Labor Law Review Digests | Lourleth Lluz
1. THE APPLICABLE LAWS relationship.
2. BASIC PRINCIPLES
CASES:
1. Lu vs. Enopia, GR No. 197899, March 6,
2017
Doctrine: Four - Fold Test; The control test merely
calls for the existence of the right to control and not
necessarily the exercise thereof, meaning it is enough
that the employer has the right to wield the power.
Facts: Enopia et al. were hired from January 20,
1994 to March 20, 1996 as crew members of the
fishing mother boat F/B MG-28 owned by Lu who is
the sole proprietor of Mommy Gina Tuna Resources
(MGTR). They had an income-sharing arrangement
wherein 55% goes to Lu, 45% to the crew members,
with an additional 4% as "backing incentive." They
also equally share the expenses for the maintenance
and repair of the mother boat, and for the purchase
of nets, ropes and payaos.
Sometime in August 1997, Lu proposed the signing of
a Joint Venture Fishing Agreement between them, but
Enopia et al. refused to sign the same as they
opposed the one-year term provided in the
agreement. According to them, during their dialogue
on August 18, 1997, Lu terminated their services right
there and then because of their refusal to sign the
agreement.
On August 25, 1997, Enopia et al. filed their
complaint for illegal dismissal, monetary claims and
damages. They alleged that their refusal to sign the
Joint Venture Fishing Agreement is not a just cause
for their termination.
On the other hand, Lu denied having dismissed them,
claiming that their relationship was one of joint
venture where he provided the vessel and other
fishing paraphernalia, while Enopia et al, as industrial
partners, provided labor by fishing in the high seas.
Lu alleged that there was no employer-employee
relationship as its elements were not present
Issue: Whether or not an employer-employee
relationship existed between Lu and Enopia et al.
Ruling: Yes, there is an employer-employee
In determining the existence of an employer-
employee relationship, the following elements are
considered: (1) the selection and engagement of the
workers; (2) the power to control the worker's
conduct; (3) the payment of wages by whatever
means; and (4) the power of dismissal. We find all
these elements present in this case.
In this case, Lu contends that it was the piado who
hired Enopia et al, however, it was shown by
evidence that the employer stated in their Social
Security System (SSS) online inquiry system printouts
was MGTR, which is owned by Lu. Thus, the fact that
Lu had registered them with SSS is proof that they
were indeed his employees. The coverage of the
Social Security Law is predicated on the existence of
an employer-employee relationship.
The control test merely calls for the existence of the
right to control, and not necessarily the exercise
thereof. It is not essential that the employer actually
supervises the performance of duties by the
employee. It is enough that the former has a right to
wield the power.
Lu controls the entire fishing operations. He assigned
a master fisherman (piado) and assistant master
fisherman (assistant piado) for each mother fishing
boat, who every now and then supervise the fishing
operations. He also assigned checkers based on the
office to monitor and contact every now and then the
crew at sea through radio. The checkers advise him
of the condition and he, through radio, will then
instruct the "piado" how to conduct the fishing
operations.
The payment of Enopia et al. wages based on the
percentage share of the fish catch falls within the
scope and meaning of the term “wage” as defined
under Article 97(f) of the Labor Code.
Lu wielded the power of dismissal over Enopia et al.
when he dismissed them after they refused to sign
the joint fishing venture agreement.
The primary standard for determining regular
employment is the reasonable connection between
the particular activity performed by the employee in
relation to the usual trade or business of the
1|Page

employer.
There is a direct linkage or causal connection
between the nature of Enopia et al.’s work visa- vis
MGTR's line of business. In fact, MGTR's line of
business could not possibly exist, let alone flourish
without people like the fishermen crew members of
its fishing vessels who actually undertook the fishing
activities in the high seas.
Considering that Enopia et al. were Lu’s regular
employees, his act of asking them to sign the joint
fishing venture agreement which provides that the
venture shall be for a period of one year from the
date of the agreement, subject to renewal upon
mutual agreement of the parties, and may be pre-
terminated by any of the parties before the expiration
of the one-year period, is violative of the former's
security of tenure. And their termination based on
their refusal to sign the same, not being shown to be
one of those just causes for termination under Article
282, is, therefore, illegal.
2. Reyes et al., vs. Doctolero, et al., GR No.
185597, August 2, 2017
Doctrine: (Torts case on vicarious liability in relation
to EE-ER relationship) The principal is not liable for
the acts of the contractor’s employees. There is no
employer – employee relationship between the
principal and the security guards.
As a general rule, one is only responsible for his own
act or omission. (Article 2176 of the Civil Code) The
law provides for exceptions when it makes certain
persons liable for the act or omission of another. One
exception is an employer who is made vicariously
liable for the tort committed by his employee under
paragraph 5 of Article 2180.
Facts: In this case, two security guards, of Grandeur
Security and Services Corp., got into an altercation
with petitioners in Makati Cinema Square’s (MCS)
parking lot. This resulted in one security guard
accidentally shooting one of the petitioners while
another security guard shot another petitioner. This
resulted in the two petitioners sustaining injuries, one
on his leg while the other on his stomach.
Labor Law Review Digests | Lourleth Lluz
Petitioners insist that MCS and Grandeur are liable for
damages, they rely on the vicarious liability of
employers.
Issue: Whether Grandeur and MCS may be held
vicariously liable for damages caused by their security
guards to petitioners John and Mervin Reyes?
Ruling: With respect to MCS, the court ruled that
they are not liable for the acts of the security guards.
There is no employer – employee relationship. The
guards were merely assigned by Grandeur to secure
MCS' premises pursuant to their Contract of Guard
Services. Thus, MCS cannot be held vicariously liable
for damages caused by these guards' acts or
omissions.
The rule on vicarious liability applies only if there is an
employer – employee relationship. This employer-
employee relationship cannot be presumed but must
be sufficiently proven by the plaintiff. Neither can it
be said that a principal-agency relationship existed
between MCS and Grandeur, as their contract stated
otherwise.
With respect to Grandeur, the court here ruled that
they managed to overcome the presumption of
negligence.
3. The Provincial Bus Operators Association
of the Philippines et al vs. DOLE, et a., GR
No. 202275, July 17, 2018, En Banc
Doctrine: (1) Laws requiring the payment of
minimum wage, security of tenure and traffic safety
have been declared as not violative of due process for
being valid police power legislations. When
administrative agencies exercise quasi legislative
power, notice and hearing are not required.
(2) Not all contracts are protected by the non-
impairment clause of the constitution. Contracts
whose subject matters are so related to the public
welfare are subject to the police power of the state.
(Like Er-E rel which is imbued with public interest)
Likewise, contracts which related to rights that are
not considered property, such as franchises and
permits, are also not protected by the non-
impairment clause.
(3) Equal protection clause; a valid classification (a)
substantial distinctions which make real differences;
2|Page

(b) the classification must be germane to the purpose
of the law; (c) It must not be limited to existing
conditions only; (d) It must apply to each member of
the class.
Facts: The Provincial Bus Operators Association of
the Philippines questions DOLE DO 118-12 otherwise
known as “Rules and Regulations Governing the
Employment and Working Conditions of Drivers and
Conductors in the Public Utility Bus Transport
Industry” and it’s IRR, while LTFRB issued
memorandum circular no. 118-12 which provides that
PUB companies are required to get a Labor Standards
Compliance Certificate from DOLE, failure to do so
shall be considered a ground for the immediate
cancellation or revocation of their franchises
(Certificate of Public Convenience)
DO 118-12 provides a new compensation scheme for
drivers and conductors which ensure that the risk
taking behaviors of drivers are addressed. The new
compensation scheme has to components: a fixed
rate and a performance based rate/ part fixed and
part performance based.
“SECTION 3. Hours of Work and Hours of Rest. —
The normal hours of work of a driver and conductor
shall not exceed eight (8) hours a day. If the
driver/conductor is required to work overtime, the
maximum hours of work shall not exceed twelve (12)
hours in any 24-hour period, subject to the overriding
safety and operational conditions of the public utility
bus.
Drivers and conductors shall be entitled to rest
periods of at least one (1) hour, exclusive of meal
breaks, within a 12-hour shift.”
“SECTION 2. Method of Determining Compensation.
— Bus owners and/or operators, in consultation with
their drivers and conductors shall determine the
following:
[a]) The fixed component shall be based on an
amount mutually agreed upon by the owner/operator
and the driver/conductor, which shall in no case be
lower than the applicable minimum wage for work
during normal hours/days. They shall also be entitled
to wage[-]related benefits such as overtime pay,
premium pay and holiday pay, among others.
[b]) The performance-based component shall be
based on safety performance, business performance
Labor Law Review Digests | Lourleth Lluz
and other related parameters.”
NWPC Guidelines:
SECTION 2. Fixed Wage Component. —
a) The fixed wage component shall be an amount
mutually agreed upon by the owner/operator and the
driver/conductor and shall be paid in legal tender. It
shall in no case be lower than the applicable
minimum wage (basic wage + COLA) for work
performed during normal hours/days. It shall include
wage[-]related bene ts such as overtime pay,
nightshift differential, service incentive leave and
premium pay among others. The payment of 13th
month pay, holiday and service incentive leave may
be integrated into the daily wage of drivers and
conductors, upon agreement of both
owners/operators and drivers and conductors.
b.) The fixed wage may be based on a time unit of
work (e.g., hourly, daily or monthly). It may also be
based on a per trip or per kilometer basis where the
drivers/conductors and operators may consider the
minimum number of trips or kilometres/distance
travelled within an 8-hour period, as basis for
determining regular/normal workload for an 8-hour
period. The fixed wage may be computed as follows:
Fixed Wage (Time Rate) = (Basic Wage + Wage –
Related Benefits) ORFixed Wage (Trip Basis) = Rate
per Trip x No. of Trips per Day
SECTION 3. Performance-Based Wage
Component. —
a) The performance-based wage component shall be
based on business performance, safety performance
and other relevant parameters. Business performance
shall consider revenue/ridership. Safety performance
shall consider safety records such as the incidence of
road accident and tra c violation. The performance-
based wage may be computed as follows:
Reference Amount of Performance Incentive =
(Current Average Daily Earnings – Fixed Wage) x Y%
Where: Current average daily earnings shall be
estimated based on average daily earnings for 2011
and/or prior years, as may be agreed upon.
Y — range of values (in percent) that correspond to
various levels of safety performance, such that: The
lower the incidence of traffic violations and road
accidents, the higher will be the value of Y and the
performance incentive
The higher the incidence of traffic violations and road
accidents, the lower will be the value of Y and the
performance incentive Bus operators/owners and
3|Page

drivers/conductors may modify or use other formula
for their compensation scheme provided it is in
accordance with the part- fixed[-] part-
performance[-]based compensation scheme as
provided herein.
Petitioners claim that the issuance violates the PUB
Company’s due process; they also claim that the non-
impairment of contractual relations clause of the
constitution was breached since they agreed with
drivers and conductors that the boundary system
(based on number of trips) was their system of
compensation.
Issues: (1) Whether or not the DOLE Department
Order No. 118-12 and the LTFRB Memorandum
Circular No. 2012-001 deprive public utility bus
operators of their right to due process of law?
(2) Whether or not the DOLE Department Order No.
118-12 and the LTFRB Memorandum Circular No.
2012-001 impair public utility bus operators' right to
non- impairment of obligation of contracts?
(3) Whether or not the DOLE Department Order No.
118-12 and the LTFRB Memorandum Circular No.
2012-001 deny public utility bus operators of their
right to equal protection of the laws?
Ruling: The court dismissed the petition for
petitioners’ failure to respect the doctrine of hierarchy
of courts by directly invoking this Court's jurisdiction
without any special reason. Furthermore, petitioners
also failed to present any actual controversy ripe for
adjudication and do not even have the requisite
standing to the case. They also failed to show the
unconstitutionality of the DOLE Department Order No.
118- 12 and the LTFRB Memorandum Circular No.
2012-001.
(1) Laws requiring the payment of minimum
wage, security of tenure and traffic safety
have been declared as not violative of due
process for being valid police power
legislations. When administrative agencies
exercise quasi legislative power, notice and
hearing are not required.
Social legislations to enhance the status of
bus drovers and conductors and to promote
the general welfare of the riding public. They
are reasonable and are not violative of due
process.
(2) The non-impairment clause: Section 10,
Article III: No law impairing the obligation of
contracts shall be passed. – the provision is
Labor Law Review Digests | Lourleth Lluz
meant to encourage purely private
agreements from state interference. There is
an impairment when, either by statute or
any administrative rule issued by an agency
exercising quasi legislative power, the terms
of a contract is changed either in respect to
the time or mode of performance of the
obligation.
Not all contracts are protected by the non-
impairment clause of the constitution.
Contracts whose subject matters are so
related to the public welfare are subject to
the police power of the state. (Like Er-E rel
which is imbued with public interest)
Likewise, contracts which related to rights
that are not considered property, such as
franchises and permits, are also not
protected by the non- impairment clause.
(3) Petitioners failed to show how the equal
protection clause was violated. Furthermore,
the qual protection clause does not prevent
the legislature from making classifications for
as long as there is: (a) substantial
distinctions which make real differences; (b)
the classification must be germane to the
purpose of the law; (c) It must not be
limited to existing conditions only; (d) It
must apply to each member of the class.
4. Council of Teachers & Staff of Colleges
& Universities of the Phils. vs. Sec. of
Education, et al., GR No. 216930,
October 9, 2018
Facts: The K to 12 basic education was implemented
in parts. Universal kindergarten was offered starting
School Year (SY) 2011-2012. In 2012, DepEd started
unclogging the BEC to conform to the K to 12
Curriculum. Thus, DO No. 31 was issued setting forth
policy guidelines in the implementation of the Grades
1 to 10 of the K to 12 Curriculum. DO No. 31 provides
that effective SY 2012-2013, the new K to 12 BEC,
which follows a spiral approach across subjects and
uses the mother tongue as a medium of instruction
from Grades 1 to 3, shall be first implemented in
Grades 1 and 7 of all public elementary and
secondary schools; and while private schools are
enjoined to do the same, they may further enhance
the curriculum to suit their school's vision/mission.
4|Page

Five (5) school years from SY 2012-2013, the
implementation of the K to 12 basic education was to
be completed. In 2018, the first group of Grade 6 and
Grade 12 students under the K to 12 BEC are set to
graduate.
Claiming that the K to 12 Basic Education Program
violates various constitutional provisions, the several
petitions were filed before the Court praying that the
Kindergarten Education Act, K to 12 Law, K to 12 IRR,
DO No. 31, Joint Guidelines, and CMO No. 20, be
declared unconstitutional.
Issue: Whether or not such law is unconstitutional for
exceeding the State’s exercise of police power to
regulate education.
Ruling: No. Police power is defined broadly as the
State's authority to enact legislation that may
interfere with personal liberty or property in order to
promote the general welfare. This all-comprehensive
definition provides ample room for the State to meet
the exigencies of the times depending on the
conditions and circumstances. It is not capable of an
exact definition but has been, purposely, veiled in
general terms to underscore its all-comprehensive
embrace.
It finds no specific Constitutional grant for the plain
reason that it does not owe its origin to the charter.
Along with the taxing power and eminent domain, it is
inborn in the very fact of statehood and sovereignty.
It is a fundamental attribute of government that has
enabled it to perform the most vital functions of
governance.
From the legislative history of the Philippine education
system, one can easily discern that the enactment of
education laws, including the K to 12 Law and the
Kindergarten Education Act, their respective
implementing rules and regulations and the issuances
of the government agencies, are an exercise of the
State's police power. The State has an interest in
prescribing regulations to promote the education and
the general welfare of the people. In Wisconsin v.
Yoder, the U.S. Supreme Court ruled that "there is no
doubt as to the power of a State, having a high
responsibility for education of its citizens, to impose
reasonable regulations for the control and duration
of basic education."
Here, petitioners essentially assail the State's exercise
of police power to regulate education through the
Labor Law Review Digests | Lourleth Lluz
adoption of the K to 12 Basic Education Program,
because the K to 12 Law and its related issuances
purportedly violate the Constitutional provisions as
enumerated in the outline of issues above.
To be sure, the Court's role is to balance the State's
exercise of its police power as against the rights of
petitioners. In fact, in Wisconsin v. Yoder, where the
question was the validity of a statute criminalizing the
failure of parents to allow their children to attend
compulsory high school education, the U.S. Supreme
Court ruled that although the State's interest in
universal education is highly ranked in terms of State
functions, this does not free this exercise of State
function from the balancing process when it impinges
on fundamental rights and interests, specifically the
Free Exercise Clause.
This balancing of interest approach has been applied
in this jurisdiction in Lantion in determining whether
there was a violation of the private respondent's right
to due process when he was not furnished a copy of
the request for his extradition. This right was
balanced against the country's commitment under the
RP-US Extradition Treaty to extradite to the United
States of America persons who were charged with the
violation of some of its laws.
It is with these standards and framework that the
Court examines whether the enactments of the
Kindergarten Education Act, the K to 12 Law and their
implementing rules and regulations, were valid
exercises of the State's police power to regulate
education. In this regard, and to digress, only self-
executing provisions of the Constitution embody
judicially enforceable rights and therefore give rise to
causes of action in court.
5. Apelanio vs. Arcanys, Inc. GR No.
227098, November 14, 2018
Facts: On April 10, 2012, petitioner Apelanio was
hired by respondents Arcanys and CEO Alan
Debonneville as a Usability/Web Design Expert.
He was placed on a probationary status for a
period of 6 months. During the said period,
respondent corporation evaluated his
performance in terms of reasonable standards
that he must meet at the end of such period.
Petitioner was aware that he was undergoing
evaluation.
5|Page

Upon the 6th month evaluation, respondents served
petitioner a letter informing him that they were not
converting his status into a regular employee since his
performance fell short of the stringent requirements
and standards set by the corporation. Petitioner was
given his final pay and he signed a waiver, release,
and quitclaim in favour of respondents.
Petitioner averred that when his probationary contract
was terminated, he was immediately offered a
retainership agreement which involved a similar scope
of work and responsibilities. He was told that he did
not meet the reasonable standards of satisfactory
performance, but was nevertheless offered said
retainership agreement, without security of tenure,
lesser pay, and without any labor standards benefit.
Petitioner was confused with the arrangement, but
agreed since he had a family to support. He believed
he was still undergoing evaluation.
After the lapse of the first retainership agreement,
petitioner was offered another retainership
agreement. He refused to sign this second
agreement. He alleged that respondents found him
qualified for the position but opted to hire his services
on a per project basis to prevent regularization.
On the other hand, respondent stated that they hired
petitioner as a web designer and was made aware
that he would be placed on a probationary status, and
that his failure to meet the standards would terminate
his employment contract. As a matter of fact, several
days before the end of his contract, respondents
required petitioner to sign the termination notice.
Petitioner signed such notice, and respondents
released and paid petitioner his final pay.
Respondents further alleged that at this time, there
was a hacking incident and petitioner approached
their CEO dangling the information behind the
hacking in exchange for a retainership contract. It
was only when respondents stopped transacting with
petitioner when he sued them before the Labor
Arbiter for unfair labor practice, illegal dismissal, and
damages.
The Labor Arbiter dismissed petitioner’s complaint for
illegal dismissal, holding that the circumstances
unequivocally show neither bad faith nor deceit on
the part of respondents. The dismissal was a valid
exercise of management prerogative. In addition,
petitioner was aware that he failed to qualify when he
Labor Law Review Digests | Lourleth Lluz
knowingly signed a quitclaim and waiver after his final
pay.
Upon appeal to the NLRC, the decision of the LA was
reversed. The NLRC rejected respondents’ argument
that the retainership agreement did not contain
petitioner’s signature. The NLRC agreed that it is
normal for an employee not to sign his own copy of
the agreement. Furthermore, they were not
convinced that petitioner had failed to meet
respondents’ reasonable standards of satisfactory
performance, and that they only wanted to prevent
petitioner from acquiring a regular status.
Upon appeal to the CA, the decision of the NLRC was
reversed. The CA ruled that petitioner was properly
terminated at the end of the probationary period
since he failed to meet the standards which were
made known to him at the commencement of his
engagement.
Issue: WON the CA is correct in reversing the NLRC
decision and holding the dismissal to be valid
Ruling: YES, the CA is correct.
In this case, it cannot be denied that in the
retainership agreements provided by petitioner, his
signature or adherence is notably absent. As a result,
the retainership agreements remain ineffectual and
cannot be used as evidence against respondents.
The CA correctly pointed out that the fact that the
first agreement, which supposedly re-hired the
petitioner, did not bear his signature. This stirs doubt
on whether or not the agreement was actually
finalized.
Furthermore, a review of the retainership agreements
indicates that petitioner was merely engaged as a
consultant, in relation to the hacking incidents
endured by respondents. Petitioner merely alleged
that he was hired as an employee under said
retainership agreement, but has yet to provide
evidence to support such claim. It is a basic rule in
evidence that each party must prove his affirmative
allegations. Therefore, Article 281 of the Labor Code
finds no application in this case, absent any evidence
to prove that petitioner worked beyond his
probationary employment.
6|Page

6. Dr. Loreche-Amit vs. Cagayan de Oro
Medical Center, GR No. 216635, June 3,
2019
Facts: Dr. Mary Jean P. Loreche-Amit (petitioner)
started working with Cagayan De Oro Medical Center,
Inc. (CDMC) in 1996, when she was engaged by the
late Dr. Jose N. Gaerlan as Associate Pathologist in
the Department of Laboratories. Upon the demise of
Dr. Gaerlan, CDMC's Board of Directors formally
appointed petitioner as Chief Pathologist for five years
or until 2011.
In her complaint for illegal dismissal, petitioner
averred that Dr. Hernando Emano asked her to help
his daughter to qualify as a pathologist considering
that petitioner is one of the six members of the Board
of Governors accredited by the PRC. Upon petitioner’s
refusal, Dr. Emano allegedly started scheming to oust
her from her job. 
Soon thereafter, Dr. Francisco Oh issued an Inter-
Office Memorandum addressed to all laboratory
personnel stating that working in and out of the
building without proper permission is to be treated as
absence without official leave and payment for
printing of duplicate copies not endorsed to the
hospital is a form of stealing. As petitioner slammed
the Memorandum against the wall and tagged the
name of Dr. Oh as an irrational man, she received an
Inter-Office Memorandum from Dr. Oh for alleged
conduct unbecoming/insubordination, and to explain
why her appointment should not be revoked due to
such behavior. Finally, a Memorandum by CDMC’s
board recalling her appointment was issued.
Petitioner then filed a complaint for illegal dismissal.  this test, the economic realities prevailing within the
The hospital contended that petitioner was not hired
by them as she merely assisted Dr. Gaerlan in
operating the hospital's laboratory and that petitioner
worked at the same time as pathologist in Capitol
College Hospital and J.R. Borja Memorial Hospital as
she was not prohibited to do so.
LA and NLRC dismissed the petition for lack of
jurisdiction, contending that being a corporate officer,
p9
W/N there is employee-employer relationship
between the hospital and Doctor Loreche-Amit? -NO
Ruling:
Labor Law Review Digests | Lourleth Lluz
No. She is not a corporate officer because her
position as Pathologist is not among those included in
the by-laws of CDMC. An appointment through the
issuance of a resolution by the Board of Directors
does not make the appointee a corporate officer. To
be considered as a corporate officer, the designation
must be either provided by the Corporation Code or
the by-laws of the corporation.
No. A finding that petitioner is not a corporate officer
of the hospital is not an automatic declaration that
petitioner is an employee of CDMC. The four-fold test
must be applied to determine the existence of an
employer-employee relationship. 
In this case, it is apparent that CDMC, through the
Board of Directors, exercised the power to select and
supervise petitioner as the Pathologist. However,
CDMC does not exercise the power of control over
petitioner.
The power to control the work of the employee is
considered the most significant determinant of the
existence of an employer-employee relationship. This
test is premised on whether the person for whom the
services are performed reserves the right to control
both the end achieved and the manner and means
used to achieve that end. 
Petitioner was working for two other hospitals aside
from CDMC, not to mention those other hospitals
which she caters to when her services are needed.
Such fact evinces that petitioner controls her working
hours. On this note, relevant is the economic reality
test which this Court has adopted in determining the
existence of employer-employee relationship. Under
activity or between the parties are examined, taking
into consideration the totality of circumstances
surrounding the true nature of the relationship
between the parties, to wit:
x x x. In our jurisdiction, the benchmark of economic
reality in analyzing possible employment relationships
for purposes of applying the Labor Code ought to be
the economic dependence of the worker on his
employer.
Thus, the fact that petitioner continued to work for
other hospitals strengthens the proposition that
petitioner was not wholly dependent on CDMC.
7|Page

Petitioner likewise admitted that she receives in full
her 4% share in the Clinical Section of the hospital
regardless of the number of hours she worked
therein. Alternatively put, petitioner manages her
method and hours of work.
The rule is that where a person who works for
another performs his job more or less at his own
pleasure, in the manner he sees fit, not subject to
definite hours or conditions of work, and is
compensated according to the result of his efforts and
not the amount thereof, no employer-employee
relationship exists.  LA ruled that petitioner was illegally dismissed.
Moreover, the Memorandum, pertaining to petitioner's
behavior, issued by Dr. Oh does not sufficiently
establish the element of control. The Memorandum
merely states that intolerable behavior in the hospital
cannot be countenanced. It is administrative in
character which does not, in any way, pertains to the
manner and method of petitioner's work. 
7. Fernandez vs. Kalookan
SlaughterHouse Inc., GR No. 225075,
June 19, 2019
According to petitioner, he was hired in 1994 as a
butcher by Kalookan Slaughterhouse, Inc. (Kalookan
Slaughterhouse), a single proprietorship owned by
respondent Ernesto Cunanan (Cunanan). He claimed
that he worked from Monday to Sunday, from 6:30
P.M. to 7:30 A.M., with a daily wage of P700.00,
which was later reduced to PS00.00. He further
claimed that he met an accident while driving
Kalookan Slaughterhouse's truck in December 2013
and that deductions were made from his wages.He
questioned these deductions in July 2014, and
thereafter he was treated unreasonably. Petitioner
further claimed that on July 21, 2014, he suffered
from a headache and did not report for work. The
next day, however, he was shocked when he only
received P200.00 due to his previous undertime and
was informed that he could no longer report for work
due to his old age. Kalookan Slaughterhouse, on the
other hand, asserted that petitioner is an independent
butcher working under its Operation Supervisor, Cirilo
Tablit (Tablit). He received payment based on the
number of hogs he butchered and was only required
to be in the slaughterhouse when ~customers
brought hogs to be slaughtered. Kalookan
Labor Law Review Digests | Lourleth Lluz
Slaughterhouse alleged that it imposed policies on
the entry to the premises, which applied to
employees, dealers, independent butchers, hog and
meat dealers and trainees. According to Kalookan
Slaughterhouse, petitioner violated the policies and he
misconstrued the disallowance to enter the
slaughterhouse as an act of dismissal.
On August 5, 2014, petitioner filed the complaint for
illegal dismissal before the LA. After the exchange of
pleadings, the
Issues:
The issues raised in the Petition are as follows:
WHETHER THE [CA] COMMITTED A REVERSIBLE
ERROR IN AFFIRMING THE NLRC DECISION AND
RESOLUTION WHICH FAILED TO RECOGNIZE THAT
THERE WAS AN EMPLOYER-EMPLOYEE
RELATIONSHIP BETWEEN THE PETITIONER AND THE
RESPONDENTS.
WHETHER THE [CA] COMMITTED A REVERSIBLE
ERROR IN AFFIRMING THE NLRC DECISION AND
RESOLUTION WHICH FAILED TO RECOGNIZE THAT
THERE WAS AN ILLEGAL DISMISSAL IN THE
INSTANT CASE.
Issue I:
It is settled that "[t]o determine the existence of an
employer-employee relationship, four elements
generally need to be considered, namely: (1) the
selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and
(4) the power to control the employee's conduct.
These elements or indicators comprise the so-called
'four-fold' test of employment relationship."
From the foregoing, it is undisputed that petitioner
rendered butchering services at Kalookan
Slaughterhouse. The LA found that petitioner was
engaged by Kalookan Slaughterhouse itself since
petitioner submitted log sheets and gate passes. The
NLRC and the CA, however, ruled that petitioner was
only engaged by Tablit, Kalookan Slaughterhouse's
Operation Supervisor, and he was Tablit's own
employee. This was supported by Tablit's Sinumpaang
Salaysay.
8|Page

