary arbitrators 0PMA4" Eeanwhile! citin- security and safety reasons! EPK
placed Delada on a %0>day pre.enti.e suspension and proceeded with the
administrati.e case a-ainst him" EPK e.entually found Delada liable for insubordination
and willful disobedience of the transfer order and imposed upon him a penalty of B0>day
suspension" 5he PMA ruled that there was no le-al and factual basis to support EPK*s
imposition of pre.enti.e suspension on Delada! and that the penalty of B0>day
suspension imposed by EPK a-ainst Delada went beyond the %0>day period of
pre.enti.e suspension prescribed by the 7mplementin- &ules of the Labor Code" PMA
also ruled that EPK lost its authority to continue with the administrati.e proceedin-s for
insubordination and willful disobedience of the transfer order and to impose the penalty
of B0>day suspension on Delada" Accordin- to the panel! it ac:uired e6clusi.e
Lurisdiction o.er the issue when the parties submitted the aforementioned issues before
it" 5he Supreme Court held that EPK did not lose its authority to discipline! and that
EPK had the authority to continue with the administrati.e proceedin-s for
insubordination and willful disobedience a-ainst Delada and to impose on him the
penalty of suspension" ,anila &avilion -otel, et). vs. -enry Belada, G.R. No. 1<##97,
$anuary %:, %11.
2mployee/ release and :uitclaim" @hile the law loo=s with disfa.or upon releases and
:uitclaims by employees who are in.ei-led or pressured into si-nin- them by
unscrupulous employers see=in- to e.ade their le-al responsibilities! a le-itimate
wai.er representin- a .oluntary settlement of a laborer*s claims should be respected by
the courts as the law between the parties" Considerin- the petitioner*s claim of fraud
and bad faith a-ainst Philcomsat to be unsubstantiated! the Supreme Court found the
:uitclaim in dispute to be a le-itimate wai.er" 5he Court of Appeals and the Jational
Labor &elations Commission were unanimous in holdin- that the petitioner .oluntarily
e6ecuted the subLect :uitclaim" 5he Supreme Court is not a trier of facts! and this
doctrine applies with -reater force in labor cases" Gactual :uestions are for the labor
tribunals to resol.e and whether the petitioner .oluntarily e6ecuted the subLect
:uitclaim is a :uestion of fact" 7n this case! the factual issues ha.e already been
determined by the Jational Labor &elations Commission and its ndin-s were aCrmed
by the Court of Appeals" Judicial re.iew by the Supreme Court does not e6tend to a
ree.aluation of the suCciency of the e.idence upon which the proper labor tribunal has
based its determination" -ypte R. AuGero vs. &'ilippine Communi)ations Satellite
Corporation, G.R. No. 1#!9<9, $anuary 1<, %11.
2mployee benet/ holiday pay! ser.ice incenti.e lea.e pay and proportionate 1%
th
month
pay"Ander the Labor Code! the employee is entitled to his re-ular rate on holidays e.en
if he does not wor=" Li=ewise! e6press pro.ision of the law entitles him to ser.ice
incenti.e lea.e benet if he has rendered ser.ice for more than a year already"
Gurthermore! under Presidential Decree Jo" +'1! the employee should be paid his
1%
th
month pay" 5he employer has the burden of pro.in- that it has paid these benets
to its employees" Abdul$ua'id R. &i()aulan vs. Se)urity and Credit 0nvesti(ation, 0n).
and2or Rene Amby Reyes, G.R. No. 17!"9<, $anuary 1", %11.
2mployee benet/ o.ertime pay" 7n the absence of any concrete proof that additional
ser.ice beyond the normal wor=in- hours and days had been rendered! o.ertime pay
cannot be -ranted" Kandwritten itemiDed computations are self>ser.in-! unreliable and
unsubstantiated e.idence to sustain the -rant of salary di8erentials! particularly
o.ertime pay" Ansi-ned and unauthenticated as they are! there is no way of .erifyin-
the truth of the handwritten entries stated therein"Abdul$ua'id R. &i()aulan vs. Se)urity
and Credit 0nvesti(ation, 0n). and2or Rene Amby Reyes, G.R. No. 17!"9<, $anuary 1",
%11.
2mployee benet/ permanent disability" 5he Supreme Court reiterated Remi(io v.
National Labor Relations Commission, G.R. No. 1:#<<7, April 1%, %", which stated
that9 15hus! the Court has applied the Labor Code concept of permanent total disability
to the case of seafarers" 7n &'ilippine 1ransmarine Carriers v. NLRC, G.R. No. 1%!<#1,
8ebruary %<, %1! seaman Carlos Jietes was found to be su8erin- from con-esti.e
heart failure and cardiomyopathy and was declared as unt to wor= by the company>
accredited physician" 5he Court aCrmed the award of disability benets to the seaman!
citin- 4CC v. Sani)o, G.R. No. 1!9%<, Be)ember 17, 1###! GS0S v. CA, G.R. No. 117:7%,
$anuary %#, 1##<! GS0S v. CA, G.R. No. 11"1:, $uly !1, 1##" and =eGerano v. 4CC, G. R.
No. <9777, $anuary !, 1##%, that 1disability should not be understood more on its
medical si-nicance but on the loss of earnin- capacity" Permanent total disability
means disablement of an employee to earn wa-es in the same =ind of wor=! or wor= of
similar nature that #he) was trained for or accustomed to perform! or any =ind of wor=
which a person of #his) mentality and attainment could do" 7t does not mean absolute
helplessness"3 7t li=ewise cited =eGerano to reiterate that in a disability compensation! it
is not the inLury which is compensated! but rather it is the incapacity to wor= resultin- in
the impairment of one*s earnin- capacity" 5he Court also cited the more recent case
ofCrystal S'ippin(, 0n). v. Natividad, G.R. No. 1:97#<, D)tober %, %:, applyin- the
same principles! andGS0S v. CadiA, G.R. No. 19:#!, $uly <, %!! and 0Gares v. CA, G.R.
No. 1:<:9, Au(ust %", 1###! which declared that 1permanent disability is the inability
of a wor=er to perform his Lob for more than 120 days! re-ardless of whether or not he
loses the use of any part of his body"3 ,a(saysay ,aritime Corporation, et al. vs. Dberto
S. Lobusta, G.R. No. 177:7<, $anuary %:, %11.
2mployee dismissal/ due process" Jotice and hearin- constitute the essential elements
of due process in the dismissal of employees" 5he employer must furnish the employee
with two written notices before termination of employment can be le-ally e8ected" 5he
rst apprises the employee of the particular acts or omissions for which dismissal is
sou-ht" 5he second informs the employee of the employer*s decision to dismiss him"
@ith re-ard to the re:uirement of a hearin-! the essence of due process lies simply in
an opportunity to be heard! and not that an actual hearin- should always and
indispensably be held" 5hese re:uirements were satised in this case" 5he rst re:uired
notice was dated Jo.ember %! 200%! suCciently notifyin- ,abut of the particular acts
bein- imputed a-ainst him! as well as the applicable law and the company rules
considered to ha.e been .iolated" Nn Jo.ember 1$! 200%! Eeralco conducted a hearin-
on the char-es a-ainst the petitioner where he was accorded the ri-ht to air his side
and present his defenses on the char-es a-ainst him" Si-nicantly! a hi-h>ran=in-
oCcer of the super.isory union of Eeralco assisted him durin- the said in.esti-ation"
Kis sworn statement that forms part of the case records e.en listed the matters that
were raised durin- the in.esti-ation" Ginally! Eeralco ser.ed a notice of dismissal dated
Gebruary ;! 200; upon ,abut" Such notice notied the latter of the company*s decision
to dismiss him from employment on the -rounds clearly discussed therein"Norman
Yabut vs. ,anila 4le)tri) Company and ,anuel ,. LopeA, G.R. No. 1#9!", $anuary 1",
%11.
2mployee dismissal/ due process" 2.en if there is a Lust or .alid cause for terminatin- an
employee! it is necessary to comply with the re:uirements of due process prior to the
termination" Lolita S. Con)ep)ion vs. ,ine/ 0mport Corporation2,inerama Corporation,
et al., G.R. No. 1:!:"#, $anuary %9, %11.
2mployee dismissal/ -ross ne-li-ence/ habitual ne-lect" Pross ne-li-ence has been
dened as the 1want of care in the performance of one*s duties3 and habitual
ne-lect has been dened as 1repeated failure to perform one*s duties for a period of
time! dependin- upon the circumstances"3 5hese are not o.erly technical terms! which!
in the rst place! are e6pressly sanctioned by the Labor Code of the Philippines! to wit9
A&5" 2+2" 1ermination by employer. F An employer may terminate an employment for
any of the followin- causes9 #666)0b4 Pross and habitual ne-lect by the employee of his
duties/ #666) Diosdado Bitara was dismissed from ser.ice due to habitual tardiness and
absenteeism! and for ha.in- continued disre-ardin- attendance policies despite his
underta=in- to report on time" Kis wee=ly time record for the rst :uarter of the year
2000 re.ealed that he came late 1B times out of the ;$ times he reported for wor=" Ke
also incurred 1B absences out of the (( wor=in- days durin- the :uarter" Kis absences
without prior notice and appro.al from Earch 11>1(! 2000 were considered to be the
most serious infraction of all because of its ad.erse e8ect on business operations" 5he
Supreme Court held that e.en in the absence of a written company rule denin- -ross
and habitual ne-lect of duties! Bitara*s omissions :ualify as such warrantin- his
dismissal from the ser.ice" ,ansion &rintin( Center and Clement C'en( vs. Biosdado
=itara, $r., G.R. No. 1"<1%, $anuary %:, %11.
2mployee dismissal/ Lust cause/ loss of condence" 5o dismiss an employee! the law
re:uires the e6istence of a Lust and .alid cause" Article 2+2 of the Labor
Code enumerates the Gust causes for termination by the employer9 0a4 serious
misconduct or willful disobedience by the employee of the lawful orders of his employer
or the latter*s representati.e in connection with the employee*s wor=/ 0b4 -ross and
habitual ne-lect by the employee of his duties/ 0)4 fraud or willful breach by the
employee of the trust reposed in him by his employer or his duly authoriDed
representati.e/ 0d4 commission of a crime or o8ense by the employee a-ainst the
person of his employer or any immediate member of his family or his duly authoriDed
representati.e/ and 0e4 other causes analo-ous to the fore-oin-"
7t is unfair to re:uire an employer to rst be morally certain of the -uilt of the employee
by awaitin- a con.iction before terminatin- him when there is already suCcient
showin- of the wron-doin-" &e:uirin- that certainty may pro.e too late for the
employer! whose loss may potentially be beyond repair" 7n the present case! no less
than the DNJ Secretary found probable cause for :ualied theft a-ainst Concepcion"
5hat ndin- was enou-h to Lustify her termination for loss of condence" Lolita S.
Con)ep)ion vs. ,ine/ 0mport Corporation2,inerama Corporation, et al., G.R. No.
1:!:"#, $anuary %9, %11.
2mployee dismissal/ loss of trust and condence" Gor loss of trust and condence to be
a .alid -round for dismissal! it must be based on a willful breach of trust and founded on
clearly established facts" A breach is willful if it is done intentionally! =nowin-ly and
purposely! without Lustiable e6cuse! as distin-uished from an act done carelessly!
thou-htlessly! heedlessly or inad.ertently" 7n addition! loss of trust and condence must
rest on substantial -rounds and not on the employer*s arbitrariness! whims! caprices or
suspicion" ,anila 4le)tri) Company 3,eral)o7 vs. ,a. Luisa =eltran, G.R. No. 17!779,
$anuary !, %11.
2mployee dismissal/ misconduct" Article 2+20a4 pro.ides that an employer may
terminate an employment because of an employee*s serious misconduct! a cause that
was present in this case in .iew of the petitioner*s .iolation of his employer*s code of
conduct" Eisconduct is dened as the 1trans-ression of some established and denite
rule of action! a forbidden act! a dereliction of duty! willful in character! and implies
wron-ful intent and not mere error in Lud-ment"3 Gor serious misconduct to Lustify
dismissal! the followin- re:uisites must be present9 0a4 it must be serious/ 0b4 it must
relate to the performance of the employee*s duties/ and 0c4 it must show that the
employee has become unt to continue wor=in- for the employer" 7nstallation of
shuntin- wires is without doubt a serious wron- as it demonstrates an act that is willful
or deliberate! pursued solely to wron-fully obtain electric power throu-h unlawful
means" 5he act clearly relates to the petitioner*s performance of his duties -i.en his
position as branch eld representati.e who is e:uipped with =nowled-e on meter
operations! and who has the duty to test electric meters and handle customers*
.iolations of contract" 7nstead of protectin- the company*s interest! the petitioner
himself used his =nowled-e to ille-ally obtain electric power from Eeralco" Kis
in.ol.ement in this incident deems him no lon-er t to continue performin- his
functions for respondent>company"Norman Yabut vs. ,anila 4le)tri) Company and
,anuel ,. LopeA, G.R. No. 1#9!", $anuary 1", %11.
2mployer>employee relationship/ commencement" 5he PN2A Standard 2mployment
Contract pro.ides that employment shall commence 1upon the actual departure of the
seafarer from the airport or seaport in the port of hire"3 Distinction must be made
between the perfection of the employment contract and the commencement of the
employer>employee relationship" 5he perfection of the contract! which in this case
coincided with the date of e6ecution thereof! occurred when petitioner and respondent
a-reed on the obLect and the cause! as well as the rest of the terms and conditions
therein" 5he commencement of the employer>employee relationship would ha.e ta=en
place had petitioner been actually deployed from the point of hire" Stolt6Nielsen
1ransportation Group, 0n)., et al. vs. Sulpe)io ,ode5uillo, G.R. No. 1779#<, $anuary 1<,
%11.
Jud-ment/ nality" 5he petition was brou-ht only on behalf of Pi-caulan" 5he CA Decision
has already become nal and e6ecutory as to Canoy since he did not appeal from it"
Canoy cannot now simply incorporate in his aCda.it a .erication of the contents and
alle-ations of the petition as he is not one of the petitioners therein" Abdul$ua'id R.
&i()aulan vs. Se)urity and Credit 0nvesti(ation, 0n). and2or Rene Amby Reyes, G.R. No.
17!"9<, $anuary 1", %11.
Jud-ment/ res Ludicata" 5he doctrine of res Gudi)ata lays down two main rules which may
be stated as follows9 014 5he Lud-ment or decree of a court of competent Lurisdiction on
the merits concludes the parties and their pri.ies to the liti-ation and constitutes a bar
to a new action or suit in.ol.in- the same cause of action either before the same or any
other tribunal/ and 024 Any ri-ht! fact! or matter in issue directly adLudicated or
necessarily in.ol.ed in the determination of an action before a competent court in
which a Lud-ment or decree is rendered on the merits is conclusi.ely settled by the
Lud-ment therein and cannot a-ain be liti-ated between the parties and their pri.ies
whether the claim or demand! purpose! or subLect matter of the two suits is the same or
not" 5hese two main rules mar= the distinction between the principles -o.ernin- the
two typical cases in which a Lud-ment may operate as e.idence" 7n spea=in- of these
cases! the rst -eneral rule! and which corresponds to para-raph 0b4 of Section ;$ of
&ule %B of the &ules of Court is referred to as 1bar by former Lud-ment3 while the
second -eneral rule! which is embodied in para-raph 0c4 of the same section! is =nown
as 1conclusi.eness of Lud-ment"3 5he present labor case is closely related to the ci.il
case that was decided with nality" 5he acts and omissions alle-ed by the Ban= in the
ci.il case as basis of its counterclaim a-ainst Eauricio are the .ery same acts and
omissions which were used as -rounds to terminate his employment" Considerin- that it
has already been conclusi.ely determined with nality in the ci.il case that the
:uestioned acts of Eauricio were well within his discretion as branch mana-er and
appro.in- oCcer of the Ban=! and the same were sanctioned by the Kead NCce! the
Supreme Court found that the Court of Appeals did not err in holdin- that there was no
.alid or Lust cause for the Ban= to terminate Eauricio*s employment"&rudential =ank
3noC =ank o+ t'e &'ilippine 0slands7 vs. Antonio S.A. ,auri)io, substituted by 'is le(al
'eirs ,aria 8e, @oltaire, Antonio, $r., Antonio, 4arl $o'n, and 8ran)is)o Roberto all
surnamed ,auri)io,G.R. No. 1<!!:, $anuary 1<, %11.
Jurisdiction/ .oluntary arbitrators" 7n Sime Barby &ilipinas, 0n). v. Beputy Administrator
,a(salin, G.R. No. #9%", Be)ember 1:, 1#<#! the Supreme Court ruled that the
.oluntary arbitrator had plenary Lurisdiction and authority to interpret the a-reement to
arbitrate and to determine the scope of his own authority F subLect only! in a proper
case! to the certiorari Lurisdiction of this Court" 7t was also held in that case that the
failure of the parties to specically limit the issues to that which was stated allowed the
arbitrator to assume Lurisdiction o.er the related issue" 7n Ludo ; Luym Corporation v.
Saornido, G.R. No. 19#", $anuary %, %!! the Supreme Court reco-niDed that
.oluntary arbitrators are -enerally e6pected to decide only those :uestions e6pressly
delineated by the submission a-reement/ that! ne.ertheless! they can assume that they
ha.e the necessary power to ma=e a nal settlement on the related issues! since
arbitration is the nal resort for the adLudication of disputes" 5hus! the Supreme Court
ruled that e.en if the specic issue brou-ht before the arbitrators merely mentioned the
:uestion of 1whether an employee was dischar-ed for Lust cause!3 they could
reasonably assume that their powers e6tended beyond the determination thereof to
include the power to reinstate the employee or to -rant bac= wa-es" 7n the same .ein! if
the specic issue brou-ht before the arbitrators referred to the date of re-ulariDation of
the employee! law and Lurisprudence -a.e them enou-h leeway as well as ade:uate
prero-ati.e to determine the entitlement of the employees to hi-her benets in
accordance with the ndin- of re-ulariDation" 7ndeed! to re:uire the parties to le
another action for payment of those benets would certainly undermine labor
proceedin-s and contra.ene the constitutional mandate pro.idin- full protection to
labor and speedy labor Lustice" ,anila &avilion -otel, et). vs. -enry Belada, G.R. No.
1<##97, $anuary %:, %11.
Procedural rules/ liberal application/ when wai.ed" Procedural rules may be wai.ed or
dispensed with in absolutely meritorious cases" 5he Supreme Court! in past cases! has
adhered to the strict implementation of the rules and considered them in.iolable when
it is shown that the patent lac= of merit of the appeals render liberal interpretation
pointless and nau-ht" 5he contrary obtains in this case as Philcomsat*s case is not
entirely unmeritorious" Specically! Philcomsat alle-ed that the petitioner*s e6ecution of
the subLect :uitclaim was .oluntary despite his claim that he did not do so" Philcomsat
li=ewise ar-ued that the petitioner*s educational attainment and the position he
occupied in Philcomsat*s hierarchy militate a-ainst his claim that he was pressured or
coerced into si-nin- the :uitclaim" 5he emer-in- trend in our Lurisprudence is to a8ord
e.ery party>liti-ant the amplest opportunity for the proper and Lust determination of his
cause free from the constraints of technicalities" Gar from ha.in- -ra.ely abused its
discretion! the JL&C correctly prioritiDed substantial Lustice o.er the ri-id and strin-ent
application of procedural rules" 7n the present case! the Supreme Court held that the CA
was correct in not ndin- -ra.e abuse of discretion in the JL&C*s decision to -i.e due
course to Philcomsat*s appeal despite its bein- belatedly led" -ypte R. AuGero vs.
&'ilippine Communi)ations Satellite Corporation, G.R. No. 1#!9<9, $anuary 1<, %11.
Public oCcers/ reassi-nment/ constructi.e dismissal" @hile a temporary transfer or
assi-nment of personnel is permissible e.en without the employee*s prior consent! it
cannot be done when the transfer is a preliminary step toward his remo.al! or a scheme
to lure him away from his permanent position! or when it is desi-ned to indirectly
terminate his ser.ice! or force his resi-nation" Such a transfer would in e8ect
circum.ent the pro.ision which safe-uards the tenure of oCce of those who are in the
Ci.il Ser.ice" Si-nicantly! Section (! &ule 777 of CSC Eemorandum Circular Jo" ;0! series
of 1BB+! denes constructi.e dismissal as a situation when an employee :uits his wor=
because of the a-ency head*s unreasonable! humiliatin-! or demeanin- actuations
which render continued wor= impossible" Kence! the employee is deemed to ha.e been
ille-ally dismissed" 5his may occur althou-h there is no diminution or reduction of salary
of the employee" 7t may be a transfer from one position of di-nity to a more ser.ile or
menial Lob" Republi) o+ t'e &'il., represented by t'e Civil Servi)e Commission vs.
,inerva ,.&. &a)'e)o, G.R. No. 17<%1, $anuary !1, %11.
&einstatement/ not possible/ bac=wa-es" 7n case separation pay is awarded and
reinstatement is no lon-er feasible! bac=wa-es shall be computed from the time of
ille-al dismissal up to the nality of the decision should separation pay not be paid in
the meantime" 7t is the employee*s actual receipt of the full amount of his separation
pay that will e8ecti.ely terminate the employment of an ille-ally dismissed employee"
Ntherwise! the employer>employee relationship subsists and the ille-ally dismissed
employee is entitled to bac=wa-es! ta=in- into account the increases and other
benets! includin- the 1%th month pay! that were recei.ed by his co>employees who are
not dismissed" 7t is the obli-ation of the employer to pay an ille-ally dismissed
employee or wor=er the whole amount of the salaries or wa-es! plus all other benets
and bonuses and -eneral increases! to which he would ha.e been normally entitled had
he not been dismissed and had not stopped wor=in-" 1imoteo -. Sarona vs. National
Labor Relations Commission, Royale Se)urity A(en)y, et al., G.R. No. 1<:%<, $anuary
1<, %11.
&eor-aniDation/ mana-ement prero-ati.e" Admittedly! the ri-ht of employees to
security of tenure does not -i.e them .ested ri-hts to their positions to the e6tent of
depri.in- mana-ement of its prero-ati.e to chan-e their assi-nments or to transfer
them" By mana-ement prero-ati.e is meant the ri-ht of an employer to re-ulate all
aspects of employment! such as the freedom to prescribe wor= assi-nments! wor=in-
methods! processes to be followed! re-ulation re-ardin- transfer of employees!
super.ision of their wor=! lay>o8 and discipline! and dismissal and recall of wor=ers"
Althou-h Lurisprudence reco-niDes said mana-ement prero-ati.e! it has been ruled that
the e6ercise thereof! while ordinarily not interfered with! is not absolute and is subLect to
limitations imposed by law! collecti.e bar-ainin- a-reement! and -eneral principles of
fair play and Lustice" 5hus! an employer may transfer or assi-n employees from one
oCce or area of operation to another! pro.ided there is no demotion in ran= or
diminution of salary! benets! and other pri.ile-es! and the action is not moti.ated by
discrimination! made in bad faith! or e8ected as a form of punishment or demotion
without suCcient cause" 7ndeed! ha.in- the ri-ht should not be confused with the
manner in which that ri-ht is e6ercised" Jonathan M" Eorales was hired by Karbour
Centre Port 5erminal! 7nc" 0KCP574 as an Accountant and Actin- Ginance NCcer! with a
monthly salary of P1+!000"00" &e-ulariDed on Jo.ember 1$! 2000! Eorales was
promoted to Di.ision Eana-er of the Accountin- Department! for which he was
compensated a monthly salary ofP%%!$00"00! plus allowances startin- July 1! 2002"
Subse:uent to KCP57*s transfer to its new oCces at Mitas! 5ondo! Eanila on January 2!
200%! Eorales recei.ed an inter>oCce memorandum dated Earch 2$! 200%! reassi-nin-
him to Nperations Cost Accountin-! tas=ed with the duty of 1monitorin- and e.aluatin-
all consumables re:uests! -ears and e:uipment3 related to the corporation*s operations
and of interactin- with its sub>contractor! Bul= Gleet Earine Corporation" 5he
memorandum was issued by KCP57*s new Administration Eana-er! duly noted by its
new Mice President for Administration and Ginance! and appro.ed by its President and
Chief 26ecuti.e NCcer" Eorales protested that his reassi-nment was a clear demotion
since the position to which he was transferred was not e.en included in KCP57*s
plantilla" 7n response to Eorales* -rie.ance that he had been e8ecti.ely placed on
Hoatin- status! an inter>oCce memorandum was issued on April ;! 200% to the e8ect
that 1transfer of employees is a mana-ement prero-ati.e3 and that KCP57 had 1the
ri-ht and responsibility to nd the perfect balance between the s=ills and abilities of
employees to the needs of the business"3 Kowe.er! the Supreme Court found that KCP57
did not e.en bother to show that it had implemented a corporate reor-aniDation andQor
appro.ed a new plantilla of positions which included the one to which Eorales was bein-
transferred" 5hus! the Court reinstated the JL&C*s July 2B! 200' Decision which found
Eorales* reassi-nment to be a clear demotion despite lac= of showin- of diminution of
salaries and benets" $onat'an @. ,orales vs. -arbour Centre &ort 1erminal, 0n)., G.R.
No. 179%<, $anuary %:, %11.
&ule ;'/ :uestion of law" As a -eneral rule! the Supreme Court is not a trier of facts and
a petition for re.iew on )ertiorari under &ule ;' of the &ules of Court must e6clusi.ely
raise :uestions of law" Eoreo.er! if factual ndin-s of the Jational Labor &elations
Commission and the Labor Arbiter ha.e been aCrmed by the Court of Appeals! the
Supreme Court accords them the respect and nality they deser.e" 7t is well>settled and
oft>repeated that ndin-s of fact of administrati.e a-encies and :uasi>Ludicial bodies!
which ha.e ac:uired e6pertise because their Lurisdiction is conned to specic matters!
are -enerally accorded not only respect! but nality when aCrmed by the Court of
Appeals"Je.ertheless! the Supreme Court will not hesitate to de.iate from what are
clearly procedural -uidelines and disturb and stri=e down the ndin-s of the Court of
Appeals and those of the labor tribunals if there is a showin- that they are unsupported
by the e.idence on record or there was a patent misappreciation of facts" 7ndeed! that
the impu-ned decision of the Court of Appeals is consistent with the ndin-s of the
labor tribunals does not per se conclusi.ely demonstrate the correctness thereof" By
way of e6ception to the -eneral rule! the Supreme Court will scrutiniDe the facts if only
to rectify the preLudice and inLustice resultin- from an incorrect assessment of the
e.idence presented" 1imoteo -. Sarona vs. National Labor Relations Commission,
Royale Se)urity A(en)y, et al., G.R. No. 1<:%<, $anuary 1<, %11.
Gebruary 2012 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Earch '! 2012 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines > Law
[ 5a--ed appeal! Ci.il Ser.ice Commission! constructi.e dismissal! dismissal! employee
benets! employer>employee relationship! forum shoppin-! JL&C! probationary
employment! reinstatement! res Ludicata! security of tenure [
Kere are select Gebruary 2012 rulin-s of the Supreme Court on labor law and procedure9
Appeal/ factual ndin- of JL&C" Gindin-s of fact of administrati.e a-encies and :uasi>
Ludicial bodies! which ha.e ac:uired e6pertise because their Lurisdiction is conned to
specic matters! are -enerally accorded not only respect but nality when aCrmed by
the Court of Appeals" Gactual ndin-s of :uasi>Ludicial bodies li=e the JL&C! if supported
by substantial e.idence! are accorded respect and e.en nality by the Supreme Court!
more so when they coincide with those of the Labor Arbiter" Such factual ndin-s are
-i.en more wei-ht when the same are aCrmed by the Court of Appeals" 7n the present
case! the Supreme Court found no reason to depart from these principles since the
Labor Arbiter found that there was substantial e.idence to conclude that Nasay had
breached the trust and condence of Palacio Del Pobernador Condominium Corporation!
which ndin- the JL&C had li=ewise upheld" Sebastian 8. Dasay, $r. vs. &ala)io del
Gobernador Condominium Corporation and Dmar 1. CruA, G.R. No. 1#9!", 8ebruary ",
%1%.
Ci.il Ser.ice/ Clar= De.elopment Corporation" Clar= De.elopment Corporation 0CDC4
owes its e6istence to 26ecuti.e Nrder Jo" +0 issued by then President Gidel M" &amos" 7t
was meant to be the implementin- and operatin- arm of the Bases Con.ersion and
De.elopment Authority tas=ed to mana-e the Clar= Special 2conomic \one" 26pressly!
CDC was formed in accordance with Philippine corporation laws and e6istin- rules and
re-ulations promul-ated by the Securities and 26chan-e Commission pursuant to
Section 1( of &epublic Act $22$" CDC! a -o.ernment owned or controlled corporation
without an ori-inal charter! was incorporated under the Corporation Code" Pursuant to
Article 7U>B! Sec" 2014 of the Constitution! the ci.il ser.ice embraces only those
-o.ernment owned or controlled corporations with ori-inal charter" As such! CDC and its
employees are co.ered by the Labor Code and not by the Ci.il Ser.ice Law" Antonio =.
Salen(a, et al. vs. Court o+ Appeals, et al., G.R. No. 179#91, 8ebruary 1, %1%.
Dismissal/ resi-nation .s" ille-al dismissal/ tele6 is not e:ui.alent to tender of
resi-nation" Article 2+' of the Labor Code reco-niDes termination by the employee of
the employment contract by 1ser.in- written notice on the employer at least one 014
month in ad.ance"3 Pi.en that pro.ision! the law contemplates the re:uirement of a
written notice of resi-nation" 7n the absence of a written resi-nation! it is safe to
presume that the employer terminated the seafarers" 7n this case! the Supreme Court
found the dismissal of De Pracia! et al" to be ille-al since Cosmoship merely sent a tele6
to S=ippers! the local mannin- a-ency! claimin- that De Pracia! et al" were repatriated
because the latter .oluntarily pre>terminated their contracts" Skippers ?nited &a)i.),
0n). and Skippers ,aritime Servi)es, 0n). Ltd. vs. Nat'aniel BoAa, et al., G.R. No.
17:::<. 8ebruary <, %1%.
Dismissal/ substanti.e and procedural due process" Gor a wor=er*s dismissal to be
considered .alid! it must comply with both procedural and substanti.e due process" 5he
le-ality of the manner of dismissal constitutes procedural due process! while the le-ality
of the act of dismissal constitutes substanti.e due process" Procedural due process in
dismissal cases consists of the twin re:uirements of notice and hearin-" 5he employer
must furnish the employee with two written notices before the termination of
employment can be e8ected9 014 the rst notice apprises the employee of the particular
acts or omissions for which his dismissal is sou-ht/ and 024 the second notice informs
the employee of the employer*s decision to dismiss him" Before the issuance of the
second notice! the re:uirement of a hearin- must be complied with by -i.in- the wor=er
an opportunity to be heard" 7t is not necessary that an actual hearin- be conducted"
Substanti.e due process! on the other hand! re:uires that dismissal by the employer be
made based on a Lust or authoriDed cause under Articles 2+2 to 2+; of the Labor Code"
7n this case! there was no written notice furnished to De Pracia! et al" re-ardin- the
cause of their dismissal" Cosmoship furnished a tele6 to S=ippers! the local mannin-
a-ency! claimin- that De Pracia! et al" were repatriated because they .oluntarily pre>
terminated their contracts" 5his tele6 was -i.en credibility and wei-ht by the Labor
Arbiter and JL&C in decidin- that there was pre>termination of the employment contract
1a=in to resi-nation3 and no ille-al dismissal" Kowe.er! as correctly ruled by the CA! the
tele6 messa-e is 1a biased and self>ser.in- document that does not satisfy the
re:uirement of substantial e.idence"3 7f! indeed! De Pracia! et al" .oluntarily pre>
terminated their contracts! then De Pracia! et al" should ha.e submitted their written
resi-nations" Skippers ?nited &a)i.), 0n). and Skippers ,aritime Servi)es, 0n). Ltd.
vs. Nat'aniel BoAa, et al., G.R. No. 17:::<. 8ebruary <, %1%.
2mployee benets/ ri-ht to bonus/ diminution" Grom a le-al point of .iew! a bonus is a
-ratuity or act of liberality of the -i.er which the recipient cannot demand as a matter
of ri-ht" 5he -rant of a bonus is basically a mana-ement prero-ati.e which cannot be
forced upon the employer who may not be obli-ed to assume the onerous burden of
-rantin- bonuses" Kowe.er! a bonus becomes a demandable or enforceable obli-ation if
the additional compensation is -ranted without any conditions imposed for its payment"
7n such case! the bonus is treated as part of the wa-e! salary or compensation of the
employee" Particularly instructi.e is the rulin- of the Court in ,etro 1ransit
Dr(aniAation, 0n). v. National Labor Relations Commission 0P"&" Jo" 11(00+! July 11!
1BB'4 where the Court said9
@hether or not a bonus forms part of wa-es depends upon the circumstances and
conditions for its payment" 7f it is additional compensation which the employer promised
and a-reed to -i.e without any conditions imposed for its payment! such as success of
business or -reater production or output! then it is part of the wa-e" But if it is paid only
if prots are realiDed or if a certain le.el of producti.ity is achie.ed! it cannot be
considered part of the wa-e" @here it is not payable to all but only to some employees
and only when their labor becomes more eCcient or more producti.e! it is only an
inducement for eCciency! a priDe therefore! not a part of the wa-e"
7n this case! there is no dispute that 2astern 5elecommunications Phils"! 7nc" and 2astern
5elecoms 2mployees Anion a-reed on the inclusion of a pro.ision for the -rant of 1;th!
1'th and 1(th month bonuses in the 1BB+>2001 CBA Side A-reement! as well as in their
2001>200; CBA Side A-reement! which contained no :ualication for its payment" 5here
were no conditions specied in the CBA Side A-reements for the -rant of the bonus"
5here was nothin- in the rele.ant pro.isions of the CBA which made the -rant of the
bonus dependent on the company*s nancial standin- or contin-ent upon the
realiDation of prots" 5here was also no statement that if the company deri.es no
prots! no bonus will be -i.en to the employees" 7n ne! the payment of these bonuses
was not related to the protability of business operations" Conse:uently! the -i.in- of
the subLect bonuses cannot be peremptorily withdrawn by 2astern 5elecommunications
Phils"! 7nc" without .iolatin- Article 100 of the Labor Code! which prohibits the unilateral
elimination or diminution of benets by the employer" 5he rule is settled that any
benet and supplement bein- enLoyed by the employees cannot be reduced!
diminished! discontinued or eliminated by the employer" 5he principle of non>diminution
of benets is founded on the constitutional mandate to protect the ri-hts of wor=ers and
to promote their welfare and to a8ord labor full protection" 4astern 1ele)ommuni)ations
&'ilippines, 0n). vs. 4astern 1ele)oms 4mployees ?nion, G.R. No. 1<:"":, 8ebruary <,
%1%.
2mployee dismissal/ constructi.e dismissal" 7n constructi.e dismissal cases! the
employer has the burden of pro.in- that the transfer of an employee is for Lust or .alid
-round! such as -enuine business necessity" 5he employer must demonstrate that the
transfer is not unreasonable! incon.enient! or preLudicial to the employee and that the
transfer does not in.ol.e a demotion in ran= or a diminution in salary and other
benets" 17f the employer fails to o.ercome this burden of proof! the employee*s
transfer is tantamount to unlawful constructi.e dismissal"3 #Eerc= Sharp and Dohme
0Philippines4 ." &obles! P"&" Jo" 1$('0(! Jo.ember 2'! 200B) Petitioners failed to satisfy
the burden of pro.in- that the transfer was based on Lust or .alid -round" Petitioners*
bare assertions of imminent threat from the respondents are mere accusations which
are not substantiated by any proof" 5he Supreme Court a-reed with the Court of Appeals
in rulin- that the transfer of respondents amounted to a demotion" $ulieNs =akes'op
and2or 4d(ar Reyes vs. -enry ArnaiA, et al., G.R. No. 17!<<%, 8ebruary 1:, %1%.
