San Miguel vs CA DIGEST

G.R. No. 146775. January 30, 2002

San Miguel vs CA

Facts:

Upon a routine inspection done by the Department of Labor and Employment in the premises of
San Miguel Corporation in Iligan City, it was discovered that there was underpayment by SMC
of regular Muslim Holiday pay to its employees. SMC received the inspection result which later
on contested such thus DOLE conducted summary hearings. Both DOLE Regional Office and
National Office ruled against SMC ordering the latter to consider Muslim Holidays as regular
holidays and to pay its Muslim and non-Muslim employees holiday pay.

Thus, this appeal.

Issue:

Whether or not the Muslim holiday pay is applicable to employees regardless of faith or religion

Held:

Yes.

Although Article 3 of Presidential Decree 1083 (Code of Muslim Personal Laws) provides that
the provisions of the code shall be applicable only to Muslims, on which the petitioner based its
defense, the same article provides further that nothing in the code shall be construed to the
prejudice of non-Muslims. The Supreme Court stated that there should be no distinction between
Muslims and non-Muslims as regards the payment of benefits for Muslim Holidays. The Court,
quoting the Court of Appeals, “assuming that the SMC is correct, then Muslims throughout the
Philippines are also not entitled to holiday pays on Christian holidays declared by law. We must
remind (SMC) that wages and other emoluments granted by law are determined not on the basis
of the worker’s faith or religion”, finds against the petitioner, and dismissed the petition.
 MAYON HOTEL & RESTAURANT vs. ROLANDO ADANA, et al.

G.R. No. 157634

May 16, 2005

FACTS:

Petitioner Mayon Hotel & Restaurant (MHR) hired herein 16 respondents as employees in its
business in Legaspi City. Its operation was suspended on March 31, 1997 due to the expiration
and non-renewal of the lease contract for the space it rented. While waiting for the completion of
the construction of its new site, MHR continued its operation in another site with 9 of the 16
employees. When the new site constructed and MHR resumed its business operation, none of the
16 employees was recalled to work.

MHR alleged business losses as the reason for not reinstating the respondents. On various dates,
respondents filed complaints for underpayment of wages, money claims and illegal dismissal.

ISSUES:

1. Whether or not respondents were illegally dismissed by petitioner;

2. Whether or not respondents are entitled to their money claims due to underpayment of wages,
and nonpayment of holiday pay, rest day premium, SILP, COLA, overtime pay, and night shift
differential pay.

HELD:

1. Illegal Dismissal: claim for separation pay

Since April 1997 until the time the Labor Arbiter rendered its decision in July 2000, or more than
three (3) years after the supposed “temporary” lay-off, the employment of all the respondents with
petitioner had ceased, notwithstanding that the new premises had been completed and the same
resumed its operation. This is clearly dismissal – or the permanent severance or complete
separation of the worker from the service on the initiative of the employer regardless of the reasons
therefor.

Article 286 of the Labor Code is clear — there is termination of employment when an otherwise
bona fide suspension of work exceeds six (6) months. The cessation of employment for more than
six months was patent and the employer has the burden of proving that the termination was for a
just or authorized cause.
While we recognize the right of the employer to terminate the services of an employee for a just
or authorized cause, the dismissal of employees must be made within the parameters of law and
pursuant to the tenets of fair play. And in termination disputes, the burden of proof is always on
the employer to prove that the dismissal was for a just or authorized cause. Where there is no
showing of a clear, valid and legal cause for termination of employment, the law considers the
case a matter of illegal dismissal.

If doubts exist between the evidence presented by the employer and the employee, the scales of
justice must be tilted in favor of the latter — the employer must affirmatively show rationally
adequate evidence that the dismissal was for a justifiable cause. It is a time-honored rule that in
controversies between a laborer and his master, doubts reasonably arising from the evidence, or in
the interpretation of agreements and writing should be resolved in the former’s favor. The policy
is to extend the doctrine to a greater number of employees who can avail of the benefits under the
law, which is in consonance with the avowed policy of the State to give maximum aid and
protection of labor.

2. Money claims

The Supreme Court reinstated the award of monetary claims granted by the Labor Arbiter.

The cost of meals and snacks purportedly provided to respondents cannot be deducted as part of
respondents’ minimum wage. As stated in the Labor Arbiter’s decision.

Even granting that meals and snacks were provided and indeed constituted facilities, such facilities
could not be deducted without compliance with certain legal requirements. As stated in Mabeza
v. NLRC, the employer simply cannot deduct the value from the employee’s wages without
satisfying the following: (a) proof that such facilities are customarily furnished by the trade; (b)
the provision of deductible facilities is voluntarily accepted in writing by the employee; and (c)
the facilities are charged at fair and reasonable value. The law is clear that mere availment is not
sufficient to allow deductions from employees’ wages.