The SC finds that the NLRC and the CA committed a
grave error and agrees with the LA.
Similar to the facts of this case, the Court in Masonic
Contractor, Inc. v. Madjos (Masonic Contractor) ruled
that the fact that the company provided identification
cards and uniforms and the vague affidavit of the
purported employer were sufficient evidence to prove
the existence of employer-employee relationship.
Here, the totality of petitioner's evidence and the
admissions of Kalookan Slaughterhouse convinces the
Court that petitioner was indeed an employee of
Kalookan Slaughterhouse. Petitioner was able to
present an I.D., gate passes, log sheets, and a trip
ticket. Kalookan Slaughterhouse even admitted
through De Guzman that uniforms were given to all
personnel, including petitioner.
Issue II:
Petitioner claims that on July 22, 2014 he was
callously informed that he could no longer report for
work because of his old age. Kalookan
Slaughterhouse, however, claims that petitioner was
not dismissed but was only barred from entering as
he failed to comply with the "No I.D., No Entry" Policy
and the "No Uniform, No Entry" Policy.
Indeed, Kalookan Slaughterhouse failed to specifically
deny that on July 22, 2014, petitioner was informed
that he could no longer report for work. De Guzman
only alleged that he merely barred petitioner from
entering the slaughterhouse in several instances
because of his failure to wear his I.D. and uniform but
he failed to state that this was done on July 22, 2014.
De Guzman's silence on this matter is deemed as an
admission by Kalookan Slaughterhouse that petitioner
was indeed dismissed on July 22, 2014. As the Court
held in Masonic Contractors:
xx x
By their silence, petitioners are deemed to have
admitted the same. Section of Rule of the Rules of
Court, which supplements the NLRC Rules, provides
that an allegation not specifically denied is deemed
admitted.
xxx
Labor Law Review Digests | Lourleth Lluz
Having been illegally dismissed, the LA was correct in
awarding backwages and separation pay. The LA's
award of service incentive leave pay, night shift
differential pay, and 13th month pay is also proper
as Kalookan Slaughterhouse failed to prove that it
had paid petitioner such benefits under the law. Such
award should be limited to three years prior to the
filing of the complaint in August 5, 2014 in
accordance with Article 306 of the Labor Code.
3. RIGHT TO HIRE
4. WAGES & WAGE RATIONALIZATION ACT
5. VIOLATION OF WAGE ORDERS
6. WAGE ENFORCEMENT AND RECOVERY
7. WAGE PROTECTION PROVISION &
PROHIBITION REGARDING WAGES
8. PAYMENT OF WAGES
9. CONDITIONS OF EMPLOYMENT
10. MINIMUM LABOR STANDARD BENEFITS
1. Soriano et al., vs. Secretary of Finance,
G.R. Nos. 184450, 184508, 184538,
185234, January 24, 2017, En Banc
Doctrine: Tax case; An administrative agency may
not enlarge, alter or restrict a provision of law. It
cannot add to the requirements provided by law
Facts: Petitioners question several provisions of
Revenue Regulation No. 10-2008 implementing
Republic Act No. (R.A.) 9504. They allege that the
RR is an unauthorized departure from RA 9504 - The
law grants, among others, income tax exemption for
minimum wage earners (MWEs), as well as an
increase in personal and additional exemptions for
individual taxpayers.
Two of the assailed provisions are: Sections 1 and 3
of the RR which disqualify MWEs (minimum wage
earners) who earn purely compensation income from
the privilege of the MWE exemption in case they
receive bonuses and other compensation-related
benefits (13th month pay, hazard pay, SIL and the
like) exceeding the statutory ceiling of P30,000 found
in the NIRC.
Issue: Whether or not the sections of the RR are
valid?
Held: No, they are not. An administrative agency
may not enlarge, alter or restrict a provision of law. It
9|Page

cannot add to the requirements provided by law. The
court here clarified that benefits (NOT STATUTORY
BENEFITS) not beyond P30,000 were exempted;
wages not beyond the SMW (Statutory Minimum
Wage) and de minimis benefits are exempted as well.
Conversely, benefits in excess of P30,000 are subject
to tax and, wages in excess of the SMW are still
subject to tax.
What the law exempts is the MWE's minimum wage
and other forms of statutory compensation like
holiday pay, overtime pay, night shift differential pay,
CBA benefits (productivity incentives) and hazard pay.
These are not bonuses or other benefits; these are
wages. (Read definition of wages) Regarding other
forms of income like commissions, if it exceeds the
threshold then the amount that exceeds such shall be
taxed.
Thus, the RR exceeds that provided for by the law as
benefits that exceed P30,00 cannot operate to
disenfranchise the MWE from enjoying the exemption
explicitly granted by R.A. 9504.
2. Dela Salle Araneta University vs. Bernardo,
GR No. 190809, February 13, 2017
Doctrine: Part-time employees are entitled to
retirement benefits.
Facts: Bernardo taught as a part-time professional
lecturer at DLS-AU since 1974. DLS-AU informed him
that he could not teach anymore due to the
retirement age limit. Bernardo was 75 years old at
the time. DOLE informed him that he was entitled to
receive benefits under RA 7641, also known as the
"New Retirement Law.” When the school refused to
pay, Bernardo filed a complaint for non-payment of
retirement benefits and damages. DLS- AU argued
that Bernardo was not covered by the law since he
was a part-time employee. The school further
averred that Bernardo’s employment bond was
severed when he reached the mandatory retirement
age of 65. 10 years have passed since then. His
claim for retirement benefits should have prescribed,
because under Article 291 of the Labor Code, all
money claims shall be filed within three years from
the time the cause of action accrues.
NLRC: The Labor Arbiter dismissed
Bernardo’s complaint on the ground of
Labor Law Review Digests | Lourleth Lluz
prescription. This was reversed by the NLRC.
It held that the school is estopped from
claiming prescription because it permitted
Bernardo to work beyond the mandatory
retirement age. Furthermore, part-time
employees are covered under RA 7641.
CA: The CA affirmed the NLRC’s judgment.
Issues: Whether or not part-time employees receive
retirement benefits despite a lack of CBA?
Ruling: YES. Based on RA 7641, its Implementing
Rules, and the October 24, 1996 Labor Advisory, the
only employees exempted from retirement pay are:
(1) those of the National Government and its
political subdivisions, including government-owned
and/or controlled corporations, if they are covered
by the Civil Service Law and its regulations ; and (2)
those of retail, service and agricultural
establishments or operations regularly employing not
more than 10 employees. Since part-time employees
are not among those specifically exempted, Bernardo
is entitled to receive retirement benefits.
3. Abuda et al., vs. L. Natividad Poultry
Farms, GR No. 200712, July 4, 2018
Doctrine: “A pakyaw or task basis arrangement
defines the manner of payment of wages and not the
relationship between the parties.”
“In illegal dismissal cases, it is incumbent upon the
employees to first establish the fact of their dismissal
before the burden is shifted to the employer to prove
that the dismissal was legal…It is settled that in the
absence of proof of dismissal, the remedy is
reinstatement without backwages.”
Facts: Petitioners are a group of employees who
allege that they were illegally dismissed by L.
Natividad Poultry Farms. The workers were
poultry/feed mixers and maintenance workers who
occasionally performed work on the livestock and
poultry houses in the farm. Petitioners in this case
question the decision of the Court of Appeals insofar
at it upheld the NLRC’s finding that the workers were
hired as maintenance personnel by San Mateo and
Del Remedios (who represented the employer as
supervisors) on pakyaw basis to perform specific
services for L. Natividad, they are not regular
10 | P a g e

employees.
The Court of Appeals also sustained the ruling of the
NLRC that San Mateo and Del Remedios were labor-
only contractors, and as such, they must be
considered as L. Natividad's agents. With respect to
the livestock and poultry feed mixers, they were
declared as regular as they performed tasks which
were necessary and desirable to L. Natividad's
business. Respondent alleged that they engaged San
Mateo and Rodolfo for their services as contractors.
Issues: (1) Whether or not the employees who
performed maintenance work on the farm are
considered as regular workers? (2) Was there illegal
dismissal in this case? (3) Whether or not the
employer is engaged in labor-only contracting?
Ruling: (1) Yes, a pakyaw or task basis arrangement
defines the manner of payment of wages and not the
relationship between the parties. Payment through
pakyaw or task basis is provided for in Articles 97 and
101 of the Labor Code.
(2) In relation to the allegation of illegal dismissal,
petitioners failed to prove the fact of dismissal. The
burden is on the employee to prove the fact of
dismissal, otherwise they would not be entitled to
backwages or damages. It is not enough that they
were dismissed without due process. Additional acts
of the employers must also be pleaded and proved to
show that their dismissal was tainted with bad faith or
fraud, was oppressive to labor, or was done in a
manner contrary to morals, good customs, or public
policy. Petitioners failed to allege any acts by
respondents which would justify the award of moral
or exemplary damages.
(3) L. Natividad is petitioners' real employer, in light
of the labor-only contracting arrangement between
respondents, San Mateo, and petitioner Del
Remedios. The alleged contractor did NOT have any
substantial investment in the form of tools, equipment
and even work premises, nor were the services
performed by their workers, i.e. carpentry and
masonry works, directly related to and usually
necessary and desirable in the main business of
livestock and poultry production showed that they
were merely engaged in "labor-only" contracting.
Furthermore, applying the four-fold test, it can be
proven that indeed the respondent exercised control
Labor Law Review Digests | Lourleth Lluz
over the employees, which indicates that there is
labor only contracting.
“Most importantly though, they controlled petitioners
and their work output by maintaining an attendance
sheet and by giving them specific tasks and
assignments”
4. Societe Internationale De
Telecommunications vs. Hulinganga, GR
No. 215504, August 20, 2018
 Doctrine: “To be considered a company practice or
policy, the act of extending benefits of the CBA to
managerial employees must have been practiced for
a long period of time and must be shown to be
consistent and deliberate.
Factual findings of labor officials who are deemed to
have acquired expertise in matters within their
respective jurisdictions are generally accorded not
only respect, but even finality, and are binding on the
courts.”
Facts: Huliganga is a Country Operating Officer for
petitioner Societe Internationale De
Telecommunications (SITA), the highest accountable
officer of SITA in the Philippines. He retired on
December 31, 2008 and received his retirement
benefits computed at 1.5 months of basic pay for
each year of service, or the total amount of
P7,495,102.84 in retirement and other benefits.
Huliganga filed a case for unfair labor practices,
underpayment of wages, moral and exemplary
damages, attorney's fees, underpayment of sick and
vacation leave and retirement benefits. He alleges
that the coefficient/payment factor that applies to him
should be 2 months and not 1.5 months for every
year of service in accordance with the 2005-2010
Collective Bargaining Agreement and that it has
become a well-established company practice of SITA
to adopt, update and apply the new and/or additional
economic benefits arising from the CBA as
amendments to the Employee Regulations manual.
Issue: Whether or not respondent is entitled to
retirement benefits using the co-efficient of 2 months
as stated in the CBA?
Ruling: The court reaffirmed the findings of the LA
and NLRC which the CA disagreed with - Huliganga is
11 | P a g e

undeniably a managerial employee. As such, he is not
entitled to the retirement benefits exclusively granted
to rank and file employees by the CBA. Article 245 of
the Labor Code provides that managerial employees
are not eligible to join, assist or form any labor
organization. Thus, he is not entitled to the use of the
coefficient of 2 months in computing his retirement
benefits.
The exception is when managerial employees are
given such benefits through a stipulation in the CBA
or that it has become company practice.
Huliganga, failed to substantially establish that there
is an established company practice of extending CBA
concessions to managerial employees. Again, to be
considered a company practice or policy, the act of
extending benefits of the CBA to managerial
employees must have been practiced for a long
period of time and must be shown to be consistent
and deliberate.
5. CCBPI vs. Iloilo Coca-Cola Plant
Employees Union, GR No. 195297,
December 5, 2018
Facts: The conflict arose due to the CCBPI's policy
involving Saturday work. In the said policy, several of
CCBPI's employees were required to report for work
on certain Saturdays to perform a host of activities,
usually involving maintenance of the facilities. This
prerogative was supposedly consistent with the
pertinent provisions in the CBA which stated that
management had the sole option to schedule, work
on Saturdays on the basis of operational necessity.
CCBPI later on informed the respondent that, starting
July 2, 2005, Saturday work would no longer be
scheduled because of operational necessity
specifically, for the purpose of saving on operating
expenses and compensating for the anticipated
decreased revenues.
This proposal was opposed and rejected by the
officers and members of the respondent. Despite this
opposition, CCBPI pushed through with the non-
scheduling of work.
As a result, the respondent submitted to CCBPI its
written grievance, stating that the act is a violation of
Labor Law Review Digests | Lourleth Lluz
the CBA provisions, specifically Section 1, Article 10
thereof. Respondent thus brought its grievances to
the office of the NCMB. The parties, then, pursuant to
the provisions of their CBA, submitted the case for
voluntary arbitration.
Panel of Arbitrators - ruled in favor of CCBPI
CA - reversed the decision of the Panel of Arbitrators
CCBPI's Motion for Reconsideration was denied so
CCBPI raised the case to SC.
Issues:
1) Whether or not the CA erred in ruling that under
the CBA between the parties, scheduling Saturday
work for CCBPI's employees is mandatory on the part
of the Company.
2.) Whether scheduling Saturday work has ripened
into a company practice, the removal of which
constituted a diminution of benefits.
Ruling:
1) It is axiomatic that the CBA comprises the law
between the contracting parties, and compliance
therewith is mandated by the express policy of the
law.
Consequently, in this case, recourse to the CBA
between CCBPI and the respondent as regards the
hours of work is essential.
The Court finds that a more logical and harmonious
interpretation of the CBA provisions wherein Saturday
work is optional and not mandatory keeps more with
the agreement between the parties.
To note, the CBA under Article 11, Section 1(c),
clearly provides that CCBPI has the option to schedule
work on Saturdays based on operational necessity.
There is no ambiguity to the provision, and no other
interpretation of the word "work" other than the work
itself and not the working hours.
Also, as correctly pointed out by CCBPI, if Saturday
work is indeed mandatory under the CBA, the phrase
"required to work on a Saturday" in Article 10, Section
1 would be superfluous.
As such, the provisions' tenor and plain meaning give
company management the right to compel its
12 | P a g e

employees to suffer work on Saturdays. This
necessarily includes the prerogative not to schedule
work.
This reading of the CBA is made even more apparent
by the fact that workers who are required to work on
Saturdays are paid a premium for such work.
If Saturday was part of the regular work week and
not dependent on management's decision to schedule
work, there would be no need to give additional
compensation to employees who report to work on
that day.
2) The Court does not agree with the argument of
CCBPI that work on a Saturday is akin to overtime
work as the term overtime work has an established
and technical meaning under our labor laws.
Despite the mistaken notion of CCBPI, the Court still
disagrees with the CA ruling that the previous practice
of instituting Saturday work by CCBPI had ripened
into a company practice covered by Article 100 of the
Labor Code.
It is not Saturday work per se which constitutes a
benefit to the company's employees. Rather, the
benefit involved in this case is the premium which the
company pays its employees above and beyond the
minimum requirements set by law.
The term "benefits" mentioned in the non-diminution
rule refers to monetary benefits or privileges given to
the employee with monetary equivalents.
In order for there to be proscribed diminution of
benefits that prejudiced the affected employees,
CCBPI should have unilaterally withdrawn the 50%
premium pay without abolishing Saturday work.
These are not the facts of the case at bar. CCBPI
withdrew the Saturday work itself, pursuant, as
already held, to its management prerogative.
Also, even assuming arguendo that the Saturday work
involved in this case falls within the definition of a
"benefit" protected by law, the fact that it was made
subject to a condition (i.e., the existence of
operational necessity) negates the application of
Article 100 pursuant to the established doctrine that
when the grant of a benefit is made subject to a
condition and such condition prevails, the rule on
non-diminution finds no application.
Labor Law Review Digests | Lourleth Lluz
Lastly, the Court agrees with the assertion of CCBPI
that since the affected employees are daily-paid
employees, they should be given their wages and
corresponding premiums for Saturday work only if
they are permitted to suffer work invoking the time-
honored rule of "a fair day's work for a fair day's
pay".
6. Coca-Cola Bottlers Phils Inc., vs. CCBPI
Sta. Rosa Plant Employees Union, GR No.
197494, March 25, 2019
Facts: The conflict arose due to the CCBPI's policy
involving Saturday work. In the said policy, several of
CCBPI's employees were required to report for work
on certain Saturdays to perform a host of activities,
usually involving maintenance of the facilities. This
prerogative was supposedly consistent with the
pertinent provisions in the CBA which stated that
management had the sole option to schedule, work
on Saturdays on the basis of operational necessity.
CCBPI later on informed the respondent that, starting
July 2, 2005, Saturday work would no longer be
scheduled because of operational necessity
specifically, for the purpose of saving on operating
expenses and compensating for the anticipated
decreased revenues.
This proposal was opposed and rejected by the
officers and members of the respondent. Despite this
opposition, CCBPI pushed through with the non-
scheduling of work.
As a result, the respondent submitted to CCBPI its
written grievance, stating that the act is a violation of
the CBA provisions, specifically Section 1, Article 10
thereof. Respondent thus brought its grievances to
the office of the NCMB. The parties, then, pursuant to
the provisions of their CBA, submitted the case for
voluntary arbitration.
Panel of Arbitrators - ruled in favor of CCBPI
CA - reversed the decision of the Panel of Arbitrators
CCBPI's Motion for Reconsideration was denied so
CCBPI raised the case to SC.
Issues:
13 | P a g e

1) Whether or not the CA erred in ruling that under
the CBA between the parties, scheduling Saturday
work for CCBPI's employees is mandatory on the part
of the Company.
2.) Whether scheduling Saturday work has ripened
into a company practice, the removal of which
constituted a diminution of benefits.
Ruling:
1) It is axiomatic that the CBA comprises the law
between the contracting parties, and compliance
therewith is mandated by the express policy of the
law.
Consequently, in this case, recourse to the CBA
between CCBPI and the respondent as regards the
hours of work is essential.
The Court finds that a more logical and harmonious
interpretation of the CBA provisions wherein Saturday
work is optional and not mandatory keeps more with
the agreement between the parties.
To note, the CBA under Article 11, Section 1(c),
clearly provides that CCBPI has the option to schedule
work on Saturdays based on operational necessity.
There is no ambiguity to the provision, and no other
interpretation of the word "work" other than the work
itself and not the working hours.
Also, as correctly pointed out by CCBPI, if Saturday
work is indeed mandatory under the CBA, the phrase
"required to work on a Saturday" in Article 10, Section
1 would be superfluous.
As such, the provisions' tenor and plain meaning give
company management the right to compel its
employees to suffer work on Saturdays. This
necessarily includes the prerogative not to schedule
work.
This reading of the CBA is made even more apparent
by the fact that workers who are required to work on
Saturdays are paid a premium for such work.
If Saturday was part of the regular work week and
not dependent on management's decision to schedule
work, there would be no need to give additional
compensation to employees who report to work on
that day.
Labor Law Review Digests | Lourleth Lluz
2) The Court does not agree with the argument of
CCBPI that work on a Saturday is akin to overtime
work as the term overtime work has an established
and technical meaning under our labor laws.
Despite the mistaken notion of CCBPI, the Court still
disagrees with the CA ruling that the previous practice
of instituting Saturday work by CCBPI had ripened
into a company practice covered by Article 100 of the
Labor Code.
It is not Saturday work per se which constitutes a
benefit to the company's employees. Rather, the
benefit involved in this case is the premium which the
company pays its employees above and beyond the
minimum requirements set by law.
The term "benefits" mentioned in the non-diminution
rule refers to monetary benefits or privileges given to
the employee with monetary equivalents.
In order for there to be proscribed diminution of
benefits that prejudiced the affected employees,
CCBPI should have unilaterally withdrawn the 50%
premium pay without abolishing Saturday work.
These are not the facts of the case at bar. CCBPI
withdrew the Saturday work itself, pursuant, as
already held, to its management prerogative.
Also, even assuming arguendo that the Saturday work
involved in this case falls within the definition of a
"benefit" protected by law, the fact that it was made
subject to a condition (i.e., the existence of
operational necessity) negates the application of
Article 100 pursuant to the established doctrine that
when the grant of a benefit is made subject to a
condition and such condition prevails, the rule on
non-diminution finds no application.
Lastly, the Court agrees with the assertion of CCBPI
that since the affected employees are daily-paid
employees, they should be given their wages and
corresponding premiums for Saturday work only if
they are permitted to suffer work invoking the time-
honored rule of "a fair day's work for a fair day's
pay".
7. Pablico et al., vs. Cerno/Master Pab
Resto Bar, GR No. 227200, June 10, 2019
14 | P a g e

Facts: Cerro worked as a bartender Master's Pab
Resto Bar (MPRB). He suggested to Pablico to take
over MPRB from its original owner, which Pablico did.
On the same day of the takeover, Pablico promoted
Cerro as Officer-in-Charge with a daily wage of
Php200. He also gave Cerro the authority to hire
additional employees. Cerro hired the following with
their respective wages:
Caliguiran - 200.00
Panganiban – 200
Napitan – 200
Lim – 200
Baguno – 133.33
Pauig – 157.66
Caronan – 166.66
In 2011, because of infractions that led to losses,
Pablico transferred Cerro to another establishment.
Cerro appropriated the funds of the MPRB without the
knowledge and consent of its owner. In October
2011, those hired by Cerro received text messages
which they interpreted to mean that they are being
terminated.
The respondents filed a complaint for illegal dismissal,
underpayment of salaries and benefits, damages and
attorney's fees before the National Labor Relations
Commission.
Meanwhile, Pablico insists that he is exempt from the
minimum wage law as he is engaged in the service
business that employs less than ten employees. He
admits that he has not been granted the exemption
from DOLE, but this is just because he was not
knowledgeable that such exemption is needed.
The Labor Arbiter dismissed the complaint for lack of
merit. Insofar as Cerro, the LA held that his
suspension is a valid exercise by the employer of
disciplinary authority pursuant to the former's
infractions. Anent the other respondents on the other
hand, the LA held that they failed to discharge the
burden of proving that they have been terminated.
Finally, on account of the respondents' money claims,
the LA found the payrolls presented by the petitioner
as sufficient proof of payment.
Labor Law Review Digests | Lourleth Lluz
Upon appeal to the NLRC, the petition was partially
granted. The NLRC agreed with all the Labor Arbiter’s
decision except that regarding complainants'
monetary claims, the Commission found that they are
entitled to the following, namely: (1) wage
differentials for 3 years counted backwards from
October 2011; and (2) 13th month pay for a period of
3 years counted backwards from October 2011. And
because the Commission found that the respondents
were not actually dismissed from work, they were
ordered to report back.
Considering, however, the apparent strained relations
between the parties brought about by the filing of this
complaint, respondents are directed to grant
separation pay, in lieu of reinstatement, to each of
complainants, reckoned from date of his/her
employment up to the finality of the NLRC decision.
Issue: Was MPRB exempted from the minimum wage
law?
Ruling: No.
It is a basic principle in procedure that the burden is
upon the person who asserts the truth of the matter
that he has alleged. The Court emphasized in C.
Planas Commercial v. NLRC (Second Division), that in
order to be exempted under Republic Act (R.A.) No.
6727 or the Wage Rationalization Act, two elements
must concur:
It must be shown that the establishment is regularly
employing not more than ten workers.
The establishment had applied for and was granted
exemption by the appropriate Regional Board in
accordance with the applicable rules and regulations
issued by the Commission.
The petitioner cannot shield himself from complying
with the law by the lone fact that he is just a layman
and cannot be expected to know of the law's
requirements.
Although inconsequential, with the petitioner's liability
already established, it is still useful to state that the
first element is also wanting in the case at bar. It was
found that Pablico was actually employing more than
10 employees in MPRB.
15 | P a g e

Department of Labor and Employment vs Kentex
Manufacturing Corporation and Ong King Guan, G.R.
No. 233781
Facts: On May 13, 2015, a fire broke out in the
factory owned by Kentex. The fire claimed 72 lives
and injured a number of workers. DOLE-NCR
assessed Kentex’s compliance with the occupational
health and safety standards.
It was discovered that Kentex had contracted with
CJC for the deployment of workers. The DOLE-RO
discovered that CJC, which deployed workers to
Kentex, was an unregistered private recruitment and
placement agency.
Moreover, it noted that CJC was non-compliant with
the occupational health and safety standards as well
as with labor standards, such as underpayment of
wages and nonpayment of statutory benefits. It
declared CJC as a labor-only contractor with Kentex
as its principal.
Meanwhile, during the mandatory conference set by
the DOLE-NCR, CJC's representatives admitted that
there was no service contract between CJC and
Kentex; that CJC had deployed 99 workers at the
Kentex factory on the day of the unfortunate incident;
that there were no employment contracts between
CJC and the workers; that a CJC representative was
sent once a week to Kentex only to check on the
workers' daily time records; that Kentex remitted to
CJC the wage of Php230.00/day for each of the
deployed workers from which amount CJC deducted
administrative costs and other statutory contributions,
leaving each worker a mere wage of 202 pesos.
Kentex refuted such claims.
The DOLE ruled against Kentex and made Ong
solidarily liable being a corporate officer of Kentex.
The CA ruled in favor of Kentex and made Ong not
liable despite the contention of the petitioner that the
respondent filed the appeal beyond the reglementary
period.
Issue: Did the CA err in not making ONG solidarily
liable?
Ruling: Yes.
Firstly, Ong failed to file an appeal on time. Thus the
judgment is already final and executory.
Labor Law Review Digests | Lourleth Lluz
Here, instead of filing an appeal with the DOLE
Secretary, Ong moved for a reconsideration of the
subject Order; needless to say, this did not halt or
stop the running of the period to elevate the matter
to the DOLE Secretary.
The only exceptions to the rule on the immutability of
final judgments are (1) the correction of clerical
errors, (2) the so-called nunc pro tunc entries which
cause no prejudice to any party, and (3) void
judgments.
In the absence of any showing that the CA's
modification or alteration of the subject Order falls
within the exceptions to the rule on the immutability
of final judgments, the DOLE-NCR's June 26, 2015
Order must be upheld and respected.
Neither was there merit in respondents' claim that
they had been denied or deprived of due process. The
facts clearly disclose that they had substantially
participated in the proceedings before the DOLE-NCR
from the mandatory conference up to the filing of a
position paper where their side was sufficiently heard.
8. Department of Labor & Employement vs.
Kentex Manufacturing Corp., GR No.
253781, July 8, 2019
Facts: On May 13, 2015, a fire broke out in the
factory owned by Kentex. The fire claimed 72 lives
and injured a number of workers. DOLE-NCR
assessed Kentex’s compliance with the occupational
health and safety standards.
It was discovered that Kentex had contracted with
CJC for the deployment of workers. The DOLE-RO
discovered that CJC, which deployed workers to
Kentex, was an unregistered private recruitment and
placement agency.
Moreover, it noted that CJC was non-compliant with
the occupational health and safety standards as well
as with labor standards, such as underpayment of
wages and nonpayment of statutory benefits. It
declared CJC as a labor-only contractor with Kentex
as its principal.
Meanwhile, during the mandatory conference set by
the DOLE-NCR, CJC's representatives admitted that
there was no service contract between CJC and
Kentex; that CJC had deployed 99 workers at the
16 | P a g e

Kentex factory on the day of the unfortunate
incident; that there were no employment contracts
between CJC and the workers; that a CJC
representative was sent once a week to Kentex only
to check on the workers' daily time records; that
Kentex remitted to CJC the wage of Php230.00/day
for each of the deployed workers from which amount
CJC deducted administrative costs and other
statutory contributions, leaving each worker a mere
wage of 202 pesos.
Kentex refuted such claims.
The DOLE ruled against Kentex and made Ong
solidarily liable being a corporate officer of Kentex.
The CA ruled in favor of Kentex and made Ong not
liable despite the contention of the petitioner that
the respondent filed the appeal beyond the
reglementary period.
Issue: Did the CA err in not making ONG solidarily
liable?
Ruling: Yes.
Firstly, Ong failed to file an appeal on time. Thus the
judgment is already final and executory.
Here, instead of filing an appeal with the DOLE
Secretary, Ong moved for a reconsideration of the
subject Order; needless to say, this did not halt or
stop the running of the period to elevate the matter
to the DOLE Secretary.
The only exceptions to the rule on the immutability
of final judgments are (1) the correction of clerical
errors, (2) the so-called nunc pro tunc entries which
cause no prejudice to any party, and (3) void
judgments.
In the absence of any showing that the CA's
modification or alteration of the subject Order falls
within the exceptions to the rule on the immutability
of final judgments, the DOLE-NCR's June 26, 2015
Order must be upheld and respected.
Neither was there merit in respondents' claim
that they had been denied or deprived of due
process. The facts clearly disclose that they had
substantially participated in the proceedings
before the DOLE-NCR from the mandatory
conference up to the filing of a position paper
where their side was sufficiently heard.
Labor Law Review Digests | Lourleth Lluz
11. OTHER SPECIAL BENEFITS
1. Dela Salle Araneta University vs. Bernardo,
GR No. 190908, February 13, 2017
Doctrine: A part-time fixed employee is entitled to
retirement benefits despite the existence of a CBA or
retirement benefit plan which provides that they are
not entitled to retirement benefits.
Facts: Bernardo is a part-time professional lecturer
at DLS-AU, he taught for 27 years on a per semester
and summer term basis. However, DLS-AU informed
Bernardo that he could not teach at the school
anymore as the school was implementing the
retirement age limit for its faculty members. As he
was already 75 years old, Bernardo had no choice but
to retire. Bernard sought the opinion of DOLE which
informed him that he was entitled to receive benefits
under Republic Act No. 7641 and its Implementing
Rules and Regulations.
Petitioner alleges that Bernardo was not entitled to
any kind of separation pay or benefits. DLS-AU's
policy and CBA provides that only full-time permanent
faculty for at least five years immediately preceding
the termination of their employment, can avail of
retirement benefits. As a part-time faculty member,
Bernardo did not acquire permanent employment
under the Manual of Regulations for Private Schools
which require that a full-time teacher is one that has
rendered three consecutive years of service and such
service must have been satisfactory.
Issue: Whether or not a part-time employee is
entitled to retirement benefits?
Ruling: The Retirement Benefits Law is a curative
social legislation. It intends to provide minimum
retirement benefits to employees who are not entitled
to the same under collective bargaining and other
agreements. It also applies to establishments with
existing collective bargaining or other agreements or
voluntary retirement plans whose benefits are less
than those prescribed in said law.
Republic Act No. 7641 states that "any employee may
be retired upon reaching the retirement age x x x;"
and "[i]n case of retirement, the employee shall be
entitled to receive such retirement benefits as he may
17 | P a g e

have earned under existing laws and any collective
bargaining agreement and other agreements." The
Implementing Rules provide that Republic Act No.
7641 applies to "all employees in the private sector,
regardless of their position, designation or status and
irrespective of the method by which their wages are
paid, except to those specifically exempted x x x."
And Secretary Quisumbing's Labor Advisory further
clarifies that the employees covered by Republic Act
No. 7641 shall "include part-time employees,
employees of service and other job contractors and
domestic helpers or persons in the personal service of
another."
Bernardo's claim for retirement benefits cannot be
denied on the ground that he was a part-time
employee, since part-time employees are NOT among
those specifically exempted under Republic Act No.
7641(Retirement Benefits Law) or its Implementing
Rules.
DLS-AU also alleged that the case had already
prescribed since money claims prescribe after 3 years.
The court said that the case was filed within 3 years
since the cause of action arose after he was informed
by DLS – AU that they would no longer renew
Bernard’s contract.
2. Catotocan vs. Lourdes School of Quezon
City Gr No. 213486, April 26, 2017, citing
1996 Pantranco North Express
Doctrine: “…acceptance by the employees of an
early retirement age option must be explicit,
voluntary, free, and uncompelled. While an employer
may unilaterally retire an employee earlier than the
legally permissible ages under the Labor Code, this
prerogative must be exercised pursuant to a mutually
instituted early retirement plan. In other words, only
the implementation and execution of the option may
be unilateral, but not the adoption and institution of
the retirement plan containing such option.”
Facts: Editha Catotocan(Catotocan) worked for
respondent, Lourdes School of Quezon City(LSQC) as
a music teacher. By the school year 2005- 2006, she
had already served for thirty-five (35) years. LSQC
has a retirement plan providing for retirement at sixty
(60) years old, or separation pay depending on the
number of years of service. LSQC issued
Administrative Order No. 2003-004 for all employees
Labor Law Review Digests | Lourleth Lluz
which is an addendum on its retirement policy:
“NORMAL RETIREMENT:
1. An employee may apply for retirement or be
retired by the school when he/she reaches the age of
sixty (60) years or when he/she completes thirty (30)
years of service, whichever comes first;”
Catotocan along with other faculty members
consistently opposed the amendment to the
retirement plan. Year later, after being notified that
she was being retired from service by LSQC, she
opened a savings account with BDO; she accepted all
the proceeds of her retirement package: the lump
sum and all the monthly payments credited to her
account until June 2009; upon acceptance of the
retirement benefits, there was no notation that she is
accepting the retirement benefits under protest or
without prejudice to the filing of an illegal dismissal
case. She then filed a case for illegal dismissal against
respondent.
Issue: Whether or not Catotocan receipt of
retirement benefits will prevent her from filing a case
for illegal dismissal against respondents? Whether or
not the addendum on the retirement plan is valid
despite stipulating a retirement age lower than that
provided for by the labor code?
Held: She is estopped from filing a case for illegal
dismissal. Catotocan may have initially opposed to the
idea of her retirement at an age below 60 years, but
her subsequent actions after her "retirement" are
tantamount to her consent to the addendum to the
LSQC's retirement policy of retiring an employee from
service upon serving the school for at least thirty (30)
continuous years.
Retirement is the result of a bilateral act of the
parties, a voluntary agreement between the employer
and the employee whereby the latter, after reaching a
certain age, agrees to sever his or her employment
with the former.
By express language, the Labor Code permits
employers and employees to fix the applicable
retirement age at 60 years or below, provided that
the employees' retirement benefits under any CBA
and other agreements shall not be less than those
provided by law. Only in the absence of such an
agreement shall the retirement age be fixed by the LC
apply, which provides for a compulsory retirement
age at 65 years, while the minimum age for optional
18 | P a g e