2mployee dismissal/ disease/ dereliction of duties" @ith re-ard to disease as a -round
for termination! Article 2+; of the Labor Code pro.ides that an employer may terminate
the ser.ices of an employee who has been found to be su8erin- from any disease and
whose continued employment is prohibited by law or is preLudicial to his health! as well
as to the health of his co>employees" 7n order to .alidly terminate employment on this
-round! Section +! &ule 7! Boo= M7 of the Nmnibus &ules 7mplementin- the Labor Code
re:uires that9 0i4 the employee be su8erin- from a disease and his continued
employment is prohibited by law or preLudicial to his health or to the health of his co>
employees! and 0ii4 a certication by a competent public health authority that the
disease is of such nature or at such a sta-e that it cannot be cured within a period of si6
0(4 months e.en with proper medical treatment" 7f the disease or ailment can be cured
within the period! the employer shall not terminate the employee but shall as= the
employee to ta=e a lea.e" 5he employer shall reinstate such employee to his former
position immediately upon the restoration of his normal health" 7n 1riple 4i('t
0nte(rated Servi)es, 0n). v. NLRC 3G.R. Jo" 12B'+;! December %! 1BB+7,the Court held
that the re:uirement for a medical certicate under Article 2+; of the Labor Code
cannot be dispensed with/ otherwise! it would sanction the unilateral and arbitrary
determination by the employer of the -ra.ity or e6tent of the employee*s illness and!
thus! defeat the public policy on the protection of labor"
7n this case! ,nson should ha.e reported bac= to wor= or attended the in.esti-ations
conducted by @uerth Philippines! 7nc" immediately upon bein- permitted to wor= by his
doctors! =nowin- that his position remained .acant for a considerable len-th of time"
Kowe.er! he did not e.en show any sincere e8ort to return to wor=" Clearly! since there
is no more hindrance for him to return to wor= and attend the in.esti-ations set by
@uerth Philippines! 7nc"! ,nson*s failure to do so was without any .alid or Lustiable
reason" Kis conduct shows his indi8erence and utter disre-ard of his wor= and his
employer*s interest! and displays his clear! deliberate! and -ross dereliction of duties"
5he power to dismiss an employee is a reco-niDed prero-ati.e inherent in the
employer*s ri-ht to freely mana-e and re-ulate his business" 5he law! in protectin- the
ri-hts of the laborers! authoriDes neither oppression nor self>destruction of the
employer" 5he wor=er*s ri-ht to security of tenure is not an absolute ri-ht! for the law
pro.ides that he may be dismissed for cause" As a -eneral rule! employers are allowed
wide latitude of discretion in terminatin- the employment of mana-erial personnel" 5he
mere e6istence of a basis for belie.in- that such employee has breached the trust and
condence of his employer would suCce for his dismissal" Jeedless to say! an
irresponsible employee li=e ,nson does not deser.e a position in the wor=place! and it is
@uerth Philippines! 7nc"*s mana-ement prero-ati.e to terminate his employment" 5o be
sure! an employer cannot be compelled to continue with the employment of wor=ers
when continued employment will pro.e inimical to the employer*s interest" >uert'
&'ilippines, 0n). vs. Rodante Ynson, G.R. No. 17:#!%, 8ebruary 1:, %1%.
2mployee dismissal/ due process" @ith respect to due process re:uirement! the
employer is bound to furnish the employee concerned with two 024 written notices
before termination of employment can be le-ally e8ected" Nne is the notice apprisin-
the employee of the particular acts or omissions for which his dismissal is sou-ht and
this may loosely be considered as the proper char-e" 5he other is the notice informin-
the employee of the mana-ement*s decision to se.er his employment" 5his decision!
howe.er! must come only after the employee is -i.en a reasonable period from receipt
of the rst notice within which to answer the char-e! thereby -i.in- him ample
opportunity to be heard and defend himself with the assistance of his representati.e
should he so desire" 5he re:uirement of notice! it has been stressed! is not a mere
technicality but a re:uirement of due process to which e.ery employee is entitled" Kere!
Palacio Del Pobernador Condominium Corporation complied with the 1two>notice rule3
stated abo.e" Sebastian 8. Dasay, $r. vs. &ala)io del Gobernador Condominium
Corporation and Dmar 1. CruA, G.R. No. 1#9!", 8ebruary ", %1%.
2mployee dismissal/ due process" Cityland did not a8ord Palan- the re:uired notice
before he was dismissed" As the Court of Appeals noted! the in.esti-ation conference
5upas called to loo= into the Lanitors* complaints a-ainst Palan- did not constitute the
written notice re:uired by law as he had no clear idea what the char-es a-ainst him
were" Romeo A. Galan( vs. Citiland S'aC 1oCer, 0n). and @ir(ilio =aldemor, G.R. No.
17!%#1, 8ebruary <, %1%.
2mployee dismissal/ -rounds" 5he .alidity of an employee*s dismissal from ser.ice
hin-es on the satisfaction of the two substanti.e re:uirements for a lawful termination"
5hese are! rst! whether the employee was accorded due process the basic components
of which are the opportunity to be heard and to defend himself" 5his is the procedural
aspect" And second! whether the dismissal is for any of the causes pro.ided in the
Labor Code of the Philippines" 5his constitutes the substanti.e aspect" Nn the
substanti.e aspect! the Supreme Court found that Palacio Del Pobernador Condominium
Corporation*s termination of the Nasay*s employment was for a cause pro.ided under
the Labor Code" 7n terminatin- Nasay*s employment! Palacio Del Pobernador
Condominium Corporation in.o=ed loss of trust and condence" 5he rst re:uisite for
dismissal on the -round of loss of trust and condence is that the employee concerned
must be holdin- a position of trust and condence" Kere! it is indubitable that Nasay
holds a position of trust and condence" 5he position of Buildin- Administrator! bein-
mana-erial in nature! necessarily enLoys the trust and condence of the employer" 5he
second re:uisite is that there must be an act that would Lustify the loss of trust and
condence" Loss of trust and condence! to be a .alid cause for dismissal! must be
based on a willful breach of trust and founded on clearly established facts" Palacio Del
Pobernador Condominium Corporation had established! by clear and con.incin-
e.idence! Nasay*s acts which Lustied its loss of trust and condence on the
former" Sebastian 8. Dasay, $r. vs. &ala)io del Gobernador Condominium Corporation and
Dmar 1. CruA, G.R. No. 1#9!", 8ebruary ", %1%.
2mployee dismissal/ Lust cause" 5he Supreme Court found that Palan- had become
unt to continue his employment" 5he e.idence supports the .iew that he continued to
e6hibit undesirable traits as an employee and as a person! in relation to both his co>
wor=ers and his superiors! particularly 5upas! her immediate super.isor" Yuotin- the
Court of Appeals* decision with appro.al! the Supreme Court held9 1@ithout o8erin- any
possible ill moti.e that mi-ht ha.e impelled #the respondents) to summarily dismiss
#Palan-)! who admitted ha.in- been absorbed by the former as Lanitor upon the
termination of his contract with his a-ency! this Court is more inclined to -i.e credence
to the e.idence pointin- to the conclusion that #Palan-*s) employment was actually
se.ered for a Lust cause"3 Romeo A. Galan( vs. Citiland S'aC 1oCer, 0n). and @ir(ilio
=aldemor, G.R. No. 17!%#1, 8ebruary <, %1%.
2mployer/ ri-ht to discipline employee" 7n Sa-ales ." &ustan*s Commercial Corporation
0P"&" Jo" 1(('';! Jo.ember 2$! 200+4! the Supreme Court ruled9
5ruly! while the employer has the inherent ri-ht to discipline! includin- that of
dismissin- its employees! this prero-ati.e is subLect to the re-ulation by the State in the
e6ercise of its police power"
7n this re-ard! it is a hornboo= doctrine that infractions committed by an employee
should merit only the corresponding penalty demanded by the circumstance.
The penalty must be commensurate with the act, conduct or omission
imputed to the employee and must be imposed in connection with the
disciplinary authority of the employer. 02mphasis in the ori-inal"4
7n the case at bar! the penalty handed out by the petitioners was the ultimate penalty of
dismissal" 5here was no warnin- or admonition for respondent*s .iolation of team rules!
only outri-ht termination of his ser.ices for an act which could ha.e been punished
appropriately with a se.ere reprimand or suspension" Ne(ros Slas'ers, 0n)., Rodol+o C.
AlvareA and @i)ente 1an vs. Alvin L. 1en(, G.R. No. 1<71%%, 8ebruary %%, %1%.
2mployer>employee relationship/ onus probandi" 5he onus probandi falls on petitioner to
establish or substantiate such claim by the re:uisite :uantum of e.idence" 5he issue of
Ja.ier*s alle-ed ille-al dismissal is anchored on the e6istence of an employer>employee
relationship between him and Gly Ace" As the records bear out! the Labor Arbiter and the
Court of Appeals found Ja.ier*s claim of employment with Gly Ace as wantin- and
decient" Althou-h Section 10! &ule M77 of the Jew &ules of Procedure of the JL&C allows
a rela6ation of the rules of procedure and e.idence in labor cases! this rule of liberality
does not mean a complete dispensation of proof" Labor oCcials are enLoined to use
reasonable means to ascertain the facts speedily and obLecti.ely with little re-ard to
technicalities or formalities but nowhere in the rules are they pro.ided a license to
completely discount e.idence! or the lac= of it" 5he :uantum of proof re:uired! howe.er!
must still be satised" Kence! 1when confronted with conHictin- .ersions on factual
matters! it is for them in the e6ercise of discretion to determine which party deser.es
credence on the basis of e.idence recei.ed! subLect only to the re:uirement that their
decision must be supported by substantial e.idence"3 #Salvador La)orte v. -on. Amado
G. 0n)ion(! 2;+ Phil" 2%2 01B++4) Accordin-ly! Ja.ier needs to show by substantial
e.idence that he was indeed an employee of the company a-ainst which he claims
ille-al dismissal" =itoy $avier 3Banilo &. $avier7 vs. 8ly A)e Corporation28lordelyn
Castillo, G.R. No. 1#%::<, 8ebruary 1:, %1%.
2mployer>employee relationship/ test" 5o determine the e6istence of an employer>
employee relationship! the followin- are considered9 014 the selection and en-a-ement
of the employee/ 024 the payment of wa-es/ 0%4 the power of dismissal/ and 0;4 the
power to control the employee*s conduct" Nf these elements! the most important
criterion is whether the employer controls or has reser.ed the ri-ht to control the
employee not only as to the result of the wor= but also as to the means and methods by
which the result is to be accomplished" 7n this case! Ja.ier was not able to persuade the
Court that the abo.e elements e6ist in his case" Ke could not submit competent proof
that Gly Ace en-a-ed his ser.ices as a re-ular employee/ that Gly Ace paid his wa-es as
an employee! or that Gly Ace could dictate what his conduct should be while at wor=" 7n
other words! Ja.ier*s alle-ations did not establish that his relationship with Gly Ace had
the attributes of an employer>employee relationship on the basis of the abo.e>
mentioned four>fold test" @orse! Ja.ier was not able to refute Gly Ace*s assertion that it
had an a-reement with a haulin- company to underta=e the deli.ery of its -oods" 7t
was also baIin- to realiDe that Ja.ier did not dispute Gly Ace*s denial of his ser.ices*
e6clusi.ity to the company" 7n short! all that Ja.ier laid down were bare alle-ations
without corroborati.e proof" =itoy $avier 3Banilo &. $avier7 vs. 8ly A)e
Corporation28lordelyn Castillo, G.R. No. 1#%::<, 8ebruary 1:, %1%.
2mployment contract/ sta-es" Contracts under-o three distinct sta-es! to wit9
ne-otiation/ perfection or birth/ and consummation" Je-otiation be-ins from the time
the prospecti.e contractin- parties manifest their interest in the contract and ends at
the moment of a-reement of the parties" Perfection or birth of the contract ta=es place
when the parties a-ree upon the essential elements of the contract" Consummation
occurs when the parties fulll or perform the terms a-reed upon in the contract!
culminatin- in the e6tin-uishment thereof" Ander Article 1%1' of the Ci.il Code! a
contract is perfected by mere consent and from that moment the parties are bound not
only to the fulllment of what has been e6pressly stipulated but also to all the
conse:uences which! accordin- to their nature! may be in =eepin- with -ood faith!
usa-e and law" An employment contract! li=e any other contract! is perfected at the
moment 014 the parties come to a-ree upon its terms/ and 024 concur in the essential
elements thereof9 0a4 consent of the contractin- parties! 0b4 obLect certain which is the
subLect matter of the contract and 0c4 cause of the obli-ation" 7n the present case! C"G"
Sharp! on behalf of its principal! 7nternational Shippin- Eana-ement! 7nc"! hired A-ustin
and Einimo as SandblasterQPainter for a %>month contract! with a basic monthly salary
of AST;'0"00" 5hus! the obLect of the contract is the ser.ice to be rendered by A-ustin
and Einimo on board the .essel while the cause of the contract is the monthly
compensation they e6pect to recei.e" 5hese terms were embodied in the Contract of
2mployment which was e6ecuted by the parties" 5he a-reement upon the terms of the
contract was manifested by the consent freely -i.en by both parties throu-h their
si-natures in the contract" Jeither parties disa.ow the consent they both .oluntarily
-a.e" 5hus! there is a perfected contract of employment" C.8. S'arp ; Co. 0n). and $o'n
$. Ro)'a vs. &ioneer 0nsuran)e and Surety Corporation, et al.,G.R. No. 17#9"#, 8ebruary
1:, %1%.
2mployment relationship/ commencement" 5he commencement of an employer>
employee relationship must be treated separately from the perfection of an
employment contract" Santia(o v. C8 S'arp CreC ,ana(ement, 0n)"! 0P"&" Jo" 1(2;1B!
10 July 200$4 is an instructi.e precedent on this point" 7n that case! the Supreme Court
made a distinction between the perfection of the employment contract and the
commencement of the employer>employee relationship! thus9
1'e per+e)tion o+ t'e )ontra)t, C'i)' in t'is )ase )oin)ided Cit' t'e date o+ e/e)ution
t'ereo+, o))urred C'en petitioner and respondent a(reed on t'e obGe)t and t'e )ause,
as Cell as t'e rest o+ t'e terms and )onditions t'erein. 1'e )ommen)ement o+ t'e
employer6employee relations'ip, as earlier dis)ussed, Could 'ave taken pla)e 'ad
petitioner been a)tually deployed +rom t'e point o+ 'ire. 1'us, even be+ore t'e start o+
any employer6employee relations'ip, )ontemporaneous Cit' t'e per+e)tion o+ t'e
employment )ontra)t Cas t'e birt' o+ )ertain ri('ts and obli(ations, t'e brea)' o+
C'i)' may (ive rise to a )ause o+ a)tion a(ainst t'e errin( party.
Despite the fact that the employer>employee relationship has not commenced due to
the failure to deploy A-ustin and Einimo in this case! A-ustin and Einimo are entitled to
ri-hts arisin- from the perfected Contract of 2mployment! such as the ri-ht to demand
performance by C"G" Sharp of its obli-ation under the contract" C.8. S'arp ; Co. 0n). and
$o'n $. Ro)'a vs. &ioneer 0nsuran)e and Surety Corporation, et al., G.R. No. 17#9"#,
8ebruary 1:, %1%.
Gorum shoppin-/ elements/ res Ludicata" Gor forum shoppin- to e6ist! it is necessary that
0a4 there be identity of parties or at least such parties that represent the same interests
in both actions/ 0b4 there be identity of ri-hts asserted and relief prayed for! the relief
bein- founded on the same facts/ and 0c4 the identity of the two precedin- particulars is
such that any Lud-ment rendered in one action will! re-ardless of which party is
successful! amount to res Gudi)ata in the other action" Petitioners are correct as to the
rst two re:uisites of forum shoppin-" Girst! there is identity of parties in.ol.ed9 Je-ros
Slashers 7nc" and respondent 5en-" Second! there is identity of ri-hts asserted i"e"! the
ri-ht of mana-ement to terminate employment and the ri-ht of an employee a-ainst
ille-al termination" Kowe.er! the third re:uisite of forum shoppin- is missin- in this
case" Any Lud-ment or rulin- of the NCce of the Commissioner of the Eetropolitan
Bas=etball Association will not amount to res Gudi)ata" Res Gudi)ata is dened in
Lurisprudence as to ha.e four basic elements9 014 the Lud-ment sou-ht to bar the new
action must be nal/ 024 the decision must ha.e been rendered by a court ha.in-
Lurisdiction o.er the subLect matter and the parties/ 0%4 the disposition of the case must
be a Lud-ment on the merits/ and 0;4 there must be as between the rst and second
action! identity of parties! subLect matter! and causes of action" Kere! althou-h
contractually authoriDed to settle disputes! the NCce of the Commissioner of the
Eetropolitan Bas=etball Association is not a court of competent Lurisdiction as
contemplated by law with respect to the application of the doctrine of res Gudi)ata. At
best! the NCce of the Commissioner of the Eetropolitan Bas=etball Association is a
pri.ate mediator or -o>between as a-reed upon by team mana-ement and a player in
the Eetropolitan Bas=etball Association Player*s Contract of 2mployment" Any Lud-ment
that the NCce of the Commissioner of the Eetropolitan Bas=etball Association may
render will not result in a bar for see=in- redress in other le-al .enues" Kence!
respondent*s action of lin- the same complaint in the &e-ional Arbitration Branch of
the JL&C does not constitute forum shoppin-" Ne(ros Slas'ers, 0n)., Rodol+o C. AlvareA
and @i)ente 1an vs. Alvin L. 1en(, G.R. No. 1<71%%, 8ebruary %%, %1%.
Jurisdiction/ JL&C" 7t is clear from the JL&C &ules of Procedure that appeals must be
.eried and certied a-ainst forum>shoppin- by the parties>in>interest themsel.es" 5he
purpose of .erication is to secure an assurance that the alle-ations in the pleadin- are
true and correct and ha.e been led in -ood faith" 7n the case at bar! the parties>in>
interest are petitioner Salen-a! as the employee! and respondent Clar= De.elopment
Corporation as the employer" A corporation can only e6ercise its powers and transact its
business throu-h its board of directors and throu-h its oCcers and a-ents when
authoriDed by a board resolution or its bylaws" 5he power of a corporation to sue and be
sued is e6ercised by the board of directors" 5he physical acts of the corporation! li=e the
si-nin- of documents! can be performed only by natural persons duly authoriDed for the
purpose by corporate bylaws or by a specic act of the board" Absent the re:uisite
board resolution! neither 5imbol>&oman nor Atty" Eallari! who si-ned the Eemorandum
of Appeal and Joint ACda.it of Declaration alle-edly on behalf of respondent
corporation! may be considered as the 1appellant3 and 1employer3 referred to by the
JL&C &ules of Procedure" As such! the JL&C had no Lurisdiction to entertain the
appeal" Antonio =. Salen(a, et al. vs. Court o+ Appeals, et al., G.R. No. 179#91, 8ebruary
1, %1%.
Labor/ e8ect if procedural due process not followed but with a .alid cause for
termination" 7t is re:uired that the employer furnish the employee with two written
notices9 014 a written notice ser.ed on the employee specifyin- the -round or -rounds
for termination! and -i.in- to said employee reasonable opportunity within which to
e6plain his side/ and 024 a written notice of termination ser.ed on the employee
indicatin- that upon due consideration of all the circumstances! -rounds ha.e been
established to Lustify his termination" 5he twin re:uirements of notice and hearin-
constitute the elements of due process in cases of employee*s dismissal" 5he
re:uirement of notice is intended to inform the employee concerned of the employer*s
intent to dismiss and the reason for the proposed dismissal" Apon the other hand! the
re:uirement of hearin- a8ords the employee an opportunity to answer his employer*s
char-es a-ainst him and accordin-ly! to defend himself therefrom before dismissal is
e8ected" Nb.iously! the second written notice! as indispensable as the rst! is intended
to ensure the obser.ance of due process" 7n this case! there was only one written notice
which re:uired respondents to e6plain within .e 0'4 days why they should not be
dismissed from the ser.ice" Alco.endas was the only one who si-ned the receipt of the
notice" 5he others! as claimed by Lyn.il! refused to si-n" 5he other employees ar-ue
that no notice was -i.en to them" Despite the inconsistencies! what is clear is that no
nal written notice or notices of termination were sent to the employees" Due to the
failure of Lyn.il to follow the procedural re:uirement of two>notice rule! nominal
dama-es in the amount of P'0!000 were -ranted to Ariola! et al" despite their dismissal
for Lust cause" Lynvil 8is'in( 4nterprises, 0n). vs. Andres G. Ariola, et al., G.R. No.
1<1#79, 8ebruary 1, %1%.
Labor/ liability of oCcers if termination is attended with bad faith" 7n labor cases! the
corporate directors and oCcers are solidarily liable with the corporation for the
termination of employment of employees done with malice or in bad faith" 7ndeed!
moral dama-es are reco.erable when the dismissal of an employee is attended by bad
faith or fraud or constitutes an act oppressi.e to labor! or is done in a manner contrary
to -ood morals! -ood customs or public policy" 5he term 1bad faith3 contemplates a
1state of mind aCrmati.ely operatin- with furti.e desi-n or with some moti.e of self>
interest or will or for ulterior purpose"3 5he Supreme Court a-reed with the rulin- of
both the JL&C and the Court of Appeals when they pronounced that there was no
e.idence on record that indicates commission of bad faith on the part of De BorLa! the
-eneral mana-er of Lyn.il! who was tas=ed with the super.ision of the employees and
the operation of the business" 5here is no proof that he imposed on Ariola! et al" the
1por viaGe3 pro.ision for purpose of e8ectin- their summary dismissal" Lynvil 8is'in(
4nterprises, 0n). vs. Andres G. Ariola, et al., G.R. No. 1<1#79, 8ebruary 1, %1%.
Labor/ nature of employment/ security of tenure" 7n the conte6t of these facts X 014
Ariola! et al" were doin- tas=s necessary to Lyn.il*s shin- business with positions
ran-in- from captain of the .essel to bode(ero/ 024 after the end of a trip! they will
a-ain be hired for another trip with new contracts/ and 0%4 this arran-ement continued
for more than ten years F the Court belie.ed that Lyn.il intended to -o around the
security of tenure of Ariola! et al" as re-ular employees" 5he Court held that by the
e6press pro.isions of the second para-raph of Article 2+0 which co.er casual
employment! Ariola! et al" had become re-ular employees of Lyn.il" Lynvil 8is'in(
4nterprises, 0n). vs. Andres G. Ariola, et al., G.R. No. 1<1#79, 8ebruary 1, %1%.
Labor/ procedural and substanti.e due process/ -rounds for .alid termination/ breach of
trust" Just cause is re:uired for a .alid dismissal" 5he Labor Code pro.ides that an
employer may terminate an employment based on fraud or willful breach of the trust
reposed on the employee" Such breach is considered willful if it is done intentionally!
=nowin-ly! and purposely! without Lustiable e6cuse! as distin-uished from an act done
carelessly! thou-htlessly! heedlessly or inad.ertently" 7t must also be based on
substantial e.idence and not on the employer*s whims or caprices or suspicions
otherwise! the employee would eternally remain at the mercy of the employer" Loss of
condence must not be indiscriminately used as a shield by the employer a-ainst a
claim that the dismissal of an employee was arbitrary" And! in order to constitute a Lust
cause for dismissal! the act complained of must be wor=>related and shows that the
employee concerned is unt to continue wor=in- for the employer" 7n addition! loss of
condence as a Lust cause for termination of employment is premised on the fact that
the employee concerned holds a position of responsibility! trust and condence or that
the employee concerned is entrusted with condence in delicate matters! such as the
handlin- or care and protection of the property and assets of the employer" 5he betrayal
of this trust is the essence of the o8ense for which an employee is penaliDed" 5he
Supreme Court found that breach of trust is present in this case! when Ariola 0the
captain4! Alco.endas 0Chief Eate4! Calinao 0Chief 2n-ineer4! Jubla 0coo=4! BaZeD 0oiler4!
and Sebullen 0bode(ero4 conspired with one another and stole 1pampano3 and
1tan(i(ue3 sh and deli.ered them to another .essel! to the preLudice of Lyn.il" Lynvil
8is'in( 4nterprises, 0n). vs. Andres G. Ariola, et al.,G.R. No. 1<1#79, 8ebruary 1, %1%.
Labor/ public prosecutor*s decision not bindin- on the labor tribunal" 5he Supreme Court
has held in Ni)olas v. National Labor Relations Commission I%2$ Phil" ++%! ++(>++$
01BB(4) that a criminal con.iction is not necessary to nd Lust cause for employment
termination" Ntherwise stated! an employee*s ac:uittal in a criminal case! especially
one that is -rounded on the e6istence of reasonable doubt! will not preclude a
determination in a labor case that he is -uilty of acts inimical to the employer*s
interests" 7n the re.erse! the ndin- of probable cause is not followed by automatic
adoption of such ndin- by the labor tribunals" 7n other words! whiche.er way the public
prosecutor disposes of a complaint! the ndin- does not bind the labor tribunal" Lyn.il
contends that the lin- of a criminal case before the NCce of the Prosecutor is suCcient
basis for a .alid termination of employment based on serious misconduct andQor loss of
trust and condence" 5he Supreme Court held that Lyn.il cannot ar-ue that since the
NCce of the Prosecutor found probable cause for theft! the Labor Arbiter must follow
the ndin- as a .alid reason for the termination of respondents* employment" 5he proof
re:uired for purposes that di8er from one and the other are li=ewise di8erent" Lynvil
8is'in( 4nterprises, 0n). vs. Andres G. Ariola, et al., G.R. No. 1<1#79, 8ebruary 1, %1%.
Labor/ re-ular employee/ 6ed>contract a-reement! re:uisites for .alidity" Prior
Supreme Court decisions ha.e laid two conditions for the .alidity of a 6ed>contract
a-reement between the employer and employee9 8irst, the 6ed period of employment
was =nowin-ly and .oluntarily a-reed upon by the parties without any force! duress! or
improper pressure bein- brou-ht to bear upon the employee and absent any other
circumstances .itiatin- his consent/ or Se)ond, it satisfactorily appears that the
employer and the employee dealt with each other on more or less e:ual terms with no
moral dominance e6ercised by the former or the latter" Lyn.il contends that Ariola! et al"
were employed under a 6ed>term contract which e6pired at the end of the .oya-e"
Contrarily! Ariola! et al" contend that they became re-ular employees by reason of their
continuous hirin- and performance of tas=s necessary and desirable in the usual trade
and business of Lyn.il" 5e6tually! the pro.ision in the contract between Lyn.il and Ariola!
et al" that9 QNA ako ay sumasan(6ayon na ma(lin(kod at (umaCa n( m(a (aCain san(6
ayon sa patakaran( Qpor viaGeR na ma(mumula sa pa(alis sa Navotas papunta sa
pan(isdaan at pa(babalik sa pondo'an n( lantsa sa Navotas, ,etro ,anilaR is for a
6ed period of employment" 7n the conte6t! howe.er! of the facts that9 014 Ariola! et al"
were doin- tas=s necessarily to Lyn.il*s shin- business with positions ran-in- from
captain of the .essel to bode(ero/ 024 after the end of a trip! they will a-ain be hired for
another trip with new contracts/ and 0%4 this arran-ement continued for more than ten
years! the clear intention is to -o around the security of tenure of Ariola! et al" as
re-ular employees" As such! the Supreme Court found that Ariola! et al" are re-ular
employees" Lynvil 8is'in( 4nterprises, 0n). vs. Andres G. Ariola, et al., G.R. No.
1<1#79, 8ebruary 1, %1%.
Labor Code/ ma6imum award of attorney*s fees in cases of reco.ery of wa-es" Article
111 of the Labor Code pro.ides for a ma6imum award of attorney*s fees in cases of
reco.ery of wa-es9
a" 7n cases of unlawful withholdin- of wa-es! the culpable party may be assessed
attorney*s fees e:ui.alent to ten percent of the amount of wa-es reco.ered"
b" 7t shall be unlawful for any person to demand or accept! in any Ludicial or
administrati.e proceedin-s for the reco.ery of wa-es! attorney*s fees which e6ceed ten
percent of the amount of wa-es reco.ered"
Since De Pracia! et al" had to secure the ser.ices of the lawyer to reco.er their unpaid
salaries and protect their interest! attorney*s fees in the amount of ten percent 010<4 of
the total claims was imposed" Skippers ?nited &a)i.), 0n). and Skippers ,aritime
Servi)es, 0n). Ltd. vs. Nat'aniel BoAa, et al.,G.R. No. 17:::<. 8ebruary <, %1%.
Labor contractin-/ elements" 5here is labor>only contractin- where9 0a4 the person
supplyin- wor=ers to an employer does not ha.e substantial capital or in.estment in the
form of tools! e:uipment! machineries! wor= premises! amon- others/ and 0b4 the
wor=ers recruited and placed by such person are performin- acti.ities which are directly
related to the principal business of the employer" 7n the present case! the Supreme
Court found that both the capitaliDation re:uirement and the power of control on the
part of &e:uiZo are wantin-" Penerally! the presumption is that the contractor is a labor>
only contractor unless such contractor o.ercomes the burden of pro.in- that it has the
substantial capital! in.estment! tools and the li=e" 7n the present case! thou-h Parden of
Eemories is not the contractor! it has the burden of pro.in- that &e:uiZo has suCcient
capital or in.estment since it is claimin- the supposed status of &e:uiZo as independent
contractor" Parden of Eemories! howe.er! failed to adduce e.idence purportin- to show
that &e:uiZo had suCcient capitaliDation" Jeither did it show that she in.ested in the
form of tools! e:uipment! machineries! wor= premises and other materials which are
necessary in the completion of the ser.ice contract"Garden o+ ,emories &ark and Li+e
&lan, 0n)., et al. vs. NLRC, %nd Biv., et al., G.R. No. 1"%7<, 8ebruary <, %1%.
Ei-rant @or=ers/ &A Jo" +0;2/ money claims in cases of unLust termination" Section 10
of &epublic Act Jo" +0;2 0Ei-rant @or=ers Act4 pro.ides for money claims in cases of
unLust termination of employment contracts9
7n case of termination of o.erseas employment without Lust! .alid or authoriDed cause
as dened by law or contract! the wor=ers shall be entitled to the full reimbursement of
his placement fee with interest of twel.e percent 012<4 per annum! plus his salaries for
the une6pired portion of his employment contract or for three 0%4 months for e.ery year
of the une6pired term! whiche.er is less"
5he Ei-rant @or=ers Act pro.ides that salaries for the une6pired portion of the
employment contract or three 0%4 months for e.ery year of the une6pired term!
whiche.er is less! shall be awarded to the o.erseas Gilipino wor=er! in cases of ille-al
dismissal" Kowe.er! in 2; Earch 200B!Serrano v. Gallant ,aritime Servi)es and ,arloC
Navi(ation Co. 0n). 0P"&" Jo" 1($(1;4! the Court! in an 2n Banc Decision! declared
unconstitutional the clause 1or for three months for e.ery year of the une6pired term!
whiche.er is less3 and awarded the entire une6pired portion of the employment
contract to the o.erseas Gilipino wor=er" Nn + Earch 2010! howe.er! Section $ of
&epublic Act Jo" 10022 0&A 100224 amended Section 10 of the Ei-rant @or=ers Act! and
once a-ain reiterated the pro.ision of awardin- the une6pired portion of the employent
contract or three 0%4 months for e.ery year of the une6pired term! whiche.er is less"
Je.ertheless! since the termination occurred on January 1BBB before the passa-e of the
amendatory &A 10022! the Supreme Court applied &A +0;2! without touchin- on the
constitutionality of Section $ of &A 10022" 5he declaration in Earch 200B of the
unconstitutionality of the clause 1or for three months for e.ery year of the une6pired
term! whiche.er is less3 in &A +0;2 shall be -i.en retroacti.e e8ect to the termination
that occurred in January 1BBB because an unconstitutional clause in the law confers no
ri-hts! imposes no duties and a8ords no protection" 5he unconstitutional pro.ision is
inoperati.e! as if it was not passed into law at all" Skippers ?nited &a)i.), 0n). and
Skippers ,aritime Servi)es, 0n). Ltd. vs. Nat'aniel BoAa, et al.,G.R. No.
17:::<. 8ebruary <, %1%.
JL&C/ contempt powers" Ander Article 21+ the Labor Code! the JL&C 0and the labor
arbiters4 may hold any o8endin- party in contempt! directly or indirectly! and impose
appropriate penalties in accordance with law" 5he penalty for direct contempt consists
of either imprisonment or ne! the de-ree or amount depends on whether the contempt
is a-ainst the Commission or the labor arbiter" 5he Labor Code! howe.er! re:uires the
labor arbiter or the Commission to deal with indirect contempt in the manner prescribed
under &ule $1 of the &ules of Court" &ule $1 of the &ules of Court does not re:uire the
labor arbiter or the JL&C to initiate indirect contempt proceedin-s before the trial
court" 5his mode is to be obser.ed only when there is no law -rantin- them contempt
powers" As is clear under Article 21+0d4 of the Labor Code! the labor arbiter or the
Commission is empowered or has Lurisdiction to hold the o8endin- party or parties in
direct or indirect contempt" &obosa! et al"! therefore! ha.e not improperly brou-ht the
indirect contempt char-es a-ainst the respondents before the JL&C" 8ederi)o S.
Robosa, et al. vs. National Labor Relations Commission 38irst Bivision7, et al., G.R. No.
17"<:, 8ebruary <, %1%.
JL&C/ factual ndin-s" 7t is a well>entrenched rule that ndin-s of facts of the JL&C!
aCrmin- those of the Labor Arbiter! are accorded respect and due consideration when
supported by substantial e.idence" 5he Supreme Court! howe.er! found that the
doctrine of -reat respect and nality has no application to the case at bar" 5he Labor
Arbiter dismissed ArnaiD! et al"*s complaints on mere technicality" 5he JL&C! upon
appeal! then came up with three di.er-ent rulin-s" At rst! it remanded the case to the
Labor Arbiter" Kowe.er! in a subse:uent resolution! it decided to resol.e the case on
the merits by rulin- that ArnaiD! et al" were constructi.ely dismissed" But later on! it
a-ain re.ersed itself in its third and nal resolution of the case and ruled in fa.or of
Julie*s ba=eshop" 5herefore! contrary to &eyes*s claim! the JL&C did not! on any
occasion! aCrm any factual ndin-s of the Labor Arbiter" 5he Court of Appeals is thus
correct in re.iewin- the entire records of the case to determine which ndin-s of the
JL&C is sound and in accordance with law" Besides! the Court of Appeals may still
resol.e factual issues by e6press mandate of the law despite the respect -i.en to
administrati.e ndin-s of fact" $ulieNs =akes'op and2or 4d(ar Reyes vs. -enry ArnaiA, et
al., G.R. No. 17!<<%, 8ebruary 1:, %1%.
