Labor Law 1

2000 CASES
Q: X had been working for a year as a security guard with company A., a sister
company of company B. He was hired on January 1, 1988 as he was among those
absorbed by company B when it took over the security contracts of its sister
company A. He was forced by company B to sign a new probationary contract for 6
mos; and on August 1, 1988, his employment was terminated for allegedly sleeping
on post and quarreling with a co-worker. Was B a regular employee and thereby
illegally dismissed?
A: Yes. Bs employment with company B was just a continuation of his employment
with company A. The Court cannot sanction the practice of companies that effects
the transfer of its employees to another entity whose owners are the same, in order
to deprive subject employees of the benefits he is entitled to under the law.
Nevertheless, B attained the status of a regular employee with company B upon
completion of his six-month period of probation. He started working on January 30,
1988; and the end of the period of probation was on July 27, 1988. When he was
dismissed on August 1, he was already a regular employee with a security of
tenure. Private respondents alleged violations were first infractions and do not
amount to valid grounds for terminating employment. (A Prime Security
Services, Inc. v. NLRC, G.R. 107320, January 19, 2000)
Q: KMDD-CFW is a union whose CBA with the company A expired. During
renegotiations, the management panel arrived late causing the union panel to walk
out. The management addressed a letter of apology to the union and requested for
negotiations to resume. The union panel did not show up despite letters from
management advising the former of the CBA meetings. Consequently, the union
struck. A complaint was filed by Golden Donuts to declare the strike illegal.
Counsel for the union strikers pleaded for a compromise whereupon a 257 out of
262 members agreed to a compromise settlement whereby they shall be paid
separation pay in exchange for the dismissal of the criminal and unfair labor
practice cases filed by petitioners against them. Could the union compromise or
waive the rights to security of tenure and money claims of its minority members,
without the latters consent?
A: No. Absent a showing of the unions special authority to compromise the
individual claims of private respondents for reinstatement and backwages, there is
no valid waiver of the aforesaid rights. The judgment of the Labor Arbiter upholding
the dismissal of private respondents based on the compromise agreement does not
have the effect of res judicata those who did not agree thereto since the
requirement of identity of parties is not satisfied. A judgment upon a compromise
agreement is conclusive only upon parties thereto and their privies. Private
respondents have not waived their right to security of tenure nor can they be barred
from entitlement of their individual claims. Since there was no evidence that
private respondents committed any illegal act, petitioners failure to reinstate them
after the settlement of the strike amounts to illegal dismissal. (Golden Donuts,
Inc. v. NLRC, G.R. Nos. 113666-68, January 19, 2000)

Q: Union A, of which X was a part, filed with the DOLE a notice of strike raising
charges of ULP and illegal dismissal against Company A. The Labor Arbiter ordered
Company A to pay X separation pay of month pay for every year of service. X
filed a motion for execution of the decision of the Labor Arbiter. The Rehabilitation
Receiver of Company A submitted a Manifestation with Motion, alleging that
petitioner was not yet in a position to comply with the directive of the Labor Arbiter
as it was still under Rehabilitation Receivership by virtue of the order of the SEC.
However, the Labor Arbiter still granted the motion for execution. Company A
contends that the NLRC should have denied the order of the LA for the immediate
payment of separation pay because of the order of the SEC suspending all claims
against petitioner pending before any court, tribunal or body. Can the order of the
SEC stay the execution of judgment against petitioner?
A: No. Although a stay of execution may be warranted by the fact that a petitioner
corporation has been placed under rehabilitation receivership, the SEC already
issued an order approving the rehabilitation plan of petitioner and placing it under
liquidation pursuant to PD 902-A. Since receivership proceedings have ceased and
petitioners rehabilitation receiver and liquidator has been given the imprimatur to
proceed with corporate liquidation, the cited order of the SEC has been
rendered functus oficio. Petitioners monetary obligation to private respondent is
long overdue and thus cannot delay the satisfaction of private respondents claim.
However, due to events subsequent to the filing of this petition, private respondent
must present its claim with the rehabilitation receiver and liquidator in the SEC,
subject to the rules on preference of credits. (Alemars Sibal & Sons, Inc. v.
NLRC, G.R. No. 114761, January 19, 2000)
Q: X was employed as a quality control inspector with the duty of inspecting LPB
cylinders for any possible defects. He was dismissed when he was allegedly caught
by petitioners company President for sleeping on the job, thereby violating
Company Rule 15-b. He was asked to explain why no disciplinary action should be
taken against him, to which he promptly replied. Notwithstanding his reply, he was
terminated. Was X illegally dismissed?
A: Yes. Petitioners claim that private respondent slept on the job was not
substantiated by any evidence. In other cases, sleeping on the job was found as a
valid ground for dismissal because such cases involved security guards whose duty
necessitates that they be awake and watchful at all times, such is not the degree of
discipline required of a quality control inspector. While an employer is allowed a
wide discretion in the promulgation of company policies, such should always be fair
and reasonable. In this case, the dismissal meted out on private respondent for
sleeping on the job appears to be too harsh a penalty. (VH Manufacturing, Inc. v.
NLRC, G.R. No. 130957, January 19, 2000)
Q: Company Y is engaged in road construction projects of the government. It
engaged the services of certain workers to work on various projects on different
dates. Several of its workers joined Union A as members. Union A filed a motion
for certification election with the regional office. Company Y opposed stating that
the workers were project employees and not qualified to form part of the rank and
file collective bargaining unit. Later, Company Y terminated the employment of the
workers due to the completion of its projects or the expiration of workers

contracts. The affected workers claimed they were dismissed because of their
union activities; and thus staged a strike. The strike was declared illegal and the
workers were deemed to have lost their employment status. Were the workers
validly dismissed?
A: Yes. The contracts of employment of petitioners attest to the fact that
they were hired for specific projects and their employment was
coterminous with the completion of the project for which they had been
hired. Also, they were informed in advance that said project or
undertaking for which they were hired would end on a stated or
determinable date. Since the workers were project employees, their
employment legally ended upon completion of their respective projects.
(Association of Trade Unions v. Abella, G.R. No. 100518, January 24, 2000.
Q: Company K allowed the temporary transfer holding of office at Kalibo, Aklan.
Nevertheless, majority of the employees continued to work at its office in Lezo
Aklan and were paid their respective salaries. From June 1992 to March 1993, X and
Y reported to work at the Lezo office and were not paid their salaries. From March
up to the present, they were again allowed to draw their salaries. It is the assertion
of Company K that X and Y voluntarily abandoned their work assignments and that
they defied the lawful orders by the General manager and thus the Board of
Directors passed a resolution resisting and denying X and Ys claims under the
principle of no work, no pay. X and Y interpose that the transfer to Kalibo was
illegal. Are X and Y entitled to claim their unpaid wages from June 1992 to March
1993?
A: No. Petitioner was able to show that private respondents did not render services
during the stated period. X and Y even admitted that they did not report at the
Kalibo office, as Lezo remained to be their office where they continuously reported.
It was not for X and Y to declare the managements act of transferring the office to
Kalibo as an illegal act as there was no allegation of proof that such was made in
bad faith or with malice. Private respondents were dismissed by petitioner effective
January 1992 and were accepted back, subject to the condition of no work, no pay
effective March 1993 which is why they were allowed to draw their salaries
again. (Aklan Electric Cooperative Incorporated v. NLRC, G.R. 121439,
January 25, 2000)
Q: A was hired by Isetann Department Store as a security checker to apprehend
shoplifters. As a cost-cutting measure, private respondent decided to phase out its
security section and engage the services of an independent security agency. A was
then terminated prompting him to file a complaint for illegal dismissal. NLRC
ordered petitioner to be given separation pay holding that the phase-out of the
security section was a legitimate business decision. However, A was denied the
right to be given written notice before termination of his employment. What is the
effect of violation of the notice requirement when termination is based on an
authorized cause?
A: The dismissal is ineffectual. In termination of employment under Art. 283, the
violation of notice requirement is not a denial of due process as the purpose is not

to afford the employee an opportunity to be heard on any charge against him, for
there is none. The purpose is to give him time to prepare for the eventual loss of
his job and the DOLE to determine whether economic causes do exist justifying the
termination of his employment. With respect to Art. 283, the employers failure to
comply with the notice requirement does not constitute a denial of due process but
a mere failure to observe a procedure for the termination of employment which
makes the termination of employment merely ineffectual.
If the employees separation is without cause, instead of being given separation
pay, he should be reinstated. In either case, whether he is reinstated or given
separation pay, he should be paid full backwages if he has been laid off without
written notice at least 30 days in advance.
With respect to dismissals under 282, if he was dismissed for any of the just causes
in 282, he should not be reinstated. However, he must be paid backwages from
the time his employment was terminated until it is determined that the termination
is for a just cause because the failure to hear him renders the termination of his
employment without legal effect. (Serrano v. NLRC, G.R. No. 117040, January
27, 2000)
Q: A was employed as housekeeper with Company B. He also owned a car-for-hire
which he rented to B who operated the car as a taxi. One day, B approached the
front desk clerk at petitioners hotel requesting a collectible of P2000 be added to a
certain Korean guests, Mr. Hus bill. Mr. Hu later complained that he was overbilled.
A explained his side being the front desk supervisor and owner of the car.
Eventually, Company Bs staff confirmed the error and refunded the amount to the
Korean. Company B terminated the services of A on the ground of loss of
confidence for the latters malicious intent to defraud a guest of the hotel. Was A
illegally dismissed?
A: Yes. Company B failed to prove by ample evidence that A intended to defraud Mr.
Hu. The front desk clerk admitted being the one responsible for entering the P2000
in Mr. Hus statement of account. Also, B admitted approaching the front desk clerk
to demand payment of the transportation fee as he was hired by Mr. Hus group for
two days believing in good faith that Mr. Hu owed him P2000. As there is no valid
and just cause, he is entitled to reinstatement without loss of seniority rights plus
full backwages and other benefits withheld from him up to the time of his actual
reinstatement. (Condo Suite Club Travel, Inc. v. NLRC, G.R. No. 125671,
January 28, 2000)
Q: Union A and Company B were faced with a bargaining deadlock. The union then
filed a notice of strike with the NCMB. Later, the union conducted a strike vote
among its members and the results were submitted to the Alliance of Nationalist
and Genuine labor Organization for submission to the NCMB, but which was not
made. The union went on strike without the report of the strike vote submitted to
the NCMB. Company B filed a petition to declare the strike illegal alleging that the
union barricaded gates of Company B and committed acts of violence, threats and
coercion. Trial on the merits was conducted wherein Company B presented
witnesses and evidence, Union A did not present any witness but instead relied on
their Memorandum contending that respondents evidence are inadmissible. Was
the strike illegal?

A: Yes. Failure to submit the strike vote to the NCMB immediately makes the strikek
illegal. The illegality of the strike is further affirmed by the acts of violence, threats
and coercion committed during the strike. The requirements of procedural due
process were complied with as both parties were allowed to present their witnesses
and evidence, although petitioner opted instead to file a memorandum. (Samahan
ng Manggagawa sa Moldex Products, Inc. v. NLRC, G.R. No. 119467,
February 1, 2000)
Q: V was hired by RFC as sales representative. He avers that he was transferred by
RFC to PMCI, an agency which provides RFC with additional contractual workers. In
PMCI, he was reassigned to RFC as sales representative and then later informed by
the personnel manager of RFC that his services were terminated. RFC maintains
that no employer-employee relationship existed between V and itself. V filed
complaint for illegal dismissal. RFC alleges that PMCI is an independent contractor
as the latter is a highly capitalized venture. Was V a regular employee of RFC,
thereby illegally dismissed?
A: Yes. PMCI was a labor-only contractor. Although the Neri doctrine stated that it
was enough that a contractor had substantial capital to show it was an independent
contractor, the case of Fuji Xerox clarified the doctrine stating that an independent
business must undertake the performance of the contract according to its own
manner and method free from the control of the principal. In this case, PMCI did
not even have substantial capitalization as only a small amount of its authorized
capital stock was actually paid-in. Furthermore, PMCI did not carry on an
independent business or undertake the performance of its contract according to its
own manner and method nor was it engaged to perform a specific and special job or
service. In labor-only contracting, the employees supplied by the contractor
perform activities, which are directly related to the main business of its principal. It
is clear that in this case, the work of petitioner as sales representative was directly
related to the business of RFC. Due to Vs length of service, he had attained the
status of regular employee and thus cannot be terminated without just or valid
cause. RFC failed to prove that his dismissal was for cause and that he was
afforded procedural due process. V is thus entitled to reinstatement plus full
backwages from his dismissal up to actual reinstatement. (Vinoya v. NLRC, G.R.
No. 126596, February 2, 2000)
Q: B is a lady Security Guard of Company O. She was last assigned at Vicente
Madrigal Condominium II located in Ayala Avenue, Makati. In a memorandum, the
Building Administrator of VM Condomunium II complained of the laxity of the guards
in enforcing security measures and requested to reorganize the men and women
assigned to the building to induce more discipline and proper decorum. B was then
transferred another building in Taytay, Rizal. B filed a complaint alleging that her
transfer amounted to an unjust dismissal. Was the transfer of B illegal?
A: No. Service-oriented enterprises adhere to the business adage that, the
customer is always right. In the employment of personnel, the employer has
management prerogatives subject only to limitations imposed by law. The transfer
of an employee would only amount to constructive dismissal when such is
unreasonable, inconvenient, or prejudicial to the employee, and when it involves a

demotion in rank or diminution of salaries, benefits and other privileges. In this

case, the transfer was done in good faith and in the best interest of the business
enterprise. Evidence does not show that Company O discriminated against B in
effecting her transfer as such was done to comply with a reasonable request. The
mere inconvenience of a new job assignment does not by itself make the transfer
illegal. (OSS Security and Allied Services, Inc. v. NLRC, G.R. No. 112752,
February 9, 2000)
Q: Company W is conducts a printing business in Sta. Cruz Makati. The Company
informed its workers that it was going to transfer its site in Makati to Batangas. It
gave its employees time to inform the management of their willingness to go with
petitioner, otherwise, they would find replacements. The Union advised the
company that its members were not willing to transfer to the new site. Are the
employees entitled to separation pay by virtue of their refusal to transfer to the
business in Batangas.
A: Yes. Although there is no complete dissolution of petitioners undertaking, but a
mere relocation; the phrase, closure or cessation of operation of an establishment
not due to serious business losses or reverses, under Article 283 of the Labor Code
includes the cessation of only part of a companys business. Company W had
alegitimate reason to relocate its plant due to the expiration of the lease contract in
Makati; however, it is still required to pay its workers separation pay. Cessation of
operation not due to serious business losses is an authorized cause for termination;
and the Labor Code provides that such terminated employees are entitled to
separation pay of 1 month pay or at least month for every year of service,
whichever is higher. (Cheniver Deco Print Technics Corporation v. NLRC, G.R.
No. 122876, February 17, 2000)
Q: Meralco and its union MEWA renegotiated its 1992-1997 CBA insofar as the last
two-year period was concerned. The Secretary of Labor assumed jurisdiction and
granted the arbitral awards. There was no question that these arbitral awards were
to be given retroactive effect. However, the parties dispute the reckoning period
when retroaction shall commence. Meralco claims that the award should retroact
only from such time that the Secretary of Labor rendered the award. The union
argues that the awards should retroact to such time granted by the Secretary who
has plenary and discretionary power to determine the effectivity of the arbitral
award. The union cited the case of St. Lukes and Mindanao Terminal where the
Secretary ordered the retroaction of the CBA to the date of expiration of the
previous CBA. When should the arbitral award retroact?
A: Labor laws are silent as to when an arbitral award in a labor dispute where the
Secretary has assumed jurisdiction by virtue of Art. 263 (g) shall retroact. Despite
the silence of the law, the Court ruled that the CBA arbitral awards granted after six
months from the expiration of the last CBA shall retroact to such time agreed upon
by both the employer and the employees or their union. Absent such agreement as
to retroactivity, the award shall retroact to the first day after the six-month period
following the expiration of the last day of the CBA should there be one. In the
absence of a CBA, the Secretarys determination of the date of effectivity as part of
his discretionary powers over arbitral awards shall control. (Manila Electric
Company v. Secretary of Labor, G.R. No. 127598, February 22, 2000)