retirement is set at 60 years. Therefore, the
addendum is valid.
3. Philippine Airlines vs. Hassaram, GR. No.
217730, June 5, 2017
Doctrine: Interpreting Art. 287 (Retirement) of the
Labor Code: “It can be clearly inferred from the
language of the foregoing provision that it is
applicable only to a situation where (1) there is no
CBA or other applicable employment contract
providing for retirement benefits for an employee, or
(2) there is a CBA or other applicable employment
contract providing for retirement benefits for an
employee, but it is below the requirement set by
law.”
Facts: The CA ruled that respondent, a former PAL
pilot, was entitled to receive retirement benefits from
PAL under Article 287 of the Labor Code,
notwithstanding his earlier receipt of P4,456,817.75
under the PAL Pilots' Retirement Benefit Plan.
Hassaram filed a case against PAL for illegal dismissal
and the payment of retirement benefits, damages,
and attorney's fees. He admitted that he received
P4,456,817.75 under one of PAL’s two retirement
plans, he maintained that his receipt of that sum did
not preclude him from claiming retirement benefits
from PAL, since that amount represented only a
return of his share in a distinct and separate
provident fund established for PAL pilots. The CA
declared that the funds received under the Plan were
not the retirement benefits contemplated by law. It
ruled that Hassaram was still entitled to receive
retirement benefits in the amount of P2,111,984.60
pursuant to Article 287 of the Labor Code. Since such
was higher than that provided for in PAL’s retirement
plans.
Issue: (1) Whether the amount received by
Hassaram under the retirement plan be deemed part
of his retirement pay?; (2) Whether Hassaram is
entitled to receive retirement benefits under Article
287 of the Labor Code?
Ruling: (1) The amount received by Hassaram under
the PAL Pilots' Retirement Benefit Plan must be
considered part of his retirement pay. PAL financed
and set up the retirement plan for their pilots.
It is clear from the provisions of the Plan that it is the
Labor Law Review Digests | Lourleth Lluz
company that contributes to a "retirement fund" for
the account of the pilots. The contributions comprise
the benefits received by the pilots upon retirement,
separation from service, or disability. The SC cited the
case Philippine Airlines, Inc. v. Airline Pilots
Association of the Phils., regarding the retirement
plan in question where they explained:
“PAL Pilots' Retirement Benefit Plan is a
retirement fund raised from contributions
exclusively from [PAL] of amounts
equivalent to 20% of each pilot's gross
monthly pay.”
In Elegir v. Philippine Airlines, Inc., the SC ruled:
Consistent with the purpose of the law, the
CA correctly ruled for the computation of the
petitioner's retirement benefits based on the
two (2) PAL retirement plans because it is
under the same that he will reap the most
benefits.
(2) Hassaram's retirement pay should be computed
on the basis of the retirement plans provided by PAL.
Hassaram is a member of ALPAP (Union) and as such,
is entitled to benefits from both the retirement plans
under the 1967 PAL-ALPAP CBA and the Plan. Since
the benefits found under those plans are more than
that provided for by the Labor Code.
4. Laya vs. Court of Appeals, GR No. 205813,
January 10, 2018, En banc
Doctrine: An employee in the private sector who did
not expressly agree to the terms of an early
retirement plan cannot be separated from the service
before he reaches the age of 65 years. The employer
who retires the employee prematurely is guilty of
illegal dismissal, and is liable to pay his backwages
and to reinstate him without loss of seniority and
other benefits, unless the employee has meanwhile
reached the mandatory retirement age under the
Labor Code, in which case he is entitled to separation
pay pursuant to the terms of the plan, with legal
interest on the backwages and separation pay
reckoned from the finality of the decision. H
Facts: Laya, Jr. was hired by Philippine Veterans
Bank as its Chief Legal Counsel with a rank of Vice
President. The terms and conditions of his
appointment are as follows:
"3. As a Senior Officer of the Bank, you are
19 | P a g e

entitled to the following executive ben[e]fits:
“• Membership in the Provident Fund
Program/Retirement Program.”
Respondent informed Laya that he was retired
effective on July 14, 2007, pursuant to the company’s
retirement plan, since he was already 60. Laya then
wrote to respondent bank, requesting for an
extension of his tenure for two (2) more years
pursuant to the Bank's Retirement Plan (Late
Retirement).
Respondent directed the petitioner to continue to
discharge his official duties and functions as chief
legal counsel pending his request. However,
petitioner’s request and MR for an extension of tenure
was denied by respondent.
Petitioner now alleges that (1) PVB is a government
owned bank and therefore he is covered by civil
service laws (retirement being at age 65 and that he
could not be retired before then) and (2) he was
made aware of the retirement plan of respondent
only after he had long been employed and was shown
a photocopy of the Retirement Plan Rules and
Regulations. Respondent alleges that petitioner had
agreed to the retirement plan since he signed the
terms and conditions of employment.
Issue: Whether or not Laya was validly retired at age
60?
Ruling: He was not validly retired, he was illegally
dismissed. The court ruled that Philippine Veterans
Bank is not a government owned bank but a private
one pursuant to their ruling in the case of Philippine
Veterans Bank Employees Union-NUBE v. The
Philippine Veterans Bank. The retirement of
employees in the private sector is governed by Article
287 of the Labor Code.
Acceptance by the employees of an early retirement
age option must be explicit, voluntary, free, and
uncompelled. The mere mention of the retirement
plan in the letter of appointment did not sufficiently
inform the petitioner of the contents or details of the
retirement program. Implied knowledge, regardless of
duration, does not equate to the voluntary
acceptance required by law in granting an early
retirement age option to the employee. A passive
acquiescence on the part of the employee,
considering that his early retirement age option
involved conceding the constitutional right to security
Labor Law Review Digests | Lourleth Lluz
of tenure, is not enough.
Company retirement plans must not only comply with
the standards set by the prevailing labor laws but
must also be accepted by the employees as
commensurate to their faithful services to the
employer within the requisite period. Although the
employer could be free to impose a retirement age
lower than 65 years for as long its employees
consented, the retirement of the employee whose
intent to retire was not clearly established, or whose
retirement was involuntary is to be treated as an
illegal dismissal. PVB is guilty of illegal dismissal.
5. Maria De Leon Transportation Inc., et al.,
vs. Macuray, GR No. 214940, June 6, 2018
Doctrine: Article 2208 (7) and (11) of the Civil Code
provides that attorney's fees and expenses of
litigation, other than judicial costs, may be recovered
"in actions for the recovery of wages of household
helpers, laborers and skilled workers."
Facts: Macuray was employed as a bus driver by
petitioner for 18 years, petitioner is a company
engaged in paid public transportation. Respondent
alleges that on Nov. 2009, he was no longer assigned
a bus to drive and later on, his dispatcher informed
him that he was already considered as AWOL. Despite
this, Macuray alleges that he continuously followed up
management for a bus to drive but to no avail. He
was already 62 years old when he was “dismissed”.
Petitioner alleges that top management never met
with the respondent, while the bus dispatchers denied
meeting with respondent as well. They declared in a
joint affidavit that respondent never approached them
to follow up. Petitioner claims that respondent left his
post as a bus driver to work for his family's trucking
business; and that he was seen driving the family
truck on public roads and highways. Petitioner,
however, admits that allowing drivers to take time
off/ months off from driving is normal in the
transportation industry.
The CA agreed with respondent and awarded him: 1)
separation pay; 2) backwages; 3) retirement pay; 4)
service incentive leave; 5) moral damages; 6)
exemplary damages; 7) nominal damages; and 8)
attorney's fees.
Issue: Whether or not Macuray is entitled to the
20 | P a g e

abovementioned monetary benefits?
Ruling: No, he is not. Respondent failed to prove his
allegations; he was not illegally dismissed nor did he
abandon his work. The court agreed with all of the
petitioner’s allegations.
Petitioner sanctioned the practice of allowing its
drivers to take breaks from work. Therefore, Macuray
(Respondent) availed of petitioner's company practice
and unwritten policy — of allowing its bus drivers to
take needed breaks or sabbaticals to enable them to
recover from the monotony of driving the same route
for long periods — and obtained work elsewhere.
(company-sanctioned sabbatical) Hence, there was no
dismissal.
The court ruled that since Macuray was never
dismissed from work, either for cause or by
resignation or abandonment, he is entitled to
retirement benefits. In the absence of a retirement
plan or agreement in Maria De Leon Transportation,
Inc., the provisions of the Labor Code apply. Macuray
is entitled to one month's salary for every year of
service.
Regarding atty’s fees: Article 2208 (7) and (11) of the
Civil Code provides that attorney's fees and expenses
of litigation, other than judicial costs, may be
recovered "in actions for the recovery of wages of
household helpers, laborers and skilled workers".
6. The Provincial Bus Operators Association
of the Philippines et al vs. DOLE, et a., GR
No. 202275, July 17, 2018, En Banc
Doctrine: (1) Laws requiring the payment of
minimum wage, security of tenure and traffic safety
have been declared as not violative of due process for
being valid police power legislations. When
administrative agencies exercise quasi legislative
power, notice and hearing are not required.
(2) Not all contracts are protected by the non-
impairment clause of the constitution. Contracts
whose subject matters are so related to the public
welfare are subject to the police power of the state.
(Like Er-E rel which is imbued with public interest)
Likewise, contracts which related to rights that are
not considered property, such as franchises and
Labor Law Review Digests | Lourleth Lluz
permits, are also not protected by the non-
impairment clause.
(3) Equal protection clause; a valid classification (a)
substantial distinctions which make real differences;
(b) the classification must be germane to the purpose
of the law; (c) It must not be limited to existing
conditions only; (d) It must apply to each member of
the class.
Facts: The Provincial Bus Operators Association of
the Philippines questions DOLE DO 118-12 otherwise
known as “Rules and Regulations Governing the
Employment and Working Conditions of Drivers and
Conductors in the Public Utility Bus Transport
Industry” and it’s IRR, while LTFRB issued
memorandum circular no. 118-12 which provides that
PUB companies are required to get a Labor Standards
Compliance Certificate from DOLE, failure to do so
shall be considered a ground for the immediate
cancellation or revocation of their franchises
(Certificate of Public Convenience)
DO 118-12 provides a new compensation scheme for
drivers and conductors which ensure that the risk
taking behaviors of drivers are addressed. The new
compensation scheme has to components: a fixed
rate and a performance based rate/ part fixed and
part performance based.
“SECTION 3. Hours of Work and Hours of Rest. —
The normal hours of work of a driver and conductor
shall not exceed eight (8) hours a day. If the
driver/conductor is required to work overtime, the
maximum hours of work shall not exceed twelve (12)
hours in any 24-hour period, subject to the overriding
safety and operational conditions of the public utility
bus.
Drivers and conductors shall be entitled to rest
periods of at least one (1) hour, exclusive of meal
breaks, within a 12-hour shift.”
“SECTION 2. Method of Determining Compensation.
— Bus owners and/or operators, in consultation with
their drivers and conductors shall determine the
following:
[a]) The fixed component shall be based on an
amount mutually agreed upon by the owner/operator
and the driver/conductor, which shall in no case be
lower than the applicable minimum wage for work
21 | P a g e

during normal hours/days. They shall also be entitled
to wage[-]related benefits such as overtime pay,
premium pay and holiday pay, among others.
[b]) The performance-based component shall be
based on safety performance, business performance
and other related parameters.”
NWPC Guidelines:
SECTION 2. Fixed Wage Component. —
a) The fixed wage component shall be an amount
mutually agreed upon by the owner/operator and the
driver/conductor and shall be paid in legal tender. It
shall in no case be lower than the applicable
minimum wage (basic wage + COLA) for work
performed during normal hours/days. It shall include
wage[-]related bene ts such as overtime pay,
nightshift differential, service incentive leave and
premium pay among others. The payment of 13th
month pay, holiday and service incentive leave may
be integrated into the daily wage of drivers and
conductors, upon agreement of both
owners/operators and drivers and conductors.
b.) The fixed wage may be based on a time unit of
work (e.g., hourly, daily or monthly). It may also be
based on a per trip or per kilometer basis where the
drivers/conductors and operators may consider the
minimum number of trips or kilometres/distance
travelled within an 8-hour period, as basis for
determining regular/normal workload for an 8-hour
period. The fixed wage may be computed as follows:
Fixed Wage (Time Rate) = (Basic Wage + Wage –
Related Benefits) ORFixed Wage (Trip Basis) = Rate
per Trip x No. of Trips per Day
SECTION 3. Performance-Based Wage
Component. —
a) The performance-based wage component shall be
based on business performance, safety performance
and other relevant parameters. Business performance
shall consider revenue/ridership. Safety performance
shall consider safety records such as the incidence of
road accident and tra c violation. The performance-
based wage may be computed as follows:
Reference Amount of Performance Incentive =
(Current Average Daily Earnings – Fixed Wage) x Y%
Where: Current average daily earnings shall be
estimated based on average daily earnings for 2011
and/or prior years, as may be agreed upon.
Y — range of values (in percent) that correspond to
various levels of safety performance, such that: The
lower the incidence of traffic violations and road
Labor Law Review Digests | Lourleth Lluz
accidents, the higher will be the value of Y and the
performance incentive
The higher the incidence of traffic violations and road
accidents, the lower will be the value of Y and the
performance incentive Bus operators/owners and
drivers/conductors may modify or use other formula
for their compensation scheme provided it is in
accordance with the part- fixed[-] part-
performance[-]based compensation scheme as
provided herein.
Petitioners claim that the issuance violates the PUB
Company’s due process; they also claim that the non-
impairment of contractual relations clause of the
constitution was breached since they agreed with
drivers and conductors that the boundary system
(based on number of trips) was their system of
compensation.
Issues: (1) Whether or not the DOLE Department
Order No. 118-12 and the LTFRB Memorandum
Circular No. 2012-001 deprive public utility bus
operators of their right to due process of law?
(2) Whether or not the DOLE Department Order No.
118-12 and the LTFRB Memorandum Circular No.
2012-001 impair public utility bus operators' right to
non- impairment of obligation of contracts?
(3) Whether or not the DOLE Department Order No.
118-12 and the LTFRB Memorandum Circular No.
2012-001 deny public utility bus operators of their
right to equal protection of the laws?
Ruling: The court dismissed the petition for
petitioners’ failure to respect the doctrine of hierarchy
of courts by directly invoking this Court's jurisdiction
without any special reason. Furthermore, petitioners
also failed to present any actual controversy ripe for
adjudication and do not even have the requisite
standing to the case. They also failed to show the
unconstitutionality of the DOLE Department Order No.
118- 12 and the LTFRB Memorandum Circular No.
2012-001.
(1) Laws requiring the payment of minimum
wage, security of tenure and traffic safety
have been declared as not violative of due
process for being valid police power
legislations. When administrative agencies
exercise quasi legislative power, notice and
hearing are not required.
Social legislations to enhance the status of
bus drovers and conductors and to promote
the general welfare of the riding public. They
22 | P a g e
 Labor Law Review Digests | Lourleth Lluz

are reasonable and are not violative of due thirty (30) years. Petitioner, thus, sued for
process. illegal dismissal.
(2) The non-impairment clause: Section 10,
Article III: No law impairing the obligation of Issue:
contracts shall be passed. – the provision is
meant to encourage purely private Whether or not retirement letter tendered by the
agreements from state interference. There is employee negates the claim of illegal dismissal
an impairment when, either by statute or for failure to grant teaching load.
any administrative rule issued by an agency
exercising quasi legislative power, the terms Ruling:
of a contract is changed either in respect to
the time or mode of performance of the
Yes, the retirement letter tendered by the employee
obligation.
negates the claim of illegal dismissal for failure to
grant teaching load.
Not all contracts are protected by the non-
impairment clause of the constitution.
Contracts whose subject matters are so
While retirement from service is similar to termination
related to the public welfare are subject to
of employment insofar as they are common modes of
the police power of the state. (Like Er-E rel
ending employment, they are mutually exclusive, with
which is imbued with public interest)
varying juridical bases and resulting benefits.
Likewise, contracts which related to rights
Retirement from service is contractual, while
that are not considered property, such as
termination of employment is statutory.
franchises and permits, are also not
protected by the non- impairment clause.
The employee’s intent is decisive. Petitioner's
aforesaid claim is belied by the fact that about a week
(3) Petitioners failed to show how the equal
after the beginning of school year 2014-2015, he
protection clause was violated. Furthermore,
the qual protection clause does not prevent submitted to respondents the 2014 Retirement Letter
the legislature from making classifications for wherein he expressed his intent to optionally retire at
as long as there is: (a) substantial the age of 61. Notably, records are bereft of any
distinctions which make real differences; (b) showing that petitioner ever challenged the
the classification must be germane to the authenticity and due execution of such letter.
purpose of the law; (c) It must not be
limited to existing conditions only; (d) It
must apply to each member of the class.
12. RIGHT TO SERCURITY OF TENURE

7. Barroga vs. Quezon Colleges of North, CASES:

GR No. 235572, December 5, 2018
8. Facts:
9. Petitioner was a full-time science and
chemistry teacher at Quezon Colleges of the
North High School Department continuously
from June 1985 to March 2014. A letter
dated June 9, 2014 allegedly prepared by
petitioner signifying his intention to retire
(2014 Retirement Letter). However, at the
beginning of school year 2014-2015,
respondents told him that he could not be
given any teaching load allegedly because
there were not enough enrollees. Petitioner
found the timing thereof suspicious as he
was already due for optional retirement for
continuously serving respondents for almost
1. E. Ganzon Inc. vs. Ando, Jr. GR No.
214183, Feb. 20, 2017
Doctrine: The fact that Ando was required to render
services necessary or desirable in the operation of
EGI's business for more than a year is immaterial.
The activities of project employees may or may not
be necessary or desirable to the usual busines of the
employer
Facts: Ando was hired by E. Ganzon Inc., (EGI) as
finishing carpenter for its construction business. His
employment was under three different project
employment contracts corresponding to three
successive construction projects. He was repeatedly
hired until the termination of his third contract,

23 | P a g e

wherein he was no longer renewed by EGI without
prior notice. The total duration of Ando’s employment
exceeded one (1) year and the services he rendered
were necessary or desirable to the operation of EGI's
business.
Issue: (1) Is Ando a regular employee?; (2) Is EGI
liable for failing to give Ando a notice of termination?
Ruling: No, Ando is not a regular employee. Rather,
he is a project-based employee as shown by his
corresponding employment contracts for each project.
The fact that Ando was required to render services
necessary or desirable in the operation of EGI's
business for more than a year is immaterial. The
activities of project employees may or may not be
necessary or desirable to the usual busines of the
employer. Moreover, the 2nd paragraph of Article
280, stating that an employee who has rendered
service for at least one (1) year shall be considered a
regular employee, is applicable only to casual
employees and not to project employees.
No, EGI is not liable. Prior notice of termination is not
part of procedural due process if the termination is
brought about by the completion of the contract for
which the project employee was engaged. Such
completion automatically terminates the employment
and the employer is only required by law to render a
report of the termination to DOLE.
2. Herma Shipyard Inc. vs. Oliveros, et al.,
GR No. 208936, April 17, 2017, citing ALU-
TUCP
Doctrine: In this case, the Court really scrutinized
the employment contract. The employees knowingly
and voluntarily entered into and signed the project
based employment contracts. Further, performance
by project-based employees of tasks necessary and
desirable to the usual business operation of the
employer will not automatically result in their
regularization. Repeated rehiring of project
employees to different projects does not ipso facto
make them regular employees.
Facts: Respondents were employees of Herma
Shipyard, a domestic corporation engaged in the
business of shipbuilding and repair. Respondents
Labor Law Review Digests | Lourleth Lluz
alleged that they are Herma Shipyard’s regular
employees who have been continuously performing
tasks usually necessary and desirable in its business.
However, petitioners dismissed them from
employment. Moreover, the respondents alleged that
they were made to sign employment contracts for a
fixed period ranging from 1 to 4 months to make it
appear that they were project-based employees. CA
rendered judgment in favor of the respondents and
setting aside the labor tribunals’ decisions.
Issue: Were the respondents deemed regular
employees?
Ruling: No. Under Art. 294 of the Labor Code, a
project employee is one whose employment has been
fixed for a specific project or undertaking, the
completion or termination of which has been
determined at the time of the engagement of the
employee.
The principal test in determining whether employees
were engaged in project-based or regular employees,
is whether they were assigned to carry out a specific
project or undertaking, the duration and scope of
which was specified at, and made known to them, at
the time of engagement. In the present case,
respondents were adequately informed of their
employment status as embodied in the KASUNDUAN
NG PAGLILINGOD. Second, the tasks assigned to the
respondents were indeed necessary and desirable in
the usual business of petitioner, but the same were
distinct, separate, and identifiable from the other
projects or contract services. Third, the repeated and
successive rehiring did not by and of itself, qualify
them as regular employees. As ruled in Villa v NLRC,
the rule that employees initially hired on a temporary
basis may become permanent employees by reason
of their length of service is not applicable to project-
based employees.
3. University of Sto. Tomas vs. Samahang
Manggagawa ng UST, GR No. 184262,
April 24, 2017
Doctrine:
If the employee has been performing the job for at
least a year, even if the performance is not
continuous and merely intermittent, the law deems
repeated and continuing need for its performance as
sufficient evidence of the necessity if not
24 | P a g e

indispensability of that activity to the business.
Hence, the employment is considered regular but
only with respect to such activity and while such
activity exists.
Facts: Pontesor and others were repeatedly hired as
all-around maintenance workers over the years and
as such, should be deemed regular employees of
UST. Also, as long as UST continues to operate,
Pontesor and others’ services are necessary and
desirable to the business of UST. UST posited that
they were hired on a per-project basis wherein upon
completion of the specific project, their employment is
deemed terminated as provided for in their
employment agreements.
Issues: (1) Were they considered regular
employees?; (2) Were they illegally dismissed?
Ruling: (1) Yes. Art. 295 of Labor Code provides for
two (2) types of regular employees, namely: (a) those
who are engaged to perform activities which are
usually necessary or desirable in the usual business or
trade of the employer; and (b) those who have
rendered at least one year of service, whether
continuous or broken, with respect to the activity in
which they are employed. Although their work as
maintenance workers are not necessary or desirable
to the business of UST as an educational institution,
Pontesor, et al. are still deemed regular employees,
as they fall under the second category, but only with
respect to the activities for which they were hired and
for as long as such activities exist. It is clear that the
UST has only imposed the periods to preclude
acquisition of tenurial security. The specific projects
and the supposed terms are not clearly outlined in the
agreements. Such that, they are not project
employees.
(2) Yes, they were illegally dismissed. Since they are
regularized casual employees who enjoy security of
tenure, then they cannot be terminated from
employment without any just and/or authorized
cause.
4. Innodata Knowledge Services vs. Inting et
al., GR No. 211892, December 6, 2017
Doctrine: .In light of the well-entrenched rule that
the burden to prove the validity and legality of the
termination of employment falls on the employer,
Labor Law Review Digests | Lourleth Lluz
IKSI should have established the bonafide suspension
of its business operations or undertaking that could
legitimately lead to the temporary lay-off of its
employees for a period not exceeding six (6) months,
in accordance with Article 301.
Facts: Computer Technologies (ACT) hired IKSI to
review various litigation documents. To carry out the
job, IKSI hired lawyers and law graduates to carry out
the ACT project. They were also engaged to work on
other projects such as the Bloomberg project without
making them sign new contracts. For this purpose,
IKSI engaged the services of the respondents
(Inting, et al.) as senior and junior reviewers with a
contract duration of five (5) years. However, the
respondents received a Notice of Forced Leave from
IKSI effective that same day due to changes in
business conditions. Hence, respondents filed a
complaint for illegal dismissal, other benefits, and
damages against IKSI. IKSI the sent notices to
respondents terminating their services due to the
unavailability of new work related to the product
stream.
Issue: Are respondents project employees? Is there
a just or authorized cause for their termination?
Ruling: No. The fact is IKSI actually hired
respondents to work, not only on the ACT Project, but
on other similar projects such as the Bloomberg
project. When respondents were required to work on
the Bloomberg project, without signing a new
contract for that purpose, it was already outside of
the scope of the particular undertaking for which they
were hired; it was beyond the scope of their
employment contracts. This act by IKSI indubitably
brought respondents outside the realm of the project
employees category.
No. While IKSI cited Article 301 to support the
temporary lay-off of its employees, it never really
proved the alleged lay-off. It merely indicated
changes in business conditions to justify its forced
leave/lay-off. In light of the well-entrenched rule that
the burden to prove the validity and legality of the
termination of employment falls on the employer,
IKSI should have established the bonafide suspension
of its business operations or undertaking that could
legitimately lead to the temporary lay-off of its
employees for a period not exceeding six (6) months,
in accordance with Article 301.
25 | P a g e

5. Expedition Construction Corp., vs. Africa,
GR No. 228671, December 14, 2017
Doctrine: Respondents were neither independent
contractors nor project employees. There was no
showing that respondents have substantial capital or
investment and that they were performing activities
which were not directly related to Expedition's
business to be qualified as independent contractors.
There was likewise no written contract that can prove
that respondents were project employees and that
the duration and scope of such employment were
specified at the time respondents were engaged.
Therefore, respondents should be accorded the
presumption of regular employment pursuant to
Article 280 of the Labor Code which provides that
"employees who have rendered at least one year of
service, whether such service is continuous or broken
x x x shall be considered [as] regular employees with
respect to the activity in which they are employed
and their employment shall continue while such
activity exists."
In illegal dismissal cases, the employer has the
burden of proving that the termination was for a valid
or authorized cause. However, it is likewise
incumbent upon an employee to first establish by
substantial evidence the fact of his dismissal from
employment 36 by positive and overt acts of an
employer indicating the intention to dismiss. 37 It
must also be stressed that the evidence must be
clear, positive and convincing. 38 Mere allegation is
not proof or evidence.
Facts: PETITIONER Expedition Construction Corp.
(Expedition) is engaged in garbage collection and
hauling.
It engaged the services of respondents Alexander M.
Africa and 14 others as garbage truck drivers to
collect garbage from different cities and transport the
same to the designated dumping site.
Respondents filed separate cases against Expedition
for illegal dismissal, asking for separation pay, labor
standard benefits, damages and attorney’s fees.
Expedition invoked the defense that respondents
were not its employees. It claimed that respondents
were not part of the company’s payroll but were
Labor Law Review Digests | Lourleth Lluz
being paid on a per trip basis. They were not under
Expedition’s direct control and supervision as they
worked on their own, were not subjected to company
rules nor were required to observe regular/fixed
working hours and that they hired and paid their
respective garbage collectors.
Issues: (1) Whether there exists an employer-
employee relationship between petitioner and
respondents?; (2) Whether there is illegal dismissal.
Ruling: (1) Yes. First, as clearly admitted,
respondents were engaged/hired by Expedition as
garbage truck drivers. Second, it is undeniable that
respondents received compensation from Expedition
for the services that they rendered to the latter. The
fact that respondents were paid on a per trip basis is
irrelevant in determining the existence of an
employer-employee relationship because this was
merely the method of computing the proper
compensation due to respondents. Third, Expedition’s
power to dismiss was apparent when work was
withheld from respondents as a result of the
termination of the contracts with Quezon City and
Caloocan City. Finally, Expedition has the power of
control over respondents in the performance of their
work. It was held that “the power of control refers
merely to the existence of the power and not to the
actual exercise thereof.”
As aptly observed by the CA, the agreements for the
collection of garbage were between Expedition and
the various LGUs, and respondents needed the
instruction and supervision of Expedition to effectively
perform their work in accordance with the stipulations
of the agreements.
Moreover, the trucks driven by respondents were
owned by Expedition. There was an express
instruction that these trucks were to be exclusively
used to collect and transport garbage. Respondents
were mandated to return the trucks to the premises
of Expedition after the collection of garbage.
Expedition determined the clients to be served, the
location where the garbage is to be collected and
when it is to be collected.
Indeed, Expedition determined how, where, and
when respondents would perform their tasks.
(2) No, there was no illegal dismissal.
26 | P a g e

