March 2010 Philippine Supreme Court

Decisions on Labor Law and Procedure

Posted on April 26, 2010 by Leslie C Dy ! Posted in Labor Law ! "a##ed compensable
illness, constructi$e dismissal,estoppel, ille#al dismissal, %urisdiction, labor&only
contractin#, parties, P'(A, pro%ect employee !
)ere are selected March 2010 rulin#s o* the Supreme Court o* the Philippines on labor
law and procedure+
Labor law
Cancellation o* union re#istration Art 2,-.c/ o* the Labor Code re0uires the mandatory
minimum 201 membership o* ran2&and&3le employees in the employees4 union "wenty
percent .201/ o* 112 ran2&and&3le employees in (a#le 5id#e would re0uire a union
membership o* at least 22 employees .112 6 207 8 22-/ 9hen the (5(: 3led its
application *or re#istration on December 1;, 2007, there were clearly ,0 union
members "hus, when the certi3cate o* re#istration was #ranted, there is no dispute
that the :nion complied with the mandatory 201 membership re0uirement
Accordin#ly, the retraction o* si6 union members who later se$ered and withdrew their
union membership cannot cause the cancellation o* the union4s re#istration
<esides, it cannot be ar#ued that the a=da$its o* retraction retroacted to the time o*
the application *or union re#istration or e$en way bac2 to the or#ani>ational meetin#
<e*ore their withdrawal, the si6 employees in 0uestion were bona 3de union members
"hey ne$er disputed a=6in# their si#natures beside their handwritten names durin# the
or#ani>ational meetin#s 9hile they alle#ed that they did not 2now what they were
si#nin#, their a=da$its o* retraction were not re&a=rmed durin# the hearin#s o* the
instant case renderin# them o* little, i* any, e$identiary $alue ?n any case, e$en with
the withdrawal o* si6 union members, the union would still be compliant with the
mandatory membership re0uirement under Art 2,-.c/ since the remainin# 2- union
members constitute more than the 201 membership re0uirement o* 22
employees Eagle Ridge Gold & Country Club vs. Court of Appeals, et al., G.R. No.
178989, ar!" 18, #$1$ .
Cessation o* operations@ 3nancial assistance <ased on Article 2A,, in case o* cessation
o* operations, the employer is only re0uired to pay his employees a separation pay o*
one month pay or at least one&hal* month pay *or e$ery year o* ser$ice, whiche$er is
hi#her "hat is all that the law re0uires
?n the case at bar, petitioner paid respondents the *ollowin#+ .a/ separation pay
computed at 1701 o* their #ross monthly pay per year o* ser$ice@ and .b/ cash
e0ui$alent o* earned and accrued $acation and sic2 lea$es Clearly, petitioner had #one
o$er and abo$e the re0uirements o* the law Despite this, howe$er, the Labor Arbiter
ordered petitioner to pay respondents an additional amount, e0ui$alent to one month4s
salary, as a *orm o* 3nancial assistance
"he award o* 3nancial assistance is bere*t o* le#al basis and ser$es to penali>e
petitioner who had complied with the re0uirements o* the law "he Court also point out
that petitioner may, as it has done, #rant on a $oluntary and e% gratia basis, any
amount more than what is re0uired by the law, but to insist that more 3nancial
assistance be #i$en is certainly somethin# that the Court cannot countenance
Moreo$er, any award o* additional 3nancial assistance to respondents would put them
at an ad$anta#e and in a better position than the rest o* their co&employees who
similarly lost their employment because o* petitioner4s decision to cease its
operations &olid'an( Corporation vs. National )abor Relations Co**ission, et al., G.R.
No. 1+,9,1, ar!" -$, #$1$ .
Cost o* li$in# allowance C'LA is not in the nature o* an allowance intended to
reimburse e6penses incurred by o=cials and employees o* the #o$ernment in the
per*ormance o* their o=cial *unctions ?t is not payment in consideration o* the
*ul3llment o* o=cial duty As de3ned, cost o* li$in# re*ers to Bthe le$el o* prices relatin#
to a ran#e o* e$eryday itemsC or Bthe cost o* purchasin# those #oods and ser$ices
which are included in an accepted standard le$el o* consumptionC <ased on this
premise, C'LA is a bene3t intended to co$er increases in the cost o* li$in# "hus, it is
and should be inte#rated into the standardi>ed salary rates
?n the present case, the Court is not persuaded that the continued #rant o* C'LA to the
uni*ormed personnel to the e6clusion o* other national #o$ernment o=cials run a*oul
the e0ual protection clause o* the Constitution "he *undamental ri#ht o* e0ual
protection o* the laws is not absolute, but is sub%ect to reasonable classi3cation ?* the
#roupin#s are characteri>ed by substantial distinctions that ma2e real diDerences, one
class may be treated and re#ulated diDerently *rom another "he classi3cation must
also be #ermane to the purpose o* the law and must apply to all those belon#in# to the
same class
"he Court *ound $alid reasons to treat the uni*ormed personnel diDerently *rom other
national #o$ernment o=cials <ein# in char#e o* the actual de*ense o* the State and
the maintenance o* internal peace and order, they are e6pected to be stationed $irtually
anywhere in the country "hey are li2ely to be assi#ned to a $ariety o* low, moderate,
and hi#h&cost areas Since their basic pay does not $ary based on location, the
continued #rant o* C'LA is intended to help them oDset the eDects o* li$in# in hi#her
cost areas .i!toria C. Gutierre/, et al. vs. 0epart*ent of 'udget and anage*ent, et
al.1Estrellita C. A*ponin, et al. vs. Co**ission on Audit, et al.1Augusto R. Nieves, et al.
vs. 0epart*ent of 'udget and anage*ent, et al.12apisanan ng *ga anggaga3a sa
'ureau of Agri!ultural &tatisti! 42'5, et al. vs. 0epart*ent of 'udget and
anage*ent, et al.1National 6ousing Aut"ority vs. Epifanio 7. Re!ana, et al.1 8nsuran!e
Co**ission 9:!ers and E*ployees, et al. vs. 0epart*ent of 'udget and anage*ent,
et al.1;iber 8ndustry 0evelop*ent Aut"ority E*ployees Asso!iation 4;80AEA5,et al. vs.
0epart*ent of 'udget and anage*ent, et al.1'ureau of Ani*al 8ndustry E*ployees
Asso!iation 4'A8EA5, et al. vs. 0epart*ent of 'udget and anage*ent, et al.1Re<
Re=uest of &andiganbayan for aut"ority to use t"eir savings to pay t"eir Cola
0i>erential fro* ?uly 1, 1989 to ar!" 1+, 1999, G.R. No. 1,-#++1G.R. No. 1,9$$71G.R.
No. 1,9$#91G.R. No. 17$$8@1G.R. No. 17#71-1G.R. No. 17-1191G.R. No. 17+@771G.R.
No. 17799$1A.. No. $+A@A$#A&'. ar!" 18, #$1$ .
Compensable illness Eurisprudence pro$ides that to establish compensability o* a non&
occupational disease, reasonable proo* o* wor2&connection and not direct causal relation
is re0uired Probability, not the ultimate de#ree o* certainty, is the test o* proo* in
compensation proceedin#s
?n this case, the Court sustained the Labor Arbiter and the FL5C in #rantin# total and
permanent disability bene3ts in *a$or o* Gillamater, as it was su=ciently shown that his
ha$in# contracted colon cancer was, at the $ery least, a##ra$ated by his wor2in#
conditions, ta2in# into consideration his dietary pro$isions on board, his a#e, and his %ob
as Chie* (n#ineer, who was primarily in char#e o* the technical and mechanical
operations o* the $essels to ensure $oya#e sa*ety )eonis Navigation Co., 8n!. and
Borld arine 7ana*a, &.A. vs. Catalino C. .illa*ater, et al., G.R. No. 1791+9, ar!" -,
#$1$ .
Compensable illness@ entitlement Hor disability to be compensable under Section 20
.</ o* the 2000 P'(A&S(C, two elements must concur+ .1/ the in%ury or illness must be
wor2&related@ and .2/ the wor2&related in%ury or illness must ha$e e6isted durin# the
term o* the sea*arer4s employment contract ?n other words, to be entitled to
compensation and bene3ts under this pro$ision, it is not su=cient to establish that the
sea*arer4s illness or in%ury has rendered him permanently or partially disabled@ it must
also be shown that there is a causal connection between the sea*arer4s illness or in%ury
and the wor2 *or which he had been contracted
"he 2000 P'(A&S(C de3nes Bwor2&related in%uryC as Bin%ury.ies/ resultin# in disability or
death arisin# out o* and in the course o* employmentC and Bwor2&related illnessC as
Bany sic2ness resultin# to disability or death as a result o* an occupational disease listed
under Section ,2&A o* this contract with the conditions set therein satis3edC
:nder Section 20 .</, para#raphs .2/ and .,/ o* the 2000 P'(A&S(C, it is the company&
desi#nated physician who is entrusted with the tas2 o* assessin# the seaman4s
disability
9hile it is true that medical reports issued by the company&desi#nated physicians do
not bind the courts, the Court4s e6amination o* Dr 'n#&Sal$ador4s ?nitial Medical 5eport
ha$e led it to a#ree with her 3ndin#s Dr 'n#&Sal$ador was able to su=ciently e6plain
her basis in concludin# that the respondent4s illness was not wor2&related+ she *ound the
respondent not to ha$e been e6posed to any carcino#enic *umes, or to any $iral
in*ection in his wor2place )er 3ndin#s were arri$ed at a*ter the respondent was made
to under#o a physical, neurolo#ical and laboratory e6amination, ta2in# into
consideration his past medical history, *amily history, and social history ?n addition, the
respondent was e$aluated by a specialist, a sur#eon and an oncolo#ist "he series o*
tests and e$aluations show that Dr 'n#&Sal$ador4s 3ndin#s were not arri$ed at
arbitrarily@ neither were they biased in the company4s *a$or
"he respondent, on the other hand, did not adduce proo* to show a reasonable
connection between his wor2 as an assistant house2eepin# mana#er and his lymphoma
"here was no showin# how the demands and nature o* his %ob $is&I&$is the ship4s
wor2in# conditions increased the ris2 o* contractin# lymphoma "he non&wor2
relatedness o* the respondent4s illness is rein*orced by the *act that under the
?mplementin# 5ules and 5e#ulations o* the Labor Code .(CC 5ules/, lymphoma is
considered occupational only when contracted by operatin# room personnel due to
e6posure to anesthetics "he records do not show that the respondent4s wor2 as an
assistant house2eepin# mana#er e6posed him to anesthetics
Accordin#ly, the Court held that the respondent is not entitled to total and permanent
disability bene3ts on account o* his *ailure to re*ute the company&desi#nated physician4s
3ndin#s that+ .1/ his illness was not wor2&related@ and .2/ he was 3t to resume sea
duties agsaysay ariti*e Corporation and1or Cruise &"ips Catering &ervi!es
8nternational N... vs. National )abor Relations Co**issions, et al., G.R. No. 18+18$,
ar!" ##, #$1$ .
Constructi$e dismissal ?n constructi$e dismissal cases, the employer has the burden o*
pro$in# that its conduct and action or the trans*er o* an employee are *or $alid and
le#itimate #rounds such as #enuine business necessity Particularly, *or a trans*er not
to be considered a constructi$e dismissal, the employer must be able to show that such
trans*er is not unreasonable, incon$enient, or pre%udicial to the employee Hailure o* the
employer to o$ercome this burden o* proo* taints the employee4s trans*er as a
constructi$e dismissal
?n the present case, the employer *ailed to dischar#e this burden "he combination o*
harsh actions ta2en by the ban2 rendered the employment condition o* the employee
hostile and unbearable *or the *ollowin# reasons+ Hirst, there is no showin# o* any
ur#ency or #enuine business necessity to trans*er the employee to the Ma2ati )ead
'=ce "he ban24s stated reason that the employee had to under#o branch head
trainin# because o* his #ross ine=ciency was not supported by any proo* that the
employee had a record o* #ross ine=ciency Second, the employee4s trans*er *rom
Duma#uete to Ma2ati City is clearly unreasonable, incon$enient and oppressi$e, since
the respondent and his *amily are residents o* Duma#uete City "hird, the employer
*ailed to present any $alid reason why it had to re0uire the employee to #o to the Ma2ati
)ead '=ce to under#o branch head trainin# when it could ha$e %ust easily re0uired the
latter to underta2e the same trainin# in the G?SM?F area Hinally, there was nothin# in
the order o* trans*er indicatin# the position which the employee would occupy a*ter his
trainin#@ thus, the employee was eDecti$ely placed in a BJoatin#C status "he ban24s
contention that the employee was assi#ned to a sensiti$e position in the D:)' "as2
Horce is suspect when considered with the *act that he was made to under#o branch
head trainin# which is totally diDerent *rom a position that entails reconcilin# boo2
entries o* all branches o* the *ormer 5econcilin# boo2 entries is essentially an
accountin# tas2
"he test o* constructi$e dismissal is whether a reasonable person in the employee4s
position would ha$e *elt compelled to #i$e up his position under the circumstances
<ased on the *actual considerations in the present case, the Court held that the hostile
and unreasonable wor2in# conditions o* the ban2 %usti3ed the 3ndin# o* the FL5C and
the CA that the employee was constructi$ely dismissed 7"ilippine .eterans 'an( vs.
National )abor Relations Co**ission, et al., G.R. No. 18888#, ar!" -$, #$1$ .
Disability bene3ts@ entitlement "he sea*arer, upon si#n&oD *rom his $essel, must report
to the company&desi#nated physician within three wor2in# days *rom arri$al *or
dia#nosis and treatment Applyin# Section 20.</, para#raph .,/ o* the 2000 Amended
Standard "erms and Conditions Ko$ernin# the (mployment o* Hilipino Sea*arers on
<oard 'cean&Koin# Gessels, petitioner is re0uired to under#o post&employment medical
e6amination by a company&desi#nated physician within three wor2in# days *rom arri$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 su=ce ?n aunlad Dransport, 8n!. v. anigo,
?r, LK5 Fo161-16, 1, Eune 200A, 77- SC5A --6, -7;M this Court e6plicitly declared
that it is mandatory *or a claimant to be e6amined by a company&desi#nated physician
within three days *rom his repatriation "he une6plained omission o* this re0uirement
will bar the 3lin# o* a claim *or disability bene3ts Ale% C. Cootau!o vs. & 7"il.
ariti*e &ervi!es, 8n!. s. ary C. a=uilan, and1or & Co. )td., G.R. No. 18@7##,
ar!" 1,, #$1$.
Dismissal@ dama#es Moral and e6emplary dama#es are reco$erable where the
dismissal o* an employee was attended by bad *aith or *raud or constituted an act
oppressi$e to labor or was done in a manner contrary to morals, #ood customs or public
policy 9ith re#ard to the employees o* Promm&Kem, there bein# no e$idence o* bad
*aith, *raud or any oppressi$e act on the part o* the latter, the Court *ound no support
*or the award o* dama#es
As *or PNK, the records show that it dismissed its employees throu#h SAPS in a manner
oppressi$e to labor "he sudden and peremptory barrin# o* the employees *rom wor2,
and *rom admission to the wor2 place, a*ter %ust a one&day $erbal notice, and *or no
$alid cause, bellows oppression and utter disre#ard o* the ri#ht to due process o* the
concerned petitioners )ence, an award o* moral dama#es is called *or ?oeb Aliviado,
et al. vs. 7ro!ter & Ga*ble 7"ilippines, 8n!., et al., G.R. No. 1+$,$+, ar!" 9, #$1$ .
Dismissal@ *raud and serious misconduct . ?n this case, the Court *ound that Pastoril was
as acti$ely in$ol$ed as (scoto and 'mela in the sale o* the "oyota "own Ace that
resulted in a loss to the company All three participated in ma2in# the company belie$e
that A0uino bou#ht the "oyota "own Ace *or P1;0,00000 when in *act, A0uino paid
P200,00000 *or the $ehicle "hus, Pastoril acted in concert with (scoto and 'mela in
the transaction that de*rauded their employer in the amount o* P10,00000 Pastoril
prepared and issued the deed o* sale indicatin# that the $ehicle was sold *or
P1;0,00000, althou#h she 2new that the buyer was bein# char#ed P200,00000 *or the
$ehicle (scoto, 'mela and Pastoril helped themsel$es to the price diDerence and tried
to silence 5odri#ue> .who #ot wind o* the anomaly/ by #i$in# him P1,00000 and
passin# the P10,00000 price diDerence oD as the appro$ed discount A0uino as2ed *or
"he Court held that there was a conspiracy between and amon# the three employees,
where e$ery participant had made si#ni3cant contributory acts B"ite 0ia*ond Drading
Corporation and1or ?erry Cy vs. National )abor Relations Co**ission, et al., G.R. No.
18+$19. ar!" #9, #$1$ .
Dismissal@ %ust cause@ loss o* trust and con3dence Loss o* trust and con3dence, as a
cause *or termination o* employment, is premised on the *act that the employee
concerned holds a position o* responsibility or o* trust and con3dence As such, he must
be in$ested with con3dence on delicate matters, such as custody, handlin# or care and
protection o* the property and assets o* the employer And, in order to constitute a %ust
cause *or dismissal, the act complained o* must be wor2&related and must show that the
employee is un3t to continue to wor2 *or the employer ?n the instant case, the
petitioners&employees o* Promm&Kem ha$e not been shown to be occupyin# positions
o* responsibility or o* trust and con3dence Feither is there any e$idence to show that
they are un3t to continue to wor2 as merchandisers *or Promm&Kem ?oeb Aliviado, et
al. vs. 7ro!ter & Ga*ble 7"ilippines, 8n!., et al., G.R. No. 1+$,$+, ar!" 9, #$1$ .
Dismissal@ %ust cause@ misconduct Misconduct has been de3ned as improper or wron#
conduct@ the trans#ression o* some established and de3nite rule o* action, a *orbidden
act, a dereliction o* duty, unlaw*ul in character implyin# wron#*ul intent and not mere
error o* %ud#ment "he misconduct to be serious must be o* such #ra$e and a##ra$ated
character and not merely tri$ial and unimportant "o be a %ust cause *or dismissal, such
misconduct .a/ must be serious@ .b/ must relate to the per*ormance o* the employee4s
duties@ and .c/ must show that the employee has become un3t to continue wor2in# *or
the employer ?n other words, in order to constitute serious misconduct which will
warrant the dismissal o* an employee under para#raph .a/ o* Article 2A2 o* the Labor
Code, it is not su=cient that the act or conduct complained o* has $iolated some
established rules or policies ?t is e0ually important and re0uired that the act or conduct
must ha$e been per*ormed with wron#*ul intent ?n the instant case, petitioners&
employees o* Promm&Kem may ha$e committed an error o* %ud#ment in claimin# to be
employees o* PNK, but it cannot be said that they were moti$ated by any wron#*ul
intent in doin# so As such, the Court *ound them #uilty o* simple misconduct only, *or
assailin# the inte#rity o* Promm&Kem as a le#itimate and independent promotion 3rm
A misconduct which is not serious or #ra$e, as that e6istin# in the instant case, cannot
be a $alid basis *or dismissin# an employee ?oeb Aliviado, et al. vs. 7ro!ter & Ga*ble
7"ilippines, 8n!., et al., G.R. No. 1+$,$+, ar!" 9, #$1$ .
Dismissal@ %ust cause@ union security clause ?n terminatin# the employment o* an
employee by en*orcin# the union security clause, the employer is re0uired only to
determine and pro$e that+ .1/ the union security clause is applicable@ .2/ the union is
re0uestin# *or the en*orcement o* the union security pro$ision in the C<A@ and .,/ there
is su=cient e$idence to support the decision o* the union to e6pel the employee *rom
the union "hese re0uisites constitute %ust cause *or terminatin# an employee based on
the union security pro$ision o* the C<A
?t is the third re0uisite that appears to be lac2in# in this case ?t is apparent *rom the
identical termination letters that KMC terminated Casio, et al, by relyin# upon the
resolutions o* the union, which made no mention at all o* the e$idence supportin# the
decision o* the union to e6pel Casio, et al *rom the union KMC ne$er alle#ed nor
attempted to pro$e that the company actually loo2ed into the e$idence o* the union *or
e6pellin# Casio, et al and made a determination on the su=ciency thereo* 9ithout
such a determination, KMC cannot claim that it had terminated the employment o*
Casio, et al *or %ust cause "he *ailure o* KMC to ma2e a determination o* the su=ciency
o* e$idence supportin# the decision o* the union constitutes non&obser$ance by KMC o*
procedural due process in the dismissal o* employees General illing Corporation vs.
Ernesto Casio, et al. and .irgilio 7ino, et al., G.R. No. 1@9,,#, ar!" 1$, #$1$ .
Dismissal pursuant to union security clause@ separate notice and harin# re0uired KMC
ille#ally dismissed Casio, et al because not only did KMC *ail to ma2e a determination
o* the su=ciency o* e$idence to support the union4s decision to e6pel Casio, et al, it
also *ailed to accord the e6pelled union members procedural due process, ie, notice
and hearin#, prior to the termination o* their employment
KMC, by its own admission, did not conduct a separate and independent in$esti#ation to
determine the su=ciency o* the e$idence supportin# the union4s e6pulsion o* Casio, et
al ?t simply acceded to the union4s demand Conse0uently, KMC cannot insist that it
has no liability *or the payment o* bac2wa#es and dama#es to Casio, et al, and that the
liability *or such payment should *all only upon the union o=cers and board members
who e6pelled Casio, et al KMC completely missed the point that the e6pulsion o* Casio,
et al by the union and the termination o* employment o* the same employees by KMC,
althou#h related, are two separate and distinct acts Despite a closed shop pro$ision in
the C<A, law and %urisprudence impose upon KMC the obli#ation to accord Casio, et al
substanti$e and procedural due process be*ore complyin# with the union4s demand to
dismiss the e6pelled union members *rom ser$ice "he *ailure o* KMC to carry out this
obli#ation ma2es it liable *or ille#al dismissal o* Casio, et al General illing Corporation
vs. Ernesto Casio, et al. and .irgilio 7ino, et al., G.R. No. 1@9,,#, ar!" 1$, #$1$ .
(mployee bene3t@ bonus <y de3nition, a BbonusC is a #ratuity or act o* liberality o* the
#i$er ?t is somethin# #i$en in addition to what is ordinarily recei$ed by or strictly due
the recipient A bonus is #ranted and paid to an employee *or his industry and loyalty
which contributed to the success o* the employer4s business and made possible the
reali>ation o* pro3ts A bonus is also #ranted by an enli#htened employer to spur the
employee to #reater eDorts *or the success o* the business and reali>ation o* bi##er
pro3ts
Kenerally, a bonus is not a demandable and en*orceable obli#ation Hor a bonus to be
en*orceable, it must ha$e been promised by the employer and e6pressly a#reed upon
by the parties Ki$en that the bonus in this case is inte#rated in the C<A, the same
parta2es the nature o* a demandable obli#ation Gerily, by $irtue o* its incorporation in
the C<A, the Christmas bonus due to respondent Association has become more than
%ust an act o* #enerosity on the part o* the petitioner but a contractual obli#ation it has
underta2en
All #i$en, business losses are a *eeble #round *or petitioner to repudiate its obli#ation
under the C<A "he rule is settled that any bene3t and supplement bein# en%oyed by
the employees cannot be reduced, diminished, discontinued or eliminated by the
employer "he principle o* non&diminution o* bene3ts is *ounded on the constitutional
mandate to protect the ri#hts o* wor2ers and to promote their wel*are and to aDord
labor *ull protection )ence, absent any proo* that the employer4s consent was $itiated
by *raud, mista2e or duress, it is presumed that it entered into the C<A $oluntarily and
had *ull 2nowled#e o* the contents thereo* and was aware o* its commitments under the
contract )epanto Cera*i!s, 8n!. vs. )epanto Cera*i!s E*ployees Asso!iation, G.R. No.
18$8++, ar!" #, #$1$ .
(mployee@ monetary award "he law and the rules are consistent in statin# that the
employment permit must be ac0uired prior to employment "he Labor Code states+
BAny alien see2in# admission to the Philippines *or employment purposes and any
domestic or *orei#n employer who desires to en#a#e an alien *or employment in the
Philippines shall obtain an employment permit *rom the Department o* LaborC Section
-, 5ule O?G, <oo2 1 o* the ?mplementin# 5ules and 5e#ulations pro$ides+ BFo alien
see2in# employment, whether as a resident or non&resident, may enter the Philippines
without 3rst securin# an employment permit *rom the Ministry ?* an alien enters the
country under a non&wor2in# $isa and wishes to be employed therea*ter, he may only
be allowed to be employed upon presentation o* a duly appro$ed employment permitC
Kalera wor2ed in the Philippines without a proper wor2 permit but now wants to claim
employee4s bene3ts under Philippine labor laws She cannot come to this Court with
unclean hands "o #rant Kalera4s prayer is to sanction the $iolation o* the Philippine
labor laws re0uirin# aliens to secure wor2 permits be*ore their employment B77
ar(eting Co**uni!ations, 8n!. et al. vs. ?o!elyn . Galera1?o!elyn . Galera .s. B77
ar(eting Co**uni!ations, 8n!. et al., G.R. No. 1+9#$71G.R. No. 1+9#-9, ar!" #,,
#$1$ .
(mployee $s corporate o=cer Corporate o=cers are #i$en such character either by
the Corporation Code or by the corporation4s by&laws :nder Section 27 o* the
Corporation Code, the corporate o=cers are the president, secretary, treasurer and such
other o=cers as may be pro$ided in the by&laws 'ther o=cers are sometimes created
by the charter or by&laws o* a corporation, or the board o* directors may be empowered
under the by&laws o* a corporation to create additional o=ces as may be necessary
An e6amination o* 9PP4s by&laws resulted in a 3ndin# that Kalera4s appointment as a
corporate o=cer .Gice&President with the operational title o* Mana#in# Director o*
Mindshare/ durin# a special meetin# o* 9PP4s <oard o* Directors is an appointment to a
non&e6istent corporate o=ce 9PP4s by&laws pro$ided *or only one Gice&President At
the time o* Kalera4s appointment on ,1 December 1;;;, 9PP already had one Gice&
President in the person o* 9ebster Kalera cannot be said to be a director o* 9PP also
because all 3$e directorship positions pro$ided in the by&laws are already occupied
Hinally, 9PP cannot rely on its Amended <y&Laws to support its ar#ument that Kalera is
a corporate o=cer "he Amended <y&Laws pro$ided *or more than one Gice&President
and *or two additional directors ($en thou#h 9PP4s stoc2holders $oted *or the
amendment on ,1 May 2000, the S(C appro$ed the amendments only on 16 Hebruary
2001 Kalera was dismissed on 1- December 2000 9PP, Steedman, 9ebster, and
Lansan# did not present any e$idence that Kalera4s dismissal too2 eDect with the action
o* 9PP4s <oard o* Directors
Additionally, the *ollowin# pro$isions in her employment contract are con$incin#
indicators that Kalera was an employee and not a corporate o=cer+ .1/ it mandates
where and how o*ten she is to per*orm her wor2@ .2/ the wa#es she recei$es are
completely controlled by 9PP@ .,/ she is sub%ect to the re#ular disciplinary procedures o*
9PP@ .-/ section 1- thereo* clearly states that she is a permanent employee P not a
Gice&President or a member o* the <oard o* Directors@ .7/ the intellectual property ri#hts
created or disco$ered by petitioner durin# her employment shall automatically belon#
to pri$ate respondent 9PP L:nder the ?ntellectual Property Code, this condition pre$ails
i* the creator o* the wor2 sub%ect to the laws o* patent or copyri#ht is an employee o*
the one entitled to the patent or copyri#htM@ and .6/ the disciplinary procedure states
that her ri#ht o* redress is throu#h Mindshare4s Chie* (6ecuti$e '=cer *or the Asia&
Paci3c "his last circumstance implies that she was not e$en under the disciplinary
control o* 9PP4s <oard o* Directors, and there*ore, she could not ha$e been a 9PP
corporate o=cer as only the 9PP <oard o* Directors could appoint and terminate its own
corporate o=cer B77 ar(eting Co**uni!ations, 8n!. et al. vs. ?o!elyn .
Galera1?o!elyn . Galera vs. B77 ar(eting Co**uni!ations, 8n!. et al., G.R. No.
1+9#$71G.R. No. 1+9#-9, ar!" #,, #$1$ .
?lle#al dismissal :nder 5epublic Act Fo 6Q17, employees who are ille#ally dismissed
are entitled to *ull bac2wa#es, inclusi$e o* allowances and other bene3ts or their
monetary e0ui$alent, computed *rom the time their actual compensation was withheld
*rom them up to the time o* their actual reinstatement but i* reinstatement is no lon#er
possible, the bac2wa#es shall be computed *rom the time o* their ille#al termination up
to the 3nality o* the decision
"he employees in this case are entitled to bac2wa#es and separation pay, considerin#
that reinstatement is no lon#er possible because the positions they pre$iously occupied
are no lon#er e6istin# General illing Corporation vs. Ernesto Casio, et al. and .irgilio
7ino, et al., G.R. No. 1@9,,#, ar!" 1$, #$1$.
?lle#al dismissal 9PP4s dismissal o* Kalera lac2ed both substanti$e and procedural due
process Apart *rom Steedman4s letter dated 17 December 2000 to Kalera, 9PP *ailed
to pro$e any %ust or authori>ed cause *or Kalera4s dismissal "he law also re0uires that
the employer must *urnish the wor2er sou#ht to be dismissed with two written notices
be*ore termination o* employment can be le#ally eDected+ .1/ notice which apprises the
employee o* the particular acts or omissions *or which his dismissal is sou#ht@ and .2/
the subse0uent notice which in*orms the employee o* the employer4s decision to
dismiss him Hailure to comply with these re0uirements taints the dismissal with
ille#ality 9PP4s acts clearly show that Kalera4s dismissal did not comply with the two&
notice rule B77 ar(eting Co**uni!ations, 8n!. et al. vs. ?o!elyn . Galera1?o!elyn .
Galera .s. B77 ar(eting Co**uni!ations, 8n!. et al., G.R. No. 1+9#$71G.R. No.
1+9#-9, ar!" #,, #$1$.
?lle#al dismissal@ abandonment Petitioner was, *or 3$e times, noti3ed in writin# by
respondent to resume teachin# *or the second semester o* school year 200,&200-
*ollowin# the ser$ice o* her suspension durin# the 3rst semester She was ad$ised that
a teachin# load had already been prepared *or her 5espondent ne$er replied to those
notices Petitioner4s %usti3cation *or her *ailure to respond to the notices was that her
acceptance o* the oDer could be construed as a wai$er o* her claims "he Court held
that petitioner4s %usti3cation is not a $alid e6cuse
Petitioner contends that her 3lin# o* a complaint *or ille#al dismissal was a
mani*estation o* her desire to return to her %ob and ne#ated any intention to se$er the
employer&employee relationship Petitioner *or#ets that her complaint *or Bille#al
dismissalC which she 3led on Eune 7, 200, spran#, not *rom her dismissal on December
6, 200, due to abandonment, but *rom her suspension durin# the 3rst semester o*
school year 200,&200- 9hile the 3lin# o* a complaint with a prayer *or reinstatement
ne#ates an intention to se$er the employer&employee relationship, the same
contemplates an action ta2en subse0uent to dismissal and not a*ter an employee, by all
indications, abandoned her %ob Evangeline C. Cobarrubias vs. &aint )ouis Cniversity,
8n!., G.R. No. 17+717, ar!" 17, #$1$.
?lle#al dismissal@ monetary awards Clearly, the law intends the award o* bac2wa#es
and similar bene3ts to accumulate past the date o* the Labor Arbiter4s decision until the
dismissed employee is actually reinstated <ut i*, as in this case, reinstatement is no
lon#er possible, this Court has consistently ruled that bac2wa#es shall be computed
*rom the time o* ille#al dismissal until the date the decision becomes 3nal
Separation pay, on the other hand, is e0ui$alent to one month pay *or e$ery year o*
ser$ice, a *raction o* si6 months to be considered as one whole year )ere that would
be#in *rom Eanuary ,1, 1;;- when petitioner <elen be#an his ser$ice "echnically the
computation o* his separation pay would end on the day he was dismissed on Au#ust
20, 1;;; when he supposedly ceased to render ser$ice and his wa#es ended <ut, since
<elen was entitled to collect bac2wa#es until the %ud#ment *or ille#al dismissal in his
*a$or became 3nal, here on September 22, 200A, the computation o* his separation pay
should also end on that date
Hurther, since the monetary awards remained unpaid e$en a*ter it became 3nal on
September 22, 200A because o* issues raised respectin# the correct computation o*
such awards, it is but *air that respondent Ea$ellana be re0uired to pay 121 interest per
annum on those awards *rom September 22, 200A until they are paid "he 121 interest
is proper because the Court treats monetary claims in labor cases the e0ui$alent o* a
*orbearance o* credit ?t matters not that the amounts o* the claims were still in
0uestion on September 22, 200A 9hat is decisi$e is that the order to pay the
monetary awards had lon# become 3nal 0aniel 7. ?avellana, ?r. vs. Albino 'elen1Albino
'elen .s. 0aniel 7. ?avellana, ?r. and ?avellana ;ar*s, 8n!., G.R. No. 18191-1G.R. No.
18#1,8, ar!" ,, #$1$ .
Labor only contractin# ?ndeed, it is mana#ement prero#ati$e to *arm out any o* its
acti$ities, re#ardless o* whether such acti$ity is peripheral or core in nature )owe$er,
in order *or such outsourcin# to be $alid, it must be made to an independent contractor
because the current labor rules e6pressly prohibit labor&only contractin# "here is labor&
only contractin# when the contractor or sub&contractor merely recruits, supplies or
places wor2ers to per*orm a %ob, wor2 or ser$ice *or a principal, and any o* the *ollowin#
elements are present+ .i/ the contractor or subcontractor does not ha$e substantial
capital or in$estment which relates to the %ob, wor2 or ser$ice to be per*ormed and the
employees recruited, supplied or placed by such contractor or subcontractor are
per*ormin# acti$ities which are directly related to the main business o* the principal@ or
.ii/ the contractor does not e6ercise the ri#ht to control o$er the per*ormance o* the
wor2 o* the contractual employee
?n the instant case, the 3nancial statements o* Promm&Kem show that it has authori>ed
capital stoc2 o* P1 million and a paid&in capital, or capital a$ailable *or operations, o*
P700,00000 as o* 1;;0 ?t also has lon# term assets worth P-,2,A;72A and current
assets o* PQ1;,0-2,2 Promm&Kem has also pro$en that it maintained its own
warehouse and o=ce space with a Joor area o* AQ0 s0uare meters ?t also had under its
name three re#istered $ehicles, which were used *or its promotionalRmerchandisin#
business Promm&Kem also has other clients aside *rom PNK :nder the circumstances,
we 3nd that Promm&Kem has substantial in$estment, which relates to the wor2 to be
per*ormed :nder these circumstances, Promm&Kem cannot be considered a labor&only
contractor
'n the other hand, the Articles o* ?ncorporation o* SAPS show that it has a paid&in
capital o* only P,1,27000 "here is no other e$idence to pro$e how much its wor2in#
capital and assets are Hurthermore, there is no showin# o* substantial in$estment in
tools, e0uipment or other assets
SAPS4 lac2 o* substantial capital is hi#hli#hted by the records which show that its payroll
*or its merchandisers alone *or one month would already total P--,76100 ?t had 6&
month contracts with PNK Set SAPS *ailed to show that it could complete the 6&month
contracts usin# its own capital and in$estment ?ts capital is not e$en su=cient *or one
month4s payroll SAPS *ailed to show that its paid&in capital o* P,1,27000 is su=cient
*or the period re0uired *or it to #enerate re$enues to sustain its operations
independently Substantial capital re*ers to capitali>ation used in the per*ormance or
completion o* the %ob, wor2 or ser$ice contracted out ?n the present case, SAPS has
*ailed to show substantial capital
Hurthermore, the employees in this case per*ormed merchandisin# and promotion o* the
products o* PNK, which are acti$ities that the Court has considered directly related to
the manu*acturin# business o* PNK Considerin# that SAPS has no substantial capital or
in$estment and the wor2ers it recruited are per*ormin# acti$ities which are directly
related to the principal business o* PNK, we 3nd that SAPS is en#a#ed in Blabor&only
contractin#C ?oeb Aliviado, et al. vs. 7ro!ter & Ga*ble 7"ilippines, 8n!., et al., G.R. No.
1+$,$+, ar!" 9, #$1$ .
Pro%ect employee "he test *or distin#uishin# a Bpro%ect employeeC *rom a Bre#ular
employeeC is whether or not he has been assi#ned to carry out a Bspeci3c pro%ect or
underta2in#,C with the duration and scope o* his en#a#ement speci3ed at the time his
ser$ice is contracted )ere, it is not disputed that petitioner company contracted
respondent "rinidad4s ser$ice by speci3c pro%ects with the duration o* his wor2 clearly
set out in his employment contracts )e remained a pro%ect employee re#ardless o* the
number o* years and the $arious pro%ects he wor2ed *or the company
Kenerally, len#th o* ser$ice pro$ides a *air yardstic2 *or determinin# when an employee
initially hired on a temporary basis becomes a permanent one, entitled to the security
and bene3ts o* re#ulari>ation <ut this standard will not be *air, i* applied to the
construction industry, simply because construction 3rms cannot #uarantee wor2 and
*undin# *or its payrolls beyond the li*e o* each pro%ect And #ettin# pro%ects is not a
matter o* course Construction companies ha$e no control o$er the decisions and
resources o* pro%ect proponents or owners "here is no construction company that does
not wish it has such control but the reality, understood by construction wor2ers, is that
wor2 depended on decisions and de$elopments o$er which construction companies
ha$e no say
?n this case, respondent "rinidad4s series o* employments with petitioner company were
co&terminous with its pro%ects 9hen its <oni Serrano&Tatipunan ?nterchan#e Pro%ect
was 3nished in December 200-, "rinidad4s employment ended with it )e was not
dismissed )is employment contract simply ended with the pro%ect *or which he had
si#ned up )is employment history belies the claim that he continuously wor2ed *or the
company ?nter$als or #aps separated one contract *rom another Billia* Constru!tion
Corp. and1or Deresita Cy and Billia* Cy vs. ?orge R. Drinidad, G.R. No. 18-#,$, ar!"
1#, #$1$ .
5einstatement@ reimbursement An employee cannot be compelled to reimburse the
salaries and wa#es he recei$ed durin# the pendency o* his appeal, notwithstandin# the
re$ersal by the FL5C o* the LA4s order o* reinstatement "he pertinent law on the
matter is not concerned with the wisdom or propriety o* the LA4s order o* reinstatement,
*or i* it was, then it should ha$e pro$ided that the pendency o* an appeal should stay its
e6ecution A*ter all, a decision cannot be deemed irre*ra#able unless it attains
3nality College of t"e 8**a!ulate Con!ep!ion vs. National )abor Relations Co**ission
and Atty. arius ;. Carlos, 7".0, G.R. No. 1+7,+-, ar!" ##, #$1$ .
5epresentation and "ransportation Allowance@ entitlement Statutory law, as
implemented by administrati$e issuances and interpreted in decisions, has consistently
treated 5A"A as distinct *rom salary :nli2e salary, which is paid *or ser$ices rendered,
5A"A belon#s to a bas2et o* allowances to de*ray e6penses deemed una$oidable in the
dischar#e o* o=ce )ence, 5A"A is paid only to certain o=cials who, by the nature o*
their o=ces, incur representation and transportation e6penses
At any rate, the denial o* 5A"A must be #rounded on rele$ant and speci3c pro$ision o*
law <y insistin# that, as re0uisite *or her receipt o* 5A"A, respondent must dischar#e
her o=ce as <acnotan4s treasurer while on reassi#nment at the La :nion treasurer4s
o=ce, the D<M eDecti$ely punishes respondent *or accedin# to her reassi#nment
Surely, the law could not ha$e intended to place local #o$ernment o=cials li2e
respondent in the di=cult position o* ha$in# to choose between disobeyin# a
reassi#nment order or 2eepin# an allowance 0epart*ent of 'udget and anage*ent
40'5 vs. 9livia 0. )eones, G.R. No. 1+97#+, ar!" 18, #$1$ .
Separation pay@ termination *or cause Separation pay is only warranted when the
cause *or termination is not attributable to the employee4s *ault, such as those pro$ided
in Articles 2A, and 2A- o* the Labor Code, as well as in cases o* ille#al dismissal in
which reinstatement is no lon#er *easible ?t is not allowed when an employee is
dismissed *or %ust cause, such as serious misconduct
Eurisprudence has classi3ed the*t o* company property as a serious misconduct and
denied the award o* separation pay to the errin# employee ?n this case, the Court saw
no reason why this same rule should not be similarly applied in the case o* Capor She
attempted to steal the property o* her lon#&time employer Hor committin# such
misconduct, she is de3nitely not entitled to an award o* separation pay
Capor4s ar#ument that despite the 3ndin# o* the*t, she should still be #ranted
separation pay in li#ht o* her lon# years o* ser$ice with the Company did not persuade
the Court ?ndeed, len#th o* ser$ice and a pre$iously clean employment record cannot
simply erase the #ra$ity o* the betrayal e6hibited by a mal*easant employee Len#th o*
ser$ice is not a bar#ainin# chip that can simply be stac2ed a#ainst the employer A*ter
all, an employer&employee relationship is symbiotic where both parties bene3t *rom
mutual loyalty and dedicated ser$ice ?* an employer had treated his employee well,
has accorded him *airness and ade0uate compensation as determined by law, it is only
*air to e6pect a lon#&time employee to return such *airness with at least some respect
and honesty "hus, it may be said that betrayal by a lon#&time employee is more
insultin# and odious *or a *air employer 9hile we sympathi>e with Capor4s pli#ht, bein#
o* retirement a#e and ha$in# ser$ed petitioners *or ,; years, we cannot award any
3nancial assistance in her *a$or because it is not only a#ainst the law but also a
retro#ressi$e public policy Reno ;oods, 8n!., and1or .i!ente 2"u vs. Nag(a(aisang
)a(as ng anggaga3a 4N)5 E 2atipunan on be"alf of its *e*ber, Nenita Capor, G.R.
No. 1+@$1+, ar!" 1,, #$1$.
"ermination o* employment@ con$iction in criminal case Con$iction in a criminal case is
not necessary to 3nd %ust cause *or termination o* employment Criminal cases re0uire
proo* beyond reasonable doubt while labor disputes re0uire only substantial e$idence,
which means such rele$ant e$idence as a reasonable mind mi#ht accept as ade0uate to
%usti*y a conclusion "he e$idence in this case was re$iewed by the appellate court and
two labor tribunals endowed with e6pertise on the matter U the Labor Arbiter and the
FL5C "hey all *ound substantial e$idence to conclude that Capor had been $alidly
dismissed *or dishonesty or serious misconduct Reno ;oods, 8n!., and1or .i!ente 2"u
vs. Nag(a(aisang )a(as ng anggaga3a 4N)5 E 2atipunan on be"alf of its *e*ber,
Nenita Capor, G.R. No. 1+@$1+, ar!" 1,, #$1$.
Labor Procedure
Court@ 3ndin#s o* *act .labor/ A petition *or re$iew on certiorari under 5ule -7 o* the
5ules o* Court should include only 0uestions o* law P 0uestions o* *act are not
re$iewable A 0uestion o* law e6ists when the doubt centers on what the law is on a
certain set o* *acts, while a 0uestion o* *act e6ists when the doubt centers on the truth
or *alsity o* the alle#ed *acts "here is a 0uestion o* law i* the issue raised is capable o*
bein# resol$ed without need o* re$iewin# the probati$e $alue o* the e$idence 'nce the
issue in$ites a re$iew o* the e$idence, the 0uestion is one o* *act
9hether S(: committed *raud and misrepresentation in *ailin# to remo$e Pineda4s
si#nature *rom the list o* employees who supported S(:4s application *or re#istration
and whether S(: conducted an election o* its o=cers are 0uestions o* *act "hey are
not re$iewable
Hactual 3ndin#s o* the Court o* Appeals are bindin# on the Court Absent #ra$e abuse o*
discretion, the Court will not disturb the Court o* Appeals4 *actual 3ndin#s
?n En!arna!ion v. Court of Appeals .K5 Fo 1012;2, A Eune 1;;,/, the Court held that,
Bunless there is a clearly #ra$e or whimsical abuse on its part, 3ndin#s o* *act o* the
appellate court will not be disturbed "he Supreme Court will only e6ercise its power o*
re$iew in 2nown e6ceptions such as #ross misappreciation o* e$idence or a total $oid o*
e$idenceC S"P? *ailed to show that the Court o* Appeals #ra$ely abused its
discretion Fo(o"a*a Dire 7"ilippines, 8n!. vs. Fo(o"a*a E*ployees Cnion,G.R. No.
1+-,-#, ar!" 1#, #$1$ .
Court@ 0uestions o* *act .labor/ "he petition essentially raises 0uestions o* *act 9hile
as a rule, *actual 3ndin#s o* the CA are bindin# on the Court, the Court e6ercised its
discretionary re$iew authority to re$iew the *acts o* this case in $iew o* the conJict in
the 3ndin#s o* *acts o* the labor arbiter, on the one hand, and the FL5C and the CA, on
the other B"ite 0ia*ond Drading Corporation and1or ?erry Cy vs. National
)aborRelations Co**ission, et al., G.R. No. 18+$19. ar!" #9, #$1$ .
?ndispensable party 5ule ,, Section Q o* the 5ules o* Court de3nes indispensable
parties as those who are parties in interest without whom there can be no 3nal
determination o* an action "hey are those parties who possess such an interest in the
contro$ersy that a 3nal decree would necessarily aDect their ri#hts, so that the courts
cannot proceed without their presence A party is indispensable i* his interest in the
sub%ect matter o* the suit and in the relie* sou#ht is ine6tricably intertwined with the
other parties4 interest
:n0uestionably, Gillamater4s widow stands as an indispensable party to this complaint
*or payment o* permanent and total disability bene3ts, reimbursement o* medical and
hospitali>ation e6penses, moral and e6emplary dama#es, and attorney4s *ees )eonis
Navigation Co., 8n!. and Borld arine 7ana*a, &.A. vs. Catalino C. .illa*ater, et
al., G.R. No. 1791+9, ar!" -, #$1$ .
Eurisdiction@ estoppel Petitioner is already estopped *rom belatedly raisin# the issue o*
lac2 o* %urisdiction since it has acti$ely participated in the proceedin#s be*ore the LA
and FL5C 9e ha$e consistently held that while %urisdiction may be assailed at any
sta#e, a party4s acti$e participation in the proceedin#s be*ore a court without
%urisdiction will estop such party *rom assailin# such lac2 o* it ?t is an undesirable
practice o* a party participatin# in the proceedin#s and submittin# his case *or decision
and then acceptin# the %ud#ment, only i* *a$orable, and attac2in# it *or lac2 o*
%urisdiction, when ad$erse 7"ilippine .eterans 'an( vs. National )abor Relations
Co**ission, et al.,G.R. No. 18888#, ar!" -$, #$1$ .
Eurisdiction@ labor arbiter Petitioners clearly and consistently 0uestioned the le#ality o*
5KM?4s adoption o* the new salary scheme .ie, piece&rate basis/, assertin# that such
action, amon# others, $iolated the e6istin# C<A ?ndeed, the contro$ersy was not a
simple case o* ille#al dismissal but a labor dispute in$ol$in# the manner o* ascertainin#
employees4 salaries, a matter which was #o$erned by the e6istin# C<A
9ith re#ard to the 0uestion o* %urisdiction o$er the sub%ect matter, Article 21Q.c/ o* the
Labor Code re0uires labor arbiters to re*er cases in$ol$in# the implementation o* C<As
to the #rie$ance machinery pro$ided therein and to $oluntary arbitration Moreo$er,
Article 260 o* the Labor Code clari3es that such disputes must be re*erred 3rst to the
#rie$ance machinery and, i* unresol$ed within se$en days, they shall automatically be
re*erred to $oluntary arbitration :nder this pro$ision, $oluntary arbitrators ha$e ori#inal
and e6clusi$e %urisdiction o$er matters which ha$e not been resol$ed by the #rie$ance
machinery
Pursuant to Articles 21Q in relation to Articles 260 and 261 o* the Labor Code, the labor
arbiter should ha$e re*erred the matter to the #rie$ance machinery pro$ided in the
C<A iguela &antuyo, et al. vs. Re*er!o Gar*ents anufa!turing, 8n!. and1or .i!toria
Reyes, G.R. No. 17@@#$, ar!" ##, #$1$ .
Eurisdiction@ labor case Article 21Q o* the Labor Code pro$ides that the Labor Arbiters
shall ha$e ori#inal and e6clusi$e %urisdiction to hear and decide cases in$ol$in#
termination disputes "he FL5C shall ha$e e6clusi$e appellate %urisdiction o$er all cases
decided by Labor Arbiters Kalera bein# an employee, the Labor Arbiter and the FL5C
ha$e %urisdiction o$er the present case B77 ar(eting Co**uni!ations, 8n!. et al. vs.
?o!elyn . Galera1?o!elyn . Galera vs. B77 ar(eting Co**uni!ations, 8n!. et al., G.R.
No. 1+9#$71G.R. No. 1+9#-9, ar!" #,, #$1$ .
Eurisdiction@ FL5C "he Labor Arbiter and the FL5C do not ha$e %urisdiction o$er L5"A
Petitioners themsel$es admitted in their complaint that L5"A Bis a #o$ernment a#ency
or#ani>ed and e6istin# pursuant to an ori#inal charter .(6ecuti$e 'rder Fo 60,/,C and
that they are employees o* M("5'
)ig"t Rail Dransit Aut"ority v. .enus, ?r. .K5 Fos 16,QA2 N 16,AA1, March 2-, 2006/,
which has a similar *actual bac2drop, holds that L5"A, bein# a #o$ernment&owned or
controlled corporation created by an ori#inal charter, is beyond the reach o* the
Department o* Labor and (mployment which has %urisdiction o$er wor2ers in the pri$ate
sector, B(mployees o* petitioner M("5' cannot be considered as employees o*
petitioner L5"A "he employees hired by M("5' are co$ered by the Labor Code and are
under the %urisdiction o* the Department o* Labor and (mployment, whereas the
employees o* petitioner L5"A, a #o$ernment&owned and controlled corporation with
ori#inal charter, are co$ered by ci$il ser$ice rules )erein pri$ate respondent wor2ers
cannot ha$e the best o* two worlds, e#, be considered #o$ernment employees o*
petitioner L5"A, yet allowed to stri2e as pri$ate employees under our labor lawsC
?n 3ne, the Labor Arbiter4s decision a#ainst L5"A was rendered without %urisdiction,
hence, it is $oid "hus, it was improper *or the appellate court to order the remand o*
the case to the FL5C, and *or it .FL5C/ to #i$e due course to L5"A4s appeal E**anuel
&. 6ugo, et al. vs. )ig"t Rail Dransit Aut"ority, G.R. No. 1818++, ar!" 18, #$1$ .
FL5C@ 3nal decision Petitioners recei$ed the Eune 17, 200- resolution o* the FL5C,
denyin# their motion *or reconsideration, on Eune 16, 200- "hey 3led their petition *or
certiorari be*ore the CA on Au#ust ;, 200-, or 7- calendar days *rom the date o* notice
o* the Eune 17, 200- resolution <y reason o* the 3nality o* the Eune 17, 200- FL5C
resolution, the Labor Arbiter issued on Euly 2;, 200- a 9rit o* (6ecution Petitioners
ne$er mo$ed *or a reconsideration o* this 'rder re#ardin# the $oluntariness o* their
payment to Sonia, as well as the dismissal with pre%udice and the concomitant
termination o* the case
)owe$er, petitioners ar#ued that the 3nality o* the case did not render the petition *or
certiorari be*ore the CA moot and academic 'n this point, we a#ree with petitioners
?n the landmar2 case o* &t. artin ;uneral 6o*e v. N)RC .K5 Fo 1,0A66, September
16, 1;;A/, we ruled that %udicial re$iew o* decisions o* the FL5C is sou#ht $ia a petition
*or certiorari under 5ule 67 o* the 5ules o* Court, and the petition should be 3led be*ore
the CA, *ollowin# the strict obser$ance o* the hierarchy o* courts :nder 5ule 67,
Section -, petitioners are allowed si6ty .60/ days *rom notice o* the assailed order or
resolution within which to 3le the petition
Simply put, the e6ecution o* the 3nal and e6ecutory decision or resolution o* the FL5C
shall proceed despite the pendency o* a petition *or certiorari, unless it is restrained by
the proper court )eonis Navigation Co., 8n!. and Borld arine 7ana*a, &.A. vs.
Catalino C. .illa*ater, et al., G.R. No. 1791+9, ar!" -, #$1$ .
P'(A@ *actual 3ndin#s As a #eneral rule, *actual 3ndin#s o* administrati$e and 0uasi&
%udicial a#encies speciali>in# in their respecti$e 3elds, especially when a=rmed by the
CA, must be accorded hi#h respect, i* not 3nality )owe$er, we are not bound to adhere
to the #eneral rule i* we 3nd that the *actual 3ndin#s do not con*orm to the e$idence on
record or are not supported by substantial e$idence, as in the instant case
"he sel*&ser$in# and unsubstantiated alle#ations o* respondent cannot de*eat the
concrete e$idence submitted by petitioner 9e note that respondent did not deny the
due e6ecution o* the withdrawal *orm as well as the #enuineness o* his si#nature and
thumb mar2 a=6ed therein 'n the contrary, he admitted si#nin# the same 9hen he
$oluntarily si#ned the document, respondent is bound by the terms stipulated
therein )N& 8nternational anpo3er &ervi!es vs. Ar*ando 7adua, ?r.,G.R. No. 17979#,
ar!" ,, #$1$ .
Au#ust 2010 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on September 16, 2010 by Leslie C Dy ! Posted in Labor Law
! "a##ed abandonment, bac2wa#es, breach o* trust,burden o* proo*, dama#es, employee
bene3ts, ille#al dismissal, ille#al stri2e, labor&only contractin#, loss o* trust and
con3dence, mer#er, ne#li#ence, FL5C, probationary employment, pro%ect
employee, rehabilitation, reinstatement,retirement, security o* tenure, serious misconduct, union !
)ere are selected Au#ust 2010 rulin#s o* the Supreme Court o* the Philippines on labor
law and procedure+
Labor Law
Dismissal@ abandonment "ime and a#ain, the Supreme Court has held that
abandonment is totally inconsistent with the immediate 3lin# o* a complaint *or ille#al
dismissal, more so i* the same is accompanied by a prayer *or reinstatement ?n the
present case, howe$er, petitioner 3led his complaint more than one year a*ter his
alle#ed termination *rom employment Moreo$er, petitioner did not as2 *or
reinstatement in the complaint *orm, which he personally 3lled up and 3led with the
FL5C "he prayer *or reinstatement is made only in the Position Paper that was later
prepared by his counsel "his is an indication that petitioner ne$er had the intention or
desire to return to his %ob Elpidio Calipay vs. National )abor Relations Co**ission, et
al., G.R. No. 1++@11, August -, #$1$.
Dismissal@ burden o* proo* ?n termination cases, the employer has the burden o*
pro$in#, by substantial e$idence that the dismissal is *or %ust cause ?* the employer *ails
to dischar#e the burden o* proo*, the dismissal is deemed ille#al ?n the present case,
<CP? *ailed to dischar#e its burden when it *ailed to present any e$idence o* the alle#ed
3st3#ht, aside *rom a sin#le statement, which was re*uted by statements made by other
witnesses and was *ound to be incredible by both the Labor Arbiter and the FL5C Ale%
Gurango vs. 'est C"e*i!als and 7lasti!, 8n!., et al., G.R. No. 17@,9-, August #,, #$1$.
Dismissal@ burden o* proo* "he law mandates that the burden o* pro$in# the $alidity o*
the termination o* employment rests with the employer Hailure to dischar#e this
e$identiary burden would necessarily mean that the dismissal was not %usti3ed and,
there*ore, ille#al :nsubstantiated suspicions, accusations, and conclusions o*
employers do not pro$ide *or le#al %usti3cation *or dismissin# employees ?n case o*
doubt, such cases should be resol$ed in *a$or o* labor, pursuant to the social %ustice
policy o* labor laws and the Constitution Century Canning Corporation, Ri!ardo D. 7o, ?r.,
et al. vs. .i!ente Randy R. Ra*il, G.R. No. 171+-$, August 8, #$1$.
Dismissal@ due process ?n termination proceedin#s o* employees, procedural due
process consists o* the twin re0uirements o* notice and hearin# "he employer must
*urnish the employee with two written notices be*ore the termination o* employment
can be eDected+ .1/ the 3rst apprises the employee o* the particular acts or omissions
*or which his dismissal is sou#ht@ and .2/ the second in*orms the employee o* the
employer4s decision to dismiss him "he re0uirement o* a hearin# is complied with as
lon# as there was an opportunity to be heard, and not necessarily that an actual hearin#
was conducted 7"ar*a!ia and CpGo"n, 8n!., et al. vs. Ri!ardo 7. Albayda, ?r., G.R. No.
17#7#@, August #-, #$1$.
Dismissal@ due process "he Labor Code reco#ni>es the ri#ht to due process o* all
wor2ers, without distinction as to the cause o* their termination, e$en i* the cause was
their supposed in$ol$ement in stri2e&related $iolence ?n the present case, P)?MC' sent
a letter to the aDected union membersRo=cers, directin# them to e6plain within 2-
hours why they should not be dismissed *or the ille#al acts they committed durin# the
stri2e@ three days later, the union membersRo=cers were in*ormed o* their dismissal
*rom employment 9e do not 3nd this company procedure to be su=cient compliance
with due process ?t does not appear *rom the e$idence that the union o=cers were
speci3cally in*ormed o* the char#es a#ainst them Also, the short inter$al o* time
between the 3rst and second notice shows that a mere to2en reco#nition o* the due
process re0uirements was made, indicatin# the company4s intent to dismiss the union
members in$ol$ed, without any meanin#*ul resort to the #uarantees accorded them by
law 768C9 8ndustries, 8n!. vs. 768C9 8ndustries )abor Asso!iation 478)A5, et al., G.R.
No. 17$8-$, August 11, #$1$.
Dismissal@ employee4s past in*ractions A pre$ious oDense may be used as $alid
%usti3cation *or dismissal *rom wor2 only i* the past in*ractions are related to the
subse0uent oDense upon which the basis o* termination is decreed "he respondent4s
pre$ious incidents o* tardiness in reportin# *or wor2 were entirely separate and distinct
*rom his latest alle#ed in*raction o* *or#ery )ence, the same could no lon#er be utili>ed
as an added %usti3cation *or his dismissal <esides, respondent had already been
sanctioned *or his prior in*ractions "o consider these oDenses as %usti3cation *or his
dismissal would be penali>in# respondent twice *or the same oDense Century Canning
Corporation, Ri!ardo D. 7o, ?r., et al. vs. .i!ente Randy R. Ra*il, G.R. No. 171+-$,
August 8, #$1$.
Dismissal@ *en# shui@ breach o* trust and con3dence "he Court 3nds that the
complainant4s alle#ations are more credible and that she was dismissed *rom her
employment because the Hen# Shui master *ound that complainant4s Chinese Vodiac
Si#n was a mismatch to that o* respondents "his is not a %ust and $alid cause *or an
employee4s dismissal
?n contrast, respondent4s pleadin#s and e$idence suDer *rom se$eral inconsistencies
and the a=da$its presented by respondents only pertain to petty matters that are not
su=cient to support respondent4s alle#ed loss o* trust and con3dence "o be a $alid
cause *or termination o* employment, the act or acts constitutin# breach o* trust must
ha$e been done intentionally, 2nowin#ly, and purposely@ and they must be *ounded on
clearly established *acts Bens"a &pa Center, in!. and1or Hu I"i ?ie ,vs. )oreta D.
Fung, G.R. No. 18,1##, August 1+, #$1$.
Dismissal@ #ross ne#li#ence and loss o* con3dence Kross ne#li#ence connotes Bwant o*
care in the per*ormance o* one4s dutiesC Petitioner4s *ailure on , separate occasions to
re0uire clients to si#n the re0uisite documents constituted #ross ne#li#ence
Hurthermore, it has been held that i* the employees are cashiers, *anagers,
super$isors, salesmen or other personnel occupyin# positions o* responsibility, the
employer4s loss o* trust and con3dence in said employees may %usti*y the termination o*
their employment As the <an24s Personal <an2in# Mana#er, petitioner4s *ailure to
comply with basic ban2in# policies and procedures were inimical to the interests o* the
ban2, ma2in# his dismissal based on loss o* con3dence %usti3ed ?esus E. 0y!o!o, ?r.vs.
E=uitable 7C8 'an( 4no3 'an!o de 9ro5, Rene 'unaventura and &iles &a*alea, G.R. No.
188#71, August 1+, #$1$.
Dismissal@ loss o* trust and con3dence (mployers are allowed a wider latitude o*
discretion in terminatin# the ser$ices o* employees who per*orm *unctions which by
their nature re0uire the employers4 *ull trust and con3dence and the mere e6istence o*
basis *or belie$in# that the employee has breached the trust o* the employer is
su=cient )owe$er, this does not mean that the said basis may be arbitrary and
un*ounded Loss o* trust and con3dence, to be a $alid cause *or dismissal, must be
based on a will*ul breach o* trust and *ounded on clearly established *acts "he basis *or
the dismissal must be clearly and con$incin#ly established ?t must rest on substantial
#rounds and not on the employer4s arbitrariness, whim, caprice or suspicion@ otherwise,
the employee would eternally remain at the mercy o* the employer Century Canning
Corporation, Ri!ardo D. 7o, ?r., et al. vs. .i!ente Randy R. Ra*il, G.R. No. 171+-$,
August 8, #$1$.
Dismissal@ probationary employment "hou#h the acts char#ed a#ainst de Castro too2
place when he was still under probationary employment, the records show that de
Castro was dismissed on the ninth month o* his employment with L<F? <y then, he was
already a re#ular employee by operation o* law As a re#ular employee, de Castro was
entitled to security o* tenure and his ille#al dismissal *rom L<F? %usti3ed the awards o*
separation pay, bac2wa#es, and dama#es Carlos 0e Castro vs. )iberty 'road!asting
Net3or(, 8n!. and Edgardo Juigue, G.R. No. 1+,1,-. August #,, #$1$
Dismissal@ pro%ect employees@ dama#es Prior or ad$ance notice o* termination is not
part o* procedural due process i* the termination o* a pro%ect employee is brou#ht about
by the completion o* the contract or phase thereo* "his is because completion o* the
wor2 or pro%ect automatically terminates the employment, in which case, the employer
is, under the law, only obli#ed to render a report to the D'L( "here*ore, *ailin# to #i$e
pro%ect employees ad$ance notice o* their termination is not a $iolation o* procedural
due process and cannot be the basis *or the payment o* nominal dama#es 0..
ConsunGi, 8n!. vs. Antonio Gobres, et al., G.R. No. 1+917$, August 8, #$1$.
Dismissal@ separation pay and bac2wa#es "he awards o* separation pay and bac2wa#es
are not mutually e6clusi$e and both may be #i$en to the respondent "he normal
conse0uences o* a 3ndin# that an employee has been ille#ally dismissed are, 3rstly,
that the employee becomes entitled to reinstatement to his *ormer position without loss
o* seniority ri#hts and, secondly, the payment o* bac2wa#es correspondin# to the period
*rom his ille#al dismissal up to actual reinstatement "hese are two separate and
distinct remedies #ranted to the employee and the inappropriateness or non&a$ailability
o* one does not carry with it the inappropriateness or non&a$ailability o* the other :nder
the doctrine o* strained relations, the payment o* separation pay has been considered
an acceptable alternati$e to reinstatement when the latter option is no lon#er desirable
or $iable "he #rant o* separation pay is a proper substitute only *or reinstatement@ it
cannot be an ade0uate substitute *or both reinstatement and bac2wa#es Century
Canning Corporation, Ri!ardo D. 7o, ?r., et al. vs. .i!ente Randy R. Ra*il, G.R. No.
171+-$, August 8, #$1$.
Dismissal@ serious misconduct Misconduct is de3ned as Bthe trans#ression o* some
established and de3nite rule o* action, a *orbidden act, a dereliction o* duty, will*ul in
character, and implies wron#*ul intent and not mere error in %ud#mentC Hor serious
misconduct to %usti*y dismissal under the law, B.a/ it must be serious, .b/ must relate to
the per*ormance o* the employee4s duties@ and .c/ must show that the employee has
become un3t to continue wor2in# *or the employerC
?t is noteworthy that prior to this incident, there had been se$eral cases o* the*t and
$andalism in$ol$in# both respondent company4s property and personal belon#in#s o*
other employees ?n order to address this issue o* losses, respondent company issued
two memoranda implementin# an intensi$e inspection procedure and remindin# all
employees that those who will be cau#ht stealin# and per*ormin# acts o* $andalism will
be dealt with in accordance with the company4s Code o* Conduct Despite these
reminders, complainant too2 the pac2in# tape and was cau#ht durin# the routine
inspection All these circumstances point to the conclusion that it was not %ust an error
o* %ud#ment, but a deliberate act o* the*t o* company property Nag(a(aisang )a(as ng
anggaga3a sa 2ei"in 4N)2A9)A)8AA2C5 and 6elen .alen/uela vs. 2ei"in 7"ilippines
Corporation, G.R. No. 17111,, August 9, #$1$
Dismissal@ union security ?n terminatin# the employment o* an employee by en*orcin#
the union security clause, the employer needs to determine and pro$e that+ .1/ the
union security clause is applicable@ .2/ the union is re0uestin# *or the en*orcement o*
the union security pro$ision in the C<A@ and .,/ there is su=cient e$idence to support
the decision o* the union to e6pel the employee *rom the union "hese re0uisites
constitute %ust cause *or terminatin# an employee based on the union security pro$ision
o* the C<A
"he petitioner *ailed to satis*y the third re0uirement since nothin# in the records would
show that respondents *ailed to maintain their membership in #ood standin# in the
union Si#ni3cantly, petitioner4s act o* dismissin# respondents stemmed *rom the
latter4s act o* si#nin# an authori>ation letter to 3le a petition *or certi3cation election as
they si#ned it outside the *reedom period "he mere si#nin# o* an authori>ation letter
be*ore the *reedom period is not su=cient #round to terminate the employment o*
respondents inasmuch as the petition itsel* was actually 3led durin# the *reedom period
"he court emphasi>es anew that the employer is bound to e6ercise caution in
terminatin# the ser$ices o* his employees especially so when it is made upon the
re0uest o* a labor union pursuant to the Collecti$e <ar#ainin# A#reement 7i!op
Resour!es 8n!orporated 47R85 vs. Ana!leto ). DaKe!a, et al., G.R. No. 1+$8#8, August 9,
#$1$.
Dimissal@ use o* ille#al dru#s "he law is clear that dru# tests shall be per*ormed only by
authori>ed dru# testin# centers ?n this case, Sulpicio Lines *ailed to pro$e that SM
La>o Clinic is an accredited dru# testin# center nor did it deny the complainant4s
alle#ation that SM La>o Clinic was not accredited Also, only a screenin# test was
conducted to determine i* the complainant was #uilty o* usin# ille#al dru#s &ulpi!io
)ines did not !onLr* t"e positive result of t"e s!reening test 3it" a !onLr*atory test as
re0uired by 5A ;167 )ence, Sulpicio Lines *ailed to indubitably pro$e that Faca#ue
was #uilty o* usin# ille#al dru#s and *ailed to clearly show that it had a $alid and le#al
cause *or terminatin# Faca#ue4s employment 9hen the alle#ed $alid cause *or the
termination o* employment is not clearly pro$en, as in this case, the law considers the
matter a case o* ille#al dismissal ?e>rey Na!ague vs. &ulpi!io )ines, 8n!., G.R. No.
17#,89, August 8, #$1$.
Dismissal@ $alidity "he company did not adduce any e$idence to pro$e that Sia>ar4s
dismissal had been *or a %ust or authori>ed cause, as in *act it had been its consistent
stand that it did not terminate him and that he 0uit on his own <ut #i$en the 3ndin#s o*
the Court that the company had indeed dismissed Sia>ar and that such dismissal has
remained une6plained, there can be no other conclusion but that the dismissal was
ille#al Agri!ultural and 8ndustrial &upplies Corporation, et al. vs. ?ueber 7. &ia/ar, et
al., G.R. No. 17797$, August #,, #$1$.
Due process@ decision rendered without due process "he $iolation o* a party4s ri#ht to
due process raises a serious %urisdictional issue that cannot be #lossed o$er or
disre#arded at will 9here the denial o* the *undamental ri#ht to due process is
apparent, a decision rendered in disre#ard o* that ri#ht is $oid *or lac2 o* %urisdiction
"his rule is e0ually true in 0uasi&%udicial and administrati$e proceedin#s, *or the
constitutional #uarantee that no man shall be depri$ed o* li*e, liberty, or property
without due process is un0uali3ed by the type o* proceedin#s .whether %udicial or
administrati$e/ where he stands to lose the same Binston ;. Gar!ia vs. ario 8. olina,
et al.1Binston ;. Gar!ia .s. ario 8. olina, et al., G.R. No. 1,7-8-1G.R. No. 17@1-7,
August 1$, #$1$.
(mployee@ e$aluation and promotion "he *act that employees were re&classi3ed *rom
Eob Krade Le$el 1 to Eob Krade Le$el 2 as a result o* a %ob e$aluation pro#ram does not
automatically entail a promotion or #rant them an increase in salary '* primordial
consideration is not the nomenclature or title #i$en to the employee, but the nature o*
his *unctions 9hat transpired in this case was only a promotion in nomenclature "he
employees continued to occupy the same positions they were occupyin# prior to the %ob
e$aluation Moreo$er, their %ob titles remained the same and they were not #i$en
additional duties and responsibilities &CA 6ygiene 7rodu!ts Corporation E*ployees
Asso!iationA;;B vs. &CA 6ygiene 7rodu!ts Corporation, G.R. No. 18#877, August 9,
#$1$.
(mployee@ security o* tenure A wor2er4s security o* tenure is #uaranteed by the
Constitution and the Labor Code :nder the security o* tenure #uarantee, a wor2er can
only be terminated *rom his employment *or cause and a*ter due process Hor a $alid
termination by the employer+ .1/ the dismissal must be *or a $alid cause as pro$ided in
Article 2A2, or *or any o* the authori>ed causes under Articles 2A, and 2A- o* the Labor
Code@ and .2/ the employee must be aDorded an opportunity to be heard and to de*end
himsel* A %ust and $alid cause *or an employee4s dismissal must be supported by
substantial e$idence, and be*ore the employee can be dismissed, he must be #i$en
proper notice o* such causeRs and an ade0uate opportunity to be heard ?n the process,
the employer bears the burden o* pro$in# that the dismissal o* an employee was *or a
$alid cause ?ts *ailure to dischar#e this burden renders the dismissal un%usti3ed and,
there*ore, ille#al Bens"a &pa Center, 8n!. and1or Hu I"i ?ie vs. )oreta D. Fung, G.R. No.
18,1##, August 1+, #$1$.
(mployee bene3t@ time o* death "he death should be deemed compensable under the
(CC since )enry was on his way bac2 to Manila in order to be on time and be ready *or
wor2 the ne6t day when his accidental death occurred )e should already be deemed en
route to the per*ormance o* his duty at the time o* the accident ?t should be noted that
)enry4s superior allowed him to tra$el to La :nion to $isit his ailin# mother on the
condition that that he return the ne6t day :nder these *acts, )enry was in the course o*
complyin# with his superior4s order when he met his *atal accident "o be sure, he was
not in an actual 3re3#htin# or accident situation when he died, but returnin# to wor2 as
instructed by his superior is no less e0ui$alent to compensable per*ormance o* duty
under Section 1, 5ule ??? o* the (CC 5ules Govern*ent &ervi!e 8nsuran!e &yste* vs.
;eli!itas Iarate, as substituted by "er "eirs, na*ely elanie Iarate, et al., G.R. No.
17$8@7, August -, #$1$.