Probationary employee/ .alid cause for dismissal but without procedural due process/
employee entitled to nominal dama-es" Section 2! &ule 7! Boo= M7 of the Labor Code*s
7mplementin- &ules and &e-ulations pro.ides9 10+ t'e termination is brou('t about by
t'e )ompletion o+ a )ontra)t or p'ase t'ereo+, or by +ailure o+ an employee to meet t'e
standards o+ t'e employer in t'e )ase o+ probationary employment, it s'all be suE)ient
t'at a Critten noti)e is served t'e employee Cit'in a reasonable time +rom t'e e*e)tive
date o+ termination.3 Dalan-in was hired by Canadian Npportunities as 7mmi-ration and
Le-al Eana-er! subLect to a probationary period of si6 months" Nne month after hirin-
Dalan-in! the company terminated his employment! declarin- him 1unt3 and
1un:ualied3 to continue as 7mmi-ration and Le-al Eana-er! for reasons which included
obstinacy and utter disre-ard of company policies" Propensity to ta=e prolon-ed and
e6tended lunch brea=s! shows no interest in familiariDin- oneself with the policies and
obLecti.es! lac= of concern for the company*s interest despite ha.in- Lust been
employed in the company 0Declined to attend company sponsored acti.ities! seminars
intended to familiariDe company employees with Eana-ement obLecti.es and
enhancement of company interest and obLecti.es4! lac= of enthusiasm toward wor=! and
lac= of interest in fosterin- relationship with his co>employees" 5he company contends
that it complied with the rule on procedural due process when it as=ed Dalan-in!
throu-h a Eemorandum! to e6plain why he could not attend the seminar" @hen he
failed to submit his e6planation! the company ser.ed him a notice the followin- day
terminatin- his employment" Accordin- to the Supreme Court! the notice to Dalan-in
was not ser.ed within a reasonable time from the e8ecti.e date of his termination as
re:uired by the rules since he was dismissed on the .ery day the notice was -i.en to
him" Kowe.er! because of the e6istence of a .alid cause for termination! the Supreme
Court did not in.alidate his dismissal but penaliDed the company for its non>compliance
with the notice re:uirement! and ordered the company to pay an indemnity! in the form
of nominal dama-es amountin- to P10!000" Canadian Dpportunities ?nlimited, 0n).
vs. =art H. Balan(in, $r., G.R. No. 17%%%!, 8ebruary ", %1%.
Probationary employee/ .alid dismissal e.en before ( months" 5he essence of a
probationary period of employment fundamentally lies in the purpose or obLecti.e of
both the employer and the employee durin- the period" @hile the employer obser.es
the tness! propriety and eCciency of a probationer to ascertain whether he is :ualied
for permanent employment! the latter see=s to pro.e to the former that he has the
:ualications to meet the reasonable standards for permanent employment" 5he 1trial
period3 or the len-th of time the probationary employee remains on probation depends
on the parties* a-reement! but it shall not e6ceed si6 0(4 months under Article 2+1 of
the Labor Code" 5he Supreme Court found substantial e.idence indicatin- that the
company was Lustied in terminatin- Dalan-in*s probationary employment" Dalan-in
admitted in compulsory arbitration that the pro6imate cause for his dismissal was his
refusal to attend the company*s 1Malues Gormation Seminar3 scheduled for Nctober 2$!
2001! a Saturday" Ke refused to attend the seminar after he learned that it had no
relation to his duties! as he claimed! and that he had to lea.e at 2900 p"m" because he
wanted to be with his family in the pro.ince" @hen the Chief Nperations NCcer!
insisted that he attend the seminar to encoura-e his co>employees to attend! he stood
pat on not attendin-! ar-uin- that mar=ed di8erences e6ist between their positions and
duties! and insinuatin- that he did not want to Loin the other employees" Ke also
:uestioned the scheduled 2900 p"m" seminars on Saturdays as they were not supposed
to be doin- a company acti.ity beyond 2900 p"m" Ke considers 2900 p"m" as the close of
wor=in- hours on Saturdays/ thus! holdin- them beyond 2900 p"m" would be in .iolation
of the law" 5his incident re.eals Dalan-in*s lac= of interest in establishin- a -ood
wor=in- relationship with his co>employees! especially the ran= and le/ he did not want
to Loin them because of his .iew that the seminar was not rele.ant to his position and
duties" 7t also betrays his arro-ant and condescendin- attitude towards his co>
employees! and a lac= of support for the company obLecti.e" Dalan-in also e6hibited
ne-ati.e wor=in- habits! particularly with respect to the one hour lunch brea= policy of
the company and the obser.ance of the company*s wor=in- hours" Dalan-in would ta=e
prolon-ed lunch brea=s or would -o out of the oCce F without lea.e of the company F
and call the personnel mana-er later only to say that he would be unable to return to
the oCce because of some personal matters he needs to attend to" Canadian
Dpportunities ?nlimited, 0n). vs. =art H. Balan(in, $r., G.R. No. 17%%%!, 8ebruary ",
%1%.
Procedural rules/ liberal application" Nrdinarily! rules of procedure are strictly enforced
by courts in order to impart stability in the le-al system" Kowe.er! in not a few
instances! the Supreme Court has rela6ed the ri-id application of the rules of procedure
to a8ord the parties the opportunity to fully .entilate their cases on the merits" 5his is
in line with the time honored principle that cases should be decided only after -i.in- all
the parties the chance to ar-ue their causes and defenses" 7n that way! the ends of
Lustice would be better ser.ed" Gor indeed! the -eneral obLecti.e of procedure is to
facilitate the application of Lustice to the ri.al claims of contendin- parties! bearin-
always in mind that procedure is not to hinder but to promote the administration of
Lustice" 7n Nn- Lim Sin-! Jr" ." G2B Leasin- and Ginance Corporation 0P"&" Jo" 1(+11'!
June +! 200$4! the Supreme Court ruled9
Courts ha.e the prero-ati.e to rela6 procedural rules of e.en the most mandatory
character! mindful of the duty to reconcile both the need to speedily put an end to
liti-ation and the parties* ri-ht to due process" 7n numerous cases! this Court has
allowed liberal construction of the rules when to do so would ser.e the demands of
substantial Lustice and e:uity" 6 6 6
7ndeed the pre.ailin- trend is to accord party liti-ants the amplest opportunity for the
proper and Lust determination of their causes! free from the constraints of needless
technicalities" 7n this case! besides the fact that a denial of the recourse to the Court of
Appeals would ser.e more to perpetuate an inLustice and .iolation of 5en-*s ri-hts under
our labor laws! the Supreme Court found that as correctly held by the Court of Appeals!
no intent to delay the administration of Lustice could be attributed to 5en-" 5he Court of
Appeals therefore did not commit re.ersible error in e6cusin- 5en-*s one>day delay in
lin- his motion for reconsideration and in -i.in- due course to his petition for
certiorari" Ne(ros Slas'ers, 0n)., Rodol+o C. AlvareA and @i)ente 1an vs. Alvin L.
1en(, G.R. No. 1<71%%, 8ebruary %%, %1%.
&einstatement/ bac=wa-es" 2mployees who are ille-ally dismissed are entitled to full
bac=wa-es! inclusi.e of allowances and other benets or their monetary e:ui.alent!
computed from the time their actual compensation was withheld from them up to the
time of their actual reinstatement" But if reinstatement is no lon-er possible! the
bac=wa-es shall be computed from the time of their ille-al termination up to the nality
of the decision" 5hus! when there is an order of reinstatement! the computation of
bac=wa-es shall be rec=oned from the time of ille-al dismissal up to the time that the
employee is actually reinstated to his former position" Pursuant to the order of
reinstatement rendered by the Labor Arbiter! the Ban= of Lubao sent Eanabat a letter
re:uirin- him to report bac= to wor= on Eay ;! 200$" Jotwithstandin- the said letter!
Eanabat opted not to report for wor=" 5hus! it is but fair that the bac=wa-es to be
awarded to Eanabat should be computed from the time that he was ille-ally dismissed
until the time when he was re:uired to report for wor=! i.e. from September 1! 200'
until Eay ;! 200$" =ank o+ Lubao, 0n). vs. Rommel $. ,anabat, et al., G.R. No.
1<<7%%, 8ebruary 1, %1%.
&einstatement/ doctrine of strained relations/ when applicable" Ander the law and
pre.ailin- Lurisprudence! an ille-ally dismissed employee is entitled to reinstatement as
a matter of ri-ht" Kowe.er! if reinstatement would only e6acerbate the tension and
strained relations between the parties! or where the relationship between the employer
and the employee has been unduly strained by reason of their irreconcilable
di8erences! parti)ularly C'ere t'e ille(ally dismissed employee 'eld a mana(erial or
key position in t'e )ompany! it would be more prudent to order payment of separation
pay instead of reinstatement" Ander the do)trine o+ strained relations! the payment of
separation pay is considered an acceptable alternati.e to reinstatement when the latter
option is no lon-er desirable or .iable" Nn one hand! such payment liberates the
employee from what could be a hi-hly oppressi.e wor= en.ironment" Nn the other hand!
it releases the employer from the -rossly unpalatable obli-ation of maintainin- in its
employ a wor=er it could no lon-er trust" 7n such cases! it should be pro.ed that the
employee concerned occupies a position where he enLoys the trust and condence of
his employer/ and that it is li=ely that if reinstated! an atmosphere of antipathy and
anta-onism may be -enerated as to ad.ersely a8ect the eCciency and producti.ity of
the employee concerned" 7n the present case! the Supreme Court found that the
relations between the parties had been already strained thereby Lustifyin- the -rant of
separation pay in lieu of reinstatement in fa.or of Eanabat" Eanabat*s reinstatement to
his former position would only ser.e to intensify the atmosphere of antipathy and
anta-onism between the parties" Andoubtedly! Ban= of Lubao*s lin- of .arious criminal
complaints a-ainst Eanabat for :ualied theft and the subse:uent lin- by the latter of
the complaint for ille-al dismissal a-ainst the former! ta=en to-ether with the pendency
of the instant case for more than si6 years! had caused strained relations between the
parties" Considerin- that Eanabat*s former position as ban= encoder in.ol.es the
handlin- of accounts of the depositors of the Ban= of Lubao! it would not be e:uitable
on the part of the Ban= of Lubao to be ordered to maintain the former in its employ
since it may only inspire .indicti.eness on the part of Eanabat" Also! the refusal of
Eanabat to return to wor= is in itself an indication of the e6istence of strained relations
between him and the petitioner"=ank o+ Lubao, 0n). vs. Rommel $. ,anabat, et al., G.R.
No. 1<<7%%, 8ebruary 1, %1%.
Seafarers/ employment contract/ perfection sta-e .s" commencement sta-e" An
employment contract! li=e any other contract! is perfected at the moment 014 the
parties come to a-ree upon its terms/ and 024 concur in the essential elements thereof9
0a4 consent of the contractin- parties! 0b4 obLect certain which is the subLect matter of
the contract! and 0c4 cause of the obli-ation" 5he obLect of the contract was the
rendition of ser.ice by Gantonial on board the .essel for which ser.ice he would be paid
the salary a-reed upon" 7n this case! the employment contract was perfected on January
1'! 2000 when it was si-ned by the parties who entered into the contract in behalf of
their principal" Kowe.er! the employment relationship ne.er commenced since Gantonial
was not allowed to lea.e on January 1$! 2000 and -o on board the .essel EQM AAS in
Permany on the -round that he was not yet declared t to wor= on the day of his
scheduled departure" But! e.en if no employer>employee relationship commenced! there
was! contemporaneous with the perfection of the employment contract! the birth of
certain ri-hts and obli-ations! the breach of which may -i.e rise to a cause of action
a-ainst the errin- party" =ri('t ,aritime Corporation 3=,C7 2 Besiree &. 1enorio
vs. Ri)ardo =. 8antonial, G.R. No. 1":#!:, 8ebruary <, %1%.
Earch 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on April 20! 2012 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines > Law
[ 5a--ed Department of Labor and 2mployment! dismissal! ille-al stri=e! loss of trust and
condence! probationary employment! proLect employee [
Kere are select Earch 2012 rulin-s of the Supreme Court of the Philippines on labor law
and procedure"
Dismissal/ constructi.e dismissal" Constructi.e dismissal e6ists where there is cessation
of wor= because continued employment is rendered impossible! unreasonable or
unli=ely! as an o8er in.ol.in- a demotion in ran= and a diminution in pay" Constructi.e
dismissal is a dismissal in dis-uise or an act amountin- to dismissal but made to appear
as if it were not" 7n constructi.e dismissal cases! the employer is! concededly! char-ed
with the burden of pro.in- that its conduct and action or the transfer of an employee
are for .alid and le-itimate -rounds such as -enuine business necessity" 7n the instant
case! the o.ert act relied upon by petitioner is not only a doubtful occurrence but is! if it
did transpire! e.en consistent with the dismissal from employment posited by the
respondent" 5he factual appraisal of the Court of Appeals is correct" Petitioner was
displeased after incurrin- e6penses for respondent*s medical chec=>up and! it is credible
that! thereafter! respondent was pre.ented entry into the wor= premises" 5his is
tantamount to constructi.e dismissal" 5he Supreme Court a-reed with the Court of
Appeals that the incredibility of petitioner*s submission about abandonment of wor=
renders credible the position of respondent that she was pre.ented from enterin- the
property" 5his was e.en corroborated by the aCda.its of Siarot and EendoDa which
were made part of the records of this case" ,a. ,elissa A. Galan( vs. $ulia
,alasu5ui, G.R. No. 17917!. ,ar)' 7, %1%.
Dismissal/ loss of trust and condence" 5he rule is lon- and well settled that! in ille-al
dismissal cases li=e the one at bench! the burden of proof is upon the employer to show
that the employee*s termination from ser.ice is for a Lust and .alid cause" 5he
employer*s case succeeds or fails on the stren-th of its e.idence and not on the
wea=ness of that adduced by the employee! in =eepin- with the principle that the scales
of Lustice should be tilted in fa.or of the latter in case of doubt in the e.idence
presented by them" Nften described as more than a mere scintilla! the :uantum of proof
is substantial e.idence which is understood as such rele.ant e.idence as a reasonable
mind mi-ht accept as ade:uate to support a conclusion! e.en if other e:ually
reasonable minds mi-ht concei.ably opine otherwise" Gailure of the employer to
dischar-e the fore-oin- onus would mean that the dismissal is not Lustied and
therefore ille-al"
7n the case at bar! the Supreme Court a-reed with the petitioners that mere substantial
e.idence and not proof beyond reasonable doubt is re:uired to Lustify the dismissal from
ser.ice of an employee char-ed with theft of company property" Kowe.er! the Court
found no error in the CA*s ndin-s that the petitioners had not ade:uately pro.en by
substantial e.idence that Arlene and Joseph indeed participated or cooperated in the
commission of theft relati.e to the si6 missin- intensifyin- screens so as to Lustify the
latter*s termination from employment on the -round of loss of trust and
condence" =lue Sky 1radin( Company, 0n). et al. vs. Arlene &. =las and $osep' B.
Silvano,G.R. No. 1#::#. ,ar)' 7, %1%.
Dismissal/ probationary employees" Pala insists that he cannot be sanctioned for the
theft of company property on Eay 2'! 200(" Ke maintains that he had no direct
participation in the incident and that he was not aware that an ille-al acti.ity was -oin-
on as he was at some distance from the truc=s when the alle-ed theft was bein-
committed" Ke adds that he did not call the attention of the foremen because he was a
mere lineman and he was focused on what he was doin- at the time" Ke ar-ues that in
any e.ent! his mere presence in the area was not enou-h to ma=e him a conspirator in
the commission of the pilfera-e"
Pala misses the point" Ke for-ets that as a probationary employee! his o.erall Lob
performance and his beha.ior were bein- monitored and measured in accordance with
the standards 0i.e., the terms and conditions4 laid down in his probationary employment
a-reement" Ander para-raph + of the a-reement! he was subLect to strict compliance
with! and non>.iolation of the Company Code on 2mployee Discipline! Safety Code! rules
and re-ulations and e6istin- policies" Par" 10 re:uired him to obser.e at all times the
hi-hest de-ree of transparency! selHessness and inte-rity in the performance of his
duties and responsibilities! free from any form of conHict or contradictin- with his own
personal interest" ,anila 4le)tri) Company vs. $an Carlo Gala, G.R. No. 1#1%<<. ,ar)'
7, %1%.
Dismissal/ relief of ille-ally dismissed employee" An ille-ally dismissed employee is
entitled to two reliefs9 bac= wa-es and reinstatement" 5he two reliefs pro.ided are
separate and distinct" 7n instances where reinstatement is no lon-er feasible because of
strained relations between the employee and the employer! separation pay is -ranted"
7n e8ect! an ille-ally dismissed employee is entitled to either reinstatement if such is
.iable! or separation pay if reinstatement is no lon-er .iable! and to bac= wa-es" 5he
normal conse:uences of respondent*s ille-al dismissal! then! are reinstatement without
loss of seniority ri-hts! and payment of bac= wa-es computed from the time
compensation was withheld from him up to the date of actual reinstatement" @here
reinstatement is no lon-er .iable as an option! separation pay e:ui.alent to one month
salary for e.ery year of ser.ice should be awarded as an alternati.e" 5he payment of
separation pay is in addition to payment of bac= wa-es"
Petitioners :uestion the CA &esolution dated Nctober 2;! 200+! ar-uin- that it modied
its Earch %1! 200+ Decision which has already attained nality insofar as respondent is
concerned" Such contention is misplaced" 5he CA merely claried the period of payment
of bac= wa-es and separation pay up to the nality of its decision 0Earch %1! 200+4
modifyin- the Labor Arbiter*s decision" 7n .iew of the modication of monetary awards
in the Labor Arbiter*s decision! the time frame for the payment of bac= wa-es and
separation pay is accordin-ly modied to the nality of the CA decision" Norkis
Bistribution, 0n)., et al. vs. Bel.n S. Bes)allar, G.R. No. 1<:%::. ,ar)' 19, %1%
2mployees/ proLect .s" re-ular employees" 5he principal test for determinin- whether
particular employees are properly characteriDed as 1proLect employees3 as
distin-uished from 1re-ular employees3 is whether or not the proLect employees were
assi-ned to carry out a 1specic proLect or underta=in-!3 the duration and scope of
which were specied at the time the employees were en-a-ed for that proLect"
7n a number of cases! the Court has held that the len-th of ser.ice or the re>hirin- of
construction wor=ers on a proLect>to>proLect basis does not confer upon them re-ular
employment status! since their re>hirin- is only a natural conse:uence of the fact that
e6perienced construction wor=ers are preferred" 2mployees who are hired for carryin-
out a separate Lob! distinct from the other underta=in-s of the company! the scope and
duration of which has been determined and made =nown to the employees at the time
of the employment are properly treated as proLect employees and their ser.ices may be
lawfully terminated upon the completion of a proLect" Should the terms of their
employment fail to comply with this standard! they cannot be considered proLect
employees"
Applyin- the abo.e dis:uisition! the Court a-reed with the ndin-s of the CA that
petitioners were proLect employees" 7t is not disputed that petitioners were hired for the
construction of the Cordo.a &eef Milla-e &esort in Cordo.a! Cebu" By the nature of the
contract alone! it is clear that petitioners* employment was to carry out a specic
proLect" >il+redo Aro, Ronilo 1irol, et al. vs. NLRC, 8ourt' Bivision, et al., G.R. No.
1797#%. ,ar)' 7, %1%.
Jurisdiction/ power of the DNL2 to determine the e6istence of employer>employee
relationship" 7f a complaint is led with the DNL2! and it is accompanied by a claim for
reinstatement! the Lurisdiction is properly with the Labor Arbiter! under Art" 21$0%4 of
the Labor Code! which pro.ides that the Labor Arbiter has ori-inal and e6clusi.e
Lurisdiction o.er those cases in.ol.in- wa-es! rates of pay! hours of wor=! and other
terms and conditions of employment! if accompanied by a claim for reinstatement"
7n the present case! the ndin- of the DNL2 &e-ional Director that there was an
employer>employee relationship has been subLected to re.iew by the Supreme Court!
with the ndin- bein- that there was no employer>employee relationship between
petitioner and pri.ate respondent! based on the e.idence presented" 5he DNL2 had no
Lurisdiction o.er the case! as there was no employer>employee relationship present"
5hus! the dismissal of the complaint a-ainst petitioner is proper" &eopleNs =road)astin(
Servi)e 3=ombo Rado &'ils., 0n).7 vs. 1'e Se)retary o+ t'e Bept. o+ Labor ; 4mployment,
et al. G.R. No. 17#":%. ,ar)' ", %1%.
Eana-ement prero-ati.e/ resi-nation of employees runnin- for public oCce" 5he
Supreme Court has consistently held that so lon- as a company*s mana-ement
prero-ati.es are e6ercised in -ood faith for the ad.ancement of the employer*s interest
and not for the purpose of defeatin- or circum.entin- the ri-hts of the employees under
special laws or under .alid a-reements! the Court will uphold them" 7n the instant case!
ABS>CBJ .alidly Lustied the implementation of Policy Jo" K&>2&>01(" 7t is well within its
ri-hts to ensure that it maintains its obLecti.ity and credibility and freein- itself from
any appearance of impartiality so that the condence of the .iewin- and listenin- public
in it will not be in any way eroded" 2.en as the law is solicitous of the welfare of the
employees! it must also protect the ri-ht of an employer to e6ercise what are clearly
mana-ement prero-ati.es" 5he free will of mana-ement to conduct its own business
a8airs to achie.e its purpose cannot be denied" 4rnesto Ymbon( vs. A=S6C=N
=road)astin( Corporation, @eranda Sy ; Bante LuAon, G.R. No. 1<9<<:. ,ar)' 7, %1%.
Separation pay/ payment to those who participated in ille-al stri=es" Separation pay
may be -i.en as a form of nancial assistance when a wor=er is dismissed in cases such
as the installation of labor>sa.in- de.ices! redundancy! retrenchment to pre.ent losses!
closin- or cessation of operation of the establishment! or in case the employee was
found to ha.e been su8erin- from a disease such that his continued employment is
prohibited by law" 7t is a statutory ri-ht dened as the amount that an employee
recei.es at the time of his se.erance from the ser.ice and is desi-ned to pro.ide the
employee with the wherewithal durin- the period that he is loo=in- for another
employment" 7t is oriented towards the immediate future! the transitional period the
dismissed employee must under-o before locatin- a replacement Lob" As a -eneral rule!
when Lust causes for terminatin- the ser.ices of an employee e6ist! the employee is not
entitled to separation pay because lawbrea=ers should not benet from their ille-al acts"
5he rule! howe.er! is subLect to e6ceptions"
Kere! not only did the Court declare the stri=e ille-al! rather! it also found the Anion
oCcers to ha.e =nowin-ly participated in the ille-al stri=e" @orse! the Anion members
committed prohibited acts durin- the stri=e" 5hus! as the Court has concluded in other
cases it has pre.iously decided! such Anion oCcers are not entitled to the award of
separation pay in the form of nancial assistance" C. Al)antara ; Sons, 0n). vs. Court o+
Appeals, et al.2Na(ka'iusan( ,amumuo sa Alsons6S&8L, et al. vs. C. Al)antara ; Sons,
0n)., et al.2Na(ka'iusan( ,amumuo sa Alsons6S&8L, et al. vs. C. Al)antara ; Sons, 0n).,
et al. G.R. No. 1::1#2G.R. No. 1::1!:2G.R. No. 17#%%. ,ar)' 19, %1%.
April 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on Eay 10! 2012 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines > Law
[ 5a--ed dismissal! due process! employer>employee relationship! probationary employment! proLect
employee! retrenchment [
Kere are select April 2012 rulin-s of the Supreme Court of the Philippines on labor law
and procedure9
Dismissal/ due process. @hen the Labor Code spea=s of procedural due process! the
reference is usually to the two 024>written notice rule en.isa-ed in Section 2 07774! &ule
UU777! Boo= M of the Nmnibus &ules 7mplementin- the Labor Code" EPP Earine Ser.ices!
7nc" ." JL&C tersely described the mechanics of what may be considered a two>part due
process re:uirement which includes the two>notice rule! 16 6 6 one! of the intention to
dismiss! indicatin- therein his acts or omissions complained a-ainst! and two! notice of
the decision to dismiss/ and an opportunity to answer and rebut the char-es a-ainst
him! in between such notices"3
Kere! the rst and second notice re:uirements ha.e not been properly obser.ed" 5he
ad.erted memo would ha.e had constituted the 1char-e sheet!3 suCcient to answer for
the rst notice re:uirement! but for the fact that there is no proof such letter had been
sent to and recei.ed by him" Jeither was there compliance with the imperati.es of a
hearin- or conference" SuCce it to point out that the record is de.oid of any showin- of
a hearin- or conference ha.in- been conducted" And the written notice of termination
itself did not indicate all the circumstances in.ol.in- the char-e to Lustify se.erance of
employment" Gor .iolatin- petitioner*s ri-ht to due process! the Supreme Court ordered
the payment to petitioner of the amount of P%0!000 as nominal dama-es" Armando
Ailin( vs. $ose =. 8eli)iano, ,anuel 8. San ,ateo 000, et al., G.R. No. 1<:<%#. April %:,
%1%.
Dismissal/ Lust cause" 7n ne! an employee*s failure to meet sales or wor= :uotas falls
under the concept of -ross ineCciency! which in turn is analo-ous to -ross ne-lect of
duty that is a Lust cause for dismissal under Article 2+2 of the Code" Kowe.er! in order
for the :uota imposed to be considered a .alid producti.ity standard and thereby
.alidate a dismissal! mana-ement*s prero-ati.e of 6in- the :uota must be e6ercised in
-ood faith for the ad.ancement of its interest" 5he duty to pro.e -ood faith! howe.er!
rests with @@@2C as part of its burden to show that the dismissal was for a Lust cause"
@@@2C must show that such :uota was imposed in -ood faith" 5his @@@2C failed to
do! perceptibly because it could not" 5he fact of the matter is that the alle-ed
imposition of the :uota was a desperate attempt to lend a semblance of .alidity to
Alilin-*s ille-al dismissal" Armando Ailin( vs. $ose =. 8eli)iano, ,anuel 8. San ,ateo 000, et
al., G.R. No. 1<:<%#. April %:, %1%.
Dismissal/ retrenchment" &etrenchment is a .alid e6ercise of mana-ement prero-ati.e
subLect to the strict re:uirements set by Lurisprudence! to wit9
014 5hat the retrenchment is reasonably necessary and li=ely to pre.ent business losses
which! if already incurred! are not merely de minimis! but substantial! serious! actual
and real! or if only e6pected! are reasonably imminent as percei.ed obLecti.ely and in
-ood faith by the employer/
024 5hat the employer ser.ed written notice both to the employees and to the
Department of Labor and 2mployment at least one month prior to the intended date of
retrenchment/
0%4 5hat the employer pays the retrenched employees separation pay e:ui.alent to one
month pay or at least ^ month pay for e.ery year of ser.ice! whiche.er is hi-her/
0;4 5hat the employer e6ercises its prero-ati.e to retrench employees in -ood faith for
the ad.ancement of its interest and not to defeat or circum.ent the employees* ri-ht to
security of tenure/ and
0'4 5hat the employer used fair and reasonable criteria in ascertainin- who would be
dismissed and who would be retained amon- the employees! such as status! 6 6 6
eCciency! seniority! physical tness! a-e! and nancial hardship for certain wor=ers"
As aptly found by the JL&C and Lustly sustained by the CA! Petrocon e6ercised its
prero-ati.e to retrench its employees in -ood faith and the considerable reduction of
wor= allotments of Petrocon by Saudi Aramco was suCcient basis for Petrocon to reduce
the number of its personnel" As for the notice re:uirement! howe.er! contrary to
petitioner*s contention! proper notice to the DNL2 within %0 days prior to the intended
date of retrenchment is necessary and must be complied with despite the fact that
respondent is an o.erseas Gilipino wor=er" 7n the present case! althou-h respondent was
duly notied of his termination by Petrocon %0 days before its e8ecti.ity! no alle-ation
or proof was ad.anced by petitioner to establish that Petrocon e.er sent a notice to the
DNL2 %0 days before the respondent was terminated" 5hus! this re:uirement of the law
was not complied with" Despite the fact that respondent was employed by Petrocon as
an NG@ in Saudi Arabia! still both he and his employer are subLect to the pro.isions of
the Labor Code when applicable" 5he basic policy in this Lurisdiction is that all Gilipino
wor=ers! whether employed locally or o.erseas! enLoy the protecti.e mantle of
Philippine labor and social le-islations 0citin- &'ilippine National =ank v. Cabansa(! P"&"
Jo" 1'$010! June 21! 200'! ;(0 SC&A '1;! '1+ and Royal CroCn 0nternationale v.
NLRC, P"&" Jo" $+0+'! Nctober 1(! 1B+B! 1$+ SC&A '(B"4 0nternational ,ana(ement
Servi)es2,arilyn C. &as)ual vs. Roel &. Lo(arta, G.R. No. 1"!":7, April 1<, %1%.
2mployee/ probationary employee" 5he afore:uoted Section ( of the 7mplementin-
&ules of Boo= M7! &ule M777>A of the Code specically re:uires the employer to inform the
probationary employee of such reasonable standards at the time of his en-a-ement!
not at any time later/ else! the latter shall be considered a re-ular employee" 5hus!
pursuant to the e6plicit pro.ision of Article 2+1 of the Labor Code! Section (0d4 of the
7mplementin- &ules of Boo= M7! &ule M777>A of the Labor Code and settled Lurisprudence!
petitioner Alilin- is deemed a re-ular employee as of June 11! 200;! the date of his
employment contract"
5he letter>o8er to Alilin- states that the re-ulariDation standards or the performance
norms to be used are still to be a-reed upon by him and his super.isor" Eoreo.er! Alilin-
was assi-ned to PU truc=in- sales! an acti.ity entirely di8erent to the Seafrei-ht Sales
for which he was ori-inally hired and trained for" 7n the present case! there was no proof
that Alilin- was informed of the standards for his continued employment! such as the
sales :uota! at the time of his en-a-ement" Armando Ailin( vs. $ose =. 8eli)iano, ,anuel
8. San ,ateo 000, et al., G.R. No. 1<:<%#. April %:, %1%.
2mployee/ separation pac=a-e" Article 2+% of the Labor Code pro.ides only the re:uired
minimum amount of separation pay! which employees dismissed for any of the
authoriDed causes are entitled to recei.e" 2mployers! therefore! ha.e the ri-ht to create
plans! pro.idin- for separation pay in an amount o.er and abo.e what is imposed by
Article 2+%" 5here is nothin- therein that prohibits employers and employees from
contractin- on the terms of employment! or from enterin- into a-reements on employee
benets! so lon- as they do not .iolate the Labor Code or any other law! and are not
contrary to morals! -ood customs! public order! or public policy"
Conse:uently! petitioners are not allowed to recei.e separation pay from both the Labor
Code! on the one hand! and the Jew Pratuity Plan and the SSP! on the other! they
would recei.e double compensation for the same cause 0i"e"! separation from the
ser.ice due to redundancy4" ,a. Corina C. $iao, et al. vs. Global =usiness =ank, 0n)., et
al., G.R. No. 1<%!!1, April 1<, %1%.
2mployer>employee relationship" 7n determinin- the presence or absence of an
employer>employee relationship! the Court has consistently loo=ed for the followin-
incidents! to wit9 0a4 the selection and en-a-ement of the employee/ 0b4 the payment
of wa-es/ 0c4 the power of dismissal/ and 0d4 the employer*s power to control the
employee on the means and methods by which the wor= is accomplished" 5he last
element! the so>called control test! is the most important element"
7t can be deduced from the Earch 1BB( aCda.it of petitioner that respondents
challen-ed his authority to deli.er some 1'+ chec=s to SGC" Considerin- that petitioner
contested respondents* challen-e by pointin- to the e6istin- arran-ements between
BCC and SGC! it should be clear that respondents did not e6ercise the power of control
o.er petitioner! because he thereby acted for the benet and in the interest of SGC more
than of BCC" C'arlie $ao vs. =CC &rodu)ts Sales, 0n). and 1erran)e 1y, G.R. No. 1"!7,
April 1<, %1%.
ProLect employee/ con.ersion into re-ular employee" 7n all the %+ proLects where DEC7
en-a-ed Jamin*s ser.ices! the tas=s he performed as a carpenter were indisputably
necessary and desirable in DEC7*s construction business" Ke mi-ht not ha.e been a
member of a wor= pool since DEC7 insisted that it does not maintain a wor= pool! but
his continuous rehirin- in %+ proLects o.er a period of %1 years and the nature of his
wor= unmista=ably made him a re-ular employee" 7n Eara-uinot! Jr" ." JL&C! %;+ Phil"
'+0 01BB+4! the Court held that once a proLect or wor= pool employee has been9 014
continuously! as opposed to intermittently! rehired by the same employer for the same
tas=s or nature of tas=s/ and 024 these tas=s are .ital! necessary and indispensable to
the usual business or trade of the employer! then the employee must be deemed a
re-ular employee"
Surely! len-th of time is not the controllin- test for proLect employment but it is .ital in
determinin- if the employee was hired for a specic underta=in- or if it is tas=ed to
perform functions .ital! necessary and indispensable to the usual business or trade of
the employer" Kere! #pri.ate) respondent had been a proLect employee se.eral times
o.er" 5he nature of his employment ceased to be proLect>based when he was repeatedly
re>hired due to the demands of petitioner*s business"B.,. ConsunGi, 0n). and2or Bavid ,.
ConsunGi vs. 4stelito, G.R. No. 1#%:19, April 1<, %1%.
Dismissal/ willful disobedience" Gor willful disobedience to be a .alid cause for dismissal!
these two elements must concur9 014 the employee*s assailed conduct must ha.e been
willful! that is! characteriDed by a wron-ful and per.erse attitude/ and 024 the order
.iolated must ha.e been reasonable! lawful! made =nown to the employee! and must
pertain to the duties which he had been en-a-ed to dischar-e"
5he petitioner*s arbitrary deance to Praphics! 7nc"*s order for him to render o.ertime
wor= constitutes willful disobedience" Because of his refusal to render o.ertime wor=!
the company failed to meet its printin- deadlines! resultin- in losses to the company"
5he Supreme Court too= into account the fact that petitioner was inclined to absent
himself and to report late for wor= despite bein- pre.iously penaliDed! and aCrmed the
CA*s rulin- that the petitioner is indeed utterly deant of the lawful orders and the
reasonable wor= standards prescribed by his employer" 5he Court reiterated its pre.ious
rulin-s statin- that an employer has the ri-ht to re:uire the performance of o.ertime
ser.ice in any of the situations contemplated under Article +B of the Labor Code and an
employee*s non>compliance is willful disobedience" Realda v. NeC A(e Grap'i)s, 0n). et.
al. G.R. No. 1#%1#, April %:, %1%.
Dismissal/ ineCciency" 5he petitioner*s failure to obser.e Praphics! 7nc"*s wor=
standards constitutes ineCciency that is a .alid cause for dismissal" Gailure to obser.e
prescribed standards of wor=! or to fulll reasonable wor= assi-nments due to
ineCciency may constitute Lust cause for dismissal" Such ineCciency is understood to
mean failure to attain wor= -oals or wor= :uotas! either by failin- to complete the same
within the alloted reasonable period! or by producin- unsatisfactory results" As the
operator of Praphics! 7nc"*s printer! he is mandated to chec= whether the colors that
would be printed are in accordance with the client*s specications and for him to do so!
he must consult the Peneral Eana-er and the color -uide used by Praphics! 7nc" before
ma=in- a full run" 5he employee in this case failed to obser.e this simple procedure and
proceeded to print without ma=in- sure that the colors were at par with the client*s
demands" 5his resulted to delays in the deli.ery of output! client dissatisfaction! and
additional costs to Praphics! 7nc"" Realda v. NeC A(e Grap'i)s, 0n). et. al. G.R. No.