In illegal dismissal cases, the employer has the
burden of proving that the termination was for a valid
or authorized cause. However, it is likewise incumbent
upon an employee to first establish by substantial
evidence the fact of his dismissal from employment
by positive and overt acts of an employer indicating
the intention to dismiss. It must also be stressed that
the evidence must be clear, positive and convincing.
There was no positive or direct evidence to
substantiate respondents' claim that they were
dismissed from employment. Also, the record is bereft
of any indication that respondents were barred from
Expedition's premises. If at all, the evidence on
record showed that Expedition intended to give
respondents new assignments as a result of the
termination of the garbage hauling contracts with
Quezon City and Caloocan City where respondents
were regularly dispatched. However, instead of
returning and waiting for their next assignments,
respondents instituted an illegal dismissal case
against Expedition. In fact, Expedition manifested its
willingness to accept respondents back to work.
Unfortunately, it was respondents who no longer
wanted to return to work. In fact, in their complaints,
respondents prayed for the payment of separation
pay instead of reinstatement.
6. Umali vs. Hobbywing Solutions Inc., GR
No. 221356, March 14, 2018
Doctrine: xxx
Facts: Umali alleges that she attained the status of
regular employment after she was suffered to work
for Hobbywing, an online casino gaming
establishment, as a supervisor, for more than six
months of probationary employment. She was only
asked to sign two employment contracts after she
had rendered seven months of service. She claims
that she was terminated without cause when she was
informed that the period of her probationary
employment had already ended. Meanwhile,
Hobbywing maintains that there was a contract of
probationary employment signed at the beginning of
Umali’s service and another one which extended the
probationary period to give Umali a chance to
improve her performance and qualify for regular
employment.
Labor Law Review Digests | Lourleth Lluz
Issue: Was there illegal dismissal?
Ruling: Yes. Is elementary in the law on labor
relations that a probationary employee engaged to
work beyond the probationary period of six months,
as provided Article 281 of the Labor Code, or for any
length of time set forth by the employer, shall be
considered a regular employee. However, there may
be a valid extension of the probationary period for
another three months, to give the employee a chance
to improve his performance and qualify for regular
employment, upon agreement of the parties. The
exception, however, finds no application in the instant
case for: (1) there was no evaluation upon the
expiration of the period of probationary employment;
and (2) the supposed extension of the probationary
period was made after the lapse of the original period
agreed by the parties. In this case, Umali commenced
working for Hobbywing on June 19, 2012 until
February 18, 2013. By that time, however, she has
already become a regular employee, a status which
accorded her protection from arbitrary termination.
7. Son et al., vs. University of Sto. Tomas, GR
No. 211273, April 18, 2018
Doctrine: xxx
Facts: Son was a full time professor and a member
of the UST Faculty Union, with which UST had a
Collective Bargaining Agreement executed in 2006.
Under the CBA’s tenure provision, and in line with the
DECS’ 1992 Revised Manual of Regulations for Private
Schools and CHED’s Memorandum Order No. 40-08, a
Master’s degree for faculty members of
undergraduate programs was made an entry
requirement. Son did not possess a Master’s degree
but was nonetheless hired by UST on the condition
that he obtain one within 5 semesters, which he failed
to do. In spite of this, Son was retained by UST. In
2010, CHED issued a Memorandum directing the strict
implementation of the Master’s degree requirement
and, acting on the same, UST terminated Son, who
thought that he had been vested tenure under the
CBA for his continued employment despite failure to
obtain the required Master’s degree.
Issue: Was Son illegally dismissed?
Facts: No. When the CBA was executed between the
parties in 2006, they had no right to include therein
27 | P a g e

the tenure by default provision because it was
violative of the 1992 Revised Manual that was in
effect at the time. As such, the said provision is null
and void. It cannot be said, either, that by agreeing
to the same, UST is deemed to have waived the
application of the DECS Revised Manual and the
CHED Memorandum as such a waiver is contrary to
law.
Furthermore, both parties are in pari delicto: UST for
maintaining professors without the mandated Master’s
degrees, and Son for agreeing to be employed
despite knowledge of his lack of the necessary
qualifications. Under the pari delicto doctrine, the
equally culpable parties shall have no action against
each other, and the law shall leave them where it
finds them.
10. Geraldo vs. The Bill Sender Corp., GR No.
222219, October 3, 2018
Doctrine: Article 280 of the Labor Code describes a
regular employee as one who is either (1) engaged to
perform activities which are necessary or desirable in
the usual business or trade of the employer; and (2)
those casual employees who have rendered at least
one year of service, whether continuous or broken,
with respect to the activity in which he is employed.
Facts: Geraldo was hired by the respondent
corporation to deliver the bills to its client PLDT. He
was paid on a per-piece basis. Geraldo filed a
complaint for illegal dismissal alleging that his
employment was terminated because he failed to
deliver certain bills. He claimed that it was illegal
because there was no due process observed in his
termination.
The company countered that he was not a full-time
employee but only a piece-rate worker as was the
usual practice for messengers. Further the company
claimed that it was Geraldo who abandoned his job
by not reporting to work.
According to the NLRC, the company failed to
discharge the burden of proving a deliberate and
unjustified refusal of Geraldo to resume his
employment without any intention of returning as well
as to observe the twin-notice requirement to insure
that due· process has been accorded to him. The CA
reversed the decision of the NLRC stating that since
Labor Law Review Digests | Lourleth Lluz
Geraldo was paid on a per piece basis, he was hired
on a per-result basis, and as such, he was not an
employee of the company.
Issue: Whether Geraldo was illegally dismissed being
a regular employee entitled to security of tenure.
Ruling: The issue of whether Geraldo was, indeed,
illegally dismissed depends upon the nature of his
relationship with the company. Article 280 of the
Labor Code describes a regular employee as one who
is either (1) engaged to perform activities which are
necessary or desirable in the usual business or trade
of the employer; and (2) those casual employees who
have rendered at least one year of service, whether
continuous or broken, with respect to the activity in
which he is employed.
The company cannot deny the fact that Geraldo was
performing activities necessary or desirable in its
usual business or trade for without his services, its
fundamental purpose of delivering bills cannot be
accomplished. On this basis alone, the law deems
Geraldo as a regular employee. But even considering
that he is not a full time employee as the company
insists, the law still deems his employment as regular
due to the fact that he had been performing the
activities for more than one year.
Having established that Geraldo was a regular
employee, the burden shifts to the employer that he
was not illegally dismissed. Upon showing on the
records, it appears that the due process requirement,
the twin notice rule was not observed.
11. Universal Robina Sugar Milling Corp.,
vs. Nagkahiusang Mamumuo sa
Ursumco-NFL, GR No. 224558,
Novebmer 28, 2018
FACTS:
URSUMCO is a domestic corporation engaged in
sugar milling business while NAMA-URSUMCO-
NFL is a legitimate labor organization acting as
the sole and exclusive bargaining representative
of all regular monthly paid and daily paid rank
and file employees of URSUMCO. A CBA was
entered into by the two parties valid from
January 1, 2010 to December 31, 2014. Article
VI, Section 2 of the CBA enumerated the
28 | P a g e

employment classification in URSUMCO, i.e.,
Permanent or Regular Employees and Regular
Seasonal Employees.
From August to September 2011, NAMA-
URSUMCO-NFL filed several grievances on behalf
of 78 URSUMCO regular seasonal employees. It
sought for the change in the employment status
of the concerned employees from regular
seasonal to permanent regular and for the
leveling of the salaries. After the grievance
machinery failed to resolve the issue, NAMA-
URSUMCO-NFL requested that the employees'
concerns be submitted to voluntary arbitration.
The VA required the parties to submit their
respective position papers.
NAMA-URSUMCO-NFL alleged that permanent or
regular employees practically performed the
same work as the regular seasonal employees
during milling season; some regular seasonal
employees would perform skilled jobs during the
off-milling season, while regular or permanent
employees would be assigned to utility jobs;
regular seasonal employees acted as leadmen,
while regular permanent or regular employees
were the helpers; longer tenured employees
were stuck as regular seasonal employees, while
new hires were given regular or permanent
status; and regular seasonal employees received
lower salaries than regular or permanent
employees even if they performed the same
functions.
URSUMCO on the other hand contended that
NAMA-URSUMCO-NFL was estopped from
questioning the classification of employees
agreed upon by the parties in the CBA.
VA sided with NAMA-URSUMCO-NFL and held
that URSUMCO’s act of providing work to regular
seasonal employees for several years is deemed
a waiver on the effects of the CBA.
CA affirmed VA decision adding that the tasked
performed to repair and up-keep works were
necessary to ensure the smooth and continuous
operation of petitioner’s machines and equipment
during milling season.
ISSUE: Whether or not the regular seasonal
employees are all permanent or regular
employees
Labor Law Review Digests | Lourleth Lluz
RULING: YES. SC upheld the VA and CA’s
decision. The employees are permanent or
regular employees as they performed tasks that
are necessary and desirable to URSUMCO’s sugar
milling business.
Generally, the parties to a CBA is given a wide
latitude to negotiate and agree the conditions
concerning wages, hours of work, and all other
terms and conditions of employment. However,
the employment status cannot be bargained
away with as it is already defined by law. Thus,
URSUMCO’s contention that NAMA-URSUMCO-
NFL is estopped from questioning the
classification agreed upon in the CBA cannot hold
water as the Labor Code already defines the
different kind of employment status.
Under Article 295 of the Labor Code, as
amended, four types of employment status are
enumerated: (a) regular employees; (b) project
employees; (c) seasonal employees; and (d)
casual employees. Meanwhile, the landmark case
of Brent School, Inc. v. Zamora identified fixed-
term employment as another valid type of
employment.
In the case at bar, the concerned URSUMCO
employees are performing work for URSUMCO
even during the off-milling season as they are
repeatedly engaged to conduct repairs on the
machineries and equipment. Strictly speaking,
they cannot be classified either as regular
seasonal employees or seasonal employees as
their work extended even beyond the milling
season. The nature of the activities performed by
the employees, considering the employer's nature
of business, and the duration and scope of work
to be done factor heavily in determining the
nature of employment.
The primary standard of determining a regular
employment is the reasonable connection
between the particular activity performed by the
employee in relation to the usual business or
trade of the employer. The test is whether the
former is usually necessary or desirable in the
usual business or trade of the employer. The
connection can be determined by considering the
nature of the work performed and its relation to
the scheme of the particular business or trade in
its entirety. Also, if the employee has been
29 | P a g e

performing the job for at least one year, even if
the performance is not continuous or merely
intermittent, the law deems the repeated and
continuing need for its performance as sufficient
evidence of the necessity if not indispensability of
that activity to the business. Hence, the
employment is also considered regular, but only
with respect to such activity and while such
activity exists.
A reading of the CBA between URSUMCO and
NAMA-URSUMCO-NFL would show that the
definition of a regular employee is not limited to
those whose functions are related only to the
milling operation of URSUMCO, but to its regular
operation. The concerned employees were
repeatedly hired in the off-milling season to
conduct repairs on URSUMCO's machineries.
Thus, it could be seen that the conduct of repairs
is part of URSUMCO's regular operation — even if
done only after the milling season. URSUMCO's
regular operations should not be confined to its
milling operation because to do so would
minimize an otherwise integral part of its
business. The repairs made on the machineries
and equipment used in the milling season are
necessary for their upkeep and maintenance so
that any damage or concern brought about by
ordinary wear and tear of the machines will not
be a problem once the milling season comes
back.
Thus, the concerned employees cannot be
categorized as regular seasonal employees as
defined under the law, jurisprudence or even the
parties' CBA. First, they perform work for
URSUMCO even during the off-milling season and
there is no showing that they were free to work
for another during the same period. Second, the
tasks done are reasonably necessary and
desirable in URSUMCO's regular operation or
business.
13. MANAGEMENT PREROGATIVE
CASES:
1. Chateau Royale Sports & Country Club vs.
Balba, et al., GR No. 197492, January 18,
2017
Labor Law Review Digests | Lourleth Lluz
Doctrine: The employee who has consented to the
company's policy of hiring sales staff willing to be
assigned anywhere in the Philippines as demanded by
the employer's business has no reason to disobey the
transfer order of management. Verily, the right of the
employee to security of tenure does not give her a
vested right to her position as to deprive
management of its authority to transfer or reassign
her where she will be most useful.
Facts: Petitioner operates a resort complex in
Batangas. Respondents were account managers. They
have the duty to forward all proposals, event orders
and contracts for an orderly and systematic booking.
However, respondents failed to comply with the
directive. A notice to explain was served on them, to
which they responded. Thereafter, notices of
administrative hearing were served on respondents.
They were also suspended but the same was lifted
even before its implementation.
Later, Petitioner ordered respondents to transfer to
the Manila office due to the resignations of the
account managers and the director of sales and
marketing, which caused serious disruptions in the
operations of the office, thereby making the
immediate transfer crucial and indispensable.
However, the respondents counter that there was no
valid cause for their transfer. They were forced to
transfer to the Manila office without consideration of
the proximity of the place and without improvements
in the employment package.
Issue: Whether the respondents were constructively
dismissed.
Ruling: No. Petitioner was able to discharge its
burden to prove that the transfer of the employee
from one area of operation to another was for a valid
and legitimate ground, like genuine business
necessity.
First, the resignations of the account managers and
the director of sales and marketing in the Manila
office brought about the immediate need for their
replacements with personnel having commensurate
experiences and skills. The transfer could not be
validly assailed as a form of constructive dismissal,
for, management had the prerogative to determine
30 | P a g e

the place where the employee is best qualified to
serve the interests of the business given the
qualifications, training and performance of the
affected employee.
Second, the transfer was neither unreasonable nor
oppressive. The petitioner rightly points out that the
transfer would be without demotion in rank, or
without diminution of benefits and salaries. Instead,
the transfer would open the way for their eventual
career growth, with the corresponding increases in
pay.
Third, respondents did not show by substantial
evidence that the petitioner was acting in bad faith or
had ill-motive in ordering their transfer. In contrast,
the urgency and genuine business necessity justifying
the transfer negated bad faith on the part of the
petitioner.
Lastly, respondents, by having voluntarily affixed their
signatures on their respective letters of appointment,
acceded to the terms and conditions of employment
incorporated therein. One of the terms and conditions
thus incorporated was the prerogative of
management to transfer and re-assign its employees
from one job to another “as it may deem necessary or
advisable.”
2. Diwa Asia Publishing et al., vs. De Leon,
GR No. 203587, August 13, 2018
FACTS:
Diwa Learning Systems, Inc. (DLSI) is a
subsidiary of Diwa. It is part of a conglomeration
of companies that include First Asia Ventures
Company, Inc. (FAVCI) and Fastech Advanced.
Assembly, Inc. (Fastech). Petitioner Saturnino
Belen is the Chairman of Diwa's Board of
Directors.
Respondent was invited to join Fastech, but was
not eventually hired due to a freeze order against
the corporation. AsuncionVice-President (VP) of
Fastech, then endorsed Respondent` to Diwa.
Respondent was subsequently hired by DLSI and
began working as its Human Resource (HR)
Manager on August 2, 2001, becoming a regular
employee therein on 2002. Sadly, however, after
Labor Law Review Digests | Lourleth Lluz
two (2) years with the company, respondent filed
a Complaint against petitioners for constructive
dismissal.
Commencement of the parties’ sour relationship
According to respondent, at around March 2002,
the employment status of an editor who had
been working for Diwa for two (2) continuous
years, was converted into "contractual status for
the sole reason of 'incompetence.'" As HR
Manager, she (Respondent) gave her opinion on
the matter. The management found her opinion
unacceptable and even construed it as an insult.
From then on, her working relationship with the
company turned sour. The management even
made imputations that she took part in inciting
employees to file labor cases against Diwa. [14]
A year after, respondent was informed that the
FAVCI Executive Director for HR, Asuncion, would
forthwith be regularly present in the
Respondent's office to provide guidance for six
(6) months in the management of employees
which was then perceived as pro-labor. On
August Respondent perceived that she was being
demoted as Asuncion instructed her to submit all
work and decisions, which she previously had the
liberty to handle and make, for Asuncion's review
and evaluation.
Respondent constantly given the cold shoulder
While Respondent vigorously tried to carry on
with her job, it was management that remained
hostile towards her, blowing even the smallest
issue out of proportion, faulting her for situations
she had nothing to do with or beyond her
control, and giving her directives which
management would later deny, as evidenced by
emails exchanged These incidents are allegedly
well-outlined in the exchanged between
Asuncion, respondent and other parties.
Respondent also averred that Asuncion would
shout at her and would more often than not give
sarcastic comments for everything she did and
said.
No longer able to bear Petitioner’s constant
ridicule, respondent filed a Complaint against
petitioners for constructive dismissal.
Petitioners' Counter-Averments
31 | P a g e

Petitioners countered that respondent was
dismissed for cause, i.e., for her unauthorized
absences from June 23, 2004 to August 6, 2004,
effective August 7, 2004.
Petitioners also denied that respondent was
demoted when Asuncion became her supervisor
as the latter held a higher position in FAVCI and,
in the exercise of management prerogative, was
merely seconded to Diwa to improve its HR's
functions. They further averred that respondent
was never relegated to a lower position or
suffered a diminution of benefits.
ISSUE: Whether Diwa’s exercise of management
prerogative amounted to constructive dismissal.
RULING:
YES, Diwa’s exercise of management prerogative
clearly amounted to constructive dismissal.
Constructive Dismissal
Constructive dismissal is a cessation of work
because continued employment is rendered
impossible, unreasonable or unlikely; when there
is a demotion in rank or diminution in pay or
both; or when a clear discrimination, insensibility,
or disdain by an employer becomes unbearable
to the employee. It is an act amounting to
dismissal but made to appear as if it were not. In
other words, it is a dismissal in disguise.
The test of constructive dismissal is whether a
reasonable person in the employee's position
would have felt compelled to give up his position
under the circumstances. Considering the facts of
this case, the Court agrees with the CA that
respondent was constructively dismissed.
Respondent's demotion
Respondent was excluded from important HR
decisions which she was expected not only to be
privy to, but also to have a say in, by virtue of
her position in the company.
Records show that petitioners made the decision
to terminate the services of two (2) employees,
without respondent's knowledge or
participation. Said actions were undertaken after
the management already reached its decision to
terminate.
Labor Law Review Digests | Lourleth Lluz
Respondent has likewise submitted evidence in
the form of e-mails from Asuncion showing that
although her job designation remained the same,
she was relegated to performing mundane or
clerical tasks such as preparing drafts of
termination notices based on a standard format
and ensuring that the last pay of employees was
released and that termination notices were
received by the Department of Labor and
Employment. As this Court previously held:
There is constructive dismissal when an
employee's functions, which were originally
supervisory in nature, were reduced; and such
reduction is not grounded on valid grounds such
as genuine business necessity.
Clearly, the reduction in respondent's duties and
responsibilities as HR Manager, coupled with the
above-cited circumstances which indubitably
present a hostile and unbearable working
environment that reasonably compelled
respondent to leave her employment presents
sufficient proof that respondent was therefore
constructively dismissed.
Hence, granting, as petitioners claimed, that
respondent's performance had been deficient or
unsatisfactory, the management's actuations
cannot be excused. As this Court previously held,
no employee should be subjected to constant
harassment and ridicule on the basis of
management prerogative or even for poor
performance at work. (Doctrine relevant to topic)
Thus, the petition is DENIED.
14. TERMINATION OF EMPLOYMENT
CASES:
1. Wesleyan University Philippines vs.
Maglaya Sr., GR No. 212774, January 23,
2017
Doctrine: The National Labor Relations Commission
has no jurisdiction over intra-corporate controversy.
Facts: Wesleyan University- Philippines (WUP) is a
non-stock, non-profit, non-sectarian educational
corporation duly organized and existing under the
32 | P a g e

Philippine laws. Respondent Atty. Guillermo T.
Maglaya, Sr. was appointed as a corporate member
and was elected as a member of the Board of
Trustees, both for a period of five (5) years. He was
elected as President of the University for a five-year
term. He was re-elected as a trustee.
In a Memorandum, the incumbent Bishops of the
United Methodist Church apprised all the corporate
members of the expiration of their tenns on
December 31, 2008, unless renewed by the former.
The said members, including Maglaya, sought the
renewal of their membership in the WUP's Board, and
signified their willingness to serve the corporation.
Dr. Dominador Cabasal, Chairman of the Board,
informed the Bishops of the cessation of corporate
terms of some of the members and/or trustees since
the by-laws provided that the vacancy shall only be
filled by the Bishops upon the recommendation of the
Board. Maglaya learned that the Bishops created an
Ad Hoc Committee to plan the efficient and orderly
turnover of the administration of the WUP in view of
the alleged "gentleman's agreement", and that the
Bishops have appointed the incoming corporate
members and trustees. He clarified that there was no
agreement and any discussion of the turnover
because the corporate members still have valid and
existing corporate terms.
In this case, the Bishops, through a formal notice to
all the officers, deans, staff, and employees of WUP,
introduced the new corporate members, trustees, and
officers. In the said notice, it was indicated that the
new Board met, organized, and elected the new set
of officers. Manuel Palomo, the new Chairman of the
Board, informed Maglaya of the termination of his
services and authority as the President of the
University.
Thereafter, Maglaya and other fonner members of the
Board filed a Complaint for Injunction and Damages
before the Regional Trial Court of Cabanatuan
City.The RTC dismissed the case declaring the same
as a nuisance or harassment suit prohibited under
Section l(b), Rule 1 of the Interim Rules for Intra-
Corporate Controversies. The RTC observed that it is
clear from the by-laws of WUP that insofar as
membership in the corporation is concerned, which
can only be given by the College of Bishops of the
United Methodist Church, it is a precondition to a seat
Labor Law Review Digests | Lourleth Lluz
in the WUP Board. Consequently, the expiration of the
terms of the plaintiffs, including Maglaya, as
corporate members carried with it their termination as
members of the Board. Moreover, their continued stay
in their office beyond their terms was only in hold-
over capacities, which ceased when the Bishops
appointed new members of the corporation and the
Board.
The CA affirmed the decision of the RTC, and
dismissed the petition for certiorari filed by the
plaintiffs for being the improper remedy.
Thereafter, Maglaya filed the present illegal dismissal
case against WUP, Palomo, Bishop Lito C. Tangonan
and Bishop Leo A. Soriano. He claimed that he was
unceremoniously dismissed in a wanton, reckless,
oppressive and malevolent manner.
The Labor Arbiter ruled in favor of WUP. But on
appeal, the National Labor Relations Commission
reversed and set aside the Decision of the LA ruling.
Thereafter, the NLRC denied the motion for
reconsideration filed by WUP and the CA dismissed
the petition for certiorari filed by WUP. The CA noted
that the decision and resolution of the NLRC became
final and executor.
Issue: Whether the Court of Appeals committed an
error of law when it summarily dismissed the special
civil action for certiorari raising lack of jurisdiction of
the NLRC filed by [WUP] where it was very clear that
the NLRC had no jurisdiction over the case involving a
corporate officer and where the nature of the
controversy is an intra-corporate dispute.
Ruling: The Court find the instant petition impressed
with merit.
WUP alleges that while the NLRC decision became
final and executory, it did not mean that the said
decision had become immutable and unalterable as
the CA ruled. WUP maintains that the remedy of the
aggrieved party against a final and executory decision
of the NLRC is the filing of the petition for certiorari
under Rule 65 of the Rules of Court. As such, it was
able to meet the conditions set forth in filing the said
remedy before the CA.
"Corporate officers" in the context of Presidential
Decree No. 902- A are those officers of the
corporation who are given that character by the
33 | P a g e

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. A
corporation may have such other officers as may be
provided for by its by-laws like, but not limited to, the
vice-president, cashier, auditor or general manager.
The number of corporate officers is thus limited by
law and by the corporation's by-laws.
Since this Court is now reversing the challenged
decision of the CA and affirming the decision of the
LA in dismissing the case for want of jurisdiction,
Maglaya is not entitled to collect the amount of
₱2,505,208.75 awarded from the time the NLRC
decision became final and executory up to the time
the CA dismissed WUP's petition for certiorari.
In sum, this Court finds that the NLRC erred in
assuming jurisdiction over, and thereafter in failing to
dismiss, Maglaya's complaint for illegal dismissal
against WUP, since the subject matter of the instant
case is an intra-corporate controversy which the NLRC
has no jurisdiction.
2. Maula vs. Ximex Delivery Express GR No.
207838, January 25, 2017
Doctrine: “Preventive Suspension is justified where
the employee’s continued employment poses a
serious and imminent threat to the life or property of
the employer or of the employee’s co-worker.”
Facts: In a span of one week, Maula, an Operation
Staff in Ximex, received three memoranda requiring
him to explain three different offenses.
For the series of willful disobedience, a memorandum
was personally served to him by Gorospe (HR
Manager), but he adamantly refused and howled at
her, “Seguro na abnormal ang utak mo!” without any
provocation from the HR manager. Ultimately, he was
suspended for 30 days and was subsequently
dismissed from employment through a notice of
dismissal sent via registered mail on the ground of
serious misconduct.
Issues: (1) Was the dismissal on the ground of
serious misconduct proper?; (2) Is the principle of
totality of infractions applicable in this case?; (3) Was
the manner of dismissal proper?
Labor Law Review Digests | Lourleth Lluz
Ruling: (1) No. Under the Labor Code, for
misconduct or improper behavior to be a just cause
for dismissal, (a) it must be serious; (b) it must relate
to the performance of the employee’s duties; and (c)
it must show that the employee has become unfit to
continue working for the employee.
In the present case, the outburst of Maula was due to
what he perceived as successive retaliatory and
orchestrated actions of Ximex.
(2) No, Ximex cannot invoke the principle considering
that Maula’s alleged previous acts of misconduct were
not established in accordance with the requirements
of procedural due process.
(3) No, the procedural due process requirement was
not complied with. The memorandum regarding his
dismissal did not contain the following:
1. A detailed narration of facts and
circumstances for Maula to prepare his
explanation;
2. A directive giving him at least 5 calendar
days to submit a written explanation.
3. No ample opportunity was also accorded to
him.
3. Sumifru Corp., vs. Baya, GR No. 188269,
April 17, 2017
Doctrine: “Constructive dismissal exists where there
is cessation of work, because continued employment
is rendered impossible, unreasonable or unlikely, as
an offer involving a demotion in rank or a diminution
in pay' and other benefits”
Facts: Baya, an employee of AMSFC, had worked his
way to a supervisory rank and eventually formed
AMSKARBEMCO, the agrarian reform organization of
the regular employees of AMSFC. Some 220 hectares
of AMSFC’s banana plantation, covered by CARL, was
eventually transferred to its regular employees as
Agrarian Reform Beneficiaries (ARBs).  They explored
a possible agribusiness venture with AMSFC, but the
talks broke down. The ARBs then held a referendum
to choose as to which group between AMSKARBEMCO
and SAFFPAI they wanted to belong. 280 went to
AMSKARBEMCO while 85 joined SAFFPAI.
34 | P a g e

When AMSFC learned of this, it summoned
AMSKARBEMCO officer, including Baya, threatening
them that the ARB’s takeover of lands would not push
through. A few days after, Baya was informed that his
secondment with DFC, AMSFC’s sister company, has
ended. Upon his return to AMSFC, he found out that
there were no supervisory positions available. He was
then assigned to different rank-and-file positions
instead.
Issue: Was Baya illegally/constructively dismissed by
AMSFC and DFC (later acquired by Sumifru?
Ruling: Yes. Both AMSFC and DFC were aware of the
lack of supervisory positions in AMSFC yet they still
proceeded to order Baya’s return thus forcing him to
accept rank-and-file positions. Constructive dismissal
exists where there is cessation of work, because
'continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a
demotion in rank or a diminution in pay' and other
benefits. Under the doctrine of strained relations, the
payment of separation pay is considered an
acceptable alternative to reinstatement when the
latter option is no longer desirable or viable. Thus,
given the clear atmosphere of animosity and
antagonism, it is more prudent that Baya be awarded
separation pay, instead of being reinstated.
4. Manggagawa ng Komunikasyon sa
Pilipinas vs. Phil Long Distance telephone
Company Inc., Gr No. 190389, April 19,
2017
Doctrine: “A Rule 45 petition can only prosper if CA
fails to correctly determine whether NLRC committed
grave abuse of discretion”
Facts: Petitioner represents PLDT‘s employees and
filed a notice of strike with the National Conciliation
and Mediation Board (NCMB). Petitioner charged
PLDT with unfair labor practice for transferring
employees to Taguig and for hiring contractual
employees for regular jobs occupied by union
members. While the notice was pending, petitioner
filed another strike. Petitioner went on a strike. PLDT
then declared 323 employees as redundant and
redeployed 180 of the 503 affected to other positions.
SOLE later on certified the labor dispute for
compulsory arbitration. Petitioner filed a Petition for
Labor Law Review Digests | Lourleth Lluz
Certiorari before CA challenging SOLE‘s order as it
distinguished the striking workers in the return-to-
work order. CA granted the petition and nullified
SOLE‘s order. Also, SC directed PLDT to readmit all
striking workers. NLRC also dismissed petitioner‘s
charges of ULP against PLDT as the redundancy
program was justified due to technological advances.
Petitioner filed a Petition for Certiorari with CA.
However, the petition was dismissed. It also rendered
moot the order of reinstatement due to NLRC‘s order
upholding the program and the dismissal.
Issue: When can a Rule 45 petition be availed of in
labor cases?
Ruling: A Rule 45 petition can only prosper if CA fails
to correctly determine whether NLRC committed
grave abuse of discretion. A court or tribunal acted
with grave abuse of discretion when it capriciously
acts or whimsically exercises judgment to be
equivalent to lack of jurisdiction. The abuse must be
so flagrant to amount to a refusal to perform a duty
or to act as provided by law. If the NLRC ruling has
basis in the evidence and jurisprudence, then no
grave abuse of discretion exists and CA should
dismiss the petition. If grave abuse of discretion
exists, then CA must grant the petition and nullify the
NLRC ruling, entering at the same time the ruling that
is justified under the evidence and the governing law,
rules and jurisprudence.
5. Javines vs. Xlibris, GR No. 214301, June 7,
2017
Doctrine: “Although appeal is an essential part of
judicial process, the right thereto is not a natural
right or a part of due process but is merely a
statutory privilege.”
Facts: Javines was hired by Xlibris as Operations
Manager. Approximately 10 months after, Javines was
terminated for falsifying/tampering three meal
receipts.
The falsification was discovered when Javines
submitted the meal receipts for reimbursement to the
finance department. Consequently, a Notice to
Explain was issued to Javines for alleged violation of
the Employee's Code of Conduct and charging him
with acts constituting dishonesty.
35 | P a g e