?lle#al dismissal@ eDect o* rehabilitation proceedin#s "he e6istence o* the Stay 'rder U
which would #enerally authori>e the suspension o* %udicial proceedin#s U could not ha$e
aDected the Court4s action on the present case due to the petitioner4s *ailure to raise
the pendency o* the rehabilitation proceedin#s in its memorandum to the Court At any
rate, a stay order simply suspends all actions *or claims a#ainst a corporation
under#oin# rehabilitation@ it does not wor2 to oust a court o* its %urisdiction o$er a case
properly 3led be*ore it "hus, the Court4s rulin# on the principal issue o* the case stands
Fe$ertheless, with L<F?4s mani*estation that it is still under#oin# rehabilitation, the
Court resol$es to suspend the e6ecution o* our Decision until the termination o* the
rehabilitation proceedin#s Carlos 0e Castro vs. )iberty 'road!asting Net3or(, 8n!. and
Edgardo Juigue, G.R. No. 1+,1,-. August #,, #$1$
Eob contractin# ?n permissible %ob contractin#, the principal a#rees to put out or *arm
out with a contractor or subcontractor the per*ormance or completion o* a speci3c %ob,
wor2 or ser$ice within a de3nite or predetermined period, re#ardless o* whether such
%ob, wor2 or ser$ice is to be per*ormed or completed within or outside the premises o*
the principal "he test is whether the independent contractor has contracted to do the
wor2 accordin# to his own methods and without bein# sub%ect to the principal4s control
e6cept only as to the results, he has substantial capital, and he has assured the
contractual employees entitlement to all labor and occupational sa*ety and health
standards, *ree e6ercise o* the ri#ht to sel*&or#ani>ation, security o* tenure, and social
and wel*are bene3ts &pi! nM &pan &ervi!es Corp. vs. Gloria 7aGe, et al., G.R. No. 17@$8@,
August #,, #$1$
Mana#ement prero#ati$e@ trans*er o* employees Eurisprudence reco#ni>es the e6ercise
o* mana#ement prero#ati$e to trans*er or assi#n employees *rom one o=ce or area o*
operation to another, pro$ided there is no demotion in ran2 or diminution o* salary,
bene3ts, and other pri$ile#es, and the action is not moti$ated by discrimination, made
in bad *aith, or eDected as a *orm o* punishment or demotion without su=cient cause
"o determine the $alidity o* the trans*er o* employees, the employer must show that the
trans*er is not unreasonable, incon$enient, or pre%udicial to the employee@ nor does it
in$ol$e a demotion in ran2 or a diminution o* his salaries, pri$ile#es and other bene3ts
Should the employer *ail to o$ercome this burden o* proo*, the employee4s trans*er shall
be tantamount to constructi$e dismissal 7"ar*a!ia and CpGo"n, 8n!., et al. vs. Ri!ardo
7. Albayda, ?r., G.R. No. 17#7#@, August #-, #$1$.
Mer#er@ employee terms and conditions "hat <P? is the same entity as H(<"C a*ter the
mer#er is but a le#al 3ction intended as a tool to ad%udicate 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 i* there is no chan#e in the personality o* the employer,
there is in reality a chan#e in the situation o* the employee 'nce an H(<"C employee is
absorbed, there are presumably chan#es in his condition o* employment e$en i* his
pre$ious tenure and salary rate is reco#ni>ed by <P? ?t is reasonable to assume that <P?
would ha$e diDerent rules and re#ulations and company practices than H(<"C and it is
incumbent upon the *ormer H(<"C employees to obey these new Fot the least o* these
chan#es is the *act that prior to the mer#er H(<"C employees were employees o* an
unor#ani>ed establishment and a*ter the mer#er they became employees o* a unioni>ed
company that had an e6istin# C<A with the certi3ed union "hus, althou#h in a sense
<P? is continuin# H(<"C4s employment o* these absorbed employees, <P?4s employment
o* these absorbed employees will not be under e6actly the same terms and conditions
as stated in the latter4s employment contracts with H(<"C 'an( of t"e 7"ilippine
8slands vs. '78 E*ployees CnionA0avao C"apterA;ederation of Cnions in '78
Cniban(, G.R. No. 1+@-$1, August 1$, #$1$.
5einstatement o* employee@ doctrine o* strained relations :nder the doctrine o*
strained relations, the payment o* separation pay has been considered an acceptable
alternati$e to reinstatement when the latter option is no lon#er desirable or $iable 'n
the one hand, such payment liberates the employee *rom what could be a hi#hly
oppressi$e wor2 en$ironment 'n the other, the payment releases the employer *rom
the #rossly unpalatable obli#ation o* maintainin# in its employ a wor2er it could no
lon#er trust Bens"a &pa Center, 8n!. and1or Hu I"i ?ie vs. )oreta D. Fung,G.R. No.
18,1##, August 1+, #$1$.
5etirement pay@ applicability to employees on commission basis ($en i* the petitioner
as bus conductor was paid on commission basis, he *alls within the co$era#e o* 5A
Q6-1 and its implementin# rules "hus, his retirement pay should include the cash
e0ui$alent o* 7&days S?L and 1R12 o* 1,th month pay "he FL5C4s reliance on the case
o* R & E Dransport, 8n!. as a basis *or rulin# that bus conductors are not co$ered by the
law on S?L and 1,
th
month pay is erroneous since that in$ol$ed a ta6i dri$er who was
paid accordin# to the Bboundary systemC "here is a diDerence between dri$ers paid
under the Bboundary systemC and conductors who are paid on commission basis ?n
practice, ta6i dri$ers do not recei$e 36ed wa#es and retain only those sums in e6cess o*
the BboundaryC or *ee they pay to the owners or operators o* the $ehicles Conductors,
on the other hand, are paid a certain percenta#e o* the bus4 earnin#s *or the
day Rodolfo ?. &errano vs. &everino &antos Dransit and1or &everino &antos, G.R. No.
187+98, August 9, #$1$.
Separation pay ?n those instances where an employee has been $alidly dismissed *or
causes other than serious misconduct or those reJectin# on his moral character,
separation pay may still be #ranted a*ter #i$in# considerable wei#ht to his lon# years o*
employment ?n this case, e0uity considerations dictate that respondent4s tenure be
computed *rom 1;QA, the year when respondent started wor2in# *or :p%ohn, and not
only *rom 1;;6, when the mer#er o* Pharmacia and :p%ohn too2 place 7"ar*a!ia and
CpGo"n, 8n!., et al. vs. Ri!ardo p. Albayda, ?r., G.R. No. 17#7#@, August #-, #$1$.
Stri2e@ $alidity o* stri2e Despite the $alidity o* the purpose o* a stri2e and the union4s
compliance with the procedural re0uirements, a stri2e may still be held ille#al where the
means employed are ille#al 9hile the stri2e had not been marred by actual $iolence
and patent intimidation, the pic2etin# that respondent P?LA o=cers and members
undertoo2 as part o* their stri2e acti$ities eDecti$ely bloc2ed the *ree in#ress to and
e#ress *rom P)?MC'4s premises, thus pre$entin# non&stri2in# employees and company
$ehicles *rom enterin# the P)?MC' compound ?n this manner, the pic2eters $iolated
Article 26-.e/ o* the Labor Code and tainted the stri2e with ille#ality 768C9 8ndustries,
8n!. vs. 768C9 8ndustries )abor Asso!iation 478)A5, et al., G.R. No. 17$8-$, August 11,
#$1$.
:nion@ eli#ibility o* con3dential employees to %oin Con3dential employees are de3ned
as those who .1/ assist or act in a con3dential capacity, .2/ to persons who *ormulate,
determine, and eDectuate mana#ement policies in the 3eld o* labor relations "he two
criteria are cumulati$e, and both must be met i* an employee is to be considered a
con3dential employee U that is, the con3dential relationship must e6ist between the
employee and his super$isor, and the super$isor must handle the prescribed
responsibilities relatin# to labor relations. ?n the present case, there is no showin# that
the secretariesRcler2s and chec2ers assisted or acted in a con3dential capacity to
mana#erial employees and obtained con3dential in*ormation relatin# to labor relations
policies And e$en assumin# that they had e6posure to internal business operations o*
the company, as respondent claims, this is not per se #round *or their e6clusion in the
bar#ainin# unit o* the ran2&and&3le employees Dunay na 7ag(a(aisa ng anggaga3a
sa Asia 're3ery vs. Asia 're3ery, 8n!., G.R. No. 1+#$#,, August -, #$1$.
:nion@ liability *or in$alid stri2e "he eDects o* ille#al stri2es, outlined in Article 26- o*
the Labor Code, ma2e a distinction between participatin# wor2ers and union o=cers
"he ser$ices o* an ordinary stri2in# wor2er cannot be terminated *or mere participation
in an ille#al stri2e@ proo* must be adduced showin# that he or she committed ille#al acts
durin# the stri2e "he ser$ices o* a participatin# union o=cer, on the other hand, may
be terminated, not only when he actually commits an ille#al act durin# a stri2e, but also
i* he 2nowin#ly participates in an ille#al stri2e768C9 8ndustries, 8n!. vs. 768C9
8ndustries )abor Asso!iation 478)A5, et al., G.R. No. 17$8-$, August 11, #$1$.
:nion shop@ eDect o* mer#er All employees in the bar#ainin# unit co$ered by a :nion
Shop Clause in their C<A with mana#ement are sub%ect to its terms )owe$er, under law
and %urisprudence, the *ollowin# 2inds o* employees are e6empted *rom its co$era#e,
namely, .1/ employees who at the time the union shop a#reement ta2es eDect are bona
3de members o* a reli#ious or#ani>ation which prohibits its members *rom %oinin# labor
unions on reli#ious #rounds@ .2/ employees already in the ser$ice and already members
o* a union other than the ma%ority at the time the union shop a#reement too2 eDect@ .,/
con3dential employees who are e6cluded *rom the ran2 and 3le bar#ainin# unit@ and .-/
employees e6cluded *rom the union shop by e6press terms o* the a#reement ?n the
absence o* any o* these reco#ni>ed e6ceptions, there is no basis to conclude that the
terms and conditions o* employment under a $alid C<A in *orce in the sur$i$in#
corporation should not be made to apply to the absorbed employees 'an( of t"e
7"ilippine 8slands vs. '78 E*ployees CnionA0avao C"apterA;ederation of Cnions in '78
Cniban(, G.R. No. 1+@-$1, August 1$, #$1$.
Labor Procedure
CSC@ rules *or dismissal "he 3lin# o* *ormal char#es a#ainst the respondents without
complyin# with the mandated preliminary in$esti#ation or at least #i$in# the
respondents the opportunity to comment $iolated the latter4s ri#ht to due process
"hese rules on due process apply e$en in cases where the complainant is the
disciplinin# o=cer himsel*, as in this case "he *act that the char#es a#ainst the
respondents are serious or that the e$idence o* their #uilt is stron# cannot compensate
*or the procedural shortcut underta2en by petitioner Binston ;. Gar!ia vs. ario 8.
olina, et al.1Binston ;. Gar!ia .s. ario 8. olina, et al., G.R. No. 1,7-8-1G.R. No.
17@1-7, August 1$, #$1$
Labor case@ due process@ ree$aluation A ree$aluation is a process by which a person or
o=ce .in this case the D'L( secretary/ re$isits its own initial pronouncement and ma2es
another assessment o* its 3ndin#s ?n simple terms, to ree$aluate is to ta2e another loo2
at a pre$ious matter in issue Hrom a procedural standpoint, a ree$aluation is
a !ontinuation o* the ori#inal case and not a new proceedin# "he e$idence, 3nancial
reports and other documents submitted by the parties in the course o* the ori#inal
proceedin# are to be $isited and re$iewed a#ain A reevaluation does not ne!essitate
t"e introdu!tion of ne3 *aterials for revie3 nor does it re=uire a full "earing for ne3
argu*ents )ence, *ailure to order the presentation o* new e$idence in the ree$aluation
o* an 'rder is not a $iolation o* due process NA&EC9 Guards Asso!iation E 7EA vs.
National &ervi!e Corporation,G.R. No. 1+,@@#, August #,, #$1$
Labor case@ non&lawyer as representati$e "he respondents in this case were
represented by a non&lawyer who ne$er showed any proo* o* his authority to represent
the respondents Petitioner ar#ued that the respondents4 representati$e had no
personality to appear be*ore the Labor Arbiter or the FL5C, and his representation *or
the respondents should produce no le#al eDect "he Court a=rmed the rulin# o* the CA
that the cited technical in3rmity cannot de*eat the respondents4 pre*erred ri#ht to
security o* tenure, without pre%udice to whate$er action may be ta2en a#ainst the
representati$e, i* he had indeed been en#a#ed in the unauthori>ed practice o* law &pi!
nM &pan &ervi!es Corp. vs. Gloria 7aGe, et al., G.R. No. 17@$8@, August #,, #$1$
FL5C@ *actual 3ndin#s Hindin#s o* *act o* the FL5C, a=rmin# those o* the LA, are
entitled to #reat wei#ht and will not be disturbed i* they are supported by substantial
e$idence "he CA had o$erstepped its le#al mandate by re$ersin# the 3ndin#s o* *act o*
the LA and the FL5C as it appears that both decisions were based on substantial
e$idence "here is no proo* o* arbitrariness or abuse o* discretion in the process by
which each body arri$ed at its own conclusions "hus, the CA should ha$e de*erred to
such speciali>ed a#encies that are considered e6perts in matters within their
%urisdictions 7"ar*a!ia and CpGo"n, 8n!., et al. vs. Ri!ardo 7. Albayda, ?r., G.R. No.
17#7#@, August #-, #$1$.
FL5C@ re$iew o* decisions "he power o* the Court o* Appeals to re$iew FL5C decisions
$ia 5ule 67 or Petition *or Certiorari has been settled as early as in our decision in &t.
artin ;uneral 6o*e v. National )abor Relations Co**ission "his Court held that the
proper $ehicle *or such re$iew was a Special Ci$il Action *or Certiorari under 5ule 67 o*
the 5ules o* Court, and that this action should be 3led in the Court o* Appeals in strict
obser$ance o* the doctrine o* the hierarchy o* courts Moreo$er, it is already settled that
under Sec ; o* <P 12;, as amended, the Court o* Appeals U pursuant to the e6ercise o*
its ori#inal %urisdiction o$er Petitions *or Certiorari U is speci3cally #i$en the power to
pass upon the e$idence, i* and when necessary, to resol$e *actual issues 7i!op
Resour!es 8n!orporated 47R85 vs. Ana!leto ). DaKe!a, et al., G.R. No. 1+$8#8, August 9,
#$1$.
Pleadin# $eri3cation "he lac2 o* a $eri3cation in a pleadin# is only a *ormal de*ect, not
a %urisdictional de*ect, and is not necessarily *atal to a case "he primary reason *or
re0uirin# a $eri3cation is simply to ensure that the alle#ations in the pleadin# are done
in #ood *aith, are true and correct, and are not mere speculations As pre$iously
e6plained in Dorres v. &pe!iali/ed 7a!(aging 0evelop*ent Corporation, where only two
o* the 27 real parties&in&interest si#ned the $eri3cation, the $eri3cation by the two could
be su=cient assurance that the alle#ations in the petition were made in #ood *aith, are
true and correct, and are not speculati$e &pi! nM &pan &ervi!es Corp. vs. Gloria 7aGe, et
al., G.R. No. 17@$8@, August #,, #$1$
Procedural rules@ strict application Procedural rules settin# the period *or per*ectin# an
appeal or 3lin# a petition *or re$iew are #enerally in$iolable ?t is doctrinally entrenched
that an appeal is not a constitutional ri#ht, but a mere statutory pri$ile#e )ence,
parties who see2 to a$ail themsel$es o* such pri$ile#e must comply with the statutes or
rules allowin# it Hurthermore, the per*ection o* an appeal in the manner and within the
period permitted by law is not only mandatory, but also %urisdictional Hailure to per*ect
the appeal renders the %ud#ment o* the court 3nal and e6ecutory Eust as a losin# party
has the pri$ile#e to 3le an appeal within the prescribed period, so does the winner also
ha$e the correlati$e ri#ht to en%oy the 3nality o* the decision Elpidio Calipay vs.
National )abor Relations Co**ission, et al., G.R. No. 1++@11, August -, #$1$.
5eal party in interest@ dismissed employee ?t is clear that the petitioners *ailed to
include the name o* the dismissed employee in the caption and body o* its petition *or
certiorari and, instead, only indicated the name o* the labor union as the party actin# on
behal* o* such dismissed employee )ence, the Court o* Appeals ri#htly dismissed the
petition *or not ha$in# been 3led by an indispensable party in interest ."he Court still
proceeded to discuss the substanti$e issues and merits o* the case despite a=rmin# the
dismissal o* the case based on procedural #rounds/Nag(a(aisang )a(as ng
anggaga3a sa 2ei"in 4N)2A9)A)8AA2C5 and 6elen .alen/uela vs. 2ei"in 7"ilippines
Corporation, G.R. No. 17111,, August 9, #$1$
5ule -7@ re$iew o* *actual 3ndin#s As a #eneral rule, only 0uestions o* law may be
raised in petitions *or certiorari under 5ule -7 o* the 5ules o* Court )owe$er, there are
reco#ni>ed e6ceptions to the rule Amon# the e6ceptions are when the 3ndin#s o* *act
are conJictin# and when the 3ndin#s are conclusions without citation o* speci3c
e$idence on which they are based ?n the present case, the 3ndin#s o* *act o* the Court
o* Appeals conJict with the 3ndin#s o* *act o* the FL5C and the Labor Arbiter Also, the
3ndin# o* the Court o* Appeals that Kuran#o en#a#ed in a 3st3#ht is a conclusion
without citation o* speci3c e$idence on which it is based Ale% Gurango vs. 'est
C"e*i!als and 7lasti!, 8n!., et al., G.R. No. 17@,9-, August #,, #$1$.
'ctober 2010 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Fo$ember 22, 2010 by Leslie C Dy ! Posted in Labor Law
! "a##ed appeal, bac2wa#es, dama#es, employer&employee relationship, e$idence, ille#al
dismissal, %urisdiction, labor&only contractin#, loss o* con3dence, ne#li#ence,probationary
employment, redundancy, reinstatement, retirement, separa, serious misconduct !
)ere are selected 'ctober 2010 rulin#s o* the Supreme Court o* the Philippine on labor
law and procedure+
Compensable illness 5espondent is entitled to sic2ness wa#es because the shootin#
pain in his ri#ht *oot is an in%ury which he suDered durin# the course o* his employment
"his is in consonance with the Standard "erms and Conditions Ko$ernin# the
(mployment o* Hilipino Sea*arers 'n <oard 'cean&Koin# Gessels o* the Department o*
Labor and (mployment Applyin# the said pro$isions o* this standard contract,
respondent is entitled to recei$e sic2ness wa#es co$erin# the ma6imum period o* 120
days Moreo$er, petitioners $iolated the contract when it *ailed to pro$ide continuous
treatment *or respondent in accordance with the recommendation o* their company
physician <ecause o* this *ailure, respondent was *orced to see2 immediate medical
attention at his own e6pense "hus, he is also entitled to reimbursement o* his medical
e6penses .arorient &"ipping Co., 8n!., et al. vs. Gil ;lores, G.R. No. 1+19-@, 9!tober +,
#$1$
Compensable illness Hor an in%ury or illness to be duly compensated under the terms o*
the Philippine '$erseas (mployment Administration&Standard (mployment Contract
.P'(A&S(C/, there must be a showin# that the in%ury or illness and the ensuin# disability
occurred durin# the eDecti$ity o* the employment contract Moreo$er, all o* these
conditions must be satis3ed P 1/ "he sea*arer4s wor2 must in$ol$e the ris2s described
in the P'(A&S(C@ 2/ "he disease was contracted as a result o* the sea*arer4s e6posure
to the described ris2s@ ,/ "he disease was contracted within a period o* e6posure and
under such other *actors necessary to contract it@ and -/ "here was no notorious
ne#li#ence on the part o* the sea*arer Speci3cally, with respect to mental diseases, the
P'(A&S(C re0uires that it must be due to traumatic in%ury to the head which did not
occur in this case ?n *act, respondent claimed that he became depressed due to the
*re0uent $erbal abuse he recei$ed *rom his Kerman superiors )owe$er, he *ailed to
show concrete proo* that, i* indeed he was sub%ected to abuse, it directly resulted in his
depression 7"ilippine Drans*arine Carriers, 8n!., Global Navigation, )td. vs.. &ilvino A.
Na/a*, G.R. No. 19$8$@. 9!tober 11, #$1$.
Constructi$e dismissal@ trans*er ?t is mana#ement prero#ati$e to trans*er or assi#n
employees *rom one o=ce or area o* operation to another )owe$er, the employer must
show that the trans*er is not unreasonable, incon$enient or pre%udicial to the employee,
or that it does not in$ol$e a demotion in ran2 or a diminution o* his salaries, pri$ile#es
and other bene3ts Should the employer *ail to o$ercome this burden, the employee4s
trans*er shall be tantamount to constructi$e dismissal ?n the instant case, Del Gillar4s
demotion is readily apparent in his new desi#nation as a mere StaD Assistant to the
Corporate Purchasin# and Materials Control Mana#er *rom bein# "ransportation Ser$ices
Mana#er "he two posts are not o* the same wei#ht in terms o* duties and
responsibilities Moreo$er, while Del Gillar4s trans*er did not result in the reduction o* his
salary, there was a diminution in his bene3ts because as a mere StaD Assistant, he
could no lon#er en%oy the use o* a company car, #asoline allowance, and annual *orei#n
tra$el, which he pre$iously en%oyed as "ransportation Ser$ices Mana#er "hus, Del Gillar
was clearly constructi$ely dismissedCo!a Cola 'ottlers 7"ilippines, 8n!. vs. Angel C. 0el
.illar, G.R. No. 1+-$91, 9!tober +, #$1$.
Dismissal@ closure o* business Petitioner terminated the employment o* respondents on
the #round o* closure or cessation o* operation o* the establishment which is an
authori>ed cause *or termination under Article 2A, o* the Labor Code 9hile it is true
that a chan#e o* ownership in a business concern is not proscribed by law, the sale or
disposition must be moti$ated by #ood *aith as a condition *or e6emption *rom liability
?n the instant case, howe$er, there was, in *act, no chan#e o* ownership Petitioner did
not present any documentary e$idence to support its claim that it sold the same to ALPS
"ransportation 'n the contrary, it continuously operates under the same name,
*ranchises and routes and under the same circumstances as be*ore the alle#ed sale
"hus, no actual sale transpired and, as such, there is no closure or cessation o* business
that can ser$e as an authori>ed cause *or the dismissal o* respondents 7eKafran!ia
Dours and Dravel Dransport, 8n!. vs. ?oselito 7. &ar*iento and Ri!ardo &. Cati*bang, G.R.
No. 178-97, 9!tober #$, #$1$.
Dismissal@ constructi$e dismissal "here is constructi$e dismissal i* an act o* clear
discrimination, insensibility, or disdain by an employer becomes so unbearable on the
part o* the employee that it would *oreclose any choice by him e6cept to *ore#o his
employment ?t also e6ists where there is cessation o* wor2 because continued
employment is rendered impossible, unreasonable or unli2ely, such as when an oDer
in$ol$es a demotion in ran2 and a diminution in pay ?n the present case, what made it
impossible, unreasonable or unli2ely *or respondent to continue wor2in# *or S)S was the
unlaw*ul withholdin# o* his salary )e then lost no time in submittin# his resi#nation
letter and e$entually 3lin# a complaint *or ille#al dismissal %ust a *ew days a*ter his
salary was withheld "hese circumstances are inconsistent with $oluntary resi#nation
and bolster the 3ndin# o* constructi$e dismissal &6& 7erforated aterials, 8n!., et al.
vs. anuel ;. 0ia/, G.R. No. 18,81@, 9!tober 1-, #$1$.
Dismissal@ corporate o=cer ?t is not the nature o* the ser$ices per*ormed, but on the
manner o* creation o* the o=ce that distin#uishes corporate o=cers who may be ousted
*rom o=ce at will and ordinary corporate employees who may only be terminated *or
%ust cause :nder Section 27 o* the Corporation Code, a position must be e6pressly
mentioned in the <y&Laws in order to be considered as a corporate o=ce "hus, the
creation o* an o=ce pursuant to a <y&Law pro$ision #i$in# a president the power to
create an o=ce does not 0uali*y as a <y&Law position ?n the present case, the position
o* Gice President *or Hinance and Administration which respondent held was merely
created by Matlin#4s President pursuant to the company4s <y&Laws ?t is not a corporate
o=ce or <y&Law position, and there*ore, respondent was not a corporate o=cer who
could be ousted *rom o=ce at will atling 8ndustrial and Co**er!ial Corp., et al. vs.
Ri!ardo R. Coros, G.R. No. 1,78$#, 9!tober 1-, #$1$.
Dismissal@ #ross and habitual ne#lect :nder Article 2A2 .b/ o* the Labor Code, an
employer may terminate an employee *or #ross and habitual ne#lect o* duties Kross
ne#li#ence connotes want o* care in the per*ormance o* one4s duties )abitual ne#lect
implies repeated *ailure to per*orm one4s duties *or a period o* time, dependin# upon
the circumstances A sin#le or isolated act o* ne#li#ence does not constitute a %ust
cause *or the dismissal o* the employee Assumin# ar#uendo that respondent was
ne#li#ent, althou#h the Court *ound otherwise, the lapse or inaction could only be
re#arded as a sin#le or isolated act o* ne#li#ence that cannot be cate#ori>ed as habitual
and, hence, not a %ust cause *or his dismissal &t. )u(eMs edi!al Center, 8n!. and Robert
2uan vs. Estrelito Na/ario, G.R. No. 1,#1++, 9!tober #$, #$1$.
Dismissal@ loss o* con3dence Loss o* con3dence as a %ust cause *or termination o*
employment is premised on the *act that the employee concerned holds a position o*
trust and con3dence "his situation holds where a person is entrusted with con3dence
on delicate matters, such as the custody, handlin#, or care and protection o* the
employer4s property )owe$er, in order to constitute a %ust cause *or dismissal, the act
complained o* must be Bwor2&relatedC such as would show the employee concerned to
be un3t to continue wor2in# *or the employer ?n the instant case, the 5esolution o* the
PAL <oard o* Directors, underscored respondent4s acts o* mismana#ement and #ross
incompetence which resulted in hu#e 3nancial losses *or petitioner As a #eneral rule,
employers are allowed wider latitude o* discretion in terminatin# the employment o*
mana#erial personnel or those who, while not o* similar ran2, per*orm *unctions which
by their nature re0uire the employer4s *ull trust and con3dence "his must be
distin#uished *rom the case o* ordinary ran2 and 3le employees, whose termination on
the basis o* these same #rounds re0uires a hi#her proo* o* in$ol$ement in the e$ents in
0uestion 7"ilippine Airlines, 8n!. vs. National )abor Relations Co**ission and Aida .
JuiGano, G.R. No. 1#-#9@, 9!tober #$, #$1$
Dismissal@ probationary employee Althou#h respondent was a probationary employee,
he is nonetheless entitled to security o* tenure Section , .2/ Article 1, o* the
Constitution #uarantees that ri#ht ?n usin# the e6pression Ball wor2ers,C the
Constitution puts no distinction between a probationary and a permanent or re#ular
employee "his means that probationary employees cannot be dismissed e6cept *or
cause or *or *ailure to 0uali*y as re#ular employees .ie, to meet the per*ormance
standards set by the company to be eli#ible *or re#ular employment/ &6& 7erforated
aterials, 8n!., et al. vs. anuel ;. 0ia/, G.R. No. 18,81@, 9!tober 1-, #$1$.
Dismissal@ re0uirement ?n dismissin# an employee, the employer must *urnish him with
two written notices+ the 3rst notice apprises the employee o* the particular acts or
omissions *or which his dismissal is sou#ht, and the second is a subse0uent notice,
which in*orms the employee o* the employer4s decision to dismiss him An
administrati$e hearin# must li2ewise be held in order to #i$e the employee a *urther
opportunity to be heard Petitioner hospital *ailed to comply with the rule on twin notice
and hearin# as it merely re0uired respondent to #i$e his written e6planation and,
therea*ter, ordered his dismissal &t. )u(eMs edi!al Center, 8n!. and Robert 2uan vs.
Estrelito Na/ario, G.R. No. 1,#1++, 9!tober #$, #$1$.
Dismissal@ serious misconduct Serious misconduct as a $alid cause *or the dismissal o*
an employee is de3ned simply as improper or wron#*ul conduct ?t is a trans#ression o*
some established and de3nite rule o* action, a *orbidden act, a dereliction o* duty, will*ul
in character, and implies wron#*ul intent and not mere error o* %ud#ment "o be serious,
the misconduct must be o* such #ra$e and a##ra$ated character and not merely tri$ial
or unimportant Moreo$er, it must be related to the per*ormance o* the employee4s
duties such as would show him to be un3t to continue wor2in# *or the employer 'n the
other hand, moral turpitude has been de3ned as Be$erythin# which is done contrary to
%ustice, modesty, or #ood morals@ an act o* baseness, $ileness or depra$ity in the
pri$ate and social duties which a man owes his *ellowmen, or to society in #eneral,
contrary to %ustice, honesty, modesty, or #ood morals ?n the case at bar, the
trans#ressions imputed to pri$ate respondent ha$e ne$er been 3rmly established as
deliberate and will*ul acts At the $ery most, they can only be characteri>ed as
unintentional, albeit ma%or, lapses in pro*essional %ud#ment 7"ilippine Airlines, 8n!. vs.
National )abor Relations Co**ission and Aida . JuiGano, G.R. No. 1#-#9@, 9!tober
#$, #$1$.
(mployer&employee relationship "hat complainants were employees o* S?P is clear *rom
the *act that S?P paid their salary 9hen complainants char#ed S?P o* underpayment,
S?P e$en interposed the de*ense o* *ree board and lod#in# #i$en to complainants
Hurthermore, the ?Ds issued to complainants bear the si#nature o* Ale%andro C Pablo,
proprietor o* S?P Li2ewise, the memoranda issued to complainants re#ardin# their
absences without lea$e were si#ned by Pablo All these clearly show that S?P is the
employer o* complainants Althou#h KMPC en#a#ed the ser$ices o* S?P to operate a
canteen, S?P and its proprietors could not be considered as labor&only contractors or
mere a#ents o* KMPC because they e6ercised the essential elements o* an employment
relationship with the complainants such as hirin#, payment o* wa#es and the power o*
control&.8.7. ;ood 6ouse and r. and rs. AleGandro 7ablo .s. Restituto 'atolina, et
al., G.R. No. 19#@7-, 9!tober 11, #$1$.
(mployer&employee relationship@ test "he elements to determine the e6istence o* an
employment relationship are+ .a/ the selection and en#a#ement o* the employee@ .b/
the payment o* wa#es@ .c/ the power o* dismissal@ and .d/ the employer4s power to
control the employee4s conduct "he most important o* these elements is the
employer4s control o* the employee4s conduct, not only as to the result o* the wor2 to be
done, but also as to the means and methods to accomplish it ?t should be remembered
that the control test merely calls *or the e6istence o* the ri#ht to control, and not
necessarily the e6ercise thereo* <ased on this *our&*old test, Manila 9ater emer#es as
the employer o* respondent collectors 5espondent bill collectors were indi$idually hired
by the contractor, but were under the direct control and super$ision o* Manila 9ater
"his control is mani*ested in the *act that respondent bill collectors reported daily to the
branch o=ces o* Manila 9ater to remit their collections with the speci3ed monthly
tar#ets and comply with the collection reportin# procedures prescribed by the latter
Accordin#ly, respondent bill collectors are employees o* petitioner Manila 9ater anila
Bater Co*pany, 8n!. vs. ?ose ?. 0alu*pines, et al., G.R. No. 17,,$1, 9!tober @, #$1$.
($identiary doubts construed in *a$or o* labor Althou#h it cannot be determined with
certainty whether respondent wor2ed *or the entire period *rom Fo$ember 16 to
Fo$ember ,0, 2007, the consistent rule is that i* doubt e6ists between the e$idence
presented by the employer and that by the employee, the scales o* %ustice must be
tilted in *a$or o* the latter in line with the policy mandated by Articles 2 and , o* the
Labor Code to aDord protection to labor and construe doubts in *a$or o* labor ?n $iew o*
petitioners4 *ailure to satis*y their burden o* proo*, respondent is presumed to ha$e
wor2ed durin# the period in 0uestion and is, accordin#ly, entitled to his salary
"here*ore, the withholdin# o* respondent4s salary by petitioners is contrary to Article
116 o* the Labor Code and, thus, unlaw*ul &6& 7erforated aterials, 8n!., et al. vs.
anuel ;. 0ia/, G.R. No. 18,81@, 9!tober 1-, #$1$.
?lle#al dismissal@ *ull bac2wa#es and reinstatement :nder 5epublic Act Fo 6Q17,
employees who are ille#ally dismissed are entitled to *ull bac2wa#es, inclusi$e o*
allowances and other bene3ts or their monetary e0ui$alent, computed *rom the time
their actual compensation was withheld *rom them up to the time o* their actual
reinstatement ?* reinstatement is no lon#er possible, the bac2wa#es shall be computed
*rom the time o* their ille#al termination up to the 3nality o* the decision Co!a Cola
'ottlers 7"ilippines, 8n!. vs. Angel C. 0el .illar, G.R. No. 1+-$91, 9!tober +, #$1$.
?lle#al dismissal@ moral and e6emplary dama#es Award o* moral and e6emplary
dama#es *or an ille#ally dismissed employee is proper where the employee had been
harassed and arbitrarily terminated by the employer Moral dama#es may be awarded
to compensate one *or in%uries such as mental an#uish, besmirched reputation,
wounded *eelin#s, and social humiliation occasioned by the employer4s unreasonable
dismissal o* the employee "he award o* such dama#es is based not on the Labor Code
but on the Ci$il Code "hese dama#es, howe$er, are not intended to enrich the ille#ally
dismissed employee "hus, the Court *ound it proper to reduce the award o* moral
dama#es *rom P700,000 to P100,00000 and e6emplary dama#es *rom P700,000 to
P70,00000 "he reduced amounts are deemed su=cient to assua#e the suDerin#s
e6perienced by Del Gillar and to set an e6ample *or the public #ood Co!a Cola 'ottlers
7"ilippines, 8n!. vs. Angel C. 0el .illar, G.R. No. 1+-$91, 9!tober +, #$1$.
?lle#al dismissal@ reinstatement and *ull bac2wa#es Probationary employees who are
un%ustly dismissed durin# the probationary period are entitled to reinstatement and
payment o* *ull bac2wa#es and other bene3ts and pri$ile#es *rom the time they were
dismissed up to their actual reinstatement 5espondent is, thus, entitled to
reinstatement without loss o* seniority ri#hts and other pri$ile#es as well as to *ull
bac2wa#es, inclusi$e o* allowances and other bene3ts or their monetary e0ui$alent
computed *rom the time his compensation was withheld up to the time o* actual
reinstatement &6& 7erforated aterials, 8n!., et al. vs. anuel ;. 0ia/, G.R. No. 18,81@,
9!tober 1-, #$1$.
?lle#al dismissal@ reinstatement and payment o* bac2wa#es Petitioners4 lac2 o* %ust
cause and non&compliance with the procedural re0uisites in terminatin# respondent4s
employment renders them #uilty o* ille#al dismissal Conse0uently, under Article 2Q; o*
the Labor Code, as amended, respondent is entitled to reinstatement to his *ormer
position without loss o* seniority ri#hts and payment o* bac2wa#es inclusi$e o*
allowances and other bene3ts, or their monetary e0ui$alent computed *rom the time
the compensation was not paid up to the time o* actual reinstatement &t. )u(eMs
edi!al Center, 8n!. and Robert 2uan vs. Estrelito Na/ario, G.R. No. 1,#1++, 9!tober #$,
#$1$.
?lle#al dismissal@ separation pay in lieu o* reinstatement ?* reinstatement pro$es
impracticable, and hardly in the best interest o* the parties, perhaps due to the lapse o*
time since the employee4s dismissal, or i* the employee decides not to be reinstated,
respondent should be awarded separation pay in lieu o* reinstatement ?n the present
case, since reinstatement is no lon#er *easible due to the lon# passa#e o* time,
petitioners are re0uired to pay respondent his separation pay e0ui$alent to one .1/
month4s pay *or e$ery year o* ser$ice Petitioners are thus ordered to pay respondent
his bac2wa#es and separation pay "he awards o* separation pay and bac2wa#es are
not mutually e6clusi$e and both may be #i$en to respondent &t. )u(eMs edi!al Center,
8n!. and Robert 2uan vs. Estrelito Na/ario, G.R. No. 1,#1++, 9!tober #$, #$1$.
Eob contractin#@ conditions Eob contractin# is permissible only i* the *ollowin# conditions
are met+ 1/ the contractor carries on an independent business and underta2es the
contract wor2 on his own account under his own responsibility accordin# to his own
manner and method, *ree *rom the control and direction o* his employer or principal in
all matters connected with the per*ormance o* the wor2 e6cept as to the results thereo*@
and 2/ the contractor has substantial capital or in$estment in the *orm o* tools,
e0uipment, machineries, wor2 premises, and other materials which are necessary in the
conduct o* the business BSubstantial capital or in$estmentC re*ers to capital stoc2s and
subscribed capitali>ation in the case o* corporations, tools, e0uipment, implements,
machineries, and wor2 premises, actually and directly used by the contractor or
subcontractor in the per*ormance or completion o* the %ob, wor2, or ser$ice contracted
out "he Bri#ht to controlC re*ers to the ri#ht reser$ed to the person *or whom the
ser$ices o* the contractual wor2ers are per*ormed, to determine not only the end to be
achie$ed, but also the manner and means to be used in reachin# that end anila Bater
Co*pany, 8n!. vs. ?ose ?. 0alu*pines, et al., G.R. No. 17,,$1, 9!tober @, #$1$.
Eurisdiction@ dismissal Pursuant to Article 21Q .a/ 2 o* the Labor Code, as amended, the
ille#al dismissal o* an o=cer or other employee o* a pri$ate employer is properly
co#ni>able by the labor arbiter )owe$er, where the complaint *or ille#al dismissal
concerns a corporate o=cer, the contro$ersy is considered an intra&corporate dispute
and *alls under the %urisdiction o* the Securities and (6chan#e Commission .S(C/ "his
%urisdiction o* the S(C, howe$er, was trans*erred to the 5"C, pursuant to 5A Fo AQ;;
which became eDecti$e on Au#ust A, 2000 Considerin# that the respondent4s complaint
*or ille#al dismissal was commenced on Au#ust 10, 2000, the appropriate %urisdiction lie
with the 5"C should it turn out that the respondent was a corporate, not a re#ular,
o=cer o* Matlin# atling 8ndustrial and Co**er!ial Corp., et al. vs. Ri!ardo R.
Coros, G.R. No. 1,78$#, 9!tober 1-, #$1$.
Eurisdiction@ labor dispute $s intra&corporate dispute Ki$en Locsin4s status as a
corporate o=cer, the 5"C, not the Labor Arbiter or the FL5C, has %urisdiction to hear the
le#ality o* the termination o* his relationship with Fissan ?n a number o* cases it has
been held that a corporate o=cer4s dismissal is always a corporate act, or an intra&
corporate contro$ersy so that the 5"C should e6ercise %urisdiction Locsin was
undeniably Chairman and President, and was elected to these positions by the Fissan
board pursuant to its <y&laws As such, he was a corporate o=cer, not an employee
($en as (6ecuti$e Gice&PresidentR"reasurer, Locsin already acted as a corporate o=cer
because the position o* (6ecuti$e Gice&PresidentR"reasurer is pro$ided *or in Fissan4s <y&
Laws Arsenio I. )o!sin vs. Nissan )ease 7"ils. 8n!. and )uis 'anson, G.R. No. 18,,+7,
9!tober #$, #$1$.
Labor&only contractin#@ elements "he Labor Code e6pressly prohibits Blabor&onlyC
contractin# which re*ers to an arran#ement where the contractor or subcontractor
merely recruits, supplies, or places wor2ers to per*orm a %ob, wor2, or ser$ice *or a
principal, and any o* the *ollowin# elements are present+ .i/ the contractor or
subcontractor does not ha$e substantial capital or in$estment which relates to the %ob,
wor2, or ser$ice to be per*ormed and the employees recruited, supplied, or placed by
such contractor or subcontractor are per*ormin# acti$ities which are directly related to
the main business o* the principal@ or .ii/ the contractor does not e6ercise the ri#ht to
control the per*ormance o* the wor2 o* the contractual employee :sin# the abo$e
criteria, it is clear that HCCS? is a labor&only contractor while the principal Manila 9ater
is the real employer HCCS? does not ha$e substantial capital or in$estment to 0uali*y as
an independent contractor as shown by the *act that althou#h it has an authori>ed
capital stoc2 o* P-00,00000, only P100,00000 o* which is actually paid&up Also, it was
Manila 9ater that pro$ided the e0uipment and ser$ice $ehicles needed in the
per*ormance o* the contracted ser$ice anila Bater Co*pany, 8n!. vs. ?ose ?.
0alu*pines, et al., G.R. No. 17,,$1, 9!tober @, #$1$.
Loss o* con3dence@ distinction between mana#erial personnel and ran2 and employees
As a #eneral rule, employers are allowed wider latitude o* discretion in terminatin# the
employment o* mana#erial personnel or those who, while not o* similar ran2, per*orm
*unctions which by their nature re0uire the employer4s *ull trust and con3dence "his
must be distin#uished *rom the case o* ordinary ran2 and 3le employees, whose
termination on the basis o* these same #rounds re0uires a hi#her proo* o* in$ol$ement
in the e$ents in 0uestion@ mere uncorroborated assertions and accusations by the
employer will not su=ce )eandro . Al!antara vs. D"e 7"ilippine Co**er!ial and
8nternational 'an(, G.R. No. 1,1-@9, 9!tober #$, #$1$.
Motion to dismiss@ appeal Petitioner Locsin4s submission that the FCLP? improperly
ele$ated the Labor Arbiter4s denial o* the Motion to Dismiss to the CA is correct A
denial o* a motion to dismiss is an interlocutory order and hence, cannot be appealed
until a 3nal %ud#ment on the merits o* the case is rendered As a #eneral rule, an
a##rie$ed party4s proper recourse to the denial is to 3le his position paper, interpose
the #rounds relied upon in the motion to dismiss U such as lac2 o* %urisdiction in the
present case U be*ore the labor arbiter, and acti$ely participate in the proceedin#s
"herea*ter, the labor arbiter4s decision can be appealed to the FL5C, not to the CA
"his FL5C rule is similar to the #eneral rule obser$ed in ci$il procedure :nder the 5ules
o* Court, the only other recourse o* the a##rie$ed party is to 3le an appropriate special
ci$il action under 5ule 67 but only when there is no appeal, or any plain, speedy, and
ade0uate remedy in the ordinary course o* law ?n the labor law settin#, a plain, speedy
and ade0uate remedy in the *orm o* the correcti$e power o* the FL5C is still open to the
a##rie$ed party when a labor arbiter denies a motion to dismiss Arsenio I. )o!sin vs.
Nissan )ease 7"ils. 8n!. and )uis 'anson, G.R. No. 18,,+7, 9!tober #$, #$1$.
Petition@ *ailure to attach documents Hailure to attach all pleadin#s and documents, by
itsel*, is not a su=cient #round to dismiss a petition "he courts may liberally construe
procedural rules in order to meet and ad$ance the cause o* substantial %ustice
Procedural lapses will be o$erloo2ed when they do not in$ol$e public policy, when they
arose *rom an honest mista2e or un*oreseen accident, and when they ha$e not
pre%udiced the ad$erse party or depri$ed the court o* its authority "hese conditions are
present in the instant case Hurthermore, a*ter petitioner4s receipt o* the Court o*
Appeals 5esolution dismissin# his petition *or *ailure to attach documents, he 3led a
Motion *or 5econsideration alon# with the documents deemed by the Court o* Appeals
as lac2in# in his ori#inal petition Such subse0uent submission should be deemed
substantial compliance as supported by %urisprudence ?n these cases, the reasons
behind the *ailure o* the petitioners to comply with the re0uired attachments were no
lon#er scrutini>ed Clearly, the Court o* Appeals erred in dismissin# petitioner4s special
ci$il action *or certiorari despite subse0uent substantial compliance with the rules on
procedure )eandro . Al!antara vs. D"e 7"ilippine Co**er!ial and 8nternational
'an(, G.R. No. 1,1-@9, 9!tober #$, #$1$.
Pri$ate recruitment a#encies@ solidary liability 5epublic Act Fo A0-2 pro$ides *or the
%oint and solidary liability o* pri$ate recruitment a#encies with their *orei#n principals in
any and all money claims a#ainst them Such pro$ision is automatically incorporated by
law in the contract *or o$erseas employment and is a condition precedent *or its
appro$al "his is to aDord the 'H9s immediate and su=cient payment o* what is due
them Moreo$er, such obli#ation is not coterminous with the a#reement between the
local a#ent and its *orei#n principal so that i* either or both o* the parties decide to end
the a#reement, the responsibilities o* such parties towards the contracted employees
under the a#reement do not at all end, but the same e6tends up to and until the
e6piration o* the employment contracts o* the employees recruited and employed
pursuant to the said recruitment a#reement "hus, to allow petitioners to simply in$o2e
the immunity *rom suit o* its *orei#n principal or to wait *or the %udicial determination o*
the *orei#n principal4s liability be*ore petitioner can be held liable renders the law on
%oint and solidary liability inutile ADC8 9verseas Corporation, et al. vs. a. ?osefa
E!"in, G.R. No. 178,,1. 9!tober 11, #$1$
5edundancy 5edundancy is one o* the authori>ed causes *or the dismissal o* an
employee under Article 2A, o* the Labor Code 5edundancy, e6ists where the ser$ices
o* an employee are in e6cess o* what is reasonably demanded by the actual
re0uirements o* the enterprise Such superJuity may be due to o$erhirin# o* wor2ers,
decreased $olume o* business, or droppin# o* a particular product line or ser$ice acti$ity
pre$iously manu*actured or underta2en by the enterprise "he determination o*
redundancy is an e6ercise o* business %ud#ment o* the employer the soundness o* which
is not sub%ect to discretionary re$iew o* the Labor Arbiter and the FL5C, pro$ided there
is no $iolation o* law and no showin# that it was prompted by an arbitrary or malicious
act "hus, a company must not merely declare that it has become o$ermanned, it must
also produce ade0uate proo* o* such redundancy Coca&Cola *ailed to o$ercome this
burden in the instant case ?nstead, it oDered proo* o* Del Gillar4s poor per*ormance
which is irrele$ant in relation to the issue on redundancy Co!a Cola 'ottlers
7"ilippines, 8n!. vs. Angel C. 0el .illar, G.R. No. 1+-$91, 9!tober +, #$1$.
5einstatement@ doctrine o* strained relations :nder the doctrine o* strained relations,
the payment o* separation pay is considered an acceptable alternati$e to reinstatement
when the latter option is no lon#er desirable or $iable Payment liberates the employee
*rom what could be a hi#hly oppressi$e wor2 en$ironment, and at the same time
releases the employer *rom the obli#ation o* 2eepin# in its employ a wor2er it no lon#er
trusts ?n the instant case, respondent4s reinstatement is no lon#er *easible as
anta#onism has caused a se$ere strain in his wor2in# relationship with petitioners
"here*ore, a more e0uitable disposition would be an award o* separation pay e0ui$alent
to at least one month pay, in addition to his *ull bac2wa#es, allowances and other
bene3ts &6& 7erforated aterials, 8n!., et al. vs. anuel ;. 0ia/, G.R. No. 18,81@,
9!tober 1-, #$1$.
5elease and 0uitclaim@ $alidity Wuitclaims e6ecuted by the employees are commonly
*rowned upon as contrary to public policy "hus, *or 0uitclaims to be $alid the *ollowin#
re0uisites must be complied with+ .a/ that there was no *raud or deceit on the part o*
any o* the parties@ .b/ that the consideration o* the 0uitclaim is credible and reasonable@
and .c/ that the contract is not contrary to law, public order, public policy, morals or
#ood customs, or pre%udicial to a third person with a ri#ht reco#ni>ed by law .arorient
&"ipping Co., 8n!., et al. vs. Gil ;lores, G.R. No. 1+19-@, 9!tober +, #$1$
5etirement@ compulsory Article 2AQ o* the Labor Code, as amended by 5A Fo Q6-1,
pe#s the a#e *or compulsory retirement at 67 years, while the minimum a#e *or optional
retirement is set at 60 years An employer is, howe$er, *ree to impose a retirement a#e
earlier than the *ore#oin# mandates pro$ided that the prero#ati$e is e6ercised pursuant
to a mutually instituted early retirement plan ?n the present case, not e$en an iota o*
$oluntary ac0uiescence to :F?P5'M4s early retirement a#e option is attributable to
petitioner :F?P5'M4s (mployees4 Fon&Contributory 5etirement Plan was unilaterally
and compulsorily imposed on them Petitioner was *orced to participate in the plan, and
the only way she could ha$e re%ected the same was to resi#n or lose her %ob Such
passi$e ac0uiescence on the part o* employees cannot e0uate to $oluntary acceptance
which must be e6plicit, $oluntary, *ree, and uncompelled )a$in# terminated petitioner
merely on the basis o* a pro$ision in the retirement plan which was not *reely assented
to by her, :F?P5'M is #uilty o* ille#al dismissal )ourdes A. Cer!ado vs. Cnipro*,
8n!., G.R. No. 1881,@. 9!tober 1-, #$1$.
5ule on appeal *rom denial o* motion to dismiss@ e6ception As a #eneral rule, a Labor
Arbiter4s denial o* the Motion to Dismiss on the #round o* lac2 o* %urisdiction is
appealable to the FL5C and not to the CA by way o* 5ule 67 )owe$er, we ta2e
e6ception to this #eneral rule in the present case because a strict implementation o*
these rules would cause substantial in%ustice to FCLP? A*ter all, the parties ha$e
su=ciently $entilated their positions on the disputed employer&employee relationship
and ha$e, in *act, submitted the matter *or the CA4s consideration Moreo$er, the CA
correctly ruled that Locsin was a corporate o=cer, not an employee and there*ore
%urisdiction lies with the 5"C and not the Labor Arbiter Arsenio I. )o!sin vs. Nissan
)ease 7"ils. 8n!. and )uis 'anson,G.R. No. 18,,+7, 9!tober #$, #$1$.
Seaman as a contractual employee@ disability claims A seaman is a contractual and not
a re#ular employee "hus, in claims o* seamen *or compensation and disability bene3ts,
the Court cannot %ust disre#ard the pro$isions o* the P'(A Standard (mployment
Contract .P'(A S(C/ ?n order to claim disability bene3ts under the P'(A S(C, it is the
Xcompany&desi#nated4 physician who must proclaim that the seaman suDered a
permanent disability, due to either in%ury or illness, durin# the term o* the latter4s
employment ?n this case, the 3ndin#s o* respondents4 desi#nated physician that
petitioner has been suDerin# *rom brie* psychotic disorder and that it is not wor2&related
must be respected 9hile it is true that labor contracts are impressed with public
interest and the pro$isions o* the P'(A S(C must be construed lo#ically and liberally in
*a$or o* Hilipino seamen in the pursuit o* their employment on board ocean&#oin#
$essels, the rule is that %ustice is, in e$ery case, only *or the deser$in#@ it is to be
dispensed with in the li#ht o* established *acts, the applicable law, and e6istin#
%urisprudence Edgardo . 7anganiban vs. Dara Drading &"ip anage*ent 8n!. and
&"inline &0N '60, G.R. No. 187$-#, 9!tober 18, #$1$
Separation pay@ e0uity ?n e6ceptional cases, this Court has #ranted separation pay to a
le#ally dismissed employee as an act o* Bsocial %usticeC or based on Be0uityC ?n both
instances, it is re0uired that the dismissal .1/ was not *or serious misconduct@ and .2/
does not reJect on the moral character o* the employee or would in$ol$e moral
turpitude "here should be no 0uestion that where it comes to such $alid but not
ini0uitous causes as *ailure to comply with wor2 standards, the #rant o* separation pay
to the dismissed employee may be both %ust and compassionate, particularly i* he has
wor2ed *or some time with the company 7"ilippine Airlines, 8n!. vs. National )abor
Relations Co**ission and Aida . JuiGano, G.R. No. 1#-#9@, 9!tober #$, #$1$.
"ermination@ loss o* con3dence Loss o* con3dence as a %ust cause *or termination o*
employment applies when the employee concerned holds a position o* trust and
con3dence )owe$er, in order to constitute a %ust cause *or dismissal, the act
complained o* must be Bwor2&relatedC such as would show the employee concerned to
be un3t to continue wor2in# *or the employer Petitioner, who, as <ranch Mana#er o* the
respondent ban2 undoubtedly held a position o* trust and con3dence, admitted that he
personally processed the two Certi3cates o* "ime Deposit .C"Ds/ at issue, despite his
2nowled#e that they were un*unded <y doin# so, he e6posed his employer to #reat
ris2 Moreo$er, by issuin# those C"Ds, he was in eDect certi*yin# the e6istence o* time
deposits in his branch that were actually 3ctitious "hus, it can be said that his ob$ious
la6ity or ne#li#ence in the issuance o* the said C"Ds was e$en tainted with dishonesty
5espondent ban2 was thus %usti3ed in terminatin# petitioner4s employment on the
#round o* loss o* trust and con3dence )eandro . Al!antara vs. D"e 7"ilippine
Co**er!ial and 8nternational 'an(, G.R. No. 1,1-@9, 9!tober #$, #$1$.
"ermination@ procedural due process Fotice and hearin# constitute the essential
elements o* due process in the dismissal o* employees "he employer must *urnish the
employee with two written notices be*ore termination o* employment can be le#ally
eDected 9ith re#ard to the re0uirement o* a hearin#, the essence o* due process lies
simply in an opportunity to be heard@ an actual trial&type hearin# is not indispensable ?n
this case, respondent acted in accordance with procedural due process when it #a$e
petitioner considerable leeway with re#ard to the submission o* his written e6planation
by allowin# multiple e6tensions o* time to submit the same and by *urnishin# him the
documents used in respondent4s in$esti#ation ($en assumin# that petitioner was not
*ully heard durin# the employer4s in$esti#ation, it was his *ault because o* his mis#uided
insistence on ha$in# a trial&type hearin# )eandro . Al!antara vs. D"e 7"ilippine
Co**er!ial and 8nternational 'an(, G.R. No. 1,1-@9, 9!tober #$, #$1$.
"ermination@ solidary liability o* corporate directors and o=cers Corporate directors and
o=cers are only solidarily liable with the corporation *or termination o* employment o*
corporate employees i* such is eDected with malice or in bad *aith <ad *aith does not
connote bad %ud#ment or ne#li#ence@ it imports dishonest purpose or some moral
obli0uity and conscious doin# o* wron#@ it means breach o* 2nown duty throu#h some
moti$e or interest or ill will@ it parta2es o* the nature o* *raud "o sustain such a 3ndin#,
there should be e$idence on record that an o=cer or director acted maliciously or in bad
*aith in terminatin# the employee ?n the instant case, petitioners withheld respondent4s
salary in the sincere belie* that respondent did not wor2 *or the period in 0uestion "hus,
althou#h they unlaw*ully withheld respondent4s salary, it cannot be concluded that such
was made in bad *aith Accordin#ly, corporate o=cers, )artmannshenn and
Schumacher, cannot be held personally liable *or the corporate obli#ations o* S)S &6&
7erforated aterials, 8n!., et al. vs. anuel ;. 0ia/, G.R. No. 18,81@, 9!tober 1-, #$1$.
9a#es@ deduction by employer "he *ree board and lod#in# S?P *urnished the employees
cannot operate as a set&oD *or the underpayment o* their wa#es ?t was held in Mabe>a
$ Fational Labor 5elations Commission that the employer cannot simply deduct *rom
the employee4s wa#es the $alue o* the board and lod#in# without satis*yin# the
*ollowin# re0uirements+ .1/ proo* that such *acilities are customarily *urnished by the
trade@ .2/ $oluntary acceptance in writin# by the employees o* the deductible *acilities@
and .,/ proo* o* the *air and reasonable $alue o* the *acilities char#ed ?t is clear *rom
the records that S?P *ailed to comply with these re0uirements&.8.7. ;ood 6ouse and r.
and rs. AleGandro 7ablo .s. Restituto 'atolina, et al., G.R. No. 19#@7-, 9!tober 11,
#$1$.
9a#es, withholdin# Mana#ement prero#ati$e does not include the ri#ht to temporarily
withhold wa#es without the consent o* the employee Such an interpretation would be
contrary to Article 116 o* the Labor Code, which pro$ides that it shall be unlaw*ul *or
any person, directly or indirectly, to withhold any amount *rom the wa#es o* a wor2er or
induce him to #i$e up any part o* his wa#es by *orce, stealth, intimidation, threat or by
any other means without the wor2er4s consent 9ithholdin# o* wa#es is allowed only in
the *orm o* wa#e deductions under the circumstances pro$ided in Article 11, o* the
Labor Code such as+ .a/ ?n cases where the wor2er is insured with his consent by the
employer, and the deduction is to recompense the employer *or the amount paid by him
as premium on the insurance@ .b/ Hor union dues, in cases where the ri#ht o* the wor2er
or his union to chec2&oD has been reco#ni>ed by the employer or authori>ed in writin#
by the indi$idual wor2er concerned@ and .c/ ?n cases where the employer is authori>ed
by law or re#ulations issued by the Secretary o* Labor ?n the present case, the
withholdin# o* complainant4s wa#es does not *all under the e6ceptions pro$ided in
Article 11, and is thus unlaw*ul &6& 7erforated aterials, 8n!., et al. vs. anuel ;.
0ia/, G.R. No. 18,81@, 9!tober 1-, #$1$.
9or2&related illness@ substantial e$idence 9or2in# conditions cannot be accepted to
ha$e caused or at least increased the ris2 o* contractin# the disease U in this case, brie*
psychotic disorder& in the absence o* substantial e$idence "he e$idence must be real
and substantial, and not merely apparent ?n sum, petitioner *ailed to establish by
substantial e$idence that his brie* psychotic disorder was caused by the nature o* his
wor2 as oiler o* the company&owned $essel ?n *act, he *ailed to elaborate on the nature
o* his %ob as oiler o* respondent company "he Court, there*ore, has di=culty in 3ndin#
any lin2 between his position as oiler and his illness Petitioner points out that his Bbrie*
psychotic disorderC which was caused by a *amily problem is wor2&related simply
because had it been a land&based employment, petitioner would ha$e easily #one home
and attended to the needs o* his *amily "his is not the Bwor2&relatedC instance
contemplated by the pro$isions o* the employment contract in order to be entitled to
the bene3ts 'therwise, e$ery seaman would automatically be entitled to compensation
because the nature o* his wor2 is not land&based Edgardo . 7anganiban vs. Dara
Drading &"ip anage*ent 8n!. and &"inline &0N '60, G.R. No. 187$-#, 9!tober 18,
#$1$.
9rit o* habeas data@ labor disputes 5espondent 0uestions her trans*er and, throu#h the
e6traordinary remedy o* habeas data, see2s the disclosure o* the reasons behind it
)owe$er, since her real ob%ecti$e is to be spared *rom complyin# with M(5ALC'4s
Memorandum directin# her reassi#nment, respondent should instead lod#e her
complaint with the FL5C and the Labor Arbiters which ha$e %urisdiction o$er such
concerns "he writ o* habeas data is a remedy a$ailable only to a person whose ri#ht to
pri$acy in li*e, liberty or security is $iolated or threatened by an unlaw*ul act or omission
o* a public o=cial or employee or o* a pri$ate indi$idual or entity en#a#ed in the
#atherin#, collectin# or storin# o* data or in*ormation re#ardin# the person, *amily,
home and correspondence o* the a##rie$ed party Petitioners4 re*usal to disclose the
contents o* reports which *orm the basis o* respondent4s trans*er does not amount to a
$iolation o* her ri#ht to pri$acyanila Ele!tri! Co*pany, Ale%ander &. 0eyto and Ruben
A. &apitula vs. Rosario Gope/ )i*, G.R. No. 18@7+9, 9!tober ,, #$1$
December 2010 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Eanuary 2-, 2011 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines & Law
! "a##ed certiorari,due process, e$idence, ille#al dismissal, %urisdiction, labor&only contractin#, loss o*
trust and con3dence, reinstatement !
)ere are selected December 2010 rulin#s o* the Supreme Court o* the Philippines on
labor law and procedure+
Dismissal@ due process@ trial&type hearin# is not essential. "he essence o* due process
is an opportunity to be heard or, as applied to administrati$e proceedin#s, an
opportunity to e6plain one4s side 5ecords show that Aboc was duly noti3ed throu#h a
letter as2in# him to e6plain why his ser$ices should not be terminated ?n *act, he
replied to the same by submittin# a written e6planation )e was li2ewise duly aDorded
ample opportunity to de*end himsel* durin# a con*erence conducted Aboc4s contention
that the con*erence he attended cannot substitute the hearin# mandated by the Labor
Code is bere*t o* merit A *ormal trial&type hearin# is not at all times and in all instances
essential to due process ?t is enou#h that the parties are #i$en a *air and reasonable
opportunity to e6plain their respecti$e sides o* the contro$ersy and to present
supportin# e$idence on which a *air decision can be based Antonio A. Abo! vs.
etropolitan 'an( And Drust Co*pany 1 etropolitan 'an( And Drust Co*pany vs.
Antonio A. Abo!, G.R. Nos. 17$,@#A@- and G.R. No. 17+@+$, 0e!e*ber 1-, #$1$.
Dismissal@ due process@ trial&type hearin# is not essential. ?n dismissal cases, the
essence o* due process is a *air and reasonable opportunity to be heard, or as applied to
administrati$e proceedin#s, an opportunity to e6plain one4s side A *ormal or trial type
hearin# is not at all times and in all instances essential Feither is it necessary that the
witnesses be cross&e6amined ?n the instant case, there was a proceedin# where the
respondent was apprised o* the char#es a#ainst him as well as o* his ri#hts "herea*ter,
he was noti3ed o* the *ormal char#es a#ainst him and was re0uired to e6plain in writin#
why he should not be dismissed *or serious misconduct A *ormal hearin# was
conducted and subse0uently, respondent recei$ed a Fotice o* "ermination in*ormin#
him that a*ter a care*ul e$aluation, he was *ound liable as char#ed and dismissed *rom
the ser$ice due to #ross misconduct Clearly, respondent was aDorded ample
opportunity to air his side and de*end himsel* )ence, there was due
process 7"ilippine )ong 0istan!e Delep"one Co*pany, vs. Eusebio . 6onrado, G.R.
No. 189-++, 0e!e*ber 8, #$1$.
Dismissal@ due process. 5espondent harps on the *act that his dismissal was
preconcei$ed because there was already a decision to terminate him e$en be*ore he
was #i$en the show cause memorandum Contrary to respondent4s alle#ations, he was
#i$en more than enou#h opportunity to de*end himsel* "he audit committee4s
conclusion to dismiss respondent *rom the ser$ice was merely recommendatory ?t was
not conclusi$e upon the petitioner company "his is precisely the reason why the
petitioner still conducted *urther in$esti#ations "o reiterate, respondent was properly
in*ormed o* the char#es and had e$ery opportunity to rebut the accusations and present
his $ersion 5espondent was not denied due process o* law *or he was ade0uately
heard as the $ery essence o* due process is the opportunity to be heard E=uitable 7C8
'an( 4No3 'an!o 0e 9ro Cniban(, 8n!.5, vs. Castor A. 0o*por, G.R. Nos. 1+-#9- &
1+-#97, 0e!e*ber 8, #$1$.
Dismissal@ loss o* con3dence@ #uidelines *or application. "he Court has set the
#uidelines *or the application o* the doctrine o* loss o* con3dence as *ollows+ .a/ Loss o*
con3dence should not be simulated@ .b/ ?t should not be used as a subter*u#e *or causes
which are improper, ille#al or un%usti3ed@ .c/ ?t may not be arbitrarily asserted in the
*ace o* o$erwhelmin# e$idence to the contrary@ and .d/ ?t must be #enuine, not a mere
a*terthou#ht to %usti*y earlier action ta2en in bad *aith ?n the case at bar, no mention
was made re#ardin# petitioner4s alle#ed loss o* trust and con3dence in respondent
Feither was there any e6planation nor discussion o* the alle#ed sensiti$e and delicate
position o* respondent re0uirin# the utmost trust o* petitioner <ecause o* its sub%ecti$e
nature, the Court has been $ery scrutini>in# in cases o* dismissal based on loss o* trust
and con3dence "hus, when the breach o* trust or loss o* con3dence is not clearly
established by *acts, as in the instant case, such dismissal on the #round o* loss and
con3dence cannot be countenanced D"e Co!aACola E%port Corporation, vs. Clarita 7.
Ga!ayan, G.R. No. 1@9@--, 0e!e*ber 1,, #$1$.
Dismissal@ serious misconduct@ wron#*ul intent re0uired. Hor misconduct or improper
beha$ior to be a %ust cause *or dismissal, .a/ it must be serious@ .b/ must relate to the
per*ormance o* the employee4s duties@ and .c/ must show that the employee has
become un3t to continue wor2in# *or the employer ?n the present case, the alle#ed
in*ractions o* respondent could hardly be considered serious misconduct ?n order to
constitute serious misconduct which will warrant the dismissal o* an employee, it is not
su=cient that the act or conduct complained o* has $iolated some established rules or
policies ?t is e0ually important and re0uired that the act or conduct must ha$e been
done with wron#*ul intent Such is, howe$er, lac2in# in the instant case D"e Co!aACola
E%port Corporation, vs. Clarita 7. Ga!ayan, G.R. No. 1@9@--, 0e!e*ber 1,, #$1$.
Dismissal@ substantial e$idence. "he 0uantum o* proo* re0uired in determinin# the
le#ality o* an employee4s dismissal is only substantial e$idence ?n a similar case, the
Court held that the standard o* substantial e$idence is met where the employer, as in
this case, has reasonable #round to belie$e that the employee is responsible *or the
misconduct and his participation in such misconduct ma2es him unworthy o* the trust
and con3dence demanded by his position ?n the present case, petitioner has su=ciently
established that respondent solicited, collected and recei$ed the P1,70000 down
payment ille#ally *rom the spouses Mueda "a2en to#ether, the petitioner has
dischar#ed its burden o* establishin# the serious misconduct committed by respondent
Such misconduct ma2es him unworthy o* the trust and con3dence demanded by his
position 7"ilippine )ong 0istan!e Delep"one Co*pany, vs. Eusebio . 6onrado, G.R.
No. 189-++, 0e!e*ber 8, #$1$.
Dismissal@ substantial e$idence. "he burden o* proo* rests on the employer to show that
the dismissal was *or a %ust cause or authori>ed cause Dismissal due to serious
misconduct and loss o* trust and con3dence must be supported by substantial e$idence
which is that amount o* rele$ant e$idence as a reasonable mind mi#ht accept as
ade0uate to support a conclusion, e$en i* other minds, e0ually reasonable, mi#ht
concei$ably opine otherwise ?n the present case, e$idence clearly shows that the acts
o* Aboc in helpin# or#ani>e the credit unions and in the operations thereo* constituted
serious misconduct or breach o* trust and con3dence )is participation in the credit
unions is hi#hly irre#ular and clearly in conJict with Metroban24s business Aboc claimed
that he was only an Bunwillin# participantC doin# a ministerial %ob "he in$esti#ation,
howe$er, showed otherwise Antonio A. Abo! vs. etropolitan 'an( And Drust
Co*pany 1 etropolitan 'an( And Drust Co*pany vs. Antonio A. Abo!, G.R. Nos.
17$,@#A@- and G.R. No. 17+@+$, 0e!e*ber 1-, #$1$.
Dismissal@ two&notice rule. "he re0uirements o* procedural due process were complied
with when petitioner sent a memo to respondent in*ormin# him o* the speci3c char#es
and #i$in# him opportunity to air his side Subse0uently, in a letter, respondent was
in*ormed that on the basis o* the results o* the in$esti#ation conducted, his written
e6planation, the written e6planation o* other employees as well as the audit report, the
mana#ement has decided to terminate him "he two&notice re0uirement, which
includes a written notice o* the cause o* dismissal to aDord the employee ample
opportunity to be heard and de*end himsel*, and written notice o* the decision to
terminate him which states the reasons there*or, was thus complied with E=uitable 7C8
'an( 4No3 'an!o 0e 9ro Cniban(, 8n!.5, vs. Castor A. 0o*por, G.R. Nos. 1+-#9- &
1+-#97, 0e!e*ber 8, #$1$.
Dismissal@ will*ul disobedience. "o %usti*y will*ul disobedience or insubordination as a
$alid #round *or termination, the employee4s assailed conduct must ha$e been will*ul or
characteri>ed by a wron#*ul or per$erse attitude and the order $iolated must ha$e been
reasonable, law*ul, made 2nown to the employee, and must pertain to the duties which
he had been en#a#ed to dischar#e ?n the case at bar, while petitioner4s manual o*
procedures does not absolutely prohibit the ne#otiation or acceptance o* second&
endorsed chec2s *or deposits, it e6pressly disallows the acceptance o* chec2s endorsed
by corporations, societies, 3rms, etc and chec2s with unusual endorsements As shown
by the records, this e6plicit policy was trans#ressed by respondent intentionally and
will*ully 5espondent was instructed by mana#ement to stop the trans#ression but he
did not stop 5espondent admittedly disobeyed not only his superiors4 directi$es but
also simple ban2 rules E=uitable 7C8 'an( 4No3 'an!o 0e 9ro Cniban(, 8n!.5, vs. Castor
A. 0o*por, G.R. Nos. 1+-#9- & 1+-#97, 0e!e*ber 8, #$1$.
Dismissal@ will*ul breach o* trust. 9ill*ul breach o* trust re0uires that the loss o*
con3dence must not be simulated@ it should not be used as a subter*u#e *or causes
which are ille#al, improper or un%usti3ed@ it may not be arbitrarily asserted in the *ace o*
o$erwhelmin# e$idence to the contrary@ it must be #enuine, not a mere a*terthou#ht to
%usti*y earlier action ta2en in bad *aith@ and, the employee in$ol$ed holds a position o*
trust and con3dence 5espondent, as ban2 mana#er, has the duty to ensure that ban2
rules are strictly complied with to ser$e the best interest o* the ban2 as he holds a
position o* trust and con3dence Any ne#li#ence in the e6ercise o* his responsibilities
can be su=cient #round *or loss o* trust and con3dence As held in one case, the mere
e6istence o* a basis *or belie$in# that a mana#erial employee has breached the trust o*
his employer would su=ce *or his dismissal Proo* beyond reasonable doubt is not
re0uired ?n the case at bar, respondent4s wanton $iolation o* ban2 policies e0uates to
abuse o* authority and, there*ore, abuse o* the trust reposed in him Such is enou#h *or
his dismissal *rom ser$ice E=uitable 7C8 'an( 4No3 'an!o 0e 9ro Cniban(, 8n!.5, vs.
Castor A. 0o*por, G.R. Nos. 1+-#9- & 1+-#97, 0e!e*ber 8, #$1$.
?lle#al dismissal@ reinstatement and bac2wa#es. :nder Article 2Q; o* the Labor Code, an
employee who is un%ustly dismissed *rom wor2 shall be entitled to reinstatement without
loss o* seniority ri#hts and other pri$ile#es and to his *ull bac2wa#es, inclusi$e o*
allowances, and to his other bene3ts or their monetary e0ui$alent computed *rom the
time his compensation was withheld *rom him up to the time o* his actual
reinstatement 5espondent is entitled to such award D"e Co!aACola E%port Corporation,
vs. Clarita 7. Ga!ayan, G.R. No. 1@9@--, 0e!e*ber 1,, #$1$.
Eob contractin#@ conditions. Permissible %ob contractin# or subcontractin# re*ers to an
arran#ement whereby a principal a#rees to *arm out to the contractor the per*ormance
o* a speci3c wor2, or ser$ice within a predetermined period, re#ardless o* whether such
wor2, or ser$ice is to be per*ormed within or outside the premises o* the principal "hus,
the *ollowin# conditions must concur+ .a/ "he contractor carries on a distinct and
independent business and underta2es the contract wor2 on his account under his own
responsibility accordin# to his own manner and method, *ree *rom the control and
direction o* his principal in all matters connected with the per*ormance o* his wor2
e6cept as to the results thereo*@ .b/ "he contractor has substantial capital or
in$estment@ and .c/ "he a#reement between the principal and the contractor assures
the contractual employees4 entitlement to all labor and occupational sa*ety and health
standards, *ree e6ercise o* the ri#ht to sel*&or#ani>ation, security o* tenure, and social
wel*are bene3ts ?n the case at bar, <MS? is en#a#ed in labor&only contractin# *or LSC
Hirst, petitioners wor2ed at LSC4s premises, and nowhere else "here was no e$idence
that <MS? e6ercised control o$er them Second, there is no proo* that <MS? had
substantial capital "he e0uipment used by <MS? was merely rented *rom LSC "hird,
petitioners per*ormed acti$ities which were directly related to the main business o* LSC
Lastly, <MS? had no other client e6cept *or LSC E**anuel 'abas, 0anilo D. 'anag,
Arturo .. .illarin, &r., Ed3in ?avier, &andi 'er*eo, Re% Allesa, a%i*o &oriano, ?r.,
Arsenio Estor=ue, And ;eli%berto AnaGao, vs. )oren/o &"ipping Corporation, G.R. No.
18+$91, 0e!e*ber 1,, #$1$.
Eurisdiction o* Supreme Court@ errors o* *act@ e6ceptions. "he Court has stressed that its
%urisdiction in a petition *or re$iew on certiorari under 5ule -7 o* the 5ules o* Court is
limited to re$iewin# only errors o* law, not o* *act, unless the 3ndin#s o* *act complained
o* are de$oid o* support by the e$idence on record, or the assailed %ud#ment is based
on the misapprehension o* *acts ?n pre$ious rulin#s, the Court has declared that when
there is enou#h basis on which a proper e$aluation o* the merits can be made, it may
dispense with the time&consumin# procedure in order to pre$ent *urther delays in the
disposition o* the case )owe$er, in the case at bar, based on the nature o* the two
remainin# issues which in$ol$e *actual issues, and #i$en the inade0uacy o* the records,
pleadin#s, and other e$idence a$ailable be*ore the Court to properly resol$e those
0uestions, it is constrained to re*rain *rom passin# upon them &out" Cotabato
Co**uni!ations Corporation and Gauvain ?. 'en/onan vs. 6on. 7atri!ia A. &to. Do*as,
&e!retary 9f )abor And E*ploy*ent, Rolando ;abrigar, erlyn .elarde, .in!e )a*bo!,
;elipe Galindo, )eonardo iguel, ?ulius Rubin, Edel Roderos, erlyn Coliao And Edgar
?opson, G.R. No. 17--#+, 0e!e*ber 1,, #$1$.