Q: A, B and C were drivers of Company Q driving the latters taxicabs every other
day on a 24 hour work schedule under the boundary system where petitioners earn
an average of P400 daily and private respondent regularly deducts an amount for
the washing of the taxi units. A, B and C decided to form a labor union. Later,
Company Q refused to let petitioners drive their taxicabs. A, B and C filed with the
labor arbiter a complaint for ULP, illegal dismissal, and illegal deductions. The NLRC
found for A, B and C stating that dismissal must be for just cause and after due
process. Company Q's first motion for reconsideration was denied. It filed another
MR, which was then granted. Should the NLRC have granted the second MR?
A: No. Company Q exhausted administrative remedies available to it by seeking an
MR. The rationale for allowing only one MR from the same party is to assist the
parties in obtaining an expeditious and inexpensive settlement of labor cases. The
NLRC should have recognized that the relationship between jeepney-owners and
jeepney drivers under the boundary system is that of ee-er and not that of lessorlessee. The fact that the drivers do not receive fixed wages is not sufficient to
withdraw the relationship f3om that of er and ee. Therefore the termination of A, B
and Cs employment should have be effectuated in accordance with law. With
regard to the amount deducted for washing, such was not illegal as such is indeed a
practice in the taxi industry and is dictated by fair play. (Jardin v. NLRC, G.R. No.
119268, February 23, 2000)
Q: Union M is an affiliate of Federation U. A bitter disagreement ensued between
the Federation U and the Union M culminating in the latters declaration of general
autonomy from the former. The federation asked the company to stop the
remittance of Union Ms share in the education funds. The federation called a
meeting placing Union M under trusteeship and appointing an administrator.
Officers of Union M received letters from the administrator requiring them to explain
why they should not be removed from their office and expelled from union
membership. The officers were expelled from the federation. The federation then
advised the company of the expulsion of the 30 union officers and demanded their
separation pursuant to the Union Security Clause in the CBA. The Federation filed a
notice of strike with the NCMB to compel the company to effect the immediate
termination of the expelled union officers. Under the pressure of a strike, the
company terminated the 30 union officers from employment. Union M filed a notice
of strike on the grounds of discrimination; interference; mass dismissal of union
officers and shop stewards; threats, coercion and intimidation; and union busting.
Members of Union M prayed for the suspension of the effects of their termination.
Secretary Drilon dismissed the petition stating it was a intra-uion matter. Later, 78
union shop stewards were placed under preventive suspension. The union
members staged a walk-out and officially declared a strike that afternoon. The
strike was attended by violence. Was the dismissal of the union officers illegal?
A: Yes. The charges against respondent company proceeded mainly from the
termination of the union officers upon the demand of the federation pursuant to the
union security clause. Although the union security clause may be validly enforced,
such must comply with due process. In this case, the union officers were expelled
for allegedly committing acts of disloyalty to the federation. The company did not
inquire into the cause of the expulsion and merely relied upon the federations

allegations. The issue is not a purely intra-union matter as it was later on converted
into a termination dispute when the company dismissed the petitioners from work
without the benefit of a separate notice and hearing. As to the act of disaffiliation by
the local union; it is settled that a local union has the right to disaffiliate from its
mother union in the absence of specific provisions in the federations constitution
prohibiting such. There was no such provision in federation ULGWPs constitution.
Q: In the above case, was the strike illegal?
A: No. As to the legality of the strike; it was based on the termination dispute and
petitioners believed in good faith that in dismissing them, the company was guilty
of ULP. The no-strike, no lockout provision in the CBA can only be invoked when the
strike is economic. As to the violence, both parties agreed that the violence was not
attributed to the striking employees alone as the company itself hired men to pacify
the strikers. Such violence cannot be a ground for declaring the strike
illegal. (Malayang Samahan ng mga Manggagawa sa M. Greenfield
(MSMG0UWP) v. Ramos, G.R. No. 113907, February 28, 2000)
Q: The LA ordered petitioner to pay respondents the sum of P655, 866.41.
Petitioner appealed to the NLRC with a motion for the reduction of the supersedeas
to P100,000 and thereafter posted a cash bond of P100,000. The NLRC dismissed
the appeal for insufficiency of the bond. Petitioner said the Star Angel doctrine
should apply where the appeal may be perfected after that period upon posting of a
cash or surety bond. However, the NLRC disagreed stating that in this case, the
petitioner did not file a motion for reduction of bond within the period but instead
posted a bond in an amount not equivalent to the monetary award. Was the motion
for the reduction of the bond filed in time?

1.
2.
3.
4.

A: Yes. That petitioner did file a motion within the period is supported by the
following:
The motion for reduction was stamped with the received rubber stamp marker of
the NLRC and indicated the date of filing as 6.7.96.
Both the motion and the appeal memorandum were sent to respondents in one
envelope and sent by registered mail under Reg. Receipt 3576.
The same person notarized both the motion and the appeal on the same date.
On the last page of their comments, respondents stated that the motion for
reduction should be founded on meritorious grounds. This was found by the SC to
be an implied admittance of the receipt of the motion. Besides, respondents could
just as well have stated in their comments that no motion was filed. (Coral Point
Development Corporation v. NLRC, G.R. No.129761, February 28, 2000)
Q: A was a jeepney driver of X on the boundary system. Due to a change in
schedule, they did not report for work as protest. They were then replaced. A filed
a complaint for illegal dismissal asking for separation pay and other benefits. On
November 26, 1991, the labor arbiter rendered judgment in favor of A. X was
served a copy of the decision on April 3, 1992. X filed a memorandum on appeal on
April 13, 1992; however the appeal bond was only filed on April 30, 1992. Also,
such bond was found to be spurious. It was only on July 20, 1993 that a substitute
bond was issued by another company. Did the NLRC have jurisdiction to hear the
appeal?

A: No. The perfection of an appeal within the reglementary period and in the
manner prescribed by law is jurisdictional, and noncompliance with such legal
requirement is fatal and has the effect of rendering the judgment final and
executory. Perfection of an appeal includes the filing, within the prescribed period
of the memorandum of appeal and posting of the appeal bond. In cases where the
judgment involves a monetary award, as in this case, the appeal may be perfected
only upon posting of a cash or surety bond to the NLRC. Since the X received the
LAs decision on April 3, they had only until April 13 to file their appeal. The bond
was posted only on April 30; beyond the reglementary period. The requirement of
posting the bond has only been relaxed on grounds of substantial justice and special
circumstances which are not attendant in this case. Furthermore, the bond posted
was not genuine. The decision can no longer be amended nor altered by the labor
tribunal. (Navarro v. NLRC, G.R. No. 116464, March 1, 2000)
Q: A, is a member of the NFL, employed by X in the Patalon Coconut Estate in
Zamboanga City. Pursuant to RA 6657, the Comprehensive Agrarian Reform Law,
the Patalon Cocount Estate was warded to the Patalon Estate Reform Association, of
which A is a member and co-owner. As a result of this acquisition, the Patalon
Estate shut down operations and the employment of A was severed. A did not
receive separation pay. A became co-owner of the land and subsequently filed a
complaint for illegal dismissal. Should X, who had been compelled to cease
operations because of compulsory acquisition by the government of his land for
purposes of agrarian reform, be made liable to pay separation pay to A?
A: No. The peculiar circumstance in the case at bar involves neither the
closure of an establishment nor a reduction in personnel as contemplated
in Article 283. The closure contemplated in 283 is a voluntary act on the
part of the employer. The Labor Code does not contemplate a situation
where the closure is forced upon the employer. As such, petitioners are
not entitled to separation pay as private respondents did not voluntary
shut down operations as they even sought to be exempted from the
coverage of RA 6657. (National Federation of Labor v. NLRC, G.R. No.
127718, March 2, 2000)
Q: A and B were employed by Company E. A applied for a leave of absence and
informed the Operations Manager of his intention to avail of the optional retirement
plan under the Consecutive Enlistment Incentive Plan (CEIP). Such was denied. B
also applied for a leave of absence and informed the Operations Manger of his
intention to avail of the optional early retirement plan in view of his 20 years of
service which was likewise denied. A and B both requested for extension of their
leaves of absence. Later, they discovered that they had been dropped from the
roster of crew members. Company E asserts that A and B are contractual
employees whose employment are terminated every time their contracts expire.
Were A and B validly dismissed?
A: No. The primary standard to determine a regular employment is the reasonable
connection between the activity performed by the employee in relation to the usual
business or trade of the employer. In this case it is undisputed that petitioners were
regular employees of private respondents. Also, as they had been in the employ of

private respondents for 20 years as they were repeatedly re-hired after the
expiration of their respective contracts, it is clear that their service was necessary
and indispensable to private respondents business. Therefore, they could only be
dismissed for just and valid cause. There is no showing that they abandoned their
job as there was no showing of their unjustified refusal to resume
employment. (Millares v. NLRC, G.R. No. 110524, March 14, 2000)
Q: X is a members of Union S. The Executive Board of Union S decided to retain the
services of their counsel in connection with negotiations for a new CBA. A general
membership meeting was called where majority of union members approved a
resolution confirming the decision to engage the services of the unions counsel,
Atty. Lacsina. The resolution provided that 10% of the total economic benefits that
may be secured be given to the counsel at attorneys fees. Also it contained an
authorization for Solidbank Corporation to check-off said attorneys fees from the
first lump sum of payment of benefits under the new CBA. X issued a complaint for
illegal deduction. May the union validly deduct attorneys fees from Xs salary?
A: No. Article 241 has 3 requisites for the validity of the special assessment for
unions incidental expenses, attorneys fees and representation expenses. They
are:
1. authorization by a written resolution of majority of all the members at the general
membership meeting called for the purpose
2. secretarys record of the minutes of the meeting
3. individual written authorization for check-off duly signed by the employees
concerned.
Such requirements were not complied with, as there were no individual
written check off authorizations; thus, the employer cannot legally deduct
thus the assessment. The union should be made to shoulder the expenses
incurred for the services of a lawyer and accordingly, reimbursement
should be charged to the unions general fund or account. No deduction
can be made from the salaries of the concerned employees other than
those mandated by law. (Gabriel, et al v. Secretary of Labor, G.R. No.
115949, March 16, 2000)
Q: A and B were employed by PAL as load controller and check-in clerk,
respectively. On January 19, 1993, a passenger by the name of Cominero checked
in for the flight. It appears that B reflected a lighter weight of baggage on
Comineros ticket to make it appear that the same was within the allowable level.
When the anomaly was later discovered, B went to the cashier to pay the excess
baggage fee. Cominero further paid the sum representing the excess baggage fee.
B implicated A in the anomaly. A and B were charged with fraud against the
company and were found guilty and meted with the penalty of dismissal. The
NLRC found that the alleged defrauding of PALs excess baggage revenue was not
the handiwork of A and that PAL failed to show it suffered loss in revenues as a
consequence of private respondents questioned act. Was A validly dismissed?
A: Yes. The core of PALs evidence against A included the report of B. It was
erroneous for the NLRC to have discredited Bs testimony because he appeared
guilty as well. There is substantial evidence showing that private respondent had
direct involvement in the illegal pooling of baggage. As act is inexcusable as it

constitutes a serious offense under petitioners Code of Discipline. The fact that PAL
failed to show it suffered losses in revenue is immaterial as private respondents
mere attempt to deprive petitioner of its lawful remedy is already tantamount to
fraud. Therefore, A was validly dismissed and as such was for a just cause, he is not
entitled to backwages nor separation pay. (PAL v. NLRC, G.R. No. 126805, March
16, 2000)
Q: The NFL was the sole and exclusive bargaining representative for the rank and
file employees of Company X. NFL started to negotiate for better terms and
conditions of employment; which were met with resistance by Company X. The NFL
filed a complaint for ULP on the ground of refusal to bargain collectively. LA issued
an order declaring the company guilty of ULP and ordering the CBA proposals
submitted by the NFL as the CBA between the parties. Later, Y claimed that he was
wrongfully excluded from the benefits under the CBA filed a petition for relief.
Company X asserts that Y is not entitled to the benefits under the CBA because he
was hired after the term of a CBA and therefore, is not a party to the agreement and
may not claim benefits thereunder. As for the CBA, Company X maintains that the
force and effect of the CBAs terms are limited to only three years and cannot
extend to terms and conditions which ceased to have force and effect. Are the
assertions of Company X correct?
A: No. As to its first assertion, Y should be able to claim benefits under the CBA. The
benefits under the CBA should be extended to those who only became such after it
expired, to exclude them would constitute undue discrimination. In fact, when a
CBA is entered into by the union representing the employees and the employer,
even the non-union members are entitled to the benefits of the contract. As to its
assertion that the CBAs terms are limited to only three years, it is clear from Art.
253 that until a new CBA has been executed by and between the parties, they are
duty bound to keep the status quo and to continue in full force and effect the terms
and conditions of the existing agreement. In the case at bar, no new agreement
was entered between the parties pending appeal of the decision in the NLRC.
Consequently, the employees would be deprived of a substantial amount of
monetary benefits if the terms and conditions of the CBA were not to remain in
force and effect which runs counter to the intent of the Labor Code to curb labor
unrest and promote industrial peace. (New Pacific Timber Supply Co. v. NLRC,
G.R. No. 124224, March 17, 2000)
Q: A was employed as a data encoder by private respondent. From 1988 until 1991,
she entered into 13 employment contracts with private respondent, each contract
for a period of 3 months. In September 1991, A and 12 other employees allegedly
agreed to the filing of a PCE of the rank and file employees of private respondent.
Subsequently, A received a termination letter due to low volume of work. A filed a
complaint for illegal dismissal. Was A a regular employee entitled to tenurial
security?
A: Yes. Even though petitioner is a project employee, as in the case of Maraguinot,
Jr. v. NLRC, the court held that a project employee or member of a work pool may
acquire the status of a regular employee when the following concur:
1. there is continuous rehiring of project employees even after the cessation of a
project

2.

the tasks performed by the alleged project employee are vital, necessary and
indispensable to the usual business and trade of the employer.
A was employed as a data encoder performing duties, which are usually necessary
or desirable in the usual business or trade of the employer, continuously for a
period of more than 3 years. Being a regular employee, A is entitled to security of
tenure and could only be dismissed for a just and authorized cause; low volume of
work is not a valid cause for dismissal under Arts. 282 or 283. Having worked for
more than 3 years, A is also entitled to service incentive leave benefits from 1989
until her actual reinstatement since such is demandable after one year of service,
whether continuous or broken. (Imbuido v. NLRC, G.R. No. 114734, March 31,
2000)
Q: A was employed as a security guard by Company X. During a routinary meeting
of the security guards, A stood up and shouted at the presiding officer. She was
then suspended for 15 days. Later, she received a letter that she was reassigned
and required to report to respondents Manila office. Her services were terminated
for abandonment when she failed to report for work in her new assignment. The
Labor Arbiter found for petitioner. Private respondent appealed to the NLRC, which
denied the appeal. The decision having become final, the LA issued a writ of
execution on the reinstatement aspect, but it was not implemented as the monetary
aspect remained to be determined. Later, NLRC sheriff issued a notice of
Garnishment served on private respondents deposit account with the PNB. The LA
directed the PNB to release the amount. Meanwhile, Company X filed with the LA a
motion to quash the writ of execution on the ground that there has been a change
in the situation of the parties which would make the execution inequitable. It
contended that A accepted employment from another security agency without
previously resigning from respondents agency. Should the Labor Arbiter still order
the release of the judgment award?
A: Yes. Execution is the final stage of litigation, the end of the suit. It cannot be
frustrated except for serious reasons demanded by justice and equity. It is the
ministerial duty of the court to issue a writ of execution to enforce the judgment.
Company Xs contention that there has been a change in the situation of the parties
is without merit. It has been held that back wages awarded to an illegally dismissed
employee shall not be diminished or reduced by the earnings by him elsewhere
during the period of his illegal dismissal. The decision is final and the total amount
representing the salary differentials and back wages awarded to the petitioner has
been garnished from the account of respondent agency with no opposition or
resistance. Therefore, it is the ministerial duty of the LA to release the money to
A. (Torres v. NLRC, G.R. No. 107014, April 12, 2000)
Q: On December 1986, De La Salle University and De La Salle University Employees
Association, which is composed of regular non-academic rank and file employees
entered into a CBA. During the freedom period of such CBA, the Union initiated
negotiations, which turned out to be unsuccessful. After several conciliation
meetings, 5 out of 11 issues were resolved by the parties. A partial CBA was
executed. The parties then entered into a Submission Agreement identifying the
remaining issues for arbitration. In resolving the issues, the VA included the
computer operators from the scope of the CBA and excluded the employees of the
College of St. Benilde. Did the VA act properly in ruling as such?