In his written explanation, Javines denied having
tampered the receipts. He explained that as
Operations Manager, he is responsible for securing
reimbursement for expenses incurred by the
supervisors under him. However, the supervisors
denied participation in the tampered receipts.  himself appealed cannot obtain from the appellate
An administrative hearing was held. Javines failed to
explain why and how the incident transpired. Instead,
Javines requested for further investigation since, at
that time, he allegedly could not recall who submitted
the receipts to him.
Xlibris terminated Javines' employment through an
"end of employment notice."
Javines then filed a complaint for illegal dismissal. The
complaint was, however, dismissed by the Labor
Arbiter who found that Javines' dismissal was for just
cause and with due process.
On appeal, the NLRC found that while Javines was
dismissed for just cause, he was not afforded
procedural due process. The NLRC noticed that no
other hearing was called to afford Javines the
opportunity to confront the witnesses (supervisors)
against him before he was dismissed. As such, the
NLRC awarded nominal damages in the amount of
Pl0,000 in Javines' favor.
Javines failed to move for reconsideration of the
NLRC's decision. Only Xlibris elevated the case to the
CA on certiorari  on the sole issue that the NLRC
gravely abused its discretion in holding that it failed to
comply with the requirements of procedural due
process.
Issue: Whether or not Javines was dismissed for a
just cause.
Ruling: Yes, Javines was dismissed for a just cause.   involvement in the alleged misconduct for loss of trust
The Labor Arbiter and the NLRC uniformly held that
Javines' employment was terminated for just cause
under Article 297 of the Labor Code. It is undisputed
that from this unanimous finding, Javines failed to
move for reconsideration nor challenged said ruling
before the CA. Consequently, the NLRC decision
finding Javines to have been dismissed for just cause
became final. For failure to file the requisite petition
before the CA, the NLRC decision had attained finality
and had been placed beyond the appellate court's
power of review. Although appeal is an essential part
Labor Law Review Digests | Lourleth Lluz
of judicial process, the right thereto is not a natural
right or a part of due process but is merely a
statutory privilege. Settled are the rules that a
decision becomes final as against a party who does
not appeal the same and an appellee who has not
court any affirmative relief other than those granted
in the decision of the court below. Hence, the finding
that Javines was dismissed for just cause must be
upheld.
6. Bravo vs. Urios College, GR No. 198066,
June 7, 2017
Doctrine: “He was not an ordinary rank-and-file
employee. His position of responsibility on delicate
financial matters entailed a substantial amount of
trust from respondent. Not only does the payroll
involve the company's finances, it also affects the
welfare of all other employees who rely on their
monthly salaries.”
Facts: Bravo was designated as the school's
comptroller in Urios College whose function included,
among others, the preparation of payroll. The
committee organized to review the ranking system
discovered the Comptroller's Office’s deviation from
company procedure and the discrepancies in the
computation of his and other employees'
salaries. After receipt of a show cause memo and
subsequent hearings, Bravo was found guilty and was
notified of his termination.
Issue: Was the termination valid?
Ruling: Yes. Due to the nature of his occupation,
Bravo's employment may be terminated for willful
breach of trust under Article 297 (c) of the Labor
Code. The employer must adduce proof of actual
and confidence to warrant the dismissal of fiduciary
rank-and-file employees. However, "mere existence of
a basis for believing that the employee has breached
the trust and confidence of the employer" is sufficient
for managerial employees.
He was not an ordinary rank-and-file employee. His
position of responsibility on delicate financial
matters entailed a substantial amount of trust from
respondent. Not only does the payroll involve the
company's finances, it also affects the welfare of all
36 | P a g e

other employees who rely on their monthly salaries.
It was reasonable that he should be held liable on
the basis of command responsibility.
Furthermore, the employer complied with all the
requirements of procedural due process in
terminating his employment. Any meaningful
opportunity for the employee to present evidence
and address the charges against him or her
satisfies the requirement of ample opportunity to
be heard.  payment of separation pay.
Finally, considering that there was a just cause for
terminating petitioner from employment, there is
no basis to award him separation pay, backwages
and attorney's fees.
7. Panaligan vs. Phyvita Enterprises GR No.
202086, June 21, 2017
Doctrine: In termination cases, the burden of proof
rests on the employer to show that the dismissal is
for a just cause. In order to dismiss an employee on
the ground of loss of trust and confidence, the
employee must be guilty of an actual and willful
breach of duty duly supported by substantial
evidence. Substantial evidence is that amount of
evidence, which a reasonable mind might accept as
adequate to support a conclusion.
Facts: Panaligan, et al., employees of Phyvita, were
assigned as Roomboys at “Starfleet”, which was
engaged in the business of health club massage
parlor, spa and other related services. Phyvita
reported an alleged theft incident to the Police Station
but the latter were not able to gather sufficient
information that would lead them as to who
committed said theft. While the police investigation
was pending, Panaligan, et al., together with other
employees, filed a complaint against Starfleet for
underpayment of wages.
Subsequently, Starfleet’s Assistant Operations
Manager issued individual Office Memoranda against
them, directing them to explain in writing for the
alleged violation of Starfleet's rules and regulations,
particularly any act of dishonesty, more specifically
their alleged involvement in a theft wherein important
documents and papers including cash were lost which
happened. Memoranda were issued against them
informing them of their termination from employment
Labor Law Review Digests | Lourleth Lluz
on the ground that they violated the company’s rules
and regulations by stealing company documents and
cash.
Phyvita filed a criminal complaint against Panaligan,
et al. for theft. However, such complaint was
dismissed by the City Prosecutor there being no
sufficient evidence to warrant the finding of the crime
of theft against them. Subsequently, Panaligan, et al.
file a complaint with the NLRC for illegal dismissal and
Issue: Whether there exists a just and valid cause for
the termination of Panaligan, et al.
Ruling: No. In order to dismiss an employee on the
ground of loss of trust and confidence, the employee
must be guilty of an actual and willful breach of duty
duly supported by substantial evidence. Substantial
evidence is that amount of evidence, which a
reasonable mind might accept as adequate to support
a conclusion.
In termination cases, the burden of proof rests on the
employer to show that the dismissal is for a just
cause. In the case at bar, Phyvita failed to adduce
substantial evidence that would clearly demonstrate
that Panaligan, et al., have committed serious
misconduct or have performed actions that would
warrant the loss of trust and confidence reposed upon
them by their employer. Contrary to the findings of
the Court of Appeals and the Labor Arbiter, no
substantial evidence supports the allegation of theft
leveled by Phyvita against Panaligan, et al. - the said
criminal act being the underlying reason for the
dismissal of the latter from being employees of the
former.
8. Claudia Kitchen Inc. vs. Tanguin GR No.
221096, June 28, 2017
Doctrine: While the burden of proof rests with the
employer to show that there was no illegal dismissal,
it is incumbent upon the employee to first prove that
she was dismissed.
Facts: Tanguin, an employee of Claudia’s Kitchen,
was preventively suspended while an investigation is
being conducted against her for reports that she was
forcing some employees to buy silver jewelry from
her during office hours and inside company premises.
37 | P a g e

She then filed a complaint for illegal dismissal.
Claudia’s Kitchen denied having dismissed Tanguin
and presented notices they sent to Tanguin requiring
her to answer the charges and one notice reminding
her that she was still an employee and directing her
to report back to work.
Issue: Was respondent illegally dismissed?
Ruling: No. While the burden of proof rests with the
employer to show that there was no illegal dismissal,
it is incumbent upon the employee to first prove that
she was dismissed. In this regard, Tanguin failed to
discharge. She simply alleged that she was barred
from entering the premises but no evidence was
presented to prove the same. And even if she was
indeed barred, there was lawful basis since she was
placed under preventive suspension. While there was
no abandonment of work, the filing of complaint for
illegal dismissal with prayer for reinstatement negates
any intention to abandon employment. Since there is
no illegal dismissal, separation pay and reinstatement
cannot be awarded to an employee whose
employment was never terminated. Separation pay
and reinstatement are exclusive remedies and even if
there are instances when both are awarded, it will
only apply when there is termination. In a case where
the employee was neither found to have been
dismissed nor to have abandoned work, the general
course of action is for the Court to dismiss the
complaint, direct the employee to return to work, and
order employer to accept employee.
9. Arco Aluminum Inc. vs. Pinon, Jr. GR No.
2158741, July 5, 2017
Doctrine: To be valid, a deed of release, waiver or
quitclaim must meet the following requirements: (1)
that there was no fraud or deceit on the part of any
of the parties; (2) that the consideration for the
quitclaim is sufficient and reasonable; and (3) that
the contract is not contrary to law, public order,
public policy, morals or good customs, or prejudicial
to a third person with a right recognized by law.
Facts: Eton Properties contracted with Arlo
Aluminum, a duly registered corporation, for the
supply and installation of aluminum and glass. In
turn, Arlo Aluminum engaged the services of E.M.
Glazing through subcontracting. But then, an
unfortunate incident occurred at work that resulted to
Labor Law Review Digests | Lourleth Lluz
the demise of Vic Edward and 9 other employees of
E.M. Glazing. Companies Arlo and Eton extended
P150,000 financial assistance to the families of the
victims. In return, the families signed a Deed of
Release, Waiver and Quitclaim which provides that
the amount received is enough to cover all labor
claims. Now, Vicente (father of Vic Edward) filed a
complaint claiming that the Deed was invalid because
the consideration was insufficient to cover all the
liabilities of Arlo Aluminum.
Issue: Is the Deed of Release, Waiver and Quitclaim
valid?
Ruling: Yes. To be valid, a deed of release, waiver or
quitclaim must meet the following requirements: (1)
that there was no fraud or deceit on the part of any
of the parties; (2) that the consideration for the
quitclaim is sufficient and reasonable; and (3) that
the contract is not contrary to law, public order,
public policy, morals or good customs, or prejudicial
to a third person with a right recognized by law. The
consideration given to Vicente in the amount of
P150,000 was reasonable and sufficient to cover the
labor claims. As such, where it is shown that the
person making the waiver did so voluntarily, with full
understanding of what he was doing, and the
consideration for the quitclaim is sufficient and
reasonable, the transaction must be recognized as a
valid and binding undertaking.
10. Sterling Paper Products Enterprises vs.
KMM-Katipunan, GR No. 221493, August 2,
2017
Doctrine: To summarize, for misconduct or improper
behavior to be a just cause for dismissal, the
following elements must concur: (a) the misconduct
must be serious; (b) it must relate to the
performance of the employee's duties showing that
the employee has become unfit to continue working
for the employer; and (c) it must have been
performed with wrongful intent
Facts: Sterling hired Esponga as machine operator.
On June 26, 2010, the supervisor of Sterling, Mercy
Vinoya found Esponga and his co-employees about to
take a nap on the sheeter machine. She called their
attention and prohibited them from taking a nap
thereon for safety reasons. Esponga and his co-
employees then transferred to the mango tree near
the staff house and was heard by Vinoya
utter, "Huwag maingay, puro bawal. " She then
38 | P a g e

confronted Esponga, who responded in a loud and
disrespectful tone, "Pura kayo bawal, bakit bawal ba
magpahinga.?”When Vinoya turned away, Esponga
gave her the "dirty finger" sign in front of his co-
employees and said "Wala ka pala eh, puro ka
dakdak. Baka pag ako nagsalita hindi mo kayanin.  "
Later that day, Esponga was found to have been not
working as the machine assigned to him was not
running from 2:20 to 4:30 in the afternoon.
Additionally, he failed to submit his daily report from
June 21 to June 29, 2010.
After administrative proceedings were conducted,
Sterling terminated Esponga on the ground of gross
and serious misconduct, gross disrespect to superior
and habitual negligence, This prompted Esponga and
KMMKatipunan to file a complaint for illegal dismissal.
Issue: Whether or not Esponga is guilty of Serious
Misconduct.
Ruling: YES, Esponga is guilty of Serious Misconduct.
As such, his dismissal was valid. Under Article 282 (a)
of the Labor Code, serious misconduct by the
employee justifies the employer in terminating his or
her employment.
Misconduct is defined as an improper or wrong
conduct. It is a transgression of some established and
definite rule of action, a forbidden act, a dereliction of
duty, willful in character, and implies wrongful intent
and not mere error in judgment. To constitute a valid
cause for the dismissal within the text and meaning of
Article 282 of the Labor Code, the employee's
misconduct must be serious, i.e.,of such grave and
aggravated character and not merely trivial or
unimportant.
Additionally, the misconduct must be related to the
performance of the employee's duties showing him to
be unfit to continue working for the employer.
Further, and equally important and required, the act
or conduct must have been performed with wrongful
intent.
To summarize, for misconduct or improper behavior
to be a just cause for dismissal, the following
elements must concur: (a) the misconduct must be
serious; (b) it must relate to the performance of the
employee's duties showing that the employee has
become unfit to continue working for the employer;
and (c) it must have been performed with wrongful
intent.
In the case at bench, the charge of serious
misconduct is duly substantiated by the evidence on
record.
Labor Law Review Digests | Lourleth Lluz
Primarily, in a number of cases, the Court has
consistently ruled that the utterance of obscene,
insulting or offensive words against a superior is not
only destructive of the morale of his co-employees
and a violation of the company rules and regulations,
but also constitutes gross misconduct which is a
ground for dismissal or termination.
Then, Esponga's assailed conduct was related to his
work. Vinoya did not prohibit him from taking a nap.
She merely reminded him that he could not do so on
the sheeter machine for safety reasons. Esponga's
acts reflect an unwillingness to comply with
reasonable management directives.
Finally, contrary to the CA' s pronouncement, the
Court finds that Esponga was motivated by wrongful
intent. To reiterate, Vinoya prohibited Esponga from
sleeping on the sheeter machine. Later on, when
Vinoya was passing by, Esponga uttered "Huwag
main gay, puro bawal. " When she confronted him, he
retorted "Pura kayo bawal, bakit bawal ba
magpahinga?" Not contented, Esponga gave her
supervisor the "dirty finger" sign and said. Wala ka
pala eh, puro ka dakdak. Baka pag ako nagsalita
hindi mo kayanin. " It must be noted that he
committed all these acts in front of his co-employees,
which evidently showed that he intended to
disrespect and humiliate his supervisor.
"An aggrieved employee who wants to unburden
himself of his disappointments and frustrations in his
job or relations with his immediate superior would
normally approach said superior directly or otherwise
ask some other officer possibly to mediate and
discuss the problem with the end in view of settling
their differences without causing ferocious conflicts.
No matter how the employee dislikes his employer
professionally, and even if he is in a confrontational
disposition, he cannot afford to be disrespectful and
dare to talk with an unguarded tongue and/or with a
baleful pen.”
11. Distribution & Control Products Inc. vs.
Santos, GR No. 212616, July 10, 2017
Doctrine: Loss of trust and confidence is a just
cause for dismissal under Article 282(c) of the Labor
Code, and in order for the employer to properly
invoke this ground, the employer must satisfy two
conditions.
First, the employer must show that the employee
concerned holds a position of trust and confidence.
Jurisprudence provides for two classes of positions of
trust.
39 | P a g e

Second, the employer must establish the existence of
an act justifying the loss of trust and confidence.
Facts: Santos, was employed as company driver by
Distribution & Control Products, Inc. with Mr. Tiamsic
as its president. After more than 5 years, Santos
received a notice informing him that he was being
placed under preventive suspension for a period of 30
days for allegedly having participated in the unlawful
taking of circuit breakers and electrical products of
the company; a criminal complaint was filed against
him and several other persons. He was never given
the opportunity to explain his side before he was
suspended; and after the lapse of his 30-day
suspension he was no longer allowed to return to
work without any justification for such disallowance.
Thus, he filed a complaint for constructive illegal
dismissal and payment of separation pay
The company, on the other hand, contend that they
lost trust and confidence in Santos. Prior the
preventive suspension, it was found out that a
number of electrical materials and products with an
estimated value big amounts; Santos and the
company warehouseman were the only persons who
had complete access to the company warehouse as
they were entrusted with the handling of all products
from the company's suppliers. considering the size
and weight of the missing items, they can only be
carried by no less than 2 persons. The company
demanded an explanation from Santos and the
warehouseman, but they failed to make an account
as to how these products had gone missing from the
warehouse and office building; as such, petitioners
filed a criminal complaint for qualified theft and,
thereafter, they suspended herein respondent; and
after the lapse of his suspension, Santos no longer
returned to work.
LA: Found Santos to be illegally terminated
from his employment, thus, ordering his
reinstatement and payment of his full
backwages. LA held that the company had
the burden of proving that Santos’ dismissal
was valid and their failure to discharge this
burden only means that the dismissal was
not justified and, therefore, illegal.
NLRC: Dismissed the company’s appeal and
affirmed, with modification, the decision of
the LA. In addition to the payment of
backwages, the NLRC ordered the company
to pay Santos his separation pay equivalent
to one (1) month for every year of service,
instead of reinstatement.
Labor Law Review Digests | Lourleth Lluz
CA: Denied the certiorari petition and
affirmed the questioned NLRC Decision and
Resolution.
Issue: Was the loss and confidence of the employer
in this case a valid ground for termination?
Ruling: NO. Loss of trust and confidence is a just
cause for dismissal under Article 282(c) of the Labor
Code, and in order for the employer to properly
invoke this ground, the employer must satisfy two
conditions.
First,  the employer must show that the employee
concerned holds a position of trust and confidence.
Jurisprudence provides for two classes of positions of
trust. The first class consists of managerial
employees, or those who, by the nature of their
position, are entrusted with confidential and delicate
matters and from whom greater fidelity to duty is
correspondingly expected. The second class includes
"cashiers, auditors, property custodians, or those
who, in the normal and routine exercise of their
functions, regularly handle significant amounts of the
employer's money or property."
Second,  the employer must establish the existence of
an act justifying the loss of trust and confidence. To
be a valid cause for dismissal, the act that betrays the
employer's trust must be real. Proof beyond
reasonable doubt is not needed to justify the loss as
long as the employer has reasonable ground to
believe that the employee is unworthy of the trust
and confidence demanded of his position.
Nonetheless, when the breach of trust or loss of
confidence alleged is not borne by clearly established
facts, as in this case, such dismissal on the cited
grounds cannot be allowed.
Applied to the present case, the LA, NLRC and the CA
are unanimous in their finding that petitioners were
not able to discharge their burden of proving that
their termination of respondent's employment was for
a just and valid cause. This is a question of fact and it
is settled that findings of fact of quasi-judicial
agencies are accorded great respect, even finality, by
this Court.
It is true that respondent may indeed be considered
as one who occupies a position of trust and
confidence. However, the company failed to present
substantial evidence to support their allegations. In
other words, petitioners were not able to establish the
existence of an act justifying their alleged loss of trust
and confidence in respondent.
40 | P a g e
 Labor Law Review Digests | Lourleth Lluz

12. Valmores vs. Dr. Achacoso, GR No. activities, if such schedule conflicts
217453, July 19, 2017 with the students' exercise of their
religious obligations;
(ii) (ii) to compensate for absences,
Facts: Petitioner Denmark S. Valmores (Valmores) is
students may be allowed to do
a member of the Seventh-day Adventist Church,
remedial work, which in turn should
whose fundamental beliefs include the strict
be within the bounds of school rules
observance of the Sabbath as a sacred day.As such,
and regulations and without
petitioner Valmores joins the faithful in worshipping
affecting their grades; and
and resting on Saturday, the seventh day of the
(iii) (iii) to be entitled to exemption,
week, and refrains from non-religious undertakings
affected students must submit a
from sunset of Friday to sunset of Saturday.
certification of attendance duly
signed by their respective minister.
Prior to the instant controversy, Valmores was
enrolled as a first-year student at the MSU-College of
At once, a plain reading of the memorandum reveals
Medicine. To avoid potential conflict between his
the ministerial nature of the duty imposed upon HEIs.
academic schedule and his church's Saturday worship,
Its policy is crystal clear: a student's religious
petitioner Valmores wrote a letter to Achacoso,
obligations takes precedence over his academic
requesting that he be excused from attending his
responsibilities, consonant with the constitutional
classes in the event that a regular weekday session is
guarantee of free exercise and enjoyment of religious
rescheduled to a Saturday. At the same time,
worship. Accordingly, the CHED imposed a positive
petitioner Valmores expressed his willingness to make
duty on all HEIs to exempt students, as well as
up for any missed activity or session due to his
faculty members, from academic activities in case
absence.
such activities interfere with their religious
obligations.
In one instance, petitioner Valmores was unable to
take his Risto-Pathology laboratory examination held
Although the said memorandum contains the phrase
on a Saturday. Cabildo was his professor for the said
"within the bounds of school rules and regulations,"
subject. Despite his request for exemption, no
the same relates only to the requirement of remedial
accommodation was given by either of the
work, which, based on the language used, is merely
respondents. As a result, petitioner Valmores received
optional on the part of the HEI. Neither can such
a failing grade of 5 for that particular module and was
phrase be said to have conferred discretion as the use
considered ineligible to retake the exam.
of the words "shall be enjoined" and "strict
compliance" denote a mandatory duty on the part of
Even though Valmores wrote several letters asking the HEI to excuse its students upon submission of the
Cabildo to reconsider his decision, such efforts proved certification prescribed in the same memorandum.
futile. As such, Valmores elevated the matter before
the CHED. In connection therewith, the CHED
Clearly, under the 2010 CHED Memorandum, HEIs do
Regional Office, as well as the President of MSU,
not possess absolute discretion to grant or deny
instructed respondent Achacoso to enforce the 2010
requests for exemption of affected students. Instead,
CHED Memorandum (Guidelines to Higher Education
the memorandum only imposes minimum standards
Institution, for the exemption of teachers, personnel,
should HEIs decide to require remedial
and students from participating in school or related
work, i.e.,  that the same is within the bounds of
activities due to compliance with religious
school rules and regulations and that the grades of
obligations). However, no action was taken by
the students will not be affected.
Achacoso.

As a condition for exemption, the 2010 CHED

Issues: (1) Whether or not respondents can be
Memorandum simply requires the submission of "a
compelled by mandamus to enforce the 2010 CHED
certification or proof of attendance/participation duly
Memorandum.; (2) Whether or not respondents
signed by their pastor, priest, minister or religious
violated Valmores’ right to freedom of religion.
leader for periods of absence from classes, work or
school activities."
Ruling: (1) YES, respondents can be compelled to
enforce the 2010 CHED Memorandum through
Thus, to recapitulate, once the required certification
Mandamus. After nalyzing the 2010 CHED
or proof is submitted, the concerned HEI is enjoined
Memorandum, the following are derived:
to exempt the affected student from attending or
(i) HEIs are enjoined to excuse
participating in school-related activities if such
students from attending or
activities are in conflict with their religious obligations.
participating in school or related

41 | P a g e

As to whether HEIs will require remedial work or not,
the Court finds the same to be already within their
discretion, so long as the remedial work required is
within the bounds of school rules and regulations and
that the same will not affect the grades of the
concerned students.
For these reasons, the Court finds that respondents
were duty bound to enforce the 2010 CHED
Memorandum insofar as it requires the exemption of
petitioner Valmores from academic responsibilities
that conflict with the schedule of his Saturday
worship. Their failure to do so is therefore correctible
by mandamus.
(2) YES, respondents violated Valmores’ right to
freedom of religion. The importance of education
cannot be overstated. The Court has, on many
occasions, ruled that institutions of higher learning
are bound to afford its students a fair opportunity to
complete the course they seek to pursue, barring any
violation of school rules by the students concerned.
Here, in seeking relief, petitioner Valmores argues
that he is bound by his religious convictions to refrain
from all secular activities on Saturdays, a day that is
deemed holy by his church.
On the other hand, respondents' refusal to excuse
petitioner Valmores from Saturday classes and
examinations fundamentally rests only on the fact
that there were other Seventh-day Adventists who
had successfully completed their studies at the MSU-
College of Medicine. Respondents, in their Comment,
stated thus:
14. That there are many
successful doctors who are
members of the Seventh day
Adventist and surely they
have sacrificed before they
succeeded in their calling as
many Filipinos who shone in
their respective fields of
study.
15. That we ask ourselves,
is the case of Mr. Valmores
unique in (sic) its own?
Certainly it is not because
we have had students who
are member (sic) of the
Seventh-Day Adventist and
our College did not have a
problem with them. x x x
Without more, respondents' bare arguments crumble
against constitutional standards. As discussed above,
the Bill of Rights guarantees citizens the freedom to
act on their individual beliefs and proscribes
Labor Law Review Digests | Lourleth Lluz
government intervention unless necessary to protect
its citizens from injury or when public safety, peace,
comfort, or convenience requires it.66 Thus, as faculty
members of the MSU-College of Medicine,
respondents herein were duty-bound to protect and
preserve petitioner Valmores' religious freedom.
Even worse, respondents suggest that the "sacrifices"
of other students of the common faith justified their
refusal to give petitioner Valmores exceptional
treatment. This is non-sequitur.  Respondents brush
aside petitioner Valmores' religious beliefs as if it were
subject of compromise; one man's convictions and
another man's transgressions are theirs alone to bear.
That other fellow believers have chosen to violate
their creed is irrelevant to the case at hand, for in
religious discipline, adherence is always the general
rule, and compromise, the exception.
While in some cases the Court has sustained
government regulation of religious rights, the Court
fails to see in the present case how public order and
safety will be served by the denial of petitioner
Valmores' request for exemption. Neither is there any
showing that petitioner Valmores' absence from
Saturday classes would be injurious to the rights of
others. Precisely, the 2010 CHED Memorandum was
issued to address such conflicts and prescribes the
action to be taken by HEIs should such circumstance
arise.
What is certain, as gathered from the foregoing, is
that respondents' concerted refusal to accommodate
petitioner Valmores rests mainly on extralegal
grounds, which cannot, by no stretch of legal
verbiage, defeat the latter's constitutionally-enshrined
rights. That petitioner Valmores is being made by
respondents to choose between honoring his religious
obligations and finishing his education is a patent
infringement of his religious freedoms. As the final
bulwark of fundamental rights, this Court will not
allow such violation to perpetuate any further.
13. Cosue vs. Ferritz Integrated Development
Corp., GR No. 230664, July 24, 2017
Doctrine: The rule that the employer bears the
burden of proof in illegal dismissal cases finds no
application here because the respondents deny
having dismissed the petitioner. In illegal dismissal
cases, while the employer bears the burden to prove
that the termination was valid or authorized, the
employee must first establish by substantial evidence
the fact of dismissal from service
Facts: Petitioner worked as a janitor for FIDC and he
was suspended from July 16, 2014 to August 13,
42 | P a g e

2014 for suspicion that he stole the electrical wires
from the company’s electrical room. Beginning July
16, 2014 to August 13, 2014, petitioner was no longer
allowed to work, thus he filed a complaint against
FIDC for illegal dismissal and underpayment of
salaries. Respondent on the other hand had alleged
that Cosue was suspended from July 16 to August 13
for obtaining keys to the electrical room and entering
it without permission, and for leaving his post and
joining another employee in the electrical room.
Petitioner had returned to FIDC on August 27 and it
was agreed that he would voluntarily resigned.
However, he did not file his resignation, and
eventually instituted his complaint for illegal dismissal.
Respondents argued that there was no illegal
dismissal as there was an agreement between FIDC
and petitioner that the latter would just resign.
The Labor Arbiter and NLRC had ruled that petitioner
was not dismissed because as averred in his
complaint, he was dismissed on July 27, a date within
the suspension period.
Issue: Was petitioner illegally dismissed?
Ruling: No. In illegal dismissal cases, while the
employer bears the burden to prove that the
termination was valid or authorized, the employee
must first establish by substantial evidence the fact of
dismissal from service. Petitioner himself alleged that
he was suspended from July 16, 2014 to August 13,
2014 pending the investigation of the pilferage of
electrical wires. Thus, on July 27, the date of
dismissal alleged in his complaint, petitioner was still
serving his suspension; his employment was not
terminated. Petitioner also claimed he was not
allowed to report for work after his suspension but
this was not unsubstantiated. The respondent was
able to present entries from the FIDC security
logbook that petitioner was able to enter the premises
on August 27 and such evidence was not challenged
by petitioner. Bare allegations of constructive
dismissal, when uncorroborated by the evidence on
record, as in this case, cannot be given credence.
In this case, records do not show any demotion in
rank or a diminution in pay made against petitioner.
Neither was there any act of clear discrimination,
insensibility or disdain committed by respondents
against petitioner which would justify or force him to
terminate his employment from the company.
Labor Law Review Digests | Lourleth Lluz
Respondents' decision to give petitioner a graceful
exit is perfectly within their discretion. It is settled
that there is nothing reprehensible or illegal when the
employer grants the employee a chance to resign and
save face rather than smear the latter's employment
record.
14. Alaska Milk Corp.,/Estate of Wilfred
Uytengsu, GR No. 228412 & 2284389, July
26, 2017
Doctrins: (a) Under Article 297 (b) of the Labor
Code, an employer may terminate an employee for
gross and habitual neglect of duties. Neglect of
duty, to be a ground for dismissal, must be
both gross and habitual. 
(b) Loss of Trust and Confidence, a ground for
termination of employment -- For managerial
employees, the mere existence of a basis for
believing that such employee has breached the trust
of his employer would suffice for his dismissal. In the
case of managerial employees, proof beyond
reasonable doubt is not required, it being sufficient
that there is some basis for such loss of confidence,
such as when the employer has reasonable ground to
believe that the employee concerned is responsible
for the purported misconduct, and the nature of his
participation therein renders him unworthy of the
trust and confidence demanded by his position.
Facts: On April 1, 2008, Alaska Milk Corporation
(AMC) hired Ernesto L. Ponce ( Ponce), a licensed
mechanical engineer, as Manager for Engineering
Services of its Milk Powder Plant ( MPP) and Ultra High
Temperature Plant (UHT). He was then promoted as
Director for Engineering Services. He held the position
until his termination from employment on February
25, 2010.
AMC and Uytengsu, Sr. averred that sometime in April
2009, AMC's President and Chief Executive Officer,
Wilfred Steven Uytengsu, Jr. ( Uytengsu, Jr.),
witnessed Ponce's abrasive behavior and was
constrained to remind him to be courteous to his
colleagues.
On January 21, 2010, Uytengsu, Sr. sent an e-mail to
Ponce calling his attention to his failure to provide
updates on several engineering works and problems
involving his areas of concern.
43 | P a g e