1#%1#, April %:, %1%.
Dismissal/ due process" 7n Kin( o+ Kin(s 1ransport, 0n). v. ,ama)! this Court laid down
the manner by which the procedural due re:uirements of due process can be satised9
014 5he frst written notice to be ser.ed on the employees should contain the
specic causes or -rounds for termination a-ainst them! and a directi.e that the
employees are -i.en the opportunity to submit their written e6planation within a
reasonable period" 1&easonable opportunity3 under the Nmnibus &ules means e.ery
=ind of assistance that mana-ement must accord to the employees to enable them to
prepare ade:uately for their defense" 5his should be construed as a period of at least
.e 0'4 calendar days from receipt of the notice to -i.e the employees an opportunity to
study the accusation a-ainst them! consult a union oCcial or lawyer! -ather data and
e.idence! and decide on the defenses they will raise a-ainst the complaint" Eoreo.er!
in order to enable the employees to intelli-ently prepare their e6planation and
defenses! the notice should contain a detailed narration of the facts and circumstances
that will ser.e as basis for the char-e a-ainst the employees" A -eneral description of
the char-e will not suCce" Lastly! the notice should specically mention which company
rules! if any! are .iolated andQor which amon- the -rounds under Art" 2+2 is bein-
char-ed a-ainst the employees"
024 After ser.in- the rst notice! the employers should schedule and conduct
a hearing orconference wherein the employees will be -i.en the opportunity to9 0a4
e6plain and clarify their defenses to the char-e a-ainst them/ 0b4 present e.idence in
support of their defenses/ and 0c4 rebut the e.idence presented a-ainst them by the
mana-ement" Durin- the hearin- or conference! the employees are -i.en the chance
to defend themsel.es personally! with the assistance of a representati.e or counsel of
their choice" Eoreo.er! this conference or hearin- could be used by the parties as an
opportunity to come to an amicable settlement"
0%4 After determinin- that termination of employment is Lustied! the employers shall
ser.e the employees a written notice of termination indicatin- that9 014 all
circumstances in.ol.in- the char-e a-ainst the employees ha.e been considered/ and
024 -rounds ha.e been established to Lustify the se.erance of their employment"
Praphics! 7nc" failed to a8ord the petitioner with a reasonable opportunity to be heard
and defend itself" An administrati.e hearin- set on the same day that the petitioner
recei.ed the memorandum and the 2;>hour period -i.en to him to submit a written
e6planation is far from reasonable" Gurthermore! there is no indication that Praphics!
7nc" issued a second notice! informin- the petitioner of his dismissal" Praphics! 7nc"
admitted that it decided to terminate the petitioner*s employment when he ceased to
report for wor= after bein- ser.ed with the memorandum re:uirin- him to e6plain and
subse:uent to his failure to submit a written e6planation" Kowe.er! there is nothin- on
record showin- that Praphics! 7nc" placed its decision to dismiss in writin- and that a
copy thereof was sent to the petitioner" Jotwithstandin- the e6istence of a Lust cause to
terminate petitioner*s employment! respondent was ordered to pay P%0!000 as nominal
dama-es for .iolation of the employee*s ri-ht to due process" Realda v. NeC A(e
Grap'i)s, 0n). et. al. G.R. No. 1#%1#, April %:, %1%.
Dismissal/ willful disobedience" @illful disobedience re:uires the concurrence of two
elements9 014 the employee*s assailed conduct must ha.e been willful! that is!
characteriDed by a wron-ful and per.erse attitude/ and 024 the order .iolated must ha.e
been reasonable! lawful! made =nown to the employee! and must pertain to the duties
which he had been en-a-ed to dischar-e" Both elements are present in this case"
Girst! at no point did the dismissed employees deny Sin-spoint 26press* claim that they
refused to comply with the directi.e for them to submit to a dru- test or! at the .ery
least! e6plain their refusal" 5his -i.es rise to the impression that their non>compliance is
deliberate" 5he utter lac= of reason or Lustication for their insubordination indicates
that it was prompted by mere obstinacy! hence! willful thereby Lustifyin- their dismissal"
Second! that the company*s order to under-o a dru- test is necessary and rele.ant in
the performance of petitioners* functions as dri.ers of Sin-spoint 26press is ob.ious" As
the JL&C correctly pointed out! dri.ers are indispensable to Sin-spoint 26press* primary
business of renderin- door>to>door deli.ery ser.ices" 7t is common =nowled-e that the
use of dan-erous dru-s has ad.erse e8ects on dri.in- abilities that may render
employees incapable of performin- their duties" Jot only are they actin- a-ainst the
interests of Sin-spoint 26press! they also pose a threat to the public" Kakampi and its
members, et al. v. Kin(spoint 4/press and Lo(isti) and2or ,ary Ann Co, G.R. No.
1#9<1!, April %:, %1%.
Dismissal/ procedural due process re:uirements" @hile Sin-spoint 26press had reason
to se.er petitioners* employment! this Court nds its supposed obser.ance of the
re:uirements of procedural due process pretentious" @hile Sin-spoint 26press re:uired
the dismissed employees to e6plain their refusal to submit to a dru- test! the two 024
days a8orded to them to do so cannot :ualify as 1reasonable opportunity3! which the
Court construed in Sin- of Sin-s 5ransport! 7nc" ." Eamac as a period of at least .e 0'4
calendar days from receipt of the notice"
5hus! e.en if a Lust cause e6ists for the dismissal of petitioners! Sin-spoint 26press is
still liable to indemnify the dismissed employees! with the e6ception of Panuelos! DiDon
and Dimabayao! who did not appeal the dismissal of their complaints! with nominal
dama-es in the amount of P%0!000"00"Kakampi and its members, et al. v. Kin(spoint
4/press and Lo(isti) and2or ,ary Ann Co, G.R. No. 1#9<1!, April %:, %1%.
June 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on July 20! 2012 by Leslie C" Dy [ Posted in Labor Law
[ 5a--ed abandonment! appeal! attorney_s fees! dama-es!dismissal! due process! independent
contractor! Lurisdiction! loss of trust and condence! JL&C! reinstatement!retirement! retrenchment [
Kere are select June 2012 rulin-s of the Supreme Court of the Philippine on labor law
and procedure9
Appeal/ issue of employer>employee relationship raised for the rst time on appeal" 7t is
a fundamental rule of procedure that hi-her courts are precluded from entertainin-
matters neither alle-ed in the pleadin-s nor raised durin- the proceedin-s below! but
.entilated for the rst time only in a motion for reconsideration or on appeal" 5he
alle-ed absence of employer>employee relationship cannot be raised for the rst time
on appeal" 5he resolution of this issue re:uires the admission and calibration of
e.idence and the LA and the JL&C did not pass upon it in their decisions" Petitioner is
bound by its submissions that respondent is its employee and it should not be permitted
to chan-e its theory" Such chan-e of theory cannot be tolerated on appeal! not on
account of the strict application of procedural rules! but as a matter of fairness" Buty
8ree &'ilippines Servi)es, 0n). vs. ,anolito H. 1ria. P"&" Jo" 1$;+0B" June 2$! 2012"
Dismissal/ abandonment" Abandonment cannot be inferred from the actuations of
respondent" @hen he disco.ered that his time card was o8 the rac=! he immediately
in:uired from his super.isor" Ke later sou-ht the assistance of his counsel! who wrote a
letter addressed to Polyfoam re:uestin- that he be re>admitted to wor=" @hen said
re:uest was not acted upon! he led the instant ille-al dismissal case" 5hese
circumstances clearly ne-ate the intention to abandon his wor=" &oly+oam6RGC
0nternational, Corporation and &re)illa A. GramaGe vs. 4d(ardo Con)ep)ion. P"&" Jo"
1$2%;B! June 1%! 2012"
Dismissal/ due process" 5o meet the re:uirements of due process in the dismissal of an
employee! an employer must furnish the wor=er with two written notices9 014 a written
notice specifyin- the -rounds for termination and -i.in- to said employee a reasonable
opportunity to e6plain his side and 024 another written notice indicatin- that! upon due
consideration of all circumstances! -rounds ha.e been established to Lustify the
employer*s decision to dismiss the employee" 5he law does not re:uire that an intention
to terminate one*s employment should be included in the rst notice" 7t is enou-h that
employees are properly apprised of the char-es brou-ht a-ainst them so they can
properly prepare their defenses" 7t is only durin- the second notice that the intention to
terminate one*s employment should be e6plicitly stated"
5he -uidin- principles in connection with the hearin- re:uirement in dismissal cases are
the followin-9
1" 1Ample opportunity to be heard3 means any meanin-ful opportunity 0.erbal or
written4 -i.en to the employee to answer the char-es a-ainst him and submit
e.idence in support of his defense! whether in a hearin-! conference or some
other fair! Lust and reasonable way"
2" A formal hearin- or conference becomes mandatory only when re:uested by the
employee in writin- or substantial e.identiary disputes e6ist or a company rule or
practice re:uires it! or when similar circumstances Lustify it"
%" 5he 1ample opportunity to be heard3 standard in the Labor Code pre.ails o.er
the 1hearin- or conference3 re:uirement in the implementin- rules and
re-ulations"
5he e6istence of an actual! formal 1trial>type3 hearin-! althou-h preferred! is not
absolutely necessary to satisfy the employee*s ri-ht to be heard" 2s-uerra was able to
present her defenses/ and only upon proper consideration of it did Malle Merde send the
second memorandum terminatin- her employment" Since Malle Merde complied with the
two>notice re:uirement! no procedural defect e6ists in 2s-uerra*s termination" Bolores
1. 4s(uerra vs. @alle @erde Country Club, 0n). and 4rnesto @illaluna" P"&" Jo"
1$%012! June 1%! 2012"
Dismissal/ loss of trust and condence" 5here are two 024 classes of positions of trust"
5he rst class consists of mana-erial employees! or those .ested with the power to lay
down mana-ement policies/ and the second class consists of cashiers! auditors!
property custodians or those who! in the normal and routine e6ercise of their functions!
re-ularly handle si-nicant amounts of money or property" 2s-uerra held the position of
Cost Control Super.isor and had the duty to remit to the accountin- department the
cash sales proceeds from e.ery transaction she was assi-ned to" 5his is not a routine
tas= that a re-ular employee may perform/ it is related to the handlin- of business
e6penditures or nances" Gor this reason! 2s-uerra occupies a position of trust and
condence F a position enumerated in the second class of positions of trust" Any breach
of the trust imposed upon her can be a .alid cause for dismissal"
Loss of condence as a Lust cause for termination of employment can be in.o=ed when
an employee holds a position of responsibility! trust and condence" 7n order to
constitute a Lust cause for dismissal! the act complained of must be related to the
performance of the duties of the dismissed employee and must show that he or she is
unt to continue wor=in- for the employer for .iolation of the trust reposed in him or
her" 7t was 2s-uerra*s responsibility to account for the cash proceeds/ in case of
problems! she should ha.e promptly reported it! re-ardless of who was at fault" 7nstead!
she settled the unaccounted amount only after the accountin- department informed her
about the discrepancy! almost one month followin- the incident" 2s-uerra*s failure to
ma=e the proper report reHects her irresponsibility in the custody of cash for which she
was accountable" Dolores 5" 2s-uerra .s" Malle Merde Country Club! 7nc" and 2rnesto
Millaluna" P"&" Jo" 1$%012! June 1%! 2012"
Dismissal/ serious misconduct and loss of trust and condence" DeLan is liable for
.iolation of Section $! para-raphs ; and 11 of the Company Code of 2mployee
Discipline! constitutin- serious misconduct! fraud and willful breach of trust of the
employer! which are Lust causes for termination of employment under the law" 5here is
no dispute about the release of the meter soc=ets" Also! the persons in.ol.ed were
clearly identied F DeLan/ PoDarin! a pri.ate electrician who recei.ed the meter soc=ets/
&eyes! the owner of the Leep where the meter soc=ets were loaded by PoDarin/ Duenas!
a Eeralco eld representati.e/ and Depante! another pri.ate electrician who
purportedly owned the meter soc=ets" 5he release by DeLan of the meter soc=ets to
PoDarin without the written authority or SPA from the customer or customers who
applied for electric connection 0as a matter of company policy4 ser.ed as a =ey element
in pro.in- the pri.ate contractin- acti.ity for electric ser.ice connection bein-
underta=en by DeLan and Duenas"
Eoreo.er! it was bad enou-h that DeLan failed to as= for a written authoriDation from
the customers for the release of the meter soc=ets as re:uired by company policy! but
the elaborate scheme pursued by DeLan in concert with Duenas! were all underta=en to
defraud Eeralco" Kence! Eeralco had .alid reasons for losin- its trust and condence in
DeLan" Ke is no ordinary employee" As branch representati.e! he was principally
char-ed with the function and responsibility to accept payment of fees re:uired for the
installation of electric ser.ice and facilitate issuance of meter soc=ets" 5he duties of his
position re:uire him to always act with the hi-hest de-ree of honesty! inte-rity and
sincerity! as the company puts it" 7n li-ht of his fraudulent act! Eeralco! an enterprise
imbued with public interest! cannot be compelled to continue DeLan*s employment! as it
would be inimical to its interest" ,anila 4le)tri) Company 3,eral)o7 vs. -ermini(ildo -.
BeGan. P"&" Jo" 1B;10(! June 1+! 2012"
2mployee benet/ attorney*s fees" LaDaro must establish a le-al basis F either by law!
contract or other sources of obli-ations F to merit the receipt of the additional 10<
attorney*s fees collected in the .arious foreclosure procedures he settled as the ban=*s
le-al oCcer" LaDaro has not produced any contract or pro.ision of law that would
warrant the payment of the additional attorney*s fees" Ke is only entitled to his salaries
as the ban=*s le-al oCcer! because the ser.ices he rendered in the foreclosure
proceedin-s were part of his oCcial tas=s" =an)o 8ilipino Savin(s and ,ort(a(e =ank
vs. ,i(uelito ,. LaAaro2,i(uelito ,. LaAaro vs. =an)o 8ilipino Savin(s and ,ort(a(e
=ank, et al. P"&" Jo" 1+'%;( R P"&" Jo" 1+';;2" June 2$! 2012"
2mployee benet/ retirement pay" Banco Gilipino maintains that the se.en>year period
when it was under li:uidation should not be credited in computin- LaDaro*s retirement
pay because! durin- that period! the ban= was considered closed" 5he Supreme Court
held that ban=s under li:uidation retain their le-al personality" 7n fact! e.en if they are
prohibited from conductin- re-ular ban=in- business! it is necessary that debts owed to
them be collected" LaDaro performed the duty of foreclosin- debts in fa.or of Banco
Gilipino" 7t cannot ri-htfully disclaim LaDaro*s wor= that benetted it"
As found in the 7mplementin- &ules of the &etirement Pay Law and in Lurisprudence!
only in the absence of an applicable retirement a-reement shall Article 2+$ of the Labor
Code apply" 5here is aproviso howe.er! that an employee*s retirement benets under
any a-reement shall not be less than those pro.ided in the said article" 5he &ules of the
Banco Gilipino &etirement Gund do not pro.ide for benets lower than those in the Labor
Code" 7n fact! the ban= o8ers a retirement pay e:ui.alent to one andone>half month
salary for e.ery year of ser.ice! a rate o.er and abo.e the one>half month salary
threshold pro.ided by the law" Althou-h the &ules of the Banco Gilipino &etirement Gund
do not -rant a roundin- o8 scheme! they nonetheless pro.ide that prorated credit shall
be -i.en for incomplete years! re-ardless of the fraction of months in the retiree*s
len-th of ser.ice" Jotwithstandin- the lac= of a roundin->up pro.ision! still! the hi-her
retirement pay! to-ether with the prorated creditin-! cannot be deemed to be less
fa.orable than that pro.ided for by the law" Altimately! the more important threshold to
be considered in construin- whether the retirement a-reement pro.ides less benets!
compared to those pro.ided by the &etirement Pay Law! is that the retirement benets
in the said a-reement should at least amount to one>half of the employee*s monthly
salary" =an)o 8ilipino Savin(s and ,ort(a(e =ank vs. ,i(uelito ,. LaAaro2,i(uelito ,.
LaAaro vs. =an)o 8ilipino Savin(s and ,ort(a(e =ank, et al. P"&" Jo" 1+'%;( R P"&" Jo"
1+';;2" June 2$! 2012
2mployee dismissal" @hen the Hoatin- status of employees lasts for more than si6 0(4
months! they may be considered to ha.e been ille-ally dismissed from the ser.ice"
1Gloatin- status3 means an indenite period of time when one does not recei.e any
salary or nancial benet pro.ided by law" 7n this case! petitioners were actually
reassi-ned to new posts! albeit in a di8erent location from where they resided" 5hus!
there can be no Hoatin- status or indenite period to spea= of" 7nstead! petitioners were
the ones who refused to report for wor= in their new assi-nment"
7n cases in.ol.in- security -uards! a relief and transfer order in itself does not se.er the
employment relationship between the security -uards and their a-ency" 2mployees
ha.e the ri-ht to security of tenure! but this does not -i.e them such a .ested ri-ht to
their positions as would depri.e the company of its prero-ati.e to chan-e their
assi-nment or transfer them where their ser.ices! as security -uards! will be most
benecial to the client" An employer has the ri-ht to transfer or assi-n its employees
from one oCce or area of operation to another in pursuit of its le-itimate business
interest! pro.ided there is no demotion in ran= or diminution of salary! benets! and
other pri.ile-es/ and the transfer is not moti.ated by discrimination or bad faith! or
e8ected as a form of punishment or demotion without suCcient cause" @hile petitioners
may claim that their transfer to Eanila will cause added e6penses and incon.enience!
absent any showin- of bad faith or ill moti.e on the part of the employer! the transfer
remains .alid" Salvador D. ,oGar, et al. vs. A(ro Commer)ial Se)urity Servi)e A(en)y, et
al. P"&" Jo" 1+$1++! June 2$! 2012"
2mployee dismissal/ burden of proof" Ander the law! the burden of pro.in- that the
termination of employment was for a .alid or authoriDed cause rests on the employer"
Gailure to dischar-e this burden would result in an unLust or ille-al dismissal" 5he
company*s e.idence on the respondents* alle-ed infractions do not substantially show
that they .iolated company rules and re-ulations to warrant their dismissal" 7t is ob.ious
that the company o.erstepped the bounds of its mana-ement prero-ati.e in the
dismissal of Eauricio and Camacho" 7t lost si-ht of the principle that mana-ement
prero-ati.e must be e6ercised in -ood faith and with due re-ard to the ri-hts of the
wor=ers in the spirit of fairness and with Lustice in mind" &'ilba( 0ndustrial
,anu+a)turin( Corp. vs. &'ilba( >orkers ?nion6Lakas at Gabay n( ,an((a(aCan(
Na(kakaisa" P"&" Jo" 1+2;+(! June 20! 2012"
2mployee dismissal/ due process" &etrenchment is subLect to faithful compliance with
the substanti.e and procedural re:uirements laid down by law and Lurisprudence" Gor a
.alid retrenchment! the followin- elements must be present9
1" 5hat retrenchment is reasonably necessary and li=ely to pre.ent business losses
which! if already incurred! are not merely de minimis! but substantial! serious!
actual and real! or if only e6pected! are reasonably imminent as percei.ed
obLecti.ely and in -ood faith by the employer/
2" 5hat the employer ser.ed written notice both to the employees and to the
Department of Labor and 2mployment at least one month prior to the intended
date of retrenchment/
%" 5hat the employer pays the retrenched employees separation pay e:ui.alent to
one 014 month pay or at least ^ month pay for e.ery year of ser.ice! whiche.er
is hi-her/
;" 5hat the employer e6ercises its prero-ati.e to retrench employees in -ood faith
for the ad.ancement of its interest and not to defeat or circum.ent the
employees* ri-ht to security of tenure/ and
'" 5hat the employer used fair and reasonable criteria in ascertainin- who would be
dismissed and who would be retained amon- the employees! such as status!
eCciency! seniority! physical tness! a-e! and nancial hardship for certain
wor=ers"
All these elements were successfully pro.en by petitioner" Girst! the hu-e losses su8ered
by the Club for the past two years had forced petitioner to close it down to a.ert further
losses which would e.entually a8ect the operations of petitioner" Second! all ;'
employees wor=in- in the Club were ser.ed with notice of termination" 5he
correspondin- notice was li=ewise ser.ed to the DNL2 one month prior to retrenchment"
5hird! the employees were o8ered separation pay! most of whom ha.e accepted and
opted not to Loin in this complaint" Gourth! the cessation of or withdrawal from business
operations was bona .de in character and not impelled by a moti.e to defeat or
circum.ent the tenurial ri-hts of employees" @aterfront Cebu City Kotel .s" Ea" Eelanie
P" JimeneD! et al" P"&" Jo" 1$;21;! June 1%! 2012"
2mployee dismissal/ due process" 5he followin- are the -uidin- principles in connection
with the hearin- re:uirement in dismissal cases9
1" 1Ample opportunity to be heard3 means any meanin-ful opportunity 0.erbal or
written4 -i.en to the employee to answer the char-es a-ainst him and submit
e.idence in support of his defense! whether in a hearin-! conference or some
other fair! Lust and reasonable way"
2" A formal hearin- or conference becomes mandatory only when re:uested by the
employee in writin- or substantial e.identiary disputes e6ist or a company rule or
practice re:uires it! or when similar circumstances Lustify it"
%" 5he 1ample opportunity to be heard3 standard in the Labor Code pre.ails o.er
the 1hearin- or conference3 re:uirement in the implementin- rules and
re-ulations"
Pi.en that the petitioners e6pressly re:uested a conference or a con.enin- of a
-rie.ance committee! such formal hearin- became mandatory" After PPA7 failed to
aCrmati.ely respond to such re:uest! it follows that the hearin- re:uirement was not
complied with and! therefore! Mallota was denied his ri-ht to procedural due
process" &rudential Guarantee and Assuran)e 4mployee Labor ?nion and Sandy 1.
@allota vs. NLRC, &rudential Guarantee and Assuran)e 0n)., and2or $o)elyn RetiAos.P"&"
Jo" 1+'%%'! June 1%! 2012"
2mployee dismissal/ Lust cause" Article 2+20e4 of the Labor Code tal=s of other
analo-ous causes or those which are susceptible of comparison to another in -eneral or
in specic detail as a cause for termination of employment" A cause analo-ous to
serious misconduct is a .oluntary andQor willful act or omission attestin- to an
employee*s moral depra.ity" 5heft committed by an employee a-ainst a person other
than his employer! if pro.en by substantial e.idence! is a cause analo-ous to serious
misconduct" Pre.ious infractions may be cited as Lustication for dismissin- an
employee only if they are related to the subse:uent o8ense" Kowe.er! it must be noted
that such a discussion was unnecessary since the theft! ta=en in isolation from Germin*s
other .iolations! was in itself a .alid cause for the termination of his
employment" Cosmos =ottlin( Corp. vs. >ilson 8ermin2>ilson 8ermin vs. Cosmos
=ottlin( Corp. and Ce)ilia =autista. P"&" Jo" 1B%($( R P"&" Jo" 1B;%0%" June 20! 2012"
2mployee dismissal/ loss of trust and condence" 5he Labor Code reco-niDes that an
employer! for Lust cause! may .alidly terminate the ser.ices of an employee for serious
misconduct or willful disobedience of the lawful orders of the employer or
representati.e in connection with the employee*s wor=" Graud or willful breach by the
employee of the trust reposed by the employer in the former! or simply loss of
condence! also Lusties an employee*s dismissal from employment" @illful breach of
trust or loss of condence re:uires that the employee 014 occupied a position of trust or
024 was routinely char-ed with the care of the employer*s property" 5o warrant dismissal
based on loss of condence! there must be some basis for the loss of trust or the
employer must ha.e reasonable -rounds to belie.e that the employee is responsible for
the misconduct that renders the latter unworthy of the trust and condence demanded
by his or her position" Gor more than a month! the petitioners did not e.en inform PLD5
of the whereabouts of the plant materials" 7nstead! he stoc=ed these materials at his
residence e.en if they were needed in the daily operations of the company" 7n =eepin-
with the honesty and inte-rity demanded by his position! he should ha.e turned o.er
these materials to the plant*s warehouse" 5hus! PLD5 reasonably suspected petitioner of
stealin- the company*s property" At that Luncture! the employer may already dismiss the
employee since it had reasonable -rounds to belie.e or to entertain the moral
con.iction that the latter was responsible for the misconduct! and the nature of his
participation therein rendered him absolutely unworthy of the trust and condence
demanded by his position"Romeo 4. &aulino vs. NLRC, &'ilippine Lon( Bistan)e Co.,
0n)" P"&" Jo" 1$(1+;! June 1%! 2012"
2mployee dismissal/ loss of trust and condence" Loss of condence as a Lust cause for
dismissal was ne.er intended to pro.ide employers with a blan= chec= for terminatin-
their employees" 7t should ideally apply only to cases in.ol.in- employees occupyin-
positions of trust and condence or to those situations where the employee is routinely
char-ed with the care and custody of the employer*s money or property" 5o the rst
class belon- mana-erial employees! i"e"! those .ested with the powers or prero-ati.es
to lay down mana-ement policies andQor to hire! transfer! suspend! lay>o8! recall!
dischar-e! assi-n or discipline employees or e8ecti.ely recommend such mana-erial
actions/ and to the second class belon- cashiers! auditors! property custodians! etc"! or
those who! in the normal and routine e6ercise of their functions! re-ularly handle
si-nicant amounts of money or property"
5he rst re:uisite for dismissal on the -round of loss of trust and condence is that the
employee concerned must be one holdin- a position of trust and condence" 5he
second re:uisite is that there must be an act that would Lustify the loss of trust and
condence" Mallota*s position as Junior Pro-rammer is analo-ous to the second class of
positions of trust and condence" 5hou-h he did not physically handle money or
property! he became pri.y to condential data or information by the nature of his
functions" At a time when the most sensiti.e of information is found not printed on
paper but stored on hard dri.es and ser.ers! an employee who handles or has access to
data in electronic form naturally becomes the unwillin- recipient of condential
information" 5here was no other e.idence presented to pro.e fraud in the manner of
securin- or obtainin- the les found in Mallota*s computer" 5he presence of the les
would merely merit the de.elopment of some suspicion on the part of the employer! but
should not amount to a loss of trust and condence such as to Lustify the termination of
his employment" Such act is not of the same class! de-ree or -ra.ity as the acts that
ha.e been held to be of such character" &rudential Guarantee and Assuran)e 4mployee
Labor ?nion and Sandy 1. @allota vs. NLRC, &rudential Guarantee and Assuran)e 0n).,
and2or $o)elyn RetiAos. P"&" Jo" 1+'%%'! June 1%! 2012"
2mployee dismissal/ loss of trust and condence" 5o .alidly dismiss an employee on the
-round of loss of trust and condence under Article 2+2 0c4 of the Labor Code of the
Philippines! the followin- -uidelines must be obser.ed9 14 loss of condence should not
be simulated/ 24 it should not be used as subterfu-e for causes which are improper!
ille-al or unLustied/ %4 it may not be arbitrarily asserted in the face of o.erwhelmin-
e.idence to the contrary/ and ;4 it must be -enuine! not a mere afterthou-ht to Lustify
earlier action ta=en in bad faith" Eore importantly! it must be based on a willful breach
of trust and founded on clearly established facts" 5he testimony of LobitaZa constitutes
substantial e.idence to pro.e that respondent! as the then Power Plant Eana-er!
accepted commissions andQor 1=ic=bac=s3 from suppliers! which is a clear .iolation of
Section 2"0; of petitioner*s Company &ules and &e-ulations" Jurisprudence consistently
holds that for mana-erial employees! the mere e6istence of a basis for belie.in- that
such employee has breached the trust of his employer would suCce for his dismissal"
&espondent*s termination was for a Lust and .alid cause" Apo Cement Corporation @s.
Paldy 4. =aptisma. P"&" Jo" 1$(($1" June 20! 2012"
2mployee dismissal/ order of reinstatement" Article 22% of the Labor Code pro.ides that
in case there is an order of reinstatement! the employer must admit the dismissed
employee under the same terms and conditions! or merely reinstate the employee in
the payroll" 5he order shall be immediately e6ecutory" 5hus! %rd Alert cannot escape
liability by simply in.o=in- that Ja.ia did not report for wor=" 5he law states that the
employer must still reinstate the employee in the payroll" @here reinstatement is no
lon-er .iable as an option! separation pay e:ui.alent to one 014 month salary for e.ery
year of ser.ice could be awarded as an alternati.e" !rd Alert Se)urity and Bete)tive
Servi)es, 0n). vs. Romualdo Navia. P"&" Jo" 200('%! June 1%! 2012"
2mployee dismissal/ retrenchment" &etrenchment is the termination of employment
initiated by the employer throu-h no fault of and without preLudice to the employees" 7t
is resorted to durin- periods of business recession! industrial depression! or seasonal
Huctuations or durin- lulls occasioned by lac= of orders! shorta-e of materials!
con.ersion of the plant for a new production pro-ram or the introduction of new
methods or more eCcient machinery or of automation" 7t is an act of the employer of
dismissin- employees because of losses in the operation of a business! lac= of wor=!
and considerable reduction on the .olume of his business" 7n this case! the closure of a
department or di.ision of a company constitutes retrenchment by! and not closure of!
the company itself" Petitioner has not totally ceased its business operations" 7t merely
ceased operations of a department" @aterfront Cebu City Kotel .s" Ea" Eelanie P"
JimeneD! et al" P"&" Jo" 1$;21;! June 1%! 2012"
2mployee dismissal/ willful breach of trust" 5he loss of trust and condence must be
based on willful breach of the trust reposed in the employee by his employer" Such
breach is willful if it is done intentionally! =nowin-ly! and purposely! without Lustiable
e6cuse! as distin-uished from an act done carelessly! thou-htlessly! heedlessly or
inad.ertently" Eoreo.er! it must be based on substantial e.idence and not on the
employer*s whims or caprices or suspicions otherwise! the employee would eternally
remain at the mercy of the employer" 5he Supreme Court has laid down the -uidelines
for the application of the loss of trust and condence doctrine9 014 loss of condence
should not be simulated/ 024 it should not be used as a subterfu-e for causes which are
improper! ille-al or unLustied/ 0%4 it may not be arbitrarily asserted in the face of
o.erwhelmin- e.idence to the contrary/ and 0;4 it must be -enuine! not a mere
afterthou-ht! to Lustify an earlier action ta=en in bad faith" Millanue.a wor=ed for
Eeralco as a Branch &epresentati.e whose tas=s included the issuance of Contracts for
2lectric Ser.ice after receipt of the amount due for ser.ice connection from customers"
Nb.iously! he was entrusted not only with the responsibility of handlin- company funds
but also to cater to customers who intended to a.ail of Eeralco*s ser.ices" 5his is
nothin- but an indication that trust and condence were reposed in him by the
company! althou-h his position was not strictly mana-erial by nature" Eeralco*s loss of
trust and condence arisin- out of Millanue.a*s act of misappropriation of company
funds in the course of processin- customer applications has been pro.en by substantial
e.idence! thus! Lustied" Merily! the issuance of additional receipts for e6cessi.e
payments e6acted from customers is a willful breach of the trust reposed in him by the
company" @i)ente @illanueva, $r. vs.. 1'e National Labor Relations Commission, 1'ird
Bivision, ,anila 4le)tri) Company, ,anuel LopeA, C'airman and C4D, and 8ran)is)o
Collantes, ,ana(er" P"&" Jo" 1$(+B%! June 1%! 2012"
2mployee suit/ dama-es" 5o obtain moral dama-es! the claimant must pro.e the
e6istence of bad faith by clear and con.incin- e.idence! for the law always presumes
-ood faith" 7t is not e.en enou-h that one merely su8ered sleepless ni-hts! mental
an-uish and serious an6iety as the result of the actuations of the other party" 7n this
case! LaDaro did not state any moral an-uish that he su8ered" Jeither did he
substantiate his imputations of malice to Banco Gilipino" Ke only made a sweepin-
declaration! without concrete proof! that the ban= in refusin- his claim maliciously
dama-ed his property ri-hts and interest" Accordin-ly! neither moral dama-es nor
e6emplary dama-e can be awarded to him"
@ith respect to attorney*s fees! an award is proper only if that person was forced to
liti-ate and incur e6penses to protect one*s ri-hts and interest by reason of an
unLustied act or omission of the party for whom it is sou-ht" Banco Gilipino had a prima
facie le-itimate defense that! because it underwent li:uidation proceedin-s! it cannot
be compelled to credit that period in the computation of the employee*s the retirement
pay and prot shares" Considerin- that Banco Gilipino*s refusal cannot be accurately
characteriDed as unLustied! LaDaro cannot claim an award of attorney*s fees"=an)o
8ilipino Savin(s and ,ort(a(e =ank vs. ,i(uelito ,. LaAaro2,i(uelito ,. LaAaro vs.
=an)o 8ilipino Savin(s and ,ort(a(e =ank, et al. P"&" Jo" 1+'%;( R P"&" Jo"
1+';;2" June 2$! 2012"
7ndependent contractor/ tests" Permissible Lob contractin- or subcontractin- refers to an
arran-ement whereby a principal a-rees to put out or farm out to a contractor or
subcontractor the performance or completion of a specic Lob! wor= or ser.ice within a
denite or predetermined period! re-ardless of whether such Lob! wor= or ser.ice is to
be performed or completed within or outside the premises of the principal" A person is
considered en-a-ed in le-itimate Lob contractin- or subcontractin- if the followin-
conditions concur9
0a4 5he contractor or subcontractor carries on a distinct and independent business and
underta=es to perform the Lob! wor= or ser.ice on its own account and under its own
responsibility accordin- to its own manner and method! and free from the control and
direction of the principal in all matters connected with the performance of the wor=
e6cept as to the results thereof/
0b4 5he contractor or subcontractor has substantial capital or in.estment/ and
0c4 5he a-reement between the principal and contractor or subcontractor assures the
contractual employees entitlement to all labor and occupational safety and health
standards! free e6ercise of the ri-ht to self>or-aniDation! security of tenure! and social
welfare benets"
7n contrast! labor>only contractin-! a prohibited act! is an arran-ement where the
contractor or subcontractor merely recruits! supplies or places wor=ers to perform a Lob!
wor= or ser.ice for a principal" 7n labor>only contractin-! the followin- elements are
present9
0a4 5he contractor or subcontractor does not ha.e substantial capital or in.estment to
actually perform the Lob! wor= or ser.ice under its own account and responsibility/ and
0b4 5he employees recruited! supplied or placed by such contractor or subcontractor!
are performin- acti.ities which are directly related to the main business of the principal"
5he test of independent contractorship is whether one claimin- to be an independent
contractor has contracted to do the wor= accordin- to his own methods and without
bein- subLect to the control of the employer! e6cept only as to the results of the wor="
PramaLe is not an independent Lob contractor! but a 1labor>only3 contractor" Girst!