A: Yes. Computer operators were presently doing clerical and routinary work and
had nothing to do with the setting of management policies for the university. The
access they have to information to the Universitys operations are not necessarily
confidential. The express exclusion of the computer operators in the past does not
pose a bar to re-negotiation for future inclusion of the said employees in the
bargaining unit. Also, as to the employees of the CSB, they were properly excluded
at the two education institutions have their own separate juridical personality. (De la
Salle University v. De La Salle University Employees Association, G.R. No. 109002,
April 12, 2000)
Q: A received a letter calling to his attention his conduct during a Sales and
Marketing Christmas gathering where she allegedly made utterances of obscene,
insulting and offensive words towards the SPCs Management Committee. A was
given two days to explain why no disciplinary action should be taken against him
and he was thereafter placed on preventive suspension. A replied stating that such
utterances were only made in reference to a decision taken by the management
committee on the Cua Lim Case and not to any specific person. A was thereafter
informed in a letter that his employment was terminated. Was A validly dismissed?
A: No. As dismissal was brought about by utterances made during an informal
Christmas gathering. For misconduct to warrant dismissal, it must be in connection
with the employees work. In this case, the alleged misconduct was neither in
connection with employees work, as As utterances are not unusual in informal
gatherings, neither was it of such serious and grave character. Furthermore, As
outburst was in reaction to the decision of the management in a certain case and
was not intended to malign on the person of the respondent companys president
and general manager. The company itself did not seem to consider the offense
serious to warrant an immediate investigation. It is also provided in the companys
rules and regulations that for conduct such as that of A, a first offense would only
warrant a verbal reminder and not dismissal. (Samson v. NLRC, G.R. No.121035,
April 12, 2000).
Q: X was employed by Company C as assistant mechanic. X drove Company Cs
truck to install a panel sign and accidentally sideswiped a ten year old girl whose
injuries incurred hospitalization expenses of up to P19,534.45. Such amount was
not reimbursed by insurance as X had no drivers license at the time of the
accident; therefore Company C shouldered the expenses. Company C conducted an
investigation where X was given the opportunity to defend himself. X was then
dismissed for violating the company rules and regulation for blatant disregard of
established control procedures resulting in company damages. Was X validly
dismissed?
A: Yes. Although X contends that he was investigated simply for the offense of
driving without a valid drivers license, it was clear that he was fully aware that he
was being investigated for his involvement in the vehicular accident. It was also
known to him that the accident caused the victim to suffer serious injuries leading
to expenses which the insurance refused to cover. Due process does not
necessarily require a hearing, as long as one is given reasonable opportunity to be
heard. Xs actions clearly constituted willful disobedience. Although generally, an

employee who is dismissed for just cause is not entitled to any financial assistance,
due to equity considerations as this was Xs first offense in 18 years of service, he is
to be granted separation pay by way of financial assistance of months pay for
every year of service. (Aparente, Sr. v. NLRC, G.R. No. 117652, April 27,
2000)
Q: Y was a company nurse for the Company Z. A memorandum was issued by the
personnel manager of Company Z to Y asking her to explain why no action should
be taken against her for (1) throwing a stapler at plant manager William Chua; (2)
for losing the amount of P1,488 entrusted to her, (3) for asking a co-employee to
punch in her time card one morning when she was not there. She was then placed
on preventive suspension. Another memorandum was sent to her asking her to
explain why she failed to process the ATM applications of her co-employees. She
submitted a written explanation as to the loss of the P1,488 and the punching in of
her time card. A third memorandum was sent to her informing her of her
termination from service for gross and habitual neglect of duties, serious
misconduct, and fraud or willful breach of trust. Y claims that her throwing of the
stapler at plant manager William Chua was because the latter had been making
sexual advances on her since her first year of employment and that when she would
not accede to his requests, he threatened that he would cause her termination from
service. As to the other charges, she claimed that they were not done with malice or
bad faith. Was Y illegally dismissed, and if so, is she entitled to recover damages?
A: Yes. The grounds by which an employer may validly terminate the
services of an employee must be strictly construed. To constitute serious
misconduct to justify dismissal, the acts must be done in relation to the
performance of her duties as would show her to be unfit to continue
working for her employer. The acts complained of did not pertain to her
duties as a nurse neither did they constitute serious misconduct. On the
question of damages, although Y allowed four years to pass before coming
out with her employers sexual impositions; the time to do so admittedly
varies depending upon the needs, circumstances and emotional threshold
of each person. It is clear that Y has suffered anxiety, sleepless nights,
besmirched reputation and social humiliation by reason of the act
complained of. Thus, she should be entitled to moral and exemplary
damages for the oppressive manner with which petitioners effected her
dismissal and to serve as a warning to officers who take advantage of
their ascendancy over their employees. (Philippine Aeolus Automotive
United Corporatoin v. NLRC, G.R. No. 124617, April 28, 2000)
Q: Isetann Dept Store dismissed B due to retrenchment. However instead of giving
the required 30 day notice, the company gave 30 days pay arguing that this is
effective notice. They made B sign quitclaims so that there would be no more
claims from them. The Labor Arbiter ruled that the B was illegally dismissed
because they were not afforded due process because they failed to prove
retrenchment due to losses. The NLRC reversed the ruling saying that the dismissal
was justified because it was due to redundancy and not retrenchment. The NLRC
however did not rule on whether the 30 day pay was a sufficient substitute for the
30 day notice. The petitioner argues further that they should be given the chance
to present his side. Was the 30 days pay sufficient replacement for 30 day notice?

A: No. The Court ruled that since the dismissal is due to an authorized cause only
notice is required and that the employee has no right to present his side. The 30
day notice is needed in order to afford the employee enough time to look for work
and to give the DOLE time to look into the validity of the authorized cause. 30 days
pay is not enough to replace the notice requirement because it would not serve the
purpose of the notice. Additionally, backwages are not a severe punishment
because it is a consequence of the employers failure to give notice and due
process and the employee is therefore not deemed terminated so he should be
compensated for that period. (Serrano vs NLRC, GR No 117040, May 4, 2000)
Q: A and B filed a petition for certification election. Their petition was granted but
they lost in the election as majority of the employees voted for no union. The
next day, they failed to report for work. They claim that they were barred from
entering the premises. They filed a suit for illegal dismissal and backwages. The
company denied these allegations and alleged that A and B refused to return to
work despite their attention being called. Were A and B legally dismissed?
A: No. The Court ruled that an immediate filing of a complaint for illegal dismissal is
incompatible with abandonment. Abandonment is a matter of intention. There
must be proof of deliberate and unjustified intent to sever the employer-employee
relationship. This burden rests on the employer. In this case, the employer failed to
do so. Since they were illegally dismissed, the employees are entitled to
reinstatement
with
full
backwages,
undiminished
by
their
earnings
elsewhere. (Villar v. NLRC, GR No 130935, May 11, 2000)
Q: A school employs both local-hire and foreign-hire teachers. The foreign-hire
teachers were given an added 25% in their salary and some benefits like
transportation and housing, shipping costs etc. These were given based on two
things: dislocation and limited tenure. The added compensation was the schools
way of remaining competitive on an international level in terms of attracting
competent teachers. The local-hire teachers, part of the union contested the
difference, a deadlock resulted so the teachers went on strike. Is there
discrimination in terms of wages?
A: Yes, there is discrimination. The principle equal pay for equal work should
apply in this case. Persons who work with substantially equal qualifications, skill,
effort and responsibility, under similar conditions, should be paid similar salaries. If
an employee is paid less it is upon the employer to explain why the employee is
treated differently. Dislocation and limited tenure cannot serve as adequate or valid
bases for the difference in the salary rates. The other benefits are enough to make
up for these two factors. There is no reasonable distinction between the work of a
local-hire and a foreign-hire that will justify the difference. (International School
Alliance of Educators v. Quisumbing, GR No 128845, June 1, 2000)
Q: A company was found to have underpaid their employees and did not pay the
13thmonth pay on a routine inspection conducted by DOLE. The regional director
ordered the company to pay the deficiency. Subsequently, the NLRC affirmed the
order. A waiver was signed by 108 of the workers where they reduced by half the
amount that was due. DOLE approved the waiver saying that it was not contrary to

law, good customs and public policy. Later, petitioner filed a motion for
reconsideration alleging undue influence, coercion, intimidation, and no assistance
of counsel. The motion was denied. Eduardo Nietes, claiming that he represented
the workers, filed a position paper with the same argument. The NLRC dismissed
the case for failure to acquire jurisdiction. He again filed an appeal but the appeal
was denied for being filed out of time. The appeal was filed 9 days late along with
the appeal fee and research fee. Was the appeal was filed out of time?
A: Yes, the appeal was filed out of time. The perfection of an appeal within the
reglamentary period and in the manner prescribed by law is mandatory and
jurisdictional. Non-compliance renders the judgement appealed final and
executory. An appeal is perfected when there is proof of payment of the appeal fee
and in cases of the employer appealing and there is a monetary award, payment of
the appeal bond. A mere notice of appeal without complying with the other
requisites shall not stop the running of the period for perfecting an appeal.
Sometimes though, in the interest of justice, late appeals have been allowed. An
instance is a class suit. In this case there is no evidence that there is a class suit.
There is no evidence that the workers chose Nietes to represent them. There is no
showing that the workers are joined by a common interest. As there is no basis to
invalidate the waiver the workers signed, the waiver is valid. (Workers of Antique
Electric Cooperative v. NLRC, GR No 120062, June 8, 2000)
Q: X was a radio operator on board a ship where he had a contract for 12 months.
He was required to submit himself to a medical examination. Prior to this, he had a
pacemaker inserted to help his cardiovascular functioning but he was still declared
fit to work. On board the vessel, he had bouts of coughing and he needed open
heart surgery. He filed for sickness and disability benefits with the POEA and these
were awarded to him. Is the sickness compensable?
A: Yes, it is compensable. Compensability of the illness or death of seamen need not
depend on whether the illness was work connected or not. It is sufficient that the
illness occurred during the term of the employment contract. It will also be recalled
that petitioners admitted that private respondent's work as a radio officer exposed
him to different climates and unpredictable weather, which could trigger a heart
attack or heart failure. Even assuming that the ailment of the worker was
contracted prior to his employment, this still would not deprive him of compensation
benefits. For what matters is that his work had contributed, even in a small degree,
to the development of the disease and in bringing about his eventual death.
Neither is it necessary, in order to recover compensation, that the employee must
have been in perfect health at the time he contracted the disease. (Seagull
ShipManagement and Transport Inc. v. NLRC, GR No 123619, June 8, 2000)
Q: X is a merchandiser of respondent company. He withdraws stocks from the
warehouse, fixes the prices, price-tagging, displaying the products and inventory.
He was paid by the company through an agent. He asked for regularization of his
status. The company denied any employer-employee relationship. They claim that
they used an agent or independent contractors to sell the merchandise. Was there
labor-only contracting?

A: No. The agent is a legitimate independent contractor. Labor-only contractor

occurs only when the contractor merely recruits, supplies or places workers to
perform a job for a principal. The labor-only contractor does not have substantial
capital or investment and the workers recruited perform activities directly related to
the principal business of the employer. There is permissible contracting only when
the contractor carries an independent business and undertakes the contract in his
own manner and method, free from the control of the principal and the contractor
has substantial capital or investment. The agent, and not the company, also
exercises control over the petitioners. No documents were submitted to prove that
the company exercised control over them. The agent hired the petitioners. The
agent also pays the petitioners, no evidence was submitted showing that it was the
company paying them and not the agent. It was also the agent who terminated
their services. By petitioning for regularization, the petitioners concede that they
are not regular employees. (Escario v. NLRC, GR No 124055, June 8, 2000)
Q: X was originally employed by R Corporation as a muffler specialist, and was
subsequently appointed supervisor . He was instructed to report at private
respondents main office where he was informed by the companys personnel
manager that he would be transferred to its Sucat plant due to his failure to meet
his sales quota, and for that reason, his supervisors allowance would be withdrawn.
For a short time, X reported for work at the Sucat plant; however, he protested his
transfer, subsequently filing a complaint for illegal termination. X decries his
transfer as being violative of his security of tenure, the clear implication being that
he was constructively dismissed. Was X constructively dismissed?
A: No. We have held that an employer acts well within its rights in transferring an
employee as it sees fit provided that there is no demotion in rank or diminution in
pay. The two circumstances are deemed badges of bad faith, and thus constitutive
of constructive dismissal. In this regard, constructive dismissal is defined as an
involuntary resignation resorted to when continued employment becomes
impossible, unreasonable, or unlikely; when there is a demotion in rank or
diminution in pay; or when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to the employee. It should be borne in mind,
however, that the right to demote an employee also falls within the category of
management prerogatives. An employer is entitled to impose productivity
standards for its workers, and in fact, non-compliance may be visited with a penalty
even more severe than demotion. Failure to observe prescribed standards of work,
or to fulfill reasonable work assignments due to inefficiency may constitute just
cause for dismissal.(Leonardo v. NLRC, G.R. No. 125303, June 16, 2000)
Q: Y was employed as a mechanic. He was dismissed after the company found out
that he was doing sideline work. It would appear that late in the evening of the day
in question, the driver of a red Corolla arrived at the shop looking for Y. The driver
said that, as prearranged, he was to pick up Y who would perform a private service
on the vehicle. When reports of the "sideline" work reached management, it
confronted Y and asked for an explanation. According to private respondent, Y gave
contradictory excuses, eventually claiming that the unauthorized service was for an
aunt. When pressed to present his aunt, it was then that Y stopped reporting for
work, filing his complaint for illegal dismissal some ten months after his alleged

termination. Y was even employed by another company thereafter. Was there

abandonment of work?
A: Yes. Y, after being pressed by the respondent company to present the customer
regarding his unauthorized solicitation of sideline work from the latter and whom he
claims to be his aunt, he never reported back to work anymore. It must be stressed
that while Y alleges that he was illegally dismissed from his employment by the
respondents, surprisingly, he never stated any reason why the respondents would
want to ease him out from his job. Moreover, why did it take him ten (10) long
months to file his case if indeed he was aggrieved by respondents. All the above
facts clearly point that the filing of his case is a mere afterthought on the part of
Y. (Leonardo v. NLRC, G.R. No. 125303, June 16, 2000)
Q: X is an officer and member of the PGA Brotherhood Association, a duly registered
labor organization, and is a security guard employed by PSVSIA. He was informed
that his services were being terminated. He contended that prior to such dismissal,
they were harassed by PSVSIA officers to withdraw their membership from the PGA
Brotherhood Association. Although PSVSIA denied the charge of illegal dismissal,
the Labor Arbiter declared PSVSIA and its responsible officers guilty of ULP and
declared that petitioners were constructively dismissed, thereby ordering
respondent to reinstate X to his former position with backwages up to the time of
actual reinstatement. However, X was paid monetary award for backwages
pursuant to an earlier decision of the NLRC limiting it to three years where he
assented to the computation made by the NLRC reducing the backwages to three
years. No M.R. was filed. In fact, X even filed a motion to release the remaining
balance to satisfy the judgment awards. X filed a motion for clarification of the
resolution reiterating their prayer for the inclusion of their backwages from time
they were terminated up to the present (until actual or payroll reinstatement). How
should the backwages be computed?
A: The NLRC decision has become final and executory. Neither a motion for
reconsideration nor appeal was ever taken by petitioners on this point. This
procedural lapse is fatal. Equally significant is the fact that petitioners actively
participated in the enforcement of the execution by garnishing the supersedeas
bond and the bank deposits of PSVSIA. The NLRC prepared a computation showing
the back wages due petitioners for three (3) years. X not only assented to the
computation made when they did not object thereto but even filed a motion to
release the remaining balance amounting toP398,600.00 still in the hands of the
NLRC to fully satisfy the judgment awards. X cannot now claim that they have
remained unpaid, especially considering that they have already received the
judgment award. (PGA Brotherhood Association, et al., v. NLRC, G.R. No.
131084, June 19, 2000).
Q: X was working as driver of passenger jeepneys. He lost his drivers license and
asked for permission to go on vacation leave to secure a new one. X only returned
after three months when he was able to obtained his license. He was however
informed that another driver had already taken his place. The company argues that
the prolonged absence of X constituted abandonment. X filed a case for illegal
dismissal. Did Xs absence constitute abandonment?