Labor&only contractin# and %ob contractin#@ how determined. "he character o* a
business, that is, whether as labor&only contractor or as %ob contractor, should be
determined in terms o* the criteria set by statute ?n one case the Court has e6plained
that despite the *act that the ser$ice contracts contain stipulations which are earmar2s
o* independent contractorship, they do not ma2e it le#ally so "he lan#ua#e o* a
contract is neither determinati$e nor conclusi$e o* the relationship between the parties
"he parties cannot dictate, by a declaration in a contract, the character o* a business
"hus, in distin#uishin# between the prohibited labor&only contractin# and permissible
%ob contractin#, the totality o* the *acts and the surroundin# circumstances o* the case
are to be considered E**anuel 'abas, 0anilo D. 'anag, Arturo .. .illarin, &r., Ed3in
?avier, &andi 'er*eo, Re% Allesa, a%i*o &oriano, ?r., Arsenio Estor=ue, And ;eli%berto
AnaGao, vs. )oren/o &"ipping Corporation,G.R. No. 18+$91, 0e!e*ber 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
wor2ers to per*orm a %ob, wor2, or ser$ice *or a principal ?n labor&only contractin#, the
*ollowin# elements are present+ .a/ the contractor or subcontractor does not ha$e
substantial capital or in$estment to actually per*orm the %ob, wor2, or ser$ice under its
own account and responsibility@ and .b/ the employees recruited, supplied, or placed by
such contractor or subcontractor per*orm acti$ities which are directly related to the
main business o* the principal E**anuel 'abas, 0anilo D. 'anag, Arturo .. .illarin, &r.,
Ed3in ?avier, &andi 'er*eo, Re% Allesa, a%i*o &oriano, ?r., Arsenio Estor=ue, And
;eli%berto AnaGao, vs. )oren/o &"ipping Corporation, G.R. No. 18+$91, 0e!e*ber 1,,
#$1$.
Labor&only contractin#@ wor2ers are re#ular employees o* principal. ?ndubitably, <MS?
can only be classi3ed as a labor&only contractor Conse0uently, the wor2ers that <MS?
supplied to its principal LSC became re#ular employees o* the latter )a$in# #ained
re#ular status, petitioners were entitled to security o* tenure and could only be
dismissed *or %ust or authori>ed causes and a*ter they had been accorded due process
"he termination o* LSC4s A#reement with <MS? cannot be considered a %ust or an
authori>ed cause *or petitioners4 dismissal E**anuel 'abas, 0anilo D. 'anag, Arturo ..
.illarin, &r., Ed3in ?avier, &andi 'er*eo, Re% Allesa, a%i*o &oriano, ?r., Arsenio
Estor=ue, And ;eli%berto AnaGao, vs. )oren/o &"ipping Corporation, G.R. No. 18+$91,
0e!e*ber 1,, #$1$.
Payroll reinstatement@ eDect o* re$ersal on appeal. Since Metroban2 chose payroll
reinstatement *or Aboc, he then became a reinstated re#ular employee "his means
that he was restored to his pre$ious position as a re#ular employee without loss o*
seniority ri#hts and other pri$ile#es appurtenant thereto )is payroll reinstatement put
him on e0ual *ootin# with the other re#ular employees inso*ar as entitlement to the
bene3ts #i$en under the Collecti$e <ar#ainin# A#reement is concerned "he *act that
the decision o* the LA was re$ersed on appeal has no controllin# si#ni3cance "he rule is
that e$en i* the order o* reinstatement o* the LA is re$ersed on appeal, it is obli#atory
on the part o* the employer to reinstate and pay the wa#es o* the dismissed employee
durin# the period o* appeal until 3nal re$ersal by the hi#her court Antonio A. Abo! vs.
etropolitan 'an( And Drust Co*pany 1 etropolitan 'an( And Drust Co*pany vs.
Antonio A. Abo!, G.R. Nos. 17$,@#A@- and G.R. No. 17+@+$, 0e!e*ber 1-, #$1$.
Petition *or certiorari@ period *or 3lin#@ retroacti$e application o* amendments. <y $irtue
o* the latest amendment o* Section -, 5ule 67 o* the 1;;Q 5ules o* Ci$il Procedure
introduced by Circular Fo 76&2000, the 60&day period to 3le a petition *or certiorari
should be rec2oned *rom the date o* receipt o* the notice o* the denial o* the motion *or
reconsideration or new trial, i* one was 3led <ein# a curati$e statute, Circular Fo 76&
2000 has been applied by Court retroacti$ely in a number o* cases Ki$en the abo$e,
respondent had a *resh 60&day period *rom the date she recei$ed a copy o* the FL5C
5esolution denyin# her motion *or reconsideration within which to 3le the petition *or
certiorari "hus, the Court ruled that respondent seasonably 3led the petition within the
re#lementary period pro$ided D"e Co!aACola E%port Corporation, vs. Clarita 7.
Ga!ayan, G.R. No. 1@9@--, 0e!e*ber 1,, #$1$.
5e#istration as independent contractor@ eDect o*. "he CA erred in considerin# <MS?4s
Certi3cate o* 5e#istration as su=cient proo* that it is an independent contractor ?n the
case o* San Mi#uel Corporation $ Gicente < Semillano, et al, the Court has held that a
Certi3cate o* 5e#istration issued by the Department o* Labor and (mployment is not
conclusi$e e$idence o* such status "he *act o* re#istration simply pre$ents the le#al
presumption o* bein# a mere labor&only contractor *rom arisin# E**anuel 'abas,
0anilo D. 'anag, Arturo .. .illarin, &r., Ed3in ?avier, &andi 'er*eo, Re% Allesa, a%i*o
&oriano, ?r., Arsenio Estor=ue, And ;eli%berto AnaGao, vs. )oren/o &"ipping
Corporation,G.R. No. 18+$91, 0e!e*ber 1,, #$1$.
5einstatement@ immediately e6ecutory pendin# appeal. :nder Article 22, o* the Labor
Code, the decision o* the Labor Arbiter reinstatin# a dismissed or separated employee,
inso*ar as the reinstatement aspect is concerned, shall be immediately e6ecutory
pendin# appeal "he employee shall either be admitted bac2 to wor2 under the same
terms and conditions pre$ailin# prior to his dismissal or separation or, at the option o*
the employer, merely reinstated in the payroll "he postin# o* a bond by the employer
shall not stay the e6ecution *or reinstatement pro$ided herein ?n the case at bench, it
cannot be denied that Metroban2 opted to reinstate Aboc in its payrollAntonio A. Abo!
vs. etropolitan 'an( And Drust Co*pany 1 etropolitan 'an( And Drust Co*pany vs.
Antonio A. Abo!, G.R. Nos. 17$,@#A@- and G.R. No. 17+@+$, 0e!e*ber 1-, #$1$.
Separation pay as a measure o* social %ustice@ when awarded. ?n se$eral instances the
Court has awarded separation pay as a measure o* social %ustice )owe$er, the matter
has been clari3ed in PLD" Co $ FL5C where the Court cate#orically declared that
separation pay shall be allowed as a measure o* social %ustice only in those instances
where the employee is $alidly dismissed *or cause other than serious misconduct ?n
another case, the Court ruled that in addition to serious misconduct, separation pay
should not be conceded to an employee who was dismissed based on will*ul
disobedience ?n the case at bar, it was established that the in*ractions committed by
the respondent constituted serious misconduct or will*ul disobedience resultin# to loss
o* trust and con3dence Clearly there*ore, e$en based on e0uity and social %ustice,
respondent does not deser$e the award o* separation pay E=uitable 7C8 'an( 4No3
'an!o 0e 9ro Cniban(, 8n!.5, vs. Castor A. 0o*por, G.R. Nos. 1+-#9- & 1+-#97,
0e!e*ber 8, #$1$.
"ermination@ #rounds. :nder the re0uirement o* substantial due process, the #rounds
*or termination o* employment must be based on %ust or authori>ed causes Article 2A2
o* the Labor Code enumerates the %ust causes *or the termination o* employment, thus+
.a/ Serious misconduct or will*ul disobedience by the employee o* the law*ul orders o*
his employer or representati$e in connection with his wor2@ .b/ Kross and habitual
ne#lect by the employee o* his duties@ .c/ Hraud or will*ul breach by the employee o*
the trust reposed in him by his employer or duly authori>ed representati$e@ .d/
Commission o* a crime or oDense by the employee a#ainst the person o* his employer
or any immediate member o* his *amily or his duly authori>ed representati$e@ and .e/
'ther causes analo#ous to the *ore#oin# D"e Co!aACola E%port Corporation, vs. Clarita
7. Ga!ayan, G.R. No. 1@9@--, 0e!e*ber 1,, #$1$.
Geri3cation and certi3cation@ eDect o* *ailure to si#n. A petition satis3es the *ormal
re0uirements only with re#ard to those who si#ned the petition, but not the co&
petitioners who did not si#n nor authori>e the other petitioners to si#n it on their behal*
?n the case at bar, only se$en .Q/ o* the nine petitioners si#ned the $eri3cation and
certi3cation a#ainst *orum shoppin# "hus, the other petitioners who did not si#n cannot
be reco#ni>ed as petitioners and ha$e no le#al standin# be*ore the Court "he petition
should be dismissed outri#ht with respect to such non&con*ormin#
petitioners E**anuel 'abas, 0anilo D. 'anag, Arturo .. .illarin, &r., Ed3in ?avier, &andi
'er*eo, Re% Allesa, a%i*o &oriano, ?r., Arsenio Estor=ue, And ;eli%berto AnaGao, vs.
)oren/o &"ipping Corporation,G.R. No. 18+$91, 0e!e*ber 1,, #$1$.
Geri3cation and certi3cation@ Bsubstantial complianceC rule. "he re0uirement o* the
certi3cation o* non&*orum shoppin# is rooted in the principle that a party&liti#ant shall
not be allowed to pursue simultaneous remedies in diDerent *ora )owe$er, the Court
has rela6ed the rule under %usti3able circumstances, considerin# that, althou#h it is
obli#atory, it is not %urisdictional Fot bein# %urisdictional, it can be rela6ed under the
rule o* substantial compliance ?n the case at bar, the Court holds that there has been
substantial compliance on the petitioners4 part in consonance with our rulin# in one
case that the President o* a petitioner&corporation is in a position to $eri*y the
truth*ulness and correctness o* the alle#ations in the petition Petitioner <en>onan
clearly satis3es the a*orementioned %urisprudential re0uirement because he is the
President o* petitioner&corporation Moreo$er, he is also named as co&respondent o*
petitioner&corporation in the labor case which is the sub%ect matter o* the special ci$il
action &out" Cotabato Co**uni!ations Corporation and Gauvain ?. 'en/onan vs.
6on. 7atri!ia A. &to. Do*as, &e!retary 9f )abor And E*ploy*ent, Rolando ;abrigar,
erlyn .elarde, .in!e )a*bo!, ;elipe Galindo, )eonardo iguel, ?ulius Rubin, Edel
Roderos, erlyn Coliao And Edgar ?opson, G.R. No. 17--#+, 0e!e*ber 1,, #$1$.
Geri3cation and certi3cation@ who can si#n *or the company without need o* board
resolution ?n pre$ious cases, the Court has held that the *ollowin# can si#n the
$eri3cation and certi3cation a#ainst *orum shoppin# without need o* a board resolution+
.1/ the Chairperson o* the <oard o* Directors, .2/ the President o* a corporation, .,/ the
Keneral Mana#er or Actin# Keneral Mana#er, .-/ Personnel '=cer, and .7/ an
(mployment Specialist in a labor case 9hile the abo$e cases do not pro$ide a complete
listin# o* authori>ed si#natories, the determination o* the su=ciency o* the authority
was done on a case to case basis ?n the *ore#oin# cases the authority o* said corporate
representati$es to si#n the $eri3cation or certi3cate is %usti3ed in their bein# in a
position to $eri*y the truth*ulness and correctness o* the alle#ations in the petition
)owe$er, the better procedure is still to append a board resolution to the complaint or
petition to ob$iate 0uestions re#ardin# the authority o* the si#natory o* the $eri3cation
and certi3cation &out" Cotabato Co**uni!ations Corporation and Gauvain ?. 'en/onan
vs. 6on. 7atri!ia A. &to. Do*as, &e!retary 9f )abor And E*ploy*ent, Rolando ;abrigar,
erlyn .elarde, .in!e )a*bo!, ;elipe Galindo, )eonardo iguel, ?ulius Rubin, Edel
Roderos, erlyn Coliao And Edgar ?opson, G.R. No. 17--#+, 0e!e*ber 1,, #$1$.
Hebruary 2011 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on March 1A, 2011 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines & Law
! "a##edabandonment, burden o* proo*, certiotari, constructi$e dismissal, due
process, e6ecution, ille#al dismissal, %urisdiction,pro%ect
employee, 0uitclaim, redundancy, retrenchment, un*air, union !
)ere are selected Hebruary 2011 rulin#s o* the Supreme Court o* the Philippines on
labor law and procedure+
Abandonment@ elements 5espondents 3led an ille#al dismissal case a#ainst the
petitioner&corporation Hor its de*ense, petitioner&corporation alle#ed that the
respondents abandoned their wor2 and were not dismissed, and that it sent letters
ad$isin# respondents to report *or wor2, but they re*used "he Court held that *or
abandonment to e6ist, it is essential .a/ that the employee must ha$e *ailed to report
*or wor2 or must ha$e been absent without $alid or %usti3able reason@ and .b/ that there
must ha$e been a clear intention to se$er the employer&employee relationship
mani*ested by some o$ert acts "he employer has the burden o* proo* to show the
employee4s deliberate and un%usti3ed re*usal to resume his employment without any
intention o* returnin# Mere absence is not su=cient "here must be an une0ui$ocal
intent on the part o* the employee to discontinue his employment <ased on the
e$idence presented, the reason why respondents *ailed to report *or wor2 was because
petitioner&corporation barred them *rom enterin# its construction sites ?t is a settled
rule that *ailure to report *or wor2 a*ter a notice to return to wor2 has been ser$ed does
not necessarily constitute abandonment "he intent to discontinue the employment
must be shown by clear proo* that it was deliberate and un%usti3ed Petitioner&
corporation *ailed to show o$ert acts committed by respondents *rom which it may be
deduced that they had no more intention to wor2 5espondents4 3lin# o* the case *or
ille#al dismissal barely *our .-/ days *rom their alle#ed abandonment is totally
inconsistent with the 2nown concept o* what constitutes abandonment E.G. & 8.
Constru!tion Corporation and Edsel Galeos v. Ananias 7. &ato, et al., G.R. No. 18#$7$,
;ebruary 1+, #$11.
Certi3cation election@ petition *or cancellation o* union re#istration 5espondent union
3led a petition *or certi3cation election Petitioner mo$ed to dismiss the petition *or
certi3cation election alle#in# the pendency o* a petition *or cancellation o* the union4s
re#istration "he D'L( Secretary ruled in *a$or o* the le#itimacy o* the respondent as a
labor or#ani>ation and ordered the immediate conduct o* a certi3cation election
Pendin# appeal in the Court o* Appeals, the petition *or cancellation was #ranted and
became 3nal and e6ecutory Petitioner ar#ued that the cancellation o* the union4s
certi3cate o* re#istration should retroact to the time o* its issuance "hus, it claimed
that the union4s petition *or certi3cation election and its demand to enter into collecti$e
bar#ainin# a#reement with the petitioner should be dismissed due to respondent4s lac2
o* le#al personality "he Court ruled that the pendency o* a petition *or cancellation o*
union re#istration does not preclude collecti$e bar#ainin#, and that an order to hold a
certi3cation election is proper despite the pendency o* the petition *or cancellation o*
the union4s re#istration because at the time the respondent union 3led its petition, it
still had the le#al personality to per*orm such act absent an order cancellin# its
re#istration )egend 8nternational Resorts )i*ited v. 2ilusang anggaga3a ng
)egenda, G.R. No. 1+97,@, ;ebruary #-, #$11.
Certiorari under 5ule 67@ re$iew o* *acts by the Court o* Appeals 9hile it is true that
*actual 3ndin#s made by 0uasi&%udicial and administrati$e tribunals, i* supported by
substantial e$idence, are accorded #reat respect and e$en 3nality by the courts, this
#eneral rule admits o* e6ceptions 9hen there is a showin# that a palpable and
demonstrable mista2e that needs recti3cation has been committed or when the *actual
3ndin#s were arri$ed at arbitrarily or in disre#ard o* the e$idence on record, these
3ndin#s may be e6amined by the courts ?n the present case, the Court o* Appeals
*ound itsel* unable to completely sustain the 3ndin#s o* the FL5C thus, it was compelled
to re$iew the *acts and e$idence and not limit itsel* to the issue o* #ra$e abuse o*
discretion Nelson A. Culili v. Eastern Dele!o**uni!ations 7"ilippines, 8n!., et al. G.R.
No. 1+,-81, ;ebruary 9, #$11.
Construction ?ndustry@ pro%ect employees Petitioner is a duly licensed labor contractor
en#a#ed in paintin# houses and buildin#s 5espondents, *ormer painters o* the
petitioner, 3led an ille#al dismissal case a#ainst petitioner Petitioner alle#ed that the
respondents abandoned their %ob and were not dismissed by the petitioner "he Labor
Arbiter ruled that there was neither ille#al dismissal nor abandonment o* %ob and that
the respondents should be reinstated but without any bac2wa#es 'n appeal, petitioner
alle#ed that the reinstatement o* respondents to their *ormer positions, which were no
lon#er e6istin#, is impossible, hi#hly un*air and un%ust ?t *urther alle#ed that the pro%ect
they were wor2in# on at the time o* their alle#ed dismissal was already completed
)a$in# completed their tas2s, their positions automatically ceased to e6ist "hus, there
were no more positions where they can be reinstated as painters "he Court ruled that
there are two types o* employees in the construction industry "he 3rst is re*erred to as
pro%ect employees or those employed in connection with a particular construction
pro%ect or phase thereo* and such employment is coterminous with each pro%ect or
phase o* the pro%ect to which they are assi#ned "he second is 2nown as non&pro%ect
employees or those employed without re*erence to any particular construction pro%ect
or phase o* a pro%ect 5espondents belon#ed to the second type and are classi3ed as
re#ular employees o* petitioner ?t is clear *rom the records o* the case that when one
pro%ect is completed, respondents were automatically trans*erred to the ne6t pro%ect
awarded to petitioners "here was no employment a#reement #i$en to respondents
which clearly spelled out the duration o* their employment and the speci3c wor2 to be
per*ormed and there is no proo* that they were made aware o* these terms and
conditions o* their employment at the time o* hirin# "hus, it is now too late *or
petitioner to claim that respondents are pro%ect employees whose employment is
coterminous with each pro%ect or phase o* the pro%ect to which they are assi#ned
Fonetheless, assumin# that respondents were initially hired as pro%ect employees, a
pro%ect employee may ac0uire the status o* a re#ular employee when the *ollowin#
*actors concur+ .1/ "here is a continuous rehirin# o* pro%ect employees e$en a*ter
cessation o* a pro%ect@ and .2/ "he tas2s per*ormed by the alle#ed pro%ect employee are
$ital, necessary and indispensable to the usual business or trade o* the employer ?n this
case, the e$idence on record shows that respondents were employed and assi#ned
continuously to the $arious pro%ects o* petitioners As painters, they per*ormed
acti$ities which were necessary and desirable in the usual business o* petitioner, which
was en#a#ed in subcontractin# %obs *or paintin# o* residential units, condominium and
commercial buildin#s As re#ular employees, respondents are entitled to be reinstated
without loss o* seniority ri#hts E%odus 8nternational Constru!tion Corporation, et al. v.
Guiller*o 'is!o!"o, et al., G.R. No. 1++1$9, ;ebruary #-, #$11.
Constructi$e Dismissal@ security #uards 5espondent was hired by petitioner, a security
a#ency, as a security #uard )e was assi#ned at the Philippine )eart Center until his
relie* on Eanuary ,0, 2006 5espondent was not #i$en any assi#nment therea*ter "hus,
on Au#ust 2, 2006, he 3led a complaint *or constructi$e dismissal and nonpayment o*
1,
th
month pay, with prayer *or dama#es a#ainst petitioner "o re*ute the claim,
petitioner alle#ed that respondent was not constructi$ely or ille#ally dismissed, but had
$oluntarily resi#ned "he Court held that respondent was constructi$ely dismissed ?n
cases in$ol$in# security #uards, a relie* and trans*er order in itsel* does not se$er
employment relationship between a security #uard and his a#ency An employee has
the ri#ht to security o* tenure, but this does not #i$e him a $ested ri#ht to his position
as would depri$e the company o* its prero#ati$e to chan#e his assi#nment or trans*er
him where his ser$ice, as security #uard, will be most bene3cial to the client "emporary
BoD&detailC or the period o* time security #uards are made to wait until they are
trans*erred or assi#ned to a new post or client does not constitute constructi$e
dismissal, so lon# as such status does not continue beyond si6 months "heonus o*
pro$in# that there is no post a$ailable to which the security #uard can be assi#ned rests
on the employer ?n the instant case, the *ailure o* petitioner to #i$e respondent a wor2
assi#nment beyond the reasonable si6&month period ma2es it liable *or constructi$e
dismissal Nation3ide &e!urity and Allied &ervi!es, 8n!. v. Ronald 7. .aldera*a, G.R. No.
18++1@, ;ebruary #-, #$11.
Constructi$e dismissal@ de*ense o* abandonment 5espondent 3led an ille#al dismissal
case a#ainst the petitioner Petitioner alle#ed that respondent abandoned his %ob and
was not dismissed "he Court held that respondent was ille#ally dismissed "he
%urisprudential rule on abandonment is constant ?t is a matter o* intention and cannot
li#htly be presumed *rom certain e0ui$ocal acts "o constitute abandonment, two
elements must concur+ .1/ the *ailure to report *or wor2 or absence without $alid or
%usti3able reason@ and .2/ a clear intent, mani*ested throu#h o$ert acts, to se$er the
employer&employee relationship ?n this case, petitioner *ailed to establish clear
e$idence o* respondent4s intention to abandon his employment (6cept *or petitioner4s
bare assertion that respondent did not report to the o=ce *or reassi#nment, no proo*
was oDered to pro$e that respondent intended to se$er the employer&employee
relationship <esides, the *act that respondent 3led the instant complaint ne#ates any
intention on his part to *orsa2e his wor2 ?t is a settled doctrine that the 3lin# o* a
complaint *or ille#al dismissal is inconsistent with the char#e o* abandonment, *or an
employee who ta2es steps to protest his dismissal cannot by lo#ic be said to ha$e
abandoned his wor2 Nation3ide &e!urity and Allied &ervi!es, 8n!. v. Ronald 7.
.aldera*a, G.R. No. 18++1@, ;ebruary #-, #$11.
Constructi$e dismissal@ de*ense o* resi#nation 5espondent, a security #uard, 3led an
ille#al dismissal case a#ainst the petitioner "o re*ute the claim, petitioner alle#ed that
respondent was not constructi$ely or ille#ally dismissed, but had $oluntarily resi#ned
Petitioner alle#ed that respondent4s resi#nation is e$ident *rom his withdrawal o* his
cash and 3rearm bonds 5esi#nation is the $oluntary act o* an employee who is in a
situation where one belie$es that personal reasons cannot be sacri3ced in *a$or o* the
e6i#ency o* the ser$ice, and one has no other choice but to dissociate onesel* *rom
employment ?t is a *ormal pronouncement or relin0uishment o* an o=ce "he intent to
relin0uish must concur with the o$ert act o* relin0uishment "hus, the acts o* the
employee be*ore and a*ter the alle#ed resi#nation must be considered in determinin#
whether, he or she, in *act, intended to se$er his or her employment Should the
employer interpose the de*ense o* resi#nation, it is incumbent upon the employer to
pro$e that the employee $oluntarily resi#ned 'n this point, the Court held that
petitioner *ailed to dischar#e its burden Moreo$er, the 3lin# o* a complaint belies
petitioner4s claim that respondent $oluntarily resi#ned Nation3ide &e!urity and Allied
&ervi!es, 8n!. v. Ronald 7. .aldera*a, G.R. No. 18++1@, ;ebruary #-, #$11.
(6ecution o* Eud#ment@ properties co$ered Premier Allied and Contractin# Ser$ices, ?nc
.PACS?/ and its President, the petitioner, were held liable to pay the respondents
separation pay and attorney4s *ees "o e6ecute this %ud#ment, the FL5C sheriD issued a
Fotice o* Sale o* a property with a "C" in the name o* the petitioner and his wi*e "he
Court ruled that the Fotice o* Sale is null and $oid "he power o* the FL5C, or the
courts, to e6ecute its %ud#ment e6tends only to properties un0uestionably belon#in# to
the %ud#ment debtor alone A sheriD, there*ore, has no authority to attach the property
o* any person e6cept that o* the %ud#ment debtor Li2ewise, there is no showin# that
the sheriD e$er tried to e6ecute on the properties o* the corporation "he "C" o* the
property bears out that, indeed, it belon#s to petitioner and his wi*e "hus, e$en i* we
consider petitioner as an a#ent o* the corporation U and, there*ore, not a stran#er to the
case U such that the pro$ision on third&party claims will not apply to him, the property
was re#istered not only in the name o* petitioner but also o* his wi*e She stands to lose
the property sub%ect o* e6ecution without e$er bein# a party to the case "his will be
tantamount to depri$ation o* property without due process 7a=uito .. Ando v. Andresito
F. Ca*po, et al., G.R. No. 18@$$7, ;ebruary 1+, #$11.
?lle#al dismissal@ burden o* proo* 5espondents 3led an ille#al dismissal case a#ainst
petitioner Petitioner alle#ed that the respondents abandoned their wor2 and were ne$er
dismissed by the petitioner FL5C ruled that the respondents were not ille#ally
dismissed since they *ailed to present a written notice o* termination "his was howe$er
re$ersed by the Court o* Appeals "he Court held that a written notice o* dismissal is not
a pre&re0uisite *or a 3ndin# o* ille#al dismissal Petitioner *ailed to pro$e that
respondents were dismissed *or a %ust or authori>ed cause ?n an ille#al dismissal case,
the onus probandi rests on the employer to pro$e that the dismissal o* an employee is
*or a $alid cause E.G. & 8. Constru!tion Corporation and Edsel Galeos v. Ananias 7. &ato,
et al., G.R. No. 18#$7$, ;ebruary 1+, #$11.
?lle#al dismissal@ burden o* proo* 5espondents 3led an ille#al dismissal case a#ainst the
petitioners Petitioners, in their de*ense, alle#ed that the respondents abandoned their
wor2 and were not dismissed by the petitioners Althou#h ?n cases o* ille#al dismissal,
the employer bears the burden o* proo* to pro$e that the termination was *or a $alid or
authori>ed cause, the employee must 3rst establish by substantial e$idence the *act
that he was dismissed ?* there is no dismissal, then there can be no 0uestion as to the
le#ality or ille#ality thereo* ?n the present case, the Court held that there was no
e$idence that respondents were dismissed or that they were pre$ented *rom returnin#
to their wor2 ?t was only respondents4 unsubstantiated conclusion that they were
dismissed As a matter o* *act, respondents could not name the particular person who
eDected their dismissal and under what particular circumstances Absent any showin#
o* an o$ert or positi$e act pro$in# that petitioners had dismissed respondents, the
latters4 claim o* ille#al dismissal cannot be sustained E%odus 8nternational Constru!tion
Corporation, et al. v. Guiller*o 'is!o!"o, et al., G.R. No. 1++1$9, ;ebruary #-, #$11.
?lle#al dismissal@ 3nal and e6ecutory %ud#ment 5espondent employee 3led an ille#al
dismissal case a#ainst the petitioner&company and "om Madula, its operations mana#er
"he case was dismissed by the labor arbiter and the dismissal was a=rmed by FL5C 'n
Au#ust 2;, 2002, the Court o* Appeals re$ersed and set aside the FL5C decision and
resolution "he CA ordered the petitioner company to pay respondent separation pay,
moral and e6emplary dama#es, and attorney4s *ees "he decision became 3nal and
e6ecutory on Hebruary 2Q, 200-, and conse0uently a writ o* e6ecution was issued
Petitioner&company 3led a Motion to Wuash 9rit o* (6ecution "he Labor Arbiter #ranted
the Motion and e6onerated the petitioner company *rom payin# bac2wa#es and held
that it was petitioner Madula who should be liable to pay bac2wa#es 5espondent then
3led be*ore the CA a Gery :r#ent Motion *or Clari3cation o* Eud#ment 'n December 10,
200-, CA #ranted the Motion and held that petitioner&company is solely liable *or the
%ud#ment award As a #eneral rule, 3nal and e6ecutory %ud#ments are immutable and
unalterable, e6cept under these reco#ni>ed e6ceptions, to wit+ .a/ clerical errors@
.b/ nun! pro tun! entries which cause no pre%udice to any party@ and .c/ $oid %ud#ments
"he underlyin# reason *or the rule is two&*old+ .1/ to a$oid delay in the administration o*
%ustice and thus ma2e orderly the dischar#e o* %udicial business, and .2/ to put %udicial
contro$ersies to an end, at the ris2 o* occasional errors, inasmuch as contro$ersies
cannot be allowed to dra# on inde3nitely and the ri#hts and obli#ations o* e$ery liti#ant
must not han# in suspense *or an inde3nite period o* time 9hat the CA rendered on
December 10, 200- was a nun! pro tun! order clari*yin# the decretal portion o* its
Au#ust 2;, 2002 Decision "he ob%ect o* a %ud#ment nun! pro tun! is not the renderin#
o* a new %ud#ment and the ascertainment and determination o* new ri#hts, but is one
placin# in proper *orm on the record, the %ud#ment that had been pre$iously rendered,
to ma2e it spea2 the truth, so as to ma2e it show what the %udicial action really was ?t is
not to correct %udicial errors, such as to render a %ud#ment anew in place o* the one it
rendered, nor to supply nonaction by the court, howe$er erroneous the %ud#ment may
ha$e been ;ilipinas 7al*oil 7ro!essing, 8n!. and 0ennis D. .illareal v. ?oel 7. 0eGapa,
represented by "is AttorneyAinA;a!t yrna an/ano, G.R. No. 1+7--#, ;ebruary 7, #$11.
?lle#al dismissal@ liability o* corporate o=cers Petitioner 3led a complaint a#ainst
respondent company and its o=cers *or ille#al dismissal, un*air labor practice, and
money claims Petitioner alle#ed that the o=cers should be held personally liable *or the
acts o* company which were tainted with bad *aith and arbitrariness As a #eneral rule,
a corporate o=cer cannot be held liable *or acts done in his o=cial capacity because a
corporation, by le#al 3ction, has a personality separate and distinct *rom its o=cers,
stoc2holders, and members "o pierce this 3ctional $eil, it must be shown that the
corporate personality was used to perpetuate *raud or an ille#al act, or to e$ade an
e6istin# obli#ation, or to con*use a le#itimate issue ?n ille#al dismissal cases, corporate
o=cers may be held solidarily liable with the corporation i* the termination was done
with malice or bad *aith Moral dama#es are awarded only where the dismissal was
attended by bad *aith or *raud, or constituted an act oppressi$e to labor, or was done in
a manner contrary to morals, #ood customs or public policy (6emplary dama#es may
a$ail i* the dismissal was eDected in a wanton, oppressi$e or male$olent manner ?n the
present case, the Court held that petitioner *ailed to pro$e that his dismissal was
orchestrated by the indi$idual respondents and their acts were attended with bad *aith
or were done oppressi$ely Nelson A. Culili v. Eastern Dele!o**uni!ations 7"ilippines,
8n!., et al. G.R. No. 1+,-81, ;ebruary 9, #$11.
?lle#al dismissal@ redundancy 5espondent&company, due to business troubles and
losses, implemented a 5i#ht&Si>in# Pro#ram which entailed a company&wide
reor#ani>ation in$ol$in# the trans*er, mer#er, absorption or abolition o* certain
departments o* the company As a result, respondent&company terminated the ser$ices
o* petitioner on account o* redundancy Petitioner 3led a complaint a#ainst respondent&
company and its o=cers *or ille#al dismissal, un*air labor practice, and money claims
"he Court ruled that petitioner was $alidly dismissed "here is redundancy when the
ser$ice capability o* the wor2*orce is #reater than what is reasonably re0uired to meet
the demands o* the business enterprise A position becomes redundant when it is
rendered superJuous by any number o* *actors such as o$er&hirin# o* wor2ers, decrease
in $olume o* business, or droppin# a particular product line or ser$ice acti$ity pre$iously
manu*actured or underta2en by the enterprise "he Court has been consistent in holdin#
that the determination o* whether or not an employee4s ser$ices are still needed or
sustainable properly belon#s to the employer Pro$ided there is no $iolation o* law or a
showin# that the employer was prompted by an arbitrary or malicious act, the
soundness or wisdom o* this e6ercise o* business %ud#ment is not sub%ect to the
discretionary re$iew o* the Labor Arbiter and the FL5C )owe$er, an employer cannot
simply declare that it has become o$ermanned and dismiss its employees without
producin# ade0uate proo* to sustain its claim o* redundancy Amon# the re0uisites o* a
$alid redundancy pro#ram are+ .1/ the #ood *aith o* the employer in abolishin# the
redundant position@ and .2/ *air and reasonable criteria in ascertainin# what positions
are to be declared redundant, such as but not limited to+ pre*erred status, e=ciency,
and seniority "he Court also held that the *ollowin# e$idence may be proDered to
substantiate redundancy+ adoption o* a new sta=n# pattern, *easibility studiesR proposal
on the $iability o* the newly created positions, %ob description and the appro$al by the
mana#ement o* the restructurin# Nelson A. Culili v. Eastern Dele!o**uni!ations
7"ilippines, 8n!., et al. G.R. No. 1+,-81, ;ebruary 9, #$11.
Labor :nion@ collateral attac2 on le#al personality Petitioner mo$ed to dismiss the
petition *or certi3cation election 3led by respondent union by 0uestionin# the $alidity o*
the respondent4s union re#istration "he Court held that le#itimacy o* the le#al
personality o* respondent cannot be collaterally attac2ed in a petition *or certi3cation
election proceedin# but only throu#h a separate action instituted particularly *or the
purpose o* assailin# it "he ?mplementin# 5ules stipulate that a labor or#ani>ation shall
be deemed re#istered and $ested with le#al personality on the date o* issuance o* its
certi3cate o* re#istration 'nce a certi3cate o* re#istration is issued to a union, its le#al
personality cannot be sub%ect to a collateral attac2 ?t may be 0uestioned only in an
independent petition *or cancellation in accordance with Section 7 o* 5ule G, <oo2 G o*
the ?mplementin# 5ules )egend 8nternational Resorts )i*ited v. 2ilusang anggaga3a
ng )egenda, G.R. No. 1+97,@ , ;ebruary #-, #$11.
Money claims@ burden o* proo* 5espondents alle#ed that petitioner&corporation *ailed to
pay them their *ull compensation "he Labor Arbiter #ranted their monetary claims but
the FL5C re$ersed the award considerin# that the petitioner&corporation submitted
copies o* payrolls, which it anne6ed to its memorandum on appeal, showin# *ull
payment "he #eneral rule is that the burden rests on the employer to pro$e payment,
rather than on the employee to pro$e non&payment "he reason *or the rule is that the
pertinent personnel 3les, payrolls, records, remittances, and other similar documents P
which will show that o$ertime, diDerentials, ser$ice incenti$e lea$e, and other claims o*
the wor2er ha$e been paid P are not in the possession o* the wor2er but in the custody
and absolute control o* the employer ?n this case, the submission by petitioner&
corporation o* the time records and payrolls only when the case was on appeal be*ore
the FL5C is contrary to the elementary precepts o* %ustice and *air play 5espondents
were not #i$en the opportunity to chec2 the authenticity and correctness o* the
e$idence submitted on appeal "hus, the Supreme Court held that the monetary claims
o* respondents should be #ranted ?t is a time&honored principle that i* doubts e6ist
between the e$idence presented by the employer and the employee, the scales o*
%ustice must be tilted in *a$or o* the latter ?t is the rule in contro$ersies between a
laborer and his master that doubts reasonably arisin# *rom the e$idence, or in the
interpretation o* a#reements and writin#, should be resol$ed in the *ormer4s *a$or E.G.
& 8. Constru!tion Corporation and Edsel Galeos v. Ananias 7. &ato, et al., G.R. No.
18#$7$ ,;ebruary 1+, #$11.
Fational Labor 5elations Commission@ %urisdiction 5espondents 3led an ille#al dismissal
case a#ainst Premier Allied and Contractin# Ser$ices, ?nc .PACS?/ and its President, the
petitioner PACS? and the petitioner were held liable to pay the respondents separation
pay and attorney4s *ees "o e6ecute this %ud#ment, FL5C sheriD issued a Fotice o* Sale
o* a property with "C" in the name o* the petitioner and his wi*e Petitioner 3led an
action *or prohibition and dama#es with prayer *or the issuance o* a temporary
restrainin# order ."5'/ be*ore the 5e#ional "rial Court .5"C/ "he Court ruled that the
5"C lac2s %urisdiction to resol$e the matter "he Court has lon# reco#ni>ed that re#ular
courts ha$e no %urisdiction to hear and decide 0uestions which arise *rom and are
incidental to the en*orcement o* decisions, orders, or awards rendered in labor cases by
appropriate o=cers and tribunals o* the Department o* Labor and (mployment "o hold
otherwise is to sanction splittin# o* %urisdiction which is obno6ious to the orderly
administration o* %ustice "he FL5C Manual on the (6ecution o* Eud#ment deals
speci3cally with third&party claims in cases brou#ht be*ore that body ?t de3nes a third&
party claim as one where a person, not a party to the case, asserts title to or ri#ht to the
possession o* the property le$ied upon ?t also sets out the procedure *or the 3lin# o* a
third&party claim, to wit+ Bsuch person shall ma2e an a=da$it o* his title thereto or ri#ht
to the possession thereo*, statin# the #rounds o* such ri#ht or title and shall 3le the
same with the sheriD and copies thereo* ser$ed upon the Labor Arbiter or proper o=cer
issuin# the writ and upon the pre$ailin# partyC ?n the present case, there is no doubt
that petitioner4s complaint is a third&party claim within the co#ni>ance o* the FL5C
Petitioner may indeed be considered a Bthird partyC in relation to the property sub%ect o*
the e6ecution since there is no 0uestion that the property belon#s to petitioner and his
wi*e, and not to the corporation ?t can be said that the property belon#s to the con%u#al
partnership, and not to petitioner alone At the $ery least, the Court can consider
petitioner4s wi*e to be a third party within the contemplation o* the law 7a=uito .. Ando
v. Andresito F. Ca*po, et al., G.R. No. 18@$$7, ;ebruary 1+, #$11.
Placement Hee@ proo* o* e6cessi$e collection Petitioner 3led a complaint a#ainst
respondent *or collection o* e6cess placement *ee de3ned in Article ,-.a/ o* the Labor
Code Petitioner presented as her e$idence a promissory note reJectin# e6cessi$e *ees
and testi3ed as to the deductions made by her *orei#n employer 'n the other hand,
respondent presented an ac2nowled#ment receipt reJectin# collection o* an amount
authori>ed by P'(A "he Court held that the pieces o* e$idence presented by petitioner
are not substantial enou#h to show that the respondent collected *rom her more than
the allowable placement *ee ?n proceedin#s be*ore administrati$e and 0uasi&%udicial
a#encies, the 0uantum o* e$idence re0uired to establish a *act is substantial e$idence,
or that le$el o* rele$ant e$idence which a reasonable mind mi#ht accept as ade0uate to
%usti*y a conclusion "he Court #a$e more credence to respondent4s e$idence consistin#
o* the ac2nowled#ment receipt showin# the amount paid by petitioner and recei$ed by
respondent A receipt is a written and si#ned ac2nowled#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 o* the records o* the case *ails to disclose any other e$idence su=cient and
stron# enou#h to o$erturn the ac2nowled#ment embodied in respondent4s receipt as to
the amount it actually recei$ed *rom petitioner )a$in# *ailed to adduce su=cient
rebuttal e$idence, petitioner is bound by the contents o* the receipt issued by
respondent "he sub%ect receipt remains as the primary or best e$idence "he
promissory note presented by petitioner cannot be considered as ade0uate e$idence to
show the e6cessi$e placement *ee ?t must be emphasi>ed that a promissory note is a
solemn ac2nowled#ment o* a debt and a *ormal 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 a=6es thereto as a to2en o* his #ood *aith "he *act that
respondent is not a lendin# company does not preclude it *rom e6tendin# a loan to
petitioner *or her personal use As *or the deductions purportedly made by petitioner4s
*orei#n employer, the Court noted that there is no sin#le piece o* document or receipt
showin# that deductions ha$e in *act been made, or is there any proo* that these
deductions *rom the salary *ormed part o* the sub%ect placement *ee "o be sure, mere
#eneral alle#ations o* payment o* e6cessi$e placement *ees cannot be #i$en merit as
the char#e o* ille#al e6action is considered a #ra$e oDense which could cause the
suspension or cancellation o* the a#ency4s license "hey should be pro$en and
substantiated by clear, credible, and competent e$idence Avelina ;. &agun v. &una!e
8nternational anage*ent &ervi!es, 8n!., G.R. No. 179#@#, ;ebruary #-, #$11.
Procedural due process@ notice re0uirements Petitioner was dismissed by respondent&
company due to redundancy )owe$er, it *ailed to pro$ide the Department o* Labor and
(mployment with a written notice re#ardin# petitioner4s termination "he notice o*
termination was also not properly ser$ed on the petitioner Hurther, a readin# o* the
notice shows that respondent&company *ailed to properly in*orm the petitioner o* the
#rounds *or his termination "here are two aspects which characteri>e the concept o*
due process under the Labor Code+ one is substanti$e P whether the termination o*
employment was based on the pro$ision o* the Labor Code or in accordance with the
pre$ailin# %urisprudence@ the other is procedural P the manner in which the dismissal
was eDected "here is a psycholo#ical eDect or a sti#ma in immediately 3ndin# one4s
sel* laid oD *rom wor2 "his is why our labor laws ha$e pro$ided *or procedural due
process 9hile employers ha$e the ri#ht to terminate employees it can no lon#er
sustain, our laws also reco#ni>e the employee4s ri#ht to be properly in*ormed o* the
impendin# termination o* his employment "hou#h the *ailure o* respondent&company to
comply with the notice re0uirements under the Labor Code did not aDect the $alidity o*
the dismissal, petitioner is howe$er entitled to nominal dama#es in addition to his
separation pay Nelson A. Culili v. Eastern Dele!o**uni!ations 7"ilippines, 8n!., et
al. G.R. No. 1+,-81, ;ebruary 9, #$11.
Wuitclaims@ $alidity 5espondents were terminated *rom employment due to
retrenchment implemented by petitioner :pon their dismissal, the respondents si#ned
indi$idual B5elease 9ai$er and WuitclaimC "he Court ruled that a wai$er or 0uitclaim 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
$oluntarily and with a *ull understandin# o* its import ?n this case, the respondents
were su=ciently apprised o* their ri#hts under the wai$ers and 0uitclaims that they
si#ned (ach document contained the si#natures o* the union president and its counsel,
which pro$ed that respondents were duly assisted when they si#ned the wai$ers and
0uitclaims )ence, the Court upheld the $alidity o* the wai$ers and 0uitclaims si#ned by
the respondents in this case 7lasti*er 8ndustrial Corporation and Deo 2ee 'in v. Natalia
C. Gopo, et al., G.R. No. 18--9$, ;ebruary 1+, #$11.
5etrenchment@ notice re0uirements Petitioner issued a Memorandum in*ormin# all its
employees o* the decision o* the company4s <oard o* Directors to downsi>e and
reor#ani>e its business operations due to the chan#e o* its corporate structure
Petitioner ser$ed the indi$idual notice o* termination on its employees on May 1-, 200-
or ,0 days be*ore the eDecti$e date o* their termination on 1, Eune 200-, while it
submitted the notice o* termination to the Department o* Labor and (mployment only
on 26 May 200-, short o* the one&month prior notice re0uirement under Article 2A, o*
the Labor Code "he Court held that petitioners4 *ailure to comply with the one&month
notice to the D'L( is only a procedural in3rmity and does not render the retrenchment
ille#al 9hen the dismissal is *or a %ust cause, the absence o* proper notice will not
nulli*y the dismissal or render it ille#al or ineDectual ?nstead, the employer should
indemni*y the employee *or $iolation o* his statutory ri#hts 7lasti*er 8ndustrial
Corporation and Deo 2ee 'in v. Natalia C. Gopo, et al., G.R. No. 18--9$, ;ebruary 1+,
#$11.
5etrenchment@ notice re0uirements ?n 200-, the petitioner had to retrench and
conse0uently terminate the employment o* the respondents 5espondents 0uestioned
the $alidity o* the retrenchment, and alle#ed that thou#h petitioner4s 3nancial
statements in 2001 and 2002 reJected losses, it declared net income in 200, "he Court
ruled that the *act that there was a net income in 200, does mean that there was no
$alid reason *or the retrenchment 5ecords showed that the net income
o* P6,1A7,Q0Q07 in 200, was not enou#h to allow petitioners to reco$er the loss
o*P72,;0-,2;QAA which it suDered in 2002 Article 2A, o* the Labor Code reco#ni>es
retrenchment to pre$ent losses as a ri#ht o* the mana#ement to meet clear and
continuin# economic threats or durin# periods o* economic recession to pre$ent losses
"here is no need *or the employer to wait *or substantial losses to materiali>e be*ore
e6ercisin# ultimate and drastic option to pre$ent such losses 7lasti*er 8ndustrial
Corporation and Deo 2ee 'in v. Natalia C. Gopo, et al., G.R. No. 18--9$, ;ebruary 1+,
#$11.
:n*air Labor Practice@ ri#ht to sel*&or#ani>e 5espondent&company implemented a
company&wide reor#ani>ation which resulted in the abolition o* petitioner4s position
Petitioner alle#ed that he was ille#ally dismissed and that respondent&company is #uilty
o* un*air labor practice because his *unctions were outsourced to labor&only contractors
"he Supreme Court held un*air labor practice re*ers to acts that $iolate the wor2ers4
ri#ht to or#ani>e "he prohibited acts are related to the wor2ers4 ri#ht to sel*&
or#ani>ation and to the obser$ance o* a C<A "hus, an employer may be held liable *or
un*air labor practice only i* it can be shown that his acts inter*ere with his employees4
ri#ht to sel*&or#ani>ation Since there is no showin# that the respondent company4s
implementation o* the 5i#ht&Si>in# Pro#ram was moti$ated by ill will, bad *aith or
malice, or that it was aimed at inter*erin# with its employees4 ri#ht to sel*&or#ani>ation,
there is no un*air labor practice to spea2 o* in this case Nelson A. Culili v. Eastern
Dele!o**uni!ations 7"ilippines, 8n!., et al. G.R. No. 1+,-81, ;ebruary 9, #$11.
March 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on April 1-, 2011 by Leslie C Dy ! Posted in Labor Law !
)ere are selected March 2011 rulin#s o* the Supreme Court o* the Philippines on labor
law and procedure+
Abandonment@ elements 5espondent employee was dismissed by petitioners on the
#round o* alle#ed habitual absenteeism and abandonment o* wor2 Eurisprudence
pro$ides *or two essential re0uirements *or abandonment o* wor2 to e6ist+ .1/ the *ailure
to report *or wor2 or absence without $alid or %usti3able reason, and .2/ clear intention
to se$er the employer&employee relationship mani*ested by some o$ert acts should
both concur Hurther, the employee4s deliberate and un%usti3ed re*usal to resume his
employment without any intention o* returnin# should be established and pro$en by the
employer "he Court held that petitioners *ailed to pro$e that it was respondent
employee who $oluntarily re*used to report bac2 *or wor2 by his de3ance and re*usal to
accept the memoranda and the notices o* absences sent to him Petitioners *ailed to
present e$idence that they sent these notices to respondent employee4s last 2nown
address *or the purpose o* warnin# him that his continued *ailure to report would be
construed as abandonment o* wor2 Moreo$er, the *act that respondent employee
ne$er prayed *or reinstatement and has sou#ht employment in another company which
is a competitor o* petitioners cannot be construed as his o$ert acts o* abandonin#
employment Feither can the delay o* *our months be ta2en as an indication that the
respondent employee4s 3lin# o* a complaint *or ille#al dismissal is a mere a*terthou#ht
5ecords show that respondent employee attempted to #et his separation pay and
alle#ed commissions *rom the company, but it was only a*ter his re0uests went
unheeded that he resorted to %udicial recourse 6arpoon arine &ervi!es, 8n!., et al. v.
;ernan 6. ;ran!is!o, GR No. 1+77,1, ar!" #, #$11.
Corporate o=cer@ solidary liability 5espondent employee 3led an ille#al dismissal case
a#ainst the Petitioner Corporation and its President "hou#h the Court *ound that
5espondent was ille#ally dismissed, it held that the President o* the Petitioner
Corporation should not be held solidarily liable with Petitioner Corporation 'bli#ations
incurred by corporate o=cers, actin# as such corporate a#ents, are not theirs but the
direct accountabilities o* the corporation they represent "hus, they should not be
#enerally held %ointly and solidarily liable with the corporation "he #eneral rule is
#rounded on the theory that a corporation has a le#al personality separate and distinct
*rom the persons comprisin# it As e6ceptions to the #eneral rule, solidary liability may
be imposed+ .1/ 9hen directors and trustees or, in appropriate cases, the o=cers o* a
corporation U.a/ $ote *or or assent to LpatentlyM unlaw*ul acts o* the corporation@ .b/
act in bad *aith or with #ross ne#li#ence in directin# the corporate aDairs@ .c/ are #uilty
o* conJict o* interest to the pre%udice o* the corporation, its stoc2holders or members,
and other persons@ .2/ 9hen the director or o=cer has consented to the issuance o*
watered stoc2 or who, ha$in# 2nowled#e thereo*, did not *orthwith 3le with the
corporate secretary his written ob%ection thereto@ .,/ 9hen a director, trustee or o=cer
has contractually a#reed or stipulated to hold himsel* personally and solidarily liable
with the corporation@ .-/ 9hen a director, trustee or o=cer is made, by speci3c
pro$ision o* law, personally liable *or his corporate action "o warrant the piercin# o* the
$eil o* corporate 3ction, the o=cer4s bad *aith or wron#doin# must be established
clearly and con$incin#ly as bad *aith is ne$er presumed 6arpoon arine &ervi!es, 8n!.,
et al. v. ;ernan 6. ;ran!is!o, GR No. 1+77,1, ar!" #, #$11.
Labor or#ani>ation@ collateral attac2 on le#al personality 5espondent company
0uestioned the le#al personality o* the petitioner union in a certi3cation election
proceedin# "he Court ruled that the le#al personality o* the petitioner union cannot be
collaterally attac2ed by respondent company (6cept when it is re0uested to bar#ain
collecti$ely, an employer is a mere bystander to any petition *or certi3cation election@
such proceedin# is non&ad$ersarial and merely in$esti#ati$e, considerin# that its
purpose is to determine i* the employees would li2e to be represented by a union and to
select the or#ani>ation that will represent them in their collecti$e bar#ainin# with the
employer "he choice o* their representati$e is the e6clusi$e concern o* the employees@
the employer cannot ha$e any partisan interest therein@ it cannot inter*ere with, much
less oppose, the process by 3lin# a motion to dismiss or an appeal *rom it@ not e$en the
alle#ation that some employees participatin# in a petition *or certi3cation election are
actually mana#erial employees will #i$e an employer le#al personality to bloc2 the
certi3cation election "he employer4s only ri#ht in the proceedin# is to be noti3ed or
in*ormed thereo* &a*a"ang anggaga3a sa C"arter C"e*i!al &olidarity of Cnions in
t"e 7"ilippines for E*po3er*ent and Refor*s N&CCA&C7ERO, Ia!arrias ?erry .i!torio E
Cnion 7resident v. C"arter C"e*i!al and Coating Corporation, G.R. No. 1+9717, ar!"
1+, #$11.
Labor or#ani>ation@ membership o* super$isory employees Petitioner union 3led a
Petition *or Certi3cation (lection amon# the re#ular ran2&and&3le employees o* the
respondent company 5espondent contends that petitioner union is not a le#itimate
labor or#ani>ation because its composition is a mi6ture o* super$isory and ran2&and&3le
employees "he Court ruled that the inclusion o* the super$isory employees in petitioner
union does not di$est it o* its status as a le#itimate labor or#ani>ation A*ter a labor
or#ani>ation has been re#istered, it may e6ercise all the ri#hts and pri$ile#es o* a
le#itimate labor or#ani>ation Any min#lin# between super$isory and ran2&and&3le
employees in its membership cannot aDect its le#itimacy *or that is not amon# the
#rounds *or cancellation o* its re#istration, unless such min#lin# was brou#ht about by
misrepresentation, *alse statement or *raud under Article 2,; o* the Labor
Code &a*a"ang anggaga3a sa C"arter C"e*i!al &olidarity of Cnions in t"e
7"ilippines for E*po3er*ent and Refor*s N&CCA&C7ERO, Ia!arrias ?erry .i!torio E
Cnion 7resident v. C"arter C"e*i!al and Coating Corporation,G.R. No. 1+9717, ar!"
1+, #$11.
Labor or#ani>ation@ re#istration Petitioner union 3led a Petition *or Certi3cation (lection
amon# the re#ular ran2&and&3le employees o* the respondent company 5espondent
company 3led an Answer with Motion to Dismiss on the #round that petitioner union is
not a le#itimate labor or#ani>ation because o* its *ailure to comply with the
documentary re0uirements set by law, ie non&$eri3cation o* the charter certi3cate "he
Court ruled that it was not necessary *or the charter certi3cate to be certi3ed and
attested by the localRchapter o=cers Considerin# that the charter certi3cate is
prepared and issued by the national union and not the localRchapter, it does not ma2e
sense to ha$e the localRchapter4s o=cers certi*y or attest to a document which they did
not prepare ?n accordance with this rulin#, petitioner union4s charter certi3cate need
not be e6ecuted under oath Conse0uently, it $alidly ac0uired the status o* a le#itimate
labor or#ani>ation upon submission o* .1/ its charter certi3cate, .2/ the names o* its
o=cers, their addresses, and its principal o=ce, and .,/ its constitution and by&lawsP
the last two re0uirements ha$in# been e6ecuted under oath by the proper union
o=cials &a*a"ang anggaga3a sa C"arter C"e*i!al &olidarity of Cnions in t"e
7"ilippines for E*po3er*ent and Refor*s N&CCA&C7ERO, Ia!arrias ?erry .i!torio E
Cnion 7resident v. C"arter C"e*i!al and Coating Corporation, G.R. No. 1+9717, ar!"
1+, #$11.
5einstatement@ accrued bac2wa#es "he Labor Arbiter and the FL5C held that petitioner
employer ille#ally dismissed the respondent employee 'n appeal, the Court o* Appeals
re$ersed the decision and ruled that the dismissal was $alid )owe$er, the Court o*
Appeals ordered petitioner employer to pay respondent employee her salary *rom the
date o* the Labor Arbiter4s decision orderin# her reinstatement until the Court o*
Appeals rendered its decision declarin# the dismissal $alid Petitioner employer
0uestioned the order and re*used to pay "he Court held that e$en i* the order o*
reinstatement o* the Labor Arbiter is re$ersed on appeal, it is obli#atory on the part o*
the employer to reinstate and pay the wa#es o* the dismissed employee durin# the
period o* appeal until re$ersal by the hi#her court 'n the other hand, i* the employee
has been reinstated durin# the appeal period and such reinstatement order is re$ersed
with 3nality, the employee is not re0uired to reimburse whate$er salary he recei$ed,
more so, i* he actually rendered ser$ices durin# the period "he payment o* such wa#es
cannot be deemed as un%ust enrichment on respondent4s part 7L/er, 8n!., et al. v.
Geraldine .elas!o, G.R. No. 177@+7, ar!" 9, #$11.
5einstatement@ immediately e6ecutory order "he Labor Arbiter held that petitioner
employer ille#ally dismissed the respondent employee Pendin# its appeal, petitioner
employer *ailed to immediately admit respondent employee bac2 to wor2 despite o* an
order o* reinstatement "he Court held that that the pro$ision o* Article 22, is clear that
an award by the Labor Arbiter *or reinstatement shall be immediately e6ecutory e$en
pendin# appeal and the postin# o* a bond by the employer shall not stay the e6ecution
*or reinstatement "he le#islati$e intent is to ma2e an award o* reinstatement
immediately en*orceable, e$en pendin# appeal "o re0uire the application *or and
issuance o* a writ o* e6ecution as prere0uisites *or the e6ecution o* a reinstatement
award would certainly betray the e6ecutory nature o* a reinstatement order or award ?n
the case at bar, petitioner employer did not immediately admit respondent employee
bac2 to wor2 which, accordin# to the law, should ha$e been done as soon as an order or
award o* reinstatement is handed down by the Labor Arbiter without need *or the
issuance o* a writ o* e6ecution 7L/er, 8n!., et al. v. Geraldine .elas!o, G.R. No.
177@+7, ar!" 9, #$11.
5einstatement@ terms and conditions Due to the order o* reinstatement issued by the
Labor Arbiter, petitioner employer sent a letter to the respondent employee to report
bac2 to wor2 and assi#ned her to a new location "he Court held that such is not a bona
3de reinstatement :nder Article 22, o* the Labor Code, an employee entitled to
reinstatement shall either be admitted bac2 to wor2 under the same terms and
conditions pre$ailin# prior to his dismissal or separation or, at the option o* the
employer, merely reinstated in the payroll ?t is established in %urisprudence that
reinstatement means restoration to a state or condition *rom which one had been
remo$ed or separated "he person reinstated assumes the position he had occupied
prior to his dismissal 5einstatement presupposes that the pre$ious position *rom which
one had been remo$ed still e6ists, or that there is an un3lled position which is
substantially e0ui$alent or o* similar nature as the one pre$iously occupied by the
employee Applyin# the *ore#oin# principle, it cannot be said that petitioner employer
has a clear intent to reinstate respondent employee to her *ormer position under the
same terms and conditions nor to a substantially e0ui$alent position "o be#in with, the
return&to&wor2 order petitioner sent to respondent employee is silent with re#ard to the
position it wanted the respondent employee to assume Moreo$er, a trans*er o* wor2
assi#nment without any %usti3cation there*or, e$en i* respondent employee would be
presumably doin# the same %ob with the same pay, cannot be deemed as *aith*ul
compliance with the reinstatement order 7L/er, 8n!., et al. v. Geraldine .elas!o, G.R.
No. 177@+7, ar!" 9, #$11.
"ermination by employer@ will*ul disobedience Petitioner employer ordered the
respondent employee to prepare chec2s *or payment o* petitioner4s obli#ations
5espondent did not immediately comply with the instruction since petitioner employer
has no su=cient *unds to co$er the chec2s Petitioner employer dismissed respondent
employee *or will*ul disobedience "he Court held that respondent employee was
ille#ally dismissed "he oDense o* will*ul disobedience re0uires the concurrence o* two
.2/ re0uisites+ .1/ the employee4s assailed conduct must ha$e been will*ul, that is
characteri>ed by a wron#*ul and per$erse attitude@ and .2/ the order $iolated must ha$e
been reasonable, law*ul, made 2nown to the employee and must pertain to the duties
which he had been en#a#ed to dischar#e "hou#h there is nothin# unlaw*ul in the
directi$e o* petitioner employer to prepare chec2s in payment o* petitioner4s
obli#ations, respondent employee4s initial reluctance to prepare the chec2s, althou#h
seemin#ly disrespect*ul and de3ant, was *or honest and well intentioned reasons
Protectin# the petitioner employer *rom liability under the <ouncin# Chec2s Law was
*oremost in her mind ?t was not wron#*ul or will*ul Feither can it be considered an
obstinate de3ance o* company authority "he Court ta2es into consideration that
respondent employee, despite her initial reluctance, e$entually did prepare the chec2s
on the same day she was tas2ed to do it )ores Realty Enterprises, 8n!., )oren/o F.
&u*ulong 888 v. .irginia E. 7a!ia, G.R. No. 171189, ar!" 9, #$11.
9a#es@ *acilities and supplements 5espondent employees alle#ed underpayment o*
their wa#es Petitioner employer claimed that the cost o* *ood and lod#in# pro$ided by
petitioner to the respondent employees should be included in the computation o* the
wa#es recei$ed by respondents "he Court ma2es a distinction between B*acilitiesC and
BsupplementsC Supplements constitute e6tra remuneration or special pri$ile#es or
bene3ts #i$en to or recei$ed by the laborers o$er and abo$e their ordinary earnin#s or
wa#es Hacilities, on the other hand, are items o* e6pense necessary *or the laborer4s
and his *amily4s e6istence and subsistence so that by e6press pro$ision o* law, they
*orm part o* the wa#e and when *urnished by the employer are deductible there*rom,
since i* they are not so *urnished, the laborer would spend and pay *or them %ust the
same ?n short, the bene3t or pri$ile#e #i$en to the employee which constitutes an e6tra
remuneration abo$e and o$er his basic or ordinary earnin# or wa#e is supplement@ and
when said bene3t or pri$ile#e is part o* the laborers4 basic wa#es, it is a *acility "he
distinction lies not so much in the 2ind o* bene3t or item .*ood, lod#in#, bonus or sic2
lea$e/ #i$en, but in the purpose *or which it is #i$en ?n the case at bench, the items
pro$ided were #i$en *reely by petitioner employer *or the purpose o* maintainin# the
e=ciency and health o* its wor2ers while they were wor2in# at their respecti$e pro%ects
"hus, the Court is o* the $iew that the *ood and lod#in#, or the electricity and water
alle#edly consumed by respondents in this case were not *acilities but supplements
which should not be included in the computation o* wa#es recei$ed by respondent
employees &)) 8nternational Cables &pe!ialist and &onny ). )agon v. N)RC, Roldan
)ope/, et al., G.R. No. 17#1+1, ar!" #, #$11.
9a#es@ proo* o* payment ?n an ille#al dismissal case a#ainst the petitioner employer,
respondent employees alle#ed that they were underpaid ?n their de*ense, petitioner
employer alle#ed that respondent employees actually recei$ed wa#es hi#her than the
prescribed minimum "he Court held that as a #eneral rule, a party who alle#ed
payment o* wa#es as a de*ense has the burden o* pro$in# it Speci3cally with respect to
labor cases, the burden o* pro$in# payment o* monetary claims rests on the employer,
the rationale bein# that the pertinent personnel 3les, payrolls, records, remittances and
other similar documents P which will show that o$ertime, diDerentials, ser$ice incenti$e
lea$e and other claims o* wor2ers ha$e been paid P are not in the possession o* the
wor2er but in the custody and absolute control o* the employer ?n this case, petitioner
employer, aside *rom bare alle#ations that respondent employees recei$ed wa#es
hi#her than the prescribed minimum, *ailed to present any e$idence, such as payroll or
payslips, to support their de*ense o* payment "hus, petitioner employer utterly *ailed
to dischar#e the onus probandi &)) 8nternational Cables &pe!ialist and &onny ). )agon
v. N)RC, Roldan )ope/, et al., G.R. No. 17#1+1, ar!" #, #$11.
9a#es@ $alue o* *acilities Petitioner employer alle#ed that the cost o* *acilities must be
included in the computation o* wa#es paid "he Court held that be*ore the $alue o*
*acilities can be deducted *rom the employees4 wa#es, the *ollowin# re0uisites must all
be attendant+ Lrst, proo* must be shown that such *acilities are customarily *urnished by
the trade@ se!ond, the pro$ision o* deductible *acilities must be $oluntarily accepted in
writin# by the employee@ and Lnally, *acilities must be char#ed at reasonable $alue
Mere a$ailment is not su=cient to allow deductions *rom employees4 wa#es "hese
re0uirements, howe$er, ha$e not been met in this case Petitioner employer *ailed to
present any company policy or #uideline showin# that pro$isions *or meals and lod#in#
were part o* the employee4s salaries ?t also *ailed to pro$ide proo* o* the employees4
written authori>ation, much less show how they arri$ed at their $aluations At any rate,
it is not e$en clear whether respondent employees actually en%oyed said *acilities &))
8nternational Cables &pe!ialist and &onny ). )agon v. N)RC, Roldan )ope/, et al., G.R.
No. 17#1+1, ar!" #, #$11.
April 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on May 1;, 2011 by Leslie C Dy ! Posted in Labor Law ! "a##ed certiorari, ille#al dismissal, loss
o* trust and con3dence !
)ere are selected April 2011 rulin#s o* the Supreme Court o* the Philippines on labor law
and procedure+
Dismissal@ breach o* trust and con3dence Petitioner was employed as Assistant Gice&
President o* the Eewelry Department in respondent ban2 )is employment was
terminated on the #round o* will*ul breach o* trust and con3dence Eurisprudence
pro$ides *or two re0uisites *or dismissal on the #round o* loss o* trust and con3dence@
.1/ the employee concerned must be holdin# a position o* trust and con3dence, and .2/
there must be an act that would %usti*y the loss o* trust and con3dence Loss o* trust
and con3dence, to be a $alid cause *or dismissal, must be based on a will*ul breach o*
trust and *ounded on clearly established *acts "he basis *or the dismissal must be
clearly and con$incin#ly established but proo* beyond reasonable doubt is not
necessary Hurthermore, the burden o* establishin# *acts as bases *or an employer4s loss
o* con3dence is on the employer "he court held that the termination o* petitioner was
without %ust cause and there*ore ille#al Althou#h the 3rst re0uisite was present, the
respondent *ailed to satis*y the second re0uisite 5espondent ban2 was not able to
show any concrete proo* that petitioner had participated in the appro$al o* the
0uestioned accounts "he in$ocation by respondent o* the loss o* trust and con3dence
as #round *or petitioner4s termination has there*ore no basis at all ?a*es 'en ).
?erusale* v. 2eppel onte 'an(, et al., G.R. No. 1+9,+@. April +, #$11.
<reach o* "rust and Con3dence@ duties o* employee Petitioner was employed as
Assistant Gice&President in respondent ban2 )is employment was terminated on the
#round o* will*ul breach o* trust and con3dence *or endorsin# G?SA card applicants who
later turned out to be impostors resultin# in 3nancial losses to respondent ban2 "he
court held that petitioner was ille#ally dismissed As pro$ided in Article 2A2 o* the Labor
Code, an employer may terminate an employee4s employment *or *raud or will*ul breach
o* trust reposed in him )owe$er, in order to constitute a %ust cause *or dismissal, the
act complained o* must be Xwor2&related4 such as would show the employee concerned
to be un3t to continue wor2in# *or the employer "he act o* betrayal o* trust, i* any,
must ha$e been committed by the employee in connection with the per*ormance o* his
*unction or position "he court *ound that the element o* Xwor2&connection4 was not
present in this case since petitioner was assi#ned under the Eewelry department, and
there*ore had nothin# to do with the appro$al o* G?SA Cards, which was under a
diDerent department alto#ether ?a*es 'en ). ?erusale* v. 2eppel onte 'an(, et
al., G.R. No. 1+9,+@. April +, #$11.
Certiorari under 5ule -7@ 0uestions o* law and e6ceptions "he Labor Arbiter and the
FL5C *ound that respondent employer ne#lected to pay petitioner4s sic2ness allowance
)owe$er, on appeal, the Court o* Appeals re$ersed such 3ndin#s and held that
petitioner already recei$ed his sic2ness allowance *rom respondent Petitioner
0uestioned the rulin# o* the Court o* Appeals by 3lin# a petition *or re$iew on certiorari
under 5ule -7 "he Supreme Court held that, as a rule, only 0uestions o* law, not
0uestions o* *act, may be raised in a petition *or re$iew on !ertiorari under 5ule -7
)owe$er, this principle is sub%ect to reco#ni>ed e6ceptions ?n the labor law settin#, the
Court will del$e into *actual issues when conJict o* *actual 3ndin#s e6ists amon# the
labor arbiter, the FL5C, and the Court o* Appeals Considerin# that in the present case
there were diDerin# *actual 3ndin#s on the part o* the Court o* Appeals, on one hand,
and the Labor Arbiter and the FL5C, on the other, the Supreme Court *ound it necessary
to ma2e an independent e$aluation o* the e$idence on record Bilfredo F. Anti=uina v.
agsaysay ariti*e Corporation and1or asterbul( 7te., )td., G.R. No. 1+89##. April
1-, #$11.
5ules o* Procedure@ liberal construction in *a$or o* wor2in# class Petitioner claimed
disability bene3ts under a Collecti$e <ar#ainin# A#reement that the respondent
employer entered into with a *orei#n union "he Court o* Appeals re*used to admit the
e$idence o* petitioner showin# his membership in the union on the #round that it was
submitted only with the Motion *or 5econsideration "he Supreme Court, in a#reein# to
e6amine the e$idence belatedly submitted by petitioner, pointed out that technical
rules o* procedure shall be liberally construed in *a$or o* the wor2in# class in
accordance with the demands o* substantial %ustice 5ules o* procedure and e$idence
should not be applied in a $ery ri#id and technical sense in labor cases in order that
technicalities would not stand in the way o* e0uitably and completely resol$in# the
ri#hts and obli#ations o* the parties Bilfredo F. Anti=uina v. agsaysay ariti*e
Corporation and1or asterbul( 7te., )td., G.R. No. 1+89##. April 1-, #$11.
Disability <ene3ts@ entitlement and burden o* proo* Petitioner suDered a *ractured arm
while wor2in# on respondent4s $essel )e 3led a complaint *or permanent disability
bene3ts, amon# others Petitioner claims that he is entitled to the hi#her amount o*
disability bene3ts under the Collecti$e <ar#ainin# A#reement which respondent entered
into with a union o* which petitioner was a member "he Court o* Appeals denied the
petitioner4s claim "he Supreme Court, in upholdin# the Court o* Appeals, held that the
burden o* proo* rests upon the party who asserts the a=rmati$e o* an issue And in
labor cases, the 0uantum o* proo* necessary is substantial e$idence, or such amount o*
rele$ant e$idence which a reasonable mind mi#ht accept as ade0uate to %usti*y a
conclusion Petitioner had the duty to pro$e by substantial e$idence his own positi$e
assertions )e did not dischar#e this burden o* proo* when he submitted photocopied
portions o* a diDerent C<A with a diDerent union Bilfredo F. Anti=uina v. agsaysay
ariti*e Corporation and1or asterbul( 7te., )td., G.R. No. 1+89##. April 1-, #$11.
Public o=ce@ casual employees 5espondent was a casual teller who was dismissed *rom
ser$ice by petitioner without bein# *ormally char#ed 'n appeal, the Ci$il Ser$ice
Commission .CSC/ upheld the dismissal and reasoned that respondent was a casual
employee, and there*ore her ser$ices may be terminated at any time, without need o* a
%ust cause :pon re$iew, both the Court o* Appeals and the Supreme Court *ound that
respondent was ille#ally terminated "he Supreme Court reco#ni>ed its pronouncement
in a recent case that B($en a casual or temporary employee en%oys security o* tenure
and cannot be dismissed e6cept *or cause enumerated in Sec 22, 5ule O?G o* the
'mnibus Ci$il Ser$ice 5ules and 5e#ulations and other pertinent lawsC )owe$er, the
Court also went on to state that, despite this new rulin# on casual employees, it is not
the intention o* the Court to ma2e the status o* a casual employee at par with that o* a
re#ular employee, who en%oys permanence o* employment "he rule is still that casual
employment will cease automatically at the end o* the period unless renewed Casual
employees may also be terminated anyti*e thou#h sub%ect to certain conditions or
0uali3cations with re*erence to the CSC Horm Fo 001 "hus, they may be laid&
oD anyti*e be*ore the e6piration o* the employment period pro$ided any o* the
*ollowin# occurs+ .1/ when their ser$ices are no lon#er needed@ .2/ *unds are no lon#er
a$ailable@ .,/ the pro%ect has already been completedR3nished@ or .-/ their per*ormance
are below par 7"ilippine C"arity &3eepsta(es 9:!e 'oard of 0ire!tors and Reynaldo 7.
artin v. arie ?ean C. )apid, G.R. No. 1919@$. April 1#, #$11.
Public o=ce@ security o* tenure 5espondent was a casual teller who, ha$in# been *ound
#uilty o* XDiscourtesy in the Course o* '=cial Duties4 and o* XKra$e Misconduct4, was
dismissed *rom ser$ice by petitioner 'n appeal, the Ci$il Ser$ice Commission .CSC/
ruled that despite lapses in procedural due process committed by petitioner employer,
the dismissal was proper since respondent belon#ed to the cate#ory o* a casual
employee which does not en%oy security o* tenure )ence, she may be separated *rom
ser$ice at any time, there bein# no need to show cause "he Court o* Appeals disa#reed
and declared the dismissal ille#al "he Supreme Court a=rmed the 3ndin#s o* the Court
o* Appeals ?n doin# so, the Court relied on Section ,.2/, Article O??? o* the Constitution
which #uarantees the ri#hts o* all 3or(ers to security o* tenure "he Court also
reco#ni>ed its pronouncement in a recent case that B($en a casual or temporary
employee en%oys security o* tenure and cannot be dismissed e6cept *or cause
enumerated in Sec 22, 5ule O?G o* the 'mnibus Ci$il Ser$ice 5ules and 5e#ulations and
other pertinent lawsC 7"ilippine C"arity &3eepsta(es 9:!e 'oard of 0ire!tors and
Reynaldo 7. artin v. arie ?ean C. )apid, G.R. No. 1919@$. April 1#, #$11.