PramaLe has no substantial capital or in.estment" 5he presumption is that a contractor
is a labor>only contractor unless he o.ercomes the burden of pro.in- that it has
substantial capital! in.estment! tools! and the li=e" Jeither PramaLe nor Polyfoam
presented e.idence showin- PramaLe*s ownership of the e:uipment and machineries
used in the performance of the alle-ed contracted Lob"
Second! PramaLe did not carry on an independent business or underta=e the
performance of its ser.ice contract accordin- to its own manner and method! free from
the control and super.ision of its principal! Polyfoam! its apparent role ha.in- been
merely to recruit persons to wor= for Polyfoam" 7t is undisputed that respondent had
performed his tas= of pac=in- Polyfoam*s foam products in Polyfoam*s premises" As to
the recruitment of respondent! petitioners were able to establish only that respondent*s
application was referred to PramaLe! but that is all" Prior to his termination! respondent
had been performin- the same Lob in Polyfoam*s business for almost si6 0(4 years" Ke
was e.en furnished a copy of Polyfoam*s Q,(a Alituntunin at Karampatan(
&arusa,Rwhich embodied Polyfoam*s rules on attendance! the manner of performin- the
employee*s duties! ethical standards! cleanliness! health! safety! peace and order"
5hese rules carried with them the correspondin- penalties in case of .iolation" @hile it is
true that petitioners submitted the ACda.it of Polyfoam*s super.isor! claimin- that the
latter did not e6ercise super.ision o.er respondent because the latter was not
Polyfoam*s but PramaLe*s employee! said ACda.it is insuCcient to pro.e such claim"
Petitioners should ha.e presented the person who they claim to ha.e e6ercised
super.ision o.er respondent and their alle-ed other employees assi-ned to Polyfoam" 7t
was ne.er established that PramaLe too= entire char-e! control and super.ision of the
wor= and ser.ice a-reed upon" &oly+oam6RGC 0nternational, Corporation and &re)illa A.
GramaGe vs. 4d(ardo Con)ep)ion.P"&" Jo" 1$2%;B! June 1%! 2012"
JL&C/ Lurisdiction o.er interpretation or implementation of the CBA" &"A" +0;2 is a
special law -o.ernin- o.erseas Gilipino wor=ers" Kowe.er! there is no specic pro.ision
thereunder which pro.ides for Lurisdiction o.er disputes or unresol.ed -rie.ances
re-ardin- the interpretation or implementation of a CBA" Section 10 of &"A" +0;2 simply
spea=s! in -eneral! of 1claims arisin- out of an employer>employee relationship or by
.irtue of any law or contract in.ol.in- Gilipino wor=ers for o.erseas deployment
includin- claims for actual! moral! e6emplary and other forms of dama-es"3 Nn the
other hand! Articles 21$0c4 and 2(1 of the Labor Code are .ery specic in statin- that
.oluntary arbitrators ha.e Lurisdiction o.er cases arisin- from the interpretation or
implementation of collecti.e bar-ainin- a-reements" 7n the present case! the basic
issue raised by Eerridy Jane in her complaint led with the JL&C is9 which pro.ision of
the subLect CBA applies insofar as death benets due to the heirs of Jelson are
concerned" 5his issue clearly in.ol.es the interpretation or implementation of the said
CBA" 5hus! the specic or special pro.isions of the Labor Code -o.ern"
CBA is the law or contract between the parties" Article 1%"1 of the CBA entered into by
and between respondent PC7 and AENSAP pro.ides that the Company and the Anion
a-ree that in case of dispute or conHict in the interpretation or application of any of the
pro.isions of this A-reement! or enforcement of Company policies! the same shall be
settled throu-h ne-otiation! conciliation or .oluntary arbitration" 5he pro.isions of the
CBA are in consonance with &ule M77! Section $ of the present Nmnibus &ules and
&e-ulations 7mplementin- the Ei-rant @or=ers and N.erseas Gilipinos Act of 1BB'! as
amended by &epublic Act Jo" 10022! which states that for NG@s with collecti.e
bar-ainin- a-reements! the case shall be submitted for .oluntary arbitration in
accordance with Articles 2(1 and 2(2 of the Labor Code" @ith respect to disputes
in.ol.in- claims of Gilipino seafarers wherein the parties are co.ered by a collecti.e
bar-ainin- a-reement! the dispute or claim should be submitted to the Lurisdiction of a
.oluntary arbitrator or panel of arbitrators" 7t is only in the absence of a collecti.e
bar-ainin- a-reement that parties may opt to submit the dispute to either the JL&C or
to .oluntary arbitration" 4state o+ Nelson R. Bulay, represented by 'is Ci+e ,eddiry $ane
&. Bulay vs. AboitiA $ebsen ,aritime, 0n). and General C'arterers, 0n). P"&" Jo"
1$2(;2! June 1%! 2012"
Ser.ice/ proof of ser.ice" Petitioners alle-e that no aCda.it of ser.ice was attached to
the CA Petition" Kowe.er! the Supreme Court noted that in the CA &esolution! the
appellate court stated that their records re.ealed that Atty" 2spinas! petitioners* counsel
of record at the time! was duly ser.ed a copy of the followin-9 CA &esolution -rantin-
respondent*s Eotion for 26tension of 5ime to le the CA Petition/ CA &esolution re:uirin-
petitioners to le their Comment on the CA Petition/ and CA &esolution! submittin- the
case for resolution! as no comment was led" Such ser.ice to Atty" 2spinas was .alid
despite the fact he was already deceased at the time" 7f a party to a case has appeared
by counsel! ser.ice of pleadin-s and Lud-ments shall be made upon his counsel or one
of them! unless ser.ice upon the party is specically ordered by the court" 7t is not the
duty of the courts to in:uire! durin- the pro-ress of a case! whether the law rm or
partnership representin- one of the liti-ants continues to e6ist lawfully! whether the
partners are still ali.e! or whether its associates are still connected with the
rm" Salvador D. ,oGar, et al. vs. A(ro Commer)ial Se)urity Servi)e A(en)y, et al. P"&"
Jo" 1+$1++! June 2$! 2012"
July 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on Au-ust +! 2012 by Leslie C" Dy [ Posted in Labor Law! Philippines > Law [ 5a--ed due
process! employer>employee relationship! ille-al dismissal! loss of trust and condence! retirement [
Kere are select July 2012 rulin-s of the Supreme Court of the Philippines on labor law
and procedure9
Dismissal/ due process" Due process re:uirement is met when there is simply an
opportunity to be heard and to e6plain one*s side e.en if no hearin- is conducted" An
employee may be a8orded ample opportunity to be heard by means of any method!
.erbal or written! whether in a hearin-! conference or some other fair! Lust and
reasonable way" After recei.in- the rst notice apprisin- him of the char-es a-ainst him!
the employee may submit a written e6planation 0which may be in the form of a letter!
memorandum! aCda.it or position paper4 and o8er e.idence in support thereof! li=e
rele.ant company records and the sworn statements of his witnesses" Gor this purpose!
he may prepare his e6planation personally or with the assistance of a representati.e or
counsel" Ke may also as= the employer to pro.ide him copy of records material to his
defense" Kis written e6planation may also include a re:uest that a formal hearin- or
conference be held" 7n such a case! the conduct of a formal hearin- or conference
becomes mandatory! Lust as it is where there e6ist substantial e.identiary disputes or
where company rules or practice re:uires an actual hearin- as part of employment pre>
termination procedure"
Petitioner*s written response to the prere:uisite notice pro.ided her with an a.enue to
e6plain and defend her side and thus ser.ed the purpose of due process" 5hat there was
no hearin-! in.esti-ation or ri-ht to appeal! which petitioner opined to be a .iolation of
company policies! is of no moment since the record is bereft of any showin- that there
is an e6istin- company policy that re:uires these procedures with respect to the
termination of a CK& Director li=e petitioner or that company practice calls for the
same" 5here was also no re:uest for a formal hearin- on the part of petitioner" As she
was ser.ed with a notice apprisin- her of the char-es a-ainst her and also a subse:uent
notice informin- her of the mana-ement*s decision to terminate her ser.ices after
respondents found her written response to the rst notice unsatisfactory! petitioner was
clearly a8orded her ri-ht to due process" 8lordeliAa ,aria Reyes6Rayel vs. &'ilippine
Luen 1'ai -oldin(s Corporation, et al. P"&" Jo" 1$;+B%! July 11! 2012"
Dismissal/ loss of trust and condence" An employer has a distinct prero-ati.e and
wider latitude of discretion in dismissin- a mana-erial personnel who performs functions
which by their nature re:uire the employer*s full trust and condence"As distin-uished
from a ran= and le personnel! mere e6istence of a basis for belie.in- that a mana-erial
employee has breached the trust of the employer Lusties dismissal" Loss of condence
as a -round for dismissal does not re:uire proof beyond reasonable doubt as the law
re:uires only that there be at least some basis to Lustify it"
Petitioner was LR5*s CK& Director for Eanufacturin-! which is a mana-erial position
saddled with -reat responsibility" As such! she was directly responsible for mana-in- her
own departmental sta8" Because of this! petitioner must enLoy the full trust and
condence of her superiors" Kowe.er! petitioner deli.ered dismal performance and
displayed poor wor= attitude! which constitute suCcient reasons for an employer to
terminate an employee on the -round of loss of trust and condence" Girst! records
show that petitioner indeed unreasonably failed to e8ecti.ely communicate with her
immediate superior" Second! the aCda.its of petitioner*s co>wor=ers re.ealed her
ne-ati.e attitude and unprofessional beha.ior towards them and the company" Lastly!
petitioner displayed ineCciency and ineptitude in her Lob as a CK& Director" 5a=in- all
these circumstances collecti.ely! the Court is con.inced that respondents ha.e
suCcient and .alid reasons for terminatin- the ser.ices of petitioner as her continued
employment would be patently inimical to respondents* interest" 8lordeliAa ,aria Reyes6
Rayel vs. &'ilippine Luen 1'ai -oldin(s Corporation, et al. P"&" Jo" 1$;+B%! July 11!
2012"
2mployee dismissal/ .alidity of termination" &etrenchment is one of the authoriDed
causes for the dismissal of employees reco-niDed by the Labor Code" 7t is a
mana-ement prero-ati.e resorted to by employers to a.oid or to minimiDe business
losses" 5he Court has laid down the followin- standards that an employer should meet
to Lustify retrenchment and to foil abuse! namely9
0a4 5he e6pected losses should be substantial and not merely de minimis in e6tent/
0b4 5he substantial losses apprehended must be reasonably imminent/
0c4 5he retrenchment must be reasonably necessary and li=ely to e8ecti.ely pre.ent
the e6pected losses/ and
0d4 5he alle-ed losses! if already incurred! and the e6pected imminent losses sou-ht to
be forestalled must be pro.ed by suCcient and con.incin- e.idence
7n termination cases! the burden of pro.in- that the dismissal was for a .alid or
authoriDed cause rests upon the employer" 5he petitioner did not submit e.idence of the
losses to its business operations and the economic ha.oc it would thereby imminently
sustain" 7t only claimed that respondent*s termination was due to its 1present
businessQnancial condition3" 5his bare statement fell short of the norm to show a .alid
retrenchment" 7ndeed! not e.ery loss incurred or e6pected to be incurred by an
employer can Lustify retrenchment" 5he employer must pro.e! amon- others! that the
losses are substantial and that the retrenchment is reasonably necessary to a.ert such
losses" 5hus! by its failure to present suCcient and con.incin- e.idence to pro.e that
retrenchment was necessary! respondent*s termination due to retrenchment is not
allowed" Le(end -otel I,anilaJ, oCned by 1itatium Corporation, et al. vs. -ernani S.
Realuyo, also knoCn as $oey Roa. P"&" Jo" 1'%'11! July 1+! 2012"
2mployee trainin-/ reimbursement" 5he Supreme Court reco-niDed the ri-ht of PAL to
recoup the costs of a pilot*s trainin- in the form of ser.ice for a period of at least three
0%4 years" By carryin- o.er the same stipulation settin- the a-e of fty>se.en 0'$4 years
as the rec=onin- point when a pilot becomes dis:ualied to bid for a hi-her position in
the present CBA! both PAL and ALPAP reco-niDed that the company*s e8ort in sendin-
pilots for trainin- abroad is an in.estment which necessarily e6pects a reasonable
return in the form of ser.ice for a period of at least three 0%4 years" 5his stipulation had
been repeatedly adopted by the parties in the succeedin- renewals of their CBA! thus
.alidatin- the impression that it is a reasonable and acceptable term to both PAL and
ALPAP" Conse:uently! the petitioner cannot con.eniently disre-ard this stipulation by
simply raisin- the absence of a contract e6pressly re:uirin- the pilot to remain within
PAL*s employ within a period of % years after he has been sent on trainin-" 5he
supposed absence of contract bein- raised by the petitioner cannot stand as the CBA
clearly co.ered the petitioner*s obli-ation to render ser.ice to PAL within % years to
enable it to recoup the costs of its in.estment" =ibiano C. 4le(ir vs. &'ilippine Airlines,
0n). P"&" Jo" 1+1BB'! July 1(! 2012"
2mployer>employee relationship/ e6istence" 5he issue of whether or not an employer>
employee relationship e6isted is essentially a :uestion of fact" 5he factors that
determine the issue include who has the power to select the employee! who pays the
employee*s wa-es! who has the power to dismiss the employee! and who e6ercises
control of the methods and results by which the wor= of the employee is accomplished"
Althou-h no particular form of e.idence is re:uired to pro.e the e6istence of the
relationship! and any competent and rele.ant e.idence to pro.e the relationship may be
admitted! a ndin- that the relationship e6ists must nonetheless rest on substantial
e.idence! which is that amount of rele.ant e.idence that a reasonable mind mi-ht
accept as ade:uate to Lustify a conclusion"
A re.iew of the circumstances re.eals that respondent was! indeed! petitioner*s
employee" Ke was undeniably employed as a pianist in petitioner*s &estaurant" Girst of
all! petitioner actually wielded the power of selection at the time it entered into the
ser.ice contract with respondent" 5he power of selection was rmly e.idenced by!
amon- others! the e6press written recommendation by petitioner*s restaurant mana-er!
for the increase of his remuneration" Secondly! there is no denyin- that the
remuneration denominated as talent fees was 6ed on the basis of his talent and s=ill
and the :uality of the music he played durin- the hours of performance each ni-ht!
ta=in- into account the pre.ailin- rate for similar talents in the entertainment industry"
&espondent*s remuneration! albeit denominated as talent fees! was still considered as
included in the term wa-ein the sense and conte6t of the Labor Code! re-ardless of how
petitioner chose to desi-nate the remuneration" 5hirdly! the petitioner has the power to
dismiss respondent" 5he memorandum informin- respondent of the discontinuance of
his ser.ice because of the present business or nancial condition of petitioner showed
that the latter had the power to dismiss him from employment" Lastly! the power of the
employer to control the wor= of the employee is considered the most si-nicant
determinant of the e6istence of an employer>employee relationship" 5his is the so>called
control test! and is premised on whether the person for whom the ser.ices are
performed reser.es the ri-ht to control both the end achie.ed and the manner and
means used to achie.e that end" &espondent performed his wor= as a pianist under
petitioner*s super.ision and control" Petitioner*s control of both the end achie.ed and
the manner and means used to achie.e that end was demonstrated by the followin-! to
wit9 014Ke could not choose the time of his performance! which petitioners had 6ed
from $900 pm to 10900 pm! three to si6 times a wee=/ 024Ke could not choose the place
of his performance/ 0%4 5he restaurant*s mana-er re:uired him at certain times to
perform only 5a-alo- son-s or music! or to wear baron( 5a-alo- to conform to the
Gilipiniana motif/ and 0;4Ke was subLected to the rules on employees* representation
chec= and chits! a pri.ile-e -ranted to other employees" Le(end -otel I,anilaJ, oCned
by 1itatium Corporation, et al. vs. -ernani S. Realuyo, also knoCn as $oey Roa. P"&" Jo"
1'%'11! July 1+! 2012"
Eana-ement prero-ati.e/ transfer of employees" An employer*s decision to transfer an
employee! if made in -ood faith! is a .alid e6ercise of a mana-ement prero-ati.e!
althou-h it may result in personal incon.enience or hardship to the employee" &e>
assi-nments made by mana-ement pendin- in.esti-ation of irre-ularities alle-edly
committed by an employee fall within the ambit of mana-ement prero-ati.e" 5he
purpose of reassi-nments is no di8erent from that of pre.enti.e suspension which
mana-ement could .alidly impose as a disciplinary measure for the protection of the
company*s property pendin- in.esti-ation of any alle-ed malfeasance or misfeasance
committed by the employee"
As the e6ecuti.e assistant of the president! petitioner undeniably occupied a sensiti.e
position that re:uired her employer*s utmost trust and condence" Ka.in- lost his trust
and condence in petitioner! respondent Deln had the ri-ht to transfer her to ensure
that she would no lon-er ha.e access to the companies* condential les" Althou-h it is
true that petitioner has yet to be pro.en -uilty! respondents had the authority to
reassi-n her! pendin- in.esti-ation" @hen petitioner was assi-ned to Ca.ite! there was
an on-oin- in.esti-ation of the char-es led a-ainst her" 7t is undisputed that she
refused to ll up! for no Lustiable reasons! the :uestionnaire distributed by her
employer to determine who amon- those who had access to the condential les was
responsible for their ta=in-" Gurthermore! a witness had e6ecuted an ACda.it claimin-
that she found the missin- les! and that her husband told her that it was petitioner
who handed those les to him" Lastly! the person who supposedly recei.ed these
documents from petitioner did not deny or rebu=e the statements made by his
wife" $osep'ine RuiA vs. >endel Dsaka Realty Corp., et al.P"&" Jo" 1+B0+2! July 11!
2012"
&etirement Pay/ collecti.e bar-ainin- a-reement" Article 2+$ of the Labor Code pro.ides
that it is applicable only to a situation where 014 there is no CBA or other applicable
employment contract pro.idin- for retirement benets for an employee! or 024 there is a
CBA or other applicable employment contract pro.idin- for retirement benets for an
employee! but it is below the re:uirement set by law" 5he rationale for the rst situation
is to pre.ent the absurd situation where an employee! deser.in- to recei.e retirement
benets! is denied to them throu-h the nefarious scheme of employers to depri.e
employees of the benets due them under e6istin- labor laws" Nn the other hand! the
second situation aims to pre.ent pri.ate contracts from dero-atin- from the public law"
5he determinin- factor in choosin- which retirement scheme to apply is still
superiorityin terms of benets pro.ided" 5hus! e.en if there is an e6istin- CBA but the
same does not pro.ide for retirement benets e:ual or superior to that which is
pro.ided under Article 2+$ of the Labor Code! the latter will apply"
5here are two retirement schemes at point in this case9 014 Article 2+$ of the Labor
Code! and/ 024 the PAL>ALPAP &etirement Plan and the PAL Pilots* &etirement Benet
Plan" 5he two retirement schemes are alternati.e in nature such that the retired pilot
can only be entitled to that which pro.ides for superior benets" Comparin- the benets
under the two 024 retirement schemes! it can readily be percei.ed that the 22"' days
worth of salary for e.ery year of ser.ice pro.ided under Article 2+$ of the Labor Code
cannot match the 2;0< of salary or almost two and a half worth of monthly salary per
year of ser.ice pro.ided under the PAL Pilots* &etirement Benet Plan! which will be
further added to the 12'!000"00 to which the petitioner is entitled under the PAL>
ALPAP &etirement Plan" Clearly then! it is to the petitioner*s ad.anta-e that PAL*s
retirement plans were applied in the computation of his retirement benets" =ibiano C.
4le(ir vs. &'ilippine Airlines, 0n). P"&" Jo" 1+1BB'! July 1(! 2012"
AnLust enrichment" 5here is unLust enrichment when a person unLustly retains a benet
at the loss of another! or when a person retains the money or property of another
a-ainst the fundamental principles of Lustice! e:uity and -ood conscience" 5wo
conditions must concur9 014 a person is unLustly beneted/ and 024 such benet is
deri.ed at the e6pense of or with dama-es to another" 5he enrichment may consist of a
patrimonial! physical! or moral ad.anta-e! so lon- as it is appreciable in money" 7t must
ha.e a correlati.e preLudice! disad.anta-e or inLury to the plainti8 which may consist!
not only of the loss of the property or the depri.ation of its enLoyment! but also of the
non>payment of compensation for a prestation or ser.ice rendered to the defendant
without intent to donate on the part of the plainti8! or the failure to ac:uire somethin-
that the latter would ha.e obtained"
PAL in.ested a considerable amount of money in sendin- the petitioner abroad to
under-o trainin- to prepare him for his new appointment as B$;$>;00 Captain" 7n the
process! the petitioner ac:uired new =nowled-e and s=ills which e8ecti.ely enriched his
technical =now>how" As all other in.estors! PAL e6pects a return on in.estment in the
form of ser.ice by the petitioner for a period of % years! which is the estimated len-th of
time within which the costs of the latter*s trainin- can be fully reco.ered" 5he petitioner
is! thus! e6pected to wor= for PAL and utiliDe whate.er =nowled-e he had learned from
the trainin- for the benet of the company" Kowe.er! after only one 014 year of ser.ice!
the petitioner opted to retire from ser.ice! lea.in- PAL stripped of a necessary
manpower" Andeniably! the petitioner was enriched at the e6pense of PAL" After
under-oin- the trainin- fully shouldered by PAL! he ac:uired a hi-her le.el of technical
competence which! in the professional realm! translates to a hi-her compensation"
Gurther! his trainin- broadened his opportunities for a better employment as in fact he
was able to transfer to another airline company immediately after he left PAL" 5o allow
the petitioner to simply lea.e the company without reimbursin- it for the proportionate
amount of the e6penses it incurred for his trainin- will only ma-nify the nancial
disad.anta-e sustained by PAL" &eason and fairness dictate that he must return to the
company a proportionate amount of the costs of his trainin-" =ibiano C. 4le(ir vs.
&'ilippine Airlines, 0n). P"&" Jo" 1+1BB'! July 1(! 2012"
Au-ust 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on September 10! 2012 by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines >
Law! Philippines > &e-ulation [
Kere are select rulin-s of the Philippine Supreme Court on labor law and procedure9
Disability benets/ entitlement" 2ntitlement of seafarers to disability benets is
-o.erned not only by medical ndin-s but also by contract and by law" By contract!
Department Nrder Jo" ;! series of 2000! of the Department of Labor and 2mployment
and the parties* Collecti.e Bar-ainin- A-reement bind the seafarer and the employer"
By law! the Labor Code pro.isions on disability apply with e:ual force to seafarers" 5he
seafarer! upon si-n>o8 from his .essel! must report to the company>desi-nated
physician within three 0%4 days from arri.al for dia-nosis and treatment" Gor the duration
of the treatment but in no case to e6ceed 120 days! the seaman is on temporary total
disability as he is totally unable to wor=" Ke recei.es his basic wa-e durin- this period
until he is declared t to wor= or his temporary disability is ac=nowled-ed by the
company to be permanent! either partially or totally! as his condition is dened under
the PN2A Standard 2mployment Contract and by applicable Philippine laws" 7f the 120
days initial period is e6ceeded and no such declaration is made because the seafarer
re:uires further medical attention! then the temporary total disability period may be
e6tended up to a ma6imum of 2;0 days! subLect to the ri-ht of the employer to declare
within this period that a permanent partial or total disability already e6ists" 5he seaman
may of course also be declared t to wor= at any time such declaration is Lustied by his
medical condition"
Grom the time 5omacruD was repatriated on Jo.ember 1+! 2002! he submitted himself
to the care and treatment of the company>desi-nated physician" @hen the company>
desi-nated physician made a declaration on July 2'! 200% that 5omacruD was already t
to wor=! 2;B days had already lapsed from the time he was repatriated" As such! his
temporary total disability should be deemed total and permanent! pursuant to Article
1B2 0c4014 of the Labor Code and its implementin- rule"&'ilasia S'ippin( A(en)y
Corporation, et al. vs. Andres G. 1oma)ruA. P"&" Jo" 1+11+0! Au-ust 1'! 2012"
2mployee dismissal/ due process re:uirements" 5he followin- standards of due process
shall be substantially obser.ed for termination of employment based on Lust causes as
dened in Article 2+2 of the Labor Code9
0i4 A written notice ser.ed on the employee specifyin- the -round or -rounds for
termination! and -i.in- said employee reasonable opportunity within which to e6plain
his side"
0ii4 A hearin- or conference durin- which the employee concerned! with the assistance
of counsel if he so desires is -i.en opportunity to respond to the char-e! present his
e.idence or rebut the e.idence presented a-ainst him"
0iii4 A written notice of termination ser.ed on the employee! indicatin- that upon due
consideration of all the circumstances! -rounds ha.e been established to Lustify his
termination"
Petitioners* e.idence fails to pro.e their contention that they a8orded Atencio with due
process" 5he June 21! 1BBB letter! which alle-edly pro.es Atencio*s =nowled-e of the
char-es a-ainst him! and which alle-edly constitutes Atencio*s e6planation! clearly
discusses an entirely di8erent topic F which is the remo.al of his construction company
from the Calte6 proLect" As for the Eay 2;! 1BBB letter! which alle-edly constitutes the
notice of termination of Atencio*s employment as JA&L*s chief operatin- mana-er! the
said letter in.ol.es the termination of the subcontractin- a-reement between JA&L and
Atencio*s company! and not the termination of Atencio*s employment" Gor petitioners*
failure to obser.e the two>notice rule under Article 2$$0b4 of the Labor Code!
respondent is entitled to nominal dama-es" $arl Constru)tion and Armando K. 1eGada vs.
Simeon A. Aten)io. P"&" Jo" 1$'B(B! Au-ust 1! 2012"
Jud-ment/ law of the case"5he law of the case has been dened as the opinion deli.ered
on a former appeal" 7t means that whate.er is once irre.ocably established as the
controllin- le-al rule or decision between the same parties in the same case continues
to be the law of the case! whether correct on -eneral principles or not! so lon- as the
facts on which such decision was predicated continue to be the facts of the case before
the court"
Both P"&" Jo" 1(+;$$ and this petition are o8shoots of petitioner*s purported temporary
measures to preser.e its neutrality with re-ard to the percei.ed .oid in the union
leadership" @hile these two cases arose out of di8erent notices to stri=e! it is undeniable
that the facts cited and the ar-uments raised by petitioner are almost identical"
7ne.itably! P"&" Jo" 1(+;$$ and this petition see= only one relief! that is! to absol.e
petitioner from respondent*s char-e of committin- an unfair labor practice" Gor this
reason! we are constrained to apply the law of the case doctrine in li-ht of the nality of
our July 20! 200' and September 21! 200' resolutions in P"&" Jo" 1(+;$$" 7n other
words! our pre.ious aCrmance of the Court of Appeals* ndin- F that petitioner erred in
suspendin- collecti.e bar-ainin- ne-otiations with the union and in placin- the union
funds in escrow considerin- the intra>union dispute between the AliaDas and BaZeD
factions was not a Lustication therefor X is bindin- in the present case" Be la Salle
?niversity vs. Be la Salle ?niversity 4mployees Asso)iation. P"&" Jo" 1(B2';" Au-ust 2%!
2012"
Lien/ unpaid wa-es" Ander &epublic Act Jo" 101;2! otherwise =nown as the Ginancial
&ehabilitation and 7nsol.ency Act of 2010! the ri-ht of a secured creditor to enforce his
lien durin- li:uidation proceedin-s is retained" Nn the ri-ht of rst preference as re-ards
unpaid wa-es! a distinction should be made between a preference of credit and a lien" A
preference applies only to claims which do not attach to specic properties" A lien
creates a char-e on a particular property" 5he ri-ht of rst preference as re-ards unpaid
wa-es reco-niDed by Article 110 of the Labor Code does not constitute a lien on the
property of the insol.ent debtor in fa.or of wor=ers" 7t is but a preference of credit in
their fa.or! a preference in application" 7t is a method adopted to determine and specify
the order in which credits should be paid in the nal distribution of the proceeds of the
insol.ent*s assets" 7t is a ri-ht to a rst preference in the dischar-e of the funds of the
Lud-ment debtor" Conse:uently! the ri-ht of rst preference for unpaid wa-es may not
be in.o=ed in this case to nullify the foreclosure sales conducted pursuant to PJB*s ri-ht
as a secured creditor to enforce its lien on specic properties of its debtor!
A&CAE" ,anuel B. Yn(son, $r., 3in 'is )apa)ity as t'e Li5uidator o+ ARCA, ; Co., 0n).7
vs. &'ilippine National =ank" P"&" Jo" 1$11%2! Au-ust 1'! 2012"
JL&C/ Lurisdiction" Althou-h &epublic Act Jo" +0;2! throu-h its Section 10! transferred
the ori-inal and e6clusi.e Lurisdiction to hear and decide money claims in.ol.in-
o.erseas Gilipino wor=ers from the PN2A to the Labor Arbiters! the law did not remo.e
from the PN2A the ori-inal and e6clusi.e Lurisdiction to hear and decide all disciplinary
action cases and other special cases administrati.e in character in.ol.in- such wor=ers"
5he ob.ious intent of &epublic Act Jo" +0;2 was to ha.e the PN2A focus its e8orts in
resol.in- all administrati.e matters a8ectin- and in.ol.in- such wor=ers" 5he JL&C had
no appellate Lurisdiction to re.iew the decision of the PN2A in disciplinary cases
in.ol.in- o.erseas contract wor=ers"
Althou-h! as a rule! all laws are prospecti.e in application unless the contrary is
e6pressly pro.ided! or unless the law is procedural or curati.e in nature! there is no
serious :uestion about the retroacti.e applicability of &epublic Act Jo" +0;2 to the
appeal of the PN2A*s decision on petitioners* disciplinary action a-ainst respondents" 7n
a way! &epublic Act Jo" +0;2 was a procedural law due to its pro.idin- or omittin-
-uidelines on appeal" &epublic Act Jo" +0;2 applies to petitioners* complaint by .irtue
of the case bein- then still pendin- or undetermined at the time of the law*s passa-e!
there bein- no .ested ri-hts in rules of procedure" 5hey could not .alidly insist that the
rec=onin- period to ascertain which law or rule should apply was the time when the
disciplinary complaint was ori-inally led in the PN2A in 1BB%" Eoreo.er! &epublic Act
Jo" +0;2 and its implementin- rules and re-ulations were already in e8ect when
petitioners too= their appeal" @hen &epublic Act Jo" +0;2 withheld the appellate
Lurisdiction of the JL&C in respect of cases decided by the PN2A! the appellate
Lurisdiction was .ested in the Secretary of Labor in accordance with his power of
super.ision and control under Section %+014! Chapter $! 5itle 77! Boo= 777 of the &e.ised
Administrati.e Code of 1B+$" 4astern ,editerranean ,aritime Ltd., et al. vs. 4stanislao
Surio, et al. P"&" Jo" 1';21%! Au-ust 2%! 2012"
Petition for re.iew/ :uestion of fact" @hile -enerally! only :uestions of law can be raised
in a petition for re.iew on )ertiorari under &ule ;' of the &ules of Court! the rule admits
of certain e6ceptions! namely9 014 when the ndin-s are -rounded entirely on
speculations! surmises! or conLectures/ 024 when the inference made is manifestly
mista=en! absurd! or impossible/ 0%4 when there is a -ra.e abuse of discretion/ 0;4 when
the Lud-ment is based on misappreciation of facts/ 0'4 when the ndin-s of fact are
conHictin-/ 0(4 when in ma=in- its ndin-s! the same are contrary to the admissions of
both appellant and appellee/ 0$4 when the ndin-s are contrary to those of the trial
court/ 0+4 when the ndin-s are conclusions without citation of specic e.idence on
which they are based/ 0B4 when the facts set forth in the petition as well as in the
petitioner*s main and reply briefs are not disputed by the respondent/ and 0104 when
the ndin-s of fact are premised on the supposed absence of e.idence and contradicted
by the e.idence on record" 5he ille-ality of petitioner*s dismissal was an issue that was
s:uarely raised before the JL&C" @hen the JL&C decision was re.ersed by the Court of
Appeals! there was a situation where 1the ndin-s of facts are conHictin-3" 5he petition
for re.iew led by the Petitioner comes within the pur.iew of e6ception 0'4 and by
analo-y! e6ception 0$4" ,ylene CarvaGal vs. LuAon Bevelopment =ank and2or Ds)ar P.
RamireA. P"&" Jo" 1+(1(B! Au-ust 1! 2012"
Probationary employee/ security of tenure" A probationary employee! li=e a re-ular
employee! enLoys security of tenure" Kowe.er! in cases of probationary employment!
aside from Lust or authoriDed causes of termination! an additional -round is pro.ided
under Article 2+1 of the Labor Code! i.e., the probationary employee may also be
terminated for failure to :ualify as a re-ular employee in accordance with reasonable
standards made =nown by the employer to the employee at the time of the
en-a-ement"
Punctuality is a reasonable standard imposed on e.ery employee! whether in
-o.ernment or pri.ate sector" As a matter of fact! habitual tardiness is a serious o8ense
that may .ery well constitute -ross or habitual ne-lect of duty! a Lust cause to dismiss a
re-ular employee" Assumin- that petitioner was not apprised of the standards
concomitant to her Lob! it is but common sense that she must abide by the wor= hours
imposed by the ban=" Satisfactory performance is and should be one of the basic
standards for re-ulariDation" Jaturally! before an employer hires an employee! the
former can re:uire the employee! upon his en-a-ement! to under-o a trial period durin-
which the employer determines his tness to :ualify for re-ular employment based on
reasonable standards made =nown to him at the time of en-a-ement"
7t is e.ident that the primary cause of respondent*s dismissal from her probationary
employment was her 1chronic tardiness"3 At the .ery start of her employment!
petitioner already e6hibited poor wor=in- habits" 2.en durin- her rst month on the Lob!
she already incurred ei-ht 0+4 tardiness" &espondent also cited other infractions such as
unauthoriDed lea.es of absence! mista=e in clearin- of a chec=! and underperformance"
All of these infractions were not refuted by petitioner",ylene CarvaGal vs. LuAon
Bevelopment =ank and2or Ds)ar P. RamireA. P"&" Jo" 1+(1(B! Au-ust 1! 2012"
Salaries/ burden of proof of payment" @hen there is an alle-ation of nonpayment of
salaries and other monetary benets! it is the employer*s burden to pro.e its payment
to its employee" 5he employer*s e.idence must show! with a reasonable de-ree of
certainty! that it paid and that the wor=ers actually recei.ed the payment" 5he reason
for the rule is that the pertinent personnel les! payrolls! records! remittances and other
similar documents are not in the possession of the wor=er but are in the custody and
absolute control of the employer" 7n the case at bar! the two oCcial receipts issued by
Safemar=! and o8ered as JA&L*s e.idence! only pro.e that JA&L made a total partial
payment of P1!+B1!'0B"'0 to the said company for its 1professional ser.ices"3 Since
JA&L admits that the said company actually rendered ser.ices for JA&L on its Calte6
proLect! the payment can only be assumed as co.erin- for the said ser.ices" 5here is
nothin- on the face of the receipts to support the conclusion that Atencio 0and not his
company4 recei.ed it as payment for his ser.ice as a JA&L employee" $arl Constru)tion
and Armando K. 1eGada vs. Simeon A. Aten)io. P"&" Jo" 1$'B(B! Au-ust 1! 2012"
Seafarers/ contract" 5he employment of seafarers! and its incidents! includin- claims for
death benets! is -o.erned by the contracts they si-n e.ery time they are hired or
rehired" Such contracts ha.e the force of law between the parties as lon- as their
stipulations are not contrary to law! morals! public order or public policy" @hile the
seafarers and their employers are -o.erned by their mutual a-reements! the PN2A rules
and re-ulations re:uire that the PN2A Standard 2mployment Contract! which contains
the standard terms and conditions of the seafarers* employment in forei-n ocean>-oin-
.essels! be inte-rated in e.ery seafarer*s contract" 5he pertinent pro.ision of the 1BB(
PN2A S2C! which was in e8ect at the time of 5anawan*s employment! was Section 200B4
F Compensation and Benets. >allem ,aritime Servi)es, 0n). vs. 4rnesto C.