In February 2010, Uytengsu, Sr. received a copy of an
e-mail that Ponce sent to 12 of his colleagues in
connection with his "Receipted Allowance" ( R/A) for
business-related expenses. In the said e-mail ( R/A e-
mail), Ponce solicited official receipts from his
colleagues in exchange for a five percent (5%) rebate
on the value of the receipts submitted to him.
On February 16, 2010, Uytengsu, Sr. issued the First
Performance Evaluation Memorandum, directing
Ponce to explain why his services should not be
terminated for gross and habitual neglect of duties
and other analogous causes under Article 282 of the
Labor Code.
After finding Ponce's explanation unsatisfactory, AMC
issued the Second Performance Evaluation
Memorandum and terminated Ponce's employment
effective February 25, 2010 for:
(1) Failure to provide updates on ongoing
and planned engineering works;
(2) Emailing 12 colleagues requesting for
official receipts in exchange for a 5% rebate
to be used in liquidating his receipted
allowance/fraudulently submitting official
receipts of expenses which he did not incur;
(3) Disrespectful manner towards the AMC's
President and CEO who called Ponce's
attention regarding his violation of AMC's
company policy;
(4) Continued abrasive attitude towards his
fellow officers and specially to his
subordinates and other rank-and-file workers
of AMC, whom Ponce allegedly subjected to
unjust treatment and abusive language
resulting in death threats being hurdled
against Ponce and the filing of several
complaints against AMC by its employees;
Ponce filed a complaint for illegal dismissal with
prayer for reinstatement, payment of backwages and
damages against AMC, the estate of Uytengsu, Sr.,
AMWU, and its president Ferdinand Bautista.
LA: The LA ruled that Ponce was illegally
dismissed. In resolving the issue on gross
and habitual neglect of duties, the LA held
that the instances cited by AMC were hardly
gross enough to warrant dismissal. While
delay in the completion of Ponce's assigned
Labor Law Review Digests | Lourleth Lluz
tasks was unacceptable, the same could not
be equated with negligence.
As for Ponce's act of soliciting receipts for his
R/A, the LA noted that AMC did not issue
any warning or admonition against him
during the period covering May 5, 2009, the
day after Ponce sent the R/A e-mail, up to
February 15, 2010, the day before the First
Performance Evaluation was issued. It
pointed out that AMC never claimed, much
less proved, that Ponce had presented for
reimbursement representation expenses
covered by an official receipt belonging to
any one of his co-employees. Hence, the LA
concluded that AMC condoned Ponce's act
because it was unbelievable for AMC to have
taken more than nine (9) months before it
informed Ponce that solicitation of receipts
was a violation of company rules.
AMC elevated an appeal before the NLRC.
NLRC: The NLRC reversed  and set aside the
LA's ruling. It ruled that the act of soliciting
official receipts in exchange for a 5% rebate
was an act of dishonesty inimical to the
interest of AMC, as Ponce would be
collecting receipted allowance from expenses
which he did not actually incur. The NLRC
rejected the LA's theory that AMC condoned
the act because it did not warn or admonish
Ponce prior to the issuance of the First
Performance Evaluation Memorandum. It
pointed out that Ponce's R/A e-mail came to
the knowledge of Uytengsu, Sr. only in
February 2010. Accordingly, it ruled that
there was sufficient evidence to sustain
Ponce's dismissal on the ground of loss of
trust and confidence.
Ponce filed a petition for certiorari with the
CA.
CA:The CA reversed and set aside the NLRC
ruling. It held that no substantial evidence
was presented to prove the cause of Ponce's
dismissal.
The CA opined that Ponce's dismissal on the
ground of loss of trust and confidence was a
44 | P a g e

mere afterthought. It found that the First
Performance Evaluation Memorandum did
not mention Ponce's acts which resulted in
AMC's loss of trust and confidence; and that
there was neither any explanation nor
discussion of his alleged sensitive and
delicate position requiring AMC's utmost
trust. Moreover, it was only in the Second
Performance Evaluation Memorandum
(termination letter) that AMC invoked loss of
trust and confidence as a ground for
dismissal.
The CA further held that the penalty of
dismissal was too harsh. It observed that
AMC failed to issue any warning during the
period after the sending of the R/A e-mail up
to the day prior to the issuance of the First
Performance Evaluation Memorandum. Also,
the CA noted that Ponce had no previous
disciplinary record in his almost two (2)
years of service; and that his promotion
attested to his competence and diligence in
the performance of his duties.
Issus: (1) Whether there is just cause to terminate
ponce's employment due to gross and habitual
neglect of duties; (2) Whether there is just cause to
terminate ponce's employment due to loss of trust
and confidence.
Ruling: As a rule, the Court does not review
questions of fact, but only questions of law in an
appeal by certiorari under Rule 45 of the Rules of
Court. The rule, however, is not absolute as the Court
may review the facts in labor cases where the
findings of the CA and of the labor tribunals are
contradictory.
In the case at bench, the factual findings of the LA
and the CA differ from those of the NLRC. This
divergence of positions constrains the Court to review
and evaluate assiduously the evidence on record.
(1) No. AMC failed to show by substantial evidence
that Ponce was guilty of gross and habitual neglect of
duties Under Article 297 (b) [formerly Article 282 (b)]
of the Labor Code, an employer may terminate an
employee for gross and habitual neglect of duties.
Neglect of duty, to be a ground for dismissal, must be
both gross and habitual. Gross negligence implies a
want or absence of or failure to exercise even slight
Labor Law Review Digests | Lourleth Lluz
care or diligence, or the entire absence of care. It
evinces a thoughtless disregard of consequences
without exerting any effort to avoid them. Habitual
neglect implies repeated failure to perform one's
duties for a period of time, depending upon the
circumstances.
Ponce's termination from employment based on gross
and habitual neglect of duties is unwarranted.
Aside from enumerating the projects/improvements
which Ponce purportedly failed to implement, AMC
adduced no other evidence to substantiate its
charges. As allegation is not evidence, the rule has
always been to the effect that a party alleging a
critical fact must support his allegation with
substantial evidence which has been construed to
mean such relevant evidence as a reasonable mind
will accept as adequate to support a
conclusion. Records show that AMC proffered nothing
beyond bare allegations to prove that failure to
implement the projects/improvements was occasioned
by gross neglect on the part of Ponce.
The fact that Ponce admitted to having been delayed
in some of the tasks assigned to him does not
establish gross and habitual neglect of duties.
(2) Yes. The records point to the existence of a just
cause for termination — Loss of Trust and Confidence
Among the just causes for termination is the
employer's loss of trust and confidence in its
employee. Article 297 (c) [formerly Article 282 (c)] of
the Labor Code provides that an employer may
terminate the services of an employee for fraud or
willful breach of the trust reposed in him. In order for
the said cause to be properly invoked, however,
certain requirements must be complied with, namely:
(1) the employee concerned must be holding a
position of trust and confidence; and (2) there must
be an act that would justify the loss of trust and
confidence.
There are two classes of positions of trust: (1)
managerial employees whose primary duty consists of
the management of the establishment in which they
are employed or of a department or a subdivision
thereof, and to other officers or members of the
managerial staff; and (2) fiduciary rank-and-file
employees, such as cashiers, auditors, property
custodians, or those who, in the normal exercise of
45 | P a g e

their functions, regularly handle significant amounts
of money or property. These employees, though rank-
and-file, are routinely charged with the care and
custody of the employer's money or property, and
are, thus, classified as occupying positions of trust
and confidence.
As regards a managerial employee, the mere
existence of a basis for believing that such employee
has breached the trust of his employer would suffice
for his dismissal. Hence, in the case of managerial
employees, proof beyond reasonable doubt is not
required, it being sufficient that there is some basis
for such loss of confidence, such as when the
employer has reasonable ground to believe that the
employee concerned is responsible for the purported
misconduct, and the nature of his participation
therein renders him unworthy of the trust and
confidence demanded by his position.
Ponce held the position of Director for Engineering
Services. He was in charge of managing AMC's
Engineering Department. Hence, he belongs to the
managerial class of employees who occupy a position
of trust and confidence.
AMC and Uytengsu, Sr. argue that the sending of the
R/A e-mail soliciting official receipts in exchange for a
5% cash rebate is an act inimical to the company's
interests because Ponce will be reimbursed for
expenses he did not incur. They consider such act a
fraudulent representation sufficient to erode its trust
and confidence.
The act of soliciting receipts from colleagues
constitutes dishonesty, inimical to AMC's interests, for
the simple reason that Ponce would be collecting
receipted allowance from expenses he did not actually
incur. It has long been settled that an employer
cannot be compelled to retain an employee who is
guilty of acts inimical to his interests. This is all the
more true in the case of supervisors or personnel
occupying positions of responsibility.
Whether Ponce was actually able to gather and
submit receipts to AMC for reimbursement is
immaterial. The sending of the R/A e-mail already
discloses a dishonest motive unbecoming of a director
for engineering services, and the existence of that e-
mail in the records is sufficient basis to justify Ponce's
dismissal on the ground of loss of trust and
confidence. Ponce ought to be reminded of his own
words.
Labor Law Review Digests | Lourleth Lluz
15. Evic Human Resource Management Inc.
vs. Panahon, GR No. 206890, July 31, 2017
Doctrine: For dismissal to be valid, the employer
must show that (1) the dismissal was for a just or
authorized cause; and (2) the dismissed employee
was afforded due process of law.
Facts: Rogelio Panahon was hired by EVIC as Chief
Mate on board the vessel of Free Bulkers (EVIC’s
foreign principal) for a period of 6 months. His
contract was not finished as he was repatriated in the
Philippines for gross negligence and intoxication. An
unnotarized Crew Behavior Report was the basis. It
was also alleged by Panahon that there was no notice
of dismissal.
Respondent filed a Complaint for illegal dismissal. In
his Position Paper, he claimed that since his initial
deployment, he has diligently performed all his duties
and responsibilities and has never been disciplined or
dismissed.
Respondent averred that on September 7, 2010, he
took a sip from the small flask of whisky given to him
by one of the stevedores he dealt with and went to
bed; but Captain Buton had him awakened and
ordered him to make a report on some damages in
the railings of the ship caused by the stevedores.
When he submitted the report to Captain Buton, the
latter allegedly smelled a faint odor of whisky and
asked respondent if he had been drinking, to which
he replied that he drank a little whisky and was
willing to take an alcohol test.
Respondent claimed that Captain Buton shrugged off
his offer to take an alcohol test; but as soon as he left
respondent, Captain Buton made a logbook entry
dated September 7, 2010, recommending
respondent's immediate replacement.
Issue: Was the dismissal proper considering that the
only basis for the dismissal was the unnotarized Crew
Behavior Report? Is it still proper to dismiss employee
without notice of dismissal?
Ruling: Settled rule in labor cases that the employer
has the burden of proving that the dismissal of an
employee was for a just or authorized cause, and
failure to show this would mean that the dismissal
was unjustified and illegal. The employer must prove
that 1) the dismissal was for a just and authorized
46 | P a g e

cause; and 2) the dismissed employee was afforded
due process of law.
Substantive
The SC ruled that the Report was uncorroborated and
self-serving. No other evidence was presented by the
employer. Thus, no just cause was proven.
Incompetence is understood to mean the failure to
attain work goals or work quotas, either by failing to
complete the same within the allotted reasonable
period, or by producing unsatisfactory results. Neglect
of duty must be both gross and habitual. Gross
negligence implies a lack of or failure to exercise
slight care or diligence, or the total absence of care in
the performance of duty. Petitioner failed to prove
these.
Procedural
Furthermore, the POEA Rules provide the requirement
on the two-notice rule to afford the employee due
process. An erring seaman is given a written notice of
charge against him and is afforded an opportunity to
explain or defend himself. Should sanctions be
imposed, then a written notice of penalty and the
reason for it shall be furnished. It is only in the
exceptional case of clear and existing danger to the
safety of the crew or vessel that the required notices
are dispensed with.
16. Read-Rite Phils vs. Francisco, et al., GR
No. 195457, August 16, 2017
Doctrine: Given the diametrical nature of an
involuntary and a voluntary separation from service,
one necessarily excludes the other.
Facts: In 1999, Read-Rite began implementing a
retrenchment program due to serious business losses
and about 200 employees were terminated. From the
first batch of retrenched employees, however, there
were eight employees that apparently received
additional voluntary separation benefits.
Meanwhile, respondents only received involuntary
separation benefits in accordance with the
Compensation and Benefits Manual and Retirement
Plan of the company.
Respondents filed complaints against Read-Rite
alleging that they are also entitled payment of
Labor Law Review Digests | Lourleth Lluz
additional voluntary benefits like the first eight
employees.
Read-rite claimed that the additional payments to the
first eight employees was made only by mistake.
Issue: Are the Respondents entitled to the additional
voluntary benefits?
Ruling: No. Given the diametrical nature of an
involuntary and a voluntary separation from service,
one necessarily excludes the other. As respondents'
termination was involuntary in nature, i.e., by virtue
of a retrenchment program, they are only entitled to
receive involuntary separation benefits under the
express provisions of the company's Compensation
and Benefits Manual and the Retirement Plan. The
Court is more inclined to believe that the payment of
additional voluntary separation benefits on top of
involuntary separation benefits to eight retrenched
employees was indeed a mistake since it was not in
accordance to the company’s Compensation and
Benefits Manual and its Retirement Plan. In any
event, whether said payment of additional voluntary
benefits to was a mistake or otherwise, respondents
cannot use the same to bolster their own claim of
entitlement to additional voluntary
17. Transglobal Maritime Agency vs. Chua, GR
No. 222430, August 30, 2017
Doctrine:To constitute insubordination or willful
disobedience as a just cause for the dismissal of the
employee, two requisites must concur: 1. The
employee’s assailed conduct must have been willful,
that is, characterized by a wrongful and perverse
attitude 2. The order violated must have been
reasonable, lawful, made known to the employee,
and must pertain to his duties which he had been
engaged to discharge.
Facts: Petitioner hired respondent as seaman and the
contract was supposed to be for 9 months with the 3
months as a probationary period. While on the port of
Taiwan, respondent and companions left the ship for
shore leave from 7-10 pm. However, respondent was
able to return around 11:40 p.m.
Respondent and companions were served with a
written reprimand however, respondent refused to
sign and acknowledge the receipt of the reprimand.
47 | P a g e

Upon disembarking the ship, respondent filed a
complaint for illegal dismissal. Petitioner contends
that respondent was not illegally dismissed since the
dismissal was justified on the ground of
insubordination for their refusal to sign the written
reprimand and disrespect for officers and for failure to
return at the ship after the expiration of their shore
leave.
Issue: Whether respondent was legally dismissed?
Ruling: No. To constitute insubordination or willful
disobedience as a just cause for the dismissal of the
employee, two requisites must concur: 1. The
employee’s assailed conduct must have been willful,
that is, characterized by a wrongful and perverse
attitude 2. The order violated must have been
reasonable, lawful, made known to the employee,
and must pertain to his duties which he had been
engaged to discharge. The order made to the
respondent to sign the documents was no relevance
with respondent’s duties as a seaman. Moreover, the
refusal was not characterized was not characterized
as wrongful and perverse mental attitude and thus no
subordination.
Petitioner contended that his refusal was caused by
the falsehoods alleged in the written report. There
must be a reasonable proportionality between the will
full disobedience by the employee and the penalty
imposed. Further, as required by POEA-SEC, for
dismissal against SEAMEN, they must be served with
a written notice of the charge against him and an
opportunity must be given to explain himself.
18. Aluag vs. BIR Multi-Purpose cooperative,
GR No. 228499, December 6, 2017
Doctrine: "[t]here are two (2) classes of positions of
trust: first, managerial employees whose primary duty
consists of the management of the establishment in
which they are employed or of a department or a
subdivision thereof, and to other officers or members
of the managerial staff; and second, fiduciary rank-
and-file employees, such as cashiers, auditors,
property custodians, or those who, in the normal
exercise of their functions, regularly handle significant
amounts of money or property.”
Facts:Petitioner filed a case for illegal dismissal
against BIRMPC and its officers, respondents Norma
Labor Law Review Digests | Lourleth Lluz
Lipana and Estelita Datu. She was employed as a
cashier from November 16, 1994 until her termination
on October 31, 2013. Her duties, among others, were
to receive remittances and payments, deposit all
collections daily, record fixed deposits, determine
cash positions, issue checks for loans, collect cash
receipts, and perform such other duties that the
general manager may assign to her.
Respondents on the other hand argue that Aluag was
legally dismissed on the ground of loss of trust and
confidence.
Issue: Whether or not respondent had just cause to
terminate petitioner’s employment.
Ruling: Yes. In the present case, BIRMPC alleged
that Aluag's employment was terminated on the
ground of loss of trust and confidence under Article
297 (c) (formerly Article 282 [c] of the Labor Code.
The requisites for the existence of such ground are as
follows: (a) the employee concerned holds a position
of trust and confidence; and (b) he performs an act
that would justify such loss of trust and confidence.
Anent the first requisite, case law instructs that
"[t]here are two (2) classes of positions of trust: first,
managerial employees whose primary duty consists of
the management of the establishment in which they
are employed or of a department or a subdivision
thereof, and to other officers or members of the
managerial staff; and second, fiduciary rank-and-file
employees, such as cashiers, auditors, property
custodians, or those who, in the normal exercise of
their functions, regularly handle significant amounts
of money or property. These employees, though rank-
and-fille, are routinely charged with the care and
custody of the employer's money or property, and are
thus classified as occupying positions of trust and
confidence. Being a cashier charged with the
collection of remittances and payments, Aluag
undoubtedly occupied a position of trust and
confidence. As regards the second requisite, the
employee's act causing the loss of confidence must be
directly related to her duties rendering her woefully
unfit to continue working for the employer.
Verily, her failure to deposit the checks on their due
dates means that she failed to deliver on her task to
safeguard BIRMPC's finances. It is also well to note
that she was not given any discretion to determine
48 | P a g e

whether or not to deposit the checks. Under these
circumstances, BIRMPC had ample reason to lose the
trust and confidence it reposed upon her and thereby,
terminate her employment.
Indeed, it would be most unfair to require an
employer to continue employing a cashier whole it
reasonably believes is no longer capable of giving full
and wholehearted trustworthiness in the stewardship
of company funds, as in this case. In fine, BIRMP C
had just cause for Aluag's dismissal.
19. Mehitabel Inc., vs. Alcuizar, GR No.
228701-02, December 13, 2017
Doctrine: Filing a complaint for illegal dismissal does
not ipso fact foreclose the possibility of
abandonment. It is not the sole indicator in
determining whether or not there was desertion
Facts: Respondent was employed by petitioner as its
Purchasing Manager tasked in overseeing the
production and delivery of the latter’s goods. The
case stemmed when respondent's dismal work
performance resulted in delays in the production and
delivery of the company's goods which prompted
respondent’s immediate supervisor to counsel the
former to improve her work performance, otherwise,
she may be forced to initiate disciplinary proceedings
against him for gross inefficiency.
It was because of this that respondent gave the word
that he was quitting his job. When respondent was
furnished a notice of violation, he responded by filing
a labor dispute case against petitioner for illegal
dismissal.
Issue: Whether respondent was illegally dismissed.
Ruling: No. The Court held the established rule that
in illegal termination cases, the fact of dismissal must
be established by positive and overt acts of an
employer indicating the intention to dismiss before
the burden is shifted to the employer that the
dismissal was legal.
In this case, the records do not show any proof of
respondent’s termination. His asseveration that
Arcenas instructed him to turnover his functions to
Enriquez remains to be a naked claim. Apart from
respondent’s bare self-serving allegation, nothing in
Labor Law Review Digests | Lourleth Lluz
the records even hints of him being severed from
employment by petitioner. The publication of the
purported vacancy for Purchasing Manager does
not bolster respondent's claim of dismissal because
it was clearly made through sheer inadvertence.
Anent the issue of abandonment, the same is
bolstered by the fact that petitioner issued a Return
to Work order to respondent, which the latter
received through registered mail and disregarded
without any response. Respondent cannot harp on
the fact that he filed a complaint for illegal
dismissal in proving that he did not abandon his
post, for the filing of the said complaint does not
ipso facto foreclose the possibility of abandonment.
It is not the sole indicator in determining on
whether or not there was desertion, and to declare
as an absolute that the employee would have not
filed a complaint for illegal dismissal if he or she
had not really been dismissed is non sequitur.
In turn, it is beyond quibbling that a slothful work
attitude squarely falls within the ambit of gross and
habitual neglect of duty which is one of the
grounds for termination and that respondent’s
departure was merely a precursor to his scheme to
turn the table against petitioner.
20. Philippine Pan Asia Carriers Corp., vs.
Pelayo, GR No. 212003, February 28, 2018
Doctrine: “The Court has, however, been careful to
qualify that not every inconvenience, disruption,
difficulty, or disadvantage that an employee must
endure sustains a finding of constructive dismissal. It
is an employer's right to investigate acts of
wrongdoing by employees. Employees involved in
such investigations cannot ipso facto claim that
employers are out to get them. Their involvement in
investigations will naturally entail some
inconvenience, stress, and difficulty”
Facts: Pelayo was employed by Sulpicio Lines as an
accounting clerk at its Davao City branch office.
However, Sulpicio Lines uncovered several anomalous
transactions in its Davao City branch office which
include double disbursements, altered checks and
some other discrepancies.
Sulpicio Lines' Cebu-based management team went to
Davao to investigate. He was also asked to go to
Cebu for the continuation of the investigation. In the
midst of a panel interview, Pelayo walked out.  She
later claimed that she was being coerced to admit
49 | P a g e

complicity. Pelayo then returned to Davao City, where
she was admitted to a hospital "because of
depression and a nervous breakdown." She eventually
filed for leave of absence and ultimately stopped
reporting for work.
Asked to return, Pelayo was served with a memo
requiring her to submit a written explanation and was
placed under preventive suspension for 30 days.
Sulpicio Lines also sought assistance from the NBI
but, instead of responding or appearing, Pelayo filed a
case for constructive dismissal.
Issue: Whether there is constructive dismissal.
Ruling: No. Though it is held that there is
constructive dismissal when an employer's act of clear
discrimination, insensibility or disdain becomes so
unbearable on the part of the employee so as to
foreclose any choice on his part except to resign from
such employment, the Court has, however, been
careful to qualify that not every inconvenience,
disruption, difficulty, or disadvantage that an
employee must endure sustains a finding of
constructive dismissal. It is an employer's right to
investigate acts of wrongdoing by employees.
Employees involved in such investigations cannot ipso
facto claim that employers are out to get them. Their
involvement in investigations will naturally entail
some inconvenience, stress, and difficulty. However,
even if they might be burdened — and, in some
cases, rather heavily so — it does not necessarily
mean that an employer has embarked on their
constructive dismissal.
21. Flight Attendants and Stewards
Association of the Phils., vs. Phil. Airlines
Inc., GR No. 178083, March 13, 2018, En
Banc, Reversing July 22, 2018 and October
2, 2009 Decisions
Doctrine: Accordingly, the employer may resort to
retrenchment in order to avert serious business
losses. To justify such retrenchment, the following
conditions must be present, namely:
(1) The retrenchment must be reasonably
necessary and likely to prevent business
losses;
(2) The losses, if already incurred, are not
merely de minimis, but substantial, serious,
actual and real, or if only expected, are
reasonably imminent;
Labor Law Review Digests | Lourleth Lluz
(3) The expected or actual losses must be
proved by sufficient and convincing
evidence;
(4) The retrenchment must be in good faith for
the advancement of its interest and not to
defeat or circumvent the employees’ right to
security of tenure; and
(5) There must be fair and reasonable criteria in
ascertaining who would be dismissed and
who would be retained among the
employees, such as status, efficiency,
seniority, physical fitness, age, and financial
hardship for certain workers.
Facts: The Third Division disbelieved the veracity of
PAL’s claim of severe financial losses, and concluded
that PAL had not established its severe financial
losses because of its non-presentation of audited
financial statements. It further concluded that PAL
had implemented the retrenchment program in bad
faith, and had not used fair and reasonable criteria in
selecting the employees to be retrenched.
Upon conclusion of the oral arguments, the Court
directed the parties to explore a possible settlement
and to submit their respective memoranda.
Unfortunately, the parties did not reach any
settlement; hence, the Court, through the Special
Third Division, resolved the issues on the merits
through the resolution of October 2, 2009 denying
PAL’s motion for reconsideration.
The Special Third Division was unconvinced by PAL’s
change of theory in urging the June 1998 Association
of Airline Pilots of the Philippines (ALPAP) pilots’ strike
as the reason behind the immediate retrenchment,
and observed that the strike was a temporary
occurrence that did not require the immediate and
sweeping retrenchment of around 1,400 cabin crew.
Issues: (1) Did PAL lawfully retrench the 1,400 cabin
crew personnel?; (2) Assuming that PAL validly
implemented its retrenchment program, did the
retrenched employees sign valid quitclaims?
Ruling: (2) Yes, pal implemented a valid
retrenchment program. Retrenchment or downsizing
is a mode of terminating employment initiated by the
employer through no fault of the employee and
without prejudice to the latter, resorted to by
management during periods of business recession,
industrial depression or seasonal fluctuations or
during lulls over shortage of materials. It is a
50 | P a g e

reduction in manpower, a measure utilized by an
employer to minimize business losses incurred in the
operation of its business.
Accordingly, the employer may resort to retrenchment
in order to avert serious business losses. To justify
such retrenchment, the following conditions must be
present, namely:
1. The retrenchment must be reasonably
necessary and likely to prevent business
losses;
2. The losses, if already incurred, are not
merely de minimis, but substantial, serious,
actual and real, or if only expected, are
reasonably imminent;
3. The expected or actual losses must be
proved by sufficient and convincing
evidence;
4. The retrenchment must be in good faith for
the advancement of its interest and not to
defeat or circumvent the employees’ right to
security of tenure; and
5. There must be fair and reasonable criteria in
ascertaining who would be dismissed and
who would be retained among the
employees, such as status, efficiency,
seniority, physical fitness, age, and financial
hardship for certain workers.
Upon critical review of the records, we are convinced
that PAL had met all the standards in effecting a valid
retrenchment.
The July 22, 2008 decision recognized that PAL
underwent corporate rehabilitation. Indeed, a
company that undergoes rehabilitation sufficiently
indicates its fragile financial condition.
After having placed under corporate rehabilitation and
its rehabilitation plan having been proved by the SEC
on June 23, 2008, PAL’s dire financial predicament
could not be doubted. Incidentally, the SEC’s order of
approval came a week after PAL had sent out notices
of termination to the affected employees.
Moreover, the fact that airline operations were capital
intensive but earnings were volatile because of their
vulnerability to economic recession, among others.
The Asian financial crisis in 1997 had wrought havoc
among the air carries, PAL included. The peculiarities
existing in the airline business made it easier to
believe that at the time of the Asian financial crisis,
PAL incurred liabilities amounting to
Labor Law Review Digests | Lourleth Lluz
P90,642,933,919.00, which were way beyond the
value of its assets that then only stood at
P85,109,075,351.
PAL retrenched in good faith.
The employer is burdened to observe good faith in
implementing a retrenchment program. Good faith on
its part exists when the retrenchment is intended for
the advancement of its interest and is not for the
purpose of defeating or circumventing the rights of
the employee under special laws or under valid
agreements.
PAL could not have been motivated by ill will or bad
faith when it decided to terminate FASAP’s affected
members. On the contrary, good faith could be justly
inferred from PAL’s conduct before, during, and after
the implementation of retrenchment plan.
Notable in this respect was PAL’s candor towards
FASAP regarding its plan to implement the
retrenchment program. Records also show that the
parties met on several occasions to explore cost-
cutting measures, including the implementation of the
retrenchment program. PAL likewise manifested that
the retrenchment plan was temporarily shelved while
it implemented other measures (like termination of
probationary cabin attendant, and work-rotations).
Given PAL’s dire financial predicament, it becomes
understandable that PAL was constrained to finally
implement the retrenchment program when the
ALPAP pilots strike crippled a major part of PAL’s
operations. As between maintaining the number of its
flight crew and PAL’s survival, it was reasonable for
PAL to choose the latter alternative. This Court cannot
legitimately force PAL as a distressed employer to
maintain its manpower despite its dire financial
condition. To be sure, the right of PAL as the
employer to reasonable returns on its investments
and to expansion and growth is also enshrined in the
1987 Constitution. Thus, although labor is entitled to
the right to security of tenure, the State will not
interfere with the employer’s valid exercise of its
management prerogative.
PAL used fair and reasonable criteria in selecting the
employees to be retrenched pursuant to the CBA.
In selecting the employees to be dismissed, the
employer is required to adopt fair and reasonable
criteria, taking into considerable factors, like:
51 | P a g e