Dismissal@ due process 5espondent was dismissed *rom her post as casual teller 9hen
respondent appealed her dismissal to the Ci$il Ser$ice Commission .CSC/, the latter
*ound that respondent was ne$er *ormally char#ed *or the administrati$e oDenses *or
which she was dismissed )owe$er, despite 3ndin# that procedural due process was not
complied with, the CSC ne$ertheless upheld the dismissal on the #round that bein# a
casual employee, respondent en%oyed no security o* tenure and can be dismissed
anytime "he Court *ound that respondent was ille#ally terminated and ordered her
reinstatement Casual employees are entitled to due process especially i* they are to be
remo$ed *or more serious causes or *or causes other than the reasons mentioned in CSC
Horm Fo 001 "his is pursuant to Section 2, Article ?O.</ o* the Constitution
Hurthermore, Section -6 o* the Ci$il Ser$ice Law pro$ides that Pno o:!er or e*ployee
in t"e Civil &ervi!e s"all be suspended or dis*issed e%!ept for !ause as provided by la3
after due pro!ess.C "he reason *or this is that their termination *rom the ser$ice could
carry a penalty aDectin# their ri#hts and *uture employment in the
#o$ernment 7"ilippine C"arity &3eepsta(es 9:!e 'oard of 0ire!tors and Reynaldo 7.
artin v. arie ?ean C. )apid, G.R. No. 1919@$. April 1#, #$11.
May 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on Eune 21, 2011 by Leslie C Dy ! Posted in Constitutional Law, Labor Law
! "a##ed appeal, due process, e0ual protection, ille#al dismissal, resi#nation !
)ere are selected May 2011 rulin#s o* the Supreme Court o* the Philippines on labor law
and procedure+
Section 10, 5epublic Act Fo A0-2@ unconstitutional Petitioner Sap was employed as an
electrician *or respondent4s $essel under a 12&month contract )e was *ound to be
ille#ally terminated with nine months remainin# on his contract term "he Court o*
Appeals .CA/ awarded petitioner salaries *or three months as pro$ided under Section 10
o* 5epublic Act Fo A0-2 'n certiorari, the Supreme Court re$ersed the CA and
declared that petitioner was entitled to his salaries *or the *ull une6pired portion o* his
contract "he Court has pre$iously declared in &errano v. Gallant ariti*e &ervi!es, 8n!.
4#$$95 that the clause Bor for t"ree *ont"s for every year of t"e une%pired ter*,
3"i!"ever is lessC pro$ided in the 7th para#raph o* Section 10 o* 5A Fo A0-2 is
unconstitutional *or bein# $iolati$e o* the ri#hts o* '$erseas Hilipino 9or2ers .'H9s/ to
e0ual protection o* the laws "he sub%ect clause contains a suspect classi3cation in that,
in the computation o* the monetary bene3ts o* 36ed&term employees who are ille#ally
dischar#ed, it imposes a ,&month cap on the claim o* 'H9s with an une6pired portion o*
one year or more in their contracts, but none on the claims o* other 'H9s or local
wor2ers with 36ed&term employment "he sub%ect clause sin#les out one classi3cation o*
'H9s and burdens it with a peculiar disad$anta#e Moreo$er, the sub%ect clause does
not state or imply any de3niti$e #o$ernmental purpose@ hence, the same $iolates not
%ust petitioner4s ri#ht to e0ual protection, but also his ri#ht to substanti$e due process
under Section 1, Article ??? o* the Constitution Claudio &. Fap vs. D"ena*aris &"ipMs
anage*ent and 8nter*are ariti*e Agen!ies, 8n!., G.R. No. 179,-#, ay -$, #$11
Doctrine o* 'perati$e Hact@ applied as a matter o* e0uity and *air play Petitioner Sap was
employed on respondent4s $essel under a 12&month contract :pon 3ndin# that he was
ille#ally terminated, the Court o* Appeals .CA/ awarded petitioner salaries *or three
months as pro$ided under Section 10 o* 5epublic Act Fo A0-2 .5A A0-2/ 9hile the
case was pendin# in the Supreme Court, Section 10 o* 5A A0-2 was declared
unconstitutional ?n decidin# to award petitioner his salaries *or the entire une6pired
portion o* his contract, the Supreme Court re%ected the application o* the operati$e *act
doctrine As an e6ception to the #eneral rule, the doctrine applies only as a matter o*
e0uity and *air play ?t reco#ni>es that the e6istence o* a statute prior to a determination
o* unconstitutionality is an operati$e *act and may ha$e conse0uences which cannot
always be i#nored "he doctrine is applicable when a declaration o* unconstitutionality
will impose an undue burden on those who ha$e relied on the in$alid law "his case
should not be included in the a*orementioned e6ception A*ter all, it was not the *ault o*
petitioner that he lost his %ob due to an act o* ille#al dismissal committed by
respondents "o rule otherwise would be ini0uitous to petitioner and other 'H9s, and
would, in eDect, send a wron# si#nal that principalsRemployers and
recruitmentRmannin# a#encies may $iolate an 'H94s security o* tenure which an
employment contract embodies and actually pro3t *rom such $iolation based on an
unconstitutional pro$ision o* law Claudio &. Fap vs. D"ena*aris &"ipMs anage*ent and
8nter*are ariti*e Agen!ies, 8n!., G.R. No. 179,-#, ay -$, #$11.
Mi#rant wor2ers@ computation o* salary award Petitioner Sap was employed as an
electrician *or respondent4s $essel under a 12&month contract )e was *ound to be
ille#ally terminated with nine months remainin# on his contract term, and was declared
to be entitled to his salaries *or the balance o* his contract 5espondents claim that the
tan2er allowance should be e6cluded *rom the de3nition o* the term BsalaryC "he
Supreme Court, a*ter e6aminin# the rele$ant clauses o* the contract, re%ected
respondent4s claim "he word salaries in Section 10 .7/ does not include o$ertime and
lea$e pay Hor sea*arers, D'L( Department 'rder Fo ,,, series 1;;6, pro$ides a
Standard (mployment Contract o* Sea*arers, in which salary is understood as the basic
wa#e, e%!lusive o* o$ertime, lea$e pay and other bonuses A close perusal o* the
contract re$eals that the tan2er allowance o* :SY1,000 was not cate#ori>ed as a bonus
but was rather encapsulated in the basic salary clause, hence, *ormin# part o* the basic
salary o* petitioner ?* respondents intended it diDerently, the contract per se should
ha$e indicated that said allowance does not *orm part o* the basic salary or, simply, the
contract should ha$e separated it *rom the basic salary clause Claudio &. Fap vs.
D"ena*aris &"ipMs anage*ent and 8nter*are ariti*e Agen!ies, 8n!. G.R. No.
179,-#, ay -$, #$11.
"ermination *or Eust Cause@ separation pay by way o* 3nancial assistance Petitioner
Euliet Apacible was employed as Assistant Area Sales Mana#er *or respondent4s Cebu
operations She was in*ormed that she would be trans*erred to the Pasi# o=ce on
account o* the on#oin# reor#ani>ation Petitioner4s repeated re*usal to comply with the
trans*er order was treated by respondent as insubordination and #rounds *or her
dismissal "he Labor Arbiter, the FL5C and the Court o* Appeals all *ound that petitioner
was %ustly dismissed *rom employment "he FL5C awarded separation pay as 3nancial
assistance, howe$er, notin# that petitioner4s obstinacy was upon the ad$ice o* her
counsel and, there*ore, there was a modicum o* #ood *aith on her part 'n appeal, the
Court o* Appeals .CA/ deleted the award o* separation pay "he Supreme Court upheld
the CA and declared that the award o* 3nancial assistance shall not be #i$en to $alidly
terminated employees, whose oDenses are ini0uitous or reJecti$e o* some depra$ity in
their moral character 9hen the employee commits an act o* dishonesty, depra$ity, or
ini0uity, the #rant o* 3nancial assistance is misplaced compassion ?n this case,
petitioner4s adamant re*usal to trans*er, coupled with her *ailure to heed the order *or
her to return the company $ehicle assi#ned to her and, more importantly, allowin# her
counsel to write letters couched in harsh lan#ua#e to her superiors un0uestionably
show that she was #uilty o* insubordination, hence, not entitled to the award o*
separation pay ?uliet G. Apa!ible vs. ulti*ed 8ndustries, et al., G.R. No. 1789$-, ay
-$, #$11.
Appeal@ postin# o* Appeal <ond@ Ko$ernment4s e6emption *rom the same 5espondents
are super$isory and ran2 and 3le employees o* the DO9K&?li#an City radio station which
is owned by petitioner <anahaw <roadcastin# Corporation .<<C/ 5espondents 3led a
complaint *or ille#al dismissal, un*air labor practice, and reimbursement o* unpaid
Collecti$e <ar#ainin# A#reement .C<A/ bene3ts a#ainst petitioner "he Labor Arbiter
rendered a decision orderin# petitioner <<C to pay the money claims 'n appeal to the
FL5C, petitioner <<C a$erred that since it is wholly owned by the 5epublic o* the
Philippines, it need not post an appeal bond "he FL5C dismissed the appeal o* <<C *or
non&per*ection "he Court o* Appeals a=rmed the FL5C "he Supreme Court, in
sustainin# the CA, held that as a #eneral rule, the #o$ernment and all the attached
a#encies with no le#al personality distinct *rom the *ormer are e6empt *rom postin#
appeal bonds "he rationale is to protect the presumpti$e %ud#ment creditor a#ainst the
insol$ency o* the presumpti$e %ud#ment debtor 9hen the State liti#ates, it is not
re0uired to put up an appeal bond because it is presumed to be always sol$ent "his
e6emption, howe$er, does not, as a #eneral rule, apply to #o$ernment&owned and
controlled corporations .K'CCs/ *or the reason that the latter has a personality distinct
*rom its shareholders ?n this case, <<C, thou#h owned by the #o$ernment, is a
corporation with a personality distinct *rom the 5epublic or any o* its a#encies or
instrumentalities, and there*ore do not parta2e in the latter4s e6emption *rom the
postin# o* appeal bonds 'ana"a3 'road!asting Corporation vs. Cayetano 7ACANa 888, et
al, G.R. No. 171+7-, ay -$, #$11.
Appeal@ postin# o* appeal bond within the 10&day period is mandatory and %urisdictional
5espondents 3led a complaint *or ille#al dismissal, un*air labor practice, and
reimbursement o* unpaid Collecti$e <ar#ainin# A#reement .C<A/ bene3ts a#ainst
petitioner "he Labor Arbiter rendered a decision in *a$or o* respondents and ordered
petitioner <<C to pay the money claims Petitioner appealed to the FL5C, and without
postin# the appeal bond, 3led a Motion *or the 5e&computation o* the Monetary Award in
order that the appeal bond may be reduced "he FL5C denied the motion and dismissed
the appeal o* <<C *or non&per*ection "he Court o* Appeals and the Supreme Court both
sustained the dismissal by the FL5C "he Motion *or the 5e&computation o* the
Monetary Award 3led by <<C was tantamount to a motion *or e6tension to per*ect the
appeal, which is prohibited by the rules "he payment o* the appeal bond within the
period pro$ided by law is an indispensable and %urisdictional re0uisite and not a mere
technicality o* law or procedure )ence, the *ailure on the part o* <<C to per*ect the
appeal had the eDect o* renderin# the %ud#ment 3nal and e6ecutory 'ana"a3
'road!asting Corporation vs. Cayetano 7ACANa 888, et al, G.R. No. 171+7-, ay -$,
#$11.
Goluntary 5esi#nation@ 3nancial assistance may be awarded on e0uity
considerations Petitioner 3led a complaint *or ille#al dismissal a#ainst respondent
Hindin# instead that petitioner had $oluntarily resi#ned, the Labor Arbiter dismissed the
complaint a#ainst respondent, but ordered the latter to pay P1A,00000 by way o*
3nancial assistance 'n appeal, the FL5C *ound petitioner to be ille#ally dismissed "he
Court o* Appeals rea=rmed the 3ndin#s o* the LA but deleted the award o* 3nancial
assistance, rulin# that the same may not be awarded in cases o* $oluntary resi#nation
"he Supreme Court, in upholdin# the award o* 3nancial assistance, stated that while the
rule is that 3nancial assistance is allowed only in instances where the employee is
$alidly dismissed *or causes other than serious misconduct or those reJectin# on his
moral character, there are instances when 3nancial assistance may be allowed as a
measure o* social %ustice and as an e0uitable concession ?n this case, petitioner, who
has ser$ed respondent *or more than ei#ht years without committin# any in*raction,
may be #ranted such 3nancial assistance on e0uity considerations Rodolfo )una
vs. Allado Constru!tion Co*pany, 8n!. and1or Ra*on Allado, G.R. No. 17,#,1, ay -$,
#$11.
Fational Labor 5elations Commission@ authority to re$iew is limited to issues speci3cally
brou#ht be*ore it on appeal Petitioner 3led a complaint *or ille#al dismissal a#ainst
respondent Hindin# that petitioner had $oluntarily resi#ned, the Labor Arbiter dismissed
the complaint a#ainst respondent, but ordered the latter to pay P1A,00000 by way o*
3nancial assistance 5espondents interposed an appeal with the Fational Labor
5elations Commission .FL5C/, purely *or the purpose o* 0uestionin# the $alidity o* the
#rant o* 3nancial assistance made by the Labor Arbiter ?nstead, the FL5C ruled that
petitioner was ille#ally dismissed and was entitled to separation pay "he Court o*
Appeals .CA/ held that it was #ra$e abuse o* discretion *or the FL5C to rule on the issue
o* ille#al dismissal when the only issue raised to it on appeal was the propriety o* the
award o* 3nancial assistance "he Supreme Court sustained the $iew o* the CA,
reasonin# that Section -.d/, 5ule G? o* the 2007 5e$ised 5ules o* Procedure o* the FL5C
e6pressly pro$ides that, on appeal, the FL5C shall limit itsel* only to the speci3c issues
that were ele$ated *or re$iew ?n the case at bar, the FL5C e$idently went a#ainst its
own rules o* procedure when it passed upon the issue o* ille#al dismissal althou#h this
0uestion was not raised by respondents in their appeal Rodolfo )una vs.Allado
Constru!tion Co*pany, 8n!. and1or Ra*on Allado, G.R. No. 17,#,1, ay -$, #$11.
Eune 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on Euly 10, 2011 by Leslie C Dy ! Posted in Labor Law ! "a##ed appeal, collecti$e bar#ainin#
a#reement, dama#es,Department o* Labor and (mployment, dismissal, independent
contractor, %urisdiction, labor&only contractin#, loss o* trust and con3dence, misconduct !
)ere are selected Eune 2011 rulin#s o* the Supreme Court o* the Philippines on labor law
and procedure+
Appeal@ decision o* D'L( Secretary Hor petitioner4s re*usal to comply with his
deployment assi#nment, respondent mannin# a#ency 3led a complaint a#ainst him *or
breach o* contract be*ore the Philippine '$erseas (mployment Administration .P'(A/
"he P'(A penali>ed petitioner with one year suspension *rom o$erseas deployment "he
suspension was reduced to si6 months by the Secretary o* Labor Petitioner appealed
the latter4s decision with the '=ce o* the President .'P/ "he Supreme Court ruled that
petitioner4s appeal was erroneous "he proper remedy to 0uestion the decisions or
orders o* the Secretary o* Labor is $ia Petition *or Certiorari under 5ule 67 Appeals to
the 'P in labor cases ha$e been eliminated, e6cept those in$ol$in# national interest
o$er which the President may assume %urisdiction "he present case does not aDect
national interest )ence, petitioner4s appeal to the 'P did not toll the runnin# o* the
period and the assailed decision o* the Secretary o* Labor is deemed to ha$e attained
3nality iguel 0ela 7ena 'arairo vs. 9:!e of t"e 7resident and &D arine &ervi!es
47"ils.5 8n!., G.R. No. 189-1@. ?une 1,, #$11.
Appeal *rom decisions o* labor arbiter@ bond re0uirement *or per*ection o* appeal may
be rela6ed in meritorious cases "he postin# o* a bond is indispensable to the per*ection
o* an appeal in cases in$ol$in# monetary awards *rom the decision o* the labor arbiter
)owe$er, under Section 6, 5ule G? o* the FL5C4s 5e$ised 5ules o* Procedure, the bond
may be reduced albeit only .1/ on meritorious #rounds and .2/ upon postin# o* a partial
bond in a reasonable amount in relation to the monetary award Hor this purpose, the
FL5C is not precluded *rom conductin# a preliminary determination o* the employer4s
3nancial capability to post the re0uired bond, without necessarily passin# upon the
merits ?n the present case, the FL5C #ra$ely abused its discretion in denyin#
petitioner4s motion to reduce bond peremptorily without considerin# the e$idence
presented by petitioner showin# that it was under a state o* recei$ership Such
circumstance constitutes meritorious #rounds to reduce the bond Moreo$er, the
petitioner e6hibited its #ood *aith by postin# a partial cash bond durin# the
re#lementary period Cniversity 7lans, 8n!. vs. 'elinda 7. &olano, et al., G.R. No. 17$@1+,
?une ##, #$11
Certiorari@ substantial compliance "he three material dates which should be stated in
the petition *or !ertiorari under 5ule 67 are the dates when the notice o* %ud#ment was
recei$ed, when a motion *or reconsideration was 3led and when the notice o* the denial
o* the motion *or reconsideration was recei$ed "hese dates should be reJected in the
petition to enable the re$iewin# court to determine i* the petition was 3led on time ?n
the present case, the petition 3led with the Court o* Appeals *ailed to state when
petitioner recei$ed the assailed FL5C Decision and when he 3led his partial motion *or
reconsideration )owe$er, this omission is not at all *atal because these material dates
are reJected in petitioner4s Partial Motion *or 5econsideration attached to the petition
"he *ailure to state these two dates in the petition may be e6cused i* the same are
e$ident *rom the records o* the case "he Court *urther stated that the more important
material date which must be duly alle#ed in the petition is the date o* receipt o* the
resolution o* denial o* the motion *or reconsideration Since petitioner has duly complied
with this rule, there was substantial compliance with the re0uisite *ormalities Billia*
Endeliseo 'arroga vs. 0ata Center College of t"e 7"ilippines, et al., G.R. No.
17@1,8. ?une #7, #$11
Collecti$e bar#ainin# a#reement@ duty o* parties to maintain status 0uo pendin#
rene#otiation Article 27, o* the )abor Code mandates the parties to 2eep the status
=uo and to continue in *ull *orce and eDect the terms and conditions o* the e6istin#
a#reement durin# the 60&day period prior to the e6piration o* the old C<A andRor until a
new a#reement is reached by the parties "he law does not pro$ide *or any e6ception
nor 0uali3cation on which economic pro$isions o* the e6istin# a#reement are to retain
its *orce and eDect Li2ewise, the law does not distin#uish between a C<A duly a#reed
upon by the parties and an imposed C<A li2e the one in the present case )ence,
considerin# that no new C<A had been, in the meantime, a#reed upon by respondent
KMC and the :nion, the pro$isions o* the imposed C<A continues to ha$e *ull *orce and
eDect until a new C<A is entered into by the parties General illing CorporationA
8ndependent )abor Cnion NGCA8)CO vs. General illing Corporation1General illing
Corporation vs.General illing CorporationA8ndependent )abor Cnion NGCA8)CO, et
al., G.R. Nos. 18-1##118-889, ?une 1,, #$11.
Dama#es@ *raud or bad *aith *or the award o* moral dama#es Moral and e6emplary
dama#es are reco$erable where the dismissal o* an employee was attended by bad
*aith or *raud, or constituted an act oppressi$e to labor, or were done in a manner
contrary to morals, #ood customs or public policy ?n the present case, PNK dismissed its
employees in a manner oppressi$e to labor "he sudden and peremptory barrin# o*
petitioners *rom wor2, and *rom admission to the wor2 place, a*ter %ust a one&day $erbal
notice, and *or no $alid cause, constitutes oppression and utter disre#ard o* the ri#ht to
due process o* the concerned petitioners )ence, the Supreme Court held that an
award o* moral dama#es is called *or under the circumstances ?oeb . Aliviado, et al.
vs. 7ro!ter and Ga*ble 7"ils., 8n!., et al., G.R. No. 1+$,$+, ?une +, #$11.
Dismissal@ constructi$e dismissal Petitioner was employed as an instructor o* Data
Center Colle#e located in ?locos Forte 9hen the colle#e proposed to trans*er him to
Abra, he 3led a complaint alle#in# constructi$e dismissal since his re&assi#nment will
entail an indirect reduction o* his salary or diminution o* pay considerin# that no
additional allowance will be #i$en to co$er *or board and lod#in# e6penses )e claims
that such additional allowance was #i$en in the past and there*ore cannot be
discontinued and withdrawn without $iolatin# the prohibition a#ainst non&diminution o*
bene3ts "he Supreme Court a=rmed the 3ndin#s o* the lower bodies and declared that
petitioner4s re&assi#nment did not amount to constructi$e dismissal Constructi$e
dismissal is 0uittin# because continued employment is rendered impossible,
unreasonable or unli2ely, or because o* a demotion in ran2 or a diminution o* pay ?t
e6ists when there is a clear act o* discrimination, insensibility or disdain by an employer
which becomes unbearable *or the employee to continue his employment ?n the
present case, the colle#e4s ri#ht to trans*er petitioner is based on contractual
stipulation, particularly the condition laid down in petitioner4s employment contract that
respondents ha$e the prero#ati$e to assi#n petitioner in any o* its branches or tie&up
schools as the necessity demands ?n any e$ent, it is mana#ement prero#ati$e *or
employers to trans*er employees on %ust and $alid #rounds such as #enuine business
necessity Since respondents ha$e shown that it was e6periencin# some 3nancial
constraints at the time, the re&assi#nment was not tainted with bad *aith Hurthermore,
petitioner *ailed to present e$idence that respondents committed to pro$ide the
additional allowance or that they were consistently #rantin# such bene3t as to ha$e
ripened into a practice which cannot be peremptorily withdrawn )ence, there is no
$iolation o* the rule a#ainst diminution o* pay Billia* Endeliseo 'arroga vs. 0ata
Center College of t"e 7"ilippines, et al., G.R. No. 17@1,8. ?une #7, #$11.
Dismissal@ elements *or loss o* trust or con3dence Petitioners were employees o*
Promm&Kem, a le#itimate independent contractor, and were hired to wor2 as
merchandisers *or respondent PNK 9hen petitioners 3led a claim a#ainst PNK *or
re#ulari>ation and other bene3ts, it li2ewise attac2ed Promm&Kem as bein# merely a
labor&only contractor "he latter treated such mo$e as an act o* disloyalty a#ainst
Promm&Kem and petitioners were dismissed on the #round o* #ra$e misconduct and
breach o* trust "he Supreme Court declared such termination ille#al *or bein# without
$alid cause Loss o* trust and con3dence, as a cause *or termination o* employment, is
premised on the *act that the employee concerned holds a position o* responsibility or
o* trust and con3dence As such, he must be in$ested with con3dence on delicate
matters, such as custody, handlin# or care and protection o* the property and assets o*
the employer Moreo$er, in order to constitute a %ust cause *or dismissal, the act
complained o* must be wor2&related and must show that the employee is un3t to
continue to wor2 *or the employer ?n the instant case, the petitioners ha$e not been
shown to be occupyin# positions o* responsibility or o* trust and con3dence Feither is
there any e$idence to show that they are un3t to continue to wor2 as merchandisers *or
Promm&Kem ?oeb . Aliviado, et al. vs. 7ro!ter and Ga*ble 7"ils., 8n!., et al., G.R. No.
1+$,$+, ?une +, #$11.
Dismissal@ elements *or serious misconduct Petitioners were employees o* Promm&Kem,
a le#itimate independent contractor A*ter se$eral years o* wor2in# as merchandisers *or
respondent PNK, petitioners 3led a claim a#ainst PNK *or re#ulari>ation and other
bene3ts, and asserted incidentally that Promm&Kem was merely a labor&only contractor
"he latter treated such mo$e as an act o* disloyalty a#ainst Promm&Kem and petitioners
were dismissed on the #round o* #ra$e misconduct and breach o* trust "he Supreme
Court declared such termination ille#al *or lac2 o* a $alid clause "o be a %ust cause *or
dismissal, such misconduct .a/ must be serious@ .b/ must relate to the per*ormance o*
the employee4s duties@ and .c/ must show that the employee has become un3t to
continue wor2in# *or the employer ?n other words, in order to constitute serious
misconduct under Article 2A2 .a/ o* the Labor Code, it is not su=cient that the act or
conduct complained o* has $iolated some established rules or policies ?t is e0ually
important and re0uired that the act or conduct must ha$e been per*ormed with
wron#*ul intent ?n the instant case, petitioners may ha$e committed an error o*
%ud#ment in claimin# to be employees o* PNK, but it cannot be said that they were
moti$ated by any wron#*ul intent in doin# so As such, the court *ound them #uilty o*
simple misconduct only which does not warrant a dismissal ?oeb . Aliviado, et al. vs.
7ro!ter and Ga*ble 7"ils., 8n!., et al., G.R. No. 1+$,$+, ?une +, #$11.
Dismissal@ 3nancial assistance based on e0uity "he award o* separation pay is
authori>ed under Article 2A, and 2A- o* the Labor Code, and under Section - .b/, 5ule ?,
<oo2 G? o* the ?mplementin# 5ules and 5e#ulations where there is ille#al dismissal and
reinstatement is no lon#er *easible <y way o* e6ception, the courts ha$e allowed #rants
o* separation pay to stand as Ba measure o* social %usticeC where the employee is
$alidly dismissed *or causes other than serious misconduct or those reJectin# on his
moral character )owe$er, there is no pro$ision in the Labor Code which #rants
separation pay to $oluntarily resi#nin# employees ?n *act, the rule is that an employee
who $oluntarily resi#ns *rom employment is not entitled to separation pay, e6cept when
it is stipulated in the employment contract or collecti$e bar#ainin# a#reement .C<A/, or
it is sanctioned by established employer practice or policy ?n the present case, neither
the abo$ementioned pro$isions o* the Labor Code nor the e6ceptions apply because
petitioner was not dismissed *rom his employment nor is there any e$idence to show
that payment o* separation pay is stipulated in his employment contract or sanctioned
by established practice or policy o* his employer Fe$ertheless, the Court noted that
petitioner ne$er had any dero#atory record durin# his lon# years o* ser$ice with
respondent and that his employment was se$ered not by reason o* any in*raction on his
part but because o* his *ailin# physical condition )ence, as a measure o* social and
compassionate %ustice and as an e0uitable concession, the Court #ranted separation
pay to petitioner by way o* 3nancial assistance Ro*eo .illaruel vs. Feo 6an Guan,
doing business under t"e na*e and style Fu"ans Enterprises, G.R. No. 1+9191, ?une 1,
#$11.
Dismissal@ separation pay due to disease Petitioner was employed as a machine
operator until he stopped wor2in# when he suDered *rom an illness A*ter his reco$ery,
petitioner was directed to report *or wor2 but he re*used ?nstead, he 3led a case with
the FL5C demandin# his separation pay "he FL5C awarded him separation bene3ts
under Article 2A- o* the Labor Code )owe$er, the Court o* Appeals .CA/ deleted such
award 'n appeal, the Supreme Court stated that Article 2A- presupposes that it is the
employer who terminates the ser$ices o* the employee *ound to be suDerin# *rom any
disease and whose continued employment is prohibited by law or is pre%udicial to his
health as well as to the health o* his co&employees ?t does not contemplate a situation
where it is the employee who se$ers his or her employment ties "his is precisely the
reason why Section A, 5ule 1, <oo2 G? o* the 'mnibus 5ules ?mplementin# the Labor
Code, directs that an employer shall not terminate the ser$ices o* the employee unless
there is a certi3cation by a competent public health authority that the disease is o* such
nature or at such a sta#e that it cannot be cured within a period o* si6 .6/ months e$en
with proper medical treatment ?n the present case, petitioner was not terminated *rom
his employment and, instead, is deemed to ha$e resi#ned there*rom, and there*ore he
is not entitled to separation pay under Article 2A- o* the Labor CodeRo*eo .illaruel vs.
Feo 6an Guan, doing business under t"e na*e and style Fu"ans Enterprises, G.R. No.
1+9191, ?une 1, #$11.
D'L( assumption o* %urisdiction@ eDects A stri2e conducted a*ter the Secretary o* Labor
has assumed %urisdiction o$er a labor dispute is ille#al and any union o=cer who
2nowin#ly participates in the stri2e may be declared as ha$in# lost his employment "he
present case in$ol$ed a slowdown stri2e :nli2e other *orms o* stri2e, the employees
in$ol$ed in a slowdown do not wal2 out o* their %obs to hurt the company "hey need
only to stop wor2 or reduce the rate o* their wor2 while #enerally remainin# in their
assi#ned post "he Supreme Court upheld the 3ndin# that the union o=cers committed
ille#al acts that warranted their dismissal *rom wor2 when they re*used to wor2 or
abandoned their wor2 to %oin union assemblies a*ter the Labor Secretary assumed
%urisdiction o$er the labor dispute Folito ;adri=uelan, et al. vs. onterey ;oods
Corporation1onterey ;oods Corporation v. 'u(luran ng *ga anggaga3a sa ontereyA
8)AB, et al., G.R. No. 178@$91G.R. No. 178@-@, ?une 8, #$11.
?ndependent %ob contractin#@ re0uired substantial capital Petitioners assert that they
are employees o* PNK and that Promm&Kem and SAPS are merely labor&only contractors
pro$idin# manpower ser$ices to PNK "here is Blabor&onlyC contractin# where the
person supplyin# wor2ers to an employer does not ha$e substantial capital or
in$estment in the *orm o* tools, e0uipment, machineries, wor2 premises, amon# others,
and the wor2ers recruited and placed by such person are per*ormin# acti$ities which are
directly related to the principal business o* such employer ?n the instant case, the
Supreme Court *ound that Promm&Kem has substantial in$estment which relates to the
wor2 to be per*ormed "he 3nancial statementsshow that it has authori>ed capital stoc2
o* P1 million and a substantial amount o* paid&in capital and other assets to support its
operations :nder the circumstances, Promm&Kem cannot be considered a labor&only
contractor@ it is in *act a le#itimate independent contractor 'n the other hand, the
3nancial records o* SAPS show that it has a paid&in capital o* only P,1,27000 "here is
no other e$idence presented to show how much its wor2in# capital and assets are
Hurthermore, there is no showin# o* substantial in$estment in tools, e0uipment or other
assets Considerin# that SAPS has no substantial capital or in$estment and the wor2ers
it recruited are per*ormin# acti$ities which are directly related to the principal business
o* PNK, SAPS is considered to be en#a#ed in Blabor&only contractin#C ?oeb . Aliviado,
et al. vs. 7ro!ter and Ga*ble 7"ils., 8n!., et al., G.R. No. 1+$,$+, ?une +, #$11.
Labor law@ labor&only contractin# $ independent %ob contractin# "he law allows
contractin# arran#ements *or the per*ormance o* speci3c %obs, wor2s or ser$ices,
re#ardless o* whether such acti$ity is peripheral or core in nature )owe$er, in order *or
such outsourcin# to be $alid, it must be made to an independent contractor because the
current labor rules e6pressly prohibit labor&only contractin# "here is labor&only
contractin# when the contractor or sub&contractor merely recruits, supplies or places
wor2ers to per*orm a %ob, wor2 or ser$ice *or a principaland any o* the *ollowin#
elements are present+ .i/ "he contractor or subcontractor does not ha$e substantial
capital or in$estment which relates to the %ob, wor2 or ser$ice to be per*ormed and the
employees recruited, supplied or placed by such contractor or subcontractor are
per*ormin# acti$ities which are directly related to the main business o* the principal@ or
.ii/ "he contractor does not e6ercise the ri#ht o* control on the per*ormance o* the wor2
o* the contractual employee 9here Xlabor&only4 contractin# e6ists, the law establishes
an employer&employee relationship between the employer and the employees o* the
Xlabor&only4 contractor "he statute establishes this relationship *or a comprehensi$e
purpose+ to pre$ent a circum$ention o* labor laws "he contractor is considered merely
an a#ent o* the principal employer and the latter is responsible to the employees o* the
labor&only contractor as i* such employees had been directly employed by the principal
employer ?n the present case, petitioners, who were recruited by Promm&Kem and
SAPS to wor2 as merchandisers o* respondent PNK, 3led a complaint a#ainst the latter
*or re#ulari>ation, ser$ice incenti$e lea$e pay and other bene3ts on the #round that
they were employees o* PNK 9ith respect to the contractor Promm&Kem, it was *ound
to be a le#itimate independent %ob contractor@ hence, there was no employer&employee
relationship between its wor2ers and PNK 'n the other hand, SAPS was *ound to be
en#a#ed in labor&only contractin# Conse0uently, the petitioners who ha$e been
recruited and supplied by SAPSare considered to be the employees o* PNK ?oeb .
Aliviado, et al. vs. 7ro!ter and Ga*ble 7"ils., 8n!., et al., G.R. No. 1+$,$+, ?une +, #$11.
Labor stri2es@ liability o* union o=cers and participatin# wor2ers A distinction e6ists
between the ordinary wor2ers4 liability *or ille#al stri2e and that o* the union o=cers
who participated in it "he ordinary wor2er cannot be terminated *or merely
participatin# in the stri2e "here must be proo* that he committed ille#al acts durin# its
conduct 'n the other hand, a union o=cer can be terminated upon mere proo* that he
2nowin#ly participated in the ille#al stri2e Moreo$er, the participatin# union o=cers
ha$e to be properly identi3ed ?n the present case, with respect to those union o=cers
whose identity and participation in the stri2e ha$in# been properly established, the
termination was le#al Folito ;adri=uelan, et al. vs. onterey ;oods
Corporation1onterey ;oods Corporation v. 'u(luran ng *ga anggaga3a sa ontereyA
8)AB, et al., G.R. No. 178@$91G.R. No. 178@-@, ?une 8, #$11.
Secretary o* Labor@ power to #i$e arbitral awards "he Secretary o* Labor is empowered
to #i$e arbitral awards in the e6ercise o* his authority to assume %urisdiction o$er labor
disputes under Art 26, .#/ o* the Labor Code ?n the present case, the Supreme Court
upheld the authority o* the Secretary o* Labor to impose arbitral awards hi#her than
what was supposedly a#reed upon in the Memorandum o* A#reement .M'A/ between
the parties "he Court *urther stated that while an arbitral award cannot per se be
cate#ori>ed as an a#reement $oluntarily entered into by the parties because it re0uires
the inter*erence and imposin# power o* the State thru the Secretary o* Labor when he
assumes %urisdiction, the award can be considered as an appro6imation o* a collecti$e
bar#ainin# a#reement which would otherwise ha$e been entered into by the parties
)ence, it has the *orce and eDect o* a $alid contract obli#ation between the
parties Cirte( E*ployees )abor CnionA;ederation of ;ree 3or(ers vs. Cirte( Ele!troni!s,
8n!., G.R. No. 19$,1,. ?une +, #$11
"ermination o* employment@ resi#nation $ dismissal Petitioner claims he was dismissed
on the #round o* illness and was there*ore entitled to separation bene3ts under Article
2A- o* the Labor Code "he Supreme Court .SC/ disa#reed and instead *ound that
petitioner was the one who initiated the se$erance o* his employment relations on the
#round that his health was *ailin# ?n *act, he re%ected respondent4s oDer *or him to
return to wor2 "he SC declared that this is tantamount to resi#nation 5esi#nation is
de3ned as the $oluntary act o* an employee who 3nds himsel* in a situation where he
belie$es that personal reasons cannot be sacri3ced in *a$or o* the e6i#ency o* the
ser$ice and he has no other choice but to disassociate himsel* *rom his
employment

Ro*eo .illaruel vs. Feo 6an Guan, doing business under t"e na*e and
style Fu"ans Enterprises, G.R. No. 1+9191, ?une 1, #$11.
:nions@ disa=liation A local union may disa=liate at any time *rom its mother
*ederation, absent any showin# that the same is prohibited under its constitution or
rules Such disa=liation, howe$er, does not result in it losin# its le#al personality A
local union does not owe its e6istence to the *ederation with which it is a=liated ?t is a
separate and distinct $oluntary association owin# its creation to the will o* its members
"he mere act o* a=liation does not di$est the local union o* its own personality, neither
does it #i$e the mother *ederation the license to act independently o* the local union ?t
only #i$es rise to a contract o* a#ency where the *ormer acts in representation o* the
latter ?n the present case, whether the HH9 went a#ainst the will o* its principal .the
member&employees/ by pursuin# the case despite the si#nin# o* the M'A, is not *or the
Court, nor *or respondent employer to determine, but *or the :nion and HH9 to resol$e
on their own pursuant to their principal&a#ent relationship Moreo$er, the issue o*
disa=liation is an intra&union dispute which must be resol$ed in a diDerent *orum in an
action at the instance o* either or both the HH9 and the union or a ri$al labor
or#ani>ation, but not the employer as in this case Cirte( E*ployees )abor CnionA
;ederation of ;ree 3or(ers vs. Cirte( Ele!troni!s, 8n!., G.R. No. 19$,1,. ?une +, #$11
Au#ust 2011 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on September 17, 2011 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines &
Law !
)ere are selected Au#ust 2011 rulin#s o* the Supreme Court o* the Philippines on labor
law and procedure+
Labor relations@ appropriate bar#ainin# unit An appropriate bar#ainin# unit is de3ned
as Ba #roup o* employees o* a #i$en employer, comprised o* all or less than all o* the
entire body o* employees, which the collecti$e interest o* all the employees, consistent
with e0uity to the employer, indicate to be best suited to ser$e the reciprocal ri#hts and
duties o* the parties under the collecti$e bar#ainin# pro$isions o* the lawC "he test o*
#roupin# is community or mutuality o* interest ?n this case, there should be only one
bar#ainin# unit *or the employees in the Cabuyao, San Hernando, and 'tis plants o* the
Ma#nolia Poultry Products in$ol$ed in BdressedC chic2en processin# and Ma#nolia
Poultry Harms en#a#ed in Bli$eC chic2en operations Certain *actors, such as speci3c
line o* wor2, wor2in# conditions, location o* wor2, mode o* compensation, and other
rele$ant conditions do not aDect or impede their commonality o* interest Althou#h
they seem separate and distinct *rom each other, the speci3c tas2s o* each di$ision are
actually interrelated and there e6ists mutuality o* interests which warrants the
*ormation o* a sin#le bar#ainin# unit &an iguel ;oods, 8n!. vs. &an iguel Corp.
&upervisors and E%e*pt Cnion, G.R. No. 1@+#$+. August 1, #$11
Labor or#ani>ation@ con3dential employees Con3dential employees are de3ned as
those who .1/ assist or act in a con3dential capacity, in re#ard .2/ to persons who
*ormulate, determine, and eDectuate mana#ement policies in the 3eld o* labor
relations "he two criteria are cumulati$e, and both must be met i* an employee is to be
considered a con3dential employee Con3dential employees, such as accountin#
personnel, should be e6cluded *rom the bar#ainin# unit, as their access to con3dential
in*ormation may become the source o* undue ad$anta#e )owe$er, such *act does not
apply to the position o* Payroll Master .as in this case/ and the whole #amut o*
employees who has access to salary and compensation data "he CA correctly held that
the position o* 7ayroll aster does not in$ol$e dealin# with con3dential labor relations
in*ormation in the course o* the per*ormance o* his *unctions ?n other words, since the
nature o* his wor2 does not pertain to company rules and re#ulations and con3dential
labor relations, it *ollows that he cannot be e6cluded *rom the sub%ect bar#ainin#
unit &an iguel ;oods, 8n!. vs. &an iguel Corp. &upervisors and E%e*pt Cnion, G.R.
No. 1@+#$+. August 1, #$11
Labor or#ani>ation@ ineli#ibility to %oin Althou#h Article 2-7 o* the Labor Code limits the
ineli#ibility to %oin, *orm and assist any labor or#ani>ation to mana#erial employees,
%urisprudence has e6tended this prohibition to con3dential employees ?n this re#ard,
the CA correctly ruled that the positions o* )uman 5esource Assistant and Personnel
Assistant belon# to the cate#ory o* con3dential employees and, hence, are e6cluded
*rom the bar#ainin# unit, considerin# their respecti$e positions and %ob descriptions As
)uman 5esource Assistant, the scope o* one4s wor2 necessarily in$ol$es labor relations,
recruitment and selection o* employees, access to employees4 personal 3les and
compensation pac2a#e, and human resource mana#ement As re#ards a Personnel
Assistant, one4s wor2 includes the recordin# o* minutes *or 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 *or labor issues
*rom the petitioner4s team o* lawyers, and implementation o* company pro#rams
"here*ore, in the dischar#e o* their *unctions, both #ain access to $ital labor relations
in*ormation which outri#htly dis0uali3es them *rom union membership &an iguel
;oods, 8n!. vs. &an iguel Corp. &upervisors and E%e*pt Cnion,G.R. No. 1@+#$+. August
1, #$11.
Certi3cation election@ role o* employers "he #eneral rule is that an employer has no
standin# to 0uestion the process o* certi3cation election, since this is the sole concern
o* the wor2ers Law and policy demand that employers ta2e a strict, hands&oD stance in
certi3cation elections "he bar#ainin# representati$e o* employees should be chosen
*ree *rom any e6traneous inJuence o* mana#ement "he only e6ception is where the
employer itsel* has to 3le the petition pursuant to Article 27A o* the Labor Code because
o* a re0uest to bar#ain collecti$ely &an iguel ;oods, 8n!. vs.&an iguel Corp.
&upervisors and E%e*pt Cnion, G.R. No. 1@+#$+. August 1, #$11.
Appeal o* the decision o* the labor arbiter@ postin# o* bond "he postin# o* a bond is
indispensable to the per*ection o* an appeal in cases in$ol$in# monetary awards *rom
the Decision o* the Labor Arbiter )owe$er, the Supreme Court, considerin# the
substantial merits o* the case, has on certain occasions rela6ed this rule on, and
e6cused the late postin# o*, the appeal bond when there are stron# and compellin#
reasons *or the liberality ?n this case, the e6ception applies "he rule on the postin# o*
an appeal bond cannot de*eat the substanti$e ri#hts o* respondents to be *ree *rom an
unwarranted burden o* answerin# *or an ille#al dismissal *or which they were ne$er
responsible since no employer&employee relationship e6isted between the two arti!io
&e*blante and 0ubri!( 7ilar vs. Court of Appeals, G.R. No. 19+@#+. August 1,, #$11.
(mployer&employee relationship@ *our&*old test Petitioners are not employees o*
respondents, since their relationship *ailed to pass the *our&*old test o* employment+ .1/
the selection and en#a#ement o* the employee@ .2/ the payment o* wa#es@ .,/ the
power o* dismissal@ and .-/ the power to control the employee4s conduct, which is the
most important element As *ound by both the FL5C and the CA, respondents had no
part in petitioners4 selection and mana#ement@ petitioners4 compensation was paid out
o* the arriba .which is a percenta#e deducted *rom the total bets/, not by petitioners@
and petitioners per*ormed their *unctions as *asiador and senten!iador*ree *rom the
direction and control o* respondents arti!io &e*blante and 0ubri!( 7ilar vs. Court of
Appeals, G.R. No. 19+@#+. August 1,, #$11.
Labor@ ille#al recruitment in lar#e scale "o pro$e ille#al recruitment, it must be shown
that appellant #a$e complainants the distinct impression that she had the power or
ability to send complainants abroad *or wor2 such that the latter were con$inced to part
with their money in order to be employed All ei#ht pri$ate complainants in this case
consistently declared that 'choa oDered and promised them employment o$erseas
Moreo$er, 'choa can also be con$icted *or ille#al recruitment based on Section 6 o*
5epublic Act Fo A0-2, which clearly pro$ides that any person, whether or not a licensee
or holder o* authority may be held liable *or ille#al recruitment *or certain acts as
enumerated in para#raphs .a/ to .m/ Amon# such acts is the B*ailure to reimburse
e6penses incurred by the wor2er in connection with his documentation and processin#
*or purposes o* deployment, in cases where the deployment does not actually ta2e
place without the wor2er4s *aultC ?n this case, 'choa recei$ed placement and medical
*ees *rom pri$ate complainants and *ailed to reimburse the pri$ate complainants the
amounts they had paid when they were not able to lea$e *or "aiwan and Saudi Arabia,
throu#h no *ault o* their own 7eople of t"e 7"ilippines vs. Rosario PRoseQ 9!"oa, G.R.
No. 17-79#. August -1, #$11.
?lle#al recruitment@ admissibility o* P'(A certi3cation Section ,6, 5ule 1,0 o* the
5e$ised 5ules on ($idence, states that a witness can testi*y only to those *acts which he
2nows o* or comes *rom his personal 2nowled#e, that is, which are deri$ed *rom his
perception "his is 2nown as the hearsay rule "he law, howe$er, pro$ides *or speci3c
e6ceptions to the hearsay rule, and one o* the e6ceptions re*ers to entries in o=cial
records made in the per*ormance o* duty by a public o=cer Accordin#ly, in the case at
bar, althou#h Dir Mateo was not presented in court or did not testi*y durin# the trial to
$eri*y the said certi3cation, such certi3cation is considered as pri*a fa!iee$idence o*
the *acts stated therein and is there*ore presumed to be truth*ul, because 'choa did not
present any plausible proo* to rebut its truth*ulness 7eople of t"e 7"ilippines
vs. Rosario PRoseQ 9!"oa, G.R. No. 17-79#. August -1, #$11.
?lle#al recruitment and esta*a@ may be char#ed separately A person may be char#ed
and con$icted separately o* ille#al recruitment under 5epublic Act Fo A0-2, in relation
to the Labor Code, and esta*a under Article ,17, para#raph 2.a/ o* the 5e$ised Penal
Code "he oDense o* ille#al recruitment is *alu* pro"ibitu*, while esta*a is *alu* in
se ?n this case, there*ore, 'choa may also be char#ed and correspondin#ly held liable
*or esta*a since all the elements *or the crime are present in Criminal Case Fos ;A&
QQ,01, ;A&QQ,02, and ;A&QQ,0, 'choa4s deceit was e$ident in her *alse representation
to pri$ate complainants Kubat, Cesar, and A#ustin that she possessed the authority and
capability to send said pri$ate complainants to "aiwanRSaudi Arabia *or employment as
early as one to two wee2s *rom completion o* the re0uirements, amon# which were the
payment o* placement *ees and submission o* a medical e6amination report 7eople of
t"e 7"ilippines vs.Rosario PRoseQ 9!"oa, G.R. No. 17-79#. August -1, #$11.
Hloatin# status@ $alidity "he rule is settled that BoD&detailin#C is not e0ui$alent to
dismissal, so lon# as such status does not continue beyond a reasonable time and that
it is only when such a BJoatin# statusC lasts *or more than si6 months that the employee
may be considered to ha$e been constructi$ely dismissed A complaint *or ille#al
dismissal 3led prior to the lapse o* the si6&month period andRor the actual dismissal o*
the employee is #enerally considered as prematurely 3led ?n this case, the e$idence
adduced a =uo clearly indicates that petitioners were not in bad *aith when they placed
Leynes under Joatin# status Dis#runtled by F)P?4s countermandin# o* her decision to
bar (n#r Cantuba *rom the Pro%ect, Leynes twice si#ni3ed her intention to resi#n *rom
her position on 12 Hebruary 2002 ?n $iew o* the sensiti$e nature o* Leynes4 position
and the critical sta#e o* the Pro%ect4s business de$elopment, F)P? was constrained to
hire (n#r Eose as Leynes4 replacement as a remedial measure Nippon 6ousing 7"il.
8n!., et al. vs. aia" Angela )eynes, G.R. No. 17781+, August -, #$11.
Constructi$e dismissal@ burden o* proo* Constructi$e dismissal e6ists where there is
cessation o* wor2 because continued employment is rendered impossible, unreasonable
or unli2ely, as an oDer in$ol$in# a demotion in ran2 and a diminution in pay ?n
constructi$e dismissal cases, the employer is, concededly, char#ed with the burden o*
pro$in# that its conduct and action or the trans*er o* an employee are *or $alid and
le#itimate #rounds such as #enuine business necessity "he Supreme Court *ound that
in this case, respondents ha$e more than amply dischar#ed this burden with proo* o*
the circumstances surroundin# (n#r Carlos4 employment as Property Mana#er *or the
Pro%ect and the conse0uent una$ailability o* a similar position *or Leynes Nippon
6ousing 7"il. 8n!., et al. vs. aia" Angela )eynes, G.R. No. 17781+, August -, #$11.
Pleadin#@ $eri3cation Geri3cation o* a pleadin# is a *ormal, not %urisdictional,
re0uirement intended to secure the assurance that the matters alle#ed in a pleadin# are
true and correct ?t is deemed substantially complied with when one who has ample
2nowled#e to swear to the truth o* the alle#ations in the complaint or petition si#ns the
$eri3cation, and when matters alle#ed in the petition ha$e been made in #ood *aith or
are true and correct ?n this case, the Supreme Court *ound that the petition4s
$eri3cation substantially complied with the re0uirements o* the rules "he SPA
authori>ed <ello&'na to represent <ello in the case *rom which the present petition with
the Supreme Court ori#inated As the dau#hter o* <ello, <ello&'na is deemed to ha$e
su=cient 2nowled#e to swear to the truth o* the alle#ations in the petition, which are
matters o* record in the lower tribunals and the appellate court ;ran!is 'ello,
represented "erein by "is daug"ter and attorneyAinAfa!t, Geraldine 'elloA9na vs.
'onifa!io &e!urity &ervi!es, 8n!. and &a*uel Do*as, G.R. No. 188$8+, August -, #$11.
Dismissal@ constructi$e dismissal Case law de3nes constructi$e dismissal as a
cessation o* wor2 because continued employment has been rendered impossible,
unreasonable, or unli2ely, as when there is a demotion in ran2 or diminution in pay, or
both, or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee ?n this case, other than his bare and sel*&ser$in#
alle#ations, <ello has not oDered any e$idence that he was promoted in a span o* *our
months since his employment as tra=c marshal in Euly 2001 to a detachment
commander in Fo$ember 2001 At most, the <SS? merely chan#ed his assi#nment or
trans*erred him to the post where his ser$ice would be most bene3cial to its clients "he
mana#ement4s prero#ati$e o* trans*errin# and reassi#nin# employees *rom one area o*
operation to another in order to meet the re0uirements o* the business is #enerally not
constituti$e o* constructi$e dismissal "his was what e6actly occurred in this
case ;ran!is 'ello, represented "erein by "is daug"ter and attorneyAinAfa!t, Geraldine
'elloA9na vs. 'onifa!io &e!urity &ervi!es, 8n!. and &a*uel Do*as,G.R. No. 188$8+,
August -, #$11.
Procedural rules@ *ailure to attach duplicate ori#inal or certi3ed true copy o* the assailed
decision "he re*usal o* the Court o* Appeals to consider the petition was the absence o*
a duplicate ori#inal or certi3ed true copy o* the assailed FL5C decision, in $iolation o*
Section ,, 5ule -6 o* the 5ules o* Court .in relation to Section 1, 5ule 67/ "he
company, howe$er, corrected the procedural lapse by attachin# a certi3ed copy o* the
FL5C decision to its motion *or reconsideration "he Supreme Court *ound that the CA
precipitately denied the petition *or !ertiorari based on an o$erly ri#id application o* the
rules o* procedure ?n eDect, it sacri3ced substance to *orm in a situation where the
petitioners4 recourse was not patently *ri$olous or meritless "hus, the case was
remanded to the FL5C *or resolution o* its appeal ?obel Enterprises and1or r. 'enedi!t
)i* vs. N)RC and Eri! artine/, &r., G.R. No. 19@$-1, August 8, #$11.
Appeal@ decision or resolution o* FL5C As was enunciated in the case o* &t. artin
;uneral 6o*e v. N)RC, the special ci$il action o* !ertiorari under 5ule 67 o* the 5ules o*
Ci$il Procedure, which is 3led be*ore the CA, is the proper $ehicle *or %udicial re$iew o*
decisions o* the FL5C "he petition should be initially 3led be*ore the Court o* Appeals
in strict obser$ance o* the doctrine on hierarchy o* courts as the appropriate *orum *or
the relie* desired "hus, respondent4s recourse to the CA was the proper remedy to
0uestion the resolution o* the FL5C Ato( 'ig Bedge Co*pany, 8n!. vs. ?esus 7.
Gison, G.R. No. 1+9,1$, August 8, #$11.
(mployer&employee relationship@ *our&*old test "o ascertain the e6istence o* an
employer&employee relationship %urisprudence has in$ariably adhered to the *our&*old
test, to wit+ .1/ the selection and en#a#ement o* the employee@ .2/ the payment o*
wa#es@ .,/ the power o* dismissal@ and .-/ the power to control the employee4s conduct,
or the so&called Bcontrol testC Applyin# the a*orementioned test, an employer&employee
relationship was *ound to be absent in the case at bar Amon# other thin#s, respondent
was not re0uired to report e$eryday durin# re#ular o=ce hours o* petitioner
5espondent4s monthly retainer *ees were paid to him either at his residence or a local
restaurant More importantly, petitioner did not prescribe the manner in which
respondent would accomplish any o* the tas2s in which his e6pertise as a liaison o=cer
was needed@ respondent was le*t alone and #i$en the *reedom to accomplish the tas2s
usin# his own means and method Gerily, the absence o* the element o* control on the
part o* the petitioner en#enders a conclusion that he is not an employee o* the
petitioner Ato( 'ig Bedge Co*pany, 8n!. vs. ?esus 7. Gison, G.R. No. 1+9,1$, August 8,
#$11.
(mployment@ re#ular employee Article 2A0 o* the Labor Code, in which the lower court
used to buttress its 3ndin#s that respondent became a re#ular employee o* the
petitioner, is not applicable in the case at bar "he Supreme Court has ruled that said
pro$ision is not the yardstic2 *or determinin# the e6istence o* an employment
relationship because it merely distin#uishes between two 2inds o* employees, i.e.,
re#ular employees and casual employees, *or purposes o* determinin# the ri#ht o* an
employee to certain bene3ts, to %oin or *orm a union, or to security o* tenure@ it does not
apply where the e6istence o* an employment relationship is in dispute ?t is, there*ore,
erroneous on the part o* the Court o* Appeals to rely on Article 2A0 in determinin#
whether an employer&employee relationship e6ists between respondent and the
petitioner "here*ore, despite the *act that petitioner made use o* the ser$ices o*
respondent as a part&time consultant on retainer basis *or ele$en years, he still cannot
be considered as a re#ular employee o* petitioner usin# only as basis Article 2A0 o* the
Labor Code Ato( 'ig Bedge Co*pany, 8n!. vs. ?esus 7. Gison, G.R. No. 1+9,1$, August
8, #$11.
Claim o* disability bene3ts and sic2ness allowance@ reportin# re0uirements Anent a
sea*arer4s entitlement to compensation and bene3ts *or in%ury and illness, Section 20&<
.,/ o* 2000 P'(A&S(C pro$ides that in order *or the sea*arer to claim the said bene3ts,
he must submit himsel* to a post&employment medical e6amination by a company&
desi#nated physician within three wor2in# 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 Hailure o* the sea*arer to comply with the
mandatory reportin# re0uirement shall result in his *or*eiture o* the ri#ht to claim the
abo$e bene3ts ?n this case, there was no dispute re#ardin# the *act that (s#uerra had
alto#ether *ailed to comply with the mandatory reportin# re0uirement (s#uerra also
did not present any e$idence to pro$e %usti3cation *or his inability to submit himsel* to a
post&employment medical e6amination by a company&desi#nated physician Sel*&
ser$in# and unsubstantiated declarations are insu=cient to establish a case be*ore
0uasi&%udicial bodies where the 0uantum o* e$idence re0uired in establishin# a *act is
substantial e$idence Coastal &afe3ay arine &ervi!es vs. Esguerra,G.R. No. 18,-,#,
August 1$, #$11.
September 2011 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on 'ctober 1;, 2011 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines &
Law !
)ere are selected September 2011 rulin#s o* the Supreme Court o* the Philippines on
labor law and procedure+
(mployee@ probationary employee (mployment on probationary status o* teachin#
personnel is not only #o$erned by the Labor Code but also by the Manual o* 5e#ulations
*or Pri$ate Schools Section ;1 o* the Manual o* 5e#ulations *or Pri$ate Schools, states
that+ B($ery contract o* employment shall speci*y the desi#nation, 0uali3cation, salary
rate, the period and nature o* ser$ice and its date o* eDecti$ity, and such other terms
and condition o* employment as may be consistent with laws and rules, re#ulations and
standards o* the schoolC "hus, it is important that the contract o* probationary
employment speci*y the period or term o* its eDecti$ity ?n this case, there*ore, the
letters sent by petitioner Colle#e Dean Sr 5acadio, which were de$oid o* speci3cs,
cannot be considered as contracts "he closest they can resemble to are that o*
in*ormal correspondence amon# the said indi$iduals As such, petitioner school has the
ri#ht not to renew the contracts o* the respondents, the old ones ha$in# e6pired at the
end o* their terms Assumin#,arguendo, that the employment contracts between the
petitioner school and the respondent spouses were renewed, the SC *ound that there
was a $alid and %ust cause *or their dismissal since petitioners ha$e repeatedly $iolated
se$eral departmental and instructional policies, such as the late submission o* 3nal
#rades, *ailure to submit 3nal test 0uestions to the Pro#ram Coordinator, the #i$in# o*
tests in essay *orm instead o* the multiple choice *ormat as mandated by the school and
the hi#h number o* students with *ailin# #rades in the classes that he handled &t. 7aul
College Jue/on City, et al. vs. Re*igio i!"ael A. An!"eta 88 and Cynt"ia A.
An!"eta, G.R. No. 1+99$,. &epte*ber 7, #$11.
(mployee@ e6istence o* employer&employee relationship "o determine the e6istence o*
an employer&employee relationship, case law has consistently applied the *our&*old test
5espondents ar#ue that the element o* control is lac2in# in this case, ma2in# petitioner&
re*eree an independent contractor and not an employee o* respondents "he Supreme
Court a#reed as it *ound that there was no control o$er the means and methods by
which petitioner per*orms his wor2 as a re*eree o=ciatin# a P<A bas2etball #ame "he
contractual stipulations in the retainer contracts do not pertain to, much less dictate,
how and when petitioner will blow the whistle and ma2e calls 'n the contrary, they
merely ser$e as rules o* conduct or #uidelines in order to maintain the inte#rity o* the
pro*essional bas2etball lea#ue Moreo$er, the *ollowin# circumstances indicate that
petitioner is an independent contractor+ .1/ the re*erees are re0uired to report *or wor2
only when P<A #ames are scheduled, which is three times a wee2 spread o$er an
a$era#e o* only 107 playin# days a year, and they o=ciate #ames at an a$era#e o* two
hours per #ame@ and .2/ the only deductions *rom the *ees recei$ed by the re*erees are
withholdin# ta6es "here are no deductions *or contributions to the Social Security
System, Philhealth or Pa#&?bi#, which are the usual deductions *rom employees4 salaries
"hese undisputed circumstances buttress the *act that petitioner is an independent
contractor, and not an employee o* respondents ?ose el 'ernante vs. 7"ilippine
'as(etball Asso!iation, et al., G.R. No. 19#$8@. &epte*ber 1@, #$11.
(mployee bene3ts@ principle a#ainst diminution o* bene3ts "he issue in this case was
whether or not the chan#e in the scheme o* distribution o* the incremental proceeds
*rom tuition *ee increase is a diminution o* bene3t "he Court held that it was not
Kenerally, employees ha$e a $ested ri#ht o$er e6istin# bene3ts $oluntarily #ranted to
them by their employer "he principle a#ainst diminution o* bene3ts, howe$er, is
applicable only i* the #rant or bene3t is *ounded on an e6press policy or has ripened
into a practice o$er a lon# period o* time which is consistent and deliberate ?n other
words, the bene3t must be characteri>ed by re#ularity and the $oluntary and deliberate
intent o* the employer to #rant the bene3ts o$er a si#ni3cant period o* time ?n the
case at bench, contrary to :((A4s claim, the distribution o* the Q01 incremental
proceeds based on e0ual sharin# scheme cannot be held to ha$e ripened into a
company practice since the practice has not been *or a lon# period o* time "he same
could not also ha$e ripened into a $ested ri#ht because such #rant was not a deliberate
and $oluntary act on the part o* the petitioner "he Supreme Court held that the #rant
by an employer o* bene3ts throu#h an erroneous application o* the law due to the
absence o* clear administrati$e #uidelines is not considered a $oluntary act which
cannot be unilaterally discontinued Cniversity of t"e East vs. Cniversity of t"e East
E*ployeesM Asso!iation, G.R. No. 179,9-. &epte*ber 1@, #$11.
(mployment bene3ts@ entitlement to $acation and sic2 lea$e <P? contends that at the
time o* :y4s dismissal, she was no lon#er *unctionin# as a teller o* the ban2 but as a
low&counter staD and as such, :y is not anymore entitled to the teller4s *unctional
allowance pursuant to company policy <P? *urther ar#ues that :y is neither entitled to
the monetary con$ersion o* $acation and sic2 lea$es *or *ailure to pro$e that she is
entitled to these bene3ts at the time o* her dismissal "he Supreme Court ruled that
:y is entitled to the teller4s *unctional allowance but not to the monetary con$ersion o*
$acation and sic2 lea$es :y4s *unction as a teller at the time o* her dismissal was
*actually established and was ne$er impu#ned by the parties durin# the proceedin#s
held in the main case <esides, <P? did not present any e$idence to substantiate its
alle#ation that :y was assi#ned as a low&counter staD at the time o* her dismissal ?t is
a hornboo2 rule that he who alle#es must pro$e As to the $acation and sic2 lea$e cash
con$ersion bene3t, the Supreme Court held that entitlement to the same should be
necessarily pro$ed since this pri$ile#e is not statutory or mandatory in character but
only $oluntarily #ranted As such, the e6istence o* this bene3t as well as the
employee4s entitlement thereto cannot be presumed but should be pro$ed by the
employee ?n this case, howe$er, the records *ailed to pro$e that :y was recei$in# this
bene3t at the time o* her dismissal on December 1-, 1;;7 '78 E*ployees CnionAetro
anila, et al. vs. 'an( of t"e 7"ilippine 8slands1'an( of t"e 7"ilippine 8slands vs. '78
E*ployees CnionAetro anila, et al., G.R. Nos. 178+9911787-,. &epte*ber #1, #$11.
"ermination@ constructi$e dismissal "he concept o* constructi$e dismissal is
inapplicable to respondents in this case Constructi$e dismissal occurs when there is
cessation o* wor2 because continued employment is rendered impossible, unreasonable,
or unli2ely as when there is a demotion in ran2 or diminution in pay or when a clear
discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee lea$in# the latter with no other option but to 0uit "hat the respondents were
indeed not constructi$ely dismissed was *ound by the Supreme Court to be supported
by substantial e$idence ;irst, respondents Domin#o and 5emi#io, e$en while their
petition *or !ertiorari was pendin# be*ore the CA, remained employed at :F?LA< ?n
those instances, there was actually no dismissal to spea2 o* &e!ond, the respondents4
positions were not abolished, unli2e its pro$incial depots where the employees therein
were considered redundant employees ?n this case, their accountin# *unctions were
merely consolidated under the Hinance Di$ision o* :nilab pursuant to its Shared Ser$ices
Policy .SSP/ 5espondents, who are accountin# employees, cannot re*use their
assi#nment to the Hinance Di$ision "he Supreme Court noted that it cannot accept the
proposition that when an employee opposes his employer4s decision to trans*er him to
another wor2 place, there bein# no bad *aith or underhanded moti$es on the part o*
either party, that the employee4s wishes should be made to pre$ail Cnited
)aboratories, 8n!. vs.?ai*e 0o*ingo &ubstituted by "is spouse Car*en!ita 7un/alan
0o*ingo, et al., G.R. No. 18+#$9, &epte*ber #1, #$11.
"ermination@ loss o* trust and con3dence Loss o* con3dence should ideally apply only
to+ .1/ cases in$ol$in# employees occupyin# positions o* trust and con3dence, or .2/
situations where the employee is routinely char#ed with the care and custody o* the
employer4s money or property As branch mana#er o* the ban2, Lope> occupied a
Bposition o* trustC )is hold on his position and his stay in the ser$ice depend on the
employer4s trust and con3dence in him and on his mana#erial ser$ices ?n this case, the
Supreme Court *ound that Lope>4s dismissal was %usti3ed )e betrayed the trust and
con3dence o* the employer&ban2 when he issued the sub%ect purchase orders without
authority and despite the e6press directi$e o* the ban2 to put the client4s application on
hold "he ban2 had a #enuine concern o$er the #ranted loan applications as it *ound
throu#h its credit committee that )ert> was a credit ris2 9hether the credit committee
was correct or not is immaterial as the ban24s direct order le*t Lope> without any
authority to clear the loan application on his own El*er )ope/ vs. 2eppel 'an(
7"ilippines, 8n!. et al., G.R. No. 17+8$$. &epte*ber ,, #$11.
"ermination@ loss o* trust and con3dence Eumuad was *ound to ha$e will*ully breached
her duties as to be unworthy o* the trust and con3dence o* )i&Hlyer Hirst, Eumuad was a
mana#erial employee@ she e6ecuted mana#ement policies and had the power to
discipline the employees o* THC branches in her area She recommended actions on
employees to the head o=ce Accordin# to the Supreme Court, based on established
*acts, the mere e6istence o* the #rounds *or the loss o* trust and con3dence %usti3es
petitioner4s dismissal ?n the present case, the C(54s reports o* )i&Hlyer show that there
were anomalies committed in the THC branches mana#ed by Eumuad 'n the principle
o* respondeat superior or command responsibility alone, Eumuad may be held liable *or
ne#li#ence in the per*ormance o* her mana#erial duties She may not ha$e been
directly in$ol$ed in causin# the cash shorta#es in THC&<ohol, but her in$ol$ement in not
per*ormin# her duty monitorin# and supportin# the day to day operations o* the
branches and ensure that all the *acilities and e0uipment at the restaurant were
properly maintained and ser$iced, could ha$e pre$ented the whole debacle *rom
occurrin# 7a*ela ;lorentina 7. ?u*uad vs. 6iA;lyer ;ood, 8n!. and1or ?esus R.
onte*ayor, G.R. No. 187887. &epte*ber 7, #$11.
"ermination@ ille#al dismissal ?n the case at bar, respondent security #uards were
relie$ed *rom their posts because they 3led with the Labor Arbiter a complaint a#ainst
their employer *or money claims due to underpayment o* wa#es "he Supreme Court
*ound that this was not a $alid cause *or dismissal "he Labor Code enumerates se$eral
%ust and authori>ed causes *or a $alid termination o* employment An employee
assertin# his ri#ht and as2in# *or minimum wa#e is not amon# those causes Alert
&e!urity and 8nvestigation Agen!y, 8n!., et al. vs. &aidali 7asa3ilan, et al., G.R. No.
18#-97. &epte*ber 1@, #$11.
"ermination@ abandonment o* wor2 Petitioners a$er that respondents were merely
trans*erred to a new post wherein the wa#es are ad%usted to the current minimum wa#e
standards "hey maintain that the respondents $oluntarily abandoned their %obs when
they *ailed to report *or duty in the new location Assumin# that this contention was
true, the Supreme Court held that there was no abandonment o* wor2 Hor there to be
abandonment+ 3rst, there should be a *ailure o* the employee to report *or wor2 without
a $alid or %usti3able reason, and second, there should be a showin# that the employee
intended to se$er the employer&employee relationship "he *act that petitioners 3led a
complaint *or ille#al dismissal is indicati$e o* their intention to remain employed with
pri$ate respondent 'n the 3rst element o* *ailure to report *or wor2, in this case, there
was no showin# that respondents were noti3ed o* their new assi#nments Krantin# that
the BDuty Detail 'rdersC were indeed issued, they ser$ed no purpose unless the
intended recipients o* the orders are in*ormed o* such "here*ore, the Court held that
there was no abandonment o* wor2 in this case Alert &e!urity and 8nvestigation
Agen!y, 8n!., et al. vs. &aidali 7asa3ilan, et al., G.R. No. 18#-97. &epte*ber 1@, #$11.
"ermination@ #ross and habitual ne#lect Fe#lect o* duty, to be a #round *or dismissal,
must be both #ross and habitual ?n this case, 5espondent4s repeated *ailure to turn
o$er his tas2 o* preparin# the payroll o* the petitioner4s employees to someone capable
o* per*ormin# the $ital tas2s which he could not eDecti$ely per*orm or underta2e
because o* his heart ailment or condition constitutes #ross ne#lect )owe$er, althou#h
the dismissal was le#al, respondent was still held to be entitled to a separation pay as a
measure o* compassionate %ustice, considerin# his len#th o* ser$ice and his poor
physical condition which was one o* the reasons he 3led a lea$e o* absence As a
#eneral rule, an employee who has been dismissed *or any o* the %ust causes
enumerated under Article 2A2 o* the Labor Code is not entitled to separation pay <y
way o* e6ception, howe$er, the #rant o* separation pay or some other 3nancial
assistance may be allowed to an employee dismissed *or %ust causes on the basis o*
e0uity Nissan otors 7"ils., 8n!. vs. .i!torino Angelo, G.R. No. 1+@181. &epte*ber 1@,
#$11.
"ermination@ award o* bac2wa#es "he base 3#ure in computin# the award o* bac2
wa#es to an ille#ally dismissed employee is the employee4s basic salary plus re#ular
allowances and bene3ts recei$ed at the time o* dismissal, un0uali3ed by any wa#e and
bene3t increases #ranted in the interim "he *ull bac2wa#es, as re*erred to in the
body o* the March ,1, 2007 Supreme Court decision pertains to Bbac2wa#esC as de3ned
in 5epublic Act Fo 6Q17 :nder said law, and as pro$ided in %urisprudence, B*ull
bac2wa#esC means bac2wa#es without any deduction or 0uali3cation, includin# bene3ts
or their monetary e0ui$alent the employee is en%oyin# at the time o* his dismissal
Conse0uently, any bene3t or allowance o$er and abo$e that allowed and pro$ided by
said law is deemed e6cluded under the said Supreme Court Decision '78 E*ployees
CnionAetro anila, et al. vs. 'an( of t"e 7"ilippine 8slands1'an( of t"e 7"ilippine
8slands vs. '78 E*ployees CnionAetro anila, et al., G.R. Nos. 178+9911787-,.
&epte*ber #1, #$11.
Eanuary 2012 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Hebruary 1Q, 2012 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases !
)ere are selected Eanuary 2012 rulin#s o* the Supreme Court o* the Philippines on labor
law and procedure+
Certiorari@ eDect o* receipt o* award "he pre$ailin# party4s receipt o* the *ull amount o*
the %ud#ment award pursuant to a writ o* e6ecution issued by the labor arbiter does not
close or terminate the case i* such receipt is 0uali3ed as without pre%udice to the
outcome o* the petition *or !ertiorari pendin# with the Court o* Appeals Di*oteo 6.
&arona vs. National )abor Relations Co**ission, Royale &e!urity Agen!y, et al., G.R.
No. 18,#8$, ?anuary 18, #$11.
Constructi$e dismissal@ chan#e in position Constructi$e dismissal e6ists where there is
cessation o* wor2 because Bcontinued employment is rendered impossible,
unreasonable or unli2ely, as an oDer in$ol$in# a demotion in ran2 or a diminution in
payC and other bene3ts Aptly called a dismissal in dis#uise o* an act amountin# to
dismissal but made to appear as i* it were not,constructi$e dismissal may, li2ewise, e6ist
i* an act o* clear discrimination, insensibility, or disdain by an employer becomes so
unbearable on the part o* the employee that it could *oreclose any choice by him e6cept
to *ore#o his continued employment?n cases o* a trans*er o* an employee, the rule is
settled that the employer is char#ed with the burden o* pro$in# that its conduct and
action are *or $alid and le#itimate #rounds such as #enuine business necessity and that
the trans*er is not unreasonable, incon$enient or pre%udicial to the employee ?* the
employer cannot o$ercome this burden o* proo*, the employee4s trans*er shall be
tantamount to unlaw*ul constructi$e dismissal?onat"an .. orales vs. 6arbour Centre
7ort Der*inal, 8n!., G.R. No. 17@#$8, ?anuary #,, #$11.
Contract@ no$ation Fo$ation is the e6tin#uishment o* an obli#ation by the substitution
or chan#e o* the obli#ation by a subse0uent one which e6tin#uishes or modi3es the
3rst, either by chan#in# the ob%ect or principal conditions, or, by substitutin# another in
place o* the debtor, or by subro#atin# a third person in the ri#hts o* the creditor ?n
order *or no$ation to ta2e place, the concurrence o* the *ollowin# re0uisites is
indispensable+ .1/ "here must be a pre$ious $alid obli#ation@ .2/ "here must be an
a#reement o* the parties concerned to a new contract@ .,/ "here must be the
e6tin#uishment o* the old contract@ and .-/ "here must be the $alidity o* the new
contract "he parties impliedly e6tin#uished the 3rst contract by a#reein# to enter into
the second contract "he records also re$eal that the 2
nd
contract e6tin#uished the 3rst
contract by chan#in# its ob%ect or principal "hese contracts were *or o$erseas
employment aboard diDerent $essels "he 3rst contract was *or employment aboard the
MG BStolt AspirationC while the second contract in$ol$ed wor2in# in another $essel, the
MG BStolt PrideC Petitioners and Made0uillo, Er accepted the terms and conditions o* the
second contract :ndoubtedly, he was still employed under the 3rst contract when he
ne#otiated with petitioners on the second contract Since Made0uillo was still employed
under the 3rst contract when he ne#otiated with petitioners on the second contract,
no$ation became an una$oidable conclusion &toltANielsen Dransportation Group, 8n!., et
al. vs. &ulpe!io ode=uillo, G.R. No. 177@98, ?anuary 18, #$11.