1anaCan" P"&" Jo" 1(0;;;" Au-ust 2B! 2012"
Seafarers/ disability benets" 5he one tas=ed to determine whether the seafarer su8ers
from any disability or is t to wor= is the company>desi-nated physician" As such! the
seafarer must submit himself to the company>desi-nated physician for a post>
employment medical e6amination within three days from his repatriation" But the
assessment of the company>desi-nated physician is not nal! bindin- or conclusi.e on
the seafarer! the labor tribunals! or the courts" 5he seafarer may re:uest a second
opinion and consult a physician of his choice re-ardin- his ailment or inLury! and the
medical report issued by the physician of his choice shall also be e.aluated on its
inherent merit by the labor tribunal and the court"
5anawan submitted himself to Dr" Lim! the company>desi-nated physician! for a medical
e6amination within the %>day re-lementary period from his repatriation" 5he medical
e6amination conducted focused on 5anawan*s foot inLury! the cause of his repatriation"
Dr" Lim treated 5anawan for the foot inLury from December 1! 1BB$ until Eay 21! 1BB+!
when Dr" Lim declared him t to wor=" @ithin that period that lasted 1$2 days! 5anawan
was unable to perform his Lob! an indication of a permanent disability" Ander the law!
there is permanent disability if a wor=er is unable to perform his Lob for more than 120
days! re-ardless of whether or not he loses the use of any part of his body" Disability
should be understood more on the loss of earnin- capacity rather than on the medical
si-nicance of the disability" 2.en in the absence of an oCcial ndin- by the company>
desi-nated physician to the e8ect that the seafarer su8ers a disability and is unt for
sea duty! the seafarer may still be declared to be su8erin- from a permanent disability
if he is unable to wor= for more than 120 days" Nn the other hand! 5anawan*s claim for
disability benets due to the eye inLury was already barred by his failure to report the
inLury and to ha.e his eye e6amined by a company>desi-nated physician" 5he rationale
for the rule is that reportin- the illness or inLury within three days from repatriation fairly
ma=es it easier for a physician to determine the cause of the illness or inLury"
Ander the 1BB( PN2A S2C! it was enou-h to show that the inLury or illness was
sustained durin- the term of the contract" 5he Court has declared that the un:ualied
phrase 1durin- the term3 found in Section 200B4 thereof co.ered all inLuries or illnesses
occurrin- durin- the lifetime of the contract" @hoe.er claims entitlement to the benets
pro.ided by law should establish his ri-ht to the benets by substantial e.idence"
5anawan did not present any proof of ha.in- sustained the eye inLury durin- the term of
his contract" All that he submitted was his bare alle-ation that his eye had been
splashed with some thinner while he was on board the .essel" >allem ,aritime
Servi)es, 0n). vs. 4rnesto C. 1anaCan" P"&" Jo" 1(0;;;" Au-ust 2B! 2012"
September 2012 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Nctober +! 2012 by Leslie C" Dy [ Posted in Labor Law [
Kere are select September 2012 rulin-s of the Philippine Supreme Court on labor law
and procedure9
Breach of contract/ Contract substitution/ Constructi.e dismissal/ 7lle-al
recruitment" 5he a-ency and its principal! Eodern Eetal! committed a prohibited
practice and en-a-ed in ille-al recruitment when they altered or substituted the
contracts appro.ed by the Philippine N.erseas 2mployment Administration 0PN2A4"
Article %; 0i4 of the Labor Code pro.ides9 7t shall be unlawful for any indi.idual! entity!
licensee! or holder of authority to substitute or alter employment contracts appro.ed
and .eried by the Department of Labor from the time of actual si-nin- thereof by the
parties up to and includin- the period of e6piration of the same without the appro.al of
the Secretary of Labor" Eeanwhile! Article %+ 0i4 of the Labor Code! as amended by &"A"
+0;2! dened 1ille-al recruitment3 to include the substitution or alteration! to the
preLudice of the wor=er! of employment contracts appro.ed and .eried by the
Department of Labor and 2mployment from the time of actual si-nin- thereof by the
parties up to and includin- the period of the e6piration of the same without the appro.al
of the Department of Labor and 2mployment"
Gurthermore! the a-ency and Eodern Eetal committed breach of contract by pro.idin-
substandard wor=in- and li.in- arran-ements! when the contract pro.ided free and
suitable housin-" 5he li.in- :uarters were cramped as they shared them with 2$ other
wor=ers" 5he lod-in- house was far from the Lobsite! lea.in- them only three to four
hours of sleep e.ery wor=day because of the lon- hours of tra.el to and from their place
of wor=! not to mention that there was no potable water in the lod-in- house which was
located in an area where the air was polluted" 5hey complained with the a-ency about
the hardships that they were su8erin-! but the a-ency failed to act on their reports"
Si-nicantly! the a-ency failed to refute their claims"
5hus! with their ori-inal contracts substituted and their oppressi.e wor=in- and li.in-
conditions unmiti-ated or unresol.ed! the decision to resi-n is not surprisin-" 5hey
were compelled by the dismal state of their employment to -i.e up their Lobs/
e8ecti.ely! they were constructi.ely dismissed" A constructi.e dismissal or dischar-e is
1a :uittin- because continued employment is rendered impossible! unreasonable or
unli=ely! as! an o8er in.ol.in- a demotion in ran= and a diminution in pay"3
@ithout doubt! continued employment with Eodern Eetal had become unreasonable" A
reasonable mind would not appro.e of a substituted contract that pays a diminished
salary F from 1%'0 A2D a month in the ori-inal contract to 1!000 A2D to 1!200 A2D in
the appointment letters! a di8erence of 1'0 A2D to 2'0 A2D 0not Lust '0 A2D as the
a-ency claimed4 or an e6tended employment 0from 2 to % years4 at such inferior terms!
or a 1free and suitable3 housin- which is hours away from the Lob site! cramped and
crowded! without potable water and e6posed to air pollution"
@e thus cannot accept the a-ency*s insistence that the respondents .oluntarily
resi-ned since they personally prepared their resi-nation letters in their own
handwritin-" &ert2C&, ,anpoCer 4/ponent Co., 0n). vs. Amando A. @inuya, et al. P"&"
Jo" 1B$'2+" September '! 2012"
Disability benet" Deemed read and incorporated into the Contract of 2mployment
between Da.id and respondents are the pro.isions of the 2000 Philippine N.erseas
2mployment A-ency Standard 2mployment Contract 0PN2AS2C4" Sec" 200B40;4 of the
PN2A>S2C clearly established a disputable presumption in fa.or of the compensability of
an illness su8ered by a seafarer durin- the term of his contract" Kence! unless contrary
e.idence is presented by the seafarer*s employerQs! this disputable presumption stands"
7n this case! Da.id not only relies on this disputable presumption of the compensability
of his illness but Da.id has pro.ided more than a reasonable ne6us between the nature
of his Lob and the disease that manifested itself on the si6th month of his last contract
with respondents"
7t is not necessary that the nature of the employment be the sole and only reason for
the illness su8ered by the seafarer" 7t is suCcient that there is a reasonable lin=a-e
between the disease su8ered by the employee and his wor= to lead a rational mind to
conclude that his wor= may ha.e contributed to the establishment or! at the .ery least!
a--ra.ation of any pre>e6istin- condition he mi-ht ha.e had"
Da.id showed that part of his duties as a 5hird NCcer of the crude tan=er EQ5 &aphael
in.ol.ed 1o.erseein- the loadin-! stowa-e! securin- and unloadin- of car-oes"3 As a
necessary corollary! Da.id was fre:uently e6posed to the crude oil that EQ5 &aphael was
carryin-" 5he chemical components of crude oil include! amon- others! sulfur! .anadium
and arsenic compounds" Kydro-en sulde and carbon mono6ide may also be
encountered! while benDene is a naturally occurrin- chemical in crude oil" 7t has been
re-arded that these haDardous chemicals can possibly contribute to the formation of
cancerous masses"
7n this case! Da.id was dia-nosed with EGK 0now =nown as undi8erentiated
pleomorphic sarcoma #APS)4! which is a class of soft tissue sarcoma or an illness that
account for appro6imately 1< of the =nown mali-nant tumors" As stated by Dr" PeZa of
the EEC! who was consulted by the company>desi-nated physician! the etiolo-y of soft
tissue sarcomas are multifactorial" Kowe.er! some factors are associated with a hi-her
ris=" 5hese factors include e6posure to chemical carcino-ens li=e some of the chemical
components of crude oil" $essie @. Bavid, represented by 'is Ci+e, ,a. 1'eresa S. Bavid,
and )'ildren, Kat'erine and Kristina Bavid vs. DSG S'ipmana(ement ,anila, 0n). and2or
,i)'aelmar S'ippin( Servi)es. P"&" Jo" 1B$20'" September 2(! 2012"
Dismissal/ Anfair labor practice/ Liability of corporate oCcers/ Eoral and e6emplary
dama-es" 5he re:uisites for a .alid dismissal are9 0a4 the employee must be a8orded
due process! i"e"! he must be -i.en an opportunity to be heard and defend himself/ and
0b4 the dismissal must be for a .alid cause as pro.ided in Article 2+2 of the Labor Code!
or for any of the authoriDed causes under Articles 2+% and 2+; of the same Code" 7n the
case before us! both elements are completely lac=in-" &espondents were dismissed
without any Lust or authoriDed cause and without bein- -i.en the opportunity to be
heard and defend themsel.es" 5he law mandates that the burden of pro.in- the
.alidity of the termination of employment rests with the employer" Gailure to dischar-e
this e.identiary burden would necessarily mean that the dismissal was not Lustied and!
therefore! ille-al" Ansubstantiated suspicions! accusations! and conclusions of
employers do not pro.ide for le-al Lustication for dismissin- employees" 7n case of
doubt! such cases should be resol.ed in fa.or of labor! pursuant to the social Lustice
policy of labor laws and the Constitution"
Anent the char-e of unfair labor practice! Article 2;+ 0a4 of the Labor Code considers it
an unfair labor practice when an employer interferes! restrains or coerces employees in
the e6ercise of their ri-ht to self>or-aniDation or the ri-ht to form an association" 7n
order to show that the employer committed unfair labor practice under the Labor Code!
substantial e.idence is re:uired to support the claim" Substantial e.idence has been
dened as such rele.ant e.idence as a reasonable mind mi-ht accept as ade:uate to
support a conclusion" 7n the case at bar! respondents were indeed unceremoniously
dismissed from wor= by reason of their intent to form and or-aniDe a union"
A corporation! bein- a Luridical entity! may act only throu-h its directors! oCcers and
employees" Nbli-ations incurred by them! while actin- as corporate a-ents! are not
their personal liability but the direct accountability of the corporation they represent"
Kowe.er! corporate oCcers may be deemed solidarily liable with the corporation for the
termination of employees if they acted with malice or bad faith" 7n the present case! the
lower tribunals unanimously found that Percy and Karbutt! in their capacity as corporate
oCcers of Bur-os! acted maliciously in terminatin- the ser.ices of respondents without
any .alid -round and in order to suppress their ri-ht to self>or-aniDation" Section %1 of
the Corporation Code ma=es a director personally liable for corporate debts if he
willfully and =nowin-ly .otes for or assents to patently unlawful acts of the corporation"
7t also ma=es a director personally liable if he is -uilty of -ross ne-li-ence or bad faith in
directin- the a8airs of the corporation" 5hus! Percy and Karbutt! ha.in- acted in bad
faith in directin- the a8airs of Bur-os! are Lointly and se.erally liable with the latter for
respondents* dismissal"
5he awards of moral and e6emplary dama-es in fa.or of respondents are also in order"
Eoral dama-es may be reco.ered where the dismissal of the employee was tainted by
bad faith or fraud! or where it constituted an act oppressi.e to labor! and done in a
manner contrary to morals! -ood customs or public policy! while e6emplary dama-es
are reco.erable only if the dismissal was done in a wanton! oppressi.e! or male.olent
manner" 5he -rant of attorney*s fees is li=ewise proper" Attorney*s fees may li=ewise be
awarded to respondents who were ille-ally dismissed in bad faith and were compelled to
liti-ate or incur e6penses to protect their ri-hts by reason of the oppressi.e acts of
petitioners" 5he unLustied act of petitioners had ob.iously compelled respondents to
institute an action primarily to protect their ri-hts and interests which warrants the
-rantin- of the award" &ark -otel, et al. vs. ,anolo Soriano, et al. P"&" Jo" 1$111+"
September 10! 2012"
2mployment termination/ Substanti.e and procedural due process/ Eass lea.e/ Stri=e"
Petitioners were ille-ally dismissed as they were not a8orded substanti.e and
procedural due process" 5o Lustify the dismissal of an employee on the -round of serious
misconduct! the employer must rst establish that the employee is -uilty of improper
conduct! that the employee .iolated an e6istin- and .alid company rule or re-ulation! or
that the employee is -uilty of a wron-doin-" 7n the instant case! Biomedica failed to
e.en present a copy of the rules and to pro.e that petitioners were made aware of such
re-ulations" 5he accusation is for en-a-in- in a mass lea.e tantamount to an ille-al
stri=e" 5he phrase 1mass lea.e3 may refer to a simultaneous a.ailment of authoriDed
lea.e benets by a lar-e number of employees in a company" Kere! only ' employees
were absent on the same day" 5hey did not -o on stri=e! which is a temporary stoppa-e
of wor= by the concerted action of employees as a result of any industrial or labor
dispute" 1Concerted3 is dened as 1mutually contri.ed or planned3 or 1performed in
unison3" 7n the case at bar! the ' petitioners went on lea.e for .arious reasons" 5hey
were in di8erent places to attend to their personal needs or a8airs"
5he petitioners were char-ed with conductin- an ille-al stri=e! not a mass lea.e! without
specifyin- the e6act acts that the company considers as constitutin- an ille-al stri=e or
.iolati.e of company policies" Such alle-ation falls short of the re:uirement in Sin- of
Sin-s 5ransport! 7nc" of 1a detailed narration of the facts and circumstances that will
ser.e as basis for the char-e a-ainst the employees"3 A bare mention of an 1ille-al
stri=e3 will not suCce" Gurther! while Biomedica cites the pro.isions of the company
policy which petitioners purportedly .iolated! it failed to :uote said pro.isions in the
notice so petitioners can be ade:uately informed of the nature of the char-es a-ainst
them and intelli-ently le their e6planation and defenses to said accusations"
Eoreo.er! the period of 2; hours allotted to petitioners to answer the notice was
se.erely insuCcient and in .iolation of the implementin- rules of the Labor Code" Ander
the implementin- rule of Art" 2$$! an employee should be -i.en 1reasonable
opportunity3 to le a response to the notice"
7n addition! Biomedica did not set the char-es a-ainst petitioners for hearin- or
conference" @hile petitioners did not submit any written e6planation to the char-es! it is
incumbent for Biomedica to set the matter for hearin- or conference to hear the
defenses and recei.e e.idence of the employees" Eore importantly! Biomedica is duty>
bound to e6ert e8orts! durin- said hearin- or conference! to hammer out a settlement
of its di8erences with petitioners" 5hese prescriptions Biomedica failed to satisfy" Lastly!
Biomedica a-ain de.iated from the dictated contents of a written notice of termination
as laid down in Sec" 2! Boo= M! &ule U777 of the 7mplementin- &ules that it should
embody the facts and circumstances to support the -rounds Lustifyin- the
termination" Ale/ H. NaranGo, et al. vs. =iomedi)a -ealt' Care, 0n)., et al. P"&" Jo"
1B%$+B" September 1B! 2012"
2mployee dismissal/ &einstatement" Gollowin- Article 2$B of the Labor Code! an
employee who is unLustly dismissed from wor= is entitled to reinstatement without loss
of seniority ri-hts and other pri.ile-es and to his full bac=wa-es computed from the
time he was ille-ally dismissed" Kowe.er! considerin- that respondent Da=ila was
terminated one 014 day prior to his compulsory retirement on Eay 2! 200$! his
reinstatement is no lon-er feasible" Accordin-ly! the JL&C correctly held him entitled to
the payment of his retirement benets pursuant to the CBA" Nn the other hand! his
bac=wa-es should be computed only for days prior to his compulsory retirement which
in this case is only a day" Conse:uently! the award of reinstatement wa-es pendin-
appeal must be deleted for lac= of basis" 1'e NeC &'ilippine Skylanders, 0n). and2or
$enni+er ,. 4Kano6=ote vs. 8ran)is)o N. Bakila.P"&" Jo" 1BB';$" September 2;! 2012
2.idence/ Constructi.e dismissal/ 5ransfer/ Substantial e.idence" 7n labor cases! strict
adherence with the technical rules is not re:uired" 5his liberal policy! howe.er! should
still conform to the rudiments of e:uitable principles of law" Gor instance! belated
submission of e.idence may only be allowed if the delay is ade:uately Lustied and the
e.idence is clearly material to establish the party*s cause" Labor tribunals! such as the
JL&C! are not precluded from recei.in- e.idence submitted on appeal as technical rules
are not bindin- in cases submitted before them" Kowe.er! any delay in the submission
of e.idence should be ade:uately e6plained and should ade:uately pro.e the
alle-ations sou-ht to be pro.en" 7n the present case! EN&2SCN 77*s belated submission
of e.idence cannot be permitted" EN&2SCN 77 did not cite any reason why it had failed
to le its position paper or present its cause before the Labor Arbiter despite suCcient
notice and time -i.en to do so" Nnly after an ad.erse decision was rendered did it
present its defense and rebut the e.idence of Ca-alawan by alle-in- that his transfer
was made in response to the letter>re:uest of the area mana-er of the Pinoo- sub>oCce
as=in- for additional personnel to meet its collection :uota" 5o our mind! howe.er! the
belated submission of the said letter>re:uest without any .alid e6planation casts doubt
on its credibility! especially so when the same is not a newly disco.ered e.idence"
5he rule is that it is within the ambit of the employer*s prero-ati.e to transfer an
employee for .alid reasons and accordin- to the re:uirement of its business! pro.ided
that the transfer does not result in demotion in ran= or diminution of salary! benets
and other pri.ile-es" 5his Court has always considered the mana-ement*s prero-ati.e
to transfer its employees in pursuit of its le-itimate interests" But this prero-ati.e
should be e6ercised without -ra.e abuse of discretion and with due re-ard to the basic
elements of Lustice and fair play! such that if there is a showin- that the transfer was
unnecessary or incon.enient and preLudicial to the employee! it cannot be upheld" Kere!
while we nd that the transfer of Ca-alawan neither entails any demotion in ran= since
he did not ha.e tenurial security o.er the position of head of the disconnection crew!
nor result to diminution in pay as this was not suCciently pro.en by him! EN&2SCN 77*s
e.idence is ne.ertheless not enou-h to show that said transfer was re:uired by the
e6i-ency of the electric cooperati.e*s business interest" Simply stated! the e.idence
sou-ht to be admitted by EN&2SCN 77 is not substantial to pro.e that there was a
-enuine business ur-ency that necessitated the transfer"
@hen there is doubt between the e.idence submitted by the employer and that
submitted by the employee! the scales of Lustice must be tilted in fa.or of the
employee" 5his is consistent with the rule that an employer*s cause could only succeed
on the stren-th of its own e.idence and not on the wea=ness of the employee*s
e.idence" 5hus! EN&2SCN 77 cannot rely on the wea=ness of NrtiD*s certication in order
to -i.e more credit to its own e.idence" Self>ser.in- and unsubstantiated declarations
are not suCcient where the :uantum of e.idence re:uired to establish a fact is
substantial e.idence! described as more than a mere scintilla" 5he e.idence must be
real and substantial! and not merely apparent" EN&2SCN 77 has miserably failed to
dischar-e the onus of pro.in- the .alidity of Ca-alawan*s transfer" ,isamis Driental 00
4le)tri) Servi)e Cooperative 3,DR4SCD 007 vs. @ir(ilio ,. Ca(alaCan. P"&" Jo" 1$'1$0"
September '! 2012"
&etirement benets" @hile it is true that based on pre.ailin- Lurisprudence! disallowed
benets recei.ed in -ood faith need not be refunded! the case before us may be
distin-uished from those cases with that rulin- because the monies in.ol.ed here are
retirement benets" &etirement benets belon- to a di8erent class of benets" All the
cases with that rulin- in.ol.ed benets such as cash -ifts! representation allowances!
rice subsidies! uniform allowances! per diems! transportation allowances! and the li=e"
5he fore-oin- allowances or frin-e benets are -i.en in addition to one*s salary! either
to reimburse him for e6penses he mi-ht ha.e incurred in relation to his wor=! or as a
form of supplementary compensation" Nn the other hand! retirement benets are -i.en
to one who is separated from employment either .oluntarily or compulsorily" Such
benets! subLect to certain re:uisites imposed by law andQor contract! are -i.en to the
employee on the assumption that he can no lon-er wor=" 5hey are also -i.en as a form
of reward for the ser.ices he had rendered" 5he purpose is not to enrich him but to help
him durin- his non>producti.e years"
Nur Decision does not preclude the retirees from recei.in- retirement benets pro.ided
by e6istin- retirement laws" @hat they are prohibited from -ettin- are the additional
benets under the PS7S &GP! which we found to ha.e emanated from a .oid and ille-al
board resolution" 5o allow the payees to retain the disallowed benets would amount to
their unLust enrichment to the preLudice of the PS7S! whose a.owed purpose is to
maintain its actuarial sol.ency to nance the retirement! disability! and life insurance
benets of its members" Government Servi)e 0nsuran)e System 3GS0S7, et al. vs.
Commission on Audit 3CDA7, et al. P"&" Jo" 1(2%$2" September 11! 2012"
&eleaseQYuitclaim/ Separation pay" 5he releaseQ:uitclaim aCda.its are in.alid for bein-
a-ainst public policy for two reasons9 014 the terms of the settlement are
unconscionable/ the separation pay for termination due to reor-aniDationQrestructurin-
was decient by Php;00!000"00 for each employee/ they were -i.en only half of the
amount they were le-ally entitled to/ and 024 the absence of .oluntariness when the
employees si-ned the document! it was their dire circumstances and inability to support
their families that nally dro.e them to accept the amount o8ered" @ithout Lobs and
with families to support! they dallied in e6ecutin- the :uitclaim instrument! but were
e.entually forced to si-n -i.en their circumstances" 5o be sure! a settlement under
these terms is not and cannot be a reasonable one! -i.en especially the respondent*s
len-th of ser.ice F 2' years for ,barola and 1B years for &i.era" Radio ,indanao
NetCork, 0n). and 4ri) S. Canoy vs. Bomin(o P. Ybarola, et al. P"&" Jo" 1B+((2"
September 12! 2012"
&es Ludicata" 1&es Ludicata means a matter adLud-ed/ a thin- Ludicially acted upon or
decided/ a thin- or matter settled by Lud-ment"3 7t denotes 1that a nal Lud-ment or
decree on the merits by a court of competent Lurisdiction is conclusi.e of the ri-hts of
the parties or their pri.ies in all latter suits on all points and matters determined in the
former suit" Gor res Ludicata! in its concept as a bar by former Lud-ment to apply! the
followin- must be present9
1" 5he former Lud-ment or order is nal/
2" 7t is rendered by a court ha.in- Lurisdiction o.er the subLect matter and the
parties/
%" 7t is a Lud-ment or an order on the merits/ and!
;" 5here is between the rst and the second identity of parties! identity of subLect
matter! and identity of cause of action"
5he Decision of this Court in P"&" Jos" 1'B;(0 and 1'B;(1 became nal and e6ecutory
on Eay 20! 2011" 7t is a decision based on the merits of the case and rendered by this
Court in the e6ercise of its appellate Lurisdiction after the parties in.o=ed its
Lurisdiction" 5here is also! between the two sets of consolidated cases! identity of the
parties! subLect matter and causes of action" 5he parties in P"&" Jo" 1'B;(0 and
1'B;(1 are also impleaded as parties in these consolidated cases" And while some of
the parties herein are not included in P"&" Jos" 1'B;(0 and 1'B;(1! the same are only
few" 7n any e.ent! it is well>settled that only substantial! and not absolute! identity of
the parties is re:uired for res Ludicata to lie" 15here is substantial identity of the parties
when there is a community of interest between a party in the rst case and a party in
the second case albeit the latter was not impleaded in the rst case"3
@ith re-ard to identity of cause of action! it has been held that there is identity of
causes of action when the same e.idence will sustain both actions or when the facts
essential to the maintenance of the two actions are identical" Kere! the bone of
contention in both sets of consolidated cases boils down to the nature and
conse:uences of complainants* April %! 2000 mass action" 5he antecedent facts that
-a.e rise to all the cases were the same" Jecessarily! therefore! the same e.idence
would sustain all actions" Such similarity in the e.idence re:uired to sustain all actions
is also borne out by the identity of the issues in.ol.ed in all these cases" @hile the
parties ha.e presented a plethora of ar-uments which we earlier discussed at len-th!
the same nonetheless boil down to the same crucial issues formulated in P"&" Jos"
1'B;(0 and 1'B;(1"
7t should be recalled that in P"&" Jo" 1'%$BB! the complainants assailed the &esolutions
dated January 1;! 2002 and Gebruary 20! 2002 of the CA*s Gourth Di.ision -rantin-
Eetroban=*s re:uest for inLuncti.e reliefs" 5hey claimed that the reinstatement aspect
of the Labor Arbiter*s Decision is immediately e6ecutory" Kence! they are entitled to
bac=wa-es from the time the Labor Arbiter promul-ated his Decision until it was
re.ersed by the JL&C"
As discussed abo.e! howe.er! the Jo.ember 1'! 2010 Decision of this Court in P"&" Jos"
1'B;(0 and 1'B;(1 already adLudicated the respecti.e ri-hts and liabilities of the
parties" Said Decision pronouncin- the monetary awards to which the parties herein are
entitled became nal and e6ecutory on Eay 20! 2011" Ander the rule on immutability of
Lud-ment! this Court cannot alter or modify said Decision" 7t is a well>established rule
that once a Lud-ment has become nal and e6ecutory! it is no lon-er susceptible to any
modication" Solidbank ?nion, et al. vs. ,etropolitan =ank and 1rust
Company2,etropolitan =ank and 1rust Company vs. Solidbank ?nion, et al.2Solidbank
Corporation, et)., et al. vs. Solidbank ?nion, et al.2Solidbank ?nion, et al. vs.
,etropolitan =ank and 1rust Company. P"&" Jo" 1'%$BBQP"&" Jo" 1'$1(BQP"&" Jo"
1'$%2$QP"&" Jo" 1'$'0(" September 1$! 2012"
&einstatement/ Strained relations" A determination of the applicability of the doctrine of
strained relations is essentially a factual :uestion and! thus! not a proper subLect in this
petition" 5his rule! howe.er! admits of e6ceptions" 7n cases where the factual ndin-s
of the LA and the JL&C are conHictin-! the Court! in the e6ercise if e:uity Lurisdiction!
may re.iew and re>e.aluate the factual issues and loo= into the records of the case and
re>e6amine the :uestioned ndin-s"
As the records bear out! the LA found that patent animosity e6isted between ACEC and
Bides considerin- the confrontation that too= place between the latter and Eatthew"
5he confrontation coupled with Bides* refusal to be reinstated led to the LA*s ndin- of
1strained relations3 necessitatin- an award of separation pay in lieu of reinstatement"
5he JL&C! on the other hand! deleted the said award for lac= of factual basis" 5he CA
reinstated the LA*s ndin- of 1strained relations3 and e6plained that too much enmity
had de.eloped between ACEC and Bides that necessarily barred the latter*s
reinstatement"
5he Court is well aware that reinstatement is the rule and! for the e6ception of 1strained
relations3 to apply! it should be pro.ed that it is li=ely that! if reinstated! an atmosphere
of antipathy and anta-onism would be -enerated as to ad.ersely a8ect the eCciency
and producti.ity of the employee concerned"
Ander the doctrine of strained relations! the payment of separation pay is considered an
acceptable alternati.e to reinstatement when the latter option is no lon-er desirable or
.iable" Nn one hand! such payment liberates the employee from what could be a hi-hly
oppressi.e wor= en.ironment" Nn the other hand! it releases the employer from the
-rossly unpalatable obli-ation of maintainin- in its employ a wor=er it could no lon-er
trust" Eoreo.er! the doctrine of strained relations has been made applicable to cases
where the employee decides not to be reinstated and demands for separation pay"
7n the present case! Bides has consistently maintained! from the proceedin-s in the LA
up to the CA! his refusal to be reinstated due to his fear of reprisal which he could
e6perience as a conse:uence of his return" By doin- so! Bides une:ui.ocally foreclosed
reinstatement as a relief"
Apo C'emi)al ,anu+a)turin( and ,i)'ael C'en( vs. Ronaldo A. =ides. P"&" Jo" 1+(002"
September 1B! 2012"
Seafarers disability benets/ Attorney*s fees" 7n determinin- the disability benets due a
seafarer the PN2A Standard 2mployment Contract 0S2C4! specically its schedule of
benets! medical ndin-s! Article 1B2 0c4014 of the Labor Code! and &ule U! Section 2 of
its implementin- rules and re-ulations must be considered" 5he initial treatment period
of 120 days may be e6tended up to a ma6imum of 2;0 days under the conditions
prescribed by law"
Ander Article 22B+ of the Ci.il Code! attorney*s fees can be reco.ered 1#w)hen the
defendant*s act or omission has compelled the plainti8 to liti-ate with third persons or
to incur e6penses to protect his interest"3 5his Court sees no reason why dama-es or
attorney*s fees should be awarded to Penales" 7t is ob.ious that he did not -i.e the
petitioners* company>desi-nated physician ample time to assess and e.aluate his
condition! or to treat him properly for that matter" 5he petitioners had a .alid reason for
refusin- to pay his claims! especially when they were complyin- with the terms of the
PN2A S2C with re-ard to his allowances and treatment" &a)i.) D)ean ,annin( 0n)., et
al. vs. =enGamin B. &enales. P"&" Jo" 1(2+0B" September '! 2012"
January 201% Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Gebruary 11! 201% by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines >
Law [ 5a--ed appeal!arbitration! bac=wa-es! forum shoppin-! JL&C! redundancy! reinstatement [
Kere are select January 201% rulin-s of the Supreme Court of the Philippines on labor
law and procedure9
Appeal to the Jational Labor &elations Commission 0JL&C4/ &e:uisites for perfection of
appeal/ Joint declaration under oath accompanyin- the surety bond/ Substantial
compliance with procedural rules" 5here was substantial compliance with the JL&C
&ules of Procedure when the respondents PAL Earitime Corporation and @estern
Shippin- A-encies! Pte"! Ltd" led! albeit belatedly! the Joint Declaration Ander Nath!
which is re:uired when an employer appeals from the Labor Arbiter*s decision -rantin-
a monetary award and posts a surety bond" Ander the JL&C rules! the followin-
re:uisites are re:uired to perfect the employer*s appeal9 014 it must be led within the
re-lementary period/ 024 it must be under oath! with proof of payment of the re:uired
appeal fee and the postin- of a cash or surety bond/ and 0%4 it must be accompanied by
typewritten or printed copies of the memorandum of appeal! statin- the -rounds relied
upon! the supportin- ar-uments! the reliefs prayed for! and a statement of the date of
receipt of the appealed decision! with proof of ser.ice on the other party of said appeal"
7f the employer posts a surety bond! the JL&C rules further re:uire the submission by
the employer! his or her counsel! and the bondin- company of a Loint declaration under
oath attestin- that the surety bond posted is -enuine and that it shall be in e8ect until
the nal disposition of the case"
7n the case at bar! the respondents posted a surety bond e:ui.alent to the monetary
award and led the notice of appeal and the appeal memorandum within the
re-lementary period" @hen the JL&C subse:uently directed the lin- of a Joint
Declaration Ander Nath! the respondents immediately complied with the said order"
5here was only a late submission of the Joint Declaration" Considerin- that there was
substantial compliance with the rules! the same may be liberally construed" 5he
application of technical rules may be rela6ed in labor cases to ser.e the demands of
substantial Lustice" Rolando L. Cervantes vs. &AL ,aritime Corporation and2or >estern
S'ippin( A(en)ies, &te., Ltd. P"&" Jo" 1$'20B" January 1(! 201%"
Completeness of ser.ice by re-istered mail/ 26ception to the -eneral rule re-ardin- a
corporation*s .erication and certication of non>forum shoppin-/ 7nterpretation of
school CBA" A school CBA must be read in conLunction with statutory and administrati.e
re-ulations -o.ernin- faculty :ualications" Such re-ulations form part of a .alid CBA
without need for the parties to ma=e e6press reference to the same"
7n the case at bar! the Ani.ersity of the 2ast 0A24 repeatedly e6tended only semester>to>
semester faculty appointments to the respondents Pepanio and Bueno! since they had
not completed post-raduate de-rees" 5he respondents! howe.er! claimed that the
1BB; CBA between A2 and the faculty union did not yet re:uire a master*s de-ree for a
teacher to ac:uire re-ular status" Ka.in- rendered more than three consecuti.e years
of full>time ser.ice to the school! the respondents insisted that A2 should ha.e -i.en
them permanent appointments"
5he Supreme Court obser.ed that the policy re:uirin- colle-e teachers to ha.e
post-raduate de-rees was pro.ided in the Eanual of &e-ulations issued as early as
1BB2 by the Department of 2ducation! Culture and Sports 0D2CS4! now the Department
of 2ducation" 7n promul-atin- the Eanual of &e-ulations! D2CS e6ercised its power of
re-ulation o.er educational institutions! which includes prescribin- the minimum
academic :ualications for teachin- personnel" 5he le-islature subse:uently
transferred the power to prescribe such :ualications for teachers in institutions of
hi-her learnin- to the Commission on Ki-her 2ducation 0CK2D4" Kowe.er! the 1BB2
Eanual of &e-ulations issued by D2CS continued to apply to colle-es and uni.ersities
until 2010! when CK2D issued a &e.ised Eanual of &e-ulations"
5hus! the re:uirement of a master*s de-ree for colle-e teachers! as ori-inally pro.ided
in the 1BB2 Eanual of &e-ulations! was deemed incorporated in the 1BB; CBA between
A2 and the faculty union" Gurthermore! the subse:uent CBA in 2001! which pro.ided for
the e6tension of conditional probationary status to the respondents! subLect to their
obtainin- a master*s de-ree within the probationary period! clearly showed that A2
intended to subLect the respondents* appointments to the standards set by the law"
5he re:uirement of a master*s de-ree for tertiary education teachers is not
unreasonable! considerin- that the operation of educational institutions in.ol.es public
interest" 5he -o.ernment has a ri-ht to ensure that only :ualied persons! in
possession of suCcient academic =nowled-e and teachin- s=ills! are allowed to teach in
such institutions"
5he Supreme Court also o.erruled the respondents* contention that A2 led its appeal
to the JL&C beyond the re:uired ten 0104>day period" Gor completeness of ser.ice by
re-istered mail! the rec=onin- period starts either from the date of actual receipt of the
mail by the addressee or after .e 0'4 days from the date he or she recei.ed the rst
notice from the postmaster" 7n this case! the respondents a.erred that! on Earch 1$!