(a) Preferred status;
(b) Efficiency;
(c) Seniority, among others.
The requirement of fair and reasonable criteria is
imposed on the employer to preclude the occurrence
of arbitrary selection of employees to be retrenched.
Absent any showing of bad faith, the choice of who
should be retrenched must be conceded to the
employer for as long as the basis for the
retrenchment exists.
In fine, the Court will only strike down the
retrenchment of an employer as capricious,
whimsical, arbitrary and prejudicial in the absence of
a clear-cut and uniform guideline followed by the
employer in selecting him or her from the work pool.
Following this standard, PAL validly implemented its
retrenchment program.
PAL resorted to both efficiency rating and inverse
seniority in selecting the employees to be subject of
termination.
(2) Yes, the retrenched employees signed valid
quitclaims. In EDI Staffbuilders International, Inc. vs.
National Labor Relations Commission, we laid down
the basic contents of valid and effective quitclaims
and waivers, to wit:
(a) A fixed amount as full and compromise
settlement;
(b) The benefits of the employees if possible
with the corresponding amounts, which the
employees are giving up in consideration of
the fixed compromise amount;
(c) A statement that the employer has clearly
explained to the employee in English,
Filipino, or in the dialect known to the
employees – that by signing the waiver or
quitclaim, they are forfeiting or relinquishing
their rights to receive the benefits which are
due them under the law; and
(d) A statement that the employees signed and
executed the document voluntarily, and had
fully understood the consents of the
document and that their consent was freely
given without any threat, violence, duress,
intimidation, or undue influence exerted on
their person.
The release and quitclaim signed by the affected
employees substantially satisfied the aforestated
requirements. The consideration was clearly indicated
in the document in the English language, including
Labor Law Review Digests | Lourleth Lluz
the benefits that the employee would be relinquishing
in exchange for the amounts to be received. There is
no question that the employees who had occupied the
position of flight crew knew and understood the
English language. Hence, they fully comprehended
the terms used in the release and quitclaim that they
signed.
6. La Consolacion College of Manila, et al., vs.
Pascua, GR No. 214744, March 14, 2018
Doctrine: “Labor code recognizes retrenchment as
an authorized cause for terminating employment. It is
an option validly available to an employer to address
“losses in the operation of the enterprise, lack of
work, or considerable reduction on the volume of
business”.
Facts: Pascua’s services as school physician were
engaged by La Consolacion on January 2000. She
started working part-time before becoming full-time
on 2008. On September 2011, she was invited to
attend a meeting at the office of La Consolacion’s
President, Sr. Mora. In that meeting, she was handed
a termination of employment letter where it explain
the reason and terms of her dismissal. In that letter
the reason for her dismissal was because the school
was forced to downsize the health services and
eliminate her position due to the decrease in
enrolment. She complained that why was she
terminated when in fact there was a part time
employee to be terminated. She then filed a
complaint for illegal dismissal.
Issue: Whether there was an authorized cause for
the termination? Whether there was compliance with
the substantive requirement of using fair and
reasonable criteria in terminating employees?
Ruling: Yes. Labor code recognizes retrenchment as
an authorized cause for terminating employment. It is
an option validly available to an employer to address
“losses in the operation of the enterprise, lack of
work, or considerable reduction on the volume of
business”.
In this case, the records indicate that La Consolacion
suffered serious business reverses or an aberrant
drop in its revenue and income thus compelling it to
retrench employees. This shows that La Consolacion
proceeded with a modicum of good faith and not with
52 | P a g e

a stratagem specifically intended to undermine certain
employees’ security of tenure.
No. There is not dispute that Pascua was already a
full-time physician. La Consolacio had another
physician who served as part-tim but it was Pascua
who was terminated. La Consolacion’s disregard of
respondent’s seniority and preferred status relative to
a part-time employee indicates to an unfair and
unreasonable criterion for retrenchment.
7. University of East vs. Masangkay, et al.,
GR No. 226727, April 15, 2018
Doctrine: “Within the context of a termination
dispute, waivers are generally looked upon with
disfavor and are commonly frowned upon as contrary
to public policy and ineffective to bar claims for the
measure of a worker's legal rights. If (a) there is clear
proof that the waiver was wangled from an
unsuspecting or gullible person; or (b) the terms of
the settlement are unconscionable, and on their face
invalid, such quitclaims must be struck down as
invalid.”
Facts: Respondents were regular faculty members of
petitioner University prior to their dismissal on
November 26, 2007. They submitted three manuals to
be used as instructional materials and openly
certifying under oath that the said manuals are
entirely original and free from plagiarism.
Thereafter, petitioners received two complaint-letters
that respondents did acts of plagiarism. After a
thorough investigation, UE dismissed respondents.
Respondents, however, did not appeal the decision
terminating them and instead opted to claim their
benefits due to them.
Almost three years after having been dismissed from
service and after collecting their accrued benefits,
respondents then filed a complaint for illegal dismissal
on July 20, 2010. The Labor Arbiter held that
respondents were illegally dismissed and ordered
their reinstatement. NLRC reversed the decision but
the CA upheld the decision of the Labor Arbiter.
Issue: Were the respondents illegally dismissed?
Labor Law Review Digests | Lourleth Lluz
Ruling: No. There is sufficient basis for dismissing
respondents from service, considering the highest
integrity and morality which the profession requires
from its teachers.
Based on their actuations subsequent to their
termination, it is clear that they were amenable to
UE's decision of terminating their services on the
ground of academic dishonesty. Within the context of
a termination dispute, waivers are generally looked
upon with disfavor and are commonly frowned upon
as contrary to public policy and ineffective to bar
claims for the measure of a worker's legal rights. If
(a) there is clear proof that the waiver was wangled
from an unsuspecting or gullible person; or (b) the
terms of the settlement are unconscionable, and on
their face invalid, such quitclaims must be struck
down as invalid.
There is no sign of coercion nor intimidation, which
could have forced them to simply accept said decision
and there is no showing that respondents did not
receive less than what is legally due them in said
termination.
8. Son et al., vs. University of Sto. Tomas, et
al., GR No. 211273, April 18, 2018
Facts: Son was a full time professor and a member
of the UST Faculty Union, with which UST had a
Collective Bargaining Agreement (CBA) executed in
2006. Under the CBA’s tenure provision, and in line
with the DECS’ 1992 Revised Manual of Regulations
for Private Schools and CHED’s Memorandum Order
No. 40-08, a Master’s degree for faculty members
of undergraduate programs was made an entry
requirement. Son did not possess a Master’s degree
but was nonetheless hired by UST on the condition
that he obtain one within 5 semesters, which he
failed to do. In spite of this, Son was retained by
UST. In 2010, CHED issued a Memorandum
directing the strict implementation of the Master’s
degree requirement and, acting on the same, UST
terminated Son, who thought that he had been
vested tenure under the CBA for his continued
employment despite failure to obtain the required
Master’s degree.
Issue: Was Son illegally dismissed?
53 | P a g e

Ruling: No. When the CBA was executed between
the parties in 2006, they had no right to include
therein the tenure by default provision because it is
violative of the 1992 Revised Manual that was in
effect at the time. As such, the said provision is null
and void. It cannot be said, either, that by agreeing
to the same, UST is deemed to have waived the
application of the DECS Revised Manual and the
CHED Memorandum as such a waiver is contrary to
law.
Furthermore, both parties are in pari delicto: UST
for maintaining professors without the mandated
Master’s degrees, and Son for agreeing to be
employed despite knowledge of his lack of the
necessary qualifications. Under the pari delicto
doctrine, the equally culpable parties shall have no
action against each other, and the law shall leave
them where it finds them.
9. Maria Del Leon Transportation vs.
Macuray, GR No. 214940, June 6, 2018
Doctrine: There is no illegal dismissal when a
dispatcher informed a bus driver that the latter was
on AWOL, as a mere bus dispatcher does not possess
the power to fire a bus driver from work. However,
when an employee avails a company’s practice and
unwritten policy—of allowing its bus drivers to take
needed breaks or sabbaticals to enable them to
recover from the monotony of driving the same route
for long periods and obtained work elsewhere—he
does not abandon his employment.
Facts: Respondent Macuray filed a Complaint for
illegal dismissal against petitioner Maria De Leon
Transportation, Inc. before the Regional Arbitration
Branch San Fernando City, La Union. He contended
that after having served as bus driver of petitioner’s
company for 18 years, the latter’s bus dispatcher
informed him that he was already considered AWOL
(absent without leave), without giving him any
reason. Respondent inquired of his employment
status but the company failed to give him any notice
or explanation. During that time, he was already 62
years old, but he received no benefits for his service.
He also claimed that petitioner owed him three
months' salary for the year 2009.
On the other hand, petitioner claimed that respondent
permanently abandoned his employment, after he
failed to report for work; that it received information
later on that respondent was already engaged in
driving his family truck and was seen doing so at
public roads and highways; that respondent's claim of
Labor Law Review Digests | Lourleth Lluz
illegal dismissal was not true, as there was no
dismissal or termination of his services.
Labor Arbiter dismissed the case for respondent’s
failure to state with certainty the date and time of his
dismissal. The NLRC modified the Labor Arbiter's
judgment by awarding in favor of respondent the
amount of P 50,000.00 as financial assistance. Court
of Appeals upheld the NLRC’s ruling.
In the present case, petitioner argues that the CA
erred in entertaining respondent's Petition for
Certiorari as it was belatedly filed and defective in
form and since there was no illegal dismissal,
respondent was not entitled to his money claims,
including retirement pay and damages, as there was
no bad faith on petitioner's part.
Issues and Ruling: (1) Was respondent illegally
dismissed from work?; (2) Did respondent abandon
his employment?; (3) Is the reward of retirement
benefits proper?; (4) Should the petition be dismissed
outright for being tardy and for being procedurally
defective?; (5) Is respondent entitled for attorney’s
fees?
(1) No, respondent left his work as bus driver to work
for his family's trucking business. There is no truth to
the allegation that respondent was dismissed, actually
or constructively. He claims that the dispatcher
informed him that he was AWOL; however, a mere
bus dispatcher does not possess the power to fire him
from work—this is a prerogative belonging to
management. Respondent did not show that he met
with management to inquire on his employment
status. Since respondent was not dismissed from
work, petitioner may not be held liable for his
(respondent's) monetary claims, except those that
were actually owing to him by way of unpaid
salary/commission, and retirement benefits, which are
due to him for the reason that he reached the age of
retirement while under petitioner's employ.
(2) No, it cannot be said that respondent abandoned
his employment. Petitioner itself admitted that it
sanctioned the practice of allowing its drivers to take
breaks from work in order to afford them the
opportunity to recover from the stresses of driving the
same long and monotonous bus routes by accepting
jobs elsewhere. Hence, respondent only availed of
petitioner's company practice and unwritten policy.
(3) Yes. Since reinstatement is no longer feasible, the
reward of retirement benefits is proper. As for
retirement benefits, respondent is entitled to them
considering that he was never dismissed from work,
either for cause or by resignation or abandonment. As
far as petitioner is concerned, respondent merely
54 | P a g e

went on a company sanctioned sabbatical. It just so
happened that during this sabbatical, respondent
reached the retirement age of 60; by this time, he is
already 67 years old. By filing the labor case, he may
have pre-empted the payment of his retirement
benefits; but it is a clear demand for retirement
benefits nonetheless.
In the absence of a retirement plan or agreement in
Maria De Leon Transportation, Inc., the Supreme
Court hereby declares that respondent is entitled to
one month's salary for every year of service, that is:
Pl0,000.00 x 18 years = P180,000.00
Retirement compensation equivalent to one month's
salary for every year of service is more equitable and
just than the CA's pronouncement of one-half month's
salary per year of service, which the Court finds
insufficient. This is considering that petitioner has
been paying its drivers commission equivalent to less
than the minimum wage for the latter's work, and in
respondent's case, it has delayed payment of the
latter's compensation for three months. On the other
hand, petitioner's lax policies regarding the coming
and going of its drivers, as well as the fact that
respondent's layovers are considerable - it appears
that throughout his employment, respondent spends
a good number of days each month not driving for
petitioner, which thus allows him to accept other work
outside—makes up for deficiencies in the parties'
compensation arrangement.
(4) No. As against petitioner's claim of procedural
infirmities, the Court must uphold and protect
respondent's substantive rights. Procedure cannot
prevail over substantive rights in this case. The Court
takes into consideration the fact that respondent is
entitled to part of his monetary claims and that the
NLRC judgment failed to appreciate that respondent
remained an employee of petitioner.
(5) Yes. Under paragraphs 7 and 11, respectively, of
Article 2208 of the Civil Code, attorney's fees and
expenses of litigation, other than judicial costs, may
be recovered "in actions for the recovery of wages of
household helpers, laborers and skilled workers" and
"in any other case where the court deems it just and
equitable that attorney's fees and expenses of
litigation should be recovered." The CA award of P20,
000.00 is thus reasonable and just under the
circumstances.
10. Lingat vs. Coca-Cola Bottlers Phils, Inc. GR
No. 205688, July 4, 2018
Doctrine: “a regular employee is a) one that has
been engaged to perform tasks usually necessary or
desirable in the employer's usual business or trade —
Labor Law Review Digests | Lourleth Lluz
without falling within the category of either a fixed or
a project or a seasonal employee; or b) one that has
been engaged for a least one year, whether his or
her service is continuous or not, with respect to such
activity he or she is engaged, and the work of the
employee remains while such activity exists. To
ascertain if one is a regular employee, it is primordial
to determine the reasonable connection between the
activity he or she performs and its relation to the
trade or business of the supposed employer.”
Facts: Petitioners filed a Complaint for illegal
dismissal against Coca-Cola Bottlers Phils., Inc.
(CCBPI), Monte Dapples Trading Corp. (MDTC), and
David Lyons (Lyons) (respondents).
Petitioners averred that CCBPI employed Lingat and
Altoveros as plant driver and forklift operator, and
segregator/mixer respectively. They had continually
worked for CCBPI until their illegal dismissal in April
2005 (Lingat) and December 2005 (Altoveros). They
alleged that they were regular employees of CCBPI
because it engaged them to perform tasks necessary
and desirable in its business or trade. They asserted
that their work was the link between CCBPI and its
sales force since without them its products would not
reach its clients.
Petitioners alleged that CCBPI engaged Lingat
primarily as a plant driver but he also worked as
forklift operator. He drove CCBPI's truck loaded with
softdrinks and its other products, and thereafter,
returned the empty bottles as well as the unsold
softdrinks back to the plant of CCBPI. On the other
hand, as segregator/mixer of softdrinks, Altoveros
was required to segregate softdrinks based on the
orders of the customers. Petitioners further stated,
that after becoming regular employees (as they had
been employed for more than a year), and by way of
a modus operandi, CCBPI transferred them from one
agency to another. These agencies included Lipercon
Services, Inc., People Services, Inc., Interserve
Management and Manpower Resources, Inc. The
latest agency to where they were transferred was
MDTC. They claimed that such transfer was a scheme
to avoid their regularization in CCBPI.
Petitioners stressed that the aforesaid agencies were
labor-only contractors which did not have any
equipment, machinery, and work premises for
warehousing purposes. They insisted that CCBPI
owned the warehouse where they worked; the
supervisors thereat were CCBPI's employees; and,
petitioners themselves worked for CCBPI, not for any
agency.
55 | P a g e

In fine, they maintained that they were regular
employees of CCBPI because while at work,
petitioners were under the direction, control and
supervision of respondent Coca-Cola's regular
employees. Finally, petitioners argued that CCBPI
dismissed them after it found out that they were
"overstaying." As such, they posited that they were
illegally dismissed as their termination was without
cause and due process of law.
CCBPI and Lyons, its President/Chief Executive
Officer, countered that this case must be dismissed
because the Labor Arbiter (LA) lacked jurisdiction,
there being no employer-employee relationship
between the parties. CCBPI and Lyons declared that
CCBPI was engaged in the business of manufacturing,
distributing, and marketing of softdrinks and other
beverage products. By reason of its business, CCBPI
entered into a Warehousing Management Agreement
with MDTC for the latter to perform warehousing and
inventory functions for the former.
CCBPI and Lyons insisted that MDTC was a legitimate
and independent contractor, which only assigned
petitioners at CCBPI's plant in Otis, Manila. They
posited that MDTC carried on a distinct and
independent business; catered to other clients, aside
from CCBPI; and possessed sufficient capital and
investment in machinery and equipment for the
conduct of its business as well as an office building.
CCBPI and Lyons averred that when the Warehousing
Management Agreement between CCBPI and MDTC
expired, the parties no longer renewed the same.
Consequently, it came as a surprise to CCBPI that
petitioners filed this complaint considering that CCBPI
was not their employer, but MDTC.
Issues: (1) Whether or not there exists an employer-
employee relationship between Petitioners and
Respondent CCBPI; (2) Whether or not Petitioners
were dismissed without cause and due process.
Ruling: (1) Yes. Pursuant to Article 295 of the Labor
Code a regular employee is a) one that has been
engaged to perform tasks usually necessary or
desirable in the employer's usual business or trade —
without falling within the category of either a fixed or
a project or a seasonal employee; or b) one that has
been engaged for a least one year, whether his or her
service is continuous or not, with respect to such
activity he or she is engaged, and the work of the
employee remains while such activity exists. To
ascertain if one is a regular employee, it is primordial
to determine the reasonable connection between the
activity he or she performs and its relation to the
trade or business of the supposed employer.
Labor Law Review Digests | Lourleth Lluz
Relating petitioners' tasks to the nature of
the business of CCBPI — which involved the
manufacture, distribution, and sale of soft drinks and
other beverages — it cannot be denied that mixing
and segregating as well as loading and bringing of
CCBPI's products to its customers involved
distribution and sale of these items. Simply put,
petitioners' duties were reasonably connected to the
very business of CCBPI. They were indispensable to
such business because without them the products of
CCBPI would not reach its customers.
Petitioners have worked for CCBPI since
1993 (Lingat) and 1996 (Altoveros) until the non-
renewal of their contracts in 2005. Aside from the fact
that their work involved the distribution and sale of
the products of CCBPI, they remained to be working
for CCBPI despite having been transferred from one
agency to another. Hence, such repeated re-hiring of
petitioners, and the performance of the same tasks
for CCBPI established the necessity and the
indispensability of their activities in its business.
Labor only-contracting
CCBPI and Lyons' contention that MDTC was
a legitimate labor contractor and was the actual
employer of petitioners does not hold water.
A labor-only contractor is one who enters
into an agreement with the principal employer to act
as the agent in the recruitment, supply, or placement
of workers for the latter. A labor-only contractor 1)
does not have substantial capital or investment in
tools, equipment, work premises, among
others, AND the recruited employees perform tasks
necessary to the main business of the principal; or 2)
does not exercise any right of control anent the
performance of the contractual employee. In such
case, where a labor-only contracting exists, the
principal shall be deemed the employer of the
contractual employee; and the principal and the
labor-only contractor shall be solidarily liable for any
violation of the Labor Code.
On the other hand, a legitimate job
contractor enters into an agreement with the
employer for the supply of workers for the latter but
the "employer-employee relationship between the
employer and the contractor's employees [is] only for
a limited purpose, i.e., to ensure that the employees
are paid their wages."
Here, based on their Warehousing
Management Agreement, CCBPI hired MDTC to
perform warehousing management services, which it
claimed did not directly relate to its (CCBPI's)
manufacturing operations. However, it must be
56 | P a g e

stressed that CCBPI's business not only involved the
manufacture of its products but also included their
distribution and sale. Thus, CCBPI's argument that
petitioners were employees of MDTC because they
performed tasks directly related to "warehousing
management services," lacks merit. The records show
that petitioners were performing tasks directly related
to CCBPI's distribution and sale aspects of its
business.
To reiterate, CCBPI is engaged in the
manufacture, distribution, and sale of its products; in
turn, as plant driver and segregator/mixer of soft
drinks, petitioners were engaged to perform tasks
relevant to the distribution and sale of CCBPI's
products, which relate to the core business of CCBPI,
not to the supposed warehousing service being
rendered by MDTC to CCBPI. Petitioners' work were
directly connected to the achievement of the
purposes for which CCBPI was incorporated.
Certainly, they were regular employees of CCBPI.
(2) No. As regular employees, petitioners may be
dismissed only for cause and with due process. These
requirements were not complied with here.
11. Mamaril vs. Red System Company, GR No.
229920, July 4, 2018
Doctrine: “An employee's tenurial security shall not
be used as a shield to force the hand of an employer
to maintain a recalcitrant employee, whose continued
employment is patently inimical to the employer's
interest. Accordingly, an employee who is found to be
willfully disobedient of the employer's lawful and
reasonable rules and regulations may be dismissed
from service.”
Facts: Red System is a company engaged in the
business of transporting Coca Cola Products from
Coca-Cola warehouses to its various customers. Red
System owns and operates several delivery trucks.
Red System employed Mamaril as a delivery service
representative. Mamaril was assigned in Davao and
was tasked to transport goods from various depots to
the end users. Prior to his employment as a delivery
service representative, Mamaril was required to
undergo seminars to orient him on the rules and
regulations of Red System. During the orientation,
drivers like Mamaril, were reminded to always
observe the following safety rules, namely, to put a
tire choke (kalso), engage the hand brake, and shift
the transmission to first gear, before leaving the
parked vehicle. These safeguards were necessary to
prevent the movement of the truck while pushed by a
forklift during loading and unloading operations.
Labor Law Review Digests | Lourleth Lluz
Three days after Mamaril's employment, he failed to
put a tire choke, and worse, shifted the gear to
neutral after parking the truck he was driving. This
caused the truck to move, which caused damage to
Coca-Cola products valued at Php14,556.00. Mamaril
did not report the incident, and even concealed the
matter.
Upon discovering Mamaril's mishap, Red System
immediately re-assigned the former as a warehouse
yard driver. As a yard driver, he was involved in yet
another accident. Mamaril parked a truck without
again putting a tire choke and engaging the hand
break. As a result, the parked truck moved and hit
another vehicle, causing damage amounting to
Php25,500.00. Mamaril again concealed the incident.
Red System sent Mamaril a Notice to Explain. Mamaril
submitted his written explanation, where he admitted
that he violated the safety rules, which caused
damage to the truck.
Meanwhile, during the pendency of the administrative
hearing against Mamaril, Red Systems' officers
noticed that the former encountered several near-
accident misses and exhibited a lack of concern
towards his work. Consequently, Mamaril was advised
to be more focused on his duties. However, the
advice remained unheeded. Thus, to protect the
safety of the company personnel and equipment, Red
System placed Mamaril under preventive suspension
for a period of one month.
Subsequently, prior to the expiration of the 30-day
preventive suspension and after the completion of the
administrative investigation, Red System found
Mamaril guilty of violating the Company Code of
Conduct, particularly, Article 4 or Unacceptable
Conduct and Behavior, as well as Rule 5, Section 2,
pertaining to "Other Offenses or Other Acts of
Negligence, Inefficiency in the Performance of Duties
or in the Care, Custody/or Use of Company Property,
Funds or Equipment Where the Amount of Loss or
Damage to the company amounted to more than
Php25,000.00." Accordingly, Mamaril was terminated
for willful disobedience and willful breach of trust as
provided under Article 297 of the Labor Code.
Aggrieved, Mamaril filed a Complaint for illegal
dismissal, he asserted that his termination from
employment was too harsh as it was manifestly
disproportionate to his infractions. Moreover, he
claims that he was even subjected to a double
penalty that was harsh and excessive, as he was
initially placed under suspension and thereafter
dismissed, based on the same infraction.
57 | P a g e

Issues: (1) Whether or not Mamaril was illegally
dismissed by Red System, and is consequently
entitled to reinstatement and full backwages; (2)
Whether or not Red System was guilty of imposing a
double penalty against Mamaril.
Ruling: (1) Mamaril was validly dismissed on account
of his willful disobedience of the lawful orders of Red
System. Article 297 of the Labor Code affirms the
right of an employer to dismiss a miscreant employee
on account of the latter's willful disobedience. For an
employee to be validly dismissed on the ground of
willful disobedience, the employer must prove by
substantial evidence that: (1) the employee's assailed
conduct must have been willful or intentional, the
willfulness being characterized by a wrongful and
perverse attitude; and (2) the order violated must
have been reasonable, lawful, made known to the
employee and must pertain to the duties which he
had been engaged to discharge.
In the case at bar, the lifeblood of Red System's
business is the safe transport and delivery of Coca-
Cola products from the warehouse to the customers.
As such, drivers were repeatedly reminded to place a
tire choke, shift the engine to first gear, and pull the
hand brake, upon parking the truck. Compliance with
these safety measures was essential to prevent the
sudden movement of the truck while parked and
pushed by a forklift during loading and unloading
operations.
Red System was not remiss in reminding its drivers of
the importance of abiding by their safety regulations.
Notably, Mamaril violated Red System's safety rules
twice, and caused damage amounting to over
Php40,000.00. To make matters worse, he even
deliberately and willfully concealed his transgressions.
Such flagrant violation of the rules, coupled with the
perversity of concealing the incidents, patently show
a wrongful and perverse mental attitude rendering
Mamaril's acts inconsistent with proper subordination.
Indubitably, this shows that Mamaril was indeed
guilty of willful disobedience of Red System's lawful
orders.
Clearly, Mamaril's acts constituted a violation of Red
System's company policy. Rule 5, Section 2 (b) (3) of
Red System's Code of Conduct penalizes other acts of
negligence or inefficiency in the performance of duties
or in the care, custody and/or use of company
property, funds and/or equipment. A violation of such
rule warrants a penalty of dismissal.
(2) Mamaril's preventive suspension and subsequent
dismissal from the service do not partake of a double
penalty; neither may his dismissal be regarded as
Labor Law Review Digests | Lourleth Lluz
harsh and excessive. Mamaril's initial suspension was
a preventive suspension that was necessary to
protect Red System's equipment and personnel.
Preventive suspension is a measure allowed by law
and afforded to the employer if an employee's
continued employment poses a serious and imminent
threat to the employer's life or property or of his co-
workers." An employee may be placed under
preventive suspension during the pendency of an
investigation against him.
In fact, the employer's right to place an employee
under preventive suspension is recognized in Sections
8 and 9 of Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code.
In the case at bar, Mamaril was placed under
preventive suspension considering that during the
pendency of the administrative hearings, he was
noticed to have several near-accident misses and he
had exhibited a lack of concern for his work. His
inattentiveness posed a serious threat to the safety of
the company equipment and personnel. This is
especially true considering that he was driving trucks
loaded with fragile products.
Even if the errant employee committed the acts
complained of almost a year before the investigation
was conducted, the employer shall not be estopped
from placing the former under preventive suspension,
if the employee still performs functions that involve
handling the employer's property and funds. The
employer still has every right to protect its assets and
operations pending the employee's investigation. Red
System's decision to place Mamaril on preventive
suspension does not in any way render the said
decision questionable. What matters is that Mamaril's
continued employment posed a threat to the
company's properties and personnel. It would be at
the height of inequity to prevent Red System from
enacting measures to protect its own equipment
pending the administrative investigation.
12. Acosta vs. Matiere SAS, GR No. 232870,
June 3, 2019
FACTS:
Matiere SAS engaged Acosta as its technical
consultant for 12 months. Upon the Consulting
Agreement's expiration, Matiere SAS hired Acosta as
its technical assistant with the same P70,000.00
monthly salary.
On December 14,2011, Acosta’s salary was increased
and he was given a bonus on the same day for his
58 | P a g e
 Labor Law Review Digests | Lourleth Lluz

good performance. But on June 27, 2013, Matiere ISSUE:

SAS sent a letter to Acosta saying that the former is Whether or not petitioner Manuel G. Acosta was
terminating the employment contract due to the validly dismissed from employment on the ground of
cessation of the delivery of operations and diminution redundancy.
of the Matiere SAS’ activities.
RULING:
In a June 26, 2013 letter, Matiere SAS informed the NO.
Department of Labor and Employment that because
its last shipment had been delivered, it would have to The requirements for a valid redundancy program
terminate the employment of Acosta and four other were laid down in Asian Alcohol Corporation v.
employees National Labor Relations Commission:
On June 28, 2013, Matiere SAS filed before the
For the implementation of a redundancy program to
Department of Labor and Employment: (1) an
be valid, the employer must comply with the following
Establishment Employment Report, citing redundancy
requisites: (1) written notice served on both the
and the completion of delivery of supplies as its
employees and the Department of Labor and
reasons for dismissing its employees
Employment at least one month prior to the intended
On July 23, 2013, Acosta filed before the National date of retrenchment; (2) payment of separation pay
Labor Relations Commission a ComplainT for illegal equivalent to at least one month pay or at least one
dismissal against Matiere SAS and Gouvary. month pay for every year of service, whichever is
higher; (3) good faith in abolishing the redundant
positions; and (4) fair and reasonable criteria in
The case went all the way to the supreme court with ascertaining what positions are to be declared
Acosta filing a Petition for Review on redundant and accordingly abolished.
Certiorari63 against Matiere SAS and Gouvary.
Maintaining that the declaration of redundancy of his
position was not based on fair and reasonable criteria,
Assuming that respondents can declare some
petitioner pointed out that he, the most senior
positions redundant due to the alleged decrease in
engineer, was dismissed while the other engineers
volume of their business, they still had to comply with
remained.
the above-cited requisites. This, they failed to do.
Respondent Matiere SAS insist that they sufficiently
established that petitioner's position was already
Respondents complied with the first and second
redundant. They cite the certifications from the
requisites. There is no contention that they notified
Department of Agrarian Reform and the Department
both petitioner and the Department of Labor and
of Public Works and Highways to prove that "there
Employment at least a month before the planned
was a significant diminution in the volume of
redundancy.
materials business." Claiming that the completion of
the shipments rendered petitioner's position
irrelevant, they argue that he failed to prove that his
Petitioner also received a computation of his
other tasks were not merely incidental to his main
separation pay corresponding to at least one (1)
function. Thus, they were left with no choice but to
month pay for every year of service with additional
legally dismiss him.
payment for economic assistance.

However, as to the third and fourth requisites, this

Respondents further argue that they did not dismiss
Court held that "[t]o establish good faith, the
petitioner in bad faith, contending that they complied
company must provide substantial proof that the
with labor law requirements in terminating his
services of the employees are in excess of what is
employment. They point out that he was given a
required of the company, and that fair and reasonable
notice of termination with computation of his
criteria were used to determine the redundant
separation pay, and that the Department of Labor and
positions."
Employment was also notified.