A: No. To constitute abandonment, two elements must concur: (1) the failure to
report for work or absence without valid or justifiable reason, and (2) a clear
intention to sever the employer-employee relationship. Such is disputed by the fact
that private respondent immediately reported back for work and lost no time in
filing a case for illegal dismissal against petitioners. (Icawat v. NLRC, GR
133572, June 20, 2000)
Q: X was employed as manager by a company for its Healthcare Division. In April
1996, fictitious invoices were sent to clients made to inflate the gross revenues of
the Healthcare Division; and Nokom was placed on preventive suspension as initial
findings showed her to be involved in such anomaly. X admitted the irregularities
and made no explanation. She also failed to appear during the hearing. After the
investigation, Xs employment was terminated. X was found to have been
dismissed for fraud or willful breach of the trust reposed on her by her employer
or duly authorized representative. Was X legally dismissed?
A: Yes. In the case at bar, petitioners position demanded a high degree of
responsibility, including the unearthing of fraudulent and irregular activities.
Petitioner failed to do such and her bare denials did not disprove her guilt. The
ordinary rule is that one who has knowledge peculiarly within his control, and
refuses to divulge it, cannot complain if the court puts the most unfavorable
construction upon his silence, and infers that a disclosure would have shown the
fact to be as claimed by the opposing party. Loss of confidence is one of the just
causes for a valid dismissal; and it is enough that there be some basis for such
loss of confidence. The guidelines for the application of the doctrine of loss of
confidence as enunciated in Midas Touch Food Corporation, are:
a.....loss of confidence should not be simulated;
b.....it should not be used as a subterfuge for causes which are improper, illegal or
unjustified;
c.....it may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary; and
d.....it must be genuine, not a mere afterthought to justify earlier action taken in
bad faith.
An employer enjoys a wide latitude in the promulgation of company rules; and in
this case, the policies of respondent were fair and reasonable. (Nokom v. NLRC,
G.R. No.140043, July 18, 2000)
Q: X, President of the exclusive bargaining agent initiated renegotiations of its CBA
with the company for the last two years of the CBAs 5 year lifetime from 19891994. On the same year, the union elected a new set of officers with Z as the newly
elected President. Z wanted to continue renegotiation, but the company claimed
that the CBA was already prepared for signing. The CBA was submitted to a
referendum which was rejected by the union members. Later, the union notified the
NCMB of its intention to strike due to the companys refusal to bargain. Thereafter,
the parties agreed to disregard the unsigned CBA and to start negotiation on a new
five-year CBA. The union submitted its proposals to petitioner, which notified the
union that the same was submitted to its Board of Trustees. Meanwhile, Zs work
schedule was changed, which she protested and requested to be submitted to a
grievance machinery under the old CBA. Due to the companys inaction, the union
filed a notice of strike. Later, Z was dismissed for alleged insubordination. Both

parties again discussed the ground rules for the CBA renegotiations; however the
company stopped negotiations after allegedly receiving information that a new
group of employees had filed a Petition for Certification Elections. The union held a
stike and the Secretary assumed jurisdiction ordering all striking workers to return
to work. All were readmitted except Z.
1. Is the company guilty of unfair labor practice by refusing to bargain with the
union when it unilaterally suspended the ongoing negotiations for a new CBA upon
mere information that a petition for certification has been filed by another
legitimate labor organization?
2. Does the termination of the union president amount to an interference of the
employees right to self-organization?
A:
1. No. The duty to bargain collectively includes the mutual obligation to meet and
convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement. Petitioner failed to make a timely reply to the unions proposals,
thereby violating the proper procedure in collective bargaining as provided in Article
250. In order to allow the employer to validly suspend the bargaining process, there
must be a valid PCE raising a legitimate representation issue. In this case, the
petition was filed outside the 60-day freedom period; therefore there was no
legitimate representation issue and the filing of the PCE did not constitute a bar to
the ongoing negotiation.
2. Yes. The dismissal was in violation of the employees right to self-organization.
The dismissal must be made pursuant to the tenets of equity and fair play; wherein
the employers right to terminate the services of an employee must be exercised in
good faith; furthermore, it must not amount to interfering with, restraining or
coercing employees in their right to self-organization. The factual backdrop of the
Ambas termination reveals that such was done in order to strip the union of a
leader. Admittedly, management has the prerogative to discipline its employees for
insubordination. But when the exercise of such management right tends to interfere
with the employees right to self-organization, it amounts to union-busting and is
therefore a prohibited act. (Colegio de San Juan de Letran v. Association of
Employees and Faculty of Letran, G.R. 141471, September 18, 2000)
Q: X was employed as sewer by a corporation engaged in the business of sewing
costumes, gowns and casual and formal dresses. Eventually, she started to feel
chest pains. She then filed a leave of absence from work as the chest pains became
unbearable. After subjecting herself to medical examination, she was found to be
suffering from Atherosclerotic heart disease, Atrial Fibrillation, Cardiac Arrhythmia.
Upon recommendation of her doctor, she resigned from her work hoping that with a
much-needed complete rest, she will be cured. She later filed a disability claim with
the SSS from the Employees Compensation Fund, under Presidential Decree No.
626, as amended. Was the sickness compensable?
A: Yes, the illness is compensable. Under the Labor Code, as amended, the law
applicable to the case at bar, in order for the employee to be entitled to sickness or
death benefits, the sickness or death resulting therefrom must be or must have
resulted from either (a) any illness definitely accepted as an occupational disease
listed by the Commission, or (b) any illness caused by employment, subject to proof
that the risk of contracting the same is increased by working conditions. In other

words, for a sickness and the resulting disability or death to be compensable, the
said sickness must be an occupational disease listed under Annex A the Amended
Rules on Employees Compensation; otherwise, the claimant or employee concerned
must prove that the risk of contracting the disease is increased by the working
condition.
Indisputably, cardiovascular diseases, which, as herein above-stated include
atherosclerotic heart disease, atrial fibrillation, cardiac arrhythmia, are listed as
compensable occupational diseases in the Rules of the Employees Compensation
Commission, hence, no further proof of casual relation between the disease and
claimants work is necessary. (Salmone v. Employees Compensation
Commission and Social Security System, G.R. No. 142392, September 26,
2000)
1999 CASES
Q. A flight surgeon at PAL, was on duty from 4 pm until 12 midnight. At around 7
pm, he left the clinic to have his dinner at his residence, a 5-minute drive away.
While he was away, the clinic received an emergency call for a PAL employee
suffered from a heart attack. The nurse on duty phoned the doctor at home to
inform him of the emergency, then rushed the patient to the hospital at 7:50 pm.
The doctor arrived at 7:51 pm. The patient died the following day. After
investigation, the doctor was charged with abandonment of post while on duty, and
was later suspended for 3 months. Was this suspension legal?
A. The suspension was illegal. Article 83 of the Labor Code (Normal hours of Work)
provides that Health personnel . . . shall hold regular office hours for eight (8) hours
a day, for five (5) days a week, exclusive of time for meals, (See Art. 85 - Meal
Periods; Sec. 7, Rule I, Book III of the Omnibus Rules (Meals and Rest periods) Thus,
the 8-hour work period does not include the meal break. Nowhere in the law may it
be inferred that employees must take their meals within the company premises, as
long as they return to their posts on time. Private respondents act of going home to
take his dinner does not constitute abandonment. (Philippine Airlines, Inc. v.
NLRC, 302 SCRA 582 (1999))
Q. A jet printer operator employed at Selecta was dismissed from employment for
dishonesty and theft of company property. Considering that the employee merely
took 15 hamburger patties, a pair of boots and an aluminum container, was
dismissal the appropriate remedy?
A. No. While the SC agrees that the employer should not be required to continuously
employ someone who has betrayed its trust and confidence, dismissal would not be
proportionate to the gravity of the offense. Further, he is a non-confidential
employee. Dismissal as a measure to protect the interests of Respondent Company
is unwarranted under the facts of this case. Suspension would have
sufficed. (Associated Labor Unions-TUCP v. NLRC, 302 SCRA 708 (1999))
Q. A deliveryman of Petitioner Company filed a complaint for illegal dismissal and
non-payment of basic wages and certain monetary benefits. He was suspected of
selling fruits of his employer at a higher price, and pocketing the difference. The LA

found in favor of the employee and ordered petitioner Company to reinstate him
with back wages, salary differentials, 13 th month pay and service incentive pay. The
NLRC reversed the decision and ruled that private respondent was not entitled to
reinstatement with back wages except for the award of salary differentials due to
underpayment.
A. The SC agrees with the LA and held that private respondent was indeed illegally
dismissed. It was only upon his complaint regarding his low salary that he was no
longer allowed to report for work. This amounted to dismissal without cause and
without the requisite written notice. Such circumstances make it difficult to sustain
any allegation of abandonment. Abandonment, as a just and valid cause for
termination, requires a deliberate and unjustified refusal of an employee to resume
his work, coupled with a clear absence of any intention of returning to his or her
work.
With regard to the salary differentials granted, petitioners claim exemption under
RA 6727 (Wage Rationalization Act) and the Rules Implementing Wage Order Nos.
NCR-01 and NCR-01-A, as well as Wage Order Nos. NCR-02 and NCR-02-A. However,
regardless of the factual circumstances in this case, the SC was not convinced as
the petitioners could not even show any approved application for exemption, as
required by the applicable guidelines issued by the Commission. (C. Planas
Commercial v. NLRC, 303 SCRA 49 (1999))
Q. Is due process served even when the decision of the Labor arbiter is based solely
on position papers?
A. Petitioner likewise contends that it was not granted its right to due process, as
the decision of the LA was based purely on position papers. The standard of due
process that must be met in administrative tribunals allows a certain degree of
latitude as long as fairness is not ignored. [Adamson & Adamson, Inc. v. Amores,
152 SCRA 237, 250 (1987)] Hence it is not legally objectionable, for being violative
of due process, for the LA to resolve a case based solely on position papers,
affidavits or documentary evidence submitted by the parties. (CMP Federal
Security Agency, Inc. v. NLRC, 303 SCRA 99 (1999))
Q. While petitioner was assigned to sort out rejects in a private respondents
bakery, he went to the comfort room to answer the call of nature, with the
permission of his checker. However, when the owner saw that petitioner was not at
his station, he demanded from him a written explanation for abandoning his work.
Having verbally explained that he had to answer the call of nature, petitioner no
longer submitted a written explanation, believing that his verbal denial would
suffice. However, he was suspended for 15 days. On another occasion, petitioner
had to answer the call of nature. This time, he requested his fellow worker to
replace him while he was away. The owner, however, once again noticed that he
was gone and demanded a written explanation for his absence. Knowing better,
petitioner complied with the demand. Finding petitioners explanation
unsatisfactory, the Company served petitioner a notice of termination.
A. Petitioners act of relieving himself can hardly be characterized as abandonment,
much less a willful or intentional disobedience of company rules since bowel
movements are hardly controllable. Aside from the discomfort it causes, restraining

ones bowel movements adversely affects the efficiency and health of the worker.
Neither could it have disrupted the operations of the company as to cause it
irreparable damage. As such, answering the call of nature is a valid reason to leave
the work area. (Dimabayao v. NLRC, 303 SCRA 655 (1999))
Q. A room attendant of the Sheraton, operated by petitioner, was dismissed for
having been caught by a hotel guest with his left hand inside the guests suitcase.
After being charged and terminated based on the company rules regarding qualified
theft, he filed a complaint for illegal dismissal. He reasons that he was merely
placing the belongings of the hotel guest into the latters suitcase, as they were
scattered on the floor. Was the dismissal illegal?
A. Yes. Petitioner reasons that the employee was caught in flagrante delicto, and is
therefore a cause for dismissal. However, absent any evidence that would
substantiate such imputation against the employee, suspicions and baseless
conclusions by employers are not legal justification for dismissing employees. The
burden of proof to show the validity of the dismissal lies on the employer. Notably, it
was shown that the hotel guest lost nothing. (Maranaw Hotels and Resort
Corporation v. NLRC, 303 SCRA 541 (1999))
Q. Petitioner was a checker in the warehouse of respondent Company who met an
accident while in the course of performing his job. His hand was pinned down by a
crane which resulted in its deformity and total disability of his middle finger. He was
given a month of sick leave which he extended for another month. Later, he
discovered that the Company had terminated his services. He then filed a
complaint for illegal dismissal. The LA found that there was an illegal dismissal. In
its appeal to the NLRC, the Company alleged that the real reason why petitioner was
dismissed was due to several gambling incidents in the work area. This explanation
was accepted by the NRLC, which omitted reinstatement and backwages from the
award of the LA. Petitioner points out that the issue of gambling was raised only by
the respondents upon appeal. Not having been alleged in the Position Papers of the
respondents at the earliest instance, should the NLRC have considered the
Companys gambling allegations?
A. The Company was allowed to submit Annex 2 which contained the gambling
allegations with the LA, there was no showing whether the NLRC gave the petitioner
a clear chance to rebut the contention. Considering the lateness of its submission,
and the critical fact it alleged, this was the least that should have been done by the
NLRC. Therefore, petition granted. NLRC committed grave abuse of discretion. LAs
decision reinstated. (Villa v. NLRC, 303 SCRA 481 (1999))
Q. Supervisory employees of SMC were retired prior to reaching the compulsory age
of 60 pursuant to a CBA reducing optional retirement to fifteen years. They claim
that their signatures in conformity with their retirement from the service were
secured through threats, and that the employees had no choice but no accept the
benefits. Were the employees validly retired? Did their acceptance of benefits
amount to estoppel?