(mployee@ money claims 'n the issue o* how the sea*arer will be compensated by
reason o* the unreasonable non&deployment, the Supreme Court decreed the
application o* Section 10 o* 5epublic Act Fo A0-2 .Mi#rant 9or2ers Act/ which pro$ides
*or money claims by reason o* a contract in$ol$in# Hilipino wor2ers *or o$erseas
deployment "he law pro$ides+
Sec 10 oney Clai*s U Fotwithstandin# any pro$ision o* law to the contrary, the
Labor Arbiters o* the Fational Labor 5elations Commission .FL5C/ shall ha$e the ori#inal
and e6clusi$e %urisdiction to hear and decide, within ninety .;0/ calendar days a*ter the
3lin# o* the complaint, the claims arisin# out o* an employer&employee relationship or
by $irtue o* any law or contract in$ol$in# Hilipino wor2ers *or o$erseas deployment
includin# claims *or actual, moral, e6emplary and other *orms o* dama#es 6 6 6
.:nderscorin# supplied/
Hollowin# the law, the claim is still co#ni>able by the labor arbiters o* the FL5C under
the second phrase o* the pro$ision Applyin# the rules on actual dama#es, Article 21;;
o* the Few Ci$il Code pro$ides that one is entitled to an ade0uate compensation only
*or such pecuniary loss suDered by him as he has duly pro$ed &toltANielsen
Dransportation Group, 8n!., et al. vs. &ulpe!io ode=uillo, G.R. No. 177@98, ?anuary 18,
#$11.
(mployee@ pre$enti$e suspension@ penalty o* suspension Pre$enti$e suspension is a
disciplinary measure resorted to by the employer pendin# in$esti#ation o* an alle#ed
mal*easance or mis*easance committed by an employee "he employer temporarily
bars the employee *rom wor2in# i* his continued employment poses a serious and
imminent threat to the li*e or property o* the employer or o* his co&wor2ers 'n the
other hand, the penalty o* suspension re*ers to the disciplinary action imposed on the
employee a*ter an o=cial in$esti#ation or administrati$e hearin# is conducted "he
employer e6ercises its ri#ht to discipline errin# employees pursuant to company rules
and re#ulations ?n the present case, )enry Delada 3led a #rie$ance a#ainst Manila
Pa$ilion )otel .MP)/ Hailin# to reach a settlement, Delada lod#ed a Complaint be*ore
the Fational Conciliation and Mediation <oard, which was e$entually re*erred to a panel
o* $oluntary arbitrators .PGA/ Meanwhile, citin# security and sa*ety reasons, MP)
placed Delada on a ,0&day pre$enti$e suspension and proceeded with the
administrati$e case a#ainst him MP) e$entually *ound Delada liable *or insubordination
and will*ul disobedience o* the trans*er order and imposed upon him a penalty o* ;0&day
suspension "he PGA ruled that there was no le#al and *actual basis to support MP)4s
imposition o* pre$enti$e suspension on Delada, and that the penalty o* ;0&day
suspension imposed by MP) a#ainst Delada went beyond the ,0&day period o*
pre$enti$e suspension prescribed by the ?mplementin# 5ules o* the Labor Code PGA
also ruled that MP) lost its authority to continue with the administrati$e proceedin#s *or
insubordination and will*ul disobedience o* the trans*er order and to impose the penalty
o* ;0&day suspension on Delada Accordin# to the panel, it ac0uired e6clusi$e
%urisdiction o$er the issue when the parties submitted the a*orementioned issues be*ore
it "he Supreme Court held that MP) did not lose its authority to discipline, and that
MP) had the authority to continue with the administrati$e proceedin#s *or
insubordination and will*ul disobedience a#ainst Delada and to impose on him the
penalty o* suspension anila 7avilion 6otel, et!. vs. 6enry 0elada, G.R. No. 1899@7,
?anuary #,, #$11.
(mployee@ release and 0uitclaim 9hile the law loo2s with dis*a$or upon releases and
0uitclaims by employees who are in$ei#led or pressured into si#nin# them by
unscrupulous employers see2in# to e$ade their le#al responsibilities, a le#itimate
wai$er representin# a $oluntary settlement o* a laborer4s claims should be respected by
the courts as the law between the parties Considerin# the petitioner4s claim o* *raud
and bad *aith a#ainst Philcomsat to be unsubstantiated, the Supreme Court *ound the
0uitclaim in dispute to be a le#itimate wai$er "he Court o* Appeals and the Fational
Labor 5elations Commission were unanimous in holdin# that the petitioner $oluntarily
e6ecuted the sub%ect 0uitclaim "he Supreme Court is not a trier o* *acts, and this
doctrine applies with #reater *orce in labor cases Hactual 0uestions are *or the labor
tribunals to resol$e and whether the petitioner $oluntarily e6ecuted the sub%ect
0uitclaim is a 0uestion o* *act ?n this case, the *actual issues ha$e already been
determined by the Fational Labor 5elations Commission and its 3ndin#s were a=rmed
by the Court o* Appeals Eudicial re$iew by the Supreme Court does not e6tend to a
ree$aluation o* the su=ciency o* the e$idence upon which the proper labor tribunal has
based its determination 6ypte R. AuGero vs. 7"ilippine Co**uni!ations &atellite
Corporation, G.R. No. 19-@8@, ?anuary 18, #$11.
(mployee bene3t@ holiday pay, ser$ice incenti$e lea$e pay and proportionate 1,
th
month
pay:nder the Labor Code, the employee is entitled to his re#ular rate on holidays e$en
i* he does not wor2 Li2ewise, e6press pro$ision o* the law entitles him to ser$ice
incenti$e lea$e bene3t i* he has rendered ser$ice *or more than a year already
Hurthermore, under Presidential Decree Fo A71, the employee should be paid his
1,
th
month pay "he employer has the burden o* pro$in# that it has paid these bene3ts
to its employees Abdul?ua"id R. 7ig!aulan vs. &e!urity and Credit 8nvestigation, 8n!.
and1or Rene A*by Reyes, G.R. No. 17-+@8, ?anuary 1+, #$11.
(mployee bene3t@ o$ertime pay ?n the absence o* any concrete proo* that additional
ser$ice beyond the normal wor2in# hours and days had been rendered, o$ertime pay
cannot be #ranted )andwritten itemi>ed computations are sel*&ser$in#, unreliable and
unsubstantiated e$idence to sustain the #rant o* salary diDerentials, particularly
o$ertime pay :nsi#ned and unauthenticated as they are, there is no way o* $eri*yin#
the truth o* the handwritten entries stated thereinAbdul?ua"id R. 7ig!aulan vs. &e!urity
and Credit 8nvestigation, 8n!. and1or Rene A*by Reyes, G.R. No. 17-+@8, ?anuary 1+,
#$11.
(mployee bene3t@ permanent disability "he Supreme Court reiterated Re*igio v.
National )abor Relations Co**ission, G.R. No. 1,9887, April 1#, #$$+, which stated
that+ B"hus, the Court has applied the Labor Code concept o* permanent total disability
to the case o* sea*arers ?n 7"ilippine Drans*arine Carriers v. N)RC, G.R. No. 1#-891,
;ebruary #8, #$$1, seaman Carlos Fietes was *ound to be suDerin# *rom con#esti$e
heart *ailure and cardiomyopathy and was declared as un3t to wor2 by the company&
accredited physician "he Court a=rmed the award o* disability bene3ts to the seaman,
citin# ECC v. &ani!o, G.R. No. 1-@$#8, 0e!e*ber 17, 1999, G&8& v. CA, G.R. No. 117,7#,
?anuary #9, 1998, G&8& v. CA, G.R. No. 11+$1,, ?uly -1, 199+ and 'eGerano v. ECC, G. R.
No. 8@777, ?anuary -$, 199#, that Bdisability should not be understood more on its
medical si#ni3cance but on the loss o* earnin# capacity Permanent total disability
means disablement o* an employee to earn wa#es in the same 2ind o* wor2, or wor2 o*
similar nature that LheM was trained *or or accustomed to per*orm, or any 2ind o* wor2
which a person o* LhisM mentality and attainment could do ?t does not mean absolute
helplessnessC ?t li2ewise cited 'eGerano to reiterate that in a disability compensation, it
is not the in%ury which is compensated, but rather it is the incapacity to wor2 resultin# in
the impairment o* one4s earnin# capacity "he Court also cited the more recent case
o*Crystal &"ipping, 8n!. v. Natividad, G.R. No. 1,@798, 9!tober #$, #$$,, applyin# the
same principles, andG&8& v. Cadi/, G.R. No. 1@,$9-, ?uly 8, #$$-, and 8Gares v. CA, G.R.
No. 1$,8,@, August #+, 1999, which declared that Bpermanent disability is the inability
o* a wor2er to per*orm his %ob *or more than 120 days, re#ardless o* whether or not he
loses the use o* any part o* his bodyC agsaysay ariti*e Corporation, et al. vs. 9berto
&. )obusta, G.R. No. 177,78, ?anuary #,, #$11.
(mployee dismissal@ due process Fotice and hearin# constitute the essential elements
o* due process in the dismissal o* employees "he employer must *urnish the employee
with two written notices be*ore termination o* employment can be le#ally eDected "he
3rst apprises the employee o* the particular acts or omissions *or which dismissal is
sou#ht "he second in*orms the employee o* the employer4s decision to dismiss him
9ith re#ard to the re0uirement o* a hearin#, the essence o* due process lies simply in
an opportunity to be heard, and not that an actual hearin# should always and
indispensably be held "hese re0uirements were satis3ed in this case "he 3rst re0uired
notice was dated Fo$ember ,, 200,, su=ciently noti*yin# Sabut o* the particular acts
bein# imputed a#ainst him, as well as the applicable law and the company rules
considered to ha$e been $iolated 'n Fo$ember 1Q, 200,, Meralco 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 de*enses on the char#es a#ainst him Si#ni3cantly, a hi#h&ran2in#
o=cer o* the super$isory union o* Meralco assisted him durin# the said in$esti#ation
)is sworn statement that *orms part o* the case records e$en listed the matters that
were raised durin# the in$esti#ation Hinally, Meralco ser$ed a notice o* dismissal dated
Hebruary -, 200- upon Sabut Such notice noti3ed the latter o* the company4s decision
to dismiss him *rom employment on the #rounds clearly discussed thereinNor*an
Fabut vs. anila Ele!tri! Co*pany and anuel . )ope/, G.R. No. 19$@-+, ?anuary 1+,
#$11.
(mployee dismissal@ due process ($en i* there is a %ust or $alid cause *or terminatin# an
employee, it is necessary to comply with the re0uirements o* due process prior to the
termination )olita &. Con!ep!ion vs. ine% 8*port Corporation1inera*a Corporation,
et al., G.R. No. 1,-,+9, ?anuary #@, #$11.
(mployee dismissal@ #ross ne#li#ence@ habitual ne#lect Kross ne#li#ence has been
de3ned as the Bwant o* care in the per*ormance o* one4s dutiesC and habitual
ne#lect has been de3ned as Brepeated *ailure to per*orm one4s duties *or a period o*
time, dependin# upon the circumstancesC "hese are not o$erly technical terms, which,
in the 3rst place, are e6pressly sanctioned by the Labor Code o* the Philippines, to wit+
A5" 2A2 Der*ination by e*ployer. U An employer may terminate an employment *or
any o* the *ollowin# causes+ L666M.b/ Kross and habitual ne#lect by the employee o* his
duties@ L666M Diosdado <itara was dismissed *rom ser$ice due to habitual tardiness and
absenteeism, and *or ha$in# continued disre#ardin# attendance policies despite his
underta2in# to report on time )is wee2ly time record *or the 3rst 0uarter o* the year
2000 re$ealed that he came late 1; times out o* the -Q times he reported *or wor2 )e
also incurred 1; absences out o* the 66 wor2in# days durin# the 0uarter )is absences
without prior notice and appro$al *rom March 11&16, 2000 were considered to be the
most serious in*raction o* all because o* its ad$erse eDect on business operations "he
Supreme Court held that e$en in the absence o* a written company rule de3nin# #ross
and habitual ne#lect o* duties, <itara4s omissions 0uali*y as such warrantin# his
dismissal *rom the ser$ice ansion 7rinting Center and Cle*ent C"eng vs. 0iosdado
'itara, ?r., G.R. No. 1+81#$, ?anuary #,, #$11.
(mployee dismissal@ %ust cause@ loss o* con3dence "o dismiss an employee, the law
re0uires the e6istence o* a %ust and $alid cause Article 2A2 o* the )abor
Code enumerates the Gust causes *or termination by the employer+ .a/ serious
misconduct or will*ul disobedience by the employee o* the law*ul orders o* his employer
or the latter4s representati$e in connection with the employee4s wor2@ .b/ #ross and
habitual ne#lect by the employee o* his duties@ .!/ *raud or will*ul breach by the
employee o* the trust reposed in him by his employer or his duly authori>ed
representati$e@ .d/ commission o* a crime or oDense by the employee a#ainst the
person o* his employer or any immediate member o* his *amily or his duly authori>ed
representati$e@ and .e/ other causes analo#ous to the *ore#oin#
?t is un*air to re0uire an employer to 3rst be morally certain o* the #uilt o* the employee
by awaitin# a con$iction be*ore terminatin# him when there is already su=cient
showin# o* the wron#doin# 5e0uirin# that certainty may pro$e too late *or the
employer, whose loss may potentially be beyond repair ?n the present case, no less
than the D'E Secretary *ound probable cause *or 0uali3ed the*t a#ainst Concepcion
"hat 3ndin# was enou#h to %usti*y her termination *or loss o* con3dence )olita &.
Con!ep!ion vs. ine% 8*port Corporation1inera*a Corporation, et al., G.R. No.
1,-,+9, ?anuary #@, #$11.
(mployee dismissal@ loss o* trust and con3dence Hor loss o* trust and con3dence to be
a $alid #round *or dismissal, it must be based on a will*ul breach o* trust and *ounded on
clearly established *acts A breach is will*ul i* it is done intentionally, 2nowin#ly and
purposely, without %usti3able e6cuse, as distin#uished *rom an act done carelessly,
thou#htlessly, heedlessly or inad$ertently ?n addition, loss o* trust and con3dence must
rest on substantial #rounds and not on the employer4s arbitrariness, whims, caprices or
suspicion anila Ele!tri! Co*pany 4eral!o5 vs. a. )uisa 'eltran, G.R. No. 17-77@,
?anuary -$, #$11.
(mployee dismissal@ misconduct Article 2A2.a/ pro$ides that an employer may
terminate an employment because o* an employee4s serious misconduct, a cause that
was present in this case in $iew o* the petitioner4s $iolation o* his employer4s code o*
conduct Misconduct is de3ned as the Btrans#ression o* some established and de3nite
rule o* action, a *orbidden act, a dereliction o* duty, will*ul in character, and implies
wron#*ul intent and not mere error in %ud#mentC Hor serious misconduct to %usti*y
dismissal, the *ollowin# re0uisites must be present+ .a/ it must be serious@ .b/ it must
relate to the per*ormance o* the employee4s duties@ and .c/ it must show that the
employee has become un3t to continue wor2in# *or the employer ?nstallation o*
shuntin# wires is without doubt a serious wron# as it demonstrates an act that is will*ul
or deliberate, pursued solely to wron#*ully obtain electric power throu#h unlaw*ul
means "he act clearly relates to the petitioner4s per*ormance o* his duties #i$en his
position as branch 3eld representati$e who is e0uipped with 2nowled#e on meter
operations, and who has the duty to test electric meters and handle customers4
$iolations o* contract ?nstead o* protectin# the company4s interest, the petitioner
himsel* used his 2nowled#e to ille#ally obtain electric power *rom Meralco )is
in$ol$ement in this incident deems him no lon#er 3t to continue per*ormin# his
*unctions *or respondent&companyNor*an Fabut vs. anila Ele!tri! Co*pany and
anuel . )ope/, G.R. No. 19$@-+, ?anuary 1+, #$11.
(mployer&employee relationship@ commencement "he P'(A Standard (mployment
Contract pro$ides that employment shall commence Bupon the actual departure o* the
sea*arer *rom the airport or seaport in the port o* hireC Distinction must be made
between the per*ection o* the employment contract and the commencement o* the
employer&employee relationship "he per*ection o* the contract, which in this case
coincided with the date o* e6ecution thereo*, occurred when petitioner and respondent
a#reed on the ob%ect and the cause, as well as the rest o* the terms and conditions
therein "he commencement o* the employer&employee relationship would ha$e ta2en
place had petitioner been actually deployed *rom the point o* hire &toltANielsen
Dransportation Group, 8n!., et al. vs. &ulpe!io ode=uillo, G.R. No. 177@98, ?anuary 18,
#$11.
Eud#ment@ 3nality "he petition was brou#ht only on behal* o* Pi#caulan "he CA Decision
has already become 3nal and e6ecutory as to Canoy since he did not appeal *rom it
Canoy cannot now simply incorporate in his a=da$it a $eri3cation o* the contents and
alle#ations o* the petition as he is not one o* the petitioners therein Abdul?ua"id R.
7ig!aulan vs. &e!urity and Credit 8nvestigation, 8n!. and1or Rene A*by Reyes, G.R. No.
17-+@8, ?anuary 1+, #$11.
Eud#ment@ res %udicata "he doctrine o* res Gudi!ata lays down two main rules which may
be stated as *ollows+ .1/ "he %ud#ment or decree o* a court o* competent %urisdiction 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 o* action either be*ore the same or any
other tribunal@ and .2/ Any ri#ht, *act, or matter in issue directly ad%udicated or
necessarily in$ol$ed in the determination o* an action be*ore a competent court in
which a %ud#ment or decree is rendered on the merits is conclusi$ely settled by the
%ud#ment therein and cannot a#ain be liti#ated between the parties and their pri$ies
whether the claim or demand, purpose, or sub%ect matter o* the two suits is the same or
not "hese two main rules mar2 the distinction between the principles #o$ernin# the
two typical cases in which a %ud#ment may operate as e$idence ?n spea2in# o* these
cases, the 3rst #eneral rule, and which corresponds to para#raph .b/ o* Section -Q o*
5ule ,; o* the 5ules o* Court is re*erred to as Bbar by *ormer %ud#mentC while the
second #eneral rule, which is embodied in para#raph .c/ o* the same section, is 2nown
as Bconclusi$eness o* %ud#mentC "he present labor case is closely related to the ci$il
case that was decided with 3nality "he acts and omissions alle#ed by the <an2 in the
ci$il case as basis o* its counterclaim a#ainst Mauricio 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 3nality in the ci$il case that the
0uestioned acts o* Mauricio were well within his discretion as branch mana#er and
appro$in# o=cer o* the <an2, and the same were sanctioned by the )ead '=ce, the
Supreme Court *ound that the Court o* Appeals did not err in holdin# that there was no
$alid or %ust cause *or the <an2 to terminate Mauricio4s employment7rudential 'an(
4no3 'an( of t"e 7"ilippine 8slands5 vs. Antonio &.A. auri!io, substituted by "is legal
"eirs aria ;e, .oltaire, Antonio, ?r., Antonio, Earl ?o"n, and ;ran!is!o Roberto all
surna*ed auri!io,G.R. No. 18--,$, ?anuary 18, #$11.
Eurisdiction@ $oluntary arbitrators ?n &i*e 0arby 7ilipinas, 8n!. v. 0eputy Ad*inistrator
agsalin, G.R. No. 9$@#+, 0e!e*ber 1,, 1989, the Supreme Court ruled that the
$oluntary arbitrator had plenary %urisdiction and authority to interpret the a#reement to
arbitrate and to determine the scope o* his own authority U sub%ect only, in a proper
case, to the certiorari %urisdiction o* this Court ?t was also held in that case that the
*ailure o* the parties to speci3cally limit the issues to that which was stated allowed the
arbitrator to assume %urisdiction o$er the related issue ?n )udo & )uy* Corporation v.
&aornido, G.R. No. 1@$9+$, ?anuary #$, #$$-, the Supreme Court reco#ni>ed that
$oluntary arbitrators are #enerally e6pected to decide only those 0uestions e6pressly
delineated by the submission a#reement@ that, ne$ertheless, they can assume that they
ha$e the necessary power to ma2e a 3nal settlement on the related issues, since
arbitration is the 3nal resort *or the ad%udication o* disputes "hus, the Supreme Court
ruled that e$en i* the speci3c issue brou#ht be*ore the arbitrators merely mentioned the
0uestion o* Bwhether an employee was dischar#ed *or %ust cause,C they could
reasonably assume that their powers e6tended beyond the determination thereo* to
include the power to reinstate the employee or to #rant bac2 wa#es ?n the same $ein, i*
the speci3c issue brou#ht be*ore the arbitrators re*erred to the date o* re#ulari>ation o*
the employee, law and %urisprudence #a$e them enou#h leeway as well as ade0uate
prero#ati$e to determine the entitlement o* the employees to hi#her bene3ts in
accordance with the 3ndin# o* re#ulari>ation ?ndeed, to re0uire the parties to 3le
another action *or payment o* those bene3ts would certainly undermine labor
proceedin#s and contra$ene the constitutional mandate pro$idin# *ull protection to
labor and speedy labor %ustice anila 7avilion 6otel, et!. vs. 6enry 0elada, G.R. No.
1899@7, ?anuary #,, #$11.
Procedural rules@ liberal application@ when wai$ed Procedural rules may be wai$ed or
dispensed with in absolutely meritorious cases "he Supreme Court, in past cases, has
adhered to the strict implementation o* the rules and considered them in$iolable when
it is shown that the patent lac2 o* merit o* the appeals render liberal interpretation
pointless and nau#ht "he contrary obtains in this case as Philcomsat4s case is not
entirely unmeritorious Speci3cally, Philcomsat alle#ed that the petitioner4s e6ecution o*
the sub%ect 0uitclaim was $oluntary despite his claim that he did not do so Philcomsat
li2ewise ar#ued that the petitioner4s educational attainment and the position he
occupied in Philcomsat4s hierarchy militate a#ainst his claim that he was pressured or
coerced into si#nin# the 0uitclaim "he emer#in# trend in our %urisprudence is to aDord
e$ery party&liti#ant the amplest opportunity *or the proper and %ust determination o* his
cause *ree *rom the constraints o* technicalities Har *rom ha$in# #ra$ely abused its
discretion, the FL5C correctly prioriti>ed substantial %ustice o$er the ri#id and strin#ent
application o* procedural rules ?n the present case, the Supreme Court held that the CA
was correct in not 3ndin# #ra$e abuse o* discretion in the FL5C4s decision to #i$e due
course to Philcomsat4s appeal despite its bein# belatedly 3led 6ypte R. AuGero vs.
7"ilippine Co**uni!ations &atellite Corporation, G.R. No. 19-@8@, ?anuary 18, #$11.
Public o=cers@ reassi#nment@ constructi$e dismissal 9hile a temporary trans*er or
assi#nment o* personnel is permissible e$en without the employee4s prior consent, it
cannot be done when the trans*er is a preliminary step toward his remo$al, or a scheme
to lure him away *rom his permanent position, or when it is desi#ned to indirectly
terminate his ser$ice, or *orce his resi#nation Such a trans*er would in eDect
circum$ent the pro$ision which sa*e#uards the tenure o* o=ce o* those who are in the
Ci$il Ser$ice Si#ni3cantly, Section 6, 5ule ??? o* CSC Memorandum Circular Fo -0, series
o* 1;;A, de3nes constructi$e dismissal as a situation when an employee 0uits his wor2
because o* the a#ency head4s unreasonable, humiliatin#, or demeanin# actuations
which render continued wor2 impossible )ence, the employee is deemed to ha$e been
ille#ally dismissed "his may occur althou#h there is no diminution or reduction o* salary
o* the employee ?t may be a trans*er *rom one position o* di#nity to a more ser$ile or
menial %ob Republi! of t"e 7"il., represented by t"e Civil &ervi!e Co**ission vs.
inerva .7. 7a!"e!o, G.R. No. 178$#1, ?anuary -1, #$11.
5einstatement@ not possible@ bac2wa#es ?n case separation pay is awarded and
reinstatement is no lon#er *easible, bac2wa#es shall be computed *rom the time o*
ille#al dismissal up to the 3nality o* the decision should separation pay not be paid in
the meantime ?t is the employee4s actual receipt o* the *ull amount o* his separation
pay that will eDecti$ely terminate the employment o* an ille#ally dismissed employee
'therwise, the employer&employee relationship subsists and the ille#ally dismissed
employee is entitled to bac2wa#es, ta2in# into account the increases and other
bene3ts, includin# the 1,th month pay, that were recei$ed by his co&employees who are
not dismissed ?t is the obli#ation o* the employer to pay an ille#ally dismissed
employee or wor2er the whole amount o* the salaries or wa#es, plus all other bene3ts
and bonuses and #eneral increases, to which he would ha$e been normally entitled had
he not been dismissed and had not stopped wor2in# Di*oteo 6. &arona vs. National
)abor Relations Co**ission, Royale &e!urity Agen!y, et al., G.R. No. 18,#8$, ?anuary
18, #$11.
5eor#ani>ation@ mana#ement prero#ati$e Admittedly, the ri#ht o* employees to
security o* tenure does not #i$e them $ested ri#hts to their positions to the e6tent o*
depri$in# mana#ement o* its prero#ati$e to chan#e their assi#nments or to trans*er
them <y mana#ement prero#ati$e is meant the ri#ht o* an employer to re#ulate all
aspects o* employment, such as the *reedom to prescribe wor2 assi#nments, wor2in#
methods, processes to be *ollowed, re#ulation re#ardin# trans*er o* employees,
super$ision o* their wor2, lay&oD and discipline, and dismissal and recall o* wor2ers
Althou#h %urisprudence reco#ni>es said mana#ement prero#ati$e, it has been ruled that
the e6ercise thereo*, while ordinarily not inter*ered with, is not absolute and is sub%ect to
limitations imposed by law, collecti$e bar#ainin# a#reement, and #eneral principles o*
*air play and %ustice "hus, an employer may trans*er or assi#n employees *rom one
o=ce or area o* operation to another, pro$ided there is no demotion in ran2 or
diminution o* salary, bene3ts, and other pri$ile#es, and the action is not moti$ated by
discrimination, made in bad *aith, or eDected as a *orm o* punishment or demotion
without su=cient cause ?ndeed, ha$in# the ri#ht should not be con*used with the
manner in which that ri#ht is e6ercised Eonathan G Morales was hired by )arbour
Centre Port "erminal, ?nc .)CP"?/ as an Accountant and Actin# Hinance '=cer, with a
monthly salary o* P1A,00000 5e#ulari>ed on Fo$ember 1Q, 2000, Morales was
promoted to Di$ision Mana#er o* the Accountin# Department, *or which he was
compensated a monthly salary o*P,,,Q0000, plus allowances startin# Euly 1, 2002
Subse0uent to )CP"?4s trans*er to its new o=ces at Gitas, "ondo, Manila on Eanuary 2,
200,, Morales recei$ed an inter&o=ce memorandum dated March 2Q, 200,, reassi#nin#
him to 'perations Cost Accountin#, tas2ed with the duty o* Bmonitorin# and e$aluatin#
all consumables re0uests, #ears and e0uipmentC related to the corporation4s operations
and o* interactin# with its sub&contractor, <ul2 Hleet Marine Corporation "he
memorandum was issued by )CP"?4s new Administration Mana#er, duly noted by its
new Gice President *or Administration and Hinance, and appro$ed by its President and
Chie* (6ecuti$e '=cer Morales protested that his reassi#nment was a clear demotion
since the position to which he was trans*erred was not e$en included in )CP"?4s
plantilla ?n response to Morales4 #rie$ance that he had been eDecti$ely placed on
Joatin# status, an inter&o=ce memorandum was issued on April -, 200, to the eDect
that Btrans*er o* employees is a mana#ement prero#ati$eC and that )CP"? had Bthe
ri#ht and responsibility to 3nd the per*ect balance between the s2ills and abilities o*
employees to the needs o* the businessC )owe$er, the Supreme Court *ound that )CP"?
did not e$en bother to show that it had implemented a corporate reor#ani>ation andRor
appro$ed a new plantilla o* positions which included the one to which Morales was bein#
trans*erred "hus, the Court reinstated the FL5C4s Euly 2;, 2007 Decision which *ound
Morales4 reassi#nment to be a clear demotion despite lac2 o* showin# o* diminution o*
salaries and bene3ts ?onat"an .. orales vs. 6arbour Centre 7ort Der*inal, 8n!., G.R.
No. 17@#$8, ?anuary #,, #$11.
5ule -7@ 0uestion o* law As a #eneral rule, the Supreme Court is not a trier o* *acts and
a petition *or re$iew on !ertiorari under 5ule -7 o* the 5ules o* Court must e6clusi$ely
raise 0uestions o* law Moreo$er, i* *actual 3ndin#s o* the Fational Labor 5elations
Commission and the Labor Arbiter ha$e been a=rmed by the Court o* Appeals, the
Supreme Court accords them the respect and 3nality they deser$e ?t is well&settled and
o*t&repeated that 3ndin#s o* *act o* administrati$e a#encies and 0uasi&%udicial bodies,
which ha$e ac0uired e6pertise because their %urisdiction is con3ned to speci3c matters,
are #enerally accorded not only respect, but 3nality when a=rmed by the Court o*
AppealsFe$ertheless, the Supreme Court will not hesitate to de$iate *rom what are
clearly procedural #uidelines and disturb and stri2e down the 3ndin#s o* the Court o*
Appeals and those o* the labor tribunals i* there is a showin# that they are unsupported
by the e$idence on record or there was a patent misappreciation o* *acts ?ndeed, that
the impu#ned decision o* the Court o* Appeals is consistent with the 3ndin#s o* the
labor tribunals does not per se conclusi$ely demonstrate the correctness thereo* <y
way o* e6ception to the #eneral rule, the Supreme Court will scrutini>e the *acts i* only
to recti*y the pre%udice and in%ustice resultin# *rom an incorrect assessment o* the
e$idence presented Di*oteo 6. &arona vs. National )abor Relations Co**ission,
Royale &e!urity Agen!y, et al., G.R. No. 18,#8$, ?anuary 18, #$11.
Hebruary 2012 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on March 7, 2012 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines & Law
! "a##ed appeal, Ci$il Ser$ice Commission, constructi$e dismissal, dismissal, employee
bene3ts, employer&employee relationship, *orum shoppin#, FL5C, probationary
employment, reinstatement, res %udicata, security o* tenure !
)ere are select Hebruary 2012 rulin#s o* the Supreme Court on labor law and procedure+
Appeal@ *actual 3ndin# o* FL5C Hindin#s o* *act o* administrati$e a#encies and 0uasi&
%udicial bodies, which ha$e ac0uired e6pertise because their %urisdiction is con3ned to
speci3c matters, are #enerally accorded not only respect but 3nality when a=rmed by
the Court o* Appeals Hactual 3ndin#s o* 0uasi&%udicial bodies li2e the FL5C, i* supported
by substantial e$idence, are accorded respect and e$en 3nality by the Supreme Court,
more so when they coincide with those o* the Labor Arbiter Such *actual 3ndin#s are
#i$en more wei#ht when the same are a=rmed by the Court o* Appeals ?n the present
case, the Supreme Court *ound no reason to depart *rom these principles since the
Labor Arbiter *ound that there was substantial e$idence to conclude that 'asay had
breached the trust and con3dence o* Palacio Del Kobernador Condominium Corporation,
which 3ndin# the FL5C had li2ewise upheld &ebastian ;. 9asay, ?r. vs. 7ala!io del
Gobernador Condo*iniu* Corporation and 9*ar D. Cru/, G.R. No. 19@-$+, ;ebruary +,
#$1#.
Ci$il Ser$ice@ Clar2 De$elopment Corporation Clar2 De$elopment Corporation .CDC/
owes its e6istence to (6ecuti$e 'rder Fo A0 issued by then President Hidel G 5amos ?t
was meant to be the implementin# and operatin# arm o* the <ases Con$ersion and
De$elopment Authority tas2ed to mana#e the Clar2 Special (conomic Vone (6pressly,
CDC was *ormed in accordance with Philippine corporation laws and e6istin# rules and
re#ulations promul#ated by the Securities and (6chan#e Commission pursuant to
Section 16 o* 5epublic Act Q22Q CDC, a #o$ernment owned or controlled corporation
without an ori#inal charter, was incorporated under the Corporation Code Pursuant to
Article ?O&<, Sec 2.1/ o* the Constitution, the ci$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 '.
&alenga, et al. vs. Court of Appeals, et al., G.R. No. 17@9@1, ;ebruary 1, #$1#.
Dismissal@ resi#nation $s ille#al dismissal@ tele6 is not e0ui$alent to tender o*
resi#nation Article 2A7 o* the Labor Code reco#ni>es termination by the employee o*
the employment contract by Bser$in# written notice on the employer at least one .1/
month in ad$anceC Ki$en that pro$ision, the law contemplates the re0uirement o* a
written notice o* resi#nation ?n the absence o* a written resi#nation, it is sa*e to
presume that the employer terminated the sea*arers ?n this case, the Supreme Court
*ound the dismissal o* De Kracia, et al to be ille#al since Cosmoship merely sent a tele6
to S2ippers, the local mannin# a#ency, claimin# that De Kracia, et al were repatriated
because the latter $oluntarily pre&terminated their contracts &(ippers Cnited 7a!iL!,
8n!. and &(ippers ariti*e &ervi!es, 8n!. )td. vs. Nat"aniel 0o/a, et al., G.R. No.
17,,,8. ;ebruary 8, #$1#.
Dismissal@ substanti$e and procedural due process Hor a wor2er4s dismissal to be
considered $alid, it must comply with both procedural and substanti$e due process "he
le#ality o* the manner o* dismissal constitutes procedural due process, while the le#ality
o* the act o* dismissal constitutes substanti$e due process Procedural due process in
dismissal cases consists o* the twin re0uirements o* notice and hearin# "he employer
must *urnish the employee with two written notices be*ore the termination o*
employment can be eDected+ .1/ the 3rst notice apprises the employee o* the particular
acts or omissions *or which his dismissal is sou#ht@ and .2/ the second notice in*orms
the employee o* the employer4s decision to dismiss him <e*ore the issuance o* the
second notice, the re0uirement o* a hearin# must be complied with by #i$in# the wor2er
an opportunity to be heard ?t is not necessary that an actual hearin# be conducted
Substanti$e due process, on the other hand, re0uires that dismissal by the employer be
made based on a %ust or authori>ed cause under Articles 2A2 to 2A- o* the Labor Code
?n this case, there was no written notice *urnished to De Kracia, et al re#ardin# the
cause o* their dismissal Cosmoship *urnished a tele6 to S2ippers, the local mannin#
a#ency, claimin# that De Kracia, et al were repatriated because they $oluntarily pre&
terminated their contracts "his tele6 was #i$en credibility and wei#ht by the Labor
Arbiter and FL5C in decidin# that there was pre&termination o* the employment contract
Ba2in to resi#nationC and no ille#al dismissal )owe$er, as correctly ruled by the CA, the
tele6 messa#e is Ba biased and sel*&ser$in# document that does not satis*y the
re0uirement o* substantial e$idenceC ?*, indeed, De Kracia, et al $oluntarily pre&
terminated their contracts, then De Kracia, et al should ha$e submitted their written
resi#nations &(ippers Cnited 7a!iL!, 8n!. and &(ippers ariti*e &ervi!es, 8n!. )td.
vs. Nat"aniel 0o/a, et al., G.R. No. 17,,,8. ;ebruary 8, #$1#.
(mployee bene3ts@ ri#ht to bonus@ diminution Hrom a le#al point o* $iew, a bonus is a
#ratuity or act o* liberality o* the #i$er which the recipient cannot demand as a matter
o* ri#ht "he #rant o* a bonus is basically a mana#ement prero#ati$e which cannot be
*orced upon the employer who may not be obli#ed to assume the onerous burden o*
#rantin# bonuses )owe$er, a bonus becomes a demandable or en*orceable obli#ation i*
the additional compensation is #ranted without any conditions imposed *or its payment
?n such case, the bonus is treated as part o* the wa#e, salary or compensation o* the
employee Particularly instructi$e is the rulin# o* the Court in etro Dransit
9rgani/ation, 8n!. v. National )abor Relations Co**ission .K5 Fo 11600A, Euly 11,
1;;7/ where the Court said+
9hether or not a bonus *orms part o* wa#es depends upon the circumstances and
conditions *or its payment ?* it is additional compensation which the employer promised
and a#reed to #i$e without any conditions imposed *or its payment, such as success o*
business or #reater production or output, then it is part o* the wa#e <ut i* it is paid only
i* pro3ts are reali>ed or i* a certain le$el o* producti$ity is achie$ed, it cannot be
considered part o* the wa#e 9here it is not payable to all but only to some employees
and only when their labor becomes more e=cient or more producti$e, it is only an
inducement *or e=ciency, a pri>e there*ore, not a part o* the wa#e
?n this case, there is no dispute that (astern "elecommunications Phils, ?nc and (astern
"elecoms (mployees :nion a#reed on the inclusion o* a pro$ision *or the #rant o* 1-th,
17th and 16th month bonuses in the 1;;A&2001 C<A Side A#reement, as well as in their
2001&200- C<A Side A#reement, which contained no 0uali3cation *or its payment "here
were no conditions speci3ed in the C<A Side A#reements *or the #rant o* the bonus
"here was nothin# in the rele$ant pro$isions o* the C<A which made the #rant o* the
bonus dependent on the company4s 3nancial standin# or contin#ent upon the
reali>ation o* pro3ts "here was also no statement that i* the company deri$es no
pro3ts, no bonus will be #i$en to the employees ?n 3ne, the payment o* these bonuses
was not related to the pro3tability o* business operations Conse0uently, the #i$in# o*
the sub%ect bonuses cannot be peremptorily withdrawn by (astern "elecommunications
Phils, ?nc without $iolatin# Article 100 o* the Labor Code, which prohibits the unilateral
elimination or diminution o* bene3ts by the employer "he rule is settled that any
bene3t and supplement bein# en%oyed by the employees cannot be reduced,
diminished, discontinued or eliminated by the employer "he principle o* non&diminution
o* bene3ts is *ounded on the constitutional mandate to protect the ri#hts o* wor2ers and
to promote their wel*are and to aDord labor *ull protection Eastern Dele!o**uni!ations
7"ilippines, 8n!. vs. Eastern Dele!o*s E*ployees Cnion, G.R. No. 18,++,, ;ebruary 8,
#$1#.
(mployee dismissal@ constructi$e dismissal ?n constructi$e dismissal cases, the
employer has the burden o* pro$in# that the trans*er o* an employee is *or %ust or $alid
#round, such as #enuine business necessity "he employer must demonstrate that the
trans*er is not unreasonable, incon$enient, or pre%udicial to the employee and that the
trans*er does not in$ol$e a demotion in ran2 or a diminution in salary and other
bene3ts B?* the employer *ails to o$ercome this burden o* proo*, the employee4s
trans*er is tantamount to unlaw*ul constructi$e dismissalC LMerc2 Sharp and Dohme
.Philippines/ $ 5obles, K5 Fo 1Q6706, Fo$ember 27, 200;M Petitioners *ailed to satis*y
the burden o* pro$in# that the trans*er was based on %ust or $alid #round Petitioners4
bare assertions o* imminent threat *rom the respondents are mere accusations which
are not substantiated by any proo* "he Supreme Court a#reed with the Court o* Appeals
in rulin# that the trans*er o* respondents amounted to a demotion ?ulieMs 'a(es"op
and1or Edgar Reyes vs. 6enry Arnai/, et al., G.R. No. 17-88#, ;ebruary 1,, #$1#.
(mployee dismissal@ disease@ dereliction o* duties 9ith re#ard to disease as a #round
*or termination, Article 2A- o* the Labor Code pro$ides that an employer may terminate
the ser$ices o* an employee who has been *ound to be suDerin# *rom any disease and
whose continued employment is prohibited by law or is pre%udicial to his health, as well
as to the health o* his co&employees ?n order to $alidly terminate employment on this
#round, Section A, 5ule ?, <oo2 G? o* the 'mnibus 5ules ?mplementin# the Labor Code
re0uires that+ .i/ the employee be suDerin# *rom a disease and his continued
employment is prohibited by law or pre%udicial to his health or to the health o* his co&
employees, and .ii/ a certi3cation by a competent public health authority that the
disease is o* such nature or at such a sta#e that it cannot be cured within a period o* si6
.6/ months e$en with proper medical treatment ?* the disease or ailment can be cured
within the period, the employer shall not terminate the employee but shall as2 the
employee to ta2e a lea$e "he employer shall reinstate such employee to his *ormer
position immediately upon the restoration o* his normal health ?n Driple Eig"t
8ntegrated &ervi!es, 8n!. v. N)RC 4G.R. Fo 12;7A-, December ,, 1;;A5,the Court held
that the re0uirement *or a medical certi3cate under Article 2A- o* the Labor Code
cannot be dispensed with@ otherwise, it would sanction the unilateral and arbitrary
determination by the employer o* the #ra$ity or e6tent o* the employee4s illness and,
thus, de*eat the public policy on the protection o* labor
?n this case, Snson should ha$e reported bac2 to wor2 or attended the in$esti#ations
conducted by 9uerth Philippines, ?nc immediately upon bein# permitted to wor2 by his
doctors, 2nowin# that his position remained $acant *or a considerable len#th o* time
)owe$er, he did not e$en show any sincere eDort to return to wor2 Clearly, since there
is no more hindrance *or him to return to wor2 and attend the in$esti#ations set by
9uerth Philippines, ?nc, Snson4s *ailure to do so was without any $alid or %usti3able
reason )is conduct shows his indiDerence and utter disre#ard o* his wor2 and his
employer4s interest, and displays his clear, deliberate, and #ross dereliction o* duties
"he power to dismiss an employee is a reco#ni>ed prero#ati$e inherent in the
employer4s ri#ht to *reely mana#e and re#ulate his business "he law, in protectin# the
ri#hts o* the laborers, authori>es neither oppression nor sel*&destruction o* the
employer "he wor2er4s ri#ht to security o* tenure is not an absolute ri#ht, *or the law
pro$ides that he may be dismissed *or cause As a #eneral rule, employers are allowed
wide latitude o* discretion in terminatin# the employment o* mana#erial personnel "he
mere e6istence o* a basis *or belie$in# that such employee has breached the trust and
con3dence o* his employer would su=ce *or his dismissal Feedless to say, an
irresponsible employee li2e Snson does not deser$e a position in the wor2place, and it is
9uerth Philippines, ?nc4s mana#ement prero#ati$e to terminate his employment "o be
sure, an employer cannot be compelled to continue with the employment o* wor2ers
when continued employment will pro$e inimical to the employer4s interest Buert"
7"ilippines, 8n!. vs. Rodante Fnson, G.R. No. 17,9-#, ;ebruary 1,, #$1#.
(mployee dismissal@ due process 9ith respect to due process re0uirement, the
employer is bound to *urnish the employee concerned with two .2/ written notices
be*ore termination o* employment can be le#ally eDected 'ne is the notice apprisin#
the employee o* the particular acts or omissions *or which his dismissal is sou#ht and
this may loosely be considered as the proper char#e "he other is the notice in*ormin#
the employee o* the mana#ement4s decision to se$er his employment "his decision,
howe$er, must come only a*ter the employee is #i$en a reasonable period *rom receipt
o* the 3rst notice within which to answer the char#e, thereby #i$in# him ample
opportunity to be heard and de*end himsel* with the assistance o* his representati$e
should he so desire "he re0uirement o* notice, it has been stressed, is not a mere
technicality but a re0uirement o* due process to which e$ery employee is entitled )ere,
Palacio Del Kobernador Condominium Corporation complied with the Btwo&notice ruleC
stated abo$e &ebastian ;. 9asay, ?r. vs. 7ala!io del Gobernador Condo*iniu*
Corporation and 9*ar D. Cru/, G.R. No. 19@-$+, ;ebruary +, #$1#.
(mployee dismissal@ due process Cityland did not aDord Kalan# the re0uired notice
be*ore he was dismissed As the Court o* Appeals noted, the in$esti#ation con*erence
"upas called to loo2 into the %anitors4 complaints a#ainst Kalan# did not constitute the
written notice re0uired by law as he had no clear idea what the char#es a#ainst him
were Ro*eo A. Galang vs. Citiland &"a3 Do3er, 8n!. and .irgilio 'alde*or, G.R. No.
17-#91, ;ebruary 8, #$1#.
(mployee dismissal@ #rounds "he $alidity o* an employee4s dismissal *rom ser$ice
hin#es on the satis*action o* the two substanti$e re0uirements *or a law*ul termination
"hese are, 3rst, whether the employee was accorded due process the basic components
o* which are the opportunity to be heard and to de*end himsel* "his is the procedural
aspect And second, whether the dismissal is *or any o* the causes pro$ided in the
Labor Code o* the Philippines "his constitutes the substanti$e aspect 'n the
substanti$e aspect, the Supreme Court *ound that Palacio Del Kobernador Condominium
Corporation4s termination o* the 'asay4s employment was *or a cause pro$ided under
the Labor Code ?n terminatin# 'asay4s employment, Palacio Del Kobernador
Condominium Corporation in$o2ed loss o* trust and con3dence "he 3rst re0uisite *or
dismissal on the #round o* loss o* trust and con3dence is that the employee concerned
must be holdin# a position o* trust and con3dence )ere, it is indubitable that 'asay
holds a position o* trust and con3dence "he position o* <uildin# Administrator, bein#
mana#erial in nature, necessarily en%oys the trust and con3dence o* the employer "he
second re0uisite is that there must be an act that would %usti*y the loss o* trust and
con3dence Loss o* trust and con3dence, to be a $alid cause *or dismissal, must be
based on a will*ul breach o* trust and *ounded on clearly established *acts Palacio Del
Kobernador Condominium Corporation had established, by clear and con$incin#
e$idence, 'asay4s acts which %usti3ed its loss o* trust and con3dence on the
*ormer &ebastian ;. 9asay, ?r. vs. 7ala!io del Gobernador Condo*iniu* Corporation and
9*ar D. Cru/, G.R. No. 19@-$+, ;ebruary +, #$1#.
(mployee dismissal@ %ust cause "he Supreme Court *ound that Kalan# had become
un3t to continue his employment "he e$idence supports the $iew that he continued to
e6hibit undesirable traits as an employee and as a person, in relation to both his co&
wor2ers and his superiors, particularly "upas, her immediate super$isor Wuotin# the
Court o* Appeals4 decision with appro$al, the Supreme Court held+ B9ithout oDerin# any
possible ill moti$e that mi#ht ha$e impelled Lthe respondentsM to summarily dismiss
LKalan#M, who admitted ha$in# been absorbed by the *ormer as %anitor upon the
termination o* his contract with his a#ency, this Court is more inclined to #i$e credence
to the e$idence pointin# to the conclusion that LKalan#4sM employment was actually
se$ered *or a %ust causeC Ro*eo A. Galang vs. Citiland &"a3 Do3er, 8n!. and .irgilio
'alde*or, G.R. No. 17-#91, ;ebruary 8, #$1#.
(mployer@ ri#ht to discipline employee ?n Sa#ales $ 5ustan4s Commercial Corporation
.K5 Fo 16677-, Fo$ember 2Q, 200A/, the Supreme Court ruled+
"ruly, while the employer has the inherent ri#ht to discipline, includin# that o*
dismissin# its employees, this prero#ati$e is sub%ect to the re#ulation by the State in the
e6ercise o* its police power
?n this re#ard, it is a hornboo2 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. .(mphasis in the ori#inal/
?n the case at bar, the penalty handed out by the petitioners was the ultimate penalty o*
dismissal "here was no warnin# or admonition *or respondent4s $iolation o* team rules,
only outri#ht termination o* his ser$ices *or an act which could ha$e been punished
appropriately with a se$ere reprimand or suspension Negros &las"ers, 8n!., Rodolfo C.
Alvare/ and .i!ente Dan vs. Alvin ). Deng, G.R. No. 1871##, ;ebruary ##, #$1#.
(mployer&employee relationship@ onus probandi "he onus probandi *alls on petitioner to
establish or substantiate such claim by the re0uisite 0uantum o* e$idence "he issue o*
Ea$ier4s alle#ed ille#al dismissal is anchored on the e6istence o* an employer&employee
relationship between him and Hly Ace As the records bear out, the Labor Arbiter and the
Court o* Appeals *ound Ea$ier4s claim o* employment with Hly Ace as wantin# and
de3cient Althou#h Section 10, 5ule G?? o* the Few 5ules o* Procedure o* the FL5C allows
a rela6ation o* the rules o* procedure and e$idence in labor cases, this rule o* liberality
does not mean a complete dispensation o* proo* Labor o=cials are en%oined to use
reasonable means to ascertain the *acts speedily and ob%ecti$ely with little re#ard to
technicalities or *ormalities but nowhere in the rules are they pro$ided a license to
completely discount e$idence, or the lac2 o* it "he 0uantum o* proo* re0uired, howe$er,
must still be satis3ed )ence, Bwhen con*ronted with conJictin# $ersions on *actual
matters, it is *or them in the e6ercise o* discretion to determine which party deser$es
credence on the basis o* e$idence recei$ed, sub%ect only to the re0uirement that their
decision must be supported by substantial e$idenceC L&alvador )a!orte v. 6on. A*ado
G. 8n!iong, 2-A Phil 2,2 .1;AA/M Accordin#ly, Ea$ier needs to show by substantial
e$idence that he was indeed an employee o* the company a#ainst which he claims
ille#al dismissal 'itoy ?avier 40anilo 7. ?avier5 vs. ;ly A!e Corporation1;lordelyn
Castillo, G.R. No. 19#,,8, ;ebruary 1,, #$1#.
(mployer&employee relationship@ test "o determine the e6istence o* an employer&
employee relationship, the *ollowin# are considered+ .1/ the selection and en#a#ement
o* the employee@ .2/ the payment o* wa#es@ .,/ the power o* dismissal@ and .-/ the
power to control the employee4s conduct '* these elements, the most important
criterion is whether the employer controls or has reser$ed the ri#ht to control the
employee not only as to the result o* the wor2 but also as to the means and methods by
which the result is to be accomplished ?n this case, Ea$ier was not able to persuade the
Court that the abo$e elements e6ist in his case )e could not submit competent proo*
that Hly Ace en#a#ed his ser$ices as a re#ular employee@ that Hly Ace paid his wa#es as
an employee, or that Hly Ace could dictate what his conduct should be while at wor2 ?n
other words, Ea$ier4s alle#ations did not establish that his relationship with Hly Ace had
the attributes o* an employer&employee relationship on the basis o* the abo$e&
mentioned *our&*old test 9orse, Ea$ier was not able to re*ute Hly Ace4s assertion that it
had an a#reement with a haulin# company to underta2e the deli$ery o* its #oods ?t
was also baZin# to reali>e that Ea$ier did not dispute Hly Ace4s denial o* his ser$ices4
e6clusi$ity to the company ?n short, all that Ea$ier laid down were bare alle#ations
without corroborati$e proo* 'itoy ?avier 40anilo 7. ?avier5 vs. ;ly A!e
Corporation1;lordelyn Castillo, G.R. No. 19#,,8, ;ebruary 1,, #$1#.
(mployment contract@ sta#es Contracts under#o three distinct sta#es, to wit+
ne#otiation@ per*ection or birth@ and consummation Fe#otiation be#ins *rom the time
the prospecti$e contractin# parties mani*est their interest in the contract and ends at
the moment o* a#reement o* the parties Per*ection or birth o* the contract ta2es place
when the parties a#ree upon the essential elements o* the contract Consummation
occurs when the parties *ul3ll or per*orm the terms a#reed upon in the contract,
culminatin# in the e6tin#uishment thereo* :nder Article 1,17 o* the Ci$il Code, a
contract is per*ected by mere consent and *rom that moment the parties are bound not
only to the *ul3llment o* what has been e6pressly stipulated but also to all the
conse0uences which, accordin# to their nature, may be in 2eepin# with #ood *aith,
usa#e and law An employment contract, li2e any other contract, is per*ected at the
moment .1/ the parties come to a#ree upon its terms@ and .2/ concur in the essential
elements thereo*+ .a/ consent o* the contractin# parties, .b/ ob%ect certain which is the
sub%ect matter o* the contract and .c/ cause o* the obli#ation ?n the present case, CH
Sharp, on behal* o* its principal, ?nternational Shippin# Mana#ement, ?nc, hired A#ustin
and Minimo as SandblasterRPainter *or a ,&month contract, with a basic monthly salary
o* :SY-7000 "hus, the ob%ect o* the contract is the ser$ice to be rendered by A#ustin
and Minimo on board the $essel while the cause o* the contract is the monthly
compensation they e6pect to recei$e "hese terms were embodied in the Contract o*
(mployment which was e6ecuted by the parties "he a#reement upon the terms o* the
contract was mani*ested by the consent *reely #i$en by both parties throu#h their
si#natures in the contract Feither parties disa$ow the consent they both $oluntarily
#a$e "hus, there is a per*ected contract o* employment C.;. &"arp & Co. 8n!. and ?o"n
?. Ro!"a vs. 7ioneer 8nsuran!e and &urety Corporation, et al.,G.R. No. 179@+9, ;ebruary
1,, #$1#.
(mployment relationship@ commencement "he commencement o* an employer&
employee relationship must be treated separately *rom the per*ection o* an
employment contract &antiago v. C; &"arp Cre3 anage*ent, 8n!, .K5 Fo 162-1;,
10 Euly 200Q/ is an instructi$e precedent on this point ?n that case, the Supreme Court
made a distinction between the per*ection o* the employment contract and the
commencement o* the employer&employee relationship, thus+
D"e perfe!tion of t"e !ontra!t, 3"i!" in t"is !ase !oin!ided 3it" t"e date of e%e!ution
t"ereof, o!!urred 3"en petitioner and respondent agreed on t"e obGe!t and t"e !ause,
as 3ell as t"e rest of t"e ter*s and !onditions t"erein. D"e !o**en!e*ent of t"e
e*ployerAe*ployee relations"ip, as earlier dis!ussed, 3ould "ave ta(en pla!e "ad
petitioner been a!tually deployed fro* t"e point of "ire. D"us, even before t"e start of
any e*ployerAe*ployee relations"ip, !onte*poraneous 3it" t"e perfe!tion of t"e
e*ploy*ent !ontra!t 3as t"e birt" of !ertain rig"ts and obligations, t"e brea!" of
3"i!" *ay give rise to a !ause of a!tion against t"e erring party.
Despite the *act that the employer&employee relationship has not commenced due to
the *ailure to deploy A#ustin and Minimo in this case, A#ustin and Minimo are entitled to
ri#hts arisin# *rom the per*ected Contract o* (mployment, such as the ri#ht to demand
per*ormance by CH Sharp o* its obli#ation under the contract C.;. &"arp & Co. 8n!. and
?o"n ?. Ro!"a vs. 7ioneer 8nsuran!e and &urety Corporation, et al., G.R. No. 179@+9,
;ebruary 1,, #$1#.
Horum shoppin#@ elements@ res %udicata Hor *orum shoppin# to e6ist, it is necessary that
.a/ there be identity o* parties or at least such parties that represent the same interests
in both actions@ .b/ there be identity o* ri#hts asserted and relie* prayed *or, the relie*
bein# *ounded on the same *acts@ and .c/ the identity o* the two precedin# particulars is
such that any %ud#ment rendered in one action will, re#ardless o* which party is
success*ul, amount to res Gudi!ata in the other action Petitioners are correct as to the
3rst two re0uisites o* *orum shoppin# Hirst, there is identity o* parties in$ol$ed+ Fe#ros
Slashers ?nc and respondent "en# Second, there is identity o* ri#hts asserted ie, the
ri#ht o* mana#ement to terminate employment and the ri#ht o* an employee a#ainst
ille#al termination )owe$er, the third re0uisite o* *orum shoppin# is missin# in this
case Any %ud#ment or rulin# o* the '=ce o* the Commissioner o* the Metropolitan
<as2etball Association will not amount to res Gudi!ata Res Gudi!ata is de3ned in
%urisprudence as to ha$e *our basic elements+ .1/ the %ud#ment sou#ht to bar the new
action must be 3nal@ .2/ the decision must ha$e been rendered by a court ha$in#
%urisdiction o$er the sub%ect matter and the parties@ .,/ the disposition o* the case must
be a %ud#ment on the merits@ and .-/ there must be as between the 3rst and second
action, identity o* parties, sub%ect matter, and causes o* action )ere, althou#h
contractually authori>ed to settle disputes, the '=ce o* the Commissioner o* the
Metropolitan <as2etball Association is not a court o* competent %urisdiction as
contemplated by law with respect to the application o* the doctrine o* res Gudi!ata. At
best, the '=ce o* the Commissioner o* the Metropolitan <as2etball Association is a
pri$ate mediator or #o&between as a#reed upon by team mana#ement and a player in
the Metropolitan <as2etball Association Player4s Contract o* (mployment Any %ud#ment
that the '=ce o* the Commissioner o* the Metropolitan <as2etball Association may
render will not result in a bar *or see2in# redress in other le#al $enues )ence,
respondent4s action o* 3lin# the same complaint in the 5e#ional Arbitration <ranch o*
the FL5C does not constitute *orum shoppin# Negros &las"ers, 8n!., Rodolfo C. Alvare/
and .i!ente Dan vs. Alvin ). Deng, G.R. No. 1871##, ;ebruary ##, #$1#.
Eurisdiction@ FL5C ?t is clear *rom the FL5C 5ules o* Procedure that appeals must be
$eri3ed and certi3ed a#ainst *orum&shoppin# by the parties&in&interest themsel$es "he
purpose o* $eri3cation is to secure an assurance that the alle#ations in the pleadin# are
true and correct and ha$e been 3led in #ood *aith ?n the case at bar, the parties&in&
interest are petitioner Salen#a, as the employee, and respondent Clar2 De$elopment
Corporation as the employer A corporation can only e6ercise its powers and transact its
business throu#h its board o* directors and throu#h its o=cers and a#ents when
authori>ed by a board resolution or its bylaws "he power o* a corporation to sue and be
sued is e6ercised by the board o* directors "he physical acts o* the corporation, li2e the
si#nin# o* documents, can be per*ormed only by natural persons duly authori>ed *or the
purpose by corporate bylaws or by a speci3c act o* the board Absent the re0uisite
board resolution, neither "imbol&5oman nor Atty Mallari, who si#ned the Memorandum
o* Appeal and Eoint A=da$it o* Declaration alle#edly on behal* o* respondent
corporation, may be considered as the BappellantC and BemployerC re*erred to by the
FL5C 5ules o* Procedure As such, the FL5C had no %urisdiction to entertain the
appeal Antonio '. &alenga, et al. vs. Court of Appeals, et al., G.R. No. 17@9@1, ;ebruary
1, #$1#.
Labor@ eDect i* procedural due process not *ollowed but with a $alid cause *or
termination ?t is re0uired that the employer *urnish the employee with two written
notices+ .1/ a written notice ser$ed on the employee speci*yin# the #round or #rounds
*or termination, and #i$in# to said employee reasonable opportunity within which to
e6plain his side@ and .2/ a written notice o* termination ser$ed on the employee
indicatin# that upon due consideration o* all the circumstances, #rounds ha$e been
established to %usti*y his termination "he twin re0uirements o* notice and hearin#
constitute the elements o* due process in cases o* employee4s dismissal "he
re0uirement o* notice is intended to in*orm the employee concerned o* the employer4s
intent to dismiss and the reason *or the proposed dismissal :pon the other hand, the
re0uirement o* hearin# aDords the employee an opportunity to answer his employer4s
char#es a#ainst him and accordin#ly, to de*end himsel* there*rom be*ore dismissal is
eDected 'b$iously, the second written notice, as indispensable as the 3rst, is intended
to ensure the obser$ance o* due process ?n this case, there was only one written notice
which re0uired respondents to e6plain within 3$e .7/ days why they should not be
dismissed *rom the ser$ice Alco$endas was the only one who si#ned the receipt o* the
notice "he others, as claimed by Lyn$il, re*used to si#n "he other employees ar#ue
that no notice was #i$en to them Despite the inconsistencies, what is clear is that no
3nal written notice or notices o* termination were sent to the employees Due to the
*ailure o* Lyn$il to *ollow the procedural re0uirement o* two&notice rule, nominal
dama#es in the amount o* P70,000 were #ranted to Ariola, et al despite their dismissal
*or %ust cause )ynvil ;is"ing Enterprises, 8n!. vs. Andres G. Ariola, et al., G.R. No.
18197@, ;ebruary 1, #$1#.
Labor@ liability o* o=cers i* termination is attended with bad *aith ?n labor cases, the
corporate directors and o=cers are solidarily liable with the corporation *or the
termination o* employment o* employees done with malice or in bad *aith ?ndeed,
moral dama#es are reco$erable when the dismissal o* an employee is attended by bad
*aith or *raud or constitutes an act oppressi$e to labor, or is done in a manner contrary
to #ood morals, #ood customs or public policy "he term Bbad *aithC contemplates a
Bstate o* mind a=rmati$ely operatin# with *urti$e desi#n or with some moti$e o* sel*&
interest or will or *or ulterior purposeC "he Supreme Court a#reed with the rulin# o*
both the FL5C and the Court o* Appeals when they pronounced that there was no
e$idence on record that indicates commission o* bad *aith on the part o* De <or%a, the
#eneral mana#er o* Lyn$il, who was tas2ed with the super$ision o* the employees and
the operation o* the business "here is no proo* that he imposed on Ariola, et al the
Bpor viaGeC pro$ision *or purpose o* eDectin# their summary dismissal )ynvil ;is"ing
Enterprises, 8n!. vs. Andres G. Ariola, et al., G.R. No. 18197@, ;ebruary 1, #$1#.
Labor@ nature o* employment@ security o* tenure ?n the conte6t o* these *acts P .1/
Ariola, et al were doin# tas2s necessary to Lyn$il4s 3shin# business with positions
ran#in# *rom captain o* the $essel to bodegero@ .2/ a*ter the end o* a trip, they will
a#ain be hired *or another trip with new contracts@ and .,/ this arran#ement continued
*or more than ten years U the Court belie$ed that Lyn$il intended to #o around the
security o* tenure o* Ariola, et al as re#ular employees "he Court held that by the
e6press pro$isions o* the second para#raph o* Article 2A0 which co$er casual
employment, Ariola, et al had become re#ular employees o* Lyn$il )ynvil ;is"ing
Enterprises, 8n!. vs. Andres G. Ariola, et al., G.R. No. 18197@, ;ebruary 1, #$1#.
Labor@ procedural and substanti$e due process@ #rounds *or $alid termination@ breach o*
trust Eust cause is re0uired *or a $alid dismissal "he Labor Code pro$ides that an
employer may terminate an employment based on *raud or will*ul breach o* the trust
reposed on the employee Such breach is considered will*ul i* it is done intentionally,
2nowin#ly, and purposely, without %usti3able e6cuse, as distin#uished *rom an act done
carelessly, thou#htlessly, heedlessly or inad$ertently ?t must also be based on
substantial e$idence and not on the employer4s whims or caprices or suspicions
otherwise, the employee would eternally remain at the mercy o* the employer Loss o*
con3dence must not be indiscriminately used as a shield by the employer a#ainst a
claim that the dismissal o* an employee was arbitrary And, in order to constitute a %ust
cause *or dismissal, the act complained o* must be wor2&related and shows that the
employee concerned is un3t to continue wor2in# *or the employer ?n addition, loss o*
con3dence as a %ust cause *or termination o* employment is premised on the *act that
the employee concerned holds a position o* responsibility, trust and con3dence or that
the employee concerned is entrusted with con3dence in delicate matters, such as the
handlin# or care and protection o* the property and assets o* the employer "he betrayal
o* this trust is the essence o* the oDense *or which an employee is penali>ed "he
Supreme Court *ound that breach o* trust is present in this case, when Ariola .the
captain/, Alco$endas .Chie* Mate/, Calinao .Chie* (n#ineer/, Fubla .coo2/, <a[e> .oiler/,
and Sebullen .bodegero/ conspired with one another and stole Bpa*panoC and
BtangigueC 3sh and deli$ered them to another $essel, to the pre%udice o* Lyn$il )ynvil
;is"ing Enterprises, 8n!. vs. Andres G. Ariola, et al.,G.R. No. 18197@, ;ebruary 1, #$1#.
Labor@ public prosecutor4s decision not bindin# on the labor tribunal "he Supreme Court
has held in Ni!olas v. National )abor Relations Co**ission N,2Q Phil AA,, AA6&AAQ
.1;;6/M that a criminal con$iction is not necessary to 3nd %ust cause *or employment
termination 'therwise stated, an employee4s ac0uittal in a criminal case, especially
one that is #rounded on the e6istence o* reasonable doubt, will not preclude a
determination in a labor case that he is #uilty o* acts inimical to the employer4s
interests ?n the re$erse, the 3ndin# o* probable cause is not *ollowed by automatic
adoption o* such 3ndin# by the labor tribunals ?n other words, whiche$er way the public
prosecutor disposes o* a complaint, the 3ndin# does not bind the labor tribunal Lyn$il
contends that the 3lin# o* a criminal case be*ore the '=ce o* the Prosecutor is su=cient
basis *or a $alid termination o* employment based on serious misconduct andRor loss o*
trust and con3dence "he Supreme Court held that Lyn$il cannot ar#ue that since the
'=ce o* the Prosecutor *ound probable cause *or the*t, the Labor Arbiter must *ollow
the 3ndin# as a $alid reason *or the termination o* respondents4 employment "he proo*
re0uired *or purposes that diDer *rom one and the other are li2ewise diDerent )ynvil
;is"ing Enterprises, 8n!. vs. Andres G. Ariola, et al., G.R. No. 18197@, ;ebruary 1, #$1#.
Labor@ re#ular employee@ 36ed&contract a#reement, re0uisites *or $alidity Prior
Supreme Court decisions ha$e laid two conditions *or the $alidity o* a 36ed&contract
a#reement between the employer and employee+ ;irst, the 36ed period o* employment
was 2nowin#ly and $oluntarily a#reed upon by the parties without any *orce, duress, or
improper pressure bein# brou#ht to bear upon the employee and absent any other
circumstances $itiatin# his consent@ or &e!ond, it satis*actorily appears that the
employer and the employee dealt with each other on more or less e0ual terms with no
moral dominance e6ercised by the *ormer or the latter Lyn$il contends that Ariola, et al
were employed under a 36ed&term contract which e6pired at the end o* the $oya#e
Contrarily, Ariola, et al contend that they became re#ular employees by reason o* their
continuous hirin# and per*ormance o* tas2s necessary and desirable in the usual trade
and business o* Lyn$il "e6tually, the pro$ision in the contract between Lyn$il and Ariola,
et al that+ PNA a(o ay su*asangAayon na *agling(od at gu*a3a ng *ga ga3ain sangA
ayon sa pata(arang Ppor viaGeQ na *ag*u*ula sa pagalis sa Navotas papunta sa
pangisdaan at pagbabali( sa pondo"an ng lantsa sa Navotas, etro anilaQ is *or a
36ed period o* employment ?n the conte6t, howe$er, o* the *acts that+ .1/ Ariola, et al
were doin# tas2s necessarily to Lyn$il4s 3shin# business with positions ran#in# *rom
captain o* the $essel to bodegero@ .2/ a*ter the end o* a trip, they will a#ain be hired *or
another trip with new contracts@ and .,/ this arran#ement continued *or more than ten
years, the clear intention is to #o around the security o* tenure o* Ariola, et al as
re#ular employees As such, the Supreme Court *ound that Ariola, et al are re#ular
employees )ynvil ;is"ing Enterprises, 8n!. vs. Andres G. Ariola, et al., G.R. No.
18197@, ;ebruary 1, #$1#.
Labor Code@ ma6imum award o* attorney4s *ees in cases o* reco$ery o* wa#es Article
111 o* the Labor Code pro$ides *or a ma6imum award o* attorney4s *ees in cases o*
reco$ery o* wa#es+
a ?n cases o* unlaw*ul withholdin# o* wa#es, the culpable party may be assessed
attorney4s *ees e0ui$alent to ten percent o* the amount o* wa#es reco$ered
b ?t shall be unlaw*ul *or any person to demand or accept, in any %udicial or
administrati$e proceedin#s *or the reco$ery o* wa#es, attorney4s *ees which e6ceed ten
percent o* the amount o* wa#es reco$ered
Since De Kracia, et al had to secure the ser$ices o* the lawyer to reco$er their unpaid
salaries and protect their interest, attorney4s *ees in the amount o* ten percent .101/ o*
the total claims was imposed &(ippers Cnited 7a!iL!, 8n!. and &(ippers ariti*e
&ervi!es, 8n!. )td. vs. Nat"aniel 0o/a, et al.,G.R. No. 17,,,8. ;ebruary 8, #$1#.
Labor contractin#@ elements "here is labor&only contractin# where+ .a/ the person
supplyin# wor2ers to an employer does not ha$e substantial capital or in$estment in the
*orm o* tools, e0uipment, machineries, wor2 premises, amon# others@ and .b/ the
wor2ers recruited and placed by such person are per*ormin# acti$ities which are directly
related to the principal business o* the employer ?n the present case, the Supreme
Court *ound that both the capitali>ation re0uirement and the power o* control on the
part o* 5e0ui[o are wantin# Kenerally, the presumption is that the contractor is a labor&
only contractor unless such contractor o$ercomes the burden o* pro$in# that it has the
substantial capital, in$estment, tools and the li2e ?n the present case, thou#h Karden o*
Memories is not the contractor, it has the burden o* pro$in# that 5e0ui[o has su=cient
capital or in$estment since it is claimin# the supposed status o* 5e0ui[o as independent
contractor Karden o* Memories, howe$er, *ailed to adduce e$idence purportin# to show
that 5e0ui[o had su=cient capitali>ation Feither did it show that she in$ested in the
*orm o* tools, e0uipment, machineries, wor2 premises and other materials which are
necessary in the completion o* the ser$ice contractGarden of e*ories 7ar( and )ife
7lan, 8n!., et al. vs. N)RC, #nd 0iv., et al., G.R. No. 1+$#78, ;ebruary 8, #$1#.
Mi#rant 9or2ers@ 5A Fo A0-2@ money claims in cases o* un%ust termination Section 10
o* 5epublic Act Fo A0-2 .Mi#rant 9or2ers Act/ pro$ides *or money claims in cases o*
un%ust termination o* employment contracts+
?n case o* termination o* o$erseas employment without %ust, $alid or authori>ed cause
as de3ned by law or contract, the wor2ers shall be entitled to the *ull reimbursement o*
his placement *ee with interest o* twel$e percent .121/ per annum, plus his salaries *or
the une6pired portion o* his employment contract or *or three .,/ months *or e$ery year
o* the une6pired term, whiche$er is less
"he Mi#rant 9or2ers Act pro$ides that salaries *or the une6pired portion o* the
employment contract or three .,/ months *or e$ery year o* the une6pired term,
whiche$er is less, shall be awarded to the o$erseas Hilipino wor2er, in cases o* ille#al
dismissal )owe$er, in 2- March 200;,&errano v. Gallant ariti*e &ervi!es and arlo3
Navigation Co. 8n!. .K5 Fo 16Q61-/, the Court, in an (n <anc Decision, declared
unconstitutional the clause Bor *or three months *or e$ery year o* the une6pired term,
whiche$er is lessC and awarded the entire une6pired portion o* the employment
contract to the o$erseas Hilipino wor2er 'n A March 2010, howe$er, Section Q o*
5epublic Act Fo 10022 .5A 10022/ amended Section 10 o* the Mi#rant 9or2ers Act, and
once a#ain reiterated the pro$ision o* awardin# the une6pired portion o* the employent
contract or three .,/ months *or e$ery year o* the une6pired term, whiche$er is less
Fe$ertheless, since the termination occurred on Eanuary 1;;; be*ore the passa#e o* the
amendatory 5A 10022, the Supreme Court applied 5A A0-2, without touchin# on the
constitutionality o* Section Q o* 5A 10022 "he declaration in March 200; o* the
unconstitutionality o* the clause Bor *or three months *or e$ery year o* the une6pired
term, whiche$er is lessC in 5A A0-2 shall be #i$en retroacti$e eDect to the termination
that occurred in Eanuary 1;;; because an unconstitutional clause in the law con*ers no
ri#hts, imposes no duties and aDords no protection "he unconstitutional pro$ision is
inoperati$e, as i* it was not passed into law at all &(ippers Cnited 7a!iL!, 8n!. and
&(ippers ariti*e &ervi!es, 8n!. )td. vs. Nat"aniel 0o/a, et al.,G.R. No.
17,,,8. ;ebruary 8, #$1#.
FL5C@ contempt powers :nder Article 21A the Labor Code, the FL5C .and the labor
arbiters/ may hold any oDendin# party in contempt, directly or indirectly, and impose
appropriate penalties in accordance with law "he penalty *or direct contempt consists
o* either imprisonment or 3ne, the de#ree or amount depends on whether the contempt
is a#ainst the Commission or the labor arbiter "he Labor Code, howe$er, re0uires the
labor arbiter or the Commission to deal with indirect contempt in the manner prescribed
under 5ule Q1 o* the 5ules o* Court 5ule Q1 o* the 5ules o* Court does not re0uire the
labor arbiter or the FL5C to initiate indirect contempt proceedin#s be*ore the trial
court "his mode is to be obser$ed only when there is no law #rantin# them contempt
powers As is clear under Article 21A.d/ o* the Labor Code, the labor arbiter or the
Commission is empowered or has %urisdiction to hold the oDendin# party or parties in
direct or indirect contempt 5obosa, et al, there*ore, ha$e not improperly brou#ht the
indirect contempt char#es a#ainst the respondents be*ore the FL5C ;ederi!o &.
Robosa, et al. vs. National )abor Relations Co**ission 4;irst 0ivision5, et al., G.R. No.
17+$8,, ;ebruary 8, #$1#.