As for petitioners repeated invocation of serious business losses, suffice to say that this is not a
defense to payment of labor standard benefits. The employer cannot exempt himself from liability
to pay minimum wages because of poor financial condition of the company. The payment of
minimum wages is not dependent on the employer’s ability to pay.
G.R. No. 102467 Case Digest
G.R. No. 102467 June 13, 1997
Equitable Banking COrporation, etc., petitioners,
vs Hon. NLRC and Ricardo Sadac, respondents.
Ponente: Vitug

Facts:
Petition to go against the decision of NLRC in holding that Sadac as the
VP for the legal department of bank a regular employee of the bank.

Sadac was appointed VP for the legal department of bank with monthly
salary, allowance and Christmas bonus, with specific legal tasks to
perform for the bank.

Later, nine lawyers of the bank's legal department addressed a petition-

letter to the chairman of the board of directors accusing Sadac of
abusive conduct, inefficiency, mismanagement, ineffectiveness and
indecisiveness.

Sadac promptly minifested to file criminal, civil and administrative

chrges against the nine lawyers. Then Chairman Morales called the lawyers
in attempt to resolve the differences, but didn't result positively.
Morales in the board meeting then apprised the situation, directors
adopted a resolution directing one of the directors (Banico) to look
further into the matter and determine the best course of action for the
bank.

Banico after his meetings with the lawyers and exploring various
alternatives to solve the crisis, but failed wrote to the board of
directors his findings affirming the charges against Sadac. Morales then
sent Sadac a memorandum informing him of the charge, the findings of
Banico and the expression of the boards' loss of confidence upon him and
that they advise and awaits for Sadac's resignation.
In reaction to the memorandum, Sadac addressed a letter to Morales with
copies furnish to the directors, stating that the findings of Banico
contained libelous statements and the decision of the board will amount
to illegal dismissal; with request for a full hearing by the directors
so he could clear his name.

Vice-chairman Romulo answered Sadac that they are exercising its

managerial prerogative to control, conduct business in the manner deems
fit and to regulate the same.

In reaction thereto, Sadac requested for a full hearing and formal

investigation but the same remained unheeded. On 9 November 1989,
respondent Sadac filed a complaint for illegal dismissal with damages
against petitioner Bank and individual members of the Board of Directors
thereof. After learning of the filing of the complaint, petitioner Bank
terminated the services of respondent Sadac. Finally, on 10 August 1989,
Sadac was removed from his office.

Labor Arbiter rendered decision that Sadac’s termination was illegal and
entitled to reinstatement and payment of full back wages. NLRC affirmed
the decision upon appeal by the Bank. Sadac filed for execution of
judgment where it gave its computation which amounted to P 6.03 M
representing his back wages and the increases he should have received
during the time he was illegally dismissed. The Bank opposed to Sadac’s
computation. The Labor Arbiter favor Sadac’s computation. NLRC, upon
appeal by the bank, reversed the decision. CA reversed the decision of
NLRC. Hence, this petition.

Issue: Whether or not the computation of back wages shall include the
general increases.

Ruling:
To resolve the issue, the court revisits its pronouncements on the
interpretation of the term backwages. Backwages in general are granted
on grounds of equity for earnings which a worker or employee has lost
due to his illegal dismissal. It is not private compensation or damages
but is awarded in furtherance and effectuation of the public objective
of the Labor Code. Nor is it a redress of a private right but rather in
the nature of a command to the employer to make public reparation for
dismissing an employee either due to the former’s unlawful act or bad
faith.

In the case of Bustamante v. National Labor Relations Commission, It

said that the Court deems it appropriate to reconsider such earlier
ruling on the computation of back wages by now holding that conformably
with the evident legislative intent as expressed in Rep. Act No. 6715,
back wages to be awarded to an illegally dismissed employee, should not,
as a general rule, be diminished or reduced by the earnings derived by
him elsewhere during the period of his illegal dismissal. The underlying
reason for this ruling is that the employee, while litigating the
legality (illegality) of his dismissal, must still earn a living to
support himself and family, while full backwages have to be paid by the
employer as part of the price or penalty he has to pay for illegally
dismissing his employee. The clear legislative intent of the amendment
in Rep. Act No. 6715 is to give more benefits to workers than was
previously given them. Thus, a closer adherence to the legislative policy
behind Rep. Act No. 6715 points to "full backwages" as meaning exactly
that, i.e., without deducting from backwages the earnings derived
elsewhere by the concerned employee during the period of his illegal
dismissal.

There is no vested right to salary increases. Sadac may have received

salary increases in the past only proves fact of receipt but does not
establish a degree of assuredness that is inherent in backwages. The
conclusion is that Sadac’s computation of his full backwages which
includes his prospective salary increases cannot be permitted.