59 | P a g e

Here, respondents' only basis for declaring petitioner's
position redundant was that his function, which was
to monitor the delivery of supplies, became
unnecessary upon completion of the shipments.
However, upon careful scrutiny, this Court finds that
the Employment Agreement itself contradicts
respondents' allegation.
There was no mention of monitoring shipments as
part of petitioner's tasks. If his work pertains mainly
to the delivery of supplies, it should have been
specifically stated in his job description. Respondents
did not even present any evidence to support their
claim or to contradict petitioner's documentary
evidence. There was, hence:, no basis for
respondents to consider his position irrelevant when
the shipments had been completed.
Likewise, respondents failed to show that they used
fair and reasonable criteria in determining what
positions should be declared redundant.
In Panlilio v. National Labor Relations
Commission,83 this Court held that fair and reasonable
criteria may take into account the preferred status,
efficiency, and seniority of employees to be dismissed
due to redundancy.84 Yet, respondents never showed
that they used any of these in choosing petitioner as
among the employees affected by redundancy.
Accordingly, this Court declares petitioner to have
been illegally dismissed.
13. Gaite vs. Filipino Society of Composers
et al., GR No. 219324, August 8, 2018
FACTS: On May 16, 2006, FILSCAP employed Gaite as
its General Manager.
In 2012, several issues pertaining to Gaite
were brought to the attention of FILSCAP's Board of
Trustees which include the following: (1) the
erroneous filing of a case against a records company
without prior notice to the Board, which eventually
resulted in FILSCAP being ordered to pay
P1,000,000.00 in damages; (2) her non-disclosure of
her receipt of an e-mail inviting one of the board
members to a regional digital licensing conference in
Taipei; (3) her willful delay in taking action on the
collection of proxy forms from members for the May
Labor Law Review Digests | Lourleth Lluz
28, 2011 FILSCAP elections and, consequently,
collection of an insufficient number of proxy forms for
the said election; (4) her non- disclosure of the
complete list of members to a board member who
wanted to help in securing the proxy forms; and (5)
the appropriation for her personal benefit of show
tickets given to FILSCAP, which were supposed to be
used for monitoring purposes.
Before conducting administrative disciplinary
proceedings against Gaite, the Board sought the legal
opinion of FILSCAP's external counsel. Thereafter,
learning of the issues between FILSCAP and Gaite,
the International Confederation of Societies of
Authors and Composers (CISAC), the umbrella
organization of copyright societies around the world,
advised FILSCAP to settle the matter amicably. Thus,
FILSCAP discussed a graceful exit and separation
package with Gaite and scheduled the signing of a
Release, Waiver, and Quitclaim on June 26, 2012
which provided that FILSCAP would release, waive
and discharge Gaite from any and all actions, whether
civil, criminal or administrative, or from any and all
claims of any kind or character arising out of or in
connection with her employment with FILSCAP in
exchange for P1,440,386.01.
Days before the scheduled signing, however,
FILSCAP discovered that for several fiscal years
already, specifically from 2009 to 2011, Gaite had
been allowing funds from its Special Accounts to be
used to cover the company's Operating Expenses
without the knowledge, consent, or authorization of
the Board and in contravention of FILSCAP's
Distribution Rules. During said investigation, FILSCAP
confirmed Gaite's unauthorized misappropriation or
reallocation, which she committed together with the
then Distribution Manager, Mr. Genor Kasiguran,
amounting to P17,720,455.77. In fact, she even
admitted the same in her email to Board member, Mr.
Gary Granada, on June 22, 2012.
In view of said discovery, FILSCAP issued a
Show Cause Notice to Gaite dated July 10, 2012
requiring her to explain why no disciplinary sanctions
should be imposed on her and likewise placed her
under preventive suspension with pay, pending the
administrative investigation. In her reply, Gaite denied
any misappropriation and informed the Board that she
had already filed a case for constructive dismissal
against FILSCAP on June 28, 2012, or two (2) days
after the cancelled signing of the Quitclaim and even
60 | P a g e

before the July 10, 2012 show-cause notice was sent
to her.
LA ruled for Gaite. NLRC affirmed. CA
reversed.
ISSUES:
Whether or Not Gaite was legally dismissed
RULING:
YES. In the instant case, the Court finds that Gaite's
actuations constitutes serious misconduct. First, the
seriousness of the same cannot be denied. Not only is
the amount involved herein a staggering amount of
P17,720,455.77, the alleged reallocation violated an
express provision of the company's Distribution Rules
and was accomplished without the knowledge,
consent, or authorization of the Board. Second, Gaite
committed said transfer in the performance of her
duties as General Manager of FILSCAP who is
responsible for the overall operations thereof,
including the regular review and updating of its
distribution guidelines to facilitate royalty distribution
to FILSCAP members and foreign affiliates. Third,
because of this grave infraction causing the depletion
of the company's Special Accounts held in trust for
the rightful copyright owners, Gaite's ability to duly
perform and accomplish her duties and
responsibilities as General Manager has been
seriously put into question. It is clear, therefore, that
Gaite's acts amounted to serious misconduct
warranting her dismissal.
Here, the Court finds that FILSCAP validly terminated
Gaite's employment on the ground of loss of trust and
confidence. First, there is no doubt that she held a
position of trust and confidence. The law
contemplates two (2) classes of positions of trust. The
first class consists of managerial employees. They are
as those who are vested with the power or
prerogative to lay down management policies and to
hire, transfer, suspend, layoff, recall, discharge,
assign or discipline employees or effectively
recommend such managerial actions. The second
class consists of cashiers, auditors, property
custodians, etc. who, in the normal and routine
exercise of their functions, regularly handle significant
amounts of money or property. As General Manager
of the company, Gaite clearly falls under the first class
of employee for as earlier pointed out, she was
responsible for the overall operations thereof,
Labor Law Review Digests | Lourleth Lluz
including the regular review and updating of its
distribution guidelines to facilitate royalty distribution
to FILSCAP. members and foreign affiliates.
Specifically, her duties include: (1) preparation of the
annual and 3-5 year FILSCAP Programs and budgets,
ensuring that the same are implemented effectively
and judiciously; and (ii) regular reviews and updating
of FILSCAP's distribution guidelines to facilitate royalty
distribution to FILSCAP members and foreign
affiliates. Hence, the first requisite is present in this
case.
Second, it is rather obvious to the Court that the act
of transferring the aforementioned staggering amount
from the Special Accounts to cover the company's
Operating Expenses, without the knowledge and
consent of the Board of Directors, and in direct
contravention of FILSCAP's Distribution Rules is
sufficient reason for the loss of trust and confidence
in Gaite. It bears stressing that as managerial
employee, Gaite could be terminated on the ground
of loss of confidence by mere existence of a basis for
believing that she had breached the trust of her
employer, which in this case is FILSCAP. Proof beyond
reasonable doubt is not required. It would already be
sufficient that there is some basis for such loss of
confidence, such as when the employer has
reasonable ground to believe that the concerned
employee is responsible for the purported misconduct
and the nature of his participation therein. This
distinguishes a managerial employee from a fiduciary
rank-and-file where loss of trust and confidence, as
ground for valid dismissal, requires proof of
involvement in the alleged events in question, and
that mere uncorroborated assertion and accusation by
the employer will not be sufficient.
In the present case, the Court agrees with the
appellate court in ruling that FILSCAP has sufficiently
proven Gaite's unauthorized reallocation or transfer of
funds from the company's Special Accounts to its
Operating Expenses. For one, the report of FILSCAP's
Accounting Officer, Melinda Lenon, dated July 18,
2012 adequately showed that the funds were taken
from the distribution pool to cover the operating
expenses deficit. For another, such report was, in
fact, duly corroborated by Gaite's June 22, 2012 email
to Board member, Mr. Gary Granada.
In her belated attempt to refute the charges against
her, Gaite claims that the documents presented by
FILSCAP as evidence have no probative value for
61 | P a g e

being neither authenticated, identified, nor sworn to.
But the Court affirms the ruling of the appellate court
that technical rules of evidence are not binding in
labor cases. In addition, any objection to said
evidence must be deemed waived for Gaite never
questioned the authenticity or admissibility thereof
before the labor tribunals.
Contrary to Gaite's expectations, moreover, it has not
escaped the Court's attention that while she
persistently insists that her act of reallocating funds
was sanctioned by the company's Distribution Rules,
she unfortunately failed to cite any relevant provision
that supposedly authorizes her to do so. To support
her claim, she cites Section 3.1 of the Distribution
Rules. But all said provision states is that all expenses
arising from and incidental to the conduct,
management and operation of the company, which
includes the Operating Expenses, are first to be
deducted from the gross income. Nowhere in the
rules cited by Gaite was it provided, either expressly
or impliedly, that she, as General Manager of
FILSCAP, is authorized to transfer funds from the
Special Accounts to cover the Operating Expenses
without the knowledge or consent of the Board. As
the CA points out, it is true that the Operating
Expenses must first bdeducted from gross revenue to
arrive at the distributable revenue. But the
Distribution Rules expressly provide that part of the
distributable revenue, after operating and other
expenses have been deducted, are to be held in
suspense under special accounts for certain works to
be distributed later to the rightful owners or to the
general membership, as the case may be. Thus, Gaite
should not have used the funds from the Special
Accounts to cover Operating Expenses because in the
first place, the Operating Expenses should have
already been deducted from the gross revenue before
part of the distributable royalties may be set aside
under the Special Accounts. In fact, it bears stressing
that Paragraph 1.2 of the Distribution Rules even
provides that the Board has the sole authority to
allocate or appropriate FILSCAP's revenues consisting
of royalties and license fees. It is therefore clear that
not only did Gaite anchor her defense on an
inapplicable and irrelevant provision of the company's
Distribution Rules, her commission of the subject
reallocation goes against the express prohibitions
provided thereunder.
The Court finds it worthy to state further that Gaite
seems to be missing the point in insisting that there is
Labor Law Review Digests | Lourleth Lluz
no showing that an interested person had suffered
any damage or injury as a result of the perceived
'reallocation.' That she did not use the funds for her
personal gain and that the transfer thereof redounded
to the benefit of the company is of no moment. To
the Court, the mere fact that she authorized said
transfer without the knowledge or consent of the
Board and in direct contravention of the company's
Distribution Rules constitutes valid and legal ground
sufficient enough to warrant her dismissal. Otherwise
stated, regardless of whether FILSCAP has sufficiently
proven actual damage to FILSCAP or that she
personally benefited from her actuations, the mere
existence of a basis for believing that she breached
FILSCAP's trust and confidence suffices as grounds
for her dismissal.
14. Apelanio vs. Arcanys, Inc., GR No.
227098, Novebmer 14, 2018
Petitioners: Julius Q. Apelanio
Respondents: Arcanys, Inc. and CEO Alan
Debonneville
Ponente: Peralta (Third Division)
Topic
: Labor Law
SUMMARY
: After failing to meet the standards for regularization,
probationary employee Apelanio alleged thathe
accepted the offer of Arcanys for retainership for the
period October 10-24, 2012. He did not sign the
retainership contract. After the expiration of said
period, Apelanio alleged that Arcanys made another
offer of retainership for the period October 25-
November 12, 2012. In discussing the terms of the
second retainership offer, Apelanio and Arcanys
discussed the same remuneration figure covered by
the alleged first retainership offer. The draft
agreement embodying the second offer stated that it
was signed by the parties on the same date as the
first agreement.
DOCTRINE
: Although it may be argued that the dates were
merely clerical errors or unreplaced entries resulting
62 | P a g e
 Labor Law Review Digests | Lourleth Lluz

to oversight, the Skype conversation between Ruling:NO.

Apelanio and Arcanys’ representative on October 24,
2012, The SC cited the CA’s ruling:

confirmed the non-conclusion of the first agreement. (a)

Apelanio merely alleged that he was hired as an
The first agreement, which supposedly re-hired
employee under said retainership agreements, but
Apelanio for the same position, didnot bear his
has yet to provide evidence to support such claim. "It
signature
is a basic rule in evidence that each party must prove
his affirmative allegations." Therefore, Article 281 of
This fact alone stirs doubt on whether the
the Labor Code finds no application in this case,
aforementionedagreement really got finalized.
absent any evidence to prove that Apelanio worked
beyond his probationary employment. (b)

FACTS The NLRC gave full credence to Apelanio's

proposition that it is normal for an employeenot to
:On April 10, 2012, Apelanio was hired by Arcanys,
sign his copy and that if Apelanio really wanted to, he
Inc. as a Usability/Web Design Expert. He was placed
could have signed his copybefore submitting it as
on a "probationary status" for a period of six months.
evidence.
Due to low evaluation ratings, Arcanys served
Apelanio a letter, informing him that Arcanys would (c)
not convert his status into a regular employee.
Apelanio was given his final pay and he signed a Unfortunately, We cannot align Our view with that of
Waiver, Release and Quitclaim" in favor of the NLRC considering that x x x theabsence of
respondents. Apelanio averred that when his Apelanio's signature in the first agreement was also
probationary contract was terminated, he was coupled with otherindicators that support the
immediately offered a retainership agreement lasting conclusion that such agreement was never really
from October 10, 2012 until October 24, 2012, which carried out.
involved a similar scope of work and responsibilities
but on a project basis, without security of tenure, (d)
with lesser pay, and without any labor standard
First, the draft of the second agreement, which
benefits. Apelanio was confused with the
Apelanio claimed to be another extensionof the first,
arrangement, but agreed since he had a family to
indicated that such agreement was entered into, and
support. He believed that he was still undergoing
supposed to be signedby the parties on the 10th of
Arcanys’
October 2012 (the date supposedly of the first
evaluation. On October 26, 2012, after the lapse of agreement).
the retainership agreement, Apelanio was offered
(e)
another retainership agreement, from October 25,
2012 to November 12, 2012, again with an identical
Second, the Skype conversation between
scope of work butat a reduced daily rate. As a result,
Apelanioand Arcanys’
Apelanio became suspicious of Arcanys’
representative onOctober 24, 2012 x x x showed that
motives and consulted with a lawyer, who informed
they were discussing possible compensation
him that said practice was illegal. He then refused to
atP18,000.00, which was the remuneration indicated
sign the second retainership agreement, and
in the first agreement. If the firstagreement got
questioned why they offered him another retainership
finalized and was already implemented, then why
agreement if he was deemed unqualified for the
would the draft of thesecond one still indicate the
position. Apelanio filed a complaint for illegal
10th October 2012 as the date of execution and
dismissal.
signing ofthe first agreement?
ISSUES: WoN Apelanio was illegally dismissed


63 | P a g e

Although it may be argued that the dates were
merely clerical errors or unreplacedentries resulting to
oversight, the Skype conversation between Apelanio
and Arcanys’
representative on October 24, 2012, confirmed the
non-conclusion of the first agreement; for it would be
illogical for the parties to still discuss the
remuneration indicated in the first agreement if the
same had already been implemented, and, in fact,
was about to end on the day that the conversation
took place
(f)
Furthermore, a review of the retainership
agreements indicates that Apelanio was merely
engaged as a consultant, in relation to the hacking
incidents endured by Arcanys.
Apelanio merely alleged that he was hired as an
employee under said retainership agreements, but
has yet to provide evidence to support such claim.
"It is a basic rule in evidence that each party must
prove his affirmative allegations."
Therefore, Article 281 of the Labor Code finds no
application in this case, absent any evidence to prove
that Apelanio worked beyond his probationary
employment.
15. Union School International et al., vs.
Dagdaag, GR No. 234186, November
21, 2018, citing Leus, Capin-Cadiz
FACTS:
Charley Jane Dagdag (Dagdag) was employed as an
Elementary School Teacher on probationary status by
Union School International from July 16, 2012 to May
31, 2013. Sometime in November 2012, she
discovered she was pregnant and informed Jennifer
Mandapat (Mandapat), the school head, of her
pregnancy and that the father of her child was
marrying another woman. Being pregnant out of
wedlock constituted as gross immorality in the Faculty
and Staff Handbook of the school.
Labor Law Review Digests | Lourleth Lluz
Sometime in December 2012, Dagdag did not report
to work and gave no prior notice to the school of her
absence. The school suspended her for four days for
abandonment of work as well as an additional one
day of suspension for her second offense of being
absent without official leave. Later on, Dagdag
received a copy of a notice of hearing on the
disciplinary action for her gross immorality. However,
Dagdag failed to attend the first scheduled hearing
and it was rescheduled.
When Dagdag was finally able to attend the hearing,
she was apprised of the possible consequences if she
were to be dismissed from work as it may affect her
next job application as compared to resigning which
the management of Union School suggested was the
better option. Dagdag agreed to resign but on the
same day as the hearing, she filed a complaint for
illegal dismissal, non-payment of salaries and
benefits, and damages against Union School.
ISSUE:
Whether or not Charley Jane Dagdag was
constructively dismissed
RULING:
Yes. Charley Jane Dagdag was constructively
dismissed. Constructive dismissal is defined as “a
cessation of work because continued employment is
rendered impossible, unreasonable or unlikely; when
there is a demotion in rank or diminution in pay or
both; or when a clear discrimination, insensibility, or
disdain by an employer becomes unbearable to the
employee." The test of constructive dismissal is
whether a reasonable person in the employee's
position would have felt compelled to give up his
employment/position under the circumstances.
The suggestion of the school management that
Dagdag resign as her dismissal may result to harsher
penalties left her with no other choice but to
discontinue working. Furthermore, it would appear
that even before the hearing, the school management
had already predetermined the outcome and resolved
in the decision to terminate Dagdag’s employment.
Hence, Dagdag is left with only two options either
resignation or dismissal with a threat of the
revocation of her teaching license.
Hence, Charley Jane Dagdag was constructively
dismissed.
64 | P a g e

On disgraceful or immoral conduct
In this case, it was not fully proven that the
totality of evidence justify Dagdag’s dismissal as there
was no legal impediment for her and the father of her
child to marry. Pregnancy of a school teacher out of
wedlock is not a just cause for termination of an
employment absent any showing that the pre-marital
sexual relations and, consequently, pregnancy out of
wedlock, are indeed considered disgraceful or
immoral.
15. SUSPENSION OF BUSINESS OPERATIONS
CASES:
1. Spectrum Security Services Inc, vs. Grave
et al., GR No. 196650, June 7, 2017
Doctrine: A security guard placed on reserved or off-
detail status is deemed constructively dismissed only
if the status should last more than six months. Any
claim of constructive dismissal must be established by
clear and positive evidence.
Facts: Spectrum Security Services, Inc. (petitioner), a
domestic corporation engaged in the business of
providing security services, employed and posted the
respondents at the premises of Ibiden Philippines,
Inc. (Ibiden). When the petitioner implemented an
action plan as part of its operational and manpower
supervision enhancement program geared towards
the gradual replacement of security guards at Ibiden,
it issued separate "Notice(s) to Return to Unit" to the
respondents in July and August 2008 directing them
to report to its head office and to update their
documents for re-assignment.
However, On August 14, 2008, the respondents filed
their complaint against the petitioner for constructive
dismissal in the Regional Arbitration Branch No. IV of
the NLRC, claiming that the implementation of the
action plan was a retaliatory measure against them
for bringing several complaints along with other
employees of the petitioner to recover unpaid holiday
pay and 13th month pay. The Labor Arbiter dismissed
the complaint for constructive dismissal upon finding
that there was no evidence adduced by complainants
in the form of a termination letter and the like to
Labor Law Review Digests | Lourleth Lluz
substantiate their claim that they were indeed
unceremoniously terminated by petitioner. On appeal
to the NLRC, the latter reversed the ruling of the
Labor Arbiter and noted that had the petitioner really
intended to re-assign the respondents to new posts,
the petitioner should have indicated in the notices the
new postings or re-assignments. Such ruling was
affirmed by the Court of Appeals via a petition for
Certiorari under Rule 65.
Issue: Whether the petitioner was guilty of illegally
dismissing the respondents.
Ruling: NO. The Supreme Court held that while
security guards are entitled to security of tenure, their
situation should be differentiated from that of other
employees or workers. Their security of tenure,
though it shields them from demotions in rank or
diminutions of salaries, benefits and other privileges,
does not vest them with the right to their positions or
assignments that will prevent their transfers or re-
assignments (unless the transfers or re-assignments
are motivated by discrimination or bad faith, or
effected as a form of punishment or demotion without
sufficient cause). Such peculiar conditions of their
employment render inevitable that some of them just
have to undergo periods of reserved or off-detail
status that should not by any means equate to their
dismissal. Only when the period of their reserved or
off-detail status exceeds the reasonable period of six
months without re-assignment should the affected
security guards be regarded as dismissed.
In illegal dismissal cases, the general rule is that the
employer has the burden of proving that the dismissal
was legal. To discharge this burden, the employee
must first prove, by substantial evidence, that he had
been dismissed from employment. In this case, the
notices sent to the respondents contained nothing
from which to justly infer their having been
terminated from their employment. Furthermore, the
six-month period had not yet lapsed.
Contrary to the findings of the CA, the respondents
intended to sever their employer-employee
relationship with the petitioner because they applied
for and obtained employment with other security
agencies while they were on reserved status. Their
having done so constituted a clear and unequivocal
intent to abandon and sever their employment with
the petitioner. Thereby, the filing of their complaint
65 | P a g e

for illegal dismissal was inconsistent with the
established fact of their abandonment.
2. Ibon vs. Genghis Khan Security Services
Inc. GR No. 221085, June 19, 2017
Doctrine: General Rule: “[1] an employer must
assign the security guard to another posting within
six (6) months from his last deployment, otherwise,
he would be considered constructively dismissed; and
[2] the security guard must be assigned to a specific
or particular client. A general return-to-work order
does not suffice.
Exception: In Exocet Security and Allied Services
Corporation v. Serrano (Exocet Security), the Court
absolved the employer even if the security guard was
on a floating status for more than six (6) months
because the latter refused the reassignment to
another client”
Facts: Ravengar G. Ibon was employed as a security
guard by Genghis Khan Security
Services (respondent). He was initially assigned to a
certain Mr. Solis in New Manila, Quezon City. In July
2008, he was transferred to the 5th Avenue
Condominium in Fort Bonifacio, Taguig City, in
September 2008 and was posted there until May
2009. In June 2009, petitioner was transferred to the
Aspen Tower Condominium until his last duty on
October 4, 2010. Thereafter, respondent promised to
provide him a new assignment, which, however, did
not happen.
Petitioner asserts that he has been illegally dismissed
as he was put on floating status without any
assignment to new work, while respondent here
claims that they had actually suspended petitioner for
sleeping on the job. Further, they assert that they
sent letters to petitioner requiring him to report back
to work and that it offered reinstatement during the
proceedings before the LA, which petitioner turned
down
Issue: Whether or not petitioner was constructively
dismissed?
Ruling: Temporary displacement or temporary off-
detail of security guard is, generally allowed in a
situation where a security agency's client decided not
to renew their service contract with the agency and
no post is available for the relieved security guard.
Such situation does not normally result in a
constructive dismissal. Nonetheless, when the floating
status lasts for more than six (6) months, the
employee may be considered to have been
constructively dismissed.
Labor Law Review Digests | Lourleth Lluz
Security guard on floating status must be assigned to
a specific posting.
Petitioner was last deployed on October 4, 2010.
Thus, it was incumbent upon respondent to show that
he was redeployed within six (6) months from the
said date. Otherwise, petitioner would be deemed to
have been constructively dismissed.
A holistic analysis of the Court's disposition in JFLP
Investigation  reveals that: [1] an employer must
assign the security guard to another posting within six
(6) months from his last deployment, otherwise, he
would be considered constructively dismissed; and [2]
the security guard must be assigned to a specific or
particular client. A general return-to-work order does
not suffice.
In Exocet Security and Allied Services Corporation v.
Serrano (Exocet Security), the Court absolved the
employer even if the security guard was on a floating
status for more than six (6) months because the
latter refused the reassignment to another client, to
wit:
Respondent should have deployed petitioner
to a specific client within six (6) months
from his last assignment. The
correspondence allegedly sent to petitioner
merely required him to explain why he did
not report to work. He was never assigned
to a particular client. Thus, even if petitioner
actually received the letters of respondent,
he was still constructively dismissed because
none of these letters indicated his
reassignment to another client.
16. DISEASE AS GROUND FOR TERMINATION
17. OTHER CAUSES OF SEVERANCE OF
EMPLOYMENT RELATION
CASES:
1. Catotocan vs. Lourdes School of Quezon
City Gr No. 213486, April 26, 2017, citing
1996 Pantranco North Express
Doctrine: “…acceptance by the employees of an
early retirement age option must be explicit,
voluntary, free, and uncompelled. While an employer
may unilaterally retire an employee earlier than the
legally permissible ages under the Labor Code, this
prerogative must be exercised pursuant to a mutually
instituted early retirement plan. In other words, only
the implementation and execution of the option may
66 | P a g e

be unilateral, but not the adoption and institution of
the retirement plan containing such option.”
Facts: Editha Catotocan(Catotocan) worked for
respondent, Lourdes School of Quezon City(LSQC) as
a music teacher. By the school year 2005- 2006, she
had already served for thirty-five (35) years. LSQC
has a retirement plan providing for retirement at sixty
(60) years old, or separation pay depending on the
number of years of service. LSQC issued
Administrative Order No. 2003-004 for all employees
which is an addendum on its retirement policy:
“NORMAL RETIREMENT:
1. An employee may apply for retirement or
be retired by the school when he/she
reaches the age of sixty (60) years or when
he/she completes thirty (30) years of
service, whichever comes first;”
Catotocan along with other faculty members
consistently opposed the amendment to the
retirement plan. Year later, after being notified that
she was being retired from service by LSQC, she
opened a savings account with BDO; she accepted all
the proceeds of her retirement package: the lump
sum and all the monthly payments credited to her
account until June 2009; upon acceptance of the
retirement benefits, there was no notation that she is
accepting the retirement benefits under protest or
without prejudice to the filing of an illegal dismissal
case. She then filed a case for illegal dismissal against
respondent.
Issue: Whether or not Catotocan receipt of
retirement benefits will prevent her from filing a case
for illegal dismissal against respondents? Whether or
not the addendum on the retirement plan is valid
despite stipulating a retirement age lower than that
provided for by the labor code?
Held: She is estopped from filing a case for illegal
dismissal. Catotocan may have initially opposed to the
idea of her retirement at an age below 60 years, but
her subsequent actions after her "retirement" are
tantamount to her consent to the addendum to the
LSQC's retirement policy of retiring an employee from
service upon serving the school for at least thirty (30)
continuous years.
Retirement is the result of a bilateral act of the
parties, a voluntary agreement between the employer
Labor Law Review Digests | Lourleth Lluz
and the employee whereby the latter, after reaching a
certain age, agrees to sever his or her employment
with the former.
By express language, the Labor Code permits
employers and employees to fix the applicable
retirement age at 60 years or below, provided that
the employees' retirement benefits under any CBA
and other agreements shall not be less than those
provided by law. Only in the absence of such an
agreement shall the retirement age be fixed by the LC
apply, which provides for a compulsory retirement
age at 65 years, while the minimum age for optional
retirement is set at 60 years. Therefore, the
addendum is valid.
2. Philippine Airlines vs. Hassaram, GR. No.
217730, June 5, 2017
Doctrine: Interpreting Art. 287 (Retirement) of the
Labor Code: “It can be clearly inferred from the
language of the foregoing provision that it is
applicable only to a situation where (1) there is no
CBA or other applicable employment contract
providing for retirement benefits for an employee, or
(2) there is a CBA or other applicable employment
contract providing for retirement benefits for an
employee, but it is below the requirement set by
law.”
Facts: The CA ruled that respondent, a former PAL
pilot, was entitled to receive retirement benefits from
PAL under Article 287 of the Labor Code,
notwithstanding his earlier receipt of P4,456,817.75
under the PAL Pilots' Retirement Benefit Plan.
Hassaram filed a case against PAL for illegal dismissal
and the payment of retirement benefits, damages,
and attorney's fees. He admitted that he received
P4,456,817.75 under one of PAL’s two retirement
plans, he maintained that his receipt of that sum did
not preclude him from claiming retirement benefits
from PAL, since that amount represented only a
return of his share in a distinct and separate
provident fund established for PAL pilots. The CA
declared that the funds received under the Plan were
not the retirement benefits contemplated by law. It
ruled that Hassaram was still entitled to receive
retirement benefits in the amount of P2,111,984.60
pursuant to Article 287 of the Labor Code. Since such
was higher than that provided for in PAL’s retirement
plans.
67 | P a g e

Issue: (1) Whether the amount received by
Hassaram under the retirement plan be deemed part
of his retirement pay?; (2) Whether Hassaram is
entitled to receive retirement benefits under Article
287 of the Labor Code?
Ruling: (1) The amount received by Hassaram under
the PAL Pilots' Retirement Benefit Plan must be
considered part of his retirement pay. PAL financed
and set up the retirement plan for their pilots.
It is clear from the provisions of the Plan that it is the
company that contributes to a "retirement fund" for
the account of the pilots. The contributions comprise
the benefits received by the pilots upon retirement,
separation from service, or disability. The SC cited the
case Philippine Airlines, Inc. v. Airline Pilots
Association of the Phils., regarding the retirement
plan in question where they explained:
“PAL Pilots' Retirement Benefit Plan is a
retirement fund raised from contributions
exclusively from [PAL] of amounts
equivalent to 20% of each pilot's gross
monthly pay.”
In Elegir v. Philippine Airlines, Inc., the SC ruled:
Consistent with the purpose of the law, the
CA correctly ruled for the computation of the
petitioner's retirement benefits based on the
two (2) PAL retirement plans because it is
under the same that he will reap the most
benefits.
(2) Hassaram's retirement pay should be computed
on the basis of the retirement plans provided by PAL.
Hassaram is a member of ALPAP (Union) and as such,
is entitled to benefits from both the retirement plans
under the 1967 PAL-ALPAP CBA and the Plan. Since
the benefits found under those plans are more than
that provided for by the Labor Code.
3. Laya vs. Court of Appeals, GR No. 205813,
January 10, 2018, En banc
Doctrine: An employee in the private sector who did
not expressly agree to the terms of an early
retirement plan cannot be separated from the service
before he reaches the age of 65 years. The employer
who retires the employee prematurely is guilty of
illegal dismissal, and is liable to pay his backwages
Labor Law Review Digests | Lourleth Lluz
and to reinstate him without loss of seniority and
other benefits, unless the employee has meanwhile
reached the mandatory retirement age under the
Labor Code, in which case he is entitled to separation
pay pursuant to the terms of the plan, with legal
interest on the backwages and separation pay
reckoned from the finality of the decision. H
Facts: Laya, Jr. was hired by Philippine Veterans
Bank as its Chief Legal Counsel with a rank of Vice
President. The terms and conditions of his
appointment are as follows:
"3. As a Senior Officer of the Bank, you are
entitled to the following executive ben[e]fits:
“• Membership in the Provident Fund
Program/Retirement Program.”
Respondent informed Laya that he was retired
effective on July 14, 2007, pursuant to the company’s
retirement plan, since he was already 60. Laya then
wrote to respondent bank, requesting for an
extension of his tenure for two (2) more years
pursuant to the Bank's Retirement Plan (Late
Retirement).
Respondent directed the petitioner to continue to
discharge his official duties and functions as chief
legal counsel pending his request. However,
petitioner’s request and MR for an extension of tenure
was denied by respondent.
Petitioner now alleges that (1) PVB is a government
owned bank and therefore he is covered by civil
service laws (retirement being at age 65 and that he
could not be retired before then) and (2) he was
made aware of the retirement plan of respondent
only after he had long been employed and was shown
a photocopy of the Retirement Plan Rules and
Regulations. Respondent alleges that petitioner had
agreed to the retirement plan since he signed the
terms and conditions of employment.
Issue: Whether or not Laya was validly retired at age
60?
Ruling: He was not validly retired, he was illegally
dismissed. The court ruled that Philippine Veterans
Bank is not a government owned bank but a private
one pursuant to their ruling in the case of Philippine
Veterans Bank Employees Union-NUBE v. The
Philippine Veterans Bank. The retirement of
68 | P a g e

employees in the private sector is governed by Article
287 of the Labor Code.
Acceptance by the employees of an early retirement
age option must be explicit, voluntary, free, and
uncompelled. The mere mention of the retirement
plan in the letter of appointment did not sufficiently
inform the petitioner of the contents or details of the
retirement program. Implied knowledge, regardless of
duration, does not equate to the voluntary
acceptance required by law in granting an early
retirement age option to the employee. A passive
acquiescence on the part of the employee,
considering that his early retirement age option
involved conceding the constitutional right to security
of tenure, is not enough.
Company retirement plans must not only comply with
the standards set by the prevailing labor laws but
must also be accepted by the employees as
commensurate to their faithful services to the
employer within the requisite period. Although the
employer could be free to impose a retirement age
lower than 65 years for as long its employees
consented, the retirement of the employee whose
intent to retire was not clearly established, or whose
retirement was involuntary is to be treated as an
illegal dismissal. PVB is guilty of illegal dismissal.
4. Del Rio vs. DPO Phils., GR No. 211525,
December 10, 2018
Facts:
Petitioner Del Rio is an employee of respondent DPO
Philippines, Inc. (DPO).
On September 7, 2009, petitioner submitted his
notice of resignation and accepted by the employer
which would take effect on October 7, 2009.
Respondents, however, did not pay the separation
pay of petitioner for he was engaged in activities in
direct competition with the business, which is a
violation of the non-competition clause; and because
he voluntarily resigned. Aggrieved, petitioner, on
October 9, 2009, filed a complaint for recovery of his
monetary claims.
Ruling of the Labor Arbiter and NLRC - awarded
separation pay.
Labor Law Review Digests | Lourleth Lluz
Ruling of the CA - removed the separation pay award
because an employee who voluntarily resigns from his
employment is not entitled to separation pay unless
otherwise stipulated in the employment contract, or in
the Collective Bargaining Agreement (CBA), or
sanctioned by established employer practice or policy.
Issues:
WON the CA is correct in deleting the award of
separation pay
Ruling of this Court: Yes.
There is no dispute that petitioner resigned from his
employment. This fact is established by the letter of
resignation. Suffice it to say, an employee who
voluntarily resigