5.
The Labor Code of the Philippines
a. Brief History
b. Name of Decree- Art. 1
c. Date of Effectivity- 2
d. Declaration of Basic Policy- 3
e. Construction in favor of Labor- 4; Civil Code of the
Philippines, Art. 1702
Hocheng Phil. Corp. v. Antonio Farrales
May 18, 2015
J. Reyes
FACTS
- Farrales was first employed by HPC on May 12 1998 as
Production Operator, then promoted as Leadman in 2004,
Acting Assistant Unit Chief in 2007, Assistant Unit Chief of
Production in 2008 (supervisory position, monthly salary:
17,600)
- He was a consistent recipient of citations for outstanding
performance, and appraisal and year-end bonuses
- December 2, 2009, a report indicating that a motorcycle
helmet of an employee, Reymar Solas was stolen at the
parking lot within the premises of HPC on November 27,
2009
- December 3, 2009, Security Officer Francisco Paragas III
confirmed a video sequence recorded on CCTV showing
Farrales taking the missing helmet
- Same day, Farrales received a notice to explain his
involvement in the theft
- Investigation was supported by the employee’s union
- Farrales averred that he borrowed a helmet from one Eric
Libutan
- Libutan was preoccupied at the time Farrales was asking to
borrow the motorcycle helmet; he told Farrales to get the
helmet from his motorcycle which was black in color
- Farrales did not know the motorcycle of Eric, which is why
he asked one Andy Lopega to get the helmet from Eric’s
motorcycle (caught on tape in the CCTV)
- He immediately drove home, and on the next day, found
out that he got the wrong helmet
- December 10, 2009, a hearing was held, where Andy Lopega
said that the reason he complied with Farrales’ request was
that because Farrales told him that he owned the helmet
- February 15, 2010, HPC issued a Notice of Termination to
Farrales dismissing him for violation of Article 69, Class A,
Item No. 29 of the HPC Code of Discipline, which provides
that "stealing from the company, its employees and
officials, or from its contractors, visitors or clients," is akin
to serious misconduct and fraud or willful breach by the
employee of the trust reposed in him by his employer or
duly authorized representative, which are just causes for
termination of employment under Article 282 of the Labor
Code.
- March 25, 2010, Farrales filed a complaint for illegal
dismissal, non-payment of appraisal and mid-year bonuses,
service incentive pay and 13th month pay
- LA ruled in favor of Faralles
- NLRC reversed LA’s decision
- CA upheld the LA’s decision
ISSUE and RULING
WON the CA erred in ruling that Farrales was illegally dismissed
NO
To validly dismiss an employee, the law requires the employer
to prove the existence of any of the valid or authorized
causes,24 which, as enumerated in Article 282 of the Labor
Code, are: (a) serious misconduct or willful disobedience by
the employee of the lawful orders of his employer or the
latter’s representative in connection with his work; (b) gross
and habitual neglect by the employee of his duties; (c) fraud or
willful breach by the employee of the trust reposed in him by
his employer or his duly authorized representative; (d)
commission of a crime or offense by the employee against the
person of his employer or any immediate member of his
family or his duly authorized representative; and (e) other
causes analogous to the foregoing.
Article 4 of the Labor Code mandates that all doubts in the
implementation and interpretation of the provisions thereof
shall be resolved in favor of labor. Consistent with the State’s
avowed policy to afford protection to labor, as Article 3 of the
Labor Code and Section 3, Article XIII of the 1987 Constitution
have enunciated, particularly in relation to the worker’s
security of tenure, the Court held that "[t]o be lawful, the
cause for termination must be a serious and grave
malfeasance to justify the deprivation of a means of
livelihood. This is merely in keeping with the spirit of our
Constitution and laws which lean over backwards in favor of
the working class, and mandate that every doubt must be
resolved in their favor." Moreover, the penalty imposed on the
erring employee ought to be proportionate to the offense,
taking into account its nature and surrounding circumstances.
In ruling that Farrales’ dismissal by HPC was attended with
utmost malice and bad faith as to justify an award of moral and
exemplary damages and attorney’s fees, the LA stated that "[i]t
is succinctly clear that [the] respondents [therein] tried to
blow out of proportions the indiscretion of [Farrales] for
reasons known only to them," and moreover, "[f]inding that
the dismissal on the ground of theft is unavailing, [the]
respondents [therein] immediately offered [Farrales] his
former position when he filed [his] complaint. What does this
act of [the] respondents [therein] speak [of]?