A. No the employees were not validly retired. The mere absence of actual physical
force to compel them to ink their application for retirement did not make it
voluntary. They were confronted with the danger of being jobless. Their
acceptance of benefits did not likewise amount to estoppel. If the intention to retire
is not clearly established or if the retirement is involuntary, such is to be treated as
a discharge. In any case, the CBA is not applicable to them as it expressly excluded
supervisory positions which petitioners occupy. (San Miguel Corporation v.
NLRC; July 23, 1999)
Q. San Miguel Corporation shut down some of its plants and declared 55 positions
as redundant, in order to streamline operations due to financial losses.
Consequently, the union filed several grievance cases for the said retrenched
employees, and sought the redeployment of said employees to other divisions of
the company. Grievance proceedings were conducted pursuant to the parties'
Collective Bargaining Agreement. The procedure outlined in the CBA required the
settlement of grievances on 3 levels - department manager, plant manager, and a
conciliation board. During the proceedings, many employees were redeployed,
some accepted early retirement. San Miguel informed the union that the remaining
employees would be terminated, if they could not be redeployed. Subsequently, the
union filed a notice of strike with the NCMB of the DOLE due to a bargaining
deadlock and gross violation of the CBA such as non-compliance with the grievance
procedure. On the other hand, San Miguel filed a complaint with the NLRC to
dismiss the notice of strike. Can the union hold a strike on the grounds relied upon?
A. The grounds relied upon by the union are non-strikeable. A strike or lockout may
only be declared in cases of bargaining deadlocks and ULP. Violations of the CBA,
except flagrant/malicious refusal to comply with economic provisions shall not be
strikeable. (Sec. 1, Rule XXII, LC IRR) A collective bargaining deadlock is the
situation between the labor and management of the company where there is failure
in the collective bargaining negotiations resulting in a stalemate. This situation is
nonexistent in the present case since there is a conciliation board assigned in Step 3
of the grievance machinery to resole the conflicting views of the parties. For failing
to exhaust all the steps in the grievance machinery and arbitration proceedings
provided in the CBA, the notice of strike should have been dismissed by the NLRC
and the union ordered to proceed with the grievance and arbitration proceedings.
Moreover, in abandoning the grievance proceedings and refusing to avail of the
remedies under the CBA, the union violated the mandatory provisions of the CBA.
Parenthetically, it is worthy to note that abolition of departments or positions in the
company is one of the recognized management prerogatives. (San Miguel
Corporation v. NLRC, 304 SCRA 1 (2 March 1999))
Q. Due to alleged ULP, several employees walked out from their jobs. The company
purportedly sent them notices urging them to return to work, otherwise their
services would be terminated. The employees denied having received these notices,
and claimed that they were merely informed of their dismissal and prevented from
returning to work (removal of their machines by the company). Was there a valid
case of abandonment, as a ground for dismissal?
A. Abandonment, as a just and valid ground for dismissal, means the deliberate and
unjustified refusal of an employee to resume his employment. The burden of proof is

on the employer to show an unequivocal intent on the part of the employee to

discontinue employment. Two elements must be proved: the intention of an
employee to abandon and an overt act from which it may be inferred that the
employee has no more intent to resume his work. It is unlikely that the employees
abandoned their jobs, considering the length of their service (10-17 years). In fact,
no overt act was proven by the company from which the intention of the employees
to desist from employment may be shown. Moreover, the abandonment of work
does not per se sever the employer-employee relationship. IT is merely a form of
neglect of duty, which is in turn a just cause for termination of employment. The
operative act that will ultimately put an end to the relationship is the dismissal of
the employee, after complying with the procedure prescribed by law. If the
employer does not follow the procedure, there is illegal dismissal. (De Paul/King
Philip Customs Tailor v. NLRC, 304 SCRA 448, 10 March 1999)
Q: S was employed under an employment contract that will be effective for a period
of 1 year, unless sooner terminated. The first period was for six months terminable
at the option of the employer. The second period was also for six months but
probationary in character. After working for six months, S was made to sign a 3month probationary employment and later extended by another 3-month period.
After a total employment of one year, S was dismissed on grounds of termination of
contract employment. S filed a complaint for illegal dismissal. Was S validly
dismissed?
A: Yes. In both periods, the company did not specify the criteria for the termination
or retention of the services of S. If the contract was really for a fixed term, the
employer should not have been given the discretion to dismiss S during the one
year period of employment for reasons other than the just and authorized causes
under the Labor Code. In effect, the employer theorized that the one-year period of
employment was probationary. It was not brought to light that S was informed at the
start of his employment of the reasonable standards under which he would qualify
as a regular employee. In the case of Brent, the Court upheld the principle that
when the period was imposed to preclude the acquisition of tenurial security, they
should be disregarded for being contrary to public opinion. It was clear that S was
hired as a regular employee and his work was necessary and directly related to the
business of the company. S is considered as a regular employee of the company. At
any rate, even assuming that the original employment was probationary, the fact
that he was allowed to work beyond the six-month probationary period converts him
to a regular employee under Article 281 of the Labor Code. S was reinstated with
backwages from the time of dismissal to payroll reinstatement. (Servidad v.
National Labor Relations Commission, 305 SCRA 49, 18 March 1999)
Q: D learned from B that the latter needed factory workers in Taiwan, but B told D
that as a part of his job application, he should give a certain amount. D gave B the
money but was unable to go to Taiwan. Several other persons paid B the required
placement fee but were also unable to work abroad. The victims filed cases of illegal
recruitment in large scale (3 or more persons) and estafa. Was B guilty of illegal
recruitment and estafa?

A: Yes. Illegal recruitment is committed when the (1) offender has no valid license or
authority; and (2) he undertakes any activity within the meaning of recruitment
and placement under the Labor Code. It is the lack of necessary license or
authority that renders the recruitment activity unlawful or criminal. There is illegal
recruitment when one purports to have the ability to send a worker abroad through
without license and authority to do so. (People v. Borromeo, 305 SCRA 180, 25
March 1999)
Q: At the time AIUP filed a petition for certification election, there was an existing
CBA between the company and CCEA, the incumbent bargaining agent for all the
rank and file employees. This petition was opposed by CCEA on the ground of the
contract bar rule. AIUP filed a notice of strike citing union busting and unfair labor
practice as grounds. The union proceeded to stage a strike, in the course of which,
illegal acts were perpetrated. When AIUP ignored the TRO enjoining the union
members to refrain from blocking the road, the company dismissed several
employees on the ground of illegal strike and illegal acts perpetrated in connection
with the strike. AIUP is questioning the legality of the dismissal of several AIUP
member employees. Was the strike illegal? Was the dismissal of the AIUP member
employees valid?
A: The Court was not persuaded by the allegation of union busting. The strike
staged by AIUP was a union-recognition-strike. The petition for certification election
(PCE) should not have been entertained because of the contract bar rule. A PCE
may only be entertained 60 days before the expiration of a CBA (freedom period).
The strike staged by AIUP was illegal as they formed human barricades to
block roads and prevented co-workers from entering company premises. Even if the
strike is valid because its object or purpose is lawful, the strike may still be declared
as invalid where the means employed are illegal. Union officers who knowingly
participate in the commission of illegal acts in a strike may be declared to have lost
his employment status but an ordinary striking employee cannot be terminated for
mere participation in an illegal strike. However, there must be proof that he
committed illegal acts during the strike. For the severest penalty to dismissal to
attach, the erring strikers must be duly identified. Simply referring to them as
strikers is not enough to justify their dismissal. The petitioning members of AIUP
are ordered reinstated with full backwages. (Association of Independent Unions
in the Philippines v. NLRC, 305 SCRA 219, 25 March 1999)
Q: The original owners of AAC were driven by mounting financial loses to sell the
majority rights of the company to PH. To thwart further losses, PH implemented a reorganizational plan. Workers occupying redundant positions that were abolished
were terminated. PH duly paid their separation pay and other benefits. Six of the
union members who were terminated filed a case for illegal termination alleging
that the retrenchment program was a subterfuge for union busting. They claimed
that they were singled out for their active participation in union activities. They also
asserted that AAC was not bankrupt, as it has engaged in an aggressive scheme of
contractual hiring. Were the union members validly dismissed?
A: Yes. The condition of business losses is normally shown by audited financial
documents. It is the Courts ruling that financial statements must be prepared and
signed by independent auditors. In the instant case, the employees never contested

the veracity of the audited financial documents presented by AAC to the Labor
Arbiter, neither did they object to the documents admissibility. It is only necessary
that the employees show that its losses increased through a period of time and that
the condition of the company is not likely to improve in the near future. The
allegation of union busting is also bereft of proof. The records show that the position
on 51 other non-union members were abolished due to business loses.
The Court generally holds quitclaims to be contrary to public policy. Yet as in
the instant case, as there is no showing that the quitclaims were executed in
duress, they are binding on the parties. (Asian Alcohol Corporation v. NLRC,
305 SCRA 416, 25 March 1999)
Q: PICOP grants certain allowances to its employees depending on the
circumstances and need for such. The allowances in question pertains to the
following:
1. Staff/Managers Allowance: Free housing facilities to supervisory and managerial
employees assigned in Bislig. Due to shortage of housing facilities, the company
was constrained to grant allowances to those who live or rent houses near the
vicinity of the mill site.
2. Transportation Allowance: granted to Managers assigned to the mill site who use
their own vehicles in the performance of their duties.
3. Bislig Allowance: given in consideration of being assigned to the hostile
environment then prevailing in Bislig.
The Executive Labor Arbiter opined that the subject allowances formed part
of the employees wages. Citing jurisprudence, he concluded that the allowances
should be included in the computation of the employees base pay in determining
the separation pay. The NLRC did not share the view of the Labor Arbiter. It found
that the allowances were contingency-based and thus not included I their salaries.
Did the subject allowances form part of the petitioners wage?
A: No. Wage, as defined by the Labor Code, may include any determination by the
Secretary of Labor in appropriate instances the fair and reasonable value of board,
lodging and other facilities customarily furnished by an employer to his employees.
The Court agrees with the OSG that the subject allowances were temporary and not
regularly received by the petitioners. The allowance given to the employees in the
instant case do not represent such fair and reasonable value because the allowance
were given by the company in lieu of actual housing and transportation needs
whereas the Bislig allowance was given in consideration of being assigned to the
hostile environment then prevailing in Bislig; petitioners continuous enjoyment of
the disputed allowances was based on contingencies the occurrence of which
terminated such enjoyment. (Millares v. National Labor Relations Commission,
305 SCRA 500, 29 March 1999)
Q: A was employed by IBM for 16 years as an Engineer. He was informed, through a
letter, that his employment with the company was to be terminated on the grounds
of habitual tardiness and absenteeism. Alleging that his dismissal was without just
cause and due process, he filed a compliant with the DOLE. He also claimed that he
was not given the opportunity to be heard and hat he was summarily dismissed
from employment based on charges which has not been duly proven. IBM denied
As claims. It was alleged that A was told of his poor attendance record and
inefficiency through the companys internal electronic mail system. Attached to

IBMs position paper were copies of printouts of alleged computer entries/messages

sent by the company to A through the internal email system. Was A validly
dismissed?
A: No. It appears, however, that As Daily Time Record (DTR) and pay slips showed
that he did not incur any unexcused absences, he was not late on any day and, that
no deduction was made from his salary on account of tardiness or absences. The
computer print outs, which constitutes the only evidence of IBM, afford no
assurance of their authenticity because they are unsigned It is true that
administrative agencies are not bound by the technical rules of procedure and
evidence in the adjudication of cases. However, the liberality of procedure is subject
to limitations imposed by basic requirements of due process. The evidence
presented before the NLRC must at least have a modicum of admissibility for it to be
given some probative value. The print outs likewise failed to show that A was
allowed due process before his dismissal. The law requires an employer to furnish
the employee two written notices before termination of his employment may be
ordered. These requirements were not observed in this case. (IBM Philippines v.
National Labor Relations Commission, 305 SCRA 592, 13 April 1999)
Q: RP filed with the SEC a petition for the suspension of payments and a
rehabilitation plan. A management committee was created to oversee the
rehabilitation plan. Consequently, the SEC issued an order suspending all actions
and claims against RP. Employees of RP filed their respective complaints for illegal
dismissal, unfair labor practice, and payment of separation pay.
The Labor
Arbiter held that the order of the SEC suspending all action for claims against RP
does not cover the claims of private respondents in the labor cases because said
claims and the liability of RP as the employer still has to be determined, thus
carrying no dissipation of the assets of petitioners. Are labor claims included in the
suspension order of the SEC?
A: Yes. The law is clear: all claims for actions shall be suspended accordingly. No
exception in favor of labor claims is mentioned in the law. Allowing labor cases to
proceed clearly defeats the purpose of the automatic stay and severely encumbers
the management committees time and resources.
The preferential right of workers and employees under Article 110 of the
Labor Code may be invoked only upon the institution of insolvency or judicial
liquidation proceedings. The purpose of rehabilitation proceedings is precisely to
enable the company to gain a new lease on life and thereby allow creditors to be
paid their claims from its earnings. In insolvency proceedings, the company stops
operations and the claims of creditors are satisfied from the assets of the insolvent
company. The present case involves rehabilitation, not the liquidation, of RP
Corporation. Hence the preference of credit granted to workers is not applicable.
The labor claims filed by the employees will temporarily be suspended during the
period of the rehabilitation plan. (Rubberworld Philippines v. National Labor
Relations Commission, 305 SCRA 721, 14 April 1999)
Q: S was employed by JVAC Corporation in 1969. He retired on 1992 when he was
62 years old. Subsequently, S brought a complaint for retirement benefits and
service incentive leave pay before the NLRC against the corporation. The Labor
Arbiter granted retirement pay to S under RA 7641. The corporation challenged this

decision asserting that S retired almost a year prior to the effectivity of the said law
(7 January 1993), and thus the retirement benefits under RA 7641 should not be
applied retroactively. Was S entitled to the retirement benefits under RA 7641?
A: No. The Court held in a previous case that RA 7641 granting retirement benefits
is undoubtedly a social legislation. There should be little doubt about the fact that
the law can apply to labor contracts still existing at the time the statute has taken
effect, and that its benefits can be reckoned not only from the date of the laws
enactment but retroactively to the time said employment contract have started. The
aforecited doctrine was elaborated upon by enumerating the circumstances which
must concur before the law could be given retroactive effect: (1) the claimant must
still be an employee of the employer at the time the statute took effect; and (2) the
claimant has complied with the requirements for eligibility under the statute. In the
case under scrutiny, S retired and ceased to be an employee of JVAC Corporation
eleven months before the effectivity of RA 7641. It is thus decisively clear that the
provisions of RA 7641 could not be given retroactive effect in his favor. (J.V.
Angeles Construction Corporation v. NLRC, 305 SCRA 734, 14 April 1999)
Q: The corporation and ALU inked a CBA effective until 1995. 14 days before the
expiration of the said CBA, NAFLU filed a petition for certification election, which
was granted by the Med-Arbiter. ALU interposed a Motion to Dismiss for failure of
NAFLU to acquire for and in behalf of its local charter affiliates (COPPER), a legal
personality as a legitimate labor organization. ALU and NAFLU signed an agreement
to hold a certification election and NAFLU promised to furnish ALU a copy of its
Certificate of Registration and other pertinent documents. On the same day COPPER
was issued by the DOLE a Certificate of Registration. Was the PCE duly filed?
A: Yes. In a previous case, the Court held that a party is estopped to challenge the
personality of a corporation after having acknowledged the same by entering into a
contract with it. In the present case, ALU acknowledged the legal existence of
NAFLUs affiliate by entering into an agreement with NAFLU. ALU aver that their
agreement with NAFLU on the holding of a certification election with a suspensive
condition was not complied with. Considering, however, that NAFLU was able to
submit the documents required by the agreement, such compliance retroacted to
the date the agreement was signed.
The order of the Med-Arbiter granting the petition for the certification
election has become final in view of ALUs failure to appeal there from. Under the
Labor Code, a party has the right to appeal an order allowing or granting a petition
for certification election. But the right of appeal may only be exercised within 10
calendar days from the receipt of the order. (Associated Labor Unions v.
Quisumbing, 305 SCRA 762, 14 April 1999)
Q: A was a police officer assigned to PNP Vigan. While he was driving his tricycle
and ferrying passengers, he was confronted by another police officer about his tour
of duty. A verbal tussle then ensued between the two, which led to the fatal
shooting A. On account of As death, his wife filed a claim for death benefits with the
GSIS. In its decision, GSIS denied the claim on the ground that at the time of his
death, A was performing a personal activity that was not work-connected.
Subsequent appeal to the Employees Compensation Commission (ECC) proved to be
futile as it merely affirmed the decision of GSIS. The Court of Appeals, however,