FL5C@ *actual 3ndin#s ?t is a well&entrenched rule that 3ndin#s o* *acts o* the FL5C,
a=rmin# those o* the Labor Arbiter, are accorded respect and due consideration when
supported by substantial e$idence "he Supreme Court, howe$er, *ound that the
doctrine o* #reat respect and 3nality has no application to the case at bar "he Labor
Arbiter dismissed Arnai>, et al4s complaints on mere technicality "he FL5C, upon
appeal, then came up with three di$er#ent rulin#s At 3rst, it remanded the case to the
Labor Arbiter )owe$er, in a subse0uent resolution, it decided to resol$e the case on
the merits by rulin# that Arnai>, et al were constructi$ely dismissed <ut later on, it
a#ain re$ersed itsel* in its third and 3nal resolution o* the case and ruled in *a$or o*
Eulie4s ba2eshop "here*ore, contrary to 5eyes4s claim, the FL5C did not, on any
occasion, a=rm any *actual 3ndin#s o* the Labor Arbiter "he Court o* Appeals is thus
correct in re$iewin# the entire records o* the case to determine which 3ndin#s o* the
FL5C is sound and in accordance with law <esides, the Court o* Appeals may still
resol$e *actual issues by e6press mandate o* the law despite the respect #i$en to
administrati$e 3ndin#s o* *act ?ulieMs 'a(es"op and1or Edgar Reyes vs. 6enry Arnai/, et
al., G.R. No. 17-88#, ;ebruary 1,, #$1#.
Probationary employee@ $alid cause *or dismissal but without procedural due process@
employee entitled to nominal dama#es Section 2, 5ule ?, <oo2 G? o* the Labor Code4s
?mplementin# 5ules and 5e#ulations pro$ides+ B8f t"e ter*ination is broug"t about by
t"e !o*pletion of a !ontra!t or p"ase t"ereof, or by failure of an e*ployee to *eet t"e
standards of t"e e*ployer in t"e !ase of probationary e*ploy*ent, it s"all be su:!ient
t"at a 3ritten noti!e is served t"e e*ployee 3it"in a reasonable ti*e fro* t"e e>e!tive
date of ter*ination.C Dalan#in was hired by Canadian 'pportunities as ?mmi#ration and
Le#al Mana#er, sub%ect to a probationary period o* si6 months 'ne month a*ter hirin#
Dalan#in, the company terminated his employment, declarin# him Bun3tC and
Bun0uali3edC to continue as ?mmi#ration and Le#al Mana#er, *or reasons which included
obstinacy and utter disre#ard o* company policies Propensity to ta2e prolon#ed and
e6tended lunch brea2s, shows no interest in *amiliari>in# onesel* with the policies and
ob%ecti$es, lac2 o* concern *or the company4s interest despite ha$in# %ust been
employed in the company .Declined to attend company sponsored acti$ities, seminars
intended to *amiliari>e company employees with Mana#ement ob%ecti$es and
enhancement o* company interest and ob%ecti$es/, lac2 o* enthusiasm toward wor2, and
lac2 o* interest in *osterin# relationship with his co&employees "he company contends
that it complied with the rule on procedural due process when it as2ed Dalan#in,
throu#h a Memorandum, to e6plain why he could not attend the seminar 9hen he
*ailed to submit his e6planation, the company ser$ed him a notice the *ollowin# day
terminatin# his employment Accordin# to the Supreme Court, the notice to Dalan#in
was not ser$ed within a reasonable time *rom the eDecti$e date o* his termination as
re0uired by the rules since he was dismissed on the $ery day the notice was #i$en to
him )owe$er, because o* the e6istence o* a $alid cause *or termination, the Supreme
Court did not in$alidate his dismissal but penali>ed the company *or its non&compliance
with the notice re0uirement, and ordered the company to pay an indemnity, in the *orm
o* nominal dama#es amountin# to P10,000 Canadian 9pportunities Cnli*ited, 8n!.
vs. 'art J. 0alangin, ?r., G.R. No. 17###-, ;ebruary +, #$1#.
Probationary employee@ $alid dismissal e$en be*ore 6 months "he essence o* a
probationary period o* employment *undamentally lies in the purpose or ob%ecti$e o*
both the employer and the employee durin# the period 9hile the employer obser$es
the 3tness, propriety and e=ciency o* a probationer to ascertain whether he is 0uali3ed
*or permanent employment, the latter see2s to pro$e to the *ormer that he has the
0uali3cations to meet the reasonable standards *or permanent employment "he Btrial
periodC or the len#th o* time the probationary employee remains on probation depends
on the parties4 a#reement, but it shall not e6ceed si6 .6/ months under Article 2A1 o*
the Labor Code "he Supreme Court *ound substantial e$idence indicatin# that the
company was %usti3ed in terminatin# Dalan#in4s probationary employment Dalan#in
admitted in compulsory arbitration that the pro6imate cause *or his dismissal was his
re*usal to attend the company4s BGalues Hormation SeminarC scheduled *or 'ctober 2Q,
2001, a Saturday )e re*used to attend the seminar a*ter he learned that it had no
relation to his duties, as he claimed, and that he had to lea$e at 2+00 pm because he
wanted to be with his *amily in the pro$ince 9hen the Chie* 'perations '=cer,
insisted that he attend the seminar to encoura#e his co&employees to attend, he stood
pat on not attendin#, ar#uin# that mar2ed diDerences e6ist between their positions and
duties, and insinuatin# that he did not want to %oin the other employees )e also
0uestioned the scheduled 2+00 pm seminars on Saturdays as they were not supposed
to be doin# a company acti$ity beyond 2+00 pm )e considers 2+00 pm as the close o*
wor2in# hours on Saturdays@ thus, holdin# them beyond 2+00 pm would be in $iolation
o* the law "his incident re$eals Dalan#in4s lac2 o* interest in establishin# a #ood
wor2in# relationship with his co&employees, especially the ran2 and 3le@ he did not want
to %oin them because o* his $iew that the seminar was not rele$ant to his position and
duties ?t also betrays his arro#ant and condescendin# attitude towards his co&
employees, and a lac2 o* support *or the company ob%ecti$e Dalan#in also e6hibited
ne#ati$e wor2in# habits, particularly with respect to the one hour lunch brea2 policy o*
the company and the obser$ance o* the company4s wor2in# hours Dalan#in would ta2e
prolon#ed lunch brea2s or would #o out o* the o=ce U without lea$e o* the company U
and call the personnel mana#er later only to say that he would be unable to return to
the o=ce because o* some personal matters he needs to attend to Canadian
9pportunities Cnli*ited, 8n!. vs. 'art J. 0alangin, ?r., G.R. No. 17###-, ;ebruary +,
#$1#.
Procedural rules@ liberal application 'rdinarily, rules o* procedure are strictly en*orced
by courts in order to impart stability in the le#al system )owe$er, in not a *ew
instances, the Supreme Court has rela6ed the ri#id application o* the rules o* procedure
to aDord the parties the opportunity to *ully $entilate their cases on the merits "his is
in line with the time honored principle that cases should be decided only a*ter #i$in# all
the parties the chance to ar#ue their causes and de*enses ?n that way, the ends o*
%ustice would be better ser$ed Hor indeed, the #eneral ob%ecti$e o* procedure is to
*acilitate the application o* %ustice to the ri$al claims o* contendin# parties, bearin#
always in mind that procedure is not to hinder but to promote the administration o*
%ustice ?n 'n# Lim Sin#, Er $ H(< Leasin# and Hinance Corporation .K5 Fo 16A117,
Eune A, 200Q/, the Supreme Court ruled+
Courts ha$e the prero#ati$e to rela6 procedural rules o* e$en the most mandatory
character, mind*ul o* the duty to reconcile both the need to speedily put an end to
liti#ation and the parties4 ri#ht to due process ?n numerous cases, this Court has
allowed liberal construction o* the rules when to do so would ser$e the demands o*
substantial %ustice and e0uity 6 6 6
?ndeed the pre$ailin# trend is to accord party liti#ants the amplest opportunity *or the
proper and %ust determination o* their causes, *ree *rom the constraints o* needless
technicalities ?n this case, besides the *act that a denial o* the recourse to the Court o*
Appeals would ser$e more to perpetuate an in%ustice and $iolation o* "en#4s ri#hts under
our labor laws, the Supreme Court *ound that as correctly held by the Court o* Appeals,
no intent to delay the administration o* %ustice could be attributed to "en# "he Court o*
Appeals there*ore did not commit re$ersible error in e6cusin# "en#4s one&day delay in
3lin# his motion *or reconsideration and in #i$in# due course to his petition *or
certiorari Negros &las"ers, 8n!., Rodolfo C. Alvare/ and .i!ente Dan vs. Alvin ).
Deng, G.R. No. 1871##, ;ebruary ##, #$1#.
5einstatement@ bac2wa#es (mployees who are ille#ally dismissed are entitled to *ull
bac2wa#es, inclusi$e o* allowances and other bene3ts or their monetary e0ui$alent,
computed *rom the time their actual compensation was withheld *rom them up to the
time o* their actual reinstatement <ut i* reinstatement is no lon#er possible, the
bac2wa#es shall be computed *rom the time o* their ille#al termination up to the 3nality
o* the decision "hus, when there is an order o* reinstatement, the computation o*
bac2wa#es shall be rec2oned *rom the time o* ille#al dismissal up to the time that the
employee is actually reinstated to his *ormer position Pursuant to the order o*
reinstatement rendered by the Labor Arbiter, the <an2 o* Lubao sent Manabat a letter
re0uirin# him to report bac2 to wor2 on May -, 200Q Fotwithstandin# the said letter,
Manabat opted not to report *or wor2 "hus, it is but *air that the bac2wa#es to be
awarded to Manabat should be computed *rom the time that he was ille#ally dismissed
until the time when he was re0uired to report *or wor2, i.e. *rom September 1, 2007
until May -, 200Q 'an( of )ubao, 8n!. vs. Ro**el ?. anabat, et al., G.R. No.
1887##, ;ebruary 1, #$1#.
5einstatement@ doctrine o* strained relations@ when applicable :nder the law and
pre$ailin# %urisprudence, an ille#ally dismissed employee is entitled to reinstatement as
a matter o* ri#ht )owe$er, i* reinstatement would only e6acerbate the tension and
strained relations between the parties, or where the relationship between the employer
and the employee has been unduly strained by reason o* their irreconcilable
diDerences, parti!ularly 3"ere t"e illegally dis*issed e*ployee "eld a *anagerial or
(ey position in t"e !o*pany, it would be more prudent to order payment o* separation
pay instead o* reinstatement :nder the do!trine of strained relations, the payment o*
separation pay is considered an acceptable alternati$e to reinstatement when the latter
option is no lon#er desirable or $iable 'n one hand, such payment liberates the
employee *rom what could be a hi#hly oppressi$e wor2 en$ironment 'n the other hand,
it releases the employer *rom the #rossly unpalatable obli#ation o* maintainin# in its
employ a wor2er it could no lon#er trust ?n such cases, it should be pro$ed that the
employee concerned occupies a position where he en%oys the trust and con3dence o*
his employer@ and that it is li2ely that i* reinstated, an atmosphere o* antipathy and
anta#onism may be #enerated as to ad$ersely aDect the e=ciency and producti$ity o*
the employee concerned ?n the present case, the Supreme Court *ound that the
relations between the parties had been already strained thereby %usti*yin# the #rant o*
separation pay in lieu o* reinstatement in *a$or o* Manabat Manabat4s reinstatement to
his *ormer position would only ser$e to intensi*y the atmosphere o* antipathy and
anta#onism between the parties :ndoubtedly, <an2 o* Lubao4s 3lin# o* $arious criminal
complaints a#ainst Manabat *or 0uali3ed the*t and the subse0uent 3lin# by the latter o*
the complaint *or ille#al dismissal a#ainst the *ormer, ta2en to#ether with the pendency
o* the instant case *or more than si6 years, had caused strained relations between the
parties Considerin# that Manabat4s *ormer position as ban2 encoder in$ol$es the
handlin# o* accounts o* the depositors o* the <an2 o* Lubao, it would not be e0uitable
on the part o* the <an2 o* Lubao to be ordered to maintain the *ormer in its employ
since it may only inspire $indicti$eness on the part o* Manabat Also, the re*usal o*
Manabat to return to wor2 is in itsel* an indication o* the e6istence o* strained relations
between him and the petitioner'an( of )ubao, 8n!. vs. Ro**el ?. anabat, et al., G.R.
No. 1887##, ;ebruary 1, #$1#.
Sea*arers@ employment contract@ per*ection sta#e $s commencement sta#e An
employment contract, li2e any other contract, is per*ected at the moment .1/ the
parties come to a#ree upon its terms@ and .2/ concur in the essential elements thereo*+
.a/ consent o* the contractin# parties, .b/ ob%ect certain which is the sub%ect matter o*
the contract, and .c/ cause o* the obli#ation "he ob%ect o* the contract was the
rendition o* ser$ice by Hantonial on board the $essel *or which ser$ice he would be paid
the salary a#reed upon ?n this case, the employment contract was per*ected on Eanuary
17, 2000 when it was si#ned by the parties who entered into the contract in behal* o*
their principal )owe$er, the employment relationship ne$er commenced since Hantonial
was not allowed to lea$e on Eanuary 1Q, 2000 and #o on board the $essel MRG A:T in
Kermany on the #round that he was not yet declared 3t to wor2 on the day o* his
scheduled departure <ut, e$en i* no employer&employee relationship commenced, there
was, contemporaneous with the per*ection o* the employment contract, the birth o*
certain ri#hts and obli#ations, the breach o* which may #i$e rise to a cause o* action
a#ainst the errin# party 'rig"t ariti*e Corporation 4'C5 1 0esiree 7. Denorio
vs. Ri!ardo '. ;antonial, G.R. No. 1+,9-,, ;ebruary 8, #$1#.
March 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on April 20, 2012 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines & Law
! "a##ed Department o* Labor and (mployment, dismissal, ille#al stri2e, loss o* trust and
con3dence, probationary employment, pro%ect employee !
)ere are select March 2012 rulin#s o* the Supreme Court o* the Philippines on labor law
and procedure
Dismissal@ constructi$e dismissal Constructi$e dismissal e6ists where there is cessation
o* wor2 because continued employment is rendered impossible, unreasonable or
unli2ely, as an oDer in$ol$in# a demotion in ran2 and a diminution in pay Constructi$e
dismissal is a dismissal in dis#uise or an act amountin# to dismissal but made to appear
as i* it were not ?n constructi$e dismissal cases, the employer is, concededly, char#ed
with the burden o* pro$in# that its conduct and action or the trans*er o* an employee
are *or $alid and le#itimate #rounds such as #enuine business necessity ?n the instant
case, the o$ert act relied upon by petitioner is not only a doubt*ul occurrence but is, i* it
did transpire, e$en consistent with the dismissal *rom employment posited by the
respondent "he *actual appraisal o* the Court o* Appeals is correct Petitioner was
displeased a*ter incurrin# e6penses *or respondent4s medical chec2&up and, it is credible
that, therea*ter, respondent was pre$ented entry into the wor2 premises "his is
tantamount to constructi$e dismissal "he Supreme Court a#reed with the Court o*
Appeals that the incredibility o* petitioner4s submission about abandonment o* wor2
renders credible the position o* respondent that she was pre$ented *rom enterin# the
property "his was e$en corroborated by the a=da$its o* Siarot and Mendo>a which
were made part o* the records o* this case a. elissa A. Galang vs. ?ulia
alasu=ui, G.R. No. 17@17-. ar!" 7, #$1#.
Dismissal@ loss o* trust and con3dence "he rule is lon# and well settled that, in ille#al
dismissal cases li2e the one at bench, the burden o* proo* is upon the employer to show
that the employee4s termination *rom ser$ice is *or a %ust and $alid cause "he
employer4s case succeeds or *ails on the stren#th o* its e$idence and not on the
wea2ness o* that adduced by the employee, in 2eepin# with the principle that the scales
o* %ustice should be tilted in *a$or o* the latter in case o* doubt in the e$idence
presented by them '*ten described as more than a mere scintilla, the 0uantum o* proo*
is substantial e$idence which is understood as such rele$ant e$idence as a reasonable
mind mi#ht accept as ade0uate to support a conclusion, e$en i* other e0ually
reasonable minds mi#ht concei$ably opine otherwise Hailure o* the employer to
dischar#e the *ore#oin# onus would mean that the dismissal is not %usti3ed and
there*ore ille#al
?n the case at bar, the Supreme Court a#reed with the petitioners that mere substantial
e$idence and not proo* beyond reasonable doubt is re0uired to %usti*y the dismissal *rom
ser$ice o* an employee char#ed with the*t o* company property )owe$er, the Court
*ound no error in the CA4s 3ndin#s that the petitioners had not ade0uately pro$en by
substantial e$idence that Arlene and Eoseph indeed participated or cooperated in the
commission o* the*t relati$e to the si6 missin# intensi*yin# screens so as to %usti*y the
latter4s termination *rom employment on the #round o* loss o* trust and
con3dence 'lue &(y Drading Co*pany, 8n!. et al. vs. Arlene 7. 'las and ?osep" 0.
&ilvano,G.R. No. 19$,,9. ar!" 7, #$1#.
Dismissal@ probationary employees Kala insists that he cannot be sanctioned *or the
the*t o* company property on May 27, 2006 )e maintains that he had no direct
participation in the incident and that he was not aware that an ille#al acti$ity was #oin#
on as he was at some distance *rom the truc2s when the alle#ed the*t was bein#
committed )e adds that he did not call the attention o* the *oremen because he was a
mere lineman and he was *ocused on what he was doin# at the time )e ar#ues that in
any e$ent, his mere presence in the area was not enou#h to ma2e him a conspirator in
the commission o* the pil*era#e
Kala misses the point )e *or#ets that as a probationary employee, his o$erall %ob
per*ormance and his beha$ior were bein# monitored and measured in accordance with
the standards .i.e., the terms and conditions/ laid down in his probationary employment
a#reement :nder para#raph A o* the a#reement, he was sub%ect to strict compliance
with, and non&$iolation o* the Company Code on (mployee Discipline, Sa*ety Code, rules
and re#ulations and e6istin# policies Par 10 re0uired him to obser$e at all times the
hi#hest de#ree o* transparency, selJessness and inte#rity in the per*ormance o* his
duties and responsibilities, *ree *rom any *orm o* conJict or contradictin# with his own
personal interest anila Ele!tri! Co*pany vs. ?an Carlo Gala, G.R. No. 191#88. ar!"
7, #$1#.
Dismissal@ relie* o* ille#ally dismissed employee An ille#ally dismissed employee is
entitled to two relie*s+ bac2 wa#es and reinstatement "he two relie*s pro$ided are
separate and distinct ?n instances where reinstatement is no lon#er *easible because o*
strained relations between the employee and the employer, separation pay is #ranted
?n eDect, an ille#ally dismissed employee is entitled to either reinstatement i* such is
$iable, or separation pay i* reinstatement is no lon#er $iable, and to bac2 wa#es "he
normal conse0uences o* respondent4s ille#al dismissal, then, are reinstatement without
loss o* seniority ri#hts, and payment o* bac2 wa#es computed *rom the time
compensation was withheld *rom him up to the date o* actual reinstatement 9here
reinstatement is no lon#er $iable as an option, separation pay e0ui$alent to one month
salary *or e$ery year o* ser$ice should be awarded as an alternati$e "he payment o*
separation pay is in addition to payment o* bac2 wa#es
Petitioners 0uestion the CA 5esolution dated 'ctober 2-, 200A, ar#uin# that it modi3ed
its March ,1, 200A Decision which has already attained 3nality inso*ar as respondent is
concerned Such contention is misplaced "he CA merely clari3ed the period o* payment
o* bac2 wa#es and separation pay up to the 3nality o* its decision .March ,1, 200A/
modi*yin# the Labor Arbiter4s decision ?n $iew o* the modi3cation o* monetary awards
in the Labor Arbiter4s decision, the time *rame *or the payment o* bac2 wa#es and
separation pay is accordin#ly modi3ed to the 3nality o* the CA decision Nor(is
0istribution, 8n!., et al. vs. 0elLn &. 0es!allar, G.R. No. 18,#,,. ar!" 1@, #$1#
(mployees@ pro%ect $s re#ular employees "he principal test *or determinin# whether
particular employees are properly characteri>ed as Bpro%ect employeesC as
distin#uished *rom Bre#ular employeesC is whether or not the pro%ect employees were
assi#ned to carry out a Bspeci3c pro%ect or underta2in#,C the duration and scope o*
which were speci3ed at the time the employees were en#a#ed *or that pro%ect
?n a number o* cases, the Court has held that the len#th o* ser$ice or the re&hirin# o*
construction wor2ers on a pro%ect&to&pro%ect basis does not con*er upon them re#ular
employment status, since their re&hirin# is only a natural conse0uence o* the *act that
e6perienced construction wor2ers are pre*erred (mployees who are hired *or carryin#
out a separate %ob, distinct *rom the other underta2in#s o* the company, the scope and
duration o* which has been determined and made 2nown to the employees at the time
o* the employment are properly treated as pro%ect employees and their ser$ices may be
law*ully terminated upon the completion o* a pro%ect Should the terms o* their
employment *ail to comply with this standard, they cannot be considered pro%ect
employees
Applyin# the abo$e dis0uisition, the Court a#reed with the 3ndin#s o* the CA that
petitioners were pro%ect employees ?t is not disputed that petitioners were hired *or the
construction o* the Cordo$a 5ee* Gilla#e 5esort in Cordo$a, Cebu <y the nature o* the
contract alone, it is clear that petitioners4 employment was to carry out a speci3c
pro%ect Bilfredo Aro, Ronilo Dirol, et al. vs. N)RC, ;ourt" 0ivision, et al., G.R. No.
17@79#. ar!" 7, #$1#.
Eurisdiction@ power o* the D'L( to determine the e6istence o* employer&employee
relationship ?* a complaint is 3led with the D'L(, and it is accompanied by a claim *or
reinstatement, the %urisdiction is properly with the Labor Arbiter, under Art 21Q.,/ o*
the Labor Code, which pro$ides that the Labor Arbiter has ori#inal and e6clusi$e
%urisdiction o$er those cases in$ol$in# wa#es, rates o* pay, hours o* wor2, and other
terms and conditions o* employment, i* accompanied by a claim *or reinstatement
?n the present case, the 3ndin# o* the D'L( 5e#ional Director that there was an
employer&employee relationship has been sub%ected to re$iew by the Supreme Court,
with the 3ndin# bein# that there was no employer&employee relationship between
petitioner and pri$ate respondent, based on the e$idence presented "he D'L( had no
%urisdiction o$er the case, as there was no employer&employee relationship present
"hus, the dismissal o* the complaint a#ainst petitioner is proper 7eopleMs 'road!asting
&ervi!e 4'o*bo Rado 7"ils., 8n!.5 vs. D"e &e!retary of t"e 0ept. of )abor & E*ploy*ent,
et al. G.R. No. 179+,#. ar!" +, #$1#.
Mana#ement prero#ati$e@ resi#nation o* employees runnin# *or public o=ce "he
Supreme Court has consistently held that so lon# as a company4s mana#ement
prero#ati$es are e6ercised in #ood *aith *or the ad$ancement o* the employer4s interest
and not *or the purpose o* de*eatin# or circum$entin# the ri#hts o* the employees under
special laws or under $alid a#reements, the Court will uphold them ?n the instant case,
A<S&C<F $alidly %usti3ed the implementation o* Policy Fo )5&(5&016 ?t is well within its
ri#hts to ensure that it maintains its ob%ecti$ity and credibility and *reein# itsel* *rom
any appearance o* impartiality so that the con3dence o* the $iewin# and listenin# public
in it will not be in any way eroded ($en as the law is solicitous o* the wel*are o* the
employees, it must also protect the ri#ht o* an employer to e6ercise what are clearly
mana#ement prero#ati$es "he *ree will o* mana#ement to conduct its own business
aDairs to achie$e its purpose cannot be denied Ernesto F*bong vs. A'&AC'N
'road!asting Corporation, .eranda &y & 0ante )u/on, G.R. No. 18@88,. ar!" 7, #$1#.
Separation pay@ payment to those who participated in ille#al stri2es Separation pay
may be #i$en as a *orm o* 3nancial assistance when a wor2er is dismissed in cases such
as the installation o* labor&sa$in# de$ices, redundancy, retrenchment to pre$ent losses,
closin# or cessation o* operation o* the establishment, or in case the employee was
*ound to ha$e been suDerin# *rom a disease such that his continued employment is
prohibited by law ?t is a statutory ri#ht de3ned as the amount that an employee
recei$es at the time o* his se$erance *rom the ser$ice and is desi#ned to pro$ide the
employee with the wherewithal durin# the period that he is loo2in# *or another
employment ?t is oriented towards the immediate *uture, the transitional period the
dismissed employee must under#o be*ore locatin# a replacement %ob As a #eneral rule,
when %ust causes *or terminatin# the ser$ices o* an employee e6ist, the employee is not
entitled to separation pay because lawbrea2ers should not bene3t *rom their ille#al acts
"he rule, howe$er, is sub%ect to e6ceptions
)ere, not only did the Court declare the stri2e ille#al, rather, it also *ound the :nion
o=cers to ha$e 2nowin#ly participated in the ille#al stri2e 9orse, the :nion members
committed prohibited acts durin# the stri2e "hus, as the Court has concluded in other
cases it has pre$iously decided, such :nion o=cers are not entitled to the award o*
separation pay in the *orm o* 3nancial assistance C. Al!antara & &ons, 8n!. vs. Court of
Appeals, et al.1Nag(a"iusang a*u*uo sa AlsonsA&7;), et al. vs. C. Al!antara & &ons,
8n!., et al.1Nag(a"iusang a*u*uo sa AlsonsA&7;), et al. vs. C. Al!antara & &ons, 8n!.,
et al. G.R. No. 1,,1$91G.R. No. 1,,1-,1G.R. No. 179##$. ar!" 1@, #$1#.
April 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on May 10, 2012 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines & Law
! "a##ed dismissal, due process, employer&employee relationship, probationary employment, pro%ect
employee, retrenchment !
)ere are select April 2012 rulin#s o* the Supreme Court o* the Philippines on labor law
and procedure+
Dismissal@ due process. 9hen the Labor Code spea2s o* procedural due process, the
re*erence is usually to the two .2/&written notice rule en$isa#ed in Section 2 .???/, 5ule
OO???, <oo2 G o* the 'mnibus 5ules ?mplementin# the Labor Code MKK Marine Ser$ices,
?nc $ FL5C tersely described the mechanics o* what may be considered a two&part due
process re0uirement which includes the two&notice rule, B6 6 6 one, o* the intention to
dismiss, indicatin# therein his acts or omissions complained a#ainst, and two, notice o*
the decision to dismiss@ and an opportunity to answer and rebut the char#es a#ainst
him, in between such noticesC
)ere, the 3rst and second notice re0uirements ha$e not been properly obser$ed "he
ad$erted memo would ha$e had constituted the Bchar#e sheet,C su=cient to answer *or
the 3rst notice re0uirement, but *or the *act that there is no proo* such letter had been
sent to and recei$ed by him Feither was there compliance with the imperati$es o* a
hearin# or con*erence Su=ce it to point out that the record is de$oid o* any showin# o*
a hearin# or con*erence ha$in# been conducted And the written notice o* termination
itsel* did not indicate all the circumstances in$ol$in# the char#e to %usti*y se$erance o*
employment Hor $iolatin# petitioner4s ri#ht to due process, the Supreme Court ordered
the payment to petitioner o* the amount o* P,0,000 as nominal dama#es Ar*ando
Ailing vs. ?ose '. ;eli!iano, anuel ;. &an ateo 888, et al., G.R. No. 18,8#9. April #,,
#$1#.
Dismissal@ %ust cause ?n 3ne, an employee4s *ailure to meet sales or wor2 0uotas *alls
under the concept o* #ross ine=ciency, which in turn is analo#ous to #ross ne#lect o*
duty that is a %ust cause *or dismissal under Article 2A2 o* the Code )owe$er, in order
*or the 0uota imposed to be considered a $alid producti$ity standard and thereby
$alidate a dismissal, mana#ement4s prero#ati$e o* 36in# the 0uota must be e6ercised in
#ood *aith *or the ad$ancement o* its interest "he duty to pro$e #ood *aith, howe$er,
rests with 999(C as part o* its burden to show that the dismissal was *or a %ust cause
999(C must show that such 0uota was imposed in #ood *aith "his 999(C *ailed to
do, perceptibly because it could not "he *act o* the matter is that the alle#ed
imposition o* the 0uota was a desperate attempt to lend a semblance o* $alidity to
Alilin#4s ille#al dismissal Ar*ando Ailing vs. ?ose '. ;eli!iano, anuel ;. &an ateo 888, et
al., G.R. No. 18,8#9. April #,, #$1#.
Dismissal@ retrenchment 5etrenchment is a $alid e6ercise o* mana#ement prero#ati$e
sub%ect to the strict re0uirements set by %urisprudence, to wit+
.1/ "hat the retrenchment is reasonably necessary and li2ely to pre$ent business losses
which, i* already incurred, are not merely de *ini*is, but substantial, serious, actual
and real, or i* only e6pected, are reasonably imminent as percei$ed ob%ecti$ely and in
#ood *aith by the employer@
.2/ "hat the employer ser$ed written notice both to the employees and to the
Department o* Labor and (mployment at least one month prior to the intended date o*
retrenchment@
.,/ "hat the employer pays the retrenched employees separation pay e0ui$alent to one
month pay or at least \ month pay *or e$ery year o* ser$ice, whiche$er is hi#her@
.-/ "hat the employer e6ercises its prero#ati$e to retrench employees in #ood *aith *or
the ad$ancement o* its interest and not to de*eat or circum$ent the employees4 ri#ht to
security o* tenure@ and
.7/ "hat the employer used *air and reasonable criteria in ascertainin# who would be
dismissed and who would be retained amon# the employees, such as status, 6 6 6
e=ciency, seniority, physical 3tness, a#e, and 3nancial hardship *or certain wor2ers
As aptly *ound by the FL5C and %ustly sustained by the CA, Petrocon e6ercised its
prero#ati$e to retrench its employees in #ood *aith and the considerable reduction o*
wor2 allotments o* Petrocon by Saudi Aramco was su=cient basis *or Petrocon to reduce
the number o* its personnel As *or the notice re0uirement, howe$er, contrary to
petitioner4s contention, proper notice to the D'L( within ,0 days prior to the intended
date o* retrenchment is necessary and must be complied with despite the *act that
respondent is an o$erseas Hilipino wor2er ?n the present case, althou#h respondent was
duly noti3ed o* his termination by Petrocon ,0 days be*ore its eDecti$ity, no alle#ation
or proo* was ad$anced by petitioner to establish that Petrocon e$er sent a notice to the
D'L( ,0 days be*ore the respondent was terminated "hus, this re0uirement o* the law
was not complied with Despite the *act that respondent was employed by Petrocon as
an 'H9 in Saudi Arabia, still both he and his employer are sub%ect to the pro$isions o*
the Labor Code when applicable "he basic policy in this %urisdiction is that all Hilipino
wor2ers, whether employed locally or o$erseas, en%oy the protecti$e mantle o*
Philippine labor and social le#islations .citin# 7"ilippine National 'an( v. Cabansag, K5
Fo 17Q010, Eune 21, 2007, -60 SC5A 71-, 71A and Royal Cro3n 8nternationale v.
N)RC, K5 Fo QA0A7, 'ctober 16, 1;A;, 1QA SC5A 76;/ 8nternational anage*ent
&ervi!es1arilyn C. 7as!ual vs. Roel 7. )ogarta, G.R. No. 1+-+,7, April 18, #$1#.
(mployee@ probationary employee "he a*ore0uoted Section 6 o* the ?mplementin#
5ules o* <oo2 G?, 5ule G???&A o* the Code speci3cally re0uires the employer to in*orm the
probationary employee o* such reasonable standards at the time o* his en#a#ement,
not at any time later@ else, the latter shall be considered a re#ular employee "hus,
pursuant to the e6plicit pro$ision o* Article 2A1 o* the Labor Code, Section 6.d/ o* the
?mplementin# 5ules o* <oo2 G?, 5ule G???&A o* the Labor Code and settled %urisprudence,
petitioner Alilin# is deemed a re#ular employee as o* Eune 11, 200-, the date o* his
employment contract
"he letter&oDer to Alilin# states that the re#ulari>ation standards or the per*ormance
norms to be used are still to be a#reed upon by him and his super$isor Moreo$er, Alilin#
was assi#ned to KO truc2in# sales, an acti$ity entirely diDerent to the Sea*rei#ht Sales
*or which he was ori#inally hired and trained *or ?n the present case, there was no proo*
that Alilin# was in*ormed o* the standards *or his continued employment, such as the
sales 0uota, at the time o* his en#a#ement Ar*ando Ailing vs. ?ose '. ;eli!iano, anuel
;. &an ateo 888, et al., G.R. No. 18,8#9. April #,, #$1#.
(mployee@ separation pac2a#e Article 2A, o* the Labor Code pro$ides only the re0uired
minimum amount o* separation pay, which employees dismissed *or any o* the
authori>ed causes are entitled to recei$e (mployers, there*ore, ha$e the ri#ht to create
plans, pro$idin# *or separation pay in an amount o$er and abo$e what is imposed by
Article 2A, "here is nothin# therein that prohibits employers and employees *rom
contractin# on the terms o* employment, or *rom enterin# into a#reements on employee
bene3ts, so lon# as they do not $iolate the Labor Code or any other law, and are not
contrary to morals, #ood customs, public order, or public policy
Conse0uently, petitioners are not allowed to recei$e separation pay *rom both the Labor
Code, on the one hand, and the Few Kratuity Plan and the SSP, on the other, they
would recei$e double compensation *or the same cause .ie, separation *rom the
ser$ice due to redundancy/ a. Corina C. ?iao, et al. vs. Global 'usiness 'an(, 8n!., et
al., G.R. No. 18#--1, April 18, #$1#.
(mployer&employee relationship ?n determinin# the presence or absence o* an
employer&employee relationship, the Court has consistently loo2ed *or the *ollowin#
incidents, to wit+ .a/ the selection and en#a#ement o* the employee@ .b/ the payment
o* wa#es@ .c/ the power o* dismissal@ and .d/ the employer4s power to control the
employee on the means and methods by which the wor2 is accomplished "he last
element, the so&called control test, is the most important element
?t can be deduced *rom the March 1;;6 a=da$it o* petitioner that respondents
challen#ed his authority to deli$er some 17A chec2s to SHC Considerin# that petitioner
contested respondents4 challen#e by pointin# to the e6istin# arran#ements between
<CC and SHC, it should be clear that respondents did not e6ercise the power o* control
o$er petitioner, because he thereby acted *or the bene3t and in the interest o* SHC more
than o* <CC C"arlie ?ao vs. 'CC 7rodu!ts &ales, 8n!. and Derran!e Dy, G.R. No. 1+-7$$,
April 18, #$1#.
Pro%ect employee@ con$ersion into re#ular employee ?n all the ,A pro%ects where DMC?
en#a#ed Eamin4s ser$ices, the tas2s he per*ormed as a carpenter were indisputably
necessary and desirable in DMC?4s construction business )e mi#ht not ha$e been a
member o* a wor2 pool since DMC? insisted that it does not maintain a wor2 pool, but
his continuous rehirin# in ,A pro%ects o$er a period o* ,1 years and the nature o* his
wor2 unmista2ably made him a re#ular employee ?n Mara#uinot, Er $ FL5C, ,-A Phil
7A0 .1;;A/, the Court held that once a pro%ect or wor2 pool employee has been+ .1/
continuously, as opposed to intermittently, rehired by the same employer *or the same
tas2s or nature o* tas2s@ and .2/ these tas2s are $ital, necessary and indispensable to
the usual business or trade o* the employer, then the employee must be deemed a
re#ular employee
Surely, len#th o* time is not the controllin# test *or pro%ect employment but it is $ital in
determinin# i* the employee was hired *or a speci3c underta2in# or i* it is tas2ed to
per*orm *unctions $ital, necessary and indispensable to the usual business or trade o*
the employer )ere, Lpri$ateM respondent had been a pro%ect employee se$eral times
o$er "he nature o* his employment ceased to be pro%ect&based when he was repeatedly
re&hired due to the demands o* petitioner4s business0.. ConsunGi, 8n!. and1or 0avid .
ConsunGi vs. Estelito, G.R. No. 19#,1@, April 18, #$1#.
Dismissal@ will*ul disobedience Hor will*ul disobedience to be a $alid cause *or dismissal,
these two elements must concur+ .1/ the employee4s assailed conduct must ha$e been
will*ul, that is, characteri>ed by a wron#*ul and per$erse attitude@ and .2/ the order
$iolated must ha$e been reasonable, law*ul, made 2nown to the employee, and must
pertain to the duties which he had been en#a#ed to dischar#e
"he petitioner4s arbitrary de3ance to Kraphics, ?nc4s order *or him to render o$ertime
wor2 constitutes will*ul disobedience <ecause o* his re*usal to render o$ertime wor2,
the company *ailed to meet its printin# deadlines, resultin# in losses to the company
"he Supreme Court too2 into account the *act that petitioner was inclined to absent
himsel* and to report late *or wor2 despite bein# pre$iously penali>ed, and a=rmed the
CA4s rulin# that the petitioner is indeed utterly de3ant o* the law*ul orders and the
reasonable wor2 standards prescribed by his employer "he Court reiterated its pre$ious
rulin#s statin# that an employer has the ri#ht to re0uire the per*ormance o* o$ertime
ser$ice in any o* the situations contemplated under Article A; o* the Labor Code and an
employee4s non&compliance is will*ul disobedience Realda v. Ne3 Age Grap"i!s, 8n!. et.
al. G.R. No. 19#19$, April #,, #$1#.
Dismissal@ ine=ciency "he petitioner4s *ailure to obser$e Kraphics, ?nc4s wor2
standards constitutes ine=ciency that is a $alid cause *or dismissal Hailure to obser$e
prescribed standards o* wor2, or to *ul3ll reasonable wor2 assi#nments due to
ine=ciency may constitute %ust cause *or dismissal Such ine=ciency is understood to
mean *ailure to attain wor2 #oals or wor2 0uotas, either by *ailin# to complete the same
within the alloted reasonable period, or by producin# unsatis*actory results As the
operator o* Kraphics, ?nc4s printer, he is mandated to chec2 whether the colors that
would be printed are in accordance with the client4s speci3cations and *or him to do so,
he must consult the Keneral Mana#er and the color #uide used by Kraphics, ?nc be*ore
ma2in# a *ull run "he employee in this case *ailed to obser$e this simple procedure and
proceeded to print without ma2in# sure that the colors were at par with the client4s
demands "his resulted to delays in the deli$ery o* output, client dissatis*action, and
additional costs to Kraphics, ?nc Realda v. Ne3 Age Grap"i!s, 8n!. et. al. G.R. No.
19#19$, April #,, #$1#.
Dismissal@ due process ?n 2ing of 2ings Dransport, 8n!. v. a*a!, this Court laid down
the manner by which the procedural due re0uirements o* due process can be satis3ed+
.1/ "he frst written notice to be ser$ed on the employees should contain the
speci3c causes or #rounds *or 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 B5easonable opportunityC under the 'mnibus 5ules means e$ery
2ind o* assistance that mana#ement must accord to the employees to enable them to
prepare ade0uately *or their de*ense "his should be construed as a period o* at least
3$e .7/ calendar days *rom receipt o* the notice to #i$e the employees an opportunity to
study the accusation a#ainst them, consult a union o=cial or lawyer, #ather data and
e$idence, and decide on the de*enses they will raise a#ainst the complaint Moreo$er,
in order to enable the employees to intelli#ently prepare their e6planation and
de*enses, the notice should contain a detailed narration o* the *acts and circumstances
that will ser$e as basis *or the char#e a#ainst the employees A #eneral description o*
the char#e will not su=ce )astly, the notice should speci3cally mention which company
rules, i* any, are $iolated andRor which amon# the #rounds under Art 2A2 is bein#
char#ed a#ainst the employees
.2/ A*ter ser$in# the 3rst notice, the employers should schedule and conduct
a hearing orconference wherein the employees will be #i$en the opportunity to+ .a/
e6plain and clari*y their de*enses to the char#e a#ainst them@ .b/ present e$idence in
support o* their de*enses@ and .c/ rebut the e$idence presented a#ainst them by the
mana#ement Durin# the hearin# or con*erence, the employees are #i$en the chance
to de*end themsel$es personally, with the assistance o* a representati$e or counsel o*
their choice Moreo$er, this con*erence or hearin# could be used by the parties as an
opportunity to come to an amicable settlement
.,/ A*ter determinin# that termination o* employment is %usti3ed, the employers shall
ser$e the employees a written notice of termination indicatin# that+ .1/ all
circumstances in$ol$in# the char#e a#ainst the employees ha$e been considered@ and
.2/ #rounds ha$e been established to %usti*y the se$erance o* their employment
Kraphics, ?nc *ailed to aDord the petitioner with a reasonable opportunity to be heard
and de*end itsel* An administrati$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 *ar *rom reasonable Hurthermore, there is no indication that Kraphics,
?nc issued a second notice, in*ormin# the petitioner o* his dismissal Kraphics, ?nc
admitted that it decided to terminate the petitioner4s employment when he ceased to
report *or wor2 a*ter bein# ser$ed with the memorandum re0uirin# him to e6plain and
subse0uent to his *ailure to submit a written e6planation )owe$er, there is nothin# on
record showin# that Kraphics, ?nc placed its decision to dismiss in writin# and that a
copy thereo* was sent to the petitioner Fotwithstandin# the e6istence o* a %ust cause to
terminate petitioner4s employment, respondent was ordered to pay P,0,000 as nominal
dama#es *or $iolation o* the employee4s ri#ht to due process Realda v. Ne3 Age
Grap"i!s, 8n!. et. al. G.R. No. 19#19$, April #,, #$1#.
Dismissal@ will*ul disobedience 9ill*ul disobedience re0uires the concurrence o* two
elements+ .1/ the employee4s assailed conduct must ha$e been will*ul, that is,
characteri>ed by a wron#*ul and per$erse attitude@ and .2/ the order $iolated must ha$e
been reasonable, law*ul, made 2nown to the employee, and must pertain to the duties
which he had been en#a#ed to dischar#e <oth elements are present in this case
Hirst, at no point did the dismissed employees deny Tin#spoint (6press4 claim that they
re*used to comply with the directi$e *or them to submit to a dru# test or, at the $ery
least, e6plain their re*usal "his #i$es rise to the impression that their non&compliance is
deliberate "he utter lac2 o* reason or %usti3cation *or their insubordination indicates
that it was prompted by mere obstinacy, hence, will*ul thereby %usti*yin# their dismissal
Second, that the company4s order to under#o a dru# test is necessary and rele$ant in
the per*ormance o* petitioners4 *unctions as dri$ers o* Tin#spoint (6press is ob$ious As
the FL5C correctly pointed out, dri$ers are indispensable to Tin#spoint (6press4 primary
business o* renderin# door&to&door deli$ery ser$ices ?t is common 2nowled#e that the
use o* dan#erous dru#s has ad$erse eDects on dri$in# abilities that may render
employees incapable o* per*ormin# their duties Fot only are they actin# a#ainst the
interests o* Tin#spoint (6press, they also pose a threat to the public 2a(a*pi and its
*e*bers, et al. v. 2ingspoint E%press and )ogisti! and1or ary Ann Co, G.R. No.
19@81-, April #,, #$1#.
Dismissal@ procedural due process re0uirements 9hile Tin#spoint (6press had reason
to se$er petitioners4 employment, this Court 3nds its supposed obser$ance o* the
re0uirements o* procedural due process pretentious 9hile Tin#spoint (6press re0uired
the dismissed employees to e6plain their re*usal to submit to a dru# test, the two .2/
days aDorded to them to do so cannot 0uali*y as Breasonable opportunityC, which the
Court construed in Tin# o* Tin#s "ransport, ?nc $ Mamac as a period o* at least 3$e .7/
calendar days *rom receipt o* the notice
"hus, e$en i* a %ust cause e6ists *or the dismissal o* petitioners, Tin#spoint (6press is
still liable to indemni*y the dismissed employees, with the e6ception o* Panuelos, Di>on
and Dimabayao, who did not appeal the dismissal o* their complaints, with nominal
dama#es in the amount o* P,0,000002a(a*pi and its *e*bers, et al. v. 2ingspoint
E%press and )ogisti! and1or ary Ann Co, G.R. No. 19@81-, April #,, #$1#.
Eune 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on Euly 20, 2012 by Leslie C Dy ! Posted in Labor Law
! "a##ed abandonment, appeal, attorney]s *ees, dama#es,dismissal, due process, independent
contractor, %urisdiction, loss o* trust and con3dence, FL5C, reinstatement,retirement, retrenchment !
)ere are select Eune 2012 rulin#s o* the Supreme Court o* the Philippine on labor law
and procedure+
Appeal@ issue o* employer&employee relationship raised *or the 3rst time on appeal ?t is
a *undamental rule o* procedure that hi#her courts are precluded *rom entertainin#
matters neither alle#ed in the pleadin#s nor raised durin# the proceedin#s below, but
$entilated *or the 3rst time only in a motion *or reconsideration or on appeal "he
alle#ed absence o* employer&employee relationship cannot be raised *or the 3rst time
on appeal "he resolution o* this issue re0uires the admission and calibration o*
e$idence and the LA and the FL5C 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 o* theory cannot be tolerated on appeal, not on
account o* the strict application o* procedural rules, but as a matter o* *airness 0uty
;ree 7"ilippines &ervi!es, 8n!. vs. anolito J. Dria. K5 Fo 1Q-A0; Eune 2Q, 2012
Dismissal@ abandonment Abandonment cannot be in*erred *rom the actuations o*
respondent 9hen he disco$ered that his time card was oD the rac2, he immediately
in0uired *rom his super$isor )e later sou#ht the assistance o* his counsel, who wrote a
letter addressed to Poly*oam re0uestin# that he be re&admitted to wor2 9hen said
re0uest was not acted upon, he 3led the instant ille#al dismissal case "hese
circumstances clearly ne#ate the intention to abandon his wor2 7olyfoa*ARGC
8nternational, Corporation and 7re!illa A. Gra*aGe vs. Edgardo Con!ep!ion. K5 Fo
1Q2,-;, Eune 1,, 2012
Dismissal@ due process "o meet the re0uirements o* due process in the dismissal o* an
employee, an employer must *urnish the wor2er with two written notices+ .1/ a written
notice speci*yin# the #rounds *or termination and #i$in# to said employee a reasonable
opportunity to e6plain his side and .2/ another written notice indicatin# that, upon due
consideration o* all circumstances, #rounds ha$e been established to %usti*y the
employer4s decision to dismiss the employee "he law does not re0uire that an intention
to terminate one4s employment should be included in the 3rst notice ?t is enou#h that
employees are properly apprised o* the char#es brou#ht a#ainst them so they can
properly prepare their de*enses ?t is only durin# the second notice that the intention to
terminate one4s employment should be e6plicitly stated
"he #uidin# principles in connection with the hearin# re0uirement in dismissal cases are
the *ollowin#+
1 BAmple opportunity to be heardC means any meanin#*ul opportunity .$erbal or
written/ #i$en to the employee to answer the char#es a#ainst him and submit
e$idence in support o* his de*ense, whether in a hearin#, con*erence or some
other *air, %ust and reasonable way
2 A *ormal hearin# or con*erence becomes mandatory only when re0uested by the
employee in writin# or substantial e$identiary disputes e6ist or a company rule or
practice re0uires it, or when similar circumstances %usti*y it
, "he Bample opportunity to be heardC standard in the Labor Code pre$ails o$er
the Bhearin# or con*erenceC re0uirement in the implementin# rules and
re#ulations
"he e6istence o* an actual, *ormal Btrial&typeC hearin#, althou#h pre*erred, is not
absolutely necessary to satis*y the employee4s ri#ht to be heard (s#uerra was able to
present her de*enses@ and only upon proper consideration o* it did Galle Gerde send the
second memorandum terminatin# her employment Since Galle Gerde complied with the
two&notice re0uirement, no procedural de*ect e6ists in (s#uerra4s termination 0olores
D. Esguerra vs. .alle .erde Country Club, 8n!. and Ernesto .illaluna K5 Fo
1Q,012, Eune 1,, 2012
Dismissal@ loss o* trust and con3dence "here are two .2/ classes o* positions o* trust
"he 3rst class consists o* mana#erial employees, or those $ested with the power to lay
down mana#ement policies@ and the second class consists o* cashiers, auditors,
property custodians or those who, in the normal and routine e6ercise o* their *unctions,
re#ularly handle si#ni3cant amounts o* money or property (s#uerra held the position o*
Cost Control Super$isor and had the duty to remit to the accountin# department the
cash sales proceeds *rom e$ery transaction she was assi#ned to "his is not a routine
tas2 that a re#ular employee may per*orm@ it is related to the handlin# o* business
e6penditures or 3nances Hor this reason, (s#uerra occupies a position o* trust and
con3dence U a position enumerated in the second class o* positions o* trust Any breach
o* the trust imposed upon her can be a $alid cause *or dismissal
Loss o* con3dence as a %ust cause *or termination o* employment can be in$o2ed when
an employee holds a position o* responsibility, trust and con3dence ?n order to
constitute a %ust cause *or dismissal, the act complained o* must be related to the
per*ormance o* the duties o* the dismissed employee and must show that he or she is
un3t to continue wor2in# *or the employer *or $iolation o* the trust reposed in him or
her ?t was (s#uerra4s responsibility to account *or the cash proceeds@ in case o*
problems, she should ha$e promptly reported it, re#ardless o* who was at *ault ?nstead,
she settled the unaccounted amount only a*ter the accountin# department in*ormed her
about the discrepancy, almost one month *ollowin# the incident (s#uerra4s *ailure to
ma2e the proper report reJects her irresponsibility in the custody o* cash *or which she
was accountable Dolores " (s#uerra $s Galle Gerde Country Club, ?nc and (rnesto
Gillaluna K5 Fo 1Q,012, Eune 1,, 2012
Dismissal@ serious misconduct and loss o* trust and con3dence De%an is liable *or
$iolation o* Section Q, para#raphs - and 11 o* the Company Code o* (mployee
Discipline, constitutin# serious misconduct, *raud and will*ul breach o* trust o* the
employer, which are %ust causes *or termination o* employment under the law "here is
no dispute about the release o* the meter soc2ets Also, the persons in$ol$ed were
clearly identi3ed U De%an@ Ko>arin, a pri$ate electrician who recei$ed the meter soc2ets@
5eyes, the owner o* the %eep where the meter soc2ets were loaded by Ko>arin@ Duenas,
a Meralco 3eld representati$e@ and Depante, another pri$ate electrician who
purportedly owned the meter soc2ets "he release by De%an o* the meter soc2ets to
Ko>arin without the written authority or SPA *rom the customer or customers who
applied *or electric connection .as a matter o* company policy/ ser$ed as a 2ey element
in pro$in# the pri$ate contractin# acti$ity *or electric ser$ice connection bein#
underta2en by De%an and Duenas
Moreo$er, it was bad enou#h that De%an *ailed to as2 *or a written authori>ation *rom
the customers *or the release o* the meter soc2ets as re0uired by company policy, but
the elaborate scheme pursued by De%an in concert with Duenas, were all underta2en to
de*raud Meralco )ence, Meralco had $alid reasons *or losin# its trust and con3dence in
De%an )e is no ordinary employee As branch representati$e, he was principally
char#ed with the *unction and responsibility to accept payment o* *ees re0uired *or the
installation o* electric ser$ice and *acilitate issuance o* meter soc2ets "he duties o* his
position re0uire him to always act with the hi#hest de#ree o* honesty, inte#rity and
sincerity, as the company puts it ?n li#ht o* his *raudulent act, Meralco, an enterprise
imbued with public interest, cannot be compelled to continue De%an4s employment, as it
would be inimical to its interest anila Ele!tri! Co*pany 4eral!o5 vs. 6er*inigildo 6.
0eGan. K5 Fo 1;-106, Eune 1A, 2012
(mployee bene3t@ attorney4s *ees La>aro must establish a le#al basis U either by law,
contract or other sources o* obli#ations U to merit the receipt o* the additional 101
attorney4s *ees collected in the $arious *oreclosure procedures he settled as the ban24s
le#al o=cer La>aro has not produced any contract or pro$ision o* law that would
warrant the payment o* the additional attorney4s *ees )e is only entitled to his salaries
as the ban24s le#al o=cer, because the ser$ices he rendered in the *oreclosure
proceedin#s were part o* his o=cial tas2s 'an!o ;ilipino &avings and ortgage 'an(
vs. iguelito . )a/aro1iguelito . )a/aro vs. 'an!o ;ilipino &avings and ortgage
'an(, et al. K5 Fo 1A7,-6 N K5 Fo 1A7--2 Eune 2Q, 2012
(mployee bene3t@ retirement pay <anco Hilipino maintains that the se$en&year period
when it was under li0uidation should not be credited in computin# La>aro4s retirement
pay because, durin# that period, the ban2 was considered closed "he Supreme Court
held that ban2s under li0uidation retain their le#al personality ?n *act, e$en i* they are
prohibited *rom conductin# re#ular ban2in# business, it is necessary that debts owed to
them be collected La>aro per*ormed the duty o* *oreclosin# debts in *a$or o* <anco
Hilipino ?t cannot ri#ht*ully disclaim La>aro4s wor2 that bene3tted it
As *ound in the ?mplementin# 5ules o* the 5etirement Pay Law and in %urisprudence,
only in the absence o* an applicable retirement a#reement shall Article 2AQ o* the Labor
Code apply "here is aproviso howe$er, that an employee4s retirement bene3ts under
any a#reement shall not be less than those pro$ided in the said article "he 5ules o* the
<anco Hilipino 5etirement Hund do not pro$ide *or bene3ts lower than those in the Labor
Code ?n *act, the ban2 oDers a retirement pay e0ui$alent to one andone&hal* month
salary *or e$ery year o* ser$ice, a rate o$er and abo$e the one&hal* month salary
threshold pro$ided by the law Althou#h the 5ules o* the <anco Hilipino 5etirement Hund
do not #rant a roundin# oD scheme, they nonetheless pro$ide that prorated credit shall
be #i$en *or incomplete years, re#ardless o* the *raction o* months in the retiree4s
len#th o* ser$ice Fotwithstandin# the lac2 o* a roundin#&up pro$ision, still, the hi#her
retirement pay, to#ether with the prorated creditin#, cannot be deemed to be less
*a$orable than that pro$ided *or by the law :ltimately, the more important threshold to
be considered in construin# whether the retirement a#reement pro$ides less bene3ts,
compared to those pro$ided by the 5etirement Pay Law, is that the retirement bene3ts
in the said a#reement should at least amount to one&hal* o* the employee4s monthly
salary 'an!o ;ilipino &avings and ortgage 'an( vs. iguelito . )a/aro1iguelito .
)a/aro vs. 'an!o ;ilipino &avings and ortgage 'an(, et al. K5 Fo 1A7,-6 N K5 Fo
1A7--2 Eune 2Q, 2012
(mployee dismissal 9hen the Joatin# status o* employees lasts *or more than si6 .6/
months, they may be considered to ha$e been ille#ally dismissed *rom the ser$ice
BHloatin# statusC means an inde3nite period o* time when one does not recei$e any
salary or 3nancial bene3t pro$ided by law ?n this case, petitioners were actually
reassi#ned to new posts, albeit in a diDerent location *rom where they resided "hus,
there can be no Joatin# status or inde3nite period to spea2 o* ?nstead, petitioners were
the ones who re*used to report *or wor2 in their new assi#nment
?n cases in$ol$in# security #uards, a relie* and trans*er order in itsel* does not se$er the
employment relationship between the security #uards and their a#ency (mployees
ha$e the ri#ht to security o* tenure, but this does not #i$e them such a $ested ri#ht to
their positions as would depri$e the company o* its prero#ati$e to chan#e their
assi#nment or trans*er them where their ser$ices, as security #uards, will be most
bene3cial to the client An employer has the ri#ht to trans*er or assi#n its employees
*rom one o=ce or area o* operation to another in pursuit o* its le#itimate business
interest, pro$ided there is no demotion in ran2 or diminution o* salary, bene3ts, and
other pri$ile#es@ and the trans*er is not moti$ated by discrimination or bad *aith, or
eDected as a *orm o* punishment or demotion without su=cient cause 9hile petitioners
may claim that their trans*er to Manila will cause added e6penses and incon$enience,
absent any showin# o* bad *aith or ill moti$e on the part o* the employer, the trans*er
remains $alid &alvador 9. oGar, et al. vs. Agro Co**er!ial &e!urity &ervi!e Agen!y, et
al. K5 Fo 1AQ1AA, Eune 2Q, 2012
(mployee dismissal@ burden o* proo* :nder the law, the burden o* pro$in# that the
termination o* employment was *or a $alid or authori>ed cause rests on the employer
Hailure to dischar#e this burden would result in an un%ust or ille#al dismissal "he
company4s e$idence on the respondents4 alle#ed in*ractions do not substantially show
that they $iolated company rules and re#ulations to warrant their dismissal ?t is ob$ious
that the company o$erstepped the bounds o* its mana#ement prero#ati$e in the
dismissal o* Mauricio and Camacho ?t lost si#ht o* the principle that mana#ement
prero#ati$e must be e6ercised in #ood *aith and with due re#ard to the ri#hts o* the
wor2ers in the spirit o* *airness and with %ustice in mind 7"ilbag 8ndustrial
anufa!turing Corp. vs. 7"ilbag Bor(ers CnionA)a(as at Gabay ng anggaga3ang
Nag(a(aisa K5 Fo 1A2-A6, Eune 20, 2012
(mployee dismissal@ due process 5etrenchment is sub%ect to *aith*ul compliance with
the substanti$e and procedural re0uirements laid down by law and %urisprudence Hor a
$alid retrenchment, the *ollowin# elements must be present+
1 "hat retrenchment is reasonably necessary and li2ely to pre$ent business losses
which, i* already incurred, are not merely de minimis, but substantial, serious,
actual and real, or i* only e6pected, are reasonably imminent as percei$ed
ob%ecti$ely and in #ood *aith by the employer@
2 "hat the employer ser$ed written notice both to the employees and to the
Department o* Labor and (mployment at least one month prior to the intended
date o* retrenchment@
, "hat the employer pays the retrenched employees separation pay e0ui$alent to
one .1/ month pay or at least \ month pay *or e$ery year o* ser$ice, whiche$er
is hi#her@
- "hat the employer e6ercises its prero#ati$e to retrench employees in #ood *aith
*or the ad$ancement o* its interest and not to de*eat or circum$ent the
employees4 ri#ht to security o* tenure@ and
7 "hat the employer used *air and reasonable criteria in ascertainin# who would be
dismissed and who would be retained amon# the employees, such as status,
e=ciency, seniority, physical 3tness, a#e, and 3nancial hardship *or certain
wor2ers
All these elements were success*ully pro$en by petitioner Hirst, the hu#e losses suDered
by the Club *or the past two years had *orced petitioner to close it down to a$ert *urther
losses which would e$entually aDect the operations o* petitioner Second, all -7
employees wor2in# in the Club were ser$ed with notice o* termination "he
correspondin# notice was li2ewise ser$ed to the D'L( one month prior to retrenchment
"hird, the employees were oDered separation pay, most o* whom ha$e accepted and
opted not to %oin in this complaint Hourth, the cessation o* or withdrawal *rom business
operations was bona Lde in character and not impelled by a moti$e to de*eat or
circum$ent the tenurial ri#hts o* employees 9ater*ront Cebu City )otel $s Ma Melanie
P Eimene>, et al K5 Fo 1Q-21-, Eune 1,, 2012
(mployee dismissal@ due process "he *ollowin# are the #uidin# principles in connection
with the hearin# re0uirement in dismissal cases+
1 BAmple opportunity to be heardC means any meanin#*ul opportunity .$erbal or
written/ #i$en to the employee to answer the char#es a#ainst him and submit
e$idence in support o* his de*ense, whether in a hearin#, con*erence or some
other *air, %ust and reasonable way
2 A *ormal hearin# or con*erence becomes mandatory only when re0uested by the
employee in writin# or substantial e$identiary disputes e6ist or a company rule or
practice re0uires it, or when similar circumstances %usti*y it
, "he Bample opportunity to be heardC standard in the Labor Code pre$ails o$er
the Bhearin# or con*erenceC re0uirement in the implementin# rules and
re#ulations
Ki$en that the petitioners e6pressly re0uested a con*erence or a con$enin# o* a
#rie$ance committee, such *ormal hearin# became mandatory A*ter PKA? *ailed to
a=rmati$ely respond to such re0uest, it *ollows that the hearin# re0uirement was not
complied with and, there*ore, Gallota was denied his ri#ht to procedural due
process 7rudential Guarantee and Assuran!e E*ployee )abor Cnion and &andy D.
.allota vs. N)RC, 7rudential Guarantee and Assuran!e 8n!., and1or ?o!elyn Reti/os.K5
Fo 1A7,,7, Eune 1,, 2012
(mployee dismissal@ %ust cause Article 2A2.e/ o* the Labor Code tal2s o* other
analo#ous causes or those which are susceptible o* comparison to another in #eneral or
in speci3c detail as a cause *or termination o* employment A cause analo#ous to
serious misconduct is a $oluntary andRor will*ul act or omission attestin# to an
employee4s moral depra$ity "he*t committed by an employee a#ainst a person other
than his employer, i* pro$en by substantial e$idence, is a cause analo#ous to serious
misconduct Pre$ious in*ractions may be cited as %usti3cation *or dismissin# an
employee only i* they are related to the subse0uent oDense )owe$er, it must be noted
that such a discussion was unnecessary since the the*t, ta2en in isolation *rom Hermin4s
other $iolations, was in itsel* a $alid cause *or the termination o* his
employment Cos*os 'ottling Corp. vs. Bilson ;er*in1Bilson ;er*in vs. Cos*os
'ottling Corp. and Ce!ilia 'autista. K5 Fo 1;,6Q6 N K5 Fo 1;-,0, Eune 20, 2012
(mployee dismissal@ loss o* trust and con3dence "he Labor Code reco#ni>es that an
employer, *or %ust cause, may $alidly terminate the ser$ices o* an employee *or serious
misconduct or will*ul disobedience o* the law*ul orders o* the employer or
representati$e in connection with the employee4s wor2 Hraud or will*ul breach by the
employee o* the trust reposed by the employer in the *ormer, or simply loss o*
con3dence, also %usti3es an employee4s dismissal *rom employment 9ill*ul breach o*
trust or loss o* con3dence re0uires that the employee .1/ occupied a position o* trust or
.2/ was routinely char#ed with the care o* the employer4s property "o warrant dismissal
based on loss o* con3dence, there must be some basis *or the loss o* trust or the
employer must ha$e reasonable #rounds to belie$e that the employee is responsible *or
the misconduct that renders the latter unworthy o* the trust and con3dence demanded
by his or her position Hor more than a month, the petitioners did not e$en in*orm PLD"
o* the whereabouts o* the plant materials ?nstead, he stoc2ed these materials at his
residence e$en i* they were needed in the daily operations o* the company ?n 2eepin#
with the honesty and inte#rity demanded by his position, he should ha$e turned o$er
these materials to the plant4s warehouse "hus, PLD" reasonably suspected petitioner o*
stealin# the company4s property At that %uncture, the employer may already dismiss the
employee since it had reasonable #rounds to belie$e or to entertain the moral
con$iction that the latter was responsible *or the misconduct, and the nature o* his
participation therein rendered him absolutely unworthy o* the trust and con3dence
demanded by his positionRo*eo E. 7aulino vs. N)RC, 7"ilippine )ong 0istan!e Co.,
8n! K5 Fo 1Q61A-, Eune 1,, 2012
(mployee dismissal@ loss o* trust and con3dence Loss o* con3dence as a %ust cause *or
dismissal was ne$er intended to pro$ide employers with a blan2 chec2 *or terminatin#
their employees ?t should ideally apply only to cases in$ol$in# employees occupyin#
positions o* trust and con3dence or to those situations where the employee is routinely
char#ed with the care and custody o* the employer4s money or property "o the 3rst
class belon# mana#erial employees, ie, those $ested with the powers or prero#ati$es
to lay down mana#ement policies andRor to hire, trans*er, suspend, lay&oD, recall,
dischar#e, assi#n or discipline employees or eDecti$ely recommend such mana#erial
actions@ and to the second class belon# cashiers, auditors, property custodians, etc, or
those who, in the normal and routine e6ercise o* their *unctions, re#ularly handle
si#ni3cant amounts o* money or property
"he 3rst re0uisite *or dismissal on the #round o* loss o* trust and con3dence is that the
employee concerned must be one holdin# a position o* trust and con3dence "he
second re0uisite is that there must be an act that would %usti*y the loss o* trust and
con3dence Gallota4s position as Eunior Pro#rammer is analo#ous to the second class o*
positions o* trust and con3dence "hou#h he did not physically handle money or
property, he became pri$y to con3dential data or in*ormation by the nature o* his
*unctions At a time when the most sensiti$e o* in*ormation is *ound not printed on
paper but stored on hard dri$es and ser$ers, an employee who handles or has access to
data in electronic *orm naturally becomes the unwillin# recipient o* con3dential
in*ormation "here was no other e$idence presented to pro$e *raud in the manner o*
securin# or obtainin# the 3les *ound in Gallota4s computer "he presence o* the 3les
would merely merit the de$elopment o* some suspicion on the part o* the employer, but
should not amount to a loss o* trust and con3dence such as to %usti*y the termination o*
his employment Such act is not o* the same class, de#ree or #ra$ity as the acts that
ha$e been held to be o* such character 7rudential Guarantee and Assuran!e E*ployee
)abor Cnion and &andy D. .allota vs. N)RC, 7rudential Guarantee and Assuran!e 8n!.,
and1or ?o!elyn Reti/os. K5 Fo 1A7,,7, Eune 1,, 2012
(mployee dismissal@ loss o* trust and con3dence "o $alidly dismiss an employee on the
#round o* loss o* trust and con3dence under Article 2A2 .c/ o* the Labor Code o* the
Philippines, the *ollowin# #uidelines must be obser$ed+ 1/ loss o* con3dence should not
be simulated@ 2/ it should not be used as subter*u#e *or causes which are improper,
ille#al or un%usti3ed@ ,/ it may not be arbitrarily asserted in the *ace o* o$erwhelmin#
e$idence to the contrary@ and -/ it must be #enuine, not a mere a*terthou#ht to %usti*y
earlier action ta2en in bad *aith More importantly, it must be based on a will*ul breach
o* trust and *ounded on clearly established *acts "he testimony o* Lobita[a constitutes
substantial e$idence to pro$e that respondent, as the then Power Plant Mana#er,
accepted commissions andRor B2ic2bac2sC *rom suppliers, which is a clear $iolation o*
Section 20- o* petitioner4s Company 5ules and 5e#ulations Eurisprudence consistently
holds that *or mana#erial employees, the mere e6istence o* a basis *or belie$in# that
such employee has breached the trust o* his employer would su=ce *or his dismissal
5espondent4s termination was *or a %ust and $alid cause Apo Ce*ent Corporation .s.
Ialdy E. 'aptis*a. K5 Fo 1Q66Q1 Eune 20, 2012
(mployee dismissal@ order o* reinstatement Article 22, o* the Labor Code pro$ides that
in case there is an order o* reinstatement, the employer must admit the dismissed
employee under the same terms and conditions, or merely reinstate the employee in
the payroll "he order shall be immediately e6ecutory "hus, ,rd Alert cannot escape
liability by simply in$o2in# that Fa$ia did not report *or wor2 "he law states that the
employer must still reinstate the employee in the payroll 9here reinstatement is no
lon#er $iable as an option, separation pay e0ui$alent to one .1/ month salary *or e$ery
year o* ser$ice could be awarded as an alternati$e -rd Alert &e!urity and 0ete!tive
&ervi!es, 8n!. vs. Ro*ualdo Navia. K5 Fo 20067,, Eune 1,, 2012
(mployee dismissal@ retrenchment 5etrenchment is the termination o* employment
initiated by the employer throu#h no *ault o* and without pre%udice to the employees ?t
is resorted to durin# periods o* business recession, industrial depression, or seasonal
Juctuations or durin# lulls occasioned by lac2 o* orders, shorta#e o* materials,
con$ersion o* the plant *or a new production pro#ram or the introduction o* new
methods or more e=cient machinery or o* automation ?t is an act o* the employer o*
dismissin# employees because o* losses in the operation o* a business, lac2 o* wor2,
and considerable reduction on the $olume o* his business ?n this case, the closure o* a
department or di$ision o* a company constitutes retrenchment by, and not closure o*,
the company itsel* Petitioner has not totally ceased its business operations ?t merely
ceased operations o* a department 9ater*ront Cebu City )otel $s Ma Melanie P
Eimene>, et al K5 Fo 1Q-21-, Eune 1,, 2012
(mployee dismissal@ will*ul breach o* trust "he loss o* trust and con3dence must be
based on will*ul breach o* the trust reposed in the employee by his employer Such
breach is will*ul i* it is done intentionally, 2nowin#ly, and purposely, without %usti3able
e6cuse, as distin#uished *rom an act done carelessly, thou#htlessly, heedlessly or
inad$ertently Moreo$er, it must be based on substantial e$idence and not on the
employer4s whims or caprices or suspicions otherwise, the employee would eternally
remain at the mercy o* the employer "he Supreme Court has laid down the #uidelines
*or the application o* the loss o* trust and con3dence doctrine+ .1/ loss o* con3dence
should not be simulated@ .2/ it should not be used as a subter*u#e *or causes which are
improper, ille#al or un%usti3ed@ .,/ it may not be arbitrarily asserted in the *ace o*
o$erwhelmin# e$idence to the contrary@ and .-/ it must be #enuine, not a mere
a*terthou#ht, to %usti*y an earlier action ta2en in bad *aith Gillanue$a wor2ed *or
Meralco as a <ranch 5epresentati$e whose tas2s included the issuance o* Contracts *or
(lectric Ser$ice a*ter receipt o* the amount due *or ser$ice connection *rom customers
'b$iously, he was entrusted not only with the responsibility o* handlin# company *unds
but also to cater to customers who intended to a$ail o* Meralco4s ser$ices "his is
nothin# but an indication that trust and con3dence were reposed in him by the
company, althou#h his position was not strictly mana#erial by nature Meralco4s loss o*
trust and con3dence arisin# out o* Gillanue$a4s act o* misappropriation o* company
*unds in the course o* processin# customer applications has been pro$en by substantial
e$idence, thus, %usti3ed Gerily, the issuance o* additional receipts *or e6cessi$e
payments e6acted *rom customers is a will*ul breach o* the trust reposed in him by the
company .i!ente .illanueva, ?r. vs.. D"e National )abor Relations Co**ission, D"ird
0ivision, anila Ele!tri! Co*pany, anuel )ope/, C"air*an and CE9, and ;ran!is!o
Collantes, anager K5 Fo 1Q6A;,, Eune 1,, 2012
(mployee suit@ dama#es "o obtain moral dama#es, the claimant must pro$e the
e6istence o* bad *aith by clear and con$incin# e$idence, *or the law always presumes
#ood *aith ?t is not e$en enou#h that one merely suDered sleepless ni#hts, mental
an#uish and serious an6iety as the result o* the actuations o* the other party ?n this
case, La>aro did not state any moral an#uish that he suDered Feither did he
substantiate his imputations o* malice to <anco Hilipino )e only made a sweepin#
declaration, without concrete proo*, that the ban2 in re*usin# his claim maliciously
dama#ed his property ri#hts and interest Accordin#ly, neither moral dama#es nor
e6emplary dama#e can be awarded to him
9ith respect to attorney4s *ees, an award is proper only i* that person was *orced to
liti#ate and incur e6penses to protect one4s ri#hts and interest by reason o* an
un%usti3ed act or omission o* the party *or whom it is sou#ht <anco Hilipino had a prima
*acie le#itimate de*ense that, because it underwent li0uidation proceedin#s, it cannot
be compelled to credit that period in the computation o* the employee4s the retirement
pay and pro3t shares Considerin# that <anco Hilipino4s re*usal cannot be accurately
characteri>ed as un%usti3ed, La>aro cannot claim an award o* attorney4s *ees'an!o
;ilipino &avings and ortgage 'an( vs. iguelito . )a/aro1iguelito . )a/aro vs.