It is not, then, difficult to surmise that when Farrales told Andy
that the yellow helmet was his, his intent was not to put up a
pretence of ownership over it and thus betray his intent to
gain, as the NLRC held, but rather simply to assuage Andy’s
reluctance to heed his passing request to reach for the helmet
for him; Andy, it will be recalled, was at that moment already
seated in his motorbike and about to drive out when Farrales
made his request. As to Farrales’ claim that he and Eric were
neighbors, suffice it to say that as the CA noted, they resided in
the same barangay, and thus, loosely, were neighbors.
It is not, then, difficult to surmise that when Farrales told Andy
that the yellow helmet was his, his intent was not to put up a
pretence of ownership over it and thus betray his intent to gain,
as the NLRC held, but rather simply to assuage Andy’s
reluctance to heed his passing request to reach for the helmet
for him; Andy, it will be recalled, was at that moment already
seated in his motorbike and about to drive out when Farrales
made his request. As to Farrales’ claim that he and Eric were
neighbors, suffice it to say that as the CA noted, they resided in
the same barangay, and thus, loosely, were neighbors.
However, there was no bad faith in the dismissal of Farrales,
hence the moral damages are dismissed.
f. Labor Arbiter’s jurisdiction over labor cases- Art. 224 (217); RA
8042, Sec 10
1. DOLE v NLRC jurisdiction – Arts. 128,129, 224
KPKP, Inc. v Remedios Barreno
June 10, 2013
J. Perlas- Bernabe
FACTS
- Petitioner Kapisanang Pangkaunlaran ng Kababaihang
Potrero, Inc. (KPKPI) is a non-stock, non-profit, social service
oriented corporation
- November 1997, Technology and Livelihood Resource
Center (TLRC) tapped KPKPI to participate in its
microlending program and was granted a loan for
microfinance or re-lending for the poor
- September 20, 2001, respondents filed a Complaint6 before
the Department of Labor and Employment-National Capital
Region (DOLE-NCR) for underpayment of wages, non-
payment of labor standard benefits, namely, legal/special
holiday pay, 13th month pay and service incentive leave
pay, and non-coverage with the Social Security System and
Home Development Mutual Fund against KPKPI and its
Program Manager, petitioner Milagros H. Reyes (Reyes)
- Barreno was served a memo signed by petitioner Reyes
terminating her from employment effective October 1, 2001
- Respondents Ametin, Nonay, Dionisio and Casio were also
verbally informed by petitioner Reyes of their termination
effective October 9, 2001, but they still reported for work
until disallowed on October 15, 2001
- November 29, 2001, Petitioners filed a position paper,
claiming that respondents were not employees but mere
volunteers who received allowances and reimbursements
for their expenses.
- December 19, 2001, through a Reply, respondents insisted
that they were employees under the control of KPKPI,
submitting in support thereof a copy of an office
memorandum issued by petitioner Reyes respecting the
rules on absences of all its employees
- LA found that respondents were employees of KPKPI and
not mere volunteer members. Consequently, for failure to
justify their dismissal and to observe the twin notice
requirement under the Labor Code, the LA held petitioners
jointly and severally liable to pay respondents their
backwages
- NLRC set aside the LA’s ruling and dismissed respondents’
complaints
- Contrary to the LA’s findings, it found respondents guilty of
forum shopping in filing the same complaint against
petitioners in two (2) fora, namely the DOLE and the NLRC.
- CA found no grave abuse of discretion to have been
committed by the NLRC in giving due course to the appeal
and in setting aside the LA’s ruling
- The CA agreed with the NLRC that respondents committed
forum shopping in seeking their money claims before the
DOLE and the NLRC.
ISSUE and RULING
WON CA erred in ordering the reinstatement and remand of the
NLRC Case to the NLRC despite its finding of forum shopping
NO
Respondents are not guilty of forum shopping.
Forum shopping exists "when one party repetitively avails of several
judicial remedies in different courts, simultaneously or successively,
all substantially founded on the same transactions and the same
essential facts and circumstances, and all raising substantially the
same issues either pending in, or already resolved adversely, by
some other court. What is truly important to consider in
determining whether it exists or not is the vexation caused the
courts and parties-litigants by a party who asks different courts
and/or administrative agencies to rule on the same or related
causes and/or grant the same or substantially the same reliefs, in
the process creating the possibility of conflicting decisions being
rendered by different fora upon the same issues.
There is no identity of causes of action between the cases pending
with the DOLE and the NLRC. The DOLE CASE involved violations of
labor standard provisions where an employer-employee
relationship exists. On the other hand, the NLRC CASE questioned
the propriety of respondents’ dismissal. No less than the Labor Code
provides for these two (2) separate remedies for distinct causes of
action. More importantly, at the time the DOLE CASE was initiated,
respondents’ only cause of action was petitioners’ violation of labor
standard laws which falls within the jurisdiction of the DOLE. It was
only after the same was filed that respondents were dismissed from
employment, prompting the filing of the NLRC CASE, which is within
the mantle of the NLRC’s jurisdiction. Under the foregoing
circumstances, respondents had no choice but to avail of different
fora.