ruled otherwise. It decided that as applied to a peace officer, As work place is not
confined to the police precinct or any station, but to any place where his services,
as a lawman, to maintain peace and security, are required. At the time of his death,
A was driving his tricycle at the town complex where the police assistance center is
located. There can be no dispute therefore that he met his death literally in his
place of work. Policemen, by the nature of their functions, are deemed to be on a
round-the-clock duty. Must the activity being performed at the time of death be
work-connected for it to be compenesable?
A: Yes. While it agrees that policemen are at the beck and call of public duty as
peace officers and technically on duty round-the-clock, the same does not justify the
grant of compensation benefits for the death of A. Obviously, the matter A was
attending at the time of his death, that of ferrying passenger for a fee, was
intrinsically private and unofficial in nature proceeding as it did from no particular
directive or permission of his superiors officers. The 24-hour duty doctrine, as
applied to policemen and soldiers, serves more as an after-the-fact validation of
their acts to place them within the scope of the guidelines rather than a blanket
license to benefit them in all situations that may give rise to their deaths. In other
words, the 24-hour doctrine should not be sweepingly applied to all acts and
circumstances causing the death of a police officer but only tot hose which,
although not on official line of duty, are nonetheless basically police service in
character. Therefore, death benefits under the ECC should not be granted.
(Government Service Insurance System v. Court of Appeals, 306 SCRA 41,
20 April 1999)
Q: LG, JB and PB were accused of illegal recruitment by a syndicate in large scale. It
was alleged that the above named accused, without license or authority, recruited
several people for job placement abroad, receiving a placement fee from the
recruits in exchange. The recruits flew to the supposed country of employment yet
had to return to the Philippines as the promised job did not exist. The victims
confronted the accused, and the accused promised to refund their money. Were the
accused guilty of illegal recruitment in a syndicate?
A: Yes. The Court held that the appeal lacks merit. Recruitment for overseas
employment is not in itself necessarily immoral or unlawful. It is the lack of the
necessary license or permit, or the engagement of prohibited activities enumerated
in the Labor Code that renders such recruitment activities unlawful or criminal. The
accused asserted that the offense should not have been qualified into illegal
recruitment by a syndicate since there was no proof that they acted in conspiracy
with one another. However, the acts of the accused showed unity in purpose. One
would visit the house of the recruits several times, convincing them to work abroad.
Another would accompany the recruit to the house of the person collecting the
processing fee. All these acts established a common criminal design mutually
deliberated upon and accomplished through coordinated acts. Against the evidence
of the prosecution, the accused merely posited the defense of denial. Denials, if
unsubstantiated by clear and convincing evidence, are deemed negative and selfserving evidence unworthy of credence. (People v. Guevarra, 306 SCRA 111, 21
April 1999)

Q: Philippine Rabbit Inc. (PRI) employed PE as a bus conductor. On 1975, petitioner

terminated the services of PE, prompting him to sue PRI for illegal dismissal. The
Labor Arbiter declared the dismissal to be illegal and ordered reinstatement with full
backwages. PRI appealed to the NLRC but the appeal was dismissed, as the same
was not filed within the reglementary period. PRI appealed to the Office of the
President, which directed PRI to reinstate PE but only pay backwages for six months.
PE was paid the backwages but he was not reinstated. Thus, he moved for a second
writ of execution on 1985 and the payment of backwages from 1979 (the date he
presented himself for reinstatement) until he could actually be reinstated. The NLRC
granted the Writ of Execution. Did the NLRC committed a grave abuse of discretion
in modifying the amending the final and executory order of the Office of the
President, and in enforcing by mere motion the final judgment of the Office of the
President despite the lapse of seven years?
A: No. PRI cannot legally invoke in this case the strict application of the rule limiting
execution of judgment by mere motion within a period of 5 years only. There have
been cases where the Court allowed execution by mere motion even after the lapse
of 5 years. Their common denominator in those instances was the delay caused or
occasion by the actions of the judgment debtor and/or those incurred for his benefit.
In the instant case, PRI unduly delayed the full implementation of the final decision
of the Office of the President by fling numerous dilatory appeals and persistently
refusing to reinstate private respondent PE. Technicalities have no room in labor
cases where the Rules of Court are applied only in a suppletory manner and only to
effectuate the objectives of the Labor Code, and not to defeat them.
PRI can no longer assail the propriety of the final decision of the Office of the
President issued way back in May 1978. The finality of a decision is a jurisdictional
event that cannot be made to depend on the convenience of a party. Once a
decision attains finality, it becomes the law of the case whether or not the decision
is erroneous. (Philippine Rabbit Bus Lines, Inc. v. NLRC and Evangelista, 306
SCRA 151, 21 April 1999)
Q: According to the prosecution, the accused, RC, invited and convinced several
people to work with her as a factory worker abroad. RC promised to process the
necessary papers for a placement fee of P8, 000.00. When the agreed date of
departure came, RC failed to show up. The recruits went to the POEA who issued a
certification that RC had no license to recruit overseas workers. The recruits then
went to the police and filed a compliant for illegal recruitment in large-scale. RC
vehemently denied recruiting the complainants and declared that she merely tried
to help them work abroad at the insistence of the complainants. Is RC guilty of
illegal recruitment?
A: Yes. Large-scale illegal recruitment has the following elements: (1) The accused
undertook recruitment activities or any prohibited practice under the Labor Code.
(2) He did not have the license or authority to lawfully engage in the recruitment
and placement of workers. (3) He committed the same to two or more persons. The
prosecution evidence proved beyond reasonable doubt that the foregoing elements
were present in this case. There is no question that RC did not have a license to
engage in he recruitment of workers, as she herself admitted, and that the crime
was committed against more than three persons. The evidence on record belies her
argument that she did not engage in the recruitment and placement of workers. The

testimonies of the recruits unequivocally prove that RC promised the three jobs
abroad provided they would pay the placement fee. The fact that each of them paid
the down payment is evidence by the receipts issued and signed by RC. (People of
the Philippines v. Castillon, 306 SCRA 271, 21 April 1999)
Q: AA is the owner of a farm who employed the petitioners C and I. Petitioners
contended that they were verbally told by AA to stop working and terminated their
employment without informing them of the reason for their intended dismissal.
Hence, they charged AA for illegal dismissal with money claims. AA asserts that C
and I were dismissed for valid causes, as they were guilty of insubordination, both
disobeying the prescribed manner and procedure of doing their job. The Labor
Arbiter ruled that there was no just cause for termination. On appeal, the NLRC
reversed the decision of the Labor Arbiter for gross insufficiency of evidence to
sustain the decision, remanding the case to the Labor Arbiter for the reception of
further evidence. Was the remand of the case to the Labor Arbiter proper?
A: No. The remand of the case to the Labor Arbiter for the reception of evidence has
no legal or actual basis. Subject to the requirements of due process, proceedings
before the Labor Arbiter are generally non-litigious, because technical rules and
procedures of ordinary courts of law do not strictly apply. Thus, a formal or trial-type
hearing is not always essential. In the absence of any palpable error, arbitrariness
or partiality, the method adopted by the Labor Arbiter to decide a case must be
respected by the NLRC.
AA was not deprived of due process of law, the essence of which is simply the
opportunity to be heard. It must be stressed that all the parties to the case were
given equal opportunities to air their respective positions before the Labor Arbiter.
That AA failed to fully air his position by his own inaction or negligence does not
constitute deprivation of due process. (Caete and Isabida v. National Labor
Relations Commission, 306 SCRA 324, 21 April 1999)
Q: AL was a seaman on board the vessel M/V Cast Muskoz. His lifeless body was
found hanging by the neck from the ceiling of an old abandoned warehouse in
Quebec, Canada. According to the coroner, the probable cause of death was
asphyxiation by hanging. When ALs body was flown to Manila, his father noted that
the body bore several bruises. They submitted the cadaver to the NBI for an
autopsy. Considering that the findings of the NBI were all inconsistent with suicide,
the father filed a claim with the POEA. The POEA dismissed the compliant of the
father based on the solid evidence of the employer-shipping company. On appeal,
the NLRC affirmed the ruling of the POEA. Apparently, both labor bodies anchored
their conclusion on the fact that had there been foul play involved in ALs death, the
$2, 000.00 in his pocket would have been taken. Was the father of AL entitled to his
sons death benefits?
A: Yes. The employer failed to ascertain the circumstances surrounding ALs death,
which was its duty to undertake as ALs employer. Such willful neglect cannot but
indicate that a through investigation would have yielded a result adverse to the
employer. The records are bereft of any substantial evidence showing that
respondent employer successfully discharged its burden of proving that AL
committed suicide, so as to evade its liability for death benefits under POEAs
Standard Employment Contract for Filipino Seaman. The records of this case are

remanded to the POEA for the computation of the death benefits to be awarded to
the father of AL. (Lapid v. National Labor Relations Commission, 306 SCRA
349, 29 April 1999)
Q: R was employed by the hotel as a doorman. Professional shoppers hired by the
hotel evaluating hotel employees recommended the transfer of Rodriguez to a noncustomer-contact position because of the negative feedback on his manner of
providing services to the hotel guests. A memorandum was later issued transferring
him to the linen room as an attendant. He resisted the transfer and did not assume
his new post at the linen room. The hotel terminated his employment on the ground
of insubordination. The Labor Arbiter declared the dismissal to be legal. On appeal,
the NLRC reversed the decision of the Labor Arbiter declaring that the intended
transfer was in the nature of a disciplinary action. The hotel management contends
that the employees continuous refusal to report to his new work assignment
constituted gross insubordination. Was the transfer of the employee a valid exercise
of its management prerogative?
A: Yes. Disobedience to be a just cause for dismissal envisages the concurrence of
at least two requisites (a) the employees wrongful conduct must have been willful
or intentional; (b) the order violated must have been reasonable, lawful, made
known to the employee and must pertain to the duties which he has been engaged
to discharge. It is the employers prerogative, based on its assessment and
perception of the employees qualification, aptitude and competence, to move him
around in the various areas of its business operations in order to ascertain where
the employee will function with utmost efficiency and maximum productivity or
benefit to the company.
Deliberate disregard of company rules or defiance of management
prerogative cannot be countenanced. Until and unless the rules or orders are
declared to be illegal or improper by competent authority, the employees ignore or
disobey them at their peril. In the case at bat, the employee was repeatedly
reminded not only by management but also by his union to report to work station
but to no avail. (Westin Philippine Plaza Hotel v. National Labor Relations
Commission, 306 SCRA 631, 3 May 1999)
Q: Accused Enriquez promised employment in Taiwan to at least 42 people. They
were each asked to pay processing fees ranging from P3, 370 to P5, 000 for which
no receipts were issued and to submit documents to facilitate their travel and
subsequent deployment abroad. The POEA issued a certification showing the
Enriquez is not licensed to engage in the recruitment of workers for overseas
employment. In her defense, Enriquez claimed that it was her common-law husband
who was engaged in the business and she only acted as his secretary when she
dealt with the complainants. She allowed him to establish his recruitment office at
her residence. Enriquez claimed that she only helped her husband in the office for
three months while he was looking for a secretary. Part of her duties then was to
collect the documents submitted by the applicants and receive the money they paid
as placement fees. Is she guilty of illegal recruitment in large-scale?
A: Yes. The essential elements of the crime of illegal recruitment in large-scale can
be summarized as follows: (1) the accused engages in acts of recruitment and
placement of workers as defined in the Labor Code; (2) the accused does not have a

license or authority from the Secretary of Labor to recruit and deploy workers; and
(3) the accused commits the same unlawful acts against three or more persons,
individually or as a group.
The theory of the defense unduly strains the credulity of the Court. The
complainants positively identified Enriquez as the one who dealt directly with them
from the time they inquired about the job prospects abroad until they complied with
the requirements and followed up their applications. Worth reiterating is the rule
that illegal recruitment in large-scale is malum prohibitum, not malum in se, and
that the fact alone that a person violated the law warrants her conviction. Any claim
of lack of criminal intent is unavailing. (People of the Philippines v. Enriquez,
306 SCRA 739, 5 May 1999)
Q: Coca Cola entered into a contract of janitorial services with BJS. Coca Cola then
hired X first, as a casual employee; after the casual employment was terminated,
Coca Cola again hired X as a painter in contractual projects. He was also hired by
BJS, which assigned him to the Coca Cola considering his familiarity with its
premises. Goaded by information that Coca Cola employed previous BJS employees
who filed a complaint against the company for regularization pursuant to a
compromise agreement, X submitted a similar complaint against Coca Cola to the
Labor Arbiter; he included BJS therein as a co-respondent. He no longer reported to
work and when offered by BJS to work in other firms, he refused. He amended the
complaint to illegal dismissal and underpayment of wages. Is there an employeeemployer relationship in this case?
A: No. The Court takes judicial notice of the practice adopted in several government
and private institutions and industries of hiring janitorial services on an
independent contractor basis. Although janitorial services may be considered
directly related to the principal business of an employer, the Court deemed them
unnecessary in the conduct of the principal business. This judicial notice rests on
the assumption that the independent contractor is a legitimate job contractor so
that there can be no doubt as to the existence of an employer-employee
relationship between the contractor and the worker. It is also clear that BJS
exercises control over the work of X as most of his assigned task dealt with the
maintenance and sanitation of the company premises pursuant to BJSs contract
with the company.
The Court ruled that no employer-employee relation exists between X and
Coca Cola yet the latter shall be jointly and severally liable with BJS for the wage
differentials and 13th Month pay of X. (Coca Cola Bottlers Philippines v. NLRC,
307 SCRA 131, 17 May 1999)
Q: Admiral Hotel hired Balani as a Cost Controller. She received a memo from the
Managing Director calling her attention to several violation of hotel rules she had
violated such as using the phone for personal calls and entertaining visitors during
office hours, to the detriment of her regular work. The employee denied the charges
leveled against her and she submitted a letter of resignation. Consequently, she
received all salaries, benefits and separation pay, and executed a quitclaim in favor
of the hotel. Did the employee voluntarily resign?
A: Yes, this is a case if voluntary resignation. The employee claims that she was
constructively dismissed from her office as its location was transferred from under

the steps of the stairs to the kitchen. Such transfer caused her mental torture,
which forced her to resign. However, it was not shown that her transfer was
prompted by ill will of management. Indeed, the resident manager of the hotel
swore that the transfer affected not only the Cost Control office but also the other
offices. The transfer only involved a change in location of the office. It does not
involve a change in the employees position. Even a transfer in position is valid
when based on sound judgment, unattended by demotion in rank or diminution of
pay or bad faith. (Admiral Realty Company (Admiral Hotel) v. NLRC, 307
SCRA 162, 18 May 1999)
Q: While the oiler was anchored on port, seaman H was directed to open and clean
the main engine. To accomplish this, he had to enter a manhole in a crouching
position. After working for 4 consecutive days, he experienced back pains and foot
swelling. However, he was instructed to continue with his work until he was finally
repatriated to the Philippines where medical examinations confirmed that he
suffered from a slipped disc, which required surgery. Upon hearing that the surgery
would cost more than P 40,000, the company disregarded the recommendation for
surgery and instead proposed a less costly treatment. But this did not improve the
condition of H. After seven months, H filed a complaint with the POEA against the
maritime agencies for disability and medical benefits. The employers allege that H
signed a Receipt and Release in favor of the maritime agencies while the case was
pending in POEA, that affirmed the findings of the POEA that his illness was workconnected. H supposedly acknowledged receipt of a certain amount in complete
and final settlement of all his wages, benefits and claims. The maritime agencies
assert that the signed Receipt is a quitclaim that releases them from any liability
whatsoever. Is the agreement valid?
A: No, the law does not consider as valid any agreement to receive less
compensation than what a worker is entitled to recover nor prevent him from
demanding benefits to which he is entitled. It is appalling that H would settle for a
measly consideration of P15, 000 which is grossly inadequate, that is could not have
given rise to a valid waiver on the part of the disadvantaged employee.
In order that a quitclaim may be valid, the requisites are: (1) there was no
fraud or deceit on the part of any party; (2) the consideration of the quitclaim is
credible and reasonable; and (3) that the contract is not contrary to law, public
order, public policy, morals or good custom. But even assuming that the ailment of
H was contracted prior to his employment with the maritime agency, this fact would
not exculpate petitioners from liability. Compensability of an ailment does not
depend on whether the injury or disease was pre-existing at the time of the
employment but rather if the disease or injury is work-related or aggravated his
condition. It is safe to presume, at the very least, the arduous nature of Hs
employment had contributed to the aggravation of his injury, if indeed it was preexisting at the time of his employment. Therefore, it is but just that he be duly
compensated for it. (More Maritime Agencies and Alpha Insurance v. NLRC,
307 SCRA 189, 18 May 1999)
Q: The General Manger of the Toll way received reports that certain security
personnel are involved in mulcting activities. Acting on the complaint, the manager
along with police officers staged an entrapment. Angeles, security guard on duty in
one of the exits was caught in flagrante delicto receiving bribe money from an

undercover passenger pretending to illegally transport dogs. A notice of dismissal

on the ground of serious misconduct was issued. After formal investigations,
dismissal was advised and Angeles was informed of his dismissal. Angeles claimed
that the entrapment was masterminded by the manager as a retaliation for his
being critical of the managers administration. He now claims separation pay. Is he
entitled to separation pay?
A: An employee who is dismissed for just cause is generally not entitled to
separation pay. In some cases, the Court awards separation pay to a legally
dismissed employee on the grounds of equity and social justice. This is not allowed,
though, when the employee has been dismissed for serious misconduct or other
causes reflecting on his moral character. The act of accepting bribe money
constituted serious misconduct that warrants the dismissal from the
service. (Philippine National Construction Corporation v. NLRC, 307 SCRA
218, 18 May 1999)
Q: C, a managerial employee, was accused of sexually harassing a subordinate, S.
After hearing and investigation, the Management Evaluation Committee concluded
that the charges against C constituted a violation of the Plants rules and
regulations. It stated that, touching a female subordinates hand and shoulder,
caressing her nape and telling other people that S was the one who hugged and
kissed or that she responded to the sexual advances are unauthorized acts that
damaged her honor. It referred to the manual of the Philippine Daily Inquirer in
defining sexual harassment, which defined sexual harassment as unwelcome or
uninvited sexual advances, requests for sexual favors and other verbal or physical
conduct of sexual nature with any of the following elements...(including) such
conduct as unreasonably interferes with the individuals performance at work, or
creates an intimidating, hostile or offensive working environment. C was charged
with 30 days suspension without pay. C filed a complaint for illegal suspension. The
Labor Arbiter dismissed the petition which ruling was affirmed by the NLRC. The C
assailed the failure to apply RA 7877 in determining whether or not he actually
committed sexual harassment. Was C correctly charged with sexual harassment
justifying his suspension?
A: Yes. RA 7877 was not yet in effect at the time of the occurrence of the act
complained of. IT was still being deliberated upon in Congress. As a rule, laws shall
have no retroactive effect unless otherwise provided. Hence, the Labor Arbiter had
to rely on the MEC report and the common connotation of sexual harassment as it is
generally understood by the public. Also, as a managerial employee, is bound by
more exacting work ethics. When such moral perversity is perpetrated against a
subordinate, there is a justifiable ground for dismissal based on loss of trust and
confidence. (Libres v. NLRC, 307 SCRA 674, May 28, 1999)
Q: In an intra-union dispute involving the examination of union accounts of a Local
Chapter, the parties submitted the matter to the Office of the Regional Director,
who sustained the order for an audit to be conducted. The ILM union officers
appealed the order to the DOLE Secretary, who endorsed it to the Bureau of Labor
Relations. The BLR subsequently dismissed the appeal. Is the DOLE Secretary
correct in endorsing the case?

A: Yes. Examinations of union accounts are expressly classified by the Rules of

Procedure on Med-Arbitration, and a different process is provided for the resolution
of the same. According to Art. 226 of the Labor Code, the BLR has appellate
jurisdiction over the matter, so the DOLE Secretary was correct in its endorsement
of the case. (Barles v. Bitonio, 308 SCRA 288, June 1999)
Q: Q and L were supervisors whose jobs involved the overseeing of the withdrawal
and sorting of sacks of sugar. In one transaction involving 50,000 Class C sacks,
large numbers of sacks were misplaced, and sacks of other classes were mixed in
with the lot. As they were supervising other operations at the time, Q and L were
lax with their duties to see that the sacks were properly segregated and delivered.
As a result, a large number of sacks was stolen from the company. Q and L were
subsequently fired for gross negligence. Are they validly dismissed?
A: NO. While Quimba and Lagrana were partially responsible for the unfortunate
incident, their negligence is not gross or habitual, and as such does not merit
outright dismissal. Thus, they would be entitled to reinstatement, but the
employees have accepted the NLRCs judgement for separation pay instead due to
the animosity between the parties.(National Sugar Refineries Corp. v. NLRC,
308 SCRA 599, June 1999)
Q: R worked as the driver of T, the owner of Ultra Villa Food Haus. During the May
1992 elections, he acted as a poll watcher for Lakas-NUCD and did not report for
work for two days. For the past years, the T gave R 13 th mo. Pay. He alleged that he
was an employee of Ultra Villa Food Haus, and as such, he was entitled to the
benefits accorded to employees under the Labor Code. What is R entitled to?
A: Geniston is a personal driver of Tio, and as such, the company is not obliged to
grant overtime pay, holiday pay, premium pay and service incentive leave,
including 13th mo. pay. However, since T admitted that she has given R 13 th mo. pay
every December, it is but just to award R such benefit. (Ultra Villa Food Haus v.
Geniston, 309 SCRA 17, June 1999).
Q, a former employee of SURNECO, sent letters to the company management
requesting separation benefits for her 9 years of faithful service to the company.
Nearly four months later, E, then Personnel Officer of SURNECO, followed up and
made a review of Qs case. Subsequently, Q filed a complaint for illegal dismissal,
based largely on the report of E acting in favor of Q. The complaint was barred by
prescription, but because of what had happened, E was terminated for having
provided Q with the weapons and ammunition to wage a war against the
cooperative. Furthermore, the Board of SURNECO concluded that advancing the
interest of Q instead of the company, especially since she divulged the contents of
her internal memorandum to Q, were inimical to the company and merited
dismissal. Was E illegally dismissed?
A: YES. E was a Personnel Officer, holding a managerial position that is considered
vested with a certain amount of discretion and independent judgement. She was
simply doing her job when she reviewed Quintos case, and she is not proscribed
from taking the side of labor when she makes recommendations as to what must be
done in each situation. Also, there is no evidence that Quinto got the copy of the

internal memorandum directly from Esculano she could have acquired it from
other sources. As such, Es actions do not qualify as breach of confidence or serious
misconduct.
(Surigao Del Norte Electric Cooperative v. NLRC, 309 SCRA
233, June 1999).
Q: RA 6715 was passed creating a new classification of employee, the supervisory
employee, as not being a member of the rank and file but also not considered a
managerial employee. At around this time, the supervisory employees of Semirara
Coal decided to form their own union and intervene in the certification elections.
However, the company filed a motion to disqualify the supervisory employees from
participating in the certification elections, as their functions were managerial in
nature. Should they be allowed to participate in the certification elections?
A: Yes, they should be allowed. The said employees fall under the category of
supervisory employees. Nothing in the company policies alters the nature and duty
of these supervisory employees to managerial. There is no showing that the power
to discipline erring employees is vested in their immediate supervisors. As such,
they fall outside of the restriction on managerial employees from joining unions and
participating in certification elections. (Semirara Coal Corporation v. Secretary
of Labor, 309 SCRA 292, June 1999)
Q: Complainants are deaf-mutes hired by Company F as money sorters and counters
through an agreement called, Employment Contract for Handicapped Worker. The
Labor Arbiter and NLRC ruled that Article 280 was not controlling as complainants
were hired as an accommodation to the recommendation of civic oriented
personalities whose employments were covered by Employment Contracts with
special provisions on duration of contract as specified under Art. 80. Hence, the
terms of the contract was be the law between the parties. Complainants allege that
the contracts served to preclude the application of Article 280 and to bar them from
becoming regular employees. Company F submits that complainants were hired as
special workers under Art. 80 of the Labor Code and they never solicited the
services of petitioners. Were complainants regular employees?
A: Yes. The enactment of RA 7277, the Magna Carta for Disabled Persons, justify
the application of Art. 280 of the Labor Code. Such law mandates that a qualified
disabled employee should be given the same terms and conditions of employment
as a qualified able bodies person. The fact that complainants were qualified
disabled persons removes the employment contracts from the ambit of Art. 280,
since the Magna Carta accords them the rights of qualified able-bodied persons.
The task of complainants was necessary and desirable in the usual trade of the
employer and therefore they should be deemed regular employees. (Bernardo v.
NLRC, 310 SCRA 186, July 12, 1999)
Q: A labor dispute arose between Company Y and Union A, which caused the union
to file a notice of stricke with the NCMB charging the company with ULP for unionbusting and violations of the CBA. This was followed by picketing and the holding of
assemblies by the union outside the gate of Company Ps plant. The Secretary of
Labor assumed jurisdiction over the labor dispute and certified it for compulsory
arbitration. During the pendency of the labor dispute, Company Y agreed to sell its
plant and equipment to Company Z. The union was informed of the purchase of the

plant. Company Z asked the union to desist from picketing outside its plant. The
Union refused petitioners request, and Company Z filed a compalint for injunction.
The Union moved to dismiss the complaint alleging lack of jurisdiction on the part of
the trial court and that Company Z was an alter ego of Company Y and not merely
an innocent by-stander.
A: An innocent by-stander, who seeks to enjoin a labor strike, must satisfy the
court that its interests are totally foreign to the context of the labor dispute. It must
appear that the inevitable result of its exercise is to create an impression that a
labor dispute with which they have no connection or interest exists between them
and the picketing union or constitutes an invasion of their rights. In this case,
Company Z clearly has a connection with the labor dispute as the sale between
Company Y and Company Z reveals a legal relation between them that cannot be
ignored. (MSF Tire and Rubber, Inc. v. CA, 311 SCRA 784, August 5, 1999)
Q: M was employed by petitioner as a truck driver. One day, he was accused of
tampering with the vale sheet and he was subsequently barred from entering
company premises. M filed a complaint of illegal dismissal against private
respondent before the NLRC. A copy of the summons was sent to petitioners by
registered mail and was duly received and signed. The petitioner was also notified
of the hearing date by registered mail but no one appeared for the petitioner. The
Labor Arbiter deemed petitioners non-appearance as a failure to controvert the
facts as claimed by M and decided the case ex-parte. The petitioners allege that
they never received copies of summons or notices and that the Labor Arbiter never
acquired jurisdiction over them, as there was no valid service of summons. Were
the petitioners denied due process?
A: No. The bare assertion of petitioner that the persons who signed the summons
which were sent by registered mail were impostors or persons unknown to them
requires substantiation by competent evidence. In quasi-judicial proceedings of the
NLRC, procedural rules governing service of summons are not strictly construed and
substantial compliance is therefore sufficient. Further, official duty is presumed to
have been performed regularly unless the contrary is proven. In administrative
proceedings, due process simple means the opportunity to explain ones side or
seek a reconsideration of the action complained of. Petitioners were able to file an
appeal before the NLRC of the Labor Arbiters decision and a party who has availed
of the opportunity to present his position cannot claim to have been denied due
process.
The Court also ruled that M was constructively dismissed when he was
accused of tampering with the vale sheet and prevented from going to work. The
assertion of petitioner that M abandoned his work is also without merit as it is highly
illogical for an employee to abandon his employment and thereafter file a complaint
for illegal dismissal. Even assuming that there was abandonment, there was noncompliance with the statutory requirement of notice; therefore M is entitled to
separation pay and backwages.(Masagana Concrete Products v. NLRC, 313
SCRA 576, 3 September 1999)
Q: L was employed by NAPCO-Luzmart, which was managed by petitioner Garcia. A
mauling incident occurred in the company premise involving L and another
employee. The following day after the incident, L submitted his written explanation

of the event. 3 days later, L attempted to report for work but the company refused
to admit him. L immediately filed a complaint for illegal dismissal with the NLRC.
After the company knew of the illegal dismissal charge against it, a memorandum
was issued ordering the suspension of L. The company asserted that L remains an
employee and was merely suspended for a month. Proof of this, the company
presented the payrolls where the name of L continued to be listed as a regular
employee during the period after the alleged illegal dismissal. The company claimed
that L abandoned his work when he failed to report for work after notice of return.
Was L illegally dismissed?
A: The Court ruled that the payroll is of doubtful probative value, as it does not
contain the signature of employees as proof that they received their salaries for the
said period. For a valid finding of abandonment, two factors must be present: (1)
failure to report for work without any valid or justifiable reason; and (2) a clear
intention to sever the employer-employee relationship manifested by some overt
acts. It was the company who refused him entry into the work place and made it
impossible for him to return to work. Moreover, the filing of the complaint for illegal
dismissal 7 days after the alleged dismissal negates said charge.
Although fighting within company premises may be considered as a serious
misconduct under Article 282 of the Labor Code, not all fights within company
premises would warrant dismissal. This is especially true if the employee did not
instigate the fight and it appears from the facts of the case that L was just
defending himself from the assault of a co-employee.
The company was ordered to reinstate L and pay backwages computed from
the date of illegal dismissal. (Garcia v. National Labor Relations Commission,
313 SCRA 597, 3 September 1999)
Q: In a case of illegal dismissal against the petitioner, the Labor Arbiter ruled that
the dismissal of P was illegal and awarded damages, separation pay and
backwages. The company filed a Motion for Appeal and a Motion to Reduce Appeal
Bond before the NLRC reiterating that P voluntarily resigned and was not illegally
dismissed. Petitioners argued that considering the authorized capital stock of the
corporation was only P2, 000,000.00, an award of P1, 870,000.00 as backwages
alone was excessive and initially posted only a P50,000.00 cash bond. The NLRC
denied the Motion to Reduce the Appeal Bond. The NLRC gave the company three
extensions (totaling 30 days) for them to comply with the appeal bond requirement.
A certain R, wife of the companys chairman, posted the required bond. Yet when R
learned that she was not under any obligation to post the bond on behalf of her
husband, she withdrew the bond. Should petitioners still be made to post another
bond?
A: Yes. Since effectively, no appeal bond was posted by petitioners, no appeal was
perfected from the decision of the Labor Arbiter, for which reason the decision
sought to be appealed to the NLRC became final and executory and immutable. The
requirement of cash or surety bond to perfect an appeal from the Labor Arbiters
monetary award is jurisdictional; non-compliance is fatal and renders the award final
and executory. It is not an excuse that the bond of P2 million is too much for a small
business enterprise. The law does not require outright payment but only the posting
of a bond to ensure that the award will eventually be paid should the appeal