'an!o ;ilipino &avings and ortgage 'an(, et al. K5 Fo 1A7,-6 N K5 Fo
1A7--2 Eune 2Q, 2012
?ndependent contractor@ tests Permissible %ob contractin# or subcontractin# re*ers to an
arran#ement whereby a principal a#rees to put out or *arm out to a contractor or
subcontractor the per*ormance or completion o* a speci3c %ob, wor2 or ser$ice within a
de3nite or predetermined period, re#ardless o* whether such %ob, wor2 or ser$ice is to
be per*ormed or completed within or outside the premises o* the principal A person is
considered en#a#ed in le#itimate %ob contractin# or subcontractin# i* the *ollowin#
conditions concur+
.a/ "he contractor or subcontractor carries on a distinct and independent business and
underta2es to per*orm the %ob, wor2 or ser$ice on its own account and under its own
responsibility accordin# to its own manner and method, and *ree *rom the control and
direction o* the principal in all matters connected with the per*ormance o* the wor2
e6cept as to the results thereo*@
.b/ "he contractor or subcontractor has substantial capital or in$estment@ and
.c/ "he a#reement between the principal and contractor or subcontractor assures the
contractual employees entitlement to all labor and occupational sa*ety and health
standards, *ree e6ercise o* the ri#ht to sel*&or#ani>ation, security o* tenure, and social
wel*are bene3ts
?n contrast, labor&only contractin#, a prohibited act, is an arran#ement where the
contractor or subcontractor merely recruits, supplies or places wor2ers to per*orm a %ob,
wor2 or ser$ice *or a principal ?n labor&only contractin#, the *ollowin# elements are
present+
.a/ "he contractor or subcontractor does not ha$e substantial capital or in$estment to
actually per*orm the %ob, wor2 or ser$ice under its own account and responsibility@ and
.b/ "he employees recruited, supplied or placed by such contractor or subcontractor,
are per*ormin# acti$ities which are directly related to the main business o* the principal
"he test o* independent contractorship is whether one claimin# to be an independent
contractor has contracted to do the wor2 accordin# to his own methods and without
bein# sub%ect to the control o* the employer, e6cept only as to the results o* the wor2
Krama%e is not an independent %ob contractor, but a Blabor&onlyC contractor Hirst,
Krama%e has no substantial capital or in$estment "he presumption is that a contractor
is a labor&only contractor unless he o$ercomes the burden o* pro$in# that it has
substantial capital, in$estment, tools, and the li2e Feither Krama%e nor Poly*oam
presented e$idence showin# Krama%e4s ownership o* the e0uipment and machineries
used in the per*ormance o* the alle#ed contracted %ob
Second, Krama%e did not carry on an independent business or underta2e the
per*ormance o* its ser$ice contract accordin# to its own manner and method, *ree *rom
the control and super$ision o* its principal, Poly*oam, its apparent role ha$in# been
merely to recruit persons to wor2 *or Poly*oam ?t is undisputed that respondent had
per*ormed his tas2 o* pac2in# Poly*oam4s *oam products in Poly*oam4s premises As to
the recruitment o* respondent, petitioners were able to establish only that respondent4s
application was re*erred to Krama%e, but that is all Prior to his termination, respondent
had been per*ormin# the same %ob in Poly*oam4s business *or almost si6 .6/ years )e
was e$en *urnished a copy o* Poly*oam4s Pga Alituntunin at 2ara*patang
7arusa,Qwhich embodied Poly*oam4s rules on attendance, the manner o* per*ormin# the
employee4s duties, ethical standards, cleanliness, health, sa*ety, peace and order
"hese rules carried with them the correspondin# penalties in case o* $iolation 9hile it is
true that petitioners submitted the A=da$it o* Poly*oam4s super$isor, claimin# that the
latter did not e6ercise super$ision o$er respondent because the latter was not
Poly*oam4s but Krama%e4s employee, said A=da$it is insu=cient to pro$e such claim
Petitioners should ha$e presented the person who they claim to ha$e e6ercised
super$ision o$er respondent and their alle#ed other employees assi#ned to Poly*oam ?t
was ne$er established that Krama%e too2 entire char#e, control and super$ision o* the
wor2 and ser$ice a#reed upon 7olyfoa*ARGC 8nternational, Corporation and 7re!illa A.
Gra*aGe vs. Edgardo Con!ep!ion.K5 Fo 1Q2,-;, Eune 1,, 2012
FL5C@ %urisdiction o$er interpretation or implementation o* the C<A 5A A0-2 is a
special law #o$ernin# o$erseas Hilipino wor2ers )owe$er, there is no speci3c pro$ision
thereunder which pro$ides *or %urisdiction o$er disputes or unresol$ed #rie$ances
re#ardin# the interpretation or implementation o* a C<A Section 10 o* 5A A0-2 simply
spea2s, in #eneral, o* Bclaims arisin# out o* an employer&employee relationship or by
$irtue o* any law or contract in$ol$in# Hilipino wor2ers *or o$erseas deployment
includin# claims *or actual, moral, e6emplary and other *orms o* dama#esC 'n the
other hand, Articles 21Q.c/ and 261 o* the Labor Code are $ery speci3c in statin# that
$oluntary arbitrators ha$e %urisdiction o$er cases arisin# *rom the interpretation or
implementation o* collecti$e bar#ainin# a#reements ?n the present case, the basic
issue raised by Merridy Eane in her complaint 3led with the FL5C is+ which pro$ision o*
the sub%ect C<A applies inso*ar as death bene3ts due to the heirs o* Felson are
concerned "his issue clearly in$ol$es the interpretation or implementation o* the said
C<A "hus, the speci3c or special pro$isions o* the Labor Code #o$ern
C<A is the law or contract between the parties Article 1,1 o* the C<A entered into by
and between respondent KC? and AM'S:P pro$ides that the Company and the :nion
a#ree that in case o* dispute or conJict in the interpretation or application o* any o* the
pro$isions o* this A#reement, or en*orcement o* Company policies, the same shall be
settled throu#h ne#otiation, conciliation or $oluntary arbitration "he pro$isions o* the
C<A are in consonance with 5ule G??, Section Q o* the present 'mnibus 5ules and
5e#ulations ?mplementin# the Mi#rant 9or2ers and '$erseas Hilipinos Act o* 1;;7, as
amended by 5epublic Act Fo 10022, which states that *or 'H9s with collecti$e
bar#ainin# a#reements, the case shall be submitted *or $oluntary arbitration in
accordance with Articles 261 and 262 o* the Labor Code 9ith respect to disputes
in$ol$in# claims o* Hilipino sea*arers wherein the parties are co$ered by a collecti$e
bar#ainin# a#reement, the dispute or claim should be submitted to the %urisdiction o* a
$oluntary arbitrator or panel o* arbitrators ?t is only in the absence o* a collecti$e
bar#ainin# a#reement that parties may opt to submit the dispute to either the FL5C or
to $oluntary arbitration Estate of Nelson R. 0ulay, represented by "is 3ife eddiry ?ane
7. 0ulay vs. Aboiti/ ?ebsen ariti*e, 8n!. and General C"arterers, 8n!. K5 Fo
1Q26-2, Eune 1,, 2012
Ser$ice@ proo* o* ser$ice Petitioners alle#e that no a=da$it o* ser$ice was attached to
the CA Petition )owe$er, the Supreme Court noted that in the CA 5esolution, the
appellate court stated that their records re$ealed that Atty (spinas, petitioners4 counsel
o* record at the time, was duly ser$ed a copy o* the *ollowin#+ CA 5esolution #rantin#
respondent4s Motion *or (6tension o* "ime to 3le the CA Petition@ CA 5esolution re0uirin#
petitioners to 3le their Comment on the CA Petition@ and CA 5esolution, submittin# the
case *or resolution, as no comment was 3led Such ser$ice to Atty (spinas was $alid
despite the *act he was already deceased at the time ?* a party to a case has appeared
by counsel, ser$ice o* pleadin#s and %ud#ments shall be made upon his counsel or one
o* them, unless ser$ice upon the party is speci3cally ordered by the court ?t is not the
duty o* the courts to in0uire, durin# the pro#ress o* a case, whether the law 3rm or
partnership representin# one o* the liti#ants continues to e6ist law*ully, whether the
partners are still ali$e, or whether its associates are still connected with the
3rm &alvador 9. oGar, et al. vs. Agro Co**er!ial &e!urity &ervi!e Agen!y, et al. K5
Fo 1AQ1AA, Eune 2Q, 2012
Euly 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on Au#ust A, 2012 by Leslie C Dy ! Posted in Labor Law, Philippines & Law ! "a##ed due
process, employer&employee relationship, ille#al dismissal, loss o* trust and con3dence, retirement !
)ere are select Euly 2012 rulin#s o* the Supreme Court o* the Philippines on labor law
and procedure+
Dismissal@ due process Due process re0uirement is met when there is simply an
opportunity to be heard and to e6plain one4s side e$en i* no hearin# is conducted An
employee may be aDorded ample opportunity to be heard by means o* any method,
$erbal or written, whether in a hearin#, con*erence or some other *air, %ust and
reasonable way A*ter recei$in# the 3rst notice apprisin# him o* the char#es a#ainst him,
the employee may submit a written e6planation .which may be in the *orm o* a letter,
memorandum, a=da$it or position paper/ and oDer e$idence in support thereo*, li2e
rele$ant company records and the sworn statements o* his witnesses Hor this purpose,
he may prepare his e6planation personally or with the assistance o* a representati$e or
counsel )e may also as2 the employer to pro$ide him copy o* records material to his
de*ense )is written e6planation may also include a re0uest that a *ormal hearin# or
con*erence be held ?n such a case, the conduct o* a *ormal hearin# or con*erence
becomes mandatory, %ust as it is where there e6ist substantial e$identiary disputes or
where company rules or practice re0uires an actual hearin# as part o* employment pre&
termination procedure
Petitioner4s written response to the prere0uisite notice pro$ided her with an a$enue to
e6plain and de*end her side and thus ser$ed the purpose o* due process "hat there was
no hearin#, in$esti#ation or ri#ht to appeal, which petitioner opined to be a $iolation o*
company policies, is o* no moment since the record is bere*t o* any showin# that there
is an e6istin# company policy that re0uires these procedures with respect to the
termination o* a C)5 Director li2e petitioner or that company practice calls *or the
same "here was also no re0uest *or a *ormal hearin# on the part o* petitioner As she
was ser$ed with a notice apprisin# her o* the char#es a#ainst her and also a subse0uent
notice in*ormin# her o* the mana#ement4s decision to terminate her ser$ices a*ter
respondents *ound her written response to the 3rst notice unsatis*actory, petitioner was
clearly aDorded her ri#ht to due process ;lordeli/a aria ReyesARayel vs. 7"ilippine
)uen D"ai 6oldings Corporation, et al. K5 Fo 1Q-A;,, Euly 11, 2012
Dismissal@ loss o* trust and con3dence An employer has a distinct prero#ati$e and
wider latitude o* discretion in dismissin# a mana#erial personnel who per*orms *unctions
which by their nature re0uire the employer4s *ull trust and con3denceAs distin#uished
*rom a ran2 and 3le personnel, mere e6istence o* a basis *or belie$in# that a mana#erial
employee has breached the trust o* the employer %usti3es dismissal Loss o* con3dence
as a #round *or dismissal does not re0uire proo* beyond reasonable doubt as the law
re0uires only that there be at least some basis to %usti*y it
Petitioner was LN"4s C)5 Director *or Manu*acturin#, which is a mana#erial position
saddled with #reat responsibility As such, she was directly responsible *or mana#in# her
own departmental staD <ecause o* this, petitioner must en%oy the *ull trust and
con3dence o* her superiors )owe$er, petitioner deli$ered dismal per*ormance and
displayed poor wor2 attitude, which constitute su=cient reasons *or an employer to
terminate an employee on the #round o* loss o* trust and con3dence Hirst, records
show that petitioner indeed unreasonably *ailed to eDecti$ely communicate with her
immediate superior Second, the a=da$its o* petitioner4s co&wor2ers re$ealed her
ne#ati$e attitude and unpro*essional beha$ior towards them and the company Lastly,
petitioner displayed ine=ciency and ineptitude in her %ob as a C)5 Director "a2in# all
these circumstances collecti$ely, the Court is con$inced that respondents ha$e
su=cient and $alid reasons *or terminatin# the ser$ices o* petitioner as her continued
employment would be patently inimical to respondents4 interest ;lordeli/a aria ReyesA
Rayel vs. 7"ilippine )uen D"ai 6oldings Corporation, et al. K5 Fo 1Q-A;,, Euly 11,
2012
(mployee dismissal@ $alidity o* termination 5etrenchment is one o* the authori>ed
causes *or the dismissal o* employees reco#ni>ed by the Labor Code ?t is a
mana#ement prero#ati$e resorted to by employers to a$oid or to minimi>e business
losses "he Court has laid down the *ollowin# standards that an employer should meet
to %usti*y retrenchment and to *oil abuse, namely+
.a/ "he e6pected losses should be substantial and not merely de *ini*is in e6tent@
.b/ "he substantial losses apprehended must be reasonably imminent@
.c/ "he retrenchment must be reasonably necessary and li2ely to eDecti$ely pre$ent
the e6pected losses@ and
.d/ "he alle#ed losses, i* already incurred, and the e6pected imminent losses sou#ht to
be *orestalled must be pro$ed by su=cient and con$incin# e$idence
?n termination cases, the burden o* pro$in# that the dismissal was *or a $alid or
authori>ed cause rests upon the employer "he petitioner did not submit e$idence o* the
losses to its business operations and the economic ha$oc it would thereby imminently
sustain ?t only claimed that respondent4s termination was due to its Bpresent
businessR3nancial conditionC "his bare statement *ell short o* the norm to show a $alid
retrenchment ?ndeed, not e$ery loss incurred or e6pected to be incurred by an
employer can %usti*y retrenchment "he employer must pro$e, amon# others, that the
losses are substantial and that the retrenchment is reasonably necessary to a$ert such
losses "hus, by its *ailure to present su=cient and con$incin# e$idence to pro$e that
retrenchment was necessary, respondent4s termination due to retrenchment is not
allowed )egend 6otel NanilaO, o3ned by Ditatiu* Corporation, et al. vs. 6ernani &.
Realuyo, also (no3n as ?oey Roa. K5 Fo 17,711, Euly 1A, 2012
(mployee trainin#@ reimbursement "he Supreme Court reco#ni>ed the ri#ht o* PAL to
recoup the costs o* a pilot4s trainin# in the *orm o* ser$ice *or a period o* at least three
.,/ years <y carryin# o$er the same stipulation settin# the a#e o* 3*ty&se$en .7Q/ years
as the rec2onin# point when a pilot becomes dis0uali3ed to bid *or a hi#her position in
the present C<A, both PAL and ALPAP reco#ni>ed that the company4s eDort in sendin#
pilots *or trainin# abroad is an in$estment which necessarily e6pects a reasonable
return in the *orm o* ser$ice *or a period o* at least three .,/ years "his stipulation had
been repeatedly adopted by the parties in the succeedin# renewals o* their C<A, thus
$alidatin# the impression that it is a reasonable and acceptable term to both PAL and
ALPAP Conse0uently, the petitioner cannot con$eniently disre#ard this stipulation by
simply raisin# the absence o* a contract e6pressly re0uirin# the pilot to remain within
PAL4s employ within a period o* , years a*ter he has been sent on trainin# "he
supposed absence o* contract bein# raised by the petitioner cannot stand as the C<A
clearly co$ered the petitioner4s obli#ation to render ser$ice to PAL within , years to
enable it to recoup the costs o* its in$estment 'ibiano C. Elegir vs. 7"ilippine Airlines,
8n!. K5 Fo 1A1;;7, Euly 16, 2012
(mployer&employee relationship@ e6istence "he issue o* whether or not an employer&
employee relationship e6isted is essentially a 0uestion o* *act "he *actors that
determine the issue include who has the power to select the employee, who pays the
employee4s wa#es, who has the power to dismiss the employee, and who e6ercises
control o* the methods and results by which the wor2 o* the employee is accomplished
Althou#h no particular *orm o* e$idence is re0uired to pro$e the e6istence o* the
relationship, and any competent and rele$ant e$idence to pro$e the relationship may be
admitted, a 3ndin# that the relationship e6ists must nonetheless rest on substantial
e$idence, which is that amount o* rele$ant e$idence that a reasonable mind mi#ht
accept as ade0uate to %usti*y a conclusion
A re$iew o* the circumstances re$eals that respondent was, indeed, petitioner4s
employee )e was undeniably employed as a pianist in petitioner4s 5estaurant Hirst o*
all, petitioner actually wielded the power o* selection at the time it entered into the
ser$ice contract with respondent "he power o* selection was 3rmly e$idenced by,
amon# others, the e6press written recommendation by petitioner4s restaurant mana#er,
*or the increase o* his remuneration Secondly, there is no denyin# that the
remuneration denominated as talent *ees was 36ed on the basis o* his talent and s2ill
and the 0uality o* the music he played durin# the hours o* per*ormance each ni#ht,
ta2in# into account the pre$ailin# rate *or similar talents in the entertainment industry
5espondent4s remuneration, albeit denominated as talent *ees, was still considered as
included in the term wa#ein the sense and conte6t o* the Labor Code, re#ardless o* how
petitioner chose to desi#nate the remuneration "hirdly, the petitioner has the power to
dismiss respondent "he memorandum in*ormin# respondent o* the discontinuance o*
his ser$ice because o* the present business or 3nancial condition o* petitioner showed
that the latter had the power to dismiss him *rom employment Lastly, the power o* the
employer to control the wor2 o* the employee is considered the most si#ni3cant
determinant o* the e6istence o* an employer&employee relationship "his is the so&called
control test, and is premised on whether the person *or whom the ser$ices are
per*ormed reser$es the ri#ht to control both the end achie$ed and the manner and
means used to achie$e that end 5espondent per*ormed his wor2 as a pianist under
petitioner4s super$ision and control Petitioner4s control o* both the end achie$ed and
the manner and means used to achie$e that end was demonstrated by the *ollowin#, to
wit+ .1/)e could not choose the time o* his per*ormance, which petitioners had 36ed
*rom Q+00 pm to 10+00 pm, three to si6 times a wee2@ .2/)e could not choose the place
o* his per*ormance@ .,/ "he restaurant4s mana#er re0uired him at certain times to
per*orm only "a#alo# son#s or music, or to wear barong "a#alo# to con*orm to the
Hilipiniana moti*@ and .-/)e was sub%ected to the rules on employees4 representation
chec2 and chits, a pri$ile#e #ranted to other employees )egend 6otel NanilaO, o3ned
by Ditatiu* Corporation, et al. vs. 6ernani &. Realuyo, also (no3n as ?oey Roa. K5 Fo
17,711, Euly 1A, 2012
Mana#ement prero#ati$e@ trans*er o* employees An employer4s decision to trans*er an
employee, i* made in #ood *aith, is a $alid e6ercise o* a mana#ement prero#ati$e,
althou#h it may result in personal incon$enience or hardship to the employee 5e&
assi#nments made by mana#ement pendin# in$esti#ation o* irre#ularities alle#edly
committed by an employee *all within the ambit o* mana#ement prero#ati$e "he
purpose o* reassi#nments is no diDerent *rom that o* pre$enti$e suspension which
mana#ement could $alidly impose as a disciplinary measure *or the protection o* the
company4s property pendin# in$esti#ation o* any alle#ed mal*easance or mis*easance
committed by the employee
As the e6ecuti$e assistant o* the president, petitioner undeniably occupied a sensiti$e
position that re0uired her employer4s utmost trust and con3dence )a$in# lost his trust
and con3dence in petitioner, respondent Del3n had the ri#ht to trans*er her to ensure
that she would no lon#er ha$e access to the companies4 con3dential 3les 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 9hen petitioner was assi#ned to Ca$ite, there was
an on#oin# in$esti#ation o* the char#es 3led a#ainst her ?t is undisputed that she
re*used to 3ll up, *or no %usti3able reasons, the 0uestionnaire distributed by her
employer to determine who amon# those who had access to the con3dential 3les was
responsible *or their ta2in# Hurthermore, a witness had e6ecuted an A=da$it claimin#
that she *ound the missin# 3les, and that her husband told her that it was petitioner
who handed those 3les to him Lastly, the person who supposedly recei$ed these
documents *rom petitioner did not deny or rebu2e the statements made by his
wi*e ?osep"ine Rui/ vs. Bendel 9sa(a Realty Corp., et al.K5 Fo 1A;0A2, Euly 11,
2012
5etirement Pay@ collecti$e bar#ainin# a#reement Article 2AQ o* the Labor Code pro$ides
that it is applicable only to a situation where .1/ there is no C<A or other applicable
employment contract pro$idin# *or retirement bene3ts *or an employee, or .2/ there is a
C<A or other applicable employment contract pro$idin# *or retirement bene3ts *or an
employee, but it is below the re0uirement set by law "he rationale *or the 3rst situation
is to pre$ent the absurd situation where an employee, deser$in# to recei$e retirement
bene3ts, is denied to them throu#h the ne*arious scheme o* employers to depri$e
employees o* the bene3ts due them under e6istin# labor laws 'n the other hand, the
second situation aims to pre$ent pri$ate contracts *rom dero#atin# *rom the public law
"he determinin# *actor in choosin# which retirement scheme to apply is still
superiorityin terms o* bene3ts pro$ided "hus, e$en i* there is an e6istin# C<A but the
same does not pro$ide *or retirement bene3ts e0ual or superior to that which is
pro$ided under Article 2AQ o* the Labor Code, the latter will apply
"here are two retirement schemes at point in this case+ .1/ Article 2AQ o* the Labor
Code, and@ .2/ the PAL&ALPAP 5etirement Plan and the PAL Pilots4 5etirement <ene3t
Plan "he two retirement schemes are alternati$e in nature such that the retired pilot
can only be entitled to that which pro$ides *or superior bene3ts Comparin# the bene3ts
under the two .2/ retirement schemes, it can readily be percei$ed that the 227 days
worth o* salary *or e$ery year o* ser$ice pro$ided under Article 2AQ o* the Labor Code
cannot match the 2-01 o* salary or almost two and a hal* worth o* monthly salary per
year o* ser$ice pro$ided under the PAL Pilots4 5etirement <ene3t Plan, which will be
*urther added to the 127,00000 to which the petitioner is entitled under the PAL&
ALPAP 5etirement Plan Clearly then, it is to the petitioner4s ad$anta#e that PAL4s
retirement plans were applied in the computation o* his retirement bene3ts 'ibiano C.
Elegir vs. 7"ilippine Airlines, 8n!. K5 Fo 1A1;;7, Euly 16, 2012
:n%ust enrichment "here is un%ust enrichment when a person un%ustly retains a bene3t
at the loss o* another, or when a person retains the money or property o* another
a#ainst the *undamental principles o* %ustice, e0uity and #ood conscience "wo
conditions must concur+ .1/ a person is un%ustly bene3ted@ and .2/ such bene3t is
deri$ed at the e6pense o* or with dama#es to another "he enrichment may consist o* a
patrimonial, physical, or moral ad$anta#e, so lon# as it is appreciable in money ?t must
ha$e a correlati$e pre%udice, disad$anta#e or in%ury to the plaintiD which may consist,
not only o* the loss o* the property or the depri$ation o* its en%oyment, but also o* the
non&payment o* compensation *or a prestation or ser$ice rendered to the de*endant
without intent to donate on the part o* the plaintiD, or the *ailure to ac0uire somethin#
that the latter would ha$e obtained
PAL in$ested a considerable amount o* money in sendin# the petitioner abroad to
under#o trainin# to prepare him *or his new appointment as <Q-Q&-00 Captain ?n the
process, the petitioner ac0uired new 2nowled#e and s2ills which eDecti$ely enriched his
technical 2now&how As all other in$estors, PAL e6pects a return on in$estment in the
*orm o* ser$ice by the petitioner *or a period o* , years, which is the estimated len#th o*
time within which the costs o* the latter4s trainin# can be *ully reco$ered "he petitioner
is, thus, e6pected to wor2 *or PAL and utili>e whate$er 2nowled#e he had learned *rom
the trainin# *or the bene3t o* the company )owe$er, a*ter only one .1/ year o* ser$ice,
the petitioner opted to retire *rom ser$ice, lea$in# PAL stripped o* a necessary
manpower :ndeniably, the petitioner was enriched at the e6pense o* PAL A*ter
under#oin# the trainin# *ully shouldered by PAL, he ac0uired a hi#her le$el o* technical
competence which, in the pro*essional realm, translates to a hi#her compensation
Hurther, his trainin# broadened his opportunities *or a better employment as in *act he
was able to trans*er to another airline company immediately a*ter he le*t PAL "o allow
the petitioner to simply lea$e the company without reimbursin# it *or the proportionate
amount o* the e6penses it incurred *or his trainin# will only ma#ni*y the 3nancial
disad$anta#e sustained by PAL 5eason and *airness dictate that he must return to the
company a proportionate amount o* the costs o* his trainin# 'ibiano C. Elegir vs.
7"ilippine Airlines, 8n!. K5 Fo 1A1;;7, Euly 16, 2012
Au#ust 2012 Philippine Supreme Court
Decisions on Labor Law and Procedure
Posted on September 10, 2012 by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines &
Law, Philippines & 5e#ulation !
)ere are select rulin#s o* the Philippine Supreme Court on labor law and procedure+
Disability bene3ts@ entitlement (ntitlement o* sea*arers to disability bene3ts is
#o$erned not only by medical 3ndin#s but also by contract and by law <y contract,
Department 'rder Fo -, series o* 2000, o* the Department o* Labor and (mployment
and the parties4 Collecti$e <ar#ainin# A#reement bind the sea*arer and the employer
<y law, the Labor Code pro$isions on disability apply with e0ual *orce to sea*arers "he
sea*arer, upon si#n&oD *rom his $essel, must report to the company&desi#nated
physician within three .,/ days *rom arri$al *or dia#nosis and treatment Hor the duration
o* the treatment but in no case to e6ceed 120 days, the seaman is on temporary total
disability as he is totally unable to wor2 )e recei$es his basic wa#e durin# this period
until he is declared 3t to wor2 or his temporary disability is ac2nowled#ed by the
company to be permanent, either partially or totally, as his condition is de3ned under
the P'(A Standard (mployment Contract and by applicable Philippine laws ?* the 120
days initial period is e6ceeded and no such declaration is made because the sea*arer
re0uires *urther medical attention, then the temporary total disability period may be
e6tended up to a ma6imum o* 2-0 days, sub%ect to the ri#ht o* the employer to declare
within this period that a permanent partial or total disability already e6ists "he seaman
may o* course also be declared 3t to wor2 at any time such declaration is %usti3ed by his
medical condition
Hrom the time "omacru> was repatriated on Fo$ember 1A, 2002, he submitted himsel*
to the care and treatment o* the company&desi#nated physician 9hen the company&
desi#nated physician made a declaration on Euly 27, 200, that "omacru> was already 3t
to wor2, 2-; days had already lapsed *rom the time he was repatriated As such, his
temporary total disability should be deemed total and permanent, pursuant to Article
1;2 .c/.1/ o* the Labor Code and its implementin# rule7"ilasia &"ipping Agen!y
Corporation, et al. vs. Andres G. Do*a!ru/. K5 Fo 1A11A0, Au#ust 17, 2012
(mployee dismissal@ due process re0uirements "he *ollowin# standards o* due process
shall be substantially obser$ed *or termination o* employment based on %ust causes as
de3ned in Article 2A2 o* the Labor Code+
.i/ A written notice ser$ed on the employee speci*yin# the #round or #rounds *or
termination, and #i$in# said employee reasonable opportunity within which to e6plain
his side
.ii/ A hearin# or con*erence durin# which the employee concerned, with the assistance
o* counsel i* he so desires is #i$en opportunity to respond to the char#e, present his
e$idence or rebut the e$idence presented a#ainst him
.iii/ A written notice o* termination ser$ed on the employee, indicatin# that upon due
consideration o* all the circumstances, #rounds ha$e been established to %usti*y his
termination
Petitioners4 e$idence *ails to pro$e their contention that they aDorded Atencio with due
process "he Eune 21, 1;;; letter, which alle#edly pro$es Atencio4s 2nowled#e o* the
char#es a#ainst him, and which alle#edly constitutes Atencio4s e6planation, clearly
discusses an entirely diDerent topic U which is the remo$al o* his construction company
*rom the Calte6 pro%ect As *or the May 2-, 1;;; letter, which alle#edly constitutes the
notice o* termination o* Atencio4s employment as EA5L4s chie* operatin# mana#er, the
said letter in$ol$es the termination o* the subcontractin# a#reement between EA5L and
Atencio4s company, and not the termination o* Atencio4s employment Hor petitioners4
*ailure to obser$e the two&notice rule under Article 2QQ.b/ o* the Labor Code,
respondent is entitled to nominal dama#es ?arl Constru!tion and Ar*ando 2. DeGada vs.
&i*eon A. Aten!io. K5 Fo 1Q7;6;, Au#ust 1, 2012
Eud#ment@ law o* the case"he law o* the case has been de3ned as the opinion deli$ered
on a *ormer appeal ?t 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 o* the case, whether correct on #eneral principles or not, so lon# as the
*acts on which such decision was predicated continue to be the *acts o* the case be*ore
the court
<oth K5 Fo 16A-QQ and this petition are oDshoots o* petitioner4s purported temporary
measures to preser$e its neutrality with re#ard to the percei$ed $oid in the union
leadership 9hile these two cases arose out o* diDerent notices to stri2e, it is undeniable
that the *acts cited and the ar#uments raised by petitioner are almost identical
?ne$itably, K5 Fo 16A-QQ and this petition see2 only one relie*, that is, to absol$e
petitioner *rom respondent4s char#e o* committin# an un*air labor practice Hor this
reason, we are constrained to apply the law o* the case doctrine in li#ht o* the 3nality o*
our Euly 20, 2007 and September 21, 2007 resolutions in K5 Fo 16A-QQ ?n other
words, our pre$ious a=rmance o* the Court o* Appeals4 3ndin# U that petitioner erred in
suspendin# collecti$e bar#ainin# ne#otiations with the union and in placin# the union
*unds in escrow considerin# the intra&union dispute between the Alia>as and <a[e>
*actions was not a %usti3cation there*or P is bindin# in the present case 0e la &alle
Cniversity vs. 0e la &alle Cniversity E*ployees Asso!iation. K5 Fo 16;27- Au#ust 2,,
2012
Lien@ unpaid wa#es :nder 5epublic Act Fo 101-2, otherwise 2nown as the Hinancial
5ehabilitation and ?nsol$ency Act o* 2010, the ri#ht o* a secured creditor to en*orce his
lien durin# li0uidation proceedin#s is retained 'n the ri#ht o* 3rst pre*erence as re#ards
unpaid wa#es, a distinction should be made between a pre*erence o* credit and a lien A
pre*erence applies only to claims which do not attach to speci3c properties A lien
creates a char#e on a particular property "he ri#ht o* 3rst pre*erence as re#ards unpaid
wa#es reco#ni>ed by Article 110 o* the Labor Code does not constitute a lien on the
property o* the insol$ent debtor in *a$or o* wor2ers ?t is but a pre*erence o* credit in
their *a$or, a pre*erence in application ?t is a method adopted to determine and speci*y
the order in which credits should be paid in the 3nal distribution o* the proceeds o* the
insol$ent4s assets ?t is a ri#ht to a 3rst pre*erence in the dischar#e o* the *unds o* the
%ud#ment debtor Conse0uently, the ri#ht o* 3rst pre*erence *or unpaid wa#es may not
be in$o2ed in this case to nulli*y the *oreclosure sales conducted pursuant to PF<4s ri#ht
as a secured creditor to en*orce its lien on speci3c properties o* its debtor,
A5CAM anuel 0. Fngson, ?r., 4in "is !apa!ity as t"e )i=uidator of ARCA & Co., 8n!.5
vs. 7"ilippine National 'an( K5 Fo 1Q11,2, Au#ust 17, 2012
FL5C@ %urisdiction Althou#h 5epublic Act Fo A0-2, throu#h its Section 10, trans*erred
the ori#inal and e6clusi$e %urisdiction to hear and decide money claims in$ol$in#
o$erseas Hilipino wor2ers *rom the P'(A to the Labor Arbiters, the law did not remo$e
*rom the P'(A the ori#inal and e6clusi$e %urisdiction to hear and decide all disciplinary
action cases and other special cases administrati$e in character in$ol$in# such wor2ers
"he ob$ious intent o* 5epublic Act Fo A0-2 was to ha$e the P'(A *ocus its eDorts in
resol$in# all administrati$e matters aDectin# and in$ol$in# such wor2ers "he FL5C had
no appellate %urisdiction to re$iew the decision o* the P'(A in disciplinary cases
in$ol$in# o$erseas contract wor2ers
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$e in nature, there is no
serious 0uestion about the retroacti$e applicability o* 5epublic Act Fo A0-2 to the
appeal o* the P'(A4s decision on petitioners4 disciplinary action a#ainst respondents ?n
a way, 5epublic Act Fo A0-2 was a procedural law due to its pro$idin# or omittin#
#uidelines on appeal 5epublic Act Fo A0-2 applies to petitioners4 complaint by $irtue
o* the case bein# then still pendin# or undetermined at the time o* the law4s passa#e,
there bein# no $ested ri#hts in rules o* procedure "hey could not $alidly insist that the
rec2onin# period to ascertain which law or rule should apply was the time when the
disciplinary complaint was ori#inally 3led in the P'(A in 1;;, Moreo$er, 5epublic Act
Fo A0-2 and its implementin# rules and re#ulations were already in eDect when
petitioners too2 their appeal 9hen 5epublic Act Fo A0-2 withheld the appellate
%urisdiction o* the FL5C in respect o* cases decided by the P'(A, the appellate
%urisdiction was $ested in the Secretary o* Labor in accordance with his power o*
super$ision and control under Section ,A.1/, Chapter Q, "itle ??, <oo2 ??? o* the 5e$ised
Administrati$e Code o* 1;AQ Eastern editerranean ariti*e )td., et al. vs. Estanislao
&urio, et al. K5 Fo 17-21,, Au#ust 2,, 2012
Petition *or re$iew@ 0uestion o* *act 9hile #enerally, only 0uestions o* law can be raised
in a petition *or re$iew on !ertiorari under 5ule -7 o* the 5ules o* Court, the rule admits
o* certain e6ceptions, namely+ .1/ when the 3ndin#s are #rounded entirely on
speculations, surmises, or con%ectures@ .2/ when the in*erence made is mani*estly
mista2en, absurd, or impossible@ .,/ when there is a #ra$e abuse o* discretion@ .-/ when
the %ud#ment is based on misappreciation o* *acts@ .7/ when the 3ndin#s o* *act are
conJictin#@ .6/ when in ma2in# its 3ndin#s, the same are contrary to the admissions o*
both appellant and appellee@ .Q/ when the 3ndin#s are contrary to those o* the trial
court@ .A/ when the 3ndin#s are conclusions without citation o* speci3c e$idence on
which they are based@ .;/ when the *acts set *orth in the petition as well as in the
petitioner4s main and reply brie*s are not disputed by the respondent@ and .10/ when
the 3ndin#s o* *act are premised on the supposed absence o* e$idence and contradicted
by the e$idence on record "he ille#ality o* petitioner4s dismissal was an issue that was
s0uarely raised be*ore the FL5C 9hen the FL5C decision was re$ersed by the Court o*
Appeals, there was a situation where Bthe 3ndin#s o* *acts are conJictin#C "he petition
*or re$iew 3led by the Petitioner comes within the pur$iew o* e6ception .7/ and by
analo#y, e6ception .Q/ ylene CarvaGal vs. )u/on 0evelop*ent 'an( and1or 9s!ar I.
Ra*ire/. K5 Fo 1A616;, Au#ust 1, 2012
Probationary employee@ security o* tenure A probationary employee, li2e a re#ular
employee, en%oys security o* tenure )owe$er, in cases o* probationary employment,
aside *rom %ust or authori>ed causes o* termination, an additional #round is pro$ided
under Article 2A1 o* the Labor Code, i.e., the probationary employee may also be
terminated *or *ailure to 0uali*y as a re#ular employee in accordance with reasonable
standards made 2nown by the employer to the employee at the time o* the
en#a#ement
Punctuality is a reasonable standard imposed on e$ery employee, whether in
#o$ernment or pri$ate sector As a matter o* *act, habitual tardiness is a serious oDense
that may $ery well constitute #ross or habitual ne#lect o* duty, a %ust cause to dismiss a
re#ular employee Assumin# that petitioner was not apprised o* the standards
concomitant to her %ob, it is but common sense that she must abide by the wor2 hours
imposed by the ban2 Satis*actory per*ormance is and should be one o* the basic
standards *or re#ulari>ation Faturally, be*ore an employer hires an employee, the
*ormer can re0uire the employee, upon his en#a#ement, to under#o a trial period durin#
which the employer determines his 3tness to 0uali*y *or re#ular employment based on
reasonable standards made 2nown to him at the time o* en#a#ement
?t is e$ident that the primary cause o* respondent4s dismissal *rom her probationary
employment was her Bchronic tardinessC At the $ery start o* her employment,
petitioner already e6hibited poor wor2in# habits ($en durin# her 3rst month on the %ob,
she already incurred ei#ht .A/ tardiness 5espondent also cited other in*ractions such as
unauthori>ed lea$es o* absence, mista2e in clearin# o* a chec2, and underper*ormance
All o* these in*ractions were not re*uted by petitionerylene CarvaGal vs. )u/on
0evelop*ent 'an( and1or 9s!ar I. Ra*ire/. K5 Fo 1A616;, Au#ust 1, 2012
Salaries@ burden o* proo* o* payment 9hen there is an alle#ation o* nonpayment o*
salaries and other monetary bene3ts, it is the employer4s burden to pro$e its payment
to its employee "he employer4s e$idence must show, with a reasonable de#ree o*
certainty, that it paid and that the wor2ers actually recei$ed the payment "he reason
*or the rule is that the pertinent personnel 3les, payrolls, records, remittances and other
similar documents are not in the possession o* the wor2er but are in the custody and
absolute control o* the employer ?n the case at bar, the two o=cial receipts issued by
Sa*emar2, and oDered as EA5L4s e$idence, only pro$e that EA5L made a total partial
payment o* P1,A;1,70;70 to the said company *or its Bpro*essional ser$icesC Since
EA5L admits that the said company actually rendered ser$ices *or EA5L on its Calte6
pro%ect, the payment can only be assumed as co$erin# *or the said ser$ices "here is
nothin# on the *ace o* the receipts to support the conclusion that Atencio .and not his
company/ recei$ed it as payment *or his ser$ice as a EA5L employee ?arl Constru!tion
and Ar*ando 2. DeGada vs. &i*eon A. Aten!io. K5 Fo 1Q7;6;, Au#ust 1, 2012
Sea*arers@ contract "he employment o* sea*arers, and its incidents, includin# claims *or
death bene3ts, is #o$erned by the contracts they si#n e$ery time they are hired or
rehired Such contracts ha$e the *orce o* law between the parties as lon# as their
stipulations are not contrary to law, morals, public order or public policy 9hile the
sea*arers and their employers are #o$erned by their mutual a#reements, the P'(A rules
and re#ulations re0uire that the P'(A Standard (mployment Contract, which contains
the standard terms and conditions o* the sea*arers4 employment in *orei#n ocean&#oin#
$essels, be inte#rated in e$ery sea*arer4s contract "he pertinent pro$ision o* the 1;;6
P'(A S(C, which was in eDect at the time o* "anawan4s employment, was Section 20.</
U Compensation and <ene3ts. Balle* ariti*e &ervi!es, 8n!. vs. Ernesto C.
Dana3an K5 Fo 160--- Au#ust 2;, 2012
Sea*arers@ disability bene3ts "he one tas2ed to determine whether the sea*arer suDers
*rom any disability or is 3t to wor2 is the company&desi#nated physician As such, the
sea*arer must submit himsel* to the company&desi#nated physician *or a post&
employment medical e6amination within three days *rom his repatriation <ut the
assessment o* the company&desi#nated physician is not 3nal, bindin# or conclusi$e on
the sea*arer, the labor tribunals, or the courts "he sea*arer may re0uest a second
opinion and consult a physician o* his choice re#ardin# his ailment or in%ury, and the
medical report issued by the physician o* his choice shall also be e$aluated on its
inherent merit by the labor tribunal and the court
"anawan submitted himsel* to Dr Lim, the company&desi#nated physician, *or a medical
e6amination within the ,&day re#lementary period *rom his repatriation "he medical
e6amination conducted *ocused on "anawan4s *oot in%ury, the cause o* his repatriation
Dr Lim treated "anawan *or the *oot in%ury *rom December 1, 1;;Q until May 21, 1;;A,
when Dr Lim declared him 3t to wor2 9ithin that period that lasted 1Q2 days, "anawan
was unable to per*orm his %ob, an indication o* a permanent disability :nder the law,
there is permanent disability i* a wor2er is unable to per*orm his %ob *or more than 120
days, re#ardless o* whether or not he loses the use o* any part o* his body Disability
should be understood more on the loss o* earnin# capacity rather than on the medical
si#ni3cance o* the disability ($en in the absence o* an o=cial 3ndin# by the company&
desi#nated physician to the eDect that the sea*arer suDers a disability and is un3t *or
sea duty, the sea*arer may still be declared to be suDerin# *rom a permanent disability
i* he is unable to wor2 *or more than 120 days 'n the other hand, "anawan4s claim *or
disability bene3ts due to the eye in%ury was already barred by his *ailure to report the
in%ury and to ha$e his eye e6amined by a company&desi#nated physician "he rationale
*or the rule is that reportin# the illness or in%ury within three days *rom repatriation *airly
ma2es it easier *or a physician to determine the cause o* the illness or in%ury
:nder the 1;;6 P'(A S(C, it was enou#h to show that the in%ury or illness was
sustained durin# the term o* the contract "he Court has declared that the un0uali3ed
phrase Bdurin# the termC *ound in Section 20.</ thereo* co$ered all in%uries or illnesses
occurrin# durin# the li*etime o* the contract 9hoe$er claims entitlement to the bene3ts
pro$ided by law should establish his ri#ht to the bene3ts by substantial e$idence
"anawan did not present any proo* o* ha$in# sustained the eye in%ury durin# the term o*
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 $essel Balle* ariti*e
&ervi!es, 8n!. vs. Ernesto C. Dana3an K5 Fo 160--- Au#ust 2;, 2012
September 2012 Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on 'ctober A, 2012 by Leslie C Dy ! Posted in Labor Law !
)ere are select September 2012 rulin#s o* the Philippine Supreme Court on labor law
and procedure+
<reach o* contract@ Contract substitution@ Constructi$e dismissal@ ?lle#al
recruitment "he a#ency and its principal, Modern Metal, committed a prohibited
practice and en#a#ed in ille#al recruitment when they altered or substituted the
contracts appro$ed by the Philippine '$erseas (mployment Administration .P'(A/
Article ,- .i/ o* the Labor Code pro$ides+ ?t shall be unlaw*ul *or any indi$idual, entity,
licensee, or holder o* authority to substitute or alter employment contracts appro$ed
and $eri3ed by the Department o* Labor *rom the time o* actual si#nin# thereo* by the
parties up to and includin# the period o* e6piration o* the same without the appro$al o*
the Secretary o* Labor Meanwhile, Article ,A .i/ o* the Labor Code, as amended by 5A
A0-2, de3ned Bille#al recruitmentC to include the substitution or alteration, to the
pre%udice o* the wor2er, o* employment contracts appro$ed and $eri3ed by the
Department o* Labor and (mployment *rom the time o* actual si#nin# thereo* by the
parties up to and includin# the period o* the e6piration o* the same without the appro$al
o* the Department o* Labor and (mployment
Hurthermore, the a#ency and Modern Metal committed breach o* contract by pro$idin#
substandard wor2in# and li$in# arran#ements, when the contract pro$ided *ree and
suitable housin# "he li$in# 0uarters were cramped as they shared them with 2Q other
wor2ers "he lod#in# house was *ar *rom the %obsite, lea$in# them only three to *our
hours o* sleep e$ery wor2day because o* the lon# hours o* tra$el to and *rom their place
o* wor2, not to mention that there was no potable water in the lod#in# house which was
located in an area where the air was polluted "hey complained with the a#ency about
the hardships that they were suDerin#, but the a#ency *ailed to act on their reports
Si#ni3cantly, the a#ency *ailed to re*ute their claims
"hus, with their ori#inal contracts substituted and their oppressi$e wor2in# and li$in#
conditions unmiti#ated or unresol$ed, the decision to resi#n is not surprisin# "hey
were compelled by the dismal state o* their employment to #i$e up their %obs@
eDecti$ely, they were constructi$ely dismissed A constructi$e dismissal or dischar#e is
Ba 0uittin# because continued employment is rendered impossible, unreasonable or
unli2ely, as, an oDer in$ol$in# a demotion in ran2 and a diminution in payC
9ithout doubt, continued employment with Modern Metal had become unreasonable A
reasonable mind would not appro$e o* a substituted contract that pays a diminished
salary U *rom 1,70 A(D a month in the ori#inal contract to 1,000 A(D to 1,200 A(D in
the appointment letters, a diDerence o* 170 A(D to 270 A(D .not %ust 70 A(D as the
a#ency claimed/ or an e6tended employment .*rom 2 to , years/ at such in*erior terms,
or a B*ree and suitableC housin# which is hours away *rom the %ob site, cramped and
crowded, without potable water and e6posed to air pollution
9e thus cannot accept the a#ency4s insistence that the respondents $oluntarily
resi#ned since they personally prepared their resi#nation letters in their own
handwritin# 7ert1C7 anpo3er E%ponent Co., 8n!. vs. A*ando A. .inuya, et al. K5
Fo 1;Q72A September 7, 2012
Disability bene3t Deemed read and incorporated into the Contract o* (mployment
between Da$id and respondents are the pro$isions o* the 2000 Philippine '$erseas
(mployment A#ency Standard (mployment Contract .P'(AS(C/ Sec 20.</.-/ o* the
P'(A&S(C clearly established a disputable presumption in *a$or o* the compensability o*
an illness suDered by a sea*arer durin# the term o* his contract )ence, unless contrary
e$idence is presented by the sea*arer4s employerRs, this disputable presumption stands
?n this case, Da$id not only relies on this disputable presumption o* the compensability
o* his illness but Da$id has pro$ided more than a reasonable ne6us between the nature
o* his %ob and the disease that mani*ested itsel* on the si6th month o* his last contract
with respondents
?t is not necessary that the nature o* the employment be the sole and only reason *or
the illness suDered by the sea*arer ?t is su=cient that there is a reasonable lin2a#e
between the disease suDered by the employee and his wor2 to lead a rational mind to
conclude that his wor2 may ha$e contributed to the establishment or, at the $ery least,
a##ra$ation o* any pre&e6istin# condition he mi#ht ha$e had
Da$id showed that part o* his duties as a "hird '=cer o* the crude tan2er MR" 5aphael
in$ol$ed Bo$erseein# the loadin#, stowa#e, securin# and unloadin# o* car#oesC As a
necessary corollary, Da$id was *re0uently e6posed to the crude oil that MR" 5aphael was
carryin# "he chemical components o* crude oil include, amon# others, sul*ur, $anadium
and arsenic compounds )ydro#en sul3de and carbon mono6ide may also be
encountered, while ben>ene is a naturally occurrin# chemical in crude oil ?t has been
re#arded that these ha>ardous chemicals can possibly contribute to the *ormation o*
cancerous masses
?n this case, Da$id was dia#nosed with MH) .now 2nown as undiDerentiated
pleomorphic sarcoma L:PSM/, which is a class o* so*t tissue sarcoma or an illness that
account *or appro6imately 11 o* the 2nown mali#nant tumors As stated by Dr Pe[a o*
the MMC, who was consulted by the company&desi#nated physician, the etiolo#y o* so*t
tissue sarcomas are multi*actorial )owe$er, some *actors are associated with a hi#her
ris2 "hese *actors include e6posure to chemical carcino#ens li2e some o* the chemical
components o* crude oil ?essie .. 0avid, represented by "is 3ife, a. D"eresa &. 0avid,
and !"ildren, 2at"erine and 2ristina 0avid vs. 9&G &"ip*anage*ent anila, 8n!. and1or
i!"ael*ar &"ipping &ervi!es. K5 Fo 1;Q207 September 26, 2012
Dismissal@ :n*air labor practice@ Liability o* corporate o=cers@ Moral and e6emplary
dama#es "he re0uisites *or a $alid dismissal are+ .a/ the employee must be aDorded
due process, ie, he must be #i$en an opportunity to be heard and de*end himsel*@ and
.b/ the dismissal must be *or a $alid cause as pro$ided in Article 2A2 o* the Labor Code,
or *or any o* the authori>ed causes under Articles 2A, and 2A- o* the same Code ?n the
case be*ore us, both elements are completely lac2in# 5espondents were dismissed
without any %ust or authori>ed cause and without bein# #i$en the opportunity to be
heard and de*end themsel$es "he law mandates that the burden o* pro$in# the
$alidity o* the termination o* employment rests with the employer Hailure to dischar#e
this e$identiary burden would necessarily mean that the dismissal was not %usti3ed and,
there*ore, ille#al :nsubstantiated suspicions, accusations, and conclusions o*
employers do not pro$ide *or le#al %usti3cation *or dismissin# employees ?n case o*
doubt, such cases should be resol$ed in *a$or o* labor, pursuant to the social %ustice
policy o* labor laws and the Constitution
Anent the char#e o* un*air labor practice, Article 2-A .a/ o* the Labor Code considers it
an un*air labor practice when an employer inter*eres, restrains or coerces employees in
the e6ercise o* their ri#ht to sel*&or#ani>ation or the ri#ht to *orm an association ?n
order to show that the employer committed un*air labor practice under the Labor Code,
substantial e$idence is re0uired to support the claim Substantial e$idence has been
de3ned as such rele$ant e$idence as a reasonable mind mi#ht accept as ade0uate to
support a conclusion ?n the case at bar, respondents were indeed unceremoniously
dismissed *rom wor2 by reason o* their intent to *orm and or#ani>e a union
A corporation, bein# a %uridical entity, may act only throu#h its directors, o=cers and
employees 'bli#ations incurred by them, while actin# as corporate a#ents, are not
their personal liability but the direct accountability o* the corporation they represent
)owe$er, corporate o=cers may be deemed solidarily liable with the corporation *or the
termination o* employees i* they acted with malice or bad *aith ?n the present case, the
lower tribunals unanimously *ound that Percy and )arbutt, in their capacity as corporate
o=cers o* <ur#os, acted maliciously in terminatin# the ser$ices o* respondents without
any $alid #round and in order to suppress their ri#ht to sel*&or#ani>ation Section ,1 o*
the Corporation Code ma2es a director personally liable *or corporate debts i* he
will*ully and 2nowin#ly $otes *or or assents to patently unlaw*ul acts o* the corporation
?t also ma2es a director personally liable i* he is #uilty o* #ross ne#li#ence or bad *aith in
directin# the aDairs o* the corporation "hus, Percy and )arbutt, ha$in# acted in bad
*aith in directin# the aDairs o* <ur#os, are %ointly and se$erally liable with the latter *or
respondents4 dismissal
"he awards o* moral and e6emplary dama#es in *a$or o* respondents are also in order
Moral dama#es may be reco$ered where the dismissal o* the employee was tainted by
bad *aith or *raud, or where it constituted an act oppressi$e to labor, and done in a
manner contrary to morals, #ood customs or public policy, while e6emplary dama#es
are reco$erable only i* the dismissal was done in a wanton, oppressi$e, or male$olent
manner "he #rant o* attorney4s *ees is li2ewise proper Attorney4s *ees may li2ewise be
awarded to respondents who were ille#ally dismissed in bad *aith and were compelled to
liti#ate or incur e6penses to protect their ri#hts by reason o* the oppressi$e acts o*
petitioners "he un%usti3ed act o* petitioners had ob$iously compelled respondents to
institute an action primarily to protect their ri#hts and interests which warrants the
#rantin# o* the award 7ar( 6otel, et al. vs. anolo &oriano, et al. K5 Fo 1Q111A
September 10, 2012
(mployment termination@ Substanti$e and procedural due process@ Mass lea$e@ Stri2e
Petitioners were ille#ally dismissed as they were not aDorded substanti$e and
procedural due process "o %usti*y the dismissal o* an employee on the #round o* serious
misconduct, the employer must 3rst establish that the employee is #uilty o* improper
conduct, that the employee $iolated an e6istin# and $alid company rule or re#ulation, or
that the employee is #uilty o* a wron#doin# ?n the instant case, <iomedica *ailed to
e$en present a copy o* the rules and to pro$e that petitioners were made aware o* such
re#ulations "he accusation is *or en#a#in# in a mass lea$e tantamount to an ille#al
stri2e "he phrase Bmass lea$eC may re*er to a simultaneous a$ailment o* authori>ed
lea$e bene3ts by a lar#e number o* employees in a company )ere, only 7 employees
were absent on the same day "hey did not #o on stri2e, which is a temporary stoppa#e
o* wor2 by the concerted action o* employees as a result o* any industrial or labor
dispute BConcertedC is de3ned as Bmutually contri$ed or plannedC or Bper*ormed in
unisonC ?n the case at bar, the 7 petitioners went on lea$e *or $arious reasons "hey
were in diDerent places to attend to their personal needs or aDairs
"he petitioners were char#ed with conductin# an ille#al stri2e, not a mass lea$e, without
speci*yin# the e6act acts that the company considers as constitutin# an ille#al stri2e or
$iolati$e o* company policies Such alle#ation *alls short o* the re0uirement in Tin# o*
Tin#s "ransport, ?nc o* Ba detailed narration o* the *acts and circumstances that will
ser$e as basis *or the char#e a#ainst the employeesC A bare mention o* an Bille#al
stri2eC will not su=ce Hurther, while <iomedica cites the pro$isions o* the company
policy which petitioners purportedly $iolated, it *ailed to 0uote said pro$isions in the
notice so petitioners can be ade0uately in*ormed o* the nature o* the char#es a#ainst
them and intelli#ently 3le their e6planation and de*enses to said accusations
Moreo$er, the period o* 2- hours allotted to petitioners to answer the notice was
se$erely insu=cient and in $iolation o* the implementin# rules o* the Labor Code :nder
the implementin# rule o* Art 2QQ, an employee should be #i$en Breasonable
opportunityC to 3le a response to the notice
?n addition, <iomedica did not set the char#es a#ainst petitioners *or hearin# or
con*erence 9hile petitioners did not submit any written e6planation to the char#es, it is
incumbent *or <iomedica to set the matter *or hearin# or con*erence to hear the
de*enses and recei$e e$idence o* the employees More importantly, <iomedica is duty&
bound to e6ert eDorts, durin# said hearin# or con*erence, to hammer out a settlement
o* its diDerences with petitioners "hese prescriptions <iomedica *ailed to satis*y Lastly,
<iomedica a#ain de$iated *rom the dictated contents o* a written notice o* termination
as laid down in Sec 2, <oo2 G, 5ule O??? o* the ?mplementin# 5ules that it should
embody the *acts and circumstances to support the #rounds %usti*yin# the
termination Ale% J. NaranGo, et al. vs. 'io*edi!a 6ealt" Care, 8n!., et al. K5 Fo
1;,QA; September 1;, 2012
(mployee dismissal@ 5einstatement Hollowin# Article 2Q; o* the Labor Code, an
employee who is un%ustly dismissed *rom wor2 is entitled to reinstatement without loss
o* seniority ri#hts and other pri$ile#es and to his *ull bac2wa#es computed *rom the
time he was ille#ally dismissed )owe$er, considerin# that respondent Da2ila was
terminated one .1/ day prior to his compulsory retirement on May 2, 200Q, his
reinstatement is no lon#er *easible Accordin#ly, the FL5C correctly held him entitled to
the payment o* his retirement bene3ts pursuant to the C<A 'n the other hand, his
bac2wa#es should be computed only *or days prior to his compulsory retirement which
in this case is only a day Conse0uently, the award o* reinstatement wa#es pendin#
appeal must be deleted *or lac2 o* basis D"e Ne3 7"ilippine &(ylanders, 8n!. and1or
?ennifer . EKanoA'ote vs. ;ran!is!o N. 0a(ila.K5 Fo 1;;7-Q September 2-, 2012
($idence@ Constructi$e dismissal@ "rans*er@ Substantial e$idence ?n labor cases, strict
adherence with the technical rules is not re0uired "his liberal policy, howe$er, should
still con*orm to the rudiments o* e0uitable principles o* law Hor instance, belated
submission o* e$idence may only be allowed i* the delay is ade0uately %usti3ed and the
e$idence is clearly material to establish the party4s cause Labor tribunals, such as the
FL5C, are not precluded *rom recei$in# e$idence submitted on appeal as technical rules
are not bindin# in cases submitted be*ore them )owe$er, any delay in the submission
o* e$idence should be ade0uately e6plained and should ade0uately pro$e the
alle#ations sou#ht to be pro$en ?n the present case, M'5(SC' ??4s belated submission
o* e$idence cannot be permitted M'5(SC' ?? did not cite any reason why it had *ailed
to 3le its position paper or present its cause be*ore the Labor Arbiter despite su=cient
notice and time #i$en to do so 'nly a*ter an ad$erse decision was rendered did it
present its de*ense and rebut the e$idence o* Ca#alawan by alle#in# that his trans*er
was made in response to the letter&re0uest o* the area mana#er o* the Kinoo# sub&o=ce
as2in# *or additional personnel to meet its collection 0uota "o our mind, howe$er, the
belated submission o* the said letter&re0uest without any $alid e6planation casts doubt
on its credibility, especially so when the same is not a newly disco$ered e$idence
"he rule is that it is within the ambit o* the employer4s prero#ati$e to trans*er an
employee *or $alid reasons and accordin# to the re0uirement o* its business, pro$ided
that the trans*er does not result in demotion in ran2 or diminution o* salary, bene3ts
and other pri$ile#es "his Court has always considered the mana#ement4s prero#ati$e
to trans*er its employees in pursuit o* its le#itimate interests <ut this prero#ati$e
should be e6ercised without #ra$e abuse o* discretion and with due re#ard to the basic
elements o* %ustice and *air play, such that i* there is a showin# that the trans*er was
unnecessary or incon$enient and pre%udicial to the employee, it cannot be upheld )ere,
while we 3nd that the trans*er o* Ca#alawan neither entails any demotion in ran2 since
he did not ha$e tenurial security o$er the position o* head o* the disconnection crew,
nor result to diminution in pay as this was not su=ciently pro$en by him, M'5(SC' ??4s
e$idence is ne$ertheless not enou#h to show that said trans*er was re0uired by the
e6i#ency o* the electric cooperati$e4s business interest Simply stated, the e$idence
sou#ht to be admitted by M'5(SC' ?? is not substantial to pro$e that there was a
#enuine business ur#ency that necessitated the trans*er
9hen there is doubt between the e$idence submitted by the employer and that
submitted by the employee, the scales o* %ustice must be tilted in *a$or o* the
employee "his is consistent with the rule that an employer4s cause could only succeed
on the stren#th o* its own e$idence and not on the wea2ness o* the employee4s
e$idence "hus, M'5(SC' ?? cannot rely on the wea2ness o* 'rti>4s certi3cation in order
to #i$e more credit to its own e$idence Sel*&ser$in# and unsubstantiated declarations
are not su=cient where the 0uantum o* e$idence re0uired to establish a *act is
substantial e$idence, described as more than a mere scintilla "he e$idence must be
real and substantial, and not merely apparent M'5(SC' ?? has miserably *ailed to
dischar#e the onus o* pro$in# the $alidity o* Ca#alawan4s trans*er isa*is 9riental 88
Ele!tri! &ervi!e Cooperative 49RE&C9 885 vs. .irgilio . Cagala3an. K5 Fo 1Q71Q0
September 7, 2012
5etirement bene3ts 9hile it is true that based on pre$ailin# %urisprudence, disallowed
bene3ts recei$ed in #ood *aith need not be re*unded, the case be*ore us may be
distin#uished *rom those cases with that rulin# because the monies in$ol$ed here are
retirement bene3ts 5etirement bene3ts belon# to a diDerent class o* bene3ts All the
cases with that rulin# in$ol$ed bene3ts such as cash #i*ts, representation allowances,
rice subsidies, uni*orm allowances, per diems, transportation allowances, and the li2e
"he *ore#oin# allowances or *rin#e bene3ts are #i$en in addition to one4s salary, either
to reimburse him *or e6penses he mi#ht ha$e incurred in relation to his wor2, or as a
*orm o* supplementary compensation 'n the other hand, retirement bene3ts are #i$en
to one who is separated *rom employment either $oluntarily or compulsorily Such
bene3ts, sub%ect to certain re0uisites imposed by law andRor contract, are #i$en to the
employee on the assumption that he can no lon#er wor2 "hey are also #i$en as a *orm
o* reward *or the ser$ices he had rendered "he purpose is not to enrich him but to help
him durin# his non&producti$e years
'ur Decision does not preclude the retirees *rom recei$in# retirement bene3ts pro$ided
by e6istin# retirement laws 9hat they are prohibited *rom #ettin# are the additional
bene3ts under the KS?S 5HP, which we *ound to ha$e emanated *rom a $oid and ille#al
board resolution "o allow the payees to retain the disallowed bene3ts would amount to
their un%ust enrichment to the pre%udice o* the KS?S, whose a$owed purpose is to
maintain its actuarial sol$ency to 3nance the retirement, disability, and li*e insurance
bene3ts o* its members Govern*ent &ervi!e 8nsuran!e &yste* 4G&8&5, et al. vs.
Co**ission on Audit 4C9A5, et al. K5 Fo 162,Q2 September 11, 2012
5eleaseRWuitclaim@ Separation pay "he releaseR0uitclaim a=da$its are in$alid *or bein#
a#ainst public policy *or two reasons+ .1/ the terms o* the settlement are
unconscionable@ the separation pay *or termination due to reor#ani>ationRrestructurin#
was de3cient by Php-00,00000 *or each employee@ they were #i$en only hal* o* the
amount they were le#ally entitled to@ and .2/ the absence o* $oluntariness when the
employees si#ned the document, it was their dire circumstances and inability to support
their *amilies that 3nally dro$e them to accept the amount oDered 9ithout %obs and
with *amilies to support, they dallied in e6ecutin# the 0uitclaim instrument, but were
e$entually *orced to si#n #i$en their circumstances "o be sure, a settlement under
these terms is not and cannot be a reasonable one, #i$en especially the respondent4s
len#th o* ser$ice U 27 years *or Sbarola and 1; years *or 5i$era Radio indanao
Net3or(, 8n!. and Eri! &. Canoy vs. 0o*ingo I. Fbarola, et al. K5 Fo 1;A662
September 12, 2012
5es %udicata B5es %udicata means a matter ad%ud#ed@ a thin# %udicially acted upon or
decided@ a thin# or matter settled by %ud#mentC ?t denotes Bthat a 3nal %ud#ment or
decree on the merits by a court o* competent %urisdiction is conclusi$e o* the ri#hts o*
the parties or their pri$ies in all latter suits on all points and matters determined in the
*ormer suit Hor res %udicata, in its concept as a bar by *ormer %ud#ment to apply, the
*ollowin# must be present+
1 "he *ormer %ud#ment or order is 3nal@
2 ?t is rendered by a court ha$in# %urisdiction o$er the sub%ect matter and the
parties@
, ?t is a %ud#ment or an order on the merits@ and,
- "here is between the 3rst and the second identity o* parties, identity o* sub%ect
matter, and identity o* cause o* action
"he Decision o* this Court in K5 Fos 17;-60 and 17;-61 became 3nal and e6ecutory
on May 20, 2011 ?t is a decision based on the merits o* the case and rendered by this
Court in the e6ercise o* its appellate %urisdiction a*ter the parties in$o2ed its
%urisdiction "here is also, between the two sets o* consolidated cases, identity o* the
parties, sub%ect matter and causes o* action "he parties in K5 Fo 17;-60 and
17;-61 are also impleaded as parties in these consolidated cases And while some o*
the parties herein are not included in K5 Fos 17;-60 and 17;-61, the same are only
*ew ?n any e$ent, it is well&settled that only substantial, and not absolute, identity o*
the parties is re0uired *or res %udicata to lie B"here is substantial identity o* the parties
when there is a community o* interest between a party in the 3rst case and a party in
the second case albeit the latter was not impleaded in the 3rst caseC
9ith re#ard to identity o* cause o* action, it has been held that there is identity o*
causes o* action when the same e$idence will sustain both actions or when the *acts
essential to the maintenance o* the two actions are identical )ere, the bone o*
contention in both sets o* consolidated cases boils down to the nature and
conse0uences o* complainants4 April ,, 2000 mass action "he antecedent *acts that
#a$e rise to all the cases were the same Fecessarily, there*ore, the same e$idence
would sustain all actions Such similarity in the e$idence re0uired to sustain all actions
is also borne out by the identity o* the issues in$ol$ed in all these cases 9hile the
parties ha$e presented a plethora o* ar#uments which we earlier discussed at len#th,
the same nonetheless boil down to the same crucial issues *ormulated in K5 Fos
17;-60 and 17;-61
?t should be recalled that in K5 Fo 17,Q;;, the complainants assailed the 5esolutions
dated Eanuary 1-, 2002 and Hebruary 20, 2002 o* the CA4s Hourth Di$ision #rantin#
Metroban24s re0uest *or in%uncti$e relie*s "hey claimed that the reinstatement aspect
o* the Labor Arbiter4s Decision is immediately e6ecutory )ence, they are entitled to
bac2wa#es *rom the time the Labor Arbiter promul#ated his Decision until it was
re$ersed by the FL5C
As discussed abo$e, howe$er, the Fo$ember 17, 2010 Decision o* this Court in K5 Fos
17;-60 and 17;-61 already ad%udicated the respecti$e ri#hts and liabilities o* the
parties Said Decision pronouncin# the monetary awards to which the parties herein are
entitled became 3nal and e6ecutory on May 20, 2011 :nder the rule on immutability o*
%ud#ment, this Court cannot alter or modi*y said Decision ?t is a well&established rule
that once a %ud#ment has become 3nal and e6ecutory, it is no lon#er susceptible to any
modi3cation &olidban( Cnion, et al. vs. etropolitan 'an( and Drust
Co*pany1etropolitan 'an( and Drust Co*pany vs. &olidban( Cnion, et al.1&olidban(
Corporation, et!., et al. vs. &olidban( Cnion, et al.1&olidban( Cnion, et al. vs.
etropolitan 'an( and Drust Co*pany. K5 Fo 17,Q;;RK5 Fo 17Q16;RK5 Fo
17Q,2QRK5 Fo 17Q706 September 1Q, 2012
5einstatement@ Strained relations A determination o* the applicability o* the doctrine o*
strained relations is essentially a *actual 0uestion and, thus, not a proper sub%ect in this
petition "his rule, howe$er, admits o* e6ceptions ?n cases where the *actual 3ndin#s
o* the LA and the FL5C are conJictin#, the Court, in the e6ercise i* e0uity %urisdiction,
may re$iew and re&e$aluate the *actual issues and loo2 into the records o* the case and
re&e6amine the 0uestioned 3ndin#s
As the records bear out, the LA *ound that patent animosity e6isted between ACMC and
<ides considerin# the con*rontation that too2 place between the latter and Matthew
"he con*rontation coupled with <ides4 re*usal to be reinstated led to the LA4s 3ndin# o*
Bstrained relationsC necessitatin# an award o* separation pay in lieu o* reinstatement
"he FL5C, on the other hand, deleted the said award *or lac2 o* *actual basis "he CA
reinstated the LA4s 3ndin# o* Bstrained relationsC and e6plained that too much enmity
had de$eloped between ACMC and <ides that necessarily barred the latter4s
reinstatement
"he Court is well aware that reinstatement is the rule and, *or the e6ception o* Bstrained
relationsC to apply, it should be pro$ed that it is li2ely that, i* reinstated, an atmosphere
o* antipathy and anta#onism would be #enerated as to ad$ersely aDect the e=ciency
and producti$ity o* the employee concerned
:nder the doctrine o* strained relations, the payment o* separation pay is considered an
acceptable alternati$e to reinstatement when the latter option is no lon#er desirable or
$iable 'n one hand, such payment liberates the employee *rom what could be a hi#hly
oppressi$e wor2 en$ironment 'n the other hand, it releases the employer *rom the
#rossly unpalatable obli#ation o* maintainin# in its employ a wor2er it could no lon#er
trust Moreo$er, the doctrine o* strained relations has been made applicable to cases
where the employee decides not to be reinstated and demands *or separation pay
?n the present case, <ides has consistently maintained, *rom the proceedin#s in the LA
up to the CA, his re*usal to be reinstated due to his *ear o* reprisal which he could
e6perience as a conse0uence o* his return <y doin# so, <ides une0ui$ocally *oreclosed
reinstatement as a relie*
Apo C"e*i!al anufa!turing and i!"ael C"eng vs. Ronaldo A. 'ides. K5 Fo 1A6002
September 1;, 2012
Sea*arers disability bene3ts@ Attorney4s *ees ?n determinin# the disability bene3ts due a
sea*arer the P'(A Standard (mployment Contract .S(C/, speci3cally its schedule o*
bene3ts, medical 3ndin#s, Article 1;2 .c/.1/ o* the Labor Code, and 5ule O, Section 2 o*
its implementin# rules and re#ulations must be considered "he initial treatment period
o* 120 days may be e6tended up to a ma6imum o* 2-0 days under the conditions
prescribed by law
:nder Article 22;A o* the Ci$il Code, attorney4s *ees can be reco$ered BLwMhen the
de*endant4s act or omission has compelled the plaintiD to liti#ate with third persons or
to incur e6penses to protect his interestC "his Court sees no reason why dama#es or
attorney4s *ees should be awarded to Penales ?t is ob$ious that he did not #i$e the
petitioners4 company&desi#nated physician ample time to assess and e$aluate his
condition, or to treat him properly *or that matter "he petitioners had a $alid reason *or
re*usin# to pay his claims, especially when they were complyin# with the terms o* the
P'(A S(C with re#ard to his allowances and treatment 7a!iL! 9!ean anning 8n!., et
al. vs. 'enGa*in 0. 7enales. K5 Fo 162A0; September 7, 2012
Eanuary 201, Philippine Supreme
Court Decisions on Labor Law
and Procedure
Posted on Hebruary 11, 201, by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines &
Law ! "a##ed appeal,arbitration, bac2wa#es, *orum shoppin#, FL5C, redundancy, reinstatement !
)ere are select Eanuary 201, rulin#s o* the Supreme Court o* the Philippines on labor
law and procedure+
Appeal to the Fational Labor 5elations Commission .FL5C/@ 5e0uisites *or per*ection o*
appeal@ Eoint declaration under oath accompanyin# the surety bond@ Substantial
compliance with procedural rules "here was substantial compliance with the FL5C
5ules o* Procedure when the respondents PAL Maritime Corporation and 9estern
Shippin# A#encies, Pte, Ltd 3led, albeit belatedly, the Eoint Declaration :nder 'ath,
which is re0uired when an employer appeals *rom the Labor Arbiter4s decision #rantin#
a monetary award and posts a surety bond :nder the FL5C rules, the *ollowin#
re0uisites are re0uired to per*ect the employer4s appeal+ .1/ it must be 3led within the
re#lementary period@ .2/ it must be under oath, with proo* o* payment o* the re0uired
appeal *ee and the postin# o* a cash or surety bond@ and .,/ it must be accompanied by
typewritten or printed copies o* the memorandum o* appeal, statin# the #rounds relied
upon, the supportin# ar#uments, the relie*s prayed *or, and a statement o* the date o*
receipt o* the appealed decision, with proo* o* ser$ice on the other party o* said appeal
?* the employer posts a surety bond, the FL5C rules *urther re0uire the submission by
the employer, his or her counsel, and the bondin# company o* a %oint declaration under
oath attestin# that the surety bond posted is #enuine and that it shall be in eDect until
the 3nal disposition o* the case
?n the case at bar, the respondents posted a surety bond e0ui$alent to the monetary
award and 3led the notice o* appeal and the appeal memorandum within the
re#lementary period 9hen the FL5C subse0uently directed the 3lin# o* a Eoint
Declaration :nder 'ath, the respondents immediately complied with the said order
"here was only a late submission o* the Eoint Declaration Considerin# that there was
substantial compliance with the rules, the same may be liberally construed "he
application o* technical rules may be rela6ed in labor cases to ser$e the demands o*
substantial %ustice Rolando ). Cervantes vs. 7A) ariti*e Corporation and1or Bestern
&"ipping Agen!ies, 7te., )td. K5 Fo 1Q720; Eanuary 16, 201,
Completeness o* ser$ice by re#istered mail@ (6ception to the #eneral rule re#ardin# a
corporation4s $eri3cation and certi3cation o* non&*orum shoppin#@ ?nterpretation o*
school C<A A school C<A must be read in con%unction with statutory and administrati$e
re#ulations #o$ernin# *aculty 0uali3cations Such re#ulations *orm part o* a $alid C<A
without need *or the parties to ma2e e6press re*erence to the same
?n the case at bar, the :ni$ersity o* the (ast .:(/ repeatedly e6tended only semester&to&
semester *aculty appointments to the respondents Pepanio and <ueno, since they had
not completed post#raduate de#rees "he respondents, howe$er, claimed that the
1;;- C<A between :( and the *aculty union did not yet re0uire a master4s de#ree *or a
teacher to ac0uire re#ular status )a$in# rendered more than three consecuti$e years
o* *ull&time ser$ice to the school, the respondents insisted that :( should ha$e #i$en
them permanent appointments
"he Supreme Court obser$ed that the policy re0uirin# colle#e teachers to ha$e
post#raduate de#rees was pro$ided in the Manual o* 5e#ulations issued as early as
1;;2 by the Department o* (ducation, Culture and Sports .D(CS/, now the Department
o* (ducation ?n promul#atin# the Manual o* 5e#ulations, D(CS e6ercised its power o*
re#ulation o$er educational institutions, which includes prescribin# the minimum
academic 0uali3cations *or teachin# personnel "he le#islature subse0uently
trans*erred the power to prescribe such 0uali3cations *or teachers in institutions o*
hi#her learnin# to the Commission on )i#her (ducation .C)(D/ )owe$er, the 1;;2
Manual o* 5e#ulations issued by D(CS continued to apply to colle#es and uni$ersities
until 2010, when C)(D issued a 5e$ised Manual o* 5e#ulations
"hus, the re0uirement o* a master4s de#ree *or colle#e teachers, as ori#inally pro$ided
in the 1;;2 Manual o* 5e#ulations, was deemed incorporated in the 1;;- C<A between
:( and the *aculty union Hurthermore, the subse0uent C<A in 2001, which pro$ided *or
the e6tension o* conditional probationary status to the respondents, sub%ect to their
obtainin# a master4s de#ree within the probationary period, clearly showed that :(
intended to sub%ect the respondents4 appointments to the standards set by the law
"he re0uirement o* a master4s de#ree *or tertiary education teachers is not
unreasonable, considerin# that the operation o* educational institutions in$ol$es public
interest "he #o$ernment has a ri#ht to ensure that only 0uali3ed persons, in
possession o* su=cient academic 2nowled#e and teachin# s2ills, are allowed to teach in
such institutions
"he Supreme Court also o$erruled the respondents4 contention that :( 3led its appeal
to the FL5C beyond the re0uired ten .10/&day period Hor completeness o* ser$ice by
re#istered mail, the rec2onin# period starts either *rom the date o* actual receipt o* the
mail by the addressee or a*ter 3$e .7/ days *rom the date he or she recei$ed the 3rst
notice *rom the postmaster ?n this case, the respondents a$erred that, on March 1Q,
2007, the postmaster #a$e :(4s counsel a notice to claim the mail containin# the Labor
Arbiter4s decision "he respondents claimed that :(4s counsel was deemed in receipt o*
the decision 7 days a*ter the #i$in# o* the notice, or on March 22, 2007 "hus,
accordin# to the respondents, when :( 3led its appeal to the FL5C on April 1-, 2007,
the 10&day re#lementary period had already lapsed "he Supreme Court, howe$er,
ruled that there must be conclusi$e proo* that the re#istry notice was recei$ed by or at
least ser$ed on the addressee ?n this case, the records did not show that :(4s counsel
in *act recei$ed the alle#ed re#istry notice re0uirin# him to claim the mail 'n the other
hand, :( was able to present a re#istry return receipt showin# that its counsel actually
recei$ed a copy o* the Labor Arbiter4s decision on April -, 2007 5ec2oned *rom this
date, the 10&day re#lementary period had not yet lapsed when :( 3led its appeal to the
FL5C on April 1-, 2007
Anent :(4s *ailure to comply with the #eneral rule that the <oard o* Directors or <oard
o* "rustees o* a corporation must authori>e the person who shall si#n the $eri3cation
and certi3cation o* non&*orum shoppin# accompanyin# a petition, the Supreme Court
held that such authori>ation is not necessary when it is sel*&e$ident that the si#natory is
in a position to $eri*y the truth*ulness and correctness o* the alle#ations in the petition
"he Supreme Court declared that Dean (leanor Ea$ier, who si#ned :(4s $eri3cation and
certi3cation, was in such a position, since she 2new the *actual antecedents o* the case
and she actually communicated with the respondents re#ardin# the re0uired
post#raduate 0uali3cation Cniversity of t"e East, et al. vs. Anali/a ;. 7epanio and
ariti 0. 'ueno. K5 Fo 1;,A;Q Eanuary 2,, 201,
Disease as a #round *or termination@ 5etirement under the Labor Code@ A#e and tenure
re0uirements *or retirement@ Hinancial assistance :nder the Labor Code pro$ision on
disease as a #round *or termination .*ormerly, Article 2A-, but now renumbered
pursuant to 5epublic Act Fo 10171/, it must be the employer who initiates the
termination o* the employee4s ser$ices "he a*orementioned pro$ision cannot be
applied in this case, considerin# that it was the late petitioner Padillo, and not the 5ural
<an2 o* Fabunturan, ?nc .<an2/, who se$ered the employment relations 9ith his
memory impaired a*ter suDerin# a mild stro2e due to hypertension, Padillo wrote a letter
to the <an2, e6pressin# his intention to a$ail o* an early retirement pac2a#e "he clear
import o* Padillo4s letter and the *act that he had stopped reportin# *or wor2 e$en be*ore
sendin# the said letter shows that he $oluntarily retired Ki$en the inapplicability o* the
Labor Code pro$ision on disease as a #round *or termination, it necessarily *ollows that
Padillo4s claim *or separation pay must be denied
As re#ards Padillo4s claim *or retirement bene3ts, the pro$ision o* the Labor Code on
retirement .*ormerly, Art 2AQ, but now renumbered pursuant to 5A Fo 10171/ states
that, in the absence o* any applicable a#reement, an employee who has ser$ed at least
3$e .7/ years in the company may retire upon reachin# the a#e o* si6ty .60/ years, but
not beyond si6ty&3$e .67/ years, to be entitled to retirement pay e0ui$alent to at least
one&hal* .1R2/ month salary *or e$ery year o* ser$ice, with a *raction o* at least si6 .6/
months bein# considered as one whole year Fotably, the a*orementioned a#e and
tenure re0uirements are cumulati$e, and non&compliance with either ne#ates the
employee4s entitlement to the retirement pay under the Labor Code ?n this case, the
<an2 did not ha$e a retirement plan or any other contract with its employees, settin#
the terms and conditions *or retirement Padillo also ser$ed the <an2 *or twenty&nine
.2;/ years, *ar more than the 7&year tenure re0uirement Padillo, howe$er, did not meet
the a#e re0uirement, considerin# that he was only 3*ty&3$e .77/ years old, or less than
60 years o* a#e, when he retired "hus, Padillo4s claim *or retirement pay must also be
denied
Fe$ertheless, the Supreme Court awarded Padillo 3nancial assistance in the amount o*
PQ7,000, considerin# the len#th o* time which had super$ened be*ore the disposition o*
this case and Padillo4s unblemished record o* 2; years o* ser$ice to the <an2 "he
award was in addition to the P100,000 bene3t recei$able under the Philam Li*e Plan that
the <an2 had procured in *a$or o* Padillo Elea/ar &. 7adillo vs. Rural 'an( of
Nabunturan, 8n!., et al. K5 Fo 1;;,,A Eanuary 21, 201,
5edundancy as an authori>ed cause *or termination@ DiDerence between retirement and
termination due to redundancy@ Keneral rule re#ardin# the *actual 3ndin#s o* the FL5C
and the e6ceptions thereto :nder the Labor Code, redundancy is one o* the authori>ed
causes *or termination o* employment "he *ollowin# are the re0uisites *or the $alid
implementation o* a redundancy pro#ram+ .a/ the employer must ser$e a written notice
to the aDected employees and to the Department o* Labor and (mployment .D'L(/ at
least one month be*ore the intended date o* termination@ .b/ the employer must pay the
employees separation pay e0ui$alent to at least one month pay or at least one month
pay *or e$ery year o* ser$ice, whiche$er is hi#her@ .c/ the employer must abolish the
redundant positions in #ood *aith@ and .d/ the employer must set *air and reasonable
criteria in ascertainin# which positions are redundant and may be abolished "he
Supreme Court has also held that a company cannot simply declare redundancy without
basis "o e6hibit its #ood *aith and to show that there were *air and reasonable criteria
in ascertainin# redundant positions, a company claimin# to be o$er manned must
produce ade0uate proo* o* the same
?n the case at bar, the Keneral Millin# Corporation .KMC/ *urnished respondent Gia%ar a
written notice in*ormin# her o* the termination o* her ser$ices on the #round o*
redundancy KMC also submitted to the D'L( an (stablishment "ermination 5eport,
re#ardin# the employees, includin# Gia%ar, whose positions were deemed redundant
Gia%ar and the D'L( recei$ed the respecti$e notices one month be*ore the eDecti$e date
o* the employees4 termination Hurthermore, KMC issued to Gia%ar two chec2s
amountin# to P--0,27,02 and P21,211,7, representin# her separation pay )owe$er,
the Supreme Court held that, notwithstandin# compliance with the re0uirements on
notice and the payment o* separation pay, KMC is still considered to ha$e ille#ally
dismissed Gia%ar because the company *ailed to present substantial proo* to support its
#eneral alle#ations o* redundancy KMC could ha$e presented e$idence to substantiate
redundancy, such as a new sta=n# pattern or *easibility studies or proposals on the
$iability o* newly created positions, %ob descriptions and the appro$al by mana#ement
o* the restructurin# pro#ram, or the company4s audited 3nancial reports )owe$er, no
such e$idence was submitted by KMC
'n the other hand, Gia%ar presented proo* ne#atin# KMC4s claim o* redundancy and
clearly showin# KMC4s bad *aith in implementin# the redundancy pro#ram+ .1/ KMC had
hired new employees be*ore it terminated Gia%ar4s employment@ .2/ Gai%ar was barred
*rom enterin# the company premises e$en be*ore the eDecti$ity o* her separation@ and
.,/ Gia%ar was also *orced to si#n an BApplication *or 5etirement and <ene3tsC so that
she could a$ail o* her separation pay "he last circumstance is si#ni3cant, considerin#
that there is a diDerence between $oluntary retirement and *orced termination o* an
employee 5etirement *rom ser$ice is contractual or based on a bilateral a#reement o*
the employer and the employee, while termination o* employment is statutory or
#o$erned by the Labor Code and other related laws Goluntary retirement cuts
employment ties, lea$in# no residual employer liability@ in$oluntary retirement amounts
to a dischar#e, renderin# the employer liable *or termination without cause KMC4s
demand that Gia%ar si#n an Application *or 5etirement and <ene3ts, when she had
already been in*ormed o* the termination o* her ser$ices due to redundancy, shows that
this case in$ol$es not a $oluntary retirement, but an ille#al termination
9hile the Labor Arbiter and the FL5C both *ound that Gia%ar was $alidly dismissed, the
#eneral rule that the *actual 3ndin#s o* the FL5C must be accorded respect and 3nality
is not applicable in this case 'ne o* the e6ceptions to the said rule co$ers instances
when the 3ndin#s o* *act o* the trial court, or o* the 0uasi&%udicial a#encies concerned,
are conJictin# or contradictory with those o* the Court o* Appeals, as in the present
case Another e6ception to the #eneral rule is when the said 3ndin#s are not supported
by substantial e$idence or the in*erence or conclusion arri$ed at is mani*estly
erroneous ?n the case at bar, the Supreme Court a#reed with the Court o* Appeals that
the FL5C4s conclusion that Gia%ar was le#ally dismissed is mani*estly
erroneous General illing Corporation vs. .ioleta ). .iaGar. K5 Fo 1A1Q,A Eanuary
,0, 201,
5einstatement@ <ac2wa#es ?t is basic in %urisprudence that ille#ally dismissed wor2ers
are entitled to reinstatement with bac2wa#es plus interest at the le#al rate
"his labor contro$ersy started when the employer Automoti$e (n#ine 5ebuilders, ?nc
.A(5/ and the Pro#resibon# :nyon n# m#a Man##a#awa sa A(5 .:nion/ 3led char#es
a#ainst each other *or $iolatin# labor laws A(5 3led a complaint a#ainst the :nion and
ei#hteen .1A/ o* its members *or conductin# an ille#al stri2e 'n the other hand, thirty&
two .,2/ employees 3led a complaint a#ainst A(5 *or un*air labor practices, ille#al
dismissal, ille#al suspension, and run&away shop ?n a pre$ious decision .K5 Fo
1601,A, Euly 1,, 2011/, the Supreme Court had held that both parties were at *ault or in
pari deli!to@ hence, the complainin# employees should be reinstated but without
bac2wa#es "he Motion *or Partial 5econsideration 3led by the :nion is resol$ed in the
present case
"he Supreme Court *ound that, o* the ,2 employees who 3led the complaint a#ainst
A(5, only 1A had been char#ed by A(5 with ille#al stri2e, lea$in# 1- e6cluded *rom the
employer4s complaint As no char#es had been 3led a#ainst the 1- wor2ers, they
cannot be *ound #uilty o* ille#al stri2e Feither can they be considered in pari deli!to
)owe$er, o* the 1- employees, 3$e *ailed to write their names and a=6 their si#natures
in the Membership 5esolution attached to their petition be*ore the Court o* Appeals,
authori>in# the union president to represent them "hus, while these 3$e employees
will also be reinstated, they cannot be #ranted bac2wa#es 'n the other hand, the nine
wor2ers who si#ned their names in the a*orementioned Membership 5esolution will be
reinstated with bac2wa#es plus interest at the le#al rate Auto*otive Engine
Rebuilders, 8n!. 4AER5, et al. vs. 7rogresibong Cnyon ng *ga anggaga3a sa AER, et al.
1 7rogresibong Cnyon ng *ga anggaga3a sa AER, et al. vs. Auto*otive Engine
Rebuilders, 8n!., et al. K5 Fos 1601,A and 1601;2 Eanuary 16, 201,
5esi#nation@ 5esi#nation in relation to the subse0uent 3lin# o* an ille#al dismissal
case Petitioner Cer$antes4s claim that he did not resi#n but was terminated *rom
employment is untenable 5esi#nation is the $oluntary act o* an employee who 3nds
himsel* in a situation where he belie$es that personal reasons cannot be sacri3ced in
*a$or o* the e6i#ency o* the ser$ice, such that he has no other choice but to
disassociate himsel* *rom his employment
?n the present case, Cer$antes4s employer merely in*ormed him o* the numerous
complaints a#ainst him ?t was Cer$antes himsel* who opted to be relie$ed *rom his
post and who initiated his repatriation to Manila "his is clear *rom the tenor o* his tele6
messa#e, which reads in part+ BAFS)'9 "' AG'?D 5(P("?"?'F L'FM M'5( )A5S)
5(P'5"S "' C'M( <(""(5 A55AFK( MS 5(L?(G(5 LAFDM CR' <:S"?LL' 5(L?(G(5
ALS' :P'F A55 F(O" :SA L'AD?FK P'5" H'5 ")(?5 SA"?SHAC"?'FC Cer$antes4s
messa#e contains an unmista2able demand to be relie$ed o* his assi#nment )is
employer merely accepted his resi#nation "hus, the rule that the 3lin# o* a complaint
*or ille#al dismissal is inconsistent with resi#nation does not hold true in this case "he
clear tenor o* Cer$antes4s resi#nation letter and the 3lin# o* this case one year a*ter his
alle#ed termination shows that the complaint *or ille#al dismissal was a mere
a*terthou#ht Rolando ). Cervantes vs. 7A) ariti*e Corporation and1or Bestern
&"ipping Agen!ies, 7te., )td. K5 Fo 1Q720; Eanuary 16, 201,
Goluntary Arbitration@ Plenary authority and %urisdiction o* a $oluntary arbitrator@
Concept and e6ercise o* mana#ement prero#ati$e@ Limitations on the e6ercise o*
mana#ement prero#ati$e@ Fature o* collecti$e bar#ainin# a#reements .C<A/ Koya,
?nc4s contention that the Goluntary Arbitrator .GA/ e6ceeded his power in rulin# on a
matter not co$ered by the sole issue submitted *or $oluntary arbitration is untenable ?n
a prior case, the Supreme Court has ruled that, in #eneral, the arbitrator is e6pected to
decide those 0uestions e6pressly stated and limited in the submission a#reement
)owe$er, since arbitration is the 3nal resort *or the ad%udication o* disputes, the
arbitrator can assume that he has the power to ma2e a 3nal settlement "he GA has
plenary %urisdiction and authority to interpret the C<A and to determine the scope o* his
or her own authority Sub%ect to %udicial re$iew, this leeway o* authority and ade0uate
prero#ati$e is aimed at accomplishin# the rationale o* the law on $oluntary arbitration U
speedy labor %ustice
?n the case at bar, Koya, ?nc and Koya, ?nc (mployees :nion .:nion/ submitted *or
$oluntary arbitration the sole issue o* whether or not the company is #uilty o* an un*air
labor practice in en#a#in# the ser$ices o* P(S', a third party ser$ice pro$ider, under
e6istin# C<A, laws, and %urisprudence "he :nion claimed that the hirin# o* contractual
wor2ers *rom P(S' $iolated the C<A pro$ision that prescribes only three cate#ories o*
wor2ers in the company, namely+ the probationary, the re#ular, and the casual
employees ?nstead o* hirin# contractual wor2ers, Koya, ?nc should ha$e hired
probationary or casual employees, who could ha$e become additional :nion members,
pursuant to the union security clause in the C<A "he GA ruled that while Koya, ?nc was
not #uilty o* any un*air labor practice, it still committed a $iolation o* the C<A, thou#h
such $iolation was not #ross in character "he Supreme Court held that the GA4s rulin#
is interrelated and intertwined with the sole issue submitted *or arbitration "he rulin#
was necessary to ma2e a complete and 3nal ad%udication o* the dispute between the
parties
Hurthermore, Koya, ?nc4s assertion that its hirin# o* contractual wor2ers was a $alid
e6ercise o* mana#ement prero#ati$e is erroneous Declarin# that a particular act *alls
within the concept o* mana#ement prero#ati$e is si#ni3cantly diDerent *rom
ac2nowled#in# that such act is a $alid e6ercise thereo* 9hile the GA and the Court o*
Appeals ruled that the act o* contractin# out or outsourcin# wor2 is within the pur$iew
o* mana#ement prero#ati$e, they did not declare such act to be a $alid e6ercise
thereo* As repeatedly held, the e6ercise o* mana#ement prero#ati$e is not unlimited@ it
is sub%ect to the limitations *ound in the law, C<A, or #eneral principles o* *air play and
%ustice
?n this case, the C<A pro$ision prescribin# the cate#ories o* employees in the company
and the union security clause are interconnected and must be #i$en *ull *orce and
eDect "he parties in a C<A are *ree 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 9here the C<A is clear and unambi#uous, the literal
meanin# o* its stipulations shall control "he C<A becomes the law between the parties,
and compliance therewith is mandated by the e6press policy o* the law Goya, 8n!. vs.
Goya, 8n!. E*ployees CnionA;;B. K5 Fo 1Q007- Eanuary 21, 201,
December 201, Philippine Supreme
Court Decisions on Labor Law
Posted on Eanuary 1Q, 201- by Leslie C Dy ! Posted in Labor Law, Philippines & Cases, Philippines & Law
!
)ere are select December 201, rulin#s o* the Supreme Court o* the Philippines on labor
law+
Appeal@ FL5C@ accredited bondin# company@ re$ocation o* authority is prospecti$e in
application "he respondents 3led a surety bond issued by Security Paci3c Assurance
Corporation .Security Paci3c/ on Eune 2A, 2002 At that time, Security Paci3c was still an
accredited bondin# company )owe$er, the FL5C re$o2ed its accreditation on Hebruary
16, 200, "his subse0uent re$ocation should not pre%udice the respondents who relied
in #ood *aith on the then subsistin# accreditation o* Security Paci3c ?n Del 5osario $
Philippine Eournalists, ?nc .K5 Fo 1A1716, Au#ust 1;, 200;/, it was held that a
bondin# company4s re$ocation o* authority is prospecti$e in application Fonetheless,
the respondents should post a new bond issued by an accredited bondin# company in
compliance with para#raph -, Section 6, 5ule 6 o* the FL5C 5ules o* Procedure, which
states that BLaM cash or surety bond shall be $alid and eDecti$e *rom the date o* deposit
or postin#, until the case is 3nally decided, resol$ed or terminated or the award
satis3edC Bilgen )oon, et al. v. 7o3er aster, 8n!., et al., K5 Fo 1A;-0-, December
11, 201,
Appeal@ FL5C@ bond@ %urisdictional Para#raph 2, Article 22, o* the Labor Code pro$ides
that BLiMn case o* a %ud#ment in$ol$in# a monetary award, an appeal by the employer
may be per*ected only upon the postin# o* a cash or surety bond issued by a reputable
bondin# company duly accredited by the FL5C in the amount e0ui$alent to the
monetary award in the %ud#ment appealed *romC Contrary to the respondents4 claim,
the issue o* the appeal bond4s $alidity may be raised *or the 3rst time on appeal since
its proper 3lin# is a %urisdictional re0uirement "he re0uirement that the appeal bond
should be issued by an accredited bondin# company is mandatory and %urisdictional
"he rationale o* re0uirin# an appeal bond is to discoura#e the employers *rom usin# an
appeal to delay or e$ade the employees4 %ust and law*ul claims ?t is intended to assure
the wor2ers that they will recei$e the money %ud#ment in their *a$or i* the employer4s
appeal is dismissed Bilgen )oon, et al. v. 7o3er aster, 8n!., et al., K5 Fo 1A;-0-,
December 11, 201,
Appeal@ FL5C@ $eri3cation@ *ormal re0uisite, not %urisdictional Feither the laws nor the
rules re0uire the $eri3cation o* the supplemental appeal Hurthermore, $eri3cation is a
*ormal, not a %urisdictional, re0uirement ?t is mainly intended to #i$e assurance that the
matters alle#ed in the pleadin# are true and correct and not o* mere speculation Also,
a supplemental appeal is merely an addendum to the $eri3ed memorandum on appeal
that was earlier 3led in the case@ hence, the re0uirement *or $eri3cation has been
substantially complied Bilgen )oon, et al. v. 7o3er aster, 8n!., et al., K5 Fo 1A;-0-,
December 11, 201,
Appeal@ 5ule -7@ limited to re$iew o* 0uestions o* law ?n this 5ule -7 petition *or re$iew
on certiorari, the Supreme Court .SC/ re$iewed the Court o* Appeals4 .CA/ decision o* a
5ule 67 petition *or certiorari "he Supreme Court4s power o* 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$iew *or %urisdictional errors which it underta2es in an ori#inal
certiorari .5ule 67/ action 3led with it "he SC e6amines the CA decision based on how it
determined the presence or absence o* #ra$e abuse o* discretion in the manner by
which the FL5C rendered its decision and not on the basis o* whether the FL5C decision
on the merits o* the case was correct Moreo$er, the Court4s power in a 5ule -7 petition
limits it to a re$iew o* 0uestions o* law raised a#ainst the assailed CA decision 'aguio
Central Cniversity v. 8gna!io Gallente, K5 Fo 1AA26Q, December 2, 201,
Attorney4s *ees@ when entitled An employee is entitled to an award o* attorney4s *ees
e0ui$alent to ten percent .101/ o* the amount o* the wa#es in actions *or unlaw*ul
withholdin# o* wa#es pursuant to Article 111 o* the Labor Code Bilgen )oon, et al. v.
7o3er aster, 8n!., et al., K5 Fo 1A;-0-, December 11, 201,
<ac2wa#es@ when entitled ?n termination cases, the burden o* pro$in# %ust and $alid
cause *or dismissin# an employee *rom his employment rests upon the employer "he
employer4s *ailure to dischar#e this burden in the instant case arisin# *rom their non&
submission o* e$idence at the proceedin#s be*ore the labor arbiter resulted in the
3ndin# that the dismissal is un%usti3ed "hus, the employees are entitled to the
payment o* bac2wa#es Bilgen )oon, et al. v. 7o3er aster, 8n!., et al., K5 Fo
1A;-0-, December 11, 201,
Deeds o* release and 0uitclaim@ #rounds to in$alidate As a rule, deeds o* release and
0uitclaim cannot bar employees *rom demandin# bene3ts to which they are le#ally
entitled or *rom contestin# the le#ality o* their dismissal "he acceptance o* those
bene3ts would not amount to estoppel "o e6cuse respondents *rom complyin# with the
terms o* their wai$ers, any one o* the *ollowin# #rounds must e6ist+ .1/ the employer
used *raud or deceit in obtainin# the wai$ers@ .2/ the consideration the employer paid is
incredible and unreasonable@ or .,/ the terms o* the wai$er are contrary to law, public
order, public policy, morals, or #ood customs or pre%udicial to a third person with a ri#ht
reco#ni>ed by law "he Court concluded that the instant case *alls under the 3rst
situation
As the #round *or termination o* employment was ille#al, the 0uitclaims are deemed
ille#al because the employees4 consent had been $itiated by mista2e or *raud "he law
loo2s with dis*a$or upon 0uitclaims and releases by employees pressured into si#nin#
by unscrupulous employers minded to e$ade le#al responsibilities "he circumstances
show that petitioner4s misrepresentation led its employees, speci3cally respondents
herein, to belie$e that the company was suDerin# losses which necessitated the
implementation o* the $oluntary retirement and retrenchment pro#rams, and e$entually
the e6ecution o* the deeds o* release, wai$er and 0uitclaim "he amounts already
recei$ed by respondents as consideration *or si#nin# the releases and 0uitclaims,
howe$er, should be deducted *rom their respecti$e monetary awards 7"ilippine Carpet
anufa!turing Corporation, et al. v. 8gna!io '. Dagya*on, et al., K5 Fo 1;1-Q7,
December 11, 201,
Disability bene3ts@ principle o* wor2&a##ra$ation@ concept o* Compensability may be
established on the basis o* the theory o* wor2 a##ra$ation i*, by substantial e$idence, it
can be demonstrated that the wor2in# conditions a##ra$ated or at least contributed in
the ad$ancement o* respondent4s cancer As held in 5osario $ Den2la$ Marine, Bthe
burden is on the bene3ciaries to show a reasonable connection between the causati$e
circumstances in the employment o* the deceased employee and his death or
permanent total disabilityC ?n the present case, both parties *ailed to dischar#e their
respecti$e burdens U *or petitioners, they *ailed to pro$e the non&wor2&relatedness o*
the disease@ and *or respondent, he *ailed to pro$e that his wor2 a##ra$ated his
condition "hus, the Court had to resol$e the case on some other basis "he Court held
that disability should be understood not more on its medical si#ni3cance, but on the
loss o* earnin# capacity Permanent total disability means disablement o* an employee
to earn wa#es in the same 2ind o* wor2 or wor2 o* similar nature that he was trained *or
or accustomed to per*orm, or any 2ind o* wor2 which a person o* his mentality and
attainment could do ?t does not mean absolute helplessness ($idence o* this condition
can be *ound in a certi3cation o* 3tnessRun3tness to wor2 issued by the company&
desi#nated physician ?n this case, records re$eal that the medical report issued by the
company&desi#nated oncolo#ist was bere*t o* any certi3cation that respondent
remained 3t to wor2 as a sea*arer despite his cancer "his is important, accordin# to the
Court, since the certi3cation is the document that contains the assessment o* his
disability which can be 0uestioned in case o* disa#reement as pro$ided under Section
20 .</ .,/ o* the P'(A&S(C ?n the absence o* any certi3cation, the law presumes that
the employee remains in a state o* temporary disability Should no certi3cation be
issued within 2-0 day ma6imum period, as in this case, the pertinent disability becomes
permanent in nature Accordin#ly, the Court a=rmed respondent4s entitlement to
permanent total disability bene3ts awarded to him ?ebsens ariti*e, 8n!., et al. v.
Eleno A. 'aol, K5 Fo 20-0Q6, December -, 201,
Disability bene3ts@ principle o* wor2&relation@ concept o* As a #eneral rule, the principle
o* wor2&relation re0uires that the disease in 0uestion must be one o* those listed as an
occupational disease under Sec ,2&A o* the P'(A&S(C Fe$ertheless, should it be not
classi3ed as occupational in nature, Section 20 .</ para#raph - o* the P'(A&S(C
pro$ides that such diseases are disputably presumed as wor2&related
?n this case, it is undisputed that Fasopharyn#eal Carcinoma .FPC/ aZicted respondent
while on board the petitioners4 $essel As a non&occupational disease, it has the
disputable presumption o* bein# wor2&related "his presumption ob$iously wor2s in the
sea*arer4s *a$or )ence, unless contrary e$idence is presented by the employers, the
wor2&relatedness o* the disease must be sustained "he Court held that the petitioners,
as employers, *ailed to dispro$e the presumption o* FPC4s wor2&relatedness "he
petitioners primarily relied on the medical report issued by Dr Co Pe3a which, howe$er,
*ailed to ma2e a cate#orical statement con3rmin# the total absence o* wor2 relation As
the doctor opined only a probability, there was no certainty that his condition was not
wor2 related "here bein# no certainty, the Court will lean in *a$or o* the sea*arer
consistent with the mandate o* P'(A&S(C to secure the best terms and conditions o*
employment *or Hilipino wor2ers )ence, the presumption o* FPC4s wor2&relatedness
stays ?ebsens ariti*e, 8n!., et al. v. Eleno A. 'aol, K5 Fo 20-0Q6, December -,
201,
?lle#al dismissal@ burden o* proo* ?n termination cases, the burden o* pro$in# %ust and
$alid cause *or dismissin# an employee *rom his employment rests upon the employer
"he employer4s *ailure to dischar#e this burden results in the 3ndin# that the dismissal
is un%usti3ed
Hailin# to pro$e %ust and $alid cause *or the dismissal, the Court held that the petitioners
are entitled to salary diDerential, ser$ice incenti$e, holiday, and thirteenth month pays
As in ille#al dismissal cases, the #eneral rule is that the burden rests on the de*endant
to pro$e payment rather than on the plaintiD to pro$e non&payment o* these money
claims )owe$er, the Court decided that they are not entitled to o$ertime and premium
pays "he burden o* pro$in# entitlement to o$ertime pay and premium pay *or holidays
and rest days rests on the employee because these are not incurred in the normal
course o* business ?n the present case, the petitioners *ailed to adduce any e$idence
that would show that they actually rendered ser$ice in e6cess o* the re#ular ei#ht
wor2in# hours a day, and that they in *act wor2ed on holidays and rest days Bilgen
)oon, et al. v. 7o3er aster, 8n!., et al., K5 Fo 1A;-0-, December 11, 201,
Labor cases@ strict adherence to the technical rules o* procedure is not re0uired@ when
liberality allowed ?n labor cases, strict adherence to the technical rules o* procedure is
not re0uired "ime and a#ain, the Court has allowed e$idence to be submitted *or the
3rst time on appeal with the FL5C in the interest o* substantial %ustice "hus, it has
consistently supported the rule that labor o=cials should use all reasonable means to
ascertain the *acts in each case speedily and ob%ecti$ely, without re#ard to
technicalities o* law or procedure, in the interest o* due process )owe$er, this liberal
policy should still be sub%ect to rules o* reason and *airplay "he liberality o* procedural
rules is 0uali3ed by two re0uirements+ .1/ a party should ade0uately e6plain any delay
in the submission o* e$idence@ and .2/ a party should su=ciently pro$e the alle#ations
sou#ht to be pro$en "he reason *or these re0uirements is that the liberal application o*
the rules be*ore 0uasi&%udicial a#encies cannot be used to perpetuate in%ustice and
hamper the %ust resolution o* the case Feither is the rule on liberal construction a
license to disre#ard the rules o* procedure ?n the present case, the Court held that the
respondents *ailed to ade0uately e6plain their delay in the submission o* e$idence and
pro$e the alle#ations sou#ht to be pro$en Bilgen )oon, et al. v. 7o3er aster, 8n!., et
al., K5 Fo 1A;-0-, December 11, 201,
Labor@ #round *or $alid dismissal@ loss o* trust and con3dence@ re0uisites Loss o* trust
and con3dence is a %ust cause *or dismissal under Article 2A2.c/ o* the Labor Code
Article 2A2.c/ pro$ides that an employer may terminate an employment *or B*raud or
will*ul breach by the employee o* the trust reposed in him by his employer or duly
authori>ed representati$eC )owe$er, in order *or the employer to properly in$o2e this
#round, the employer must satis*y two conditions Hirst, the employer must show that
the employee concerned holds a position o* trust and con3dence Second, the employer
must establish the e6istence o* an act %usti*yin# the loss o* trust and con3dence "o be a
$alid cause *or dismissal, the act that betrays the employer4s trust must be real, ie,
*ounded on clearly established *acts, and the employee4s breach o* the trust must be
will*ul, ie, it was done intentionally, 2nowin#ly and purposely, without %usti3able
e6cuse
?n Lope> $ Teppel <an2 Philippines, ?nc .K5 Fo 1Q6A00, September 7, 2011/, the
Court repeated the #uidelines *or the application o* loss o* con3dence as *ollows+ .1/
loss o* con3dence should not be simulated@ .2/ it should not be used as a subter*u#e *or
causes which are improper, ille#al or un%usti3ed@ .,/ it may not be arbitrarily asserted in
the *ace o* o$erwhelmin# e$idence to the contrary@ and .-/ it must be #enuine, not a
mere a*terthou#ht to %usti*y an earlier action ta2en in bad *aith
As applied to the dismissal o* mana#erial employees, employers U as a rule U en%oy
wider latitude o* discretion "hey are not re0uired to present proo* beyond reasonable
doubt as the mere e6istence o* a basis *or belie$in# that such employee has breached
the trust o* the employer would su=ce *or the dismissal "hus, as lon# as the employer
Bhas reasonable #round to belie$e that the employee concerned is responsible *or the
purported misconduct, and the nature o* his participation therein renders him unworthy
o* the trust and con3dence demanded o* his position,C the dismissal on this #round is
$alid
"he Court held that there was su=cient basis to dismiss the respondent *or loss o* trust
and con3dence Hirst, the Court belie$ed that the respondent held a position o* trust
and con3dence because he was a mana#erial employee o* the petitioner As the Dean
o* two o* the petitioner4s departments, he was tas2ed, amon# others, to assist the
school head in all matters aDectin# the #eneral policies o* the entire institution, to direct
and ad$ise the students in their pro#rams o* study and to appro$e their sub%ect load
and e6ercise educational leadership amon# his *aculty "hese tas2s in$ol$ed the
e6ercise o* powers and prero#ati$es e0ui$alent to mana#erial actions Second, the
Court ruled that the respondent committed wil*ul breach o* trust su=cient to %usti*y
dismissal "he heart o* the loss&o*&trust char#e is the employee4s betrayal o* the
employer4s trust BDama#e a##ra$ates the char#e but its absence does not miti#ate nor
ne#ate the employee4s liability "he respondent betrayed his owed 3delity the moment
he en#a#ed in a $enture that re0uired him to per*orm tas2s and ma2e calculated
decisions which his duty to the petitioner would ha$e e0ually re0uired him to per*orm or
would ha$e otherwise re0uired him to oppose "he Court was con$inced that actual
conJict o* interest e6isted when respondent sou#ht to conduct re$iew courses *or
nursin# e6amination 2nowin# that the petitioner was already oDerin# similar classes
"he respondent4s #ood intentions were beside the point :ltimately, the determinant is
his deliberate en#a#ement in a $enture that would ha$e directly conJicted with the
petitioner4s interests ?* respondent merely intended to help the petitioner and its
students in increasin# their chances o* passin# the Ci$il Ser$ice (6amination, he could
ha$e %ust oDered, as part o* the <C:4s course curriculum, re$iew classes *or the Ci$il
Ser$ice (6amination instead o* alto#ether or#ani>in# a re$iew center that ob$iously will
oDer the course to e$eryone minded to enroll 'aguio Central Cniversity v. 8gna!io
Gallente, K5 Fo 1AA26Q, December 2, 201,
Labor@ $alid dismissal@ re0uisites 'ur Constitution, statutes and %urisprudence uni*ormly
#uarantee to e$ery employee or wor2er tenurial security 9hat this means is that an
employer shall not dismiss an employee e6cept *or %ust or authori>ed cause and only
a*ter due process is obser$ed "hus, *or an employee4s dismissal to be $alid, the
employer must meet these basic re0uirements o*+ .1/ %ust or authori>ed cause .which
constitutes the substanti$e aspect o* a $alid dismissal/@ and .2/ obser$ance o* due
process .the procedural aspect/ 'aguio Central Cniversity v. 8gna!io Gallente, K5 Fo
1AA26Q, December 2, 201,
Petition *or re$iew on certiorari@ only 0uestions o* law can be re$iewed@ e6ceptions"he
well&entrenched rule in this %urisdiction is that only 0uestions o* law may be entertained
by the SC in a petition *or re$iew on certiorari under 5ule -7 "his rule, howe$er, is not
absolute and admits certain e6ceptions, such as when the petitioner persuasi$ely
alle#es that there is insu=cient or insubstantial e$idence on record to support the
*actual 3ndin#s o* the tribunal or court a 0uo as Section 7, 5ule 1,, o* the 5ules o*
Court states in e6press terms that in cases 3led be*ore administrati$e or 0uasi&%udicial
bodies, a *act may be deemed established only i* supported by substantial
e$idence ?ebsens ariti*e, 8n!., et al. v. Eleno A. 'aol, K5 Fo 20-0Q6, December -,
201,
Probationary employment@ concept o*@ probationer can only 0uali*y upon *ul3llment o*
the reasonable standards set *or permanent employment o* a teachin# personnel
Probationary employment re*ers to the trial sta#e or period durin# which the employer
e6amines the competency and 0uali3cations o* %ob applicants, and determines whether
they are 0uali3ed to be e6tended permanent employment status Such an arran#ement
aDords an employer the opportunity U be*ore the *ull *orce o* the #uarantee o* security
o* tenure comes into play U to *ully scrutini>e and obser$e the 3tness and worth o*
probationers while on the %ob and to determine whether they would become proper and
e=cient employees ?t also #i$es the probationers the chance to pro$e to the employer
that they possess the necessary 0ualities and 0uali3cations to meet reasonable
standards *or permanent employment
Mere completion o* the three&year probation, e$en with an abo$e&a$era#e per*ormance,
does not #uarantee that the employee will automatically ac0uire a permanent
employment status ?t is settled %urisprudence that the probationer can only 0uali*y
upon *ul3llment o* the reasonable standards set *or permanent employment o* a
teachin# personnel
"he Court ruled that the re0uirement to obtain a master4s de#ree was made 2nown to
the petitioner "he contract she si#ned clearly incorporates the rules, re#ulations, and
employment conditions contained in the SSC Haculty Manual "he Manual pro$ided *or a
criteria *or permanency which includes, amon# others, the re0uirement that the *aculty
member must ha$e completed at least a master4s de#ree Giewed ne6t to the
statements and actions o* Manaois U ie, the re*erences to obtainin# a master4s de#ree
in her application letter, in the subse0uent correspondences between her and SSC, and
in the letter see2in# the e6tension o* a teachin# load *or the school year 200,&200-@
and her submission o* certi3cations *rom :P and *rom her thesis ad$iser U the Court
*ound that there is indeed substantial e$idence pro$in# that she 2new about the
necessary academic 0uali3cations to obtain the status o* permanency ?o!elyn 6erreraA
anaois v. &t. &!"olasti!aMs College, K5 Fo 1AA;1-, December 11, 201,
Probationary employment@ part&time member o* the academic personnel@ re0uisites to
ac0uire permanence o* employment and security o* tenure Pursuant to the 1;;2
Manual o* 5e#ulations *or Pri$ate Schools, pri$ate educational institutions in the tertiary
le$el may e6tend B*ull&time *acultyC status only to those who possess, inter alia, a
master4s de#ree in the 3eld o* study that will be tau#ht "his minimum re0uirement is
neither sub%ect to the prero#ati$e o* the school nor to the a#reement between the
parties Hor all intents and purposes, this 0uali3cation must be deemed impliedly written
in the employment contracts between pri$ate educational institutions and prospecti$e
*aculty members "he issue o* whether probationers were in*ormed o* this academic
re0uirement be*ore they were en#a#ed as probationary employees is thus no lon#er
material, as those who are see2in# to be educators are presumed to 2now these
mandated 0uali3cations "hus, all those who *ail to meet the criteria under the 1;;2
Manual cannot le#ally attain the status o* permanent *ull&time *aculty members, e$en i*
they ha$e completed three years o* satis*actory ser$ice
Hurther, the Court stated that in line with academic *reedom and constitutional
autonomy, an institution o* hi#her learnin# has the discretion and prero#ati$e to impose
standards on its teachers and determine whether these ha$e been met :pon
conclusion o* the probation period, the colle#e or uni$ersity, bein# the employer, has
the sole prero#ati$e to ma2e a decision on whether or not to re&hire the probationer "he
probationer cannot automatically assert the ac0uisition o* security o* tenure and *orce
the employer to renew the employment contract ?n the case at bar, petitioner *ailed to
comply with the stated academic 0uali3cations re0uired *or the position o* a permanent
*ull&time *aculty member ?o!elyn 6erreraAanaois v. &t. &!"olasti!aMs College,K5 Fo
1AA;1-, December 11, 201,
Wuestion o* law@ distin#uished *rom a 0uestion o* *act A 0uestion o* law arises when the
doubt or contro$ersy concerns the correct application o* law or %urisprudence to a
certain set o* *acts ?n contrast, a 0uestion o* *act e6ists when a doubt or diDerence
arises as to the truth or *alsehood o* *acts
?n this petition, the petitioner essentially as2s the 0uestion U whether, under the
circumstances and the presented e$idence, the termination o* respondent4s
employment was $alid As *ramed, there*ore, the 0uestion be*ore the Court is a
proscribed *actual issue that it cannot #enerally consider in this 5ule -7 petition, e6cept
to the e6tent necessary to determine whether the CA correctly *ound the FL5C in #ra$e
abuse o* its discretion in considerin# and appreciatin# this *actual issue
Fonetheless, as an e6ception to the 5ule -7 re0uirement, the Court deemed it proper to
re$iew the conJictin# *actual 3ndin#s o* the LA and the CA, on the one hand, and the
FL5C, on the other Such e6ception applies when, based on the records, the *actual
3ndin#s o* the tribunals below are in conJict 'aguio Central Cniversity v. 8gna!io
Gallente, K5 Fo 1AA26Q, December 2, 201,
&tare de!isis @ doctrine o* :nder the doctrine o* stare de!isis, when a court has laid
down a principle o* law as applicable to a certain state o* *acts, it will adhere to that
principle and apply it to all *uture cases in which the *acts are substantially the same,
e$en thou#h the parties may be diDerent 9here the *acts are essentially diDerent,
howe$er, stare de!isis does not apply because a per*ectly sound principle as applied to
one set o* *acts mi#ht be entirely inappropriate when a *actual $ariant is introduced
"his case and the Philippine Carpet (mployees Association .P)?LC(A/ $ )on Sto "omas
case .Philcea case@ K5 Fo 16AQ1;, Hebruary 22, 2006/, in$ol$e the same period which
is March to April 200-@ the issuance o* the Memorandum to employees in*ormin# them
o* the implementation o* the cost reduction pro#ram@ the implementation o* the
$oluntary retirement pro#ram and retrenchment pro#ram, e6cept that this case in$ol$es
diDerent employees@ the e6ecution o* deeds o* release, wai$er, and 0uitclaim, and the
acceptance o* separation pay by the aDected employees As the respondents here were
similarly situated as the union members in the Philcea case, and considerin# that the
0uestioned dismissal *rom 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 ?n short, stare
de!isis applies and the Court deems it wise to adopt its earlier 3ndin#s in the Philcea
case that there was no $alid #round to terminate the ser$ices o* the
employees 7"ilippine Carpet anufa!turing Corporation, et al. v. 8gna!io '. Dagya*on,
et al., K5 Fo 1;1-Q7, December 11, 201,
Substantial e$idence@ de3nition o* "he assertions o* respondent do not constitute as
substantial e$idence that a reasonable mind mi#ht accept as ade0uate to support the
conclusion that there is a causal relationship between his illness and the wor2in#
conditions on board the petitioners4 $essel Althou#h the Court has reco#ni>ed as
su=cient that wor2 conditions are pro$en to ha$e contributed e$en to a small de#ree,
such must, howe$er, be reasonable, and anchored on credible in*ormation "he claimant
must, there*ore, pro$e a con$incin# proposition other than by his mere
alle#ations ?ebsens ariti*e, 8n!., et al. v. Eleno A. 'aol, K5 Fo 20-0Q6, December -,
201,
"ermination o* employment@ authori>ed causes@ retrenchment "he ille#ality o* the basis
o* the implementation o* both $oluntary retirement and retrenchment pro#rams o*
petitioners had been thorou#hly ruled upon by the Court in Philippine Carpet (mployees
Association .P)?LC(A/ $ )on Sto "omas .K5 Fo 16AQ1;, Hebruary 22, 2006/ ?t
discussed the re0uisites o* both retrenchment and redundancy as authori>ed causes o*
termination and concluded that petitioners *ailed to substantiate them ?n ascertainin#
the bases o* the termination o* employees, it too2 into consideration petitioners4 claim
o* business losses@ the purchase o* machinery and e0uipment a*ter the termination, the
declaration o* cash di$idends to stoc2holders, the hirin# o* 100 new employees a*ter the
retrenchment, and the authori>ation o* *ull blast o$ertime wor2 *or si6 hours daily
"hese, said the Court, are inconsistent with petitioners4 claim that there was a slump in
the demand *or its products which compelled them to implement the termination
pro#rams ?n arri$in# at its conclusions, the Court too2 note o* petitioners4 net sales,
#ross and net pro3ts, as well as net income "he Court, thus, reached the conclusion
that the retrenchment eDected by the company is in$alid due to a substanti$e
de*ect 7"ilippine Carpet anufa!turing Corporation, et al. v. 8gna!io '. Dagya*on, et
al., K5 Fo 1;1-Q7, December 11, 201,
"ermination o* employment@ #round@ closure o* business due to serious business losses@
notice re0uirement Article 2;Q o* the Labor Code pro$ides that be*ore any employee is
terminated due to closure o* business, it must #i$e one .1/ month4s prior written notice
to the employee and to the Department o* Labor and (mployment ?n this relation, case
law instructs that it is the personal ri#ht o* the employee to be personally in*ormed o*
his proposed dismissal as well as the reasons there*or@ and such re0uirement o* notice is
not a mere technicality or *ormality which the employer may dispense with Since the
purpose o* pre$ious notice is to, amon# others, #i$e the employee some time to prepare
*or the e$entual loss o* his %ob, the employer has the positi$e duty to in*orm each and
e$ery employee o* their impendin# termination o* employment "o this end,
%urisprudence states that an employer4s act o* postin# notices to this eDect in
conspicuous areas in the wor2place is not enou#h Gerily, *or somethin# as si#ni3cant as
the in$oluntary loss o* one4s employment, nothin# less than an indi$idually&addressed
notice o* dismissal supplied to each wor2er is proper "he Court held that the Labor
Arbiter, FL5C, and Court o* Appeals erred in rulin# that SP? complied with the notice
re0uirement when it merely posted $arious copies o* its notice o* closure in conspicuous
places within the business premises SP? is re0uired to ser$e indi$idual written notices o*
termination to its employees &ang3oo 7"ilippines, 8n!. and1or &ang 8( ?ang, ?isso ?ang,
et al. v. &ang3oo 7"ilippines, 8n!. E*ployees CnionA9)A)8A, rep. by 7orferia
&alibong!ogon1&ang3oo 7"ilippines, 8n!. E*ployees CnionA9)A)8A, rep. by 7orferia
&alibong!ogon v. &ang3oo 7"ilippines, 8n!. and1or &ang 8( ?ang, ?isso ?ang, et al., K5
Fo 1Q,17-RK5 Fo 1Q,22;, December ;, 201,
"ermination o* employment@ authori>ed cause@ closure o* business due to serious
business losses@ separation pay Closure o* business is the re$ersal o* *ortune o* the
employer whereby there is a complete cessation o* business operations andRor an actual
loc2in#&up o* the doors o* establishment, usually due to 3nancial losses Closure o*
business, as an authori>ed cause *or termination o* employment, aims to pre$ent
*urther 3nancial drain upon an employer who cannot pay anymore his employees since
business has already stopped ?n such a case, the employer is #enerally re0uired to #i$e
separation bene3ts to its employees, unless the closure is due to serious business
losses As e6plained in the case o* Kala6ie Steel 9or2ers :nion .KS9:&FAHL:&TM:/ $
FL5C .K5 Fo 167Q7Q, 'ctober 1Q, 2006/+ B"he Constitution, while aDordin# *ull
protection to labor, nonetheless, reco#ni>es Bthe ri#ht o* enterprises to reasonable
returns on in$estments, and to e6pansion and #rowthC ?n line with this protection
aDorded to business by the *undamental law, Article L2;QM o* the Labor Code clearly
ma2es a policy distinction ?t is only in instances o* Bretrenchment to pre$ent losses and
in cases o* closures or cessation o* operations o* establishment or underta2in# not due
to serious business losses or 3nancial re$ersesC that employees whose employment has
been terminated as a result are entitled to separation pay ?n other words, Article L2;QM
o* the Labor Code does not obli#ate an employer to pay separation bene3ts when the
closure is due to serious losses "o re0uire 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, un%ust, and un*air
to the employer 'urs is a system o* laws, and the law in protectin# the ri#hts o* the
wor2in# man, authori>es neither the oppression nor the sel*&destruction o* the
employerC
?n this case, the Labor Arbiter, FL5C, and the Court o* Appeals all consistently *ound
that petitioners indeed suDered *rom serious business losses which resulted in its
permanent shutdown and accordin#ly, held the company4s closure to be $alid ?t is a
rule that absent any showin# that the 3ndin#s o* *act o* the labor tribunals and the
appellate court are not supported by e$idence on record or the %ud#ment is based on a
misapprehension o* *acts, the Court shall not e6amine anew the e$idence submitted by
the parties Per*orce, without any co#ent reason to de$iate *rom the 3ndin#s on the
$alidity o* respondent4s closure, the Court held that it is not obli#ed to #i$e separation
bene3ts to minority employees pursuant to Article 2;Q o* the Labor Code &ang3oo
7"ilippines, 8n!. and1or &ang 8( ?ang, ?isso ?ang, et al. v. &ang3oo 7"ilippines, 8n!.
E*ployees CnionA9)A)8A, rep. by 7orferia &alibong!ogon1&ang3oo 7"ilippines, 8n!.
E*ployees CnionA9)A)8A, rep. by 7orferia &alibong!ogon v. &ang3oo 7"ilippines, 8n!.
and1or &ang 8( ?ang, ?isso ?ang, et al.,K5 Fo 1Q,17-RK5 Fo 1Q,22;, December ;,
201,
"ermination o* employment due to closure@ procedural in3rmity@ nominal dama#es as
sanction ?t is well to stress that while respondent had a $alid #round to terminate its
employees, ie, closure o* business, its *ailure to comply with the proper procedure *or
termination renders it liable to pay the employee nominal dama#es *or such omission
<ased on e6istin# %urisprudence, an employer which has a $alid cause *or dismissin# its
employee but conducts the dismissal with procedural in3rmity is liable to pay the
employee nominal dama#es in the amount o* P,0,00000 i* the #round *or dismissal is a
%ust cause, or the amount o* P70,00000 i* the #round *or dismissal is an authori>ed
cause )owe$er, case law e6horts that in instances where the payment o* such
dama#es becomes impossible, un%ust, or too burdensome, modi3cation becomes
necessary in order to harmoni>e the disposition with the pre$ailin# circumstance ?n
this case, considerin# that SP? closed down its operations due to serious business losses
and that said closure appears to ha$e been done in #ood *aith, the Court as in the case
o* ?ndustrial "imber Corporation $ Ababon .K5 Fo 16-71A, March ,0, 2006/, deems it
%ust to reduce the amount o* nominal dama#es to be awarded to each o* the minority
employees *rom P70,00000 to Pl0,00000 &ang3oo 7"ilippines, 8n!. and1or &ang 8(
?ang, ?isso ?ang, et al. v. &ang3oo 7"ilippines, 8n!. E*ployees CnionA9)A)8A, rep. by
7orferia &alibong!ogon1&ang3oo 7"ilippines, 8n!. E*ployees CnionA9)A)8A, rep. by
7orferia &alibong!ogon v. &ang3oo 7"ilippines, 8n!. and1or &ang 8( ?ang, ?isso ?ang, et
al., K5 Fo 1Q,17-RK5 Fo 1Q,22;, December ;, 201,
Eanuary 201- Philippine Supreme
Court Decisions on Labor Law
<ac2wa#es@ when awarded
As a #eneral rule, bac2wa#es are #ranted to indemni*y a dismissed employee *or his
loss o* earnin#s durin# the whole period that he is out o* his %ob Considerin# that an
ille#ally dismissed employee is not deemed to ha$e le*t his employment, he is entitled
to all the ri#hts and pri$ile#es that accrue to him *rom the employment "he #rant o*
bac2wa#es to him is in *urtherance and eDectuation o* the public ob%ecti$es o* the Labor
Code, and is in the nature o* a command to the employer to ma2e a public reparation
*or dismissin# the employee in $iolation o* the Labor Code
"he Court held that the respondents are not entitled to the payment o* bac2wa#es "he
Court, citin# KNS "ransport Corporation $ ?n*ante .K 5 Fo 160,0,, September 1,,
200Q/ stated that the principle o* a B*air day4s wa#e *or a *air day4s laborC remains as
the basic *actor in determinin# the award thereo* An e6ception to the rule would be i*
the laborer was able, willin# and ready to wor2 but was ille#ally loc2ed out, suspended
or dismissed or otherwise ille#ally pre$ented *rom wor2in# ?t is, howe$er, re0uired, *or
this e6ception to apply, that the stri2e be le#al, a situation which does not obtain in the
case at bar .isayas Co**unity edi!al Center 4.CC5 for*erly (no3n as etro Cebu
Co**unity 6ospital 4CC65 v. Er*a Fballe, et al.,K5 Fo 1;6176, Eanuary 17, 201-
Dismissal@ burden o* proo* on employer
"he burden is on the employer to pro$e that the termination was *or $alid cause
:nsubstantiated accusations or baseless conclusions o* the employer are insu=cient
le#al %usti3cations to dismiss an employee B"he unJinchin# rule in ille#al dismissal
cases is that the employer bears the burden o* proo*C
'ne o* CC<P?4s policies re0uires that, on a daily basis, CC<P? SalesmenRAccount
Specialists must account *or their salesRcollections and obtain clearance *rom the
company Cashier be*ore they are allowed to lea$e company premises at the end o* their
shi*t and report *or wor2 the ne6t day ?* there is a shorta#eR*ailure to account, the
concerned SalesmenRAccount Specialist is not allowed to lea$e the company premises
until he settles the same ?n addition, shorta#es are deducted *rom the employee4s
salaries ?* CC<P? e6pects to proceed with its case a#ainst petitioner, it should ha$e
ne#ated this policy, *or its e6istence and application are ine6tricably tied to CC<P?4s
accusations a#ainst petitioner ?n the 3rst place, as petitioner4s employer, upon it lay the
burden o* pro$in# by con$incin# e$idence that he was dismissed *or cause ?* petitioner
continued to wor2 until Eune 200-, this meant that he committed no in*raction, #oin# by
this company policy@ it could also mean that any in*raction or shorta#eRnon&remittance
incurred by petitioner has been duly settled 5espondents4 decision to i#nore this issue
#enerates the belie* that petitioner is tellin# the truth, and that the alle#ed in*ractions
are *abricated, or ha$e been *or#i$en Coupled with Macatan#ay4s statement U which
remains e0ually unre*uted U that the char#es a#ainst petitioner are a scheme by local
CC<P? mana#ement to co$er up problems in the Fa#a City Plant, the conclusion is
indeed tellin# that petitioner is bein# wron#*ully made to account ?onas i!"ael R.
Gar/a v. Co!aACola 'ottlers 7"ils., 8n!., et al.,K5 Fo 1A0;Q2 Eanuary 20, 201-
(mbe>>lement@ *ailure to remit collections "he irre#ularity attributed to petitioner with
re#ard to the Asan>a account should *ail as well "o be sure, Asan>a hersel* con3rmed
that she did not ma2e any payment in cash or chec2 o* PA,16000 co$erin# the 'ctober
17, 200, deli$ery *or which petitioner is bein# held to account "his bein# the case,
petitioner could not be char#ed with embe>>lement *or *ailure to remit *unds which he
has not collected "here was nothin# to embe>>le or remit because the customer made
no payment yet ?t may appear *rom '=cial 5eceipt Fo ,0,20, issued to Asan>a that
the 'ctober 17 deli$ery o* products to her has been paid@ but as admitted by her, she
has not paid *or the said deli$ered products "he reason *or petitioner4s issuance o* said
o=cial receipt to Asan>a is the latter4s concurrent promise that she would immediately
issue the chec2 co$erin# the said amount, which she *ailed to do ?onas i!"ael R.
Gar/a v. Co!aACola 'ottlers 7"ils., 8n!., et al.,K5 Fo 1A0;Q2 Eanuary 20, 201-
Kra$e abuse o* discretion@ concept o* )a$in# established throu#h substantial e$idence
that respondent4s in%ury was sel*&inJicted and, hence, not compensable pursuant to
Section 20 .D/ o* the 1;;6 P'(A&S(C, no #ra$e abuse o* discretion can be imputed
a#ainst the FL5C in upholdin# LA4s decision to dismiss respondent4s complaint *or
disability bene3ts ?t is well&settled that an act o* a court or tribunal can only be
considered to be tainted with #ra$e abuse o* discretion when such act is done in a
capricious or whimsical e6ercise o* %ud#ment as is e0ui$alent to lac2 o* %urisdiction 8NC
&"ip*anage*ent, 8n!. Captain &igfredo E. onterroyo and1or 8nterorient Navigation
)i*ited v. Ale%ander ). oradas,K5 Fo, Eanuary 17, 201-
?lle#al stri2e and ille#al acts durin# the stri2e@ distinction between union members and
union o=cers in determinin# when they lose their employment status "he Supreme
Court stressed that the law ma2es a distinction between union members and union
o=cers A union member who merely participates in an ille#al stri2e may not be
terminated *rom employment ?t is only when he commits ille#al acts durin# a stri2e that
he may be declared to ha$e lost employment status ?n contrast, a union o=cer may be
terminated *rom employment *or 2nowin#ly participatin# in an ille#al stri2e or
participates in the commission o* ille#al acts durin# a stri2e "he law #rants the
employer the option o* declarin# a union o=cer who participated in an ille#al stri2e as
ha$in# lost his employment ?t possesses the ri#ht and prero#ati$e to terminate the
union o=cers *rom ser$ice
FAMA&MCC)&FHL is not a le#itimate labor or#ani>ation, thus, the stri2e sta#ed by its
leaders and members was declared ille#al "he union leaders who conducted the ille#al
stri2e despite 2nowled#e that FAMA&MCC)&FHL is not a duly re#istered labor union were
declared to ha$e been $alidly terminated by petitioner )owe$er, as to the respondents
who were mere union members, it was not shown that they committed any ille#al act
durin# the stri2e "he Labor Arbiter and the FL5C were one in 3ndin# that respondents
acti$ely supported the concerted protest acti$ities, si#ned the collecti$e reply o* union
members mani*estin# that they launched the mass actions to protest mana#ement4s
re*usal to ne#otiate a new C<A, re*used to appear in the in$esti#ations scheduled by
petitioner because it was the union4s stand that they would only attend these
in$esti#ations as a #roup, and *ailed to heed petitioner4s 3nal directi$e *or them to
desist *rom *urther ta2in# part in the ille#al stri2e "he CA, on the other hand, *ound that
respondents4 participation in the stri2e was limited to the wearin# o* armbands Since
an ordinary stri2in# wor2er cannot be dismissed *or such mere participation in the ille#al
stri2e, the CA correctly ruled that respondents were ille#ally dismissed )owe$er, the CA
erred in awardin# respondents *ull bac2 wa#es and orderin# their reinstatement despite
the pre$ailin# circumstances .isayas Co**unity edi!al Center 4.CC5 for*erly
(no3n as etro Cebu Co**nunity 6ospital 4CC65 v. Er*a Fballe, et al.,K5 Fo
1;6176, Eanuary 17, 201-
Labor law@ 2inds o* employment@ casual employment@ re0uisites Casual employment,
the third 2ind o* employment arran#ement, re*ers to any other employment
arran#ement that does not *all under any o* the 3rst two cate#ories, ie, re#ular or
pro%ectRseasonal Cniversal Robina &ugar illing Corporation and Rene Cabati, K5 Fo
1A6-,; Eanuary 17, 201-
Labor law@ 2inds o* employment@ 36ed term employment@ re0uisites "he Labor Code
does not mention another employment arran#ement U contractual or 36ed term
employment .or employment *or a term/ U which, i* not *or the 36ed term, should *all
under the cate#ory o* re#ular employment in $iew o* the nature o* the employee4s
en#a#ement, which is to per*orm an acti$ity usually necessary or desirable in the
employer4s business
?n <rent School, ?nc $ Vamora .K5 Fo L&-A-;-, Hebruary 7, 1;;0/, the Court, *or the
3rst time, reco#ni>ed and resol$ed the anomaly created by a narrow and literal
interpretation o* Article 2A0 o* the Labor Code that appears to restrict the employee4s
ri#ht to *reely stipulate with his employer on the duration o* his en#a#ement ?n this
case, the Court upheld the $alidity o* the 36ed&term employment a#reed upon by the
employer, <rent School, ?nc, and the employee, Dorotio Ale#re, declarin# that the
restricti$e clause in Article 2A0 Bshould be construed to re*er to the substanti$e e$il
that the Code itsel* 6 6 6 sin#led out+ a#reements entered into precisely to circum$ent
security o* tenure ?t should ha$e no application to instances where LtheM 36ed period o*
employment was a#reed upon 2nowin#ly and $oluntarily by the parties 6 6 6 absent
any 6 6 6 circumstances $itiatin# Lthe employee4sM consent, or where Lthe *acts
satis*actorily showM that the employer and LtheM employee dealt with each other on
more or less e0ual termsLMC "he indispensability or desirability o* the acti$ity per*ormed
by the employee will not preclude the parties *rom enterin# into an otherwise $alid 36ed
term employment a#reement@ a de3nite period o* employment does not essentially
contradict the nature o* the employee4s duties as necessary and desirable to the usual
business or trade o* the employer
Fe$ertheless, Bwhere the circumstances e$idently show that the employer
imposed the period precisely to preclude the employee *rom ac0uirin# tenurial
security, the law and this Court will not hesitate to stri2e down or disre#ard the period
as contrary to public policy, morals, etcC ?n such a case, the #eneral restricti$e rule
under Article 2A0 o* the Labor Code will apply and the employee shall be deemed
re#ular Cniversal Robina &ugar illing Corporation and Rene Cabati,K5 Fo 1A6-,;
Eanuary 17, 201-
Labor law@ 2inds o* employment@ nature o* the employment depends on the nature o*
the acti$ities to be per*ormed by the employee "he nature o* the employment does not
depend solely on the will or word o* the employer or on the procedure *or hirin# and the
manner o* desi#natin# the employee 5ather, the nature o* the employment depends
on the nature o* the acti$ities to be per*ormed by the employee, ta2in# into account the
nature o* the employer4s business, the duration and scope o* wor2 to be done, and, in
some cases, e$en the len#th o* time o* the per*ormance and its continued
e6istence Cniversal Robina &ugar illing Corporation and Rene Cabati, K5 Fo
1A6-,; Eanuary 17, 201-
Labor law@ 2inds o* employment@ pro%ect employment@ re0uisites@ len#th o* time not
controllin# A pro%ect employment, on the other hand, contemplates on
arran#ement whereby Bthe employment has been 36ed *or a speci3c pro%ect or
underta2in# whose completion or termination has been determined at the time o* the
en#a#ement o* the employeeLMC "wo re0uirements, there*ore, clearly need to be
satis3ed to remo$e the en#a#ement *rom the presumption o* re#ularity o* employment,
namely+ .1/ desi#nation o* a speci3c pro%ect or underta2in# *or which the employee is
hired@ and .2/ clear determination o* the completion or termination o* the pro%ect at the
time o* the employee4s en#a#ement "he ser$ices o* the pro%ect employees are le#ally
and automatically terminated upon the end or completion o* the pro%ect as the
employee4s ser$ices are coterminous with the pro%ect :nli2e in a re#ular employment
under Article 2A0 o* the Labor Code, howe$er, the len#th o* time o* the asserted
Bpro%ectC employee4s en#a#ement is not controllin# as the employment may, in *act,
last *or more than a year, dependin# on the needs or circumstances o* the pro%ect
Fe$ertheless, this len#th o* time .or the continuous rehirin# o* the employee e$en a*ter
the cessation o* the pro%ect/ may ser$e as a bad#e o* re#ular employment when the
acti$ities per*ormed by the purported Bpro%ectC employee are necessary and
indispensable to the usual business or trade o* the employer ?n this latter case, the law
will re#ard the arran#ement as re#ular employment Cniversal Robina &ugar illing
Corporation and Rene Cabati,K5 Fo 1A6-,; Eanuary 17, 201-
Labor law@ 2inds o* employment@ re#ular employment@ re0uisites Article 2A0 o* the
Labor Code pro$ides *or three 2inds o* employment arran#ements, namely+ re#ular,
pro%ectRseasonal and casual 5e#ular employment re*ers to that arran#ement whereby
the employee Bhas been en#a#ed to per*orm acti$ities which are usually necessary or
desirable in the usual business or trade o* the employerLMC :nder this de3nition, the
primary standard that determines re#ular employment is the reasonable connection
between the particular acti$ity per*ormed by the employee and the usual business or
trade o* the employer@ the emphasis is on the necessity or desirability o* the
employee4s acti$ity "hus, when the employee per*orms acti$ities considered necessary
and desirable to the o$erall business scheme o* the employer, the law re#ards the
employee as re#ular
<y way o* an e6ception, para#raph 2, Article 2A0 o* the Labor Code also considers as
re#ular, a casual employment arran#ement when the casual employee4s en#a#ement is
made to last *or at least one year, whether the ser$ice is continuous or bro2en "he
controllin# test in this arran#ement is the len#th o* time durin# which the employee is
en#a#ed Cniversal Robina &ugar illing Corporation and Rene Cabati, K5 Fo 1A6-,;
Eanuary 17, 201-
Labor law@ 2inds o* employment@ seasonal employment@ re0uisites Seasonal
employment operates much in the same way as pro%ect employment, albeit it
in$ol$es wor2 or ser$ice that is seasonal in nature or lastin# *or the duration o* the
season As with pro%ect employment, althou#h the seasonal employment
arran#ement in$ol$es wor2 that is seasonal or periodic in nature, the employment
itsel* is not automatically considered seasonal so as to pre$ent the employee *rom
attainin# re#ular status "o e6clude the asserted BseasonalC employee *rom those
classi3ed as re#ular employees, the employer must show that+ .1/ the employee must
be per*ormin# wor2 or ser$ices that are seasonal in nature@ and .2/ he had been
employed *or the duration o* the season )ence, when the BseasonalC wor2ers are
continuously and repeatedly hired to per*orm the same tas2s or acti$ities *or se$eral
seasons or e$en a*ter the cessation o* the season, this len#th o* time may li2ewise
ser$e as bad#e o* re#ular employment ?n *act, e$en thou#h denominated as Bseasonal
wor2ers,C i* these wor2ers are called to wor2 *rom time to time and are only temporarily
laid oD durin# the oD&season, the law does not consider them separated *rom the
ser$ice durin# the oD&season period "he law simply considers these seasonal wor2ers
on lea$e until re&employed Cniversal Robina &ugar illing Corporation and Rene
Cabati, K5 Fo 1A6-,; Eanuary 17, 201-
'$erseas employment@ that the entitlement o* seamen on o$erseas wor2 to disability
bene3ts is a matter #o$erned, not only by medical 3ndin#s, but by law and by contract
9ith respect to the applicable rules, it is doctrinal that the entitlement o* seamen on
o$erseas wor2 to disability bene3ts Bis a matter #o$erned, not only by medical 3ndin#s,
but by law and by contract "he material statutory pro$isions are Articles 1;1 to 1;,
under Chapter G? .Disability <ene3ts/ o* the Labor Code, in relation LtoM 5ule O o* the
5ules and 5e#ulations ?mplementin# <oo2 ?G o* the Labor Code <y contract, the P'(A&
S(C, as pro$ided under Department 'rder Fo -, series o* 2000 o* the Department o*
Labor and (mployment, and the parties4 Collecti$e <ar#ainin# A#reement bind the
seaman and his employer to each otherC
?n the *ore#oin# li#ht, the Court obser$es that respondent e6ecuted his contract o*
employment on Euly 1Q, 2000, incorporatin# therein the terms and conditions o* the
2000 P'(A&S(C which too2 eDect on Eune 27, 2000 )owe$er, since the implementation
o* the pro$isions o* the *ore#oin# 2000 P'(A&S(C was temporarily suspended by the
Court on September 11, 2000, particularly Section 20, para#raphs .A/, .</, and .D/
thereo*, and was li*ted only on Eune 7, 2002, throu#h P'(A Memorandum Circular Fo 2,
series o* 2002, the determination o* respondent4s entitlement to the disability bene3ts
should be resol$ed under the pro$isions o* the 1;;6 P'(A&S(C as it was, eDecti$ely, the
#o$ernin# circular at the time respondent4s employment contract was e6ecuted 8NC
&"ip*anage*ent, 8n!. Captain &igfredo E. onterroyo and1or 8nterorient Navigation
)i*ited v. Ale%ander ). oradas,K5 Fo, Eanuary 17, 201-
Payment o* separation pay as alternati$e relie* *or union members who were dismissed
*or ha$in# participated in an ille#al stri2e is in lieu o* reinstatement@ circumstances
when applicable "he alternati$e relie* *or union members who were dismissed *or
ha$in# participated in an illegal stri2e is the payment o* separation pay in lieu o*
reinstatement under the *ollowin# circumstances+ .a/ when reinstatement can no lon#er
be eDected in $iew o* the passa#e o* a lon# period o* time or because o* the realities o*
the situation@ .b/ reinstatement is inimical to the employer4s interest@ .c/ reinstatement
is no lon#er *easible@ .d/ reinstatement does not ser$e the best interests o* the parties
in$ol$ed@ .e/ the employer is pre%udiced by the wor2ers4 continued employment@ .*/ *acts
that ma2e e6ecution un%ust or ine0uitable ha$e super$ened@ or .#/ strained relations
between the employer and employee
"he Court ruled that the #rant o* separation pay to respondents is the appropriate relie*
under the circumstances considerin# that 17 years had lapsed *rom the onset o* this
labor dispute, and in $iew o* strained relations that ensued, in addition to the reality o*
replacements already hired by the hospital which had apparently reco$ered *rom its
hu#e losses, and with many o* the petitioners either employed elsewhere, already old
and sic2ly, or otherwise incapacitated .isayas Co**unity edi!al Center 4.CC5
for*erly (no3n as etro Cebu Co**nunity 6ospital 4CC65 v. Er*a Fballe, et al.,K5
Fo 1;6176, Eanuary 17, 201-
5ule -7@ only 0uestions o* law are allowed in a petition *or re$iew on !ertiorari ?t is a
settled rule in this %urisdiction that only 0uestions o* law are allowed in a petition *or
re$iew on certiorari "he Court4s power o* re$iew in a 5ule -7 petition is limited to
resol$in# matters pertainin# to any percei$ed le#al errors, which the CA may ha$e
committed in issuin# the assailed decision ?n re$iewin# the le#al correctness o* the
CA4s 5ule 67 decision in a labor case, the Court e6amines the CA decision in the conte6t
that it determined whether or not there is #ra$e abuse o* discretion in the FL5C decision
sub%ect o* its re$iew and not on the basis o* whether the FL5C decision on the merits o*
the case was correct Cniversal Robina &ugar illing Corporation and Rene Cabati, K5
Fo 1A6-,; Eanuary 17, 201-
5ule -7@ the Court4s %urisdiction in a 5ule -7 petition is limited to the re$iew o* pure
0uestions o* law@ e6ceptions "he Court4s %urisdiction in cases brou#ht be*ore it *rom the
CA $ia 5ule -7 o* the 5ules o* Court is #enerally limited to re$iewin# errors o* law "he
Court is not the proper $enue to consider a *actual issue as it is not a trier o* *acts "his
rule, howe$er, is not ironclad and a departure there*rom may be warranted where the
3ndin#s o* *act o* the CA are contrary to the 3ndin#s and conclusions o* the FL5C and
LA, as in this case ?n this re#ard, there is there*ore a need to re$iew the records to
determine which o* them should be pre*erred as more con*ormable to e$identiary
*acts 8NC &"ip*anage*ent, 8n!. Captain &igfredo E. onterroyo and1or 8nterorient
Navigation )i*ited v. Ale%ander ). oradas,K5 Fo, Eanuary 17, 201-
Section 20 .</ o* the 1;;6 P'(A&S(C@ an employer shall be liable *or the in%ury or illness
suDered by a sea*arer durin# the term o* his contract@ e6ception "he pre$ailin# rule
under Section 20 .</ o* the 1;;6 P'(A&S(C on compensation and bene3ts *or in%ury or
illness was that an employer shall be liable *or the in%ury or illness suDered by a sea*arer
durin# the term o* his contract "o be compensable, the in%ury or illness must be pro$en
to ha$e been contracted durin# the term o* the contract )owe$er, the employer may
be e6empt *rom liability i* he can success*ully pro$e that the cause o* the seaman4s
in%ury was directly attributable to his deliberate or will*ul act as pro$ided under Section
20 .D/ thereo*, to wit+
D Fo compensation shall be payable in respect o* any in%ury, incapacity, disability or
death o* the sea*arer resultin# *rom his will*ul or criminal act, pro$ided howe$er, that
the employer can pro$e that such in%ury, incapacity, disability or death is directly
attributable to sea*arer
)ence, the onus probandi *alls on the petitioners herein to establish or substantiate
their claim that the respondent4s in%ury was caused by his will*ul act with the re0uisite
0uantum o* e$idence8NC &"ip*anage*ent, 8n!. Captain &igfredo E. onterroyo and1or
8nterorient Navigation )i*ited v. Ale%ander ). oradas,K5 Fo, Eanuary 17, 201-
Substantial e$idence@ concept o* ?n labor cases, as in other administrati$e proceedin#s,
only substantial e$idence or such rele$ant e$idence as a reasonable mind mi#ht accept
as su=cient to support a conclusion is re0uired "o note, considerin# that substantial
e$idence is an e$identiary threshold, the Court, on e6ceptional cases, may assess the
*actual determinations made by the FL5C in a particular case
"he Court ruled that FL5C had co#ent le#al bases to conclude that petitioners ha$e
success*ully dischar#ed the burden o* pro$in# by substantial e$idence that respondent4s
in%ury was directly attributable to himsel* 5ecords bear out circumstances which all
lead to the reasonable conclusion that respondent was responsible *or the Joodin# and
burnin# incidents 9hile respondent contended that the a=da$its and statements
o* the $essel4s o=cers and his *ellow crew members should not be #i$en probati$e
$alue as they were biased, sel*&ser$in#, and mere hearsay, he nonetheless *ailed
to present any e$idence to substantiate his own theory <esides, as correctly
pointed out by the FL5C, the corroboratin# a=da$its and statements o* the
$essel4s o=cers and crew members must be ta2en as a whole and cannot %ust be
per*unctorily dismissed as sel*&ser$in# absent any showin# that they were lyin# when
they made the statements therein 8NC &"ip*anage*ent, 8n!. Captain &igfredo E.
onterroyo and1or 8nterorient Navigation )i*ited v. Ale%ander ). oradas,K5 Fo,
Eanuary 17, 201-