200'! the postmaster -a.e A2*s counsel a notice to claim the mail containin- the Labor
Arbiter*s decision" 5he respondents claimed that A2*s counsel was deemed in receipt of
the decision ' days after the -i.in- of the notice! or on Earch 22! 200'" 5hus!
accordin- to the respondents! when A2 led its appeal to the JL&C on April 1;! 200'!
the 10>day re-lementary period had already lapsed" 5he Supreme Court! howe.er!
ruled that there must be conclusi.e proof that the re-istry notice was recei.ed by or at
least ser.ed on the addressee" 7n this case! the records did not show that A2*s counsel
in fact recei.ed the alle-ed re-istry notice re:uirin- him to claim the mail" Nn the other
hand! A2 was able to present a re-istry return receipt showin- that its counsel actually
recei.ed a copy of the Labor Arbiter*s decision on April ;! 200'" &ec=oned from this
date! the 10>day re-lementary period had not yet lapsed when A2 led its appeal to the
JL&C on April 1;! 200'"
Anent A2*s failure to comply with the -eneral rule that the Board of Directors or Board
of 5rustees of a corporation must authoriDe the person who shall si-n the .erication
and certication of non>forum shoppin- accompanyin- a petition! the Supreme Court
held that such authoriDation is not necessary when it is self>e.ident that the si-natory is
in a position to .erify the truthfulness and correctness of the alle-ations in the petition"
5he Supreme Court declared that Dean 2leanor Ja.ier! who si-ned A2*s .erication and
certication! was in such a position! since she =new the factual antecedents of the case
and she actually communicated with the respondents re-ardin- the re:uired
post-raduate :ualication" ?niversity o+ t'e 4ast, et al. vs. AnaliAa 8. &epanio and
,ariti B. =ueno. P"&" Jo" 1B%+B$" January 2%! 201%"
Disease as a -round for termination/ &etirement under the Labor Code/ A-e and tenure
re:uirements for retirement/ Ginancial assistance" Ander the Labor Code pro.ision on
disease as a -round for termination 0formerly! Article 2+;! but now renumbered
pursuant to &epublic Act Jo" 101'14! it must be the employer who initiates the
termination of the employee*s ser.ices" 5he aforementioned pro.ision cannot be
applied in this case! considerin- that it was the late petitioner Padillo! and not the &ural
Ban= of Jabunturan! 7nc" 0Ban=4! who se.ered the employment relations" @ith his
memory impaired after su8erin- a mild stro=e due to hypertension! Padillo wrote a letter
to the Ban=! e6pressin- his intention to a.ail of an early retirement pac=a-e" 5he clear
import of Padillo*s letter and the fact that he had stopped reportin- for wor= e.en before
sendin- the said letter shows that he .oluntarily retired" Pi.en the inapplicability of the
Labor Code pro.ision on disease as a -round for termination! it necessarily follows that
Padillo*s claim for separation pay must be denied"
As re-ards Padillo*s claim for retirement benets! the pro.ision of the Labor Code on
retirement 0formerly! Art" 2+$! but now renumbered pursuant to &"A" Jo" 101'14 states
that! in the absence of any applicable a-reement! an employee who has ser.ed at least
.e 0'4 years in the company may retire upon reachin- the a-e of si6ty 0(04 years! but
not beyond si6ty>.e 0('4 years! to be entitled to retirement pay e:ui.alent to at least
one>half 01Q24 month salary for e.ery year of ser.ice! with a fraction of at least si6 0(4
months bein- considered as one whole year" Jotably! the aforementioned a-e and
tenure re:uirements are cumulati.e! and non>compliance with either ne-ates the
employee*s entitlement to the retirement pay under the Labor Code" 7n this case! the
Ban= did not ha.e a retirement plan or any other contract with its employees! settin-
the terms and conditions for retirement" Padillo also ser.ed the Ban= for twenty>nine
02B4 years! far more than the '>year tenure re:uirement" Padillo! howe.er! did not meet
the a-e re:uirement! considerin- that he was only fty>.e 0''4 years old! or less than
(0 years of a-e! when he retired" 5hus! Padillo*s claim for retirement pay must also be
denied"
Je.ertheless! the Supreme Court awarded Padillo nancial assistance in the amount of
P$'!000! considerin- the len-th of time which had super.ened before the disposition of
this case and Padillo*s unblemished record of 2B years of ser.ice to the Ban=" 5he
award was in addition to the P100!000 benet recei.able under the Philam Life Plan that
the Ban= had procured in fa.or of Padillo" 4leaAar S. &adillo vs. Rural =ank o+
Nabunturan, 0n)., et al. P"&" Jo" 1BB%%+" January 21! 201%"
&edundancy as an authoriDed cause for termination/ Di8erence between retirement and
termination due to redundancy/ Peneral rule re-ardin- the factual ndin-s of the JL&C
and the e6ceptions thereto" Ander the Labor Code! redundancy is one of the authoriDed
causes for termination of employment" 5he followin- are the re:uisites for the .alid
implementation of a redundancy pro-ram9 0a4 the employer must ser.e a written notice
to the a8ected employees and to the Department of Labor and 2mployment 0DNL24 at
least one month before the intended date of termination/ 0b4 the employer must pay the
employees separation pay e:ui.alent to at least one month pay or at least one month
pay for e.ery year of ser.ice! whiche.er is hi-her/ 0c4 the employer must abolish the
redundant positions in -ood faith/ and 0d4 the employer must set fair and reasonable
criteria in ascertainin- which positions are redundant and may be abolished" 5he
Supreme Court has also held that a company cannot simply declare redundancy without
basis" 5o e6hibit its -ood faith and to show that there were fair and reasonable criteria
in ascertainin- redundant positions! a company claimin- to be o.er manned must
produce ade:uate proof of the same"
7n the case at bar! the Peneral Eillin- Corporation 0PEC4 furnished respondent MiaLar a
written notice informin- her of the termination of her ser.ices on the -round of
redundancy" PEC also submitted to the DNL2 an 2stablishment 5ermination &eport!
re-ardin- the employees! includin- MiaLar! whose positions were deemed redundant"
MiaLar and the DNL2 recei.ed the respecti.e notices one month before the e8ecti.e date
of the employees* termination" Gurthermore! PEC issued to MiaLar two chec=s
amountin- to P;;0!2'%"02 and P21!211"%'! representin- her separation pay" Kowe.er!
the Supreme Court held that! notwithstandin- compliance with the re:uirements on
notice and the payment of separation pay! PEC is still considered to ha.e ille-ally
dismissed MiaLar because the company failed to present substantial proof to support its
-eneral alle-ations of redundancy" PEC could ha.e presented e.idence to substantiate
redundancy! such as a new staCn- pattern or feasibility studies or proposals on the
.iability of newly created positions! Lob descriptions and the appro.al by mana-ement
of the restructurin- pro-ram! or the company*s audited nancial reports" Kowe.er! no
such e.idence was submitted by PEC"
Nn the other hand! MiaLar presented proof ne-atin- PEC*s claim of redundancy and
clearly showin- PEC*s bad faith in implementin- the redundancy pro-ram9 014 PEC had
hired new employees before it terminated MiaLar*s employment/ 024 MaiLar was barred
from enterin- the company premises e.en before the e8ecti.ity of her separation/ and
0%4 MiaLar was also forced to si-n an 1Application for &etirement and Benets3 so that
she could a.ail of her separation pay" 5he last circumstance is si-nicant! considerin-
that there is a di8erence between .oluntary retirement and forced termination of an
employee" &etirement from ser.ice is contractual or based on a bilateral a-reement of
the employer and the employee! while termination of employment is statutory or
-o.erned by the Labor Code and other related laws" Moluntary retirement cuts
employment ties! lea.in- no residual employer liability/ in.oluntary retirement amounts
to a dischar-e! renderin- the employer liable for termination without cause" PEC*s
demand that MiaLar si-n an Application for &etirement and Benets! when she had
already been informed of the termination of her ser.ices due to redundancy! shows that
this case in.ol.es not a .oluntary retirement! but an ille-al termination"
@hile the Labor Arbiter and the JL&C both found that MiaLar was .alidly dismissed! the
-eneral rule that the factual ndin-s of the JL&C must be accorded respect and nality
is not applicable in this case" Nne of the e6ceptions to the said rule co.ers instances
when the ndin-s of fact of the trial court! or of the :uasi>Ludicial a-encies concerned!
are conHictin- or contradictory with those of the Court of Appeals! as in the present
case" Another e6ception to the -eneral rule is when the said ndin-s are not supported
by substantial e.idence or the inference or conclusion arri.ed at is manifestly
erroneous" 7n the case at bar! the Supreme Court a-reed with the Court of Appeals that
the JL&C*s conclusion that MiaLar was le-ally dismissed is manifestly
erroneous" General ,illin( Corporation vs. @ioleta L. @iaGar. P"&" Jo" 1+1$%+" January
%0! 201%"
&einstatement/ Bac=wa-es" 7t is basic in Lurisprudence that ille-ally dismissed wor=ers
are entitled to reinstatement with bac=wa-es plus interest at the le-al rate"
5his labor contro.ersy started when the employer Automoti.e 2n-ine &ebuilders! 7nc"
0A2&4 and the Pro-resibon- Anyon n- m-a Ean--a-awa sa A2& 0Anion4 led char-es
a-ainst each other for .iolatin- labor laws" A2& led a complaint a-ainst the Anion and
ei-hteen 01+4 of its members for conductin- an ille-al stri=e" Nn the other hand! thirty>
two 0%24 employees led a complaint a-ainst A2& for unfair labor practices! ille-al
dismissal! ille-al suspension! and run>away shop" 7n a pre.ious decision 0P"&" Jo"
1(01%+! July 1%! 20114! the Supreme Court had held that both parties were at fault or in
pari deli)to/ hence! the complainin- employees should be reinstated but without
bac=wa-es" 5he Eotion for Partial &econsideration led by the Anion is resol.ed in the
present case"
5he Supreme Court found that! of the %2 employees who led the complaint a-ainst
A2&! only 1+ had been char-ed by A2& with ille-al stri=e! lea.in- 1; e6cluded from the
employer*s complaint" As no char-es had been led a-ainst the 1; wor=ers! they
cannot be found -uilty of ille-al stri=e" Jeither can they be considered in pari deli)to"
Kowe.er! of the 1; employees! .e failed to write their names and aC6 their si-natures
in the Eembership &esolution attached to their petition before the Court of Appeals!
authoriDin- the union president to represent them" 5hus! while these .e employees
will also be reinstated! they cannot be -ranted bac=wa-es" Nn the other hand! the nine
wor=ers who si-ned their names in the aforementioned Eembership &esolution will be
reinstated with bac=wa-es plus interest at the le-al rate" Automotive 4n(ine
Rebuilders, 0n). 3A4R7, et al. vs. &ro(resibon( ?nyon n( m(a ,an((a(aCa sa A4R, et al.
2 &ro(resibon( ?nyon n( m(a ,an((a(aCa sa A4R, et al. vs. Automotive 4n(ine
Rebuilders, 0n)., et al. P"&" Jos" 1(01%+ and 1(01B2" January 1(! 201%"
&esi-nation/ &esi-nation in relation to the subse:uent lin- of an ille-al dismissal
case" Petitioner Cer.antes*s claim that he did not resi-n but was terminated from
employment is untenable" &esi-nation is the .oluntary act of an employee who nds
himself in a situation where he belie.es that personal reasons cannot be sacriced in
fa.or of the e6i-ency of the ser.ice! such that he has no other choice but to
disassociate himself from his employment"
7n the present case! Cer.antes*s employer merely informed him of the numerous
complaints a-ainst him" 7t was Cer.antes himself who opted to be relie.ed from his
post and who initiated his repatriation to Eanila" 5his is clear from the tenor of his tele6
messa-e! which reads in part9 1AJ,KN@ 5N AMN7D &2P25757NJ #NJ) EN&2 KA&SK
&2PN&5S 5N CNE2" B2552& A&&AJP2 E, &2L72M2& #AJD) CQN BAS57LLN &2L72M2&
ALSN" APNJ A&& J2U5 ASA LNAD7JP PN&5 GN& 5K27& SA57SGAC57NJ"3 Cer.antes*s
messa-e contains an unmista=able demand to be relie.ed of his assi-nment" Kis
employer merely accepted his resi-nation" 5hus! the rule that the lin- of a complaint
for ille-al dismissal is inconsistent with resi-nation does not hold true in this case" 5he
clear tenor of Cer.antes*s resi-nation letter and the lin- of this case one year after his
alle-ed termination shows that the complaint for ille-al dismissal was a mere
afterthou-ht" Rolando L. Cervantes vs. &AL ,aritime Corporation and2or >estern
S'ippin( A(en)ies, &te., Ltd. P"&" Jo" 1$'20B" January 1(! 201%"
Moluntary Arbitration/ Plenary authority and Lurisdiction of a .oluntary arbitrator/
Concept and e6ercise of mana-ement prero-ati.e/ Limitations on the e6ercise of
mana-ement prero-ati.e/ Jature of collecti.e bar-ainin- a-reements 0CBA4" Poya!
7nc"*s contention that the Moluntary Arbitrator 0MA4 e6ceeded his power in rulin- on a
matter not co.ered by the sole issue submitted for .oluntary arbitration is untenable" 7n
a prior case! the Supreme Court has ruled that! in -eneral! the arbitrator is e6pected to
decide those :uestions e6pressly stated and limited in the submission a-reement"
Kowe.er! since arbitration is the nal resort for the adLudication of disputes! the
arbitrator can assume that he has the power to ma=e a nal settlement" 5he MA has
plenary Lurisdiction and authority to interpret the CBA and to determine the scope of his
or her own authority" SubLect to Ludicial re.iew! this leeway of authority and ade:uate
prero-ati.e is aimed at accomplishin- the rationale of the law on .oluntary arbitration F
speedy labor Lustice"
7n the case at bar! Poya! 7nc" and Poya! 7nc" 2mployees Anion 0Anion4 submitted for
.oluntary arbitration the sole issue of whether or not the company is -uilty of an unfair
labor practice in en-a-in- the ser.ices of P2SN! a third party ser.ice pro.ider! under
e6istin- CBA! laws! and Lurisprudence" 5he Anion claimed that the hirin- of contractual
wor=ers from P2SN .iolated the CBA pro.ision that prescribes only three cate-ories of
wor=ers in the company! namely9 the probationary! the re-ular! and the casual
employees" 7nstead of hirin- contractual wor=ers! Poya! 7nc" should ha.e hired
probationary or casual employees! who could ha.e become additional Anion members!
pursuant to the union security clause in the CBA" 5he MA ruled that while Poya! 7nc" was
not -uilty of any unfair labor practice! it still committed a .iolation of the CBA! thou-h
such .iolation was not -ross in character" 5he Supreme Court held that the MA*s rulin-
is interrelated and intertwined with the sole issue submitted for arbitration" 5he rulin-
was necessary to ma=e a complete and nal adLudication of the dispute between the
parties"
Gurthermore! Poya! 7nc"*s assertion that its hirin- of contractual wor=ers was a .alid
e6ercise of mana-ement prero-ati.e is erroneous" Declarin- that a particular act falls
within the concept of mana-ement prero-ati.e is si-nicantly di8erent from
ac=nowled-in- that such act is a .alid e6ercise thereof" @hile the MA and the Court of
Appeals ruled that the act of contractin- out or outsourcin- wor= is within the pur.iew
of mana-ement prero-ati.e! they did not declare such act to be a .alid e6ercise
thereof" As repeatedly held! the e6ercise of mana-ement prero-ati.e is not unlimited/ it
is subLect to the limitations found in the law! CBA! or -eneral principles of fair play and
Lustice"
7n this case! the CBA pro.ision prescribin- the cate-ories of employees in the company
and the union security clause are interconnected and must be -i.en full force and
e8ect" 5he parties in a CBA are free to establish such stipulations they may deem
con.enient! pro.ided that the same are not contrary to law! morals! -ood customs!
public order! or public policy" @here the CBA is clear and unambi-uous! the literal
meanin- of its stipulations shall control" 5he CBA becomes the law between the parties!
and compliance therewith is mandated by the e6press policy of the law" Goya, 0n). vs.
Goya, 0n). 4mployees ?nion688>. P"&" Jo" 1$00';" January 21! 201%"
December 201% Philippine Supreme
Court Decisions on Labor Law
Posted on January 1$! 201; by Leslie C" Dy [ Posted in Labor Law! Philippines > Cases! Philippines > Law
[
Kere are select December 201% rulin-s of the Supreme Court of the Philippines on labor
law9
Appeal/ JL&C/ accredited bondin- company/ re.ocation of authority is prospecti.e in
application" 5he respondents led a surety bond issued by Security Pacic Assurance
Corporation 0Security Pacic4 on June 2+! 2002" At that time! Security Pacic was still an
accredited bondin- company" Kowe.er! the JL&C re.o=ed its accreditation on Gebruary
1(! 200%" 5his subse:uent re.ocation should not preLudice the respondents who relied
in -ood faith on the then subsistin- accreditation of Security Pacic" 7n Del &osario ."
Philippine Journalists! 7nc" 0P"&" Jo" 1+1'1(! Au-ust 1B! 200B4! it was held that a
bondin- company*s re.ocation of authority is prospecti.e in application" Jonetheless!
the respondents should post a new bond issued by an accredited bondin- company in
compliance with para-raph ;! Section (! &ule ( of the JL&C &ules of Procedure! which
states that 1#a) cash or surety bond shall be .alid and e8ecti.e from the date of deposit
or postin-! until the case is nally decided! resol.ed or terminated or the award
satised"3 >il(en Loon, et al. v. &oCer ,aster, 0n)., et al., P"&" Jo" 1+B;0;! December
11! 201%"
Appeal/ JL&C/ bond/ Lurisdictional" Para-raph 2! Article 22% of the Labor Code pro.ides
that 1#i)n case of a Lud-ment in.ol.in- a monetary award! an appeal by the employer
may be perfected only upon the postin- of a cash or surety bond issued by a reputable
bondin- company duly accredited by the JL&C in the amount e:ui.alent to the
monetary award in the Lud-ment appealed from"3 Contrary to the respondents* claim!
the issue of the appeal bond*s .alidity may be raised for the rst time on appeal since
its proper lin- is a Lurisdictional re:uirement" 5he re:uirement that the appeal bond
should be issued by an accredited bondin- company is mandatory and Lurisdictional"
5he rationale of re:uirin- an appeal bond is to discoura-e the employers from usin- an
appeal to delay or e.ade the employees* Lust and lawful claims" 7t is intended to assure
the wor=ers that they will recei.e the money Lud-ment in their fa.or if the employer*s
appeal is dismissed" >il(en Loon, et al. v. &oCer ,aster, 0n)., et al., P"&" Jo" 1+B;0;!
December 11! 201%"
Appeal/ JL&C/ .erication/ formal re:uisite! not Lurisdictional" Jeither the laws nor the
rules re:uire the .erication of the supplemental appeal" Gurthermore! .erication is a
formal! not a Lurisdictional! re:uirement" 7t is mainly intended to -i.e assurance that the
matters alle-ed in the pleadin- are true and correct and not of mere speculation" Also!
a supplemental appeal is merely an addendum to the .eried memorandum on appeal
that was earlier led in the case/ hence! the re:uirement for .erication has been
substantially complied" >il(en Loon, et al. v. &oCer ,aster, 0n)., et al., P"&" Jo" 1+B;0;!
December 11! 201%"
Appeal/ &ule ;'/ limited to re.iew of :uestions of law" 7n this &ule ;' petition for re.iew
on certiorari! the Supreme Court 0SC4 re.iewed the Court of Appeals* 0CA4 decision of a
&ule (' petition for certiorari" 5he Supreme Court*s power of re.iew in such case is
limited to le-al errors that the CA mi-ht ha.e committed in issuin- its assailed decision!
in contrast with the re.iew for Lurisdictional errors which it underta=es in an ori-inal
certiorari 0&ule ('4 action led with it" 5he SC e6amines the CA decision based on how it
determined the presence or absence of -ra.e abuse of discretion in the manner by
which the JL&C rendered its decision and not on the basis of whether the JL&C decision
on the merits of the case was correct" Eoreo.er! the Court*s power in a &ule ;' petition
limits it to a re.iew of :uestions of law raised a-ainst the assailed CA decision" =a(uio
Central ?niversity v. 0(na)io Gallente, P"&" Jo" 1++2($! December 2! 201%"
Attorney*s fees/ when entitled" An employee is entitled to an award of attorney*s fees
e:ui.alent to ten percent 010<4 of the amount of the wa-es in actions for unlawful
withholdin- of wa-es pursuant to Article 111 of the Labor Code" >il(en Loon, et al. v.
&oCer ,aster, 0n)., et al., P"&" Jo" 1+B;0;! December 11! 201%"
Bac=wa-es/ when entitled" 7n termination cases! the burden of pro.in- Lust and .alid
cause for dismissin- an employee from his employment rests upon the employer" 5he
employer*s failure to dischar-e this burden in the instant case arisin- from their non>
submission of e.idence at the proceedin-s before the labor arbiter resulted in the
ndin- that the dismissal is unLustied" 5hus! the employees are entitled to the
payment of bac=wa-es" >il(en Loon, et al. v. &oCer ,aster, 0n)., et al., P"&" Jo"
1+B;0;! December 11! 201%"
Deeds of release and :uitclaim/ -rounds to in.alidate" As a rule! deeds of release and
:uitclaim cannot bar employees from demandin- benets to which they are le-ally
entitled or from contestin- the le-ality of their dismissal" 5he acceptance of those
benets would not amount to estoppel" 5o e6cuse respondents from complyin- with the
terms of their wai.ers! any one of the followin- -rounds must e6ist9 014 the employer
used fraud or deceit in obtainin- the wai.ers/ 024 the consideration the employer paid is
incredible and unreasonable/ or 0%4 the terms of the wai.er are contrary to law! public
order! public policy! morals! or -ood customs or preLudicial to a third person with a ri-ht
reco-niDed by law" 5he Court concluded that the instant case falls under the rst
situation"
As the -round for termination of employment was ille-al! the :uitclaims are deemed
ille-al because the employees* consent had been .itiated by mista=e or fraud" 5he law
loo=s with disfa.or upon :uitclaims and releases by employees pressured into si-nin-
by unscrupulous employers minded to e.ade le-al responsibilities" 5he circumstances
show that petitioner*s misrepresentation led its employees! specically respondents
herein! to belie.e that the company was su8erin- losses which necessitated the
implementation of the .oluntary retirement and retrenchment pro-rams! and e.entually
the e6ecution of the deeds of release! wai.er and :uitclaim" 5he amounts already
recei.ed by respondents as consideration for si-nin- the releases and :uitclaims!
howe.er! should be deducted from their respecti.e monetary awards" &'ilippine Carpet
,anu+a)turin( Corporation, et al. v. 0(na)io =. 1a(yamon, et al., P"&" Jo" 1B1;$'!
December 11! 201%"
Disability benets/ principle of wor=>a--ra.ation/ concept of" Compensability may be
established on the basis of the theory of wor= a--ra.ation if! by substantial e.idence! it
can be demonstrated that the wor=in- conditions a--ra.ated or at least contributed in
the ad.ancement of respondent*s cancer" As held in &osario ." Den=la. Earine! 1the
burden is on the beneciaries to show a reasonable connection between the causati.e
circumstances in the employment of the deceased employee and his death or
permanent total disability"3 7n the present case! both parties failed to dischar-e their
respecti.e burdens F for petitioners! they failed to pro.e the non>wor=>relatedness of
the disease/ and for respondent! he failed to pro.e that his wor= a--ra.ated his
condition" 5hus! the Court had to resol.e the case on some other basis" 5he Court held
that disability should be understood not more on its medical si-nicance! but on the
loss of earnin- capacity" Permanent total disability means disablement of an employee
to earn wa-es in the same =ind of wor= or wor= of similar nature that he was trained for
or accustomed to perform! or any =ind of wor= which a person of his mentality and
attainment could do" 7t does not mean absolute helplessness" 2.idence of this condition
can be found in a certication of tnessQuntness to wor= issued by the company>
desi-nated physician" 7n this case! records re.eal that the medical report issued by the
company>desi-nated oncolo-ist was bereft of any certication that respondent
remained t to wor= as a seafarer despite his cancer" 5his is important! accordin- to the
Court! since the certication is the document that contains the assessment of his
disability which can be :uestioned in case of disa-reement as pro.ided under Section
20 0B4 0%4 of the PN2A>S2C" 7n the absence of any certication! the law presumes that
the employee remains in a state of temporary disability" Should no certication be
issued within 2;0 day ma6imum period! as in this case! the pertinent disability becomes
permanent in nature" Accordin-ly! the Court aCrmed respondent*s entitlement to
permanent total disability benets awarded to him" $ebsens ,aritime, 0n)., et al. v.
4leno A. =aol, P"&" Jo" 20;0$(! December ;! 201%"
Disability benets/ principle of wor=>relation/ concept of" As a -eneral rule! the principle
of wor=>relation re:uires that the disease in :uestion must be one of those listed as an
occupational disease under Sec" %2>A of the PN2A>S2C" Je.ertheless! should it be not
classied as occupational in nature! Section 20 0B4 para-raph ; of the PN2A>S2C
pro.ides that such diseases are disputably presumed as wor=>related"
7n this case! it is undisputed that Jasopharyn-eal Carcinoma 0JPC4 aIicted respondent
while on board the petitioners* .essel" As a non>occupational disease! it has the
disputable presumption of bein- wor=>related" 5his presumption ob.iously wor=s in the
seafarer*s fa.or" Kence! unless contrary e.idence is presented by the employers! the
wor=>relatedness of the disease must be sustained" 5he Court held that the petitioners!
as employers! failed to dispro.e the presumption of JPC*s wor=>relatedness" 5he
petitioners primarily relied on the medical report issued by Dr" Co Pea which! howe.er!
failed to ma=e a cate-orical statement conrmin- the total absence of wor= relation" As
the doctor opined only a probability! there was no certainty that his condition was not
wor= related" 5here bein- no certainty! the Court will lean in fa.or of the seafarer
consistent with the mandate of PN2A>S2C to secure the best terms and conditions of
employment for Gilipino wor=ers" Kence! the presumption of JPC*s wor=>relatedness
stays" $ebsens ,aritime, 0n)., et al. v. 4leno A. =aol, P"&" Jo" 20;0$(! December ;!
201%"
7lle-al dismissal/ burden of proof" 7n termination cases! the burden of pro.in- Lust and
.alid cause for dismissin- an employee from his employment rests upon the employer"
5he employer*s failure to dischar-e this burden results in the ndin- that the dismissal
is unLustied"
Gailin- to pro.e Lust and .alid cause for the dismissal! the Court held that the petitioners
are entitled to salary di8erential! ser.ice incenti.e! holiday! and thirteenth month pays"
As in ille-al dismissal cases! the -eneral rule is that the burden rests on the defendant
to pro.e payment rather than on the plainti8 to pro.e non>payment of these money
claims" Kowe.er! the Court decided that they are not entitled to o.ertime and premium
pays" 5he burden of pro.in- entitlement to o.ertime pay and premium pay for holidays
and rest days rests on the employee because these are not incurred in the normal
course of business" 7n the present case! the petitioners failed to adduce any e.idence
that would show that they actually rendered ser.ice in e6cess of the re-ular ei-ht
wor=in- hours a day! and that they in fact wor=ed on holidays and rest days" >il(en
Loon, et al. v. &oCer ,aster, 0n)., et al., P"&" Jo" 1+B;0;! December 11! 201%"
Labor cases/ strict adherence to the technical rules of procedure is not re:uired/ when
liberality allowed" 7n labor cases! strict adherence to the technical rules of procedure is
not re:uired" 5ime and a-ain! the Court has allowed e.idence to be submitted for the
rst time on appeal with the JL&C in the interest of substantial Lustice" 5hus! it has
consistently supported the rule that labor oCcials should use all reasonable means to
ascertain the facts in each case speedily and obLecti.ely! without re-ard to
technicalities of law or procedure! in the interest of due process" Kowe.er! this liberal
policy should still be subLect to rules of reason and fairplay" 5he liberality of procedural
rules is :ualied by two re:uirements9 014 a party should ade:uately e6plain any delay
in the submission of e.idence/ and 024 a party should suCciently pro.e the alle-ations
sou-ht to be pro.en" 5he reason for these re:uirements is that the liberal application of
the rules before :uasi>Ludicial a-encies cannot be used to perpetuate inLustice and
hamper the Lust resolution of the case" Jeither is the rule on liberal construction a
license to disre-ard the rules of procedure" 7n the present case! the Court held that the
respondents failed to ade:uately e6plain their delay in the submission of e.idence and
pro.e the alle-ations sou-ht to be pro.en" >il(en Loon, et al. v. &oCer ,aster, 0n)., et
al., P"&" Jo" 1+B;0;! December 11! 201%"
Labor/ -round for .alid dismissal/ loss of trust and condence/ re:uisites" Loss of trust
and condence is a Lust cause for dismissal under Article 2+20c4 of the Labor Code"
Article 2+20c4 pro.ides that an employer may terminate an employment for 1fraud or
willful breach by the employee of the trust reposed in him by his employer or duly
authoriDed representati.e"3 Kowe.er! in order for the employer to properly in.o=e this
-round! the employer must satisfy two conditions" Girst! the employer must show that
the employee concerned holds a position of trust and condence" Second! the employer
must establish the e6istence of an act Lustifyin- the loss of trust and condence" 5o be a
.alid cause for dismissal! the act that betrays the employer*s trust must be real! i"e"!
founded on clearly established facts! and the employee*s breach of the trust must be
willful! i"e"! it was done intentionally! =nowin-ly and purposely! without Lustiable
e6cuse"
7n LopeD ." Seppel Ban= Philippines! 7nc" 0P"&" Jo" 1$(+00! September '! 20114! the
Court repeated the -uidelines for the application of loss of condence as follows9 014
loss of condence should not be simulated/ 024 it should not be used as a subterfu-e for
causes which are improper! ille-al or unLustied/ 0%4 it may not be arbitrarily asserted in
the face of o.erwhelmin- e.idence to the contrary/ and 0;4 it must be -enuine! not a
mere afterthou-ht to Lustify an earlier action ta=en in bad faith"
As applied to the dismissal of mana-erial employees! employers F as a rule F enLoy
wider latitude of discretion" 5hey are not re:uired to present proof beyond reasonable
doubt as the mere e6istence of a basis for belie.in- that such employee has breached
the trust of the employer would suCce for the dismissal" 5hus! as lon- as the employer
1has reasonable -round to belie.e that the employee concerned is responsible for the
purported misconduct! and the nature of his participation therein renders him unworthy
of the trust and condence demanded of his position!3 the dismissal on this -round is
.alid"
5he Court held that there was suCcient basis to dismiss the respondent for loss of trust
and condence" Girst! the Court belie.ed that the respondent held a position of trust
and condence because he was a mana-erial employee of the petitioner" As the Dean
of two of the petitioner*s departments! he was tas=ed! amon- others! to assist the
school head in all matters a8ectin- the -eneral policies of the entire institution! to direct
and ad.ise the students in their pro-rams of study and to appro.e their subLect load
and e6ercise educational leadership amon- his faculty" 5hese tas=s in.ol.ed the
e6ercise of powers and prero-ati.es e:ui.alent to mana-erial actions" Second! the
Court ruled that the respondent committed wilful breach of trust suCcient to Lustify
dismissal" 5he heart of the loss>of>trust char-e is the employee*s betrayal of the
employer*s trust" 1Dama-e a--ra.ates the char-e but its absence does not miti-ate nor
ne-ate the employee*s liability" 5he respondent betrayed his owed delity the moment
he en-a-ed in a .enture that re:uired him to perform tas=s and ma=e calculated
decisions which his duty to the petitioner would ha.e e:ually re:uired him to perform or
would ha.e otherwise re:uired him to oppose" 5he Court was con.inced that actual
conHict of interest e6isted when respondent sou-ht to conduct re.iew courses for
nursin- e6amination =nowin- that the petitioner was already o8erin- similar classes"
5he respondent*s -ood intentions were beside the point" Altimately! the determinant is
his deliberate en-a-ement in a .enture that would ha.e directly conHicted with the
petitioner*s interests" 7f respondent merely intended to help the petitioner and its
students in increasin- their chances of passin- the Ci.il Ser.ice 26amination! he could
ha.e Lust o8ered! as part of the BCA*s course curriculum! re.iew classes for the Ci.il
Ser.ice 26amination instead of alto-ether or-aniDin- a re.iew center that ob.iously will
o8er the course to e.eryone minded to enroll" =a(uio Central ?niversity v. 0(na)io
Gallente, P"&" Jo" 1++2($! December 2! 201%"
Labor/ .alid dismissal/ re:uisites" Nur Constitution! statutes and Lurisprudence uniformly
-uarantee to e.ery employee or wor=er tenurial security" @hat this means is that an
employer shall not dismiss an employee e6cept for Lust or authoriDed cause and only
after due process is obser.ed" 5hus! for an employee*s dismissal to be .alid! the
employer must meet these basic re:uirements of9 014 Lust or authoriDed cause 0which
constitutes the substanti.e aspect of a .alid dismissal4/ and 024 obser.ance of due
process 0the procedural aspect4" =a(uio Central ?niversity v. 0(na)io Gallente, P"&" Jo"
1++2($! December 2! 201%"
Petition for re.iew on certiorari/ only :uestions of law can be re.iewed/ e6ceptions"5he
well>entrenched rule in this Lurisdiction is that only :uestions of law may be entertained
by the SC in a petition for re.iew on certiorari under &ule ;'" 5his rule! howe.er! is not
absolute and admits certain e6ceptions! such as when the petitioner persuasi.ely
alle-es that there is insuCcient or insubstantial e.idence on record to support the
factual ndin-s of the tribunal or court a :uo as Section '! &ule 1%% of the &ules of
Court states in e6press terms that in cases led before administrati.e or :uasi>Ludicial
bodies! a fact may be deemed established only if supported by substantial
e.idence" $ebsens ,aritime, 0n)., et al. v. 4leno A. =aol, P"&" Jo" 20;0$(! December ;!
201%"
Probationary employment/ concept of/ probationer can only :ualify upon fulllment of
the reasonable standards set for permanent employment of a teachin- personnel"
Probationary employment refers to the trial sta-e or period durin- which the employer
e6amines the competency and :ualications of Lob applicants! and determines whether
they are :ualied to be e6tended permanent employment status" Such an arran-ement
a8ords an employer the opportunity F before the full force of the -uarantee of security
of tenure comes into play F to fully scrutiniDe and obser.e the tness and worth of
probationers while on the Lob and to determine whether they would become proper and
eCcient employees" 7t also -i.es the probationers the chance to pro.e to the employer
that they possess the necessary :ualities and :ualications to meet reasonable
standards for permanent employment"
Eere completion of the three>year probation! e.en with an abo.e>a.era-e performance!
does not -uarantee that the employee will automatically ac:uire a permanent
employment status" 7t is settled Lurisprudence that the probationer can only :ualify
upon fulllment of the reasonable standards set for permanent employment of a
teachin- personnel"
5he Court ruled that the re:uirement to obtain a master*s de-ree was made =nown to
the petitioner" 5he contract she si-ned clearly incorporates the rules! re-ulations! and
employment conditions contained in the SSC Gaculty Eanual" 5he Eanual pro.ided for a
criteria for permanency which includes! amon- others! the re:uirement that the faculty
member must ha.e completed at least a master*s de-ree" Miewed ne6t to the
statements and actions of Eanaois F i"e"! the references to obtainin- a master*s de-ree
in her application letter! in the subse:uent correspondences between her and SSC! and
in the letter see=in- the e6tension of a teachin- load for the school year 200%>200;/
and her submission of certications from AP and from her thesis ad.iser F the Court
found that there is indeed substantial e.idence pro.in- that she =new about the
necessary academic :ualications to obtain the status of permanency" $o)elyn -errera6
,anaois v. St. S)'olasti)aNs Colle(e, P"&" Jo" 1++B1;! December 11! 201%"
Probationary employment/ part>time member of the academic personnel/ re:uisites to
ac:uire permanence of employment and security of tenure" Pursuant to the 1BB2
Eanual of &e-ulations for Pri.ate Schools! pri.ate educational institutions in the tertiary
le.el may e6tend 1full>time faculty3 status only to those who possess! inter alia! a
master*s de-ree in the eld of study that will be tau-ht" 5his minimum re:uirement is
neither subLect to the prero-ati.e of the school nor to the a-reement between the
parties" Gor all intents and purposes! this :ualication must be deemed impliedly written
in the employment contracts between pri.ate educational institutions and prospecti.e
faculty members" 5he issue of whether probationers were informed of this academic
re:uirement before they were en-a-ed as probationary employees is thus no lon-er
material! as those who are see=in- to be educators are presumed to =now these
mandated :ualications" 5hus! all those who fail to meet the criteria under the 1BB2
Eanual cannot le-ally attain the status of permanent full>time faculty members! e.en if
they ha.e completed three years of satisfactory ser.ice"
Gurther! the Court stated that in line with academic freedom and constitutional
autonomy! an institution of hi-her learnin- has the discretion and prero-ati.e to impose
standards on its teachers and determine whether these ha.e been met" Apon
conclusion of the probation period! the colle-e or uni.ersity! bein- the employer! has
the sole prero-ati.e to ma=e a decision on whether or not to re>hire the probationer" 5he
probationer cannot automatically assert the ac:uisition of security of tenure and force
the employer to renew the employment contract" 7n the case at bar! petitioner failed to
comply with the stated academic :ualications re:uired for the position of a permanent
full>time faculty member" $o)elyn -errera6,anaois v. St. S)'olasti)aNs Colle(e,P"&" Jo"
1++B1;! December 11! 201%"
Yuestion of law/ distin-uished from a :uestion of fact" A :uestion of law arises when the
doubt or contro.ersy concerns the correct application of law or Lurisprudence to a
certain set of facts" 7n contrast! a :uestion of fact e6ists when a doubt or di8erence
arises as to the truth or falsehood of facts"
7n this petition! the petitioner essentially as=s the :uestion F whether! under the
circumstances and the presented e.idence! the termination of respondent*s
employment was .alid" As framed! therefore! the :uestion before the Court is a
proscribed factual issue that it cannot -enerally consider in this &ule ;' petition! e6cept
to the e6tent necessary to determine whether the CA correctly found the JL&C in -ra.e
abuse of its discretion in considerin- and appreciatin- this factual issue"
Jonetheless! as an e6ception to the &ule ;' re:uirement! the Court deemed it proper to
re.iew the conHictin- factual ndin-s of the LA and the CA! on the one hand! and the
JL&C! on the other" Such e6ception applies when! based on the records! the factual
ndin-s of the tribunals below are in conHict" =a(uio Central ?niversity v. 0(na)io
Gallente, P"&" Jo" 1++2($! December 2! 201%"
Stare de)isis / doctrine of" Ander the doctrine of stare de)isis! when a court has laid
down a principle of law as applicable to a certain state of facts! it will adhere to that
principle and apply it to all future cases in which the facts are substantially the same!
e.en thou-h the parties may be di8erent" @here the facts are essentially di8erent!
howe.er! stare de)isis does not apply because a perfectly sound principle as applied to
one set of facts mi-ht be entirely inappropriate when a factual .ariant is introduced"
5his case and the Philippine Carpet 2mployees Association 0PK7LC2A4 ." Kon" Sto" 5omas
case 0Philcea case/ P"&" Jo" 1(+$1B! Gebruary 22! 200(4! in.ol.e the same period which
is Earch to April 200;/ the issuance of the Eemorandum to employees informin- them
of the implementation of the cost reduction pro-ram/ the implementation of the
.oluntary retirement pro-ram and retrenchment pro-ram! e6cept that this case in.ol.es
di8erent employees/ the e6ecution of deeds of release! wai.er! and :uitclaim! and the
acceptance of separation pay by the a8ected employees" As the respondents here were
similarly situated as the union members in the Philcea case! and considerin- that the
:uestioned dismissal from the ser.ice was based on the same -rounds under the same
circumstances! there is no need to re>liti-ate the issues presented herein" 7n short! stare
de)isis applies and the Court deems it wise to adopt its earlier ndin-s in the Philcea
case that there was no .alid -round to terminate the ser.ices of the
employees" &'ilippine Carpet ,anu+a)turin( Corporation, et al. v. 0(na)io =. 1a(yamon,
et al., P"&" Jo" 1B1;$'! December 11! 201%"
Substantial e.idence/ denition of" 5he assertions of respondent do not constitute as
substantial e.idence that a reasonable mind mi-ht accept as ade:uate to support the
conclusion that there is a causal relationship between his illness and the wor=in-
conditions on board the petitioners* .essel" Althou-h the Court has reco-niDed as
suCcient that wor= conditions are pro.en to ha.e contributed e.en to a small de-ree!
such must! howe.er! be reasonable! and anchored on credible information" 5he claimant
must! therefore! pro.e a con.incin- proposition other than by his mere
alle-ations" $ebsens ,aritime, 0n)., et al. v. 4leno A. =aol, P"&" Jo" 20;0$(! December ;!
201%"
5ermination of employment/ authoriDed causes/ retrenchment" 5he ille-ality of the basis
of the implementation of both .oluntary retirement and retrenchment pro-rams of
petitioners had been thorou-hly ruled upon by the Court in Philippine Carpet 2mployees
Association 0PK7LC2A4 ." Kon" Sto" 5omas 0P"&" Jo" 1(+$1B! Gebruary 22! 200(4" 7t
discussed the re:uisites of both retrenchment and redundancy as authoriDed causes of
termination and concluded that petitioners failed to substantiate them" 7n ascertainin-
the bases of the termination of employees! it too= into consideration petitioners* claim
of business losses/ the purchase of machinery and e:uipment after the termination! the
declaration of cash di.idends to stoc=holders! the hirin- of 100 new employees after the
retrenchment! and the authoriDation of full blast o.ertime wor= for si6 hours daily"
5hese! said the Court! are inconsistent with petitioners* claim that there was a slump in
the demand for its products which compelled them to implement the termination
pro-rams" 7n arri.in- at its conclusions! the Court too= note of petitioners* net sales!
-ross and net prots! as well as net income" 5he Court! thus! reached the conclusion
that the retrenchment e8ected by the company is in.alid due to a substanti.e
defect" &'ilippine Carpet ,anu+a)turin( Corporation, et al. v. 0(na)io =. 1a(yamon, et
al., P"&" Jo" 1B1;$'! December 11! 201%"
5ermination of employment/ -round/ closure of business due to serious business losses/
notice re:uirement" Article 2B$ of the Labor Code pro.ides that before any employee is
terminated due to closure of business! it must -i.e one 014 month*s prior written notice
to the employee and to the Department of Labor and 2mployment" 7n this relation! case
law instructs that it is the personal ri-ht of the employee to be personally informed of
his proposed dismissal as well as the reasons therefor/ and such re:uirement of notice is
not a mere technicality or formality which the employer may dispense with" Since the
purpose of pre.ious notice is to! amon- others! -i.e the employee some time to prepare
for the e.entual loss of his Lob! the employer has the positi.e duty to inform each and
e.ery employee of their impendin- termination of employment" 5o this end!
Lurisprudence states that an employer*s act of postin- notices to this e8ect in
conspicuous areas in the wor=place is not enou-h" Merily! for somethin- as si-nicant as
the in.oluntary loss of one*s employment! nothin- less than an indi.idually>addressed
notice of dismissal supplied to each wor=er is proper" 5he Court held that the Labor
Arbiter! JL&C! and Court of Appeals erred in rulin- that SP7 complied with the notice
re:uirement when it merely posted .arious copies of its notice of closure in conspicuous
places within the business premises" SP7 is re:uired to ser.e indi.idual written notices of
termination to its employees" San(Coo &'ilippines, 0n). and2or San( 0k $an(, $isso $an(,
et al. v. San(Coo &'ilippines, 0n). 4mployees ?nion6DLAL0A, rep. by &or+eria
Salibon()o(on2San(Coo &'ilippines, 0n). 4mployees ?nion6DLAL0A, rep. by &or+eria
Salibon()o(on v. San(Coo &'ilippines, 0n). and2or San( 0k $an(, $isso $an(, et al., P"&"
Jo" 1$%1';"QP"&" Jo" 1$%22B! December B! 201%
5ermination of employment/ authoriDed cause/ closure of business due to serious
business losses/ separation pay" Closure of business is the re.ersal of fortune of the
employer whereby there is a complete cessation of business operations andQor an actual
loc=in->up of the doors of establishment! usually due to nancial losses" Closure of
business! as an authoriDed cause for termination of employment! aims to pre.ent
further nancial drain upon an employer who cannot pay anymore his employees since
business has already stopped" 7n such a case! the employer is -enerally re:uired to -i.e
separation benets to its employees! unless the closure is due to serious business
losses" As e6plained in the case of Pala6ie Steel @or=ers Anion 0PS@A>JAGLA>SEA4 ."
JL&C 0P"&" Jo" 1('$'$! Nctober 1$! 200(49 15he Constitution! while a8ordin- full
protection to labor! nonetheless! reco-niDes 1the ri-ht of enterprises to reasonable
returns on in.estments! and to e6pansion and -rowth"3 7n line with this protection
a8orded to business by the fundamental law! Article #2B$) of the Labor Code clearly
ma=es a policy distinction" 7t is only in instances of 1retrenchment to pre.ent losses and
in cases of closures or cessation of operations of establishment or underta=in- not due
to serious business losses or nancial re.erses3 that employees whose employment has
been terminated as a result are entitled to separation pay" 7n other words! Article #2B$)
of the Labor Code does not obli-ate an employer to pay separation benets when the
closure is due to serious losses" 5o re:uire an employer to be -enerous when it is no
lon-er in a position to do so! in our .iew! would be unduly oppressi.e! unLust! and unfair
to the employer" Nurs is a system of laws! and the law in protectin- the ri-hts of the
wor=in- man! authoriDes neither the oppression nor the self>destruction of the
employer"3
7n this case! the Labor Arbiter! JL&C! and the Court of Appeals all consistently found
that petitioners indeed su8ered from serious business losses which resulted in its
permanent shutdown and accordin-ly! held the company*s closure to be .alid" 7t is a
rule that absent any showin- that the ndin-s of fact of the labor tribunals and the
appellate court are not supported by e.idence on record or the Lud-ment is based on a
misapprehension of facts! the Court shall not e6amine anew the e.idence submitted by
the parties" Perforce! without any co-ent reason to de.iate from the ndin-s on the
.alidity of respondent*s closure! the Court held that it is not obli-ed to -i.e separation
benets to minority employees pursuant to Article 2B$ of the Labor Code" San(Coo
&'ilippines, 0n). and2or San( 0k $an(, $isso $an(, et al. v. San(Coo &'ilippines, 0n).
4mployees ?nion6DLAL0A, rep. by &or+eria Salibon()o(on2San(Coo &'ilippines, 0n).
4mployees ?nion6DLAL0A, rep. by &or+eria Salibon()o(on v. San(Coo &'ilippines, 0n).
and2or San( 0k $an(, $isso $an(, et al.,P"&" Jo" 1$%1';"QP"&" Jo" 1$%22B! December B!
201%"
5ermination of employment due to closure/ procedural inrmity/ nominal dama-es as
sanction" 7t is well to stress that while respondent had a .alid -round to terminate its
employees! i"e"! closure of business! its failure to comply with the proper procedure for
termination renders it liable to pay the employee nominal dama-es for such omission"
Based on e6istin- Lurisprudence! an employer which has a .alid cause for dismissin- its
employee but conducts the dismissal with procedural inrmity is liable to pay the
employee nominal dama-es in the amount of P%0!000"00 if the -round for dismissal is a
Lust cause! or the amount of P'0!000"00 if the -round for dismissal is an authoriDed
cause" Kowe.er! case law e6horts that in instances where the payment of such
dama-es becomes impossible! unLust! or too burdensome! modication becomes
necessary in order to harmoniDe the disposition with the pre.ailin- circumstance" 7n
this case! considerin- that SP7 closed down its operations due to serious business losses
and that said closure appears to ha.e been done in -ood faith! the Court as in the case
of 7ndustrial 5imber Corporation ." Ababon 0P"&" Jo" 1(;'1+! Earch %0! 200(4! deems it
Lust to reduce the amount of nominal dama-es to be awarded to each of the minority
employees from P'0!000"00 to Pl0!000"00" San(Coo &'ilippines, 0n). and2or San( 0k
$an(, $isso $an(, et al. v. San(Coo &'ilippines, 0n). 4mployees ?nion6DLAL0A, rep. by
&or+eria Salibon()o(on2San(Coo &'ilippines, 0n). 4mployees ?nion6DLAL0A, rep. by
&or+eria Salibon()o(on v. San(Coo &'ilippines, 0n). and2or San( 0k $an(, $isso $an(, et
al., P"&" Jo" 1$%1';"QP"&" Jo" 1$%22B! December B! 201%"
January 201; Philippine Supreme
Court Decisions on Labor Law
Bac=wa-es/ when awarded"
As a -eneral rule! bac=wa-es are -ranted to indemnify a dismissed employee for his
loss of earnin-s durin- the whole period that he is out of his Lob" Considerin- that an
ille-ally dismissed employee is not deemed to ha.e left his employment! he is entitled
to all the ri-hts and pri.ile-es that accrue to him from the employment" 5he -rant of
bac=wa-es to him is in furtherance and e8ectuation of the public obLecti.es of the Labor
Code! and is in the nature of a command to the employer to ma=e a public reparation
for dismissin- the employee in .iolation of the Labor Code"
5he Court held that the respondents are not entitled to the payment of bac=wa-es" 5he
Court! citin- PRS 5ransport Corporation ." 7nfante 0P" &" Jo" 1(0%0%! September 1%!
200$4 stated that the principle of a 1fair day*s wa-e for a fair day*s labor3 remains as
the basic factor in determinin- the award thereof" An e6ception to the rule would be if
the laborer was able! willin- and ready to wor= but was ille-ally loc=ed out! suspended
or dismissed or otherwise ille-ally pre.ented from wor=in-" 7t is! howe.er! re:uired! for
this e6ception to apply! that the stri=e be le-al! a situation which does not obtain in the
case at bar" @isayas Community ,edi)al Center 3@C,C7 +ormerly knoCn as ,etro Cebu
Community -ospital 3,CC-7 v. 4rma Yballe, et al.,P"&" Jo" 1B(1'(! January 1'! 201;
Dismissal/ burden of proof on employer"
5he burden is on the employer to pro.e that the termination was for .alid cause"
Ansubstantiated accusations or baseless conclusions of the employer are insuCcient
le-al Lustications to dismiss an employee" 15he unHinchin- rule in ille-al dismissal
cases is that the employer bears the burden of proof"3
Nne of CCBP7*s policies re:uires that! on a daily basis! CCBP7 SalesmenQAccount
Specialists must account for their salesQcollections and obtain clearance from the
company Cashier before they are allowed to lea.e company premises at the end of their
shift and report for wor= the ne6t day" 7f there is a shorta-eQfailure to account! the
concerned SalesmenQAccount Specialist is not allowed to lea.e the company premises
until he settles the same" 7n addition! shorta-es are deducted from the employee*s
salaries" 7f CCBP7 e6pects to proceed with its case a-ainst petitioner! it should ha.e
ne-ated this policy! for its e6istence and application are ine6tricably tied to CCBP7*s
accusations a-ainst petitioner" 7n the rst place! as petitioner*s employer! upon it lay the
burden of pro.in- by con.incin- e.idence that he was dismissed for cause" 7f petitioner
continued to wor= until June 200;! this meant that he committed no infraction! -oin- by
this company policy/ it could also mean that any infraction or shorta-eQnon>remittance
incurred by petitioner has been duly settled" &espondents* decision to i-nore this issue
-enerates the belief that petitioner is tellin- the truth! and that the alle-ed infractions
are fabricated! or ha.e been for-i.en" Coupled with Eacatan-ay*s statement F which
remains e:ually unrefuted F that the char-es a-ainst petitioner are a scheme by local
CCBP7 mana-ement to co.er up problems in the Ja-a City Plant! the conclusion is
indeed tellin- that petitioner is bein- wron-fully made to account" $onas ,i)'ael R.
GarAa v. Co)a6Cola =ottlers &'ils., 0n)., et al.,P"&" Jo" 1+0B$2" January 20! 201;"
2mbeDDlement/ failure to remit collections" 5he irre-ularity attributed to petitioner with
re-ard to the AsanDa account should fail as well" 5o be sure! AsanDa herself conrmed
that she did not ma=e any payment in cash or chec= of P+!1(0"00 co.erin- the Nctober
1'! 200% deli.ery for which petitioner is bein- held to account" 5his bein- the case!
petitioner could not be char-ed with embeDDlement for failure to remit funds which he
has not collected" 5here was nothin- to embeDDle or remit because the customer made
no payment yet" 7t may appear from NCcial &eceipt Jo" %0%20% issued to AsanDa that
the Nctober 1' deli.ery of products to her has been paid/ but as admitted by her! she
has not paid for the said deli.ered products" 5he reason for petitioner*s issuance of said
oCcial receipt to AsanDa is the latter*s concurrent promise that she would immediately
issue the chec= co.erin- the said amount! which she failed to do" $onas ,i)'ael R.
GarAa v. Co)a6Cola =ottlers &'ils., 0n)., et al.,P"&" Jo" 1+0B$2" January 20! 201;
Pra.e abuse of discretion/ concept of" Ka.in- established throu-h substantial e.idence
that respondent*s inLury was self>inHicted and! hence! not compensable pursuant to
Section 20 0D4 of the 1BB( PN2A>S2C! no -ra.e abuse of discretion can be imputed
a-ainst the JL&C in upholdin- LA*s decision to dismiss respondent*s complaint for
disability benets" 7t is well>settled that an act of a court or tribunal can only be
considered to be tainted with -ra.e abuse of discretion when such act is done in a
capricious or whimsical e6ercise of Lud-ment as is e:ui.alent to lac= of Lurisdiction" 0NC
S'ipmana(ement, 0n). Captain Si(+redo 4. ,onterroyo and2or 0nterorient Navi(ation
Limited v. Ale/ander L. ,oradas,P"&" Jo"! January 1'! 201;
7lle-al stri=e and ille-al acts durin- the stri=e/ distinction between union members and
union oCcers in determinin- when they lose their employment status" 5he Supreme
Court stressed that the law ma=es a distinction between union members and union
oCcers" A union member who merely participates in an ille-al stri=e may not be
terminated from employment" 7t is only when he commits ille-al acts durin- a stri=e that
he may be declared to ha.e lost employment status" 7n contrast! a union oCcer may be
terminated from employment for =nowin-ly participatin- in an ille-al stri=e or
participates in the commission of ille-al acts durin- a stri=e" 5he law -rants the
employer the option of declarin- a union oCcer who participated in an ille-al stri=e as
ha.in- lost his employment" 7t possesses the ri-ht and prero-ati.e to terminate the
union oCcers from ser.ice"
JAEA>ECCK>JGL is not a le-itimate labor or-aniDation! thus! the stri=e sta-ed by its
leaders and members was declared ille-al" 5he union leaders who conducted the ille-al
stri=e despite =nowled-e that JAEA>ECCK>JGL is not a duly re-istered labor union were
declared to ha.e been .alidly terminated by petitioner" Kowe.er! as to the respondents
who were mere union members! it was not shown that they committed any ille-al act
durin- the stri=e" 5he Labor Arbiter and the JL&C were one in ndin- that respondents
acti.ely supported the concerted protest acti.ities! si-ned the collecti.e reply of union
members manifestin- that they launched the mass actions to protest mana-ement*s
refusal to ne-otiate a new CBA! refused to appear in the in.esti-ations scheduled by
petitioner because it was the union*s stand that they would only attend these
in.esti-ations as a -roup! and failed to heed petitioner*s nal directi.e for them to
desist from further ta=in- part in the ille-al stri=e" 5he CA! on the other hand! found that
respondents* participation in the stri=e was limited to the wearin- of armbands" Since
an ordinary stri=in- wor=er cannot be dismissed for such mere participation in the ille-al
stri=e! the CA correctly ruled that respondents were ille-ally dismissed" Kowe.er! the CA
erred in awardin- respondents full bac= wa-es and orderin- their reinstatement despite
the pre.ailin- circumstances" @isayas Community ,edi)al Center 3@C,C7 +ormerly
knoCn as ,etro Cebu Commnunity -ospital 3,CC-7 v. 4rma Yballe, et al.,P"&" Jo"
1B(1'(! January 1'! 201;
Labor law/ =inds of employment/ casual employment/ re:uisites" Casual employment!
the third =ind of employment arran-ement! refers to any other employment
arran-ement that does not fall under any of the rst two cate-ories! i"e"! re-ular or
proLectQseasonal" ?niversal Robina Su(ar ,illin( Corporation and Rene Cabati, P"&" Jo"
1+(;%B" January 1'! 201;"
Labor law/ =inds of employment/ 6ed term employment/ re:uisites" 5he Labor Code
does not mention another employment arran-ement F contractual or 6ed term
employment 0or employment for a term4 F which! if not for the 6ed term! should fall
under the cate-ory of re-ular employment in .iew of the nature of the employee*s
en-a-ement! which is to perform an acti.ity usually necessary or desirable in the
employer*s business"
7n Brent School! 7nc" ." \amora 0P"&" Jo" L>;+;B;! Gebruary '! 1BB04! the Court! for the
rst time! reco-niDed and resol.ed the anomaly created by a narrow and literal
interpretation of Article 2+0 of the Labor Code that appears to restrict the employee*s
ri-ht to freely stipulate with his employer on the duration of his en-a-ement" 7n this
case! the Court upheld the .alidity of the 6ed>term employment a-reed upon by the
employer! Brent School! 7nc"! and the employee! Dorotio Ale-re! declarin- that the
restricti.e clause in Article 2+0 1should be construed to refer to the substanti.e e.il
that the Code itself 6 6 6 sin-led out9 a-reements entered into precisely to circum.ent
security of tenure" 7t should ha.e no application to instances where #the) 6ed period of
employment was a-reed upon =nowin-ly and .oluntarily by the parties 6 6 6 absent
any 6 6 6 circumstances .itiatin- #the employee*s) consent! or where #the facts
satisfactorily show) that the employer and #the) employee dealt with each other on
more or less e:ual terms#")3 5he indispensability or desirability of the acti.ity performed
by the employee will not preclude the parties from enterin- into an otherwise .alid 6ed
term employment a-reement/ a denite period of employment does not essentially
contradict the nature of the employee*s duties as necessary and desirable to the usual
business or trade of the employer"
Je.ertheless! 1where the circumstances e.idently show that the employer
imposed the period precisely to preclude the employee from ac:uirin- tenurial
security! the law and this Court will not hesitate to stri=e down or disre-ard the period
as contrary to public policy! morals! etc"3 7n such a case! the -eneral restricti.e rule
under Article 2+0 of the Labor Code will apply and the employee shall be deemed
re-ular" ?niversal Robina Su(ar ,illin( Corporation and Rene Cabati,P"&" Jo" 1+(;%B"
January 1'! 201;"
Labor law/ =inds of employment/ nature of the employment depends on the nature of
the acti.ities to be performed by the employee" 5he nature of the employment does not
depend solely on the will or word of the employer or on the procedure for hirin- and the
manner of desi-natin- the employee" &ather! the nature of the employment depends
on the nature of the acti.ities to be performed by the employee! ta=in- into account the
nature of the employer*s business! the duration and scope of wor= to be done! and! in
some cases! e.en the len-th of time of the performance and its continued
e6istence" ?niversal Robina Su(ar ,illin( Corporation and Rene Cabati, P"&" Jo"
1+(;%B" January 1'! 201;"
Labor law/ =inds of employment/ proLect employment/ re:uisites/ len-th of time not
controllin-" A proLect employment! on the other hand! contemplates on
arran-ement whereby 1the employment has been 6ed for a specic proLect or
underta=in- whose completion or termination has been determined at the time of the
en-a-ement of the employee#")3 5wo re:uirements! therefore! clearly need to be
satised to remo.e the en-a-ement from the presumption of re-ularity of employment!
namely9 014 desi-nation of a specic proLect or underta=in- for which the employee is
hired/ and 024 clear determination of the completion or termination of the proLect at the
time of the employee*s en-a-ement" 5he ser.ices of the proLect employees are le-ally
and automatically terminated upon the end or completion of the proLect as the
employee*s ser.ices are coterminous with the proLect" Anli=e in a re-ular employment
under Article 2+0 of the Labor Code! howe.er! the len-th of time of the asserted
1proLect3 employee*s en-a-ement is not controllin- as the employment may! in fact!
last for more than a year! dependin- on the needs or circumstances of the proLect"
Je.ertheless! this len-th of time 0or the continuous rehirin- of the employee e.en after
the cessation of the proLect4 may ser.e as a bad-e of re-ular employment when the
acti.ities performed by the purported 1proLect3 employee are necessary and
indispensable to the usual business or trade of the employer" 7n this latter case! the law
will re-ard the arran-ement as re-ular employment" ?niversal Robina Su(ar ,illin(
Corporation and Rene Cabati,P"&" Jo" 1+(;%B" January 1'! 201;"
Labor law/ =inds of employment/ re-ular employment/ re:uisites" Article 2+0 of the
Labor Code pro.ides for three =inds of employment arran-ements! namely9 re-ular!
proLectQseasonal and casual" &e-ular employment refers to that arran-ement whereby
the employee 1has been en-a-ed to perform acti.ities which are usually necessary or
desirable in the usual business or trade of the employer#")3 Ander this denition! the
primary standard that determines re-ular employment is the reasonable connection
between the particular acti.ity performed by the employee and the usual business or
trade of the employer/ the emphasis is on the necessity or desirability of the
employee*s acti.ity" 5hus! when the employee performs acti.ities considered necessary
and desirable to the o.erall business scheme of the employer! the law re-ards the
employee as re-ular"
By way of an e6ception! para-raph 2! Article 2+0 of the Labor Code also considers as
re-ular! a casual employment arran-ement when the casual employee*s en-a-ement is
made to last for at least one year! whether the ser.ice is continuous or bro=en" 5he
controllin- test in this arran-ement is the len-th of time durin- which the employee is
en-a-ed" ?niversal Robina Su(ar ,illin( Corporation and Rene Cabati, P"&" Jo" 1+(;%B"
January 1'! 201;"
Labor law/ =inds of employment/ seasonal employment/ re:uisites" Seasonal
employment operates much in the same way as proLect employment! albeit it
in.ol.es wor= or ser.ice that is seasonal in nature or lastin- for the duration of the
season" As with proLect employment! althou-h the seasonal employment
arran-ement in.ol.es wor= that is seasonal or periodic in nature! the employment
itself is not automatically considered seasonal so as to pre.ent the employee from
attainin- re-ular status" 5o e6clude the asserted 1seasonal3 employee from those
classied as re-ular employees! the employer must show that9 014 the employee must
be performin- wor= or ser.ices that are seasonal in nature/ and 024 he had been
employed for the duration of the season" Kence! when the 1seasonal3 wor=ers are
continuously and repeatedly hired to perform the same tas=s or acti.ities for se.eral
seasons or e.en after the cessation of the season! this len-th of time may li=ewise
ser.e as bad-e of re-ular employment" 7n fact! e.en thou-h denominated as 1seasonal
wor=ers!3 if these wor=ers are called to wor= from time to time and are only temporarily
laid o8 durin- the o8>season! the law does not consider them separated from the
ser.ice durin- the o8>season period" 5he law simply considers these seasonal wor=ers
on lea.e until re>employed" ?niversal Robina Su(ar ,illin( Corporation and Rene
Cabati, P"&" Jo" 1+(;%B" January 1'! 201;"
N.erseas employment/ that the entitlement of seamen on o.erseas wor= to disability
benets is a matter -o.erned! not only by medical ndin-s! but by law and by contract"
@ith respect to the applicable rules! it is doctrinal that the entitlement of seamen on
o.erseas wor= to disability benets 1is a matter -o.erned! not only by medical ndin-s!
but by law and by contract" 5he material statutory pro.isions are Articles 1B1 to 1B%
under Chapter M7 0Disability Benets4 of the Labor Code! in relation #to) &ule U of the
&ules and &e-ulations 7mplementin- Boo= 7M of the Labor Code" By contract! the PN2A>
S2C! as pro.ided under Department Nrder Jo" ;! series of 2000 of the Department of
Labor and 2mployment! and the parties* Collecti.e Bar-ainin- A-reement bind the
seaman and his employer to each other"3
7n the fore-oin- li-ht! the Court obser.es that respondent e6ecuted his contract of
employment on July 1$! 2000! incorporatin- therein the terms and conditions of the
2000 PN2A>S2C which too= e8ect on June 2'! 2000" Kowe.er! since the implementation
of the pro.isions of the fore-oin- 2000 PN2A>S2C was temporarily suspended by the
Court on September 11! 2000! particularly Section 20! para-raphs 0A4! 0B4! and 0D4
thereof! and was lifted only on June '! 2002! throu-h PN2A Eemorandum Circular Jo" 2!
series of 2002! the determination of respondent*s entitlement to the disability benets
should be resol.ed under the pro.isions of the 1BB( PN2A>S2C as it was! e8ecti.ely! the
-o.ernin- circular at the time respondent*s employment contract was e6ecuted" 0NC
S'ipmana(ement, 0n). Captain Si(+redo 4. ,onterroyo and2or 0nterorient Navi(ation
Limited v. Ale/ander L. ,oradas,P"&" Jo"! January 1'! 201;
Payment of separation pay as alternati.e relief for union members who were dismissed
for ha.in- participated in an ille-al stri=e is in lieu of reinstatement/ circumstances
when applicable" 5he alternati.e relief for union members who were dismissed for
ha.in- participated in an ille(al stri=e is the payment of separation pay in lieu of
reinstatement under the followin- circumstances9 0a4 when reinstatement can no lon-er
be e8ected in .iew of the passa-e of a lon- period of time or because of the realities of
the situation/ 0b4 reinstatement is inimical to the employer*s interest/ 0c4 reinstatement
is no lon-er feasible/ 0d4 reinstatement does not ser.e the best interests of the parties
in.ol.ed/ 0e4 the employer is preLudiced by the wor=ers* continued employment/ 0f4 facts
that ma=e e6ecution unLust or ine:uitable ha.e super.ened/ or 0-4 strained relations
between the employer and employee"
5he Court ruled that the -rant of separation pay to respondents is the appropriate relief
under the circumstances considerin- that 1' years had lapsed from the onset of this
labor dispute! and in .iew of strained relations that ensued! in addition to the reality of
replacements already hired by the hospital which had apparently reco.ered from its
hu-e losses! and with many of the petitioners either employed elsewhere! already old
and sic=ly! or otherwise incapacitated" @isayas Community ,edi)al Center 3@C,C7
+ormerly knoCn as ,etro Cebu Commnunity -ospital 3,CC-7 v. 4rma Yballe, et al.,P"&"
Jo" 1B(1'(! January 1'! 201;
&ule ;'/ only :uestions of law are allowed in a petition for re.iew on )ertiorari " 7t is a
settled rule in this Lurisdiction that only :uestions of law are allowed in a petition for
re.iew on certiorari" 5he Court*s power of re.iew in a &ule ;' petition is limited to
resol.in- matters pertainin- to any percei.ed le-al errors! which the CA may ha.e
committed in issuin- the assailed decision" 7n re.iewin- the le-al correctness of the
CA*s &ule (' decision in a labor case! the Court e6amines the CA decision in the conte6t
that it determined whether or not there is -ra.e abuse of discretion in the JL&C decision
subLect of its re.iew and not on the basis of whether the JL&C decision on the merits of
the case was correct" ?niversal Robina Su(ar ,illin( Corporation and Rene Cabati, P"&"
Jo" 1+(;%B" January 1'! 201;"
&ule ;'/ the Court*s Lurisdiction in a &ule ;' petition is limited to the re.iew of pure
:uestions of law/ e6ceptions" 5he Court*s Lurisdiction in cases brou-ht before it from the
CA .ia &ule ;' of the &ules of Court is -enerally limited to re.iewin- errors of law" 5he
Court is not the proper .enue to consider a factual issue as it is not a trier of facts" 5his
rule! howe.er! is not ironclad and a departure therefrom may be warranted where the
ndin-s of fact of the CA are contrary to the ndin-s and conclusions of the JL&C and
LA! as in this case" 7n this re-ard! there is therefore a need to re.iew the records to
determine which of them should be preferred as more conformable to e.identiary
facts" 0NC S'ipmana(ement, 0n). Captain Si(+redo 4. ,onterroyo and2or 0nterorient
Navi(ation Limited v. Ale/ander L. ,oradas,P"&" Jo"! January 1'! 201;"
Section 20 0B4 of the 1BB( PN2A>S2C/ an employer shall be liable for the inLury or illness
su8ered by a seafarer durin- the term of his contract/ e6ception" 5he pre.ailin- rule
under Section 20 0B4 of the 1BB( PN2A>S2C on compensation and benets for inLury or
illness was that an employer shall be liable for the inLury or illness su8ered by a seafarer
durin- the term of his contract" 5o be compensable! the inLury or illness must be pro.en
to ha.e been contracted durin- the term of the contract" Kowe.er! the employer may
be e6empt from liability if he can successfully pro.e that the cause of the seaman*s
inLury was directly attributable to his deliberate or willful act as pro.ided under Section
20 0D4 thereof! to wit9
D" Jo compensation shall be payable in respect of any inLury! incapacity! disability or
death of the seafarer resultin- from his willful or criminal act! pro.ided howe.er! that
the employer can pro.e that such inLury! incapacity! disability or death is directly
attributable to seafarer"
Kence! the onus probandi falls on the petitioners herein to establish or substantiate
their claim that the respondent*s inLury was caused by his willful act with the re:uisite
:uantum of e.idence"0NC S'ipmana(ement, 0n). Captain Si(+redo 4. ,onterroyo and2or
0nterorient Navi(ation Limited v. Ale/ander L. ,oradas,P"&" Jo"! January 1'! 201;
Substantial e.idence/ concept of" 7n labor cases! as in other administrati.e proceedin-s!
only substantial e.idence or such rele.ant e.idence as a reasonable mind mi-ht accept
as suCcient to support a conclusion is re:uired" 5o note! considerin- that substantial
e.idence is an e.identiary threshold! the Court! on e6ceptional cases! may assess the
factual determinations made by the JL&C in a particular case"
5he Court ruled that JL&C had co-ent le-al bases to conclude that petitioners ha.e
successfully dischar-ed the burden of pro.in- by substantial e.idence that respondent*s
inLury was directly attributable to himself" &ecords bear out circumstances which all
lead to the reasonable conclusion that respondent was responsible for the Hoodin- and
burnin- incidents" @hile respondent contended that the aCda.its and statements
of the .essel*s oCcers and his fellow crew members should not be -i.en probati.e
.alue as they were biased! self>ser.in-! and mere hearsay! he nonetheless failed
to present any e.idence to substantiate his own theory" Besides! as correctly
pointed out by the JL&C! the corroboratin- aCda.its and statements of the
.essel*s oCcers and crew members must be ta=en as a whole and cannot Lust be
perfunctorily dismissed as self>ser.in- absent any showin- that they were lyin- when
they made the statements therein" 0NC S'ipmana(ement, 0n). Captain Si(+redo 4.
,onterroyo and2or 0nterorient Navi(ation Limited v. Ale/ander L. ,oradas,P"&" Jo"!
January 1'! 201;