fail. (Biogenerics Marketing and Research Corporation v. NLRC, 313 SCRA

748, 8 September 1999)
Q: X was employed by petitioner Restaurante Las Conchas while the latter was
involved in a legal battle with company Y over the land being allegedly occupied by
the petitioner. Company Y was able to obtain a favorable judgment which eventually
caused petitioner to vacate the premises. As no other suitable location was found
for petitioner to move, the restaurant was forced to close down, thereby resulting in
the termination of employment of X. No separation pay was given to X based on the
argument of petitioner that only closure of business not due to business losses
mandates payment of separation pay to dismissed employees. Should separation
be given and should the manager of the Restaurante Las Conchas be held liable as
a corporate officer?
A: The Court rules that the burden of proof that business losses actually occurred
rests on the employers. Since no statements of assets and liabilities certified by a
CPA or accounting firm was offered, nor the corporations Income Tax Return
certified by the BIR was shown, such business losses were not proven. As regards
the liability of the manager, generally, the officers and members of a corporation
are not personally liable for the acts done in the performance of their duties. An
exception is when the employer corporation is no longer existing and is unable to
satisfy the judgment in favor of the employees. In such a case, the officers should
be held liable for acting on behalf of the corporation. (Restaurante Las Conchas
and/or David Gonzales vs. Llego, 314 SCRA 24, Sept. 9, 1999)
Q: X was hired by Respondent under a 2 year contract in Kuwait. Only after 1 year,
however, X was terminated from employment and was sent back to the Philippines.
X then filed a complaint for illegal dismissal with the Labor Arbiter. Respondents
were given by the Labor Arbiter 10 days to answer the charges against.
Respondents submitted a bill of particulars instead alleging that X was lacking in the
required narration of facts constituting the causes of action. X, on the other hand,
moved to declare respondents in default for failing to submit their position papers.
Both parties agreed that the Labor Arbiter should decide on the motion on the Bill of
Particulars. The Labor Arbiter, however, declared the respondents in default for
failure to submit their position papers within the period given. Were the
respondents denied due process?
A: Yes. The court rules that there was denial of due process since no notice or order
requiring respondents to file their position paper, nor an order informing the parties
that the case was already submitted for decision. There was an utter absence of
opportunity to be heard at the arbitration level. What the Labor Arbiter should have
done was to rule on the pending motions, or at least notify private respondents that
he would no longer resolve their motions, and to direct them forthwith to submit
within a reasonable time their position paper as well as all the evidence. (Habana
vs. NLRC, 314 SCRA 187, September 1999)
Q: Petitioner X was an Italian citizen who was the Exec. Vice President and Gen.
Manager of Company Y when he was terminated by the latter. X then filed a
complaint for illegal dismissal. Company Y based the dismissal of X on the ground
that X failed to secure his employment permit. X, on the other hand, argued that it

was the duty of the company to secure his work permit during the term of his office.
The Labor Arbiter rendered a decision in favor of X. Company Y however appealed
such decision to the NLRC. X now questions the jurisdiction of NLRC as he is a
corporate officer, it is the SEC who should have jurisdiction. Did the NLRC have
jurisdiction over the case?
A: No. According to Sec 5(c) of P.D. No. 902-A, the SEC exercises exclusive
jurisdiction over controversies over regarding the election and/or designation of
directors, trustees,officers, or managers of a corporation, partnership or association.
Jurisdiction therefore is not which the Labor Arbiter nor the NLRC. (De Rossi vs.
NLRC, 314 SCRA 245, September 1999)
Q: Respondent X was hired by the Blue Dairy to work as a food technologist in the
latters laboratory. One day however, while attending to a client outside company
premises as accompanied by the company driver, the vehicle was hit by a post, as
there was a typhoon. Afterwards, X was then transferred from the laboratory to the
vegetable processing section; she was then barred from the laboratory. X claims
that she was constructively dismissed as she was evidently demoted. Was X
constructively dismissed from work?
A: Yes. The Court rules that although the employer has managerial prerogative to
transfer personnel, such must be exercised without grave abuse of discretion. The
employer has the burden of proof to show that such transfer was not unreasonable,
inconvenient or prejudicial to the employee, nor does it involve a demotion in rank
or a diminution of his salaries, privileges and other benefits. The company in this
case, alleges that the reason for the transfer was loss of trust and confidence. X
however, was never given the chance to refute such reason, nor was she notified in
advance of the transfer. (Blue Dairy Corporation vs. NLRC, 314 SCRA 401,
September 1999)
Q. A check was mis-posted, resulting in an overstatement of a clients outstanding
daily balance. The President of the bank sent a letter to petitioner to explain the
mis-posting. Internal auditors, after investigation, reported that petitioner was
liable, and the bank notified her that 20% of the amount would be deducted from
her salary. Upon petitioners demand for a full-dress investigation, she was informed
of her preventive suspension until the end of the investigation. Petitioner then filed
a complaint for illegal dismissal and damages. Was she illegally dismissed? Did
filing of damages amount to abandonment of work?
A. Yes, her preventive suspension was without valid cause since she was suspended
outright. Preventive suspension beyond the maximum period amounts to
constructive dismissal. Likewise, her claim for damages did not amount to
abandonment of work. To constitute abandonment, these should concur: 1. Failure
to report for work or absence without valid or justifiable cause; and 2. A clear
intention to sever the employee-employer relationship (more determinative factor
manifested by over acts). She merely took steps to protest her indefinite
suspension. Her failure to report for work was even due to her indefinite
suspension. (Premiere Devt Bank v. NLRC)

1998 CASES
Q. In an illegal dismissal case, the Labor Arbiter ruled in favor of the worker. The
total monetary award was more than ONE MILLION Pesos. The employer appealed
and posted a bond in the amount of P700,000.00 only. In computing the monetary
amount for the purpose of posting an appeal bond, the employer excluded the
award for damages, litigation expenses and attorneys fees. Is the employers
computation correct?
A. Yes, the computation of the monetary award is correct. Under the NLRC New
Rules of Procedure, an appeal is deemed perfected upon the posting of the bond
equivalent to the monetary award exclusive of moral and exemplary damages as
well as attorneys fees. The said implementing rule is a contemporaneous
construction of Article 223 of the Labor Code by the NLRC pursuant to the
mandate. The exclusion of moral and exemplary damages and attorneys fees from
the computation of the monetary award has been recognized by the Supreme Court
in a number of cases. (Fernandez v. NLRC, 285 SCRA 149, January 28, 1998)
Q. Reynaldo worked as a bus driver for Nelbusco, Inc.. On February 28, 1993, the
airconditioning unit of the bus which Reynaldo was driving suffered a mechanical
breakdown. The company told Reynaldo to wait until the airconditioning unit was
repaired. No other bus was assigned to Reynaldo to keep him gainfully employed.
Reynaldo continued reporting to his employers office for work, only to find out that
the airconditioning unit had not been repaired. More than six months elapsed but
Reynaldo was not given work. He filed a complaint for illegal dismissal. The NLRC
ruled that there was no illegal dismissal. Is the ruling correct?
A. No, the ruling is erroneous. Under Article 286 of the labor Code, the bona
fidesuspension of the operation of a business or undertaking for a period not
exceeding six months shall not terminate employment. Consequently, when the
suspension exceeds six months, the employment of the employee shall be deemed
terminated. By the same token and applying said rule by analogy, if the employee
was forced to remain without work or assignment for a period exceeding six
months, then he is in effect constructively dismissed. The so-called floating
status of an employee should last only for a legaly prescribed period of time.
When that floating status lasts for more than six months, he may be considered to
have been illegally dismissed from the service. (Valdez v. NLRC, 286 SCRA 87,
February 9, 1998)
Q. An employer appealed a Writ of Execution issued by the Labor Arbiter claiming
that it had varied the tenor of the judgment. The NLRC dismissed the appeal
stating that it had lost jurisdiction over the case. The NLRC stated that an order of
execution is not merely interlocutory but final in character and that after a decision
has become final, the prevailing party becomes entitled as a matter of right to its
execution. Is the dismissal of the appeal correct?
A. No, the dismissal of the appeal is erroneous. The NLRCs ruling is based on the
general rule that after a decision has become final, the prevailing party becomes

entitled as a matter of right to its execution, that it becomes merely the ministerial
duty of the court to issue the execution. This general rule cannot be applied,
however, whhere the writ of execution is assailed as having varied the decision. In
this case, the employer alleged that the writ of execution materially altered the
decision. If this allegation is correct, the appellant is entitled to the remedy of
appeal. The NLRC is vested with authority to look into the correctness of the
execution of the decision and to consider supervening events that may affect such
execution. (SGS Far East Ltd. V. NLRC, 286 SCRA 335, February 12, 1998)
Q. Federico was a regular work pool employee of PNCC. He was employed in 1971
and worked in various construction projects of PNCC. IN 1979, he worked for a
project of PNCC in the Middle East with a salary of $2.20 per hour. After the
completion of the project in 1984, Federico returned to the Philippines. PNCC then
failed to give him work in its local projects. Consequently, Federico filed a
complaint for illegal dismissal and obtained a ruling in his favor. When the
backwages were computed, the NLRC used Federicos salary rate in the Middle
East. PNCC questions the correctness of the computation and claimed that the
computation should be based on Federicos local wage rate at the time of his
transfer to the overseas project. Decide.
A. The NLRCs computation is erroneous. Federico was not illegally dismissed while
working in the Middle East project. He was dismissed from the work pool after the
completion of the Middle East project. If Federico were given local assignments
after his stint abroad, he would have received the local wage. This is the loss
which backwages aim to restore. The computation should be based on the local
rate. (PNCC v. NLRC, 286 SCRA 329, February 12, 1998)
Q. Alleging serious business losses, Edge Apparel implemented a retrenchment
program by phasing out its sewing line for simple garments. The workers assigned
to this particular sewing line were terminated. The other lines were maintained. In
the illegal dismissal case filed by the dismissed workers, the NLRC upheld the
legality of the dismissal but treated such dismissal as due to redundancy. Was the
dismissal due to redundancy?
A. No, the dismissal was due to a retrenchment program. In exercising its right to
retrench employees, the firm may choose to close all, or a part of, its business to
avoid further losses or mitigate expenses. The fact that only the dismissed
employees sewing line was phased out does not make their termination a case of
redundancy. Redundancy exists where the services of an employee are in excess of
what would reasonably be demanded by the actual requirements of the enterprise.
A position is redundant when it is superfluous. Retrenchment, in contrast to
redundancy, is an economic ground to reduce the number of employees. In order
to be justified, it must be due to business losses which are serious, actual and
real.
In this case, the phasing out of the line for simple garments and,
consequently, the termination of employees assigned to such line, was due to
serious business losses. Hence, it constitutes retrenchment.(Edge Apparel, Inc.
v. NLRC, 286 SCRA 303, February 12, 1998)
Q. Simultaneous with the filing of the appeal, the appellant-employer filed a motion
to reduce the amount of the bond. The motion was partially granted. In the order

partially granting the motion to reduce the amount of the bond, the NLRC directed
the appellant to post the bond within ten (10) days from receipt of the order.
Instead of filing the bond, the appellant employer filed a motion for reconsideration
of the NLRCs order reducing the amount of the bond. Because of the appellant
employers failure to post the bond, the NLRC dismissed the appeal. Is the NLRCs
ruling correct?
A. Yes, the ruling is correct. To have the bond reduced is not a matter of right on
the part of the appellant but lies within the sound discretion of the NLRC upon
showing of meritorious grounds. After the NLRC had exercised its discretion in
fixing the bond, the appellant should have complied with it. To file a subsequent
motion seeking another reconsideration of the already reduced amount of the bond
is to request for an extension of time to perfect an appeal which is
prohibited. (MERS Shoes Manufacturing, Inc. v. NLRC, 286 SCRA 647,
February 27, 1998)
Q. Juana is a worker in Del Monte Phil., Inc.. The company rules provide for an
Absence Without Permission (AWOP) Policy. If the worker intends to be absent from
work, he should first file an application for leave and wait for its approval before
going on leave. The first offense is punishable by oral reprimand; 2 nd offense
written reprimand; 3rdoffense 1-7 days suspension; 4 th offense 8-15 days
suspension; 5th offense 16-30 days suspension; and 6 th offense dismissal. From
1992-1994, Juana incurred 57 AWOP. Without initially penalizing Juana for her past
AWOP, the company dismissed her from service in 1994.
(a) Is the dismissal valid?
(b) Can Juana be considered to have abandoned her job due to her intermittent
absences without permission?
A. (a) No, the dismissal is not valid. The rule is that an employers power to
discipline its workers may not be exercised in an arbitrary manner as to erode the
constitutional guarantee of security of tenure. In this case, the company rules
provide for a graduation of penalties for violation of the AWOP policy. Even granting
that Juana incurred previous AWOPs as far back as 1992, the company should have
initially penallized her with reprimand or suspension for her previous AWOPs instead
of dismissing her outright from service.
(b) No, Juana did not abandon her job. Abandonment, as a just and valid ground for
termination, means the deliberate, unjustified refusal of an employee to resume his
employment. The burden of proof is on the employer to show a clear and
deliberate intent on the part of the employee to discontinue employment. The
intent cannot be lightly inferred from certain equivocal acts. For abandonment to
be a valid ground for dismissal, two elements must be proved: the intention of an
employee to abandon, coupled with an overt act from which it may be inferred that
the employee has no more intent to resume his/her work. In this case, these
elements are not present. (Del Monte Philippines, Inc. v. NLRC, 287 SCRA 71,
March 5, 1998)
Q. Ernesto was employed by Baliwag Transit as a bus driver. On May 20, 1983, the
bus driven by Ernesto was heavily damaged in an accident with two other vehicles.
Ernesto was grounded and was advised by Baliwag Transit to wait for the result of

the police investigation and the actions that may be taken by the owners of the
other vehicles. Ernesto paitiently waited. Realizing that he has waited too long,
Ernesto on December 11, 1986 requested Baliwag Transit to reinstate him. Baliwag
Transit formally informed him to look for another job because the management has
terminated his services on account of the vehicular accident. On November 15,
1990, Ernesto filed a complaint for illegal dismissal. The labor arbiter dismissed the
complaint on the ground that Ernestos action is barred by prescription since it was
filed more than four years from the accrual of the cause of action on May 20, 1983.
Is Ernestos action barred by prescription?
A. No, the action is not barred. The four year period should not be reckoned from
the time of the accident on May 20, 1983 because Ernesto was not yet considered
terminated at that time. He was merely grounded and advised to wait.
Ernestos cause of action accrued only in December 1986 when baliwag Transit
formally dismissed him from the service. Hence, the action filed on November
1990 had not yet prescribed.(Mendoza v. NLRC, 287 SCRA 51, March 5, 1998)
Q. Jose, a married man, was employed as a teacher by Hagonoy Institute. Likewise
working as a teacher for Hagonoy Institute was Arlene, also married. In the course
of their employment, Jose and Arlene fell in love and had a relationship. After
complying with the procedural requirements, Hagonoy terminated the services of
the couple. Is the dismissal valid?
A. Yes, the dismissal is valid. The illicit relationship between Jose and Arlene can be
considered immoral as to constitute just cause to terminate the couple. To
constitute immorality, the circumstances of each particular case must be
considered and evaluated in light of the prevailing norms of conduct and applicable
laws. In the present case, the gravity of the charges against the couple stem from
their being married and at the same time teachers. Teachers must adhere to the
exacting standards of morality and decency. A teacher, both in his/her official and
personal conduct, must display exemplary behavior. He/she must freely and
willingly accept restrictions on his/her conduct that might be viewed irksome by
ordinary citizens. Teachers must abide by a standard of personal conduct which
not only proscribes the commission of immoral acts, but also prohibits behavior
creating a suspicion of immorality because of the harmful impression it might have
on students. (Santos v. NLRC, 287 SCRA 117, March 6, 1998)
Q. Philippine Airlines terminated the services of two flight stewards for their alleged
involvement in currency smuggling in Hong Kong. Instead of filing an illegal
dismissal case with the Labor Arbiter, the workers filed with the NLRC (Commission)
a petition for injunction. The NLRC issued a temporary mandatory injunction
enjoining PAL to cease an desist from enforcing its memorandum of dismissal. The
NLRC further ruled that the filing of an illegal dismissal case with the Labor Arbiter
was not an adequate remedy for the workers. Is the NLRCs ruling correct?
A. No, the NLRCs ruling is erroneous. The power of the NLRC to issue an injunctive
writ originates from any labor dispute, i.e. a case between the contending parties
before the labor arbiter. In the present case, there is no labor dispute yet between
the workers and PAL since there has yet been no illegal dismissal complaint filed
with the labor arbiter. The petition for injunction directly filed before the NLRC is in

reality an action for illegal dismissal. The petition should have been filed with the
labor arbiter who has the original and exclusive jurisdiction over termination
disputes. The Labor Code does not provide blanket authority to the NLRC or any of
its divisions to issue writs of injunction, considering that the New Rules of Procedure
of the NLRC makes injunction only an ancillary remedy in ordinary labor
disputes. (PAL v. NLRC, 287 SCRA672, March 20, 1998)