Raul Cosare v Broadcom Asia, Inc.
February 5, 2014
J. Reyes
FACTS
- April 1993, Cosare was employed as a salesman by Arevalo,
who was then in the business of selling broadcast
equipment needed by television networks and production
houses
- December 2000, Arevalo set up the company Broadcom,
still to continue the business of trading communication and
broadcast equipment
- Cosare was named an incorporator of Broadcom, having
been assigned 100 shares of stock with par value of ₱1.00
per share
- October 2001, Cosare was promoted to the position of
Assistant Vice President for Sales (AVP for Sales) and Head
of the Technical Coordination, having a monthly basic net
salary and average commissions of ₱18,000.00 and
₱37,000.00
- 2003, Alex F. Abiog (Abiog) was appointed as Broadcom’s
Vice President for Sales and thus, became Cosare’s
immediate superior
- March 23, 2009, Cosare sent a confidential memo7 to
Arevalo to inform him of the following anomalies which
were allegedly being committed by Abiog against the
company: (a) he failed to report to work on time, and would
immediately leave the office on the pretext of client visits;
(b) he advised the clients of Broadcom to purchase camera
units from its competitors, and received commissions
therefor; (c) he shared in the "under the-table dealings" or
"confidential commissions" which Broadcom extended to its
clients’ personnel and engineers; and (d) he expressed his
complaints and disgust over Broadcom’s uncompetitive
salaries and wages and delay in the payment of other
benefits, even in the presence of office staff. Cosare ended
his memo by clarifying that he was not interested in Abiog’s
position, but only wanted Arevalo to know of the
irregularities for the corporation’s sake
- March 30, 2009, Cosare received from Roselyn Villareal
(Villareal), Broadcom’s Manager for Finance and
Administration, a memo10 signed by Arevalo, charging him
of serious misconduct and willful breach of trust
- April 1, 2009, Cosare was totally barred from entering the
company premises
 - April 2, 2009, Cosare attempted to furnish the company
with a Memo14 by which he addressed and denied the
accusations cited in Arevalo’s memo dated March 30, 2009.
The respondents refused to receive the memo
- respondents argued that Cosare was neither illegally
suspended nor dismissed from employment
- LA dismissed the complaint
- NLRC reversed
- a manifestation was filed by the respondents during the
pendency of the CA appeal
- they raised a new argument, i.e., the case involved an intra-
corporate controversy which was within the jurisdiction of
the RTC, instead of the LA
- CA granted the petition of the respondents
ISSUE and RULING
WON the case instituted by Cosare was an intra-corporate dispute
that was within the original jurisdiction of the RTC, and not of the
LAs
NO
An intra-corporate controversy, which falls within the jurisdiction of
regular courts, has been regarded in its broad sense to pertain to
disputes that involve any of the following relationships: (1) between
the corporation, partnership or association and the public; (2)
between the corporation, partnership or association and the state
in so far as its franchise, permit or license to operate is concerned;
(3) between the corporation, partnership or association and its
stockholders, partners, members or officers; and (4) among the
stockholders, partners or associates, themselves.29 Settled
jurisprudence, however, qualifies that when the dispute involves a
charge of illegal dismissal, the action may fall under the jurisdiction
of the LAs upon whose jurisdiction, as a rule, falls termination
disputes and claims for damages arising from employer-employee
relations as provided in Article 217 of the Labor Code.
Matling Industrial and Commercial Corporation v. Coros: the Court
distinguished between a "regular employee" and a "corporate
officer" for purposes of establishing the true nature of a dispute or
complaint for illegal dismissal and determining which body has
jurisdiction over it. It was explained that "[t]he determination of
whether the dismissed officer was a regular employee or corporate
officer unravels the conundrum" of whether a complaint for illegal
dismissal is cognizable by the LA or by the RTC. "In case of the
regular employee, the LA has jurisdiction; otherwise, the RTC
exercises the legal authority to adjudicate.
‘Corporate officers’ in the context of Presidential Decree No. 902-A
are those officers of the corporation who are given that character
by the Corporation Code or by the corporation’s by-laws. There are
three specific officers whom a corporation must have under Section
25 of the Corporation Code. These are the president, secretary and
the treasurer. The number of officers is not limited to these three.
Tabang v. NLRC: an "office" is created by the charter of the
corporation and the officer is elected by the directors and
stockholders. On the other hand, an "employee" usually occupies no
office and generally is employed not by action of the directors or
stockholders but by the managing officer of the corporation who
also determines the compensation to be paid to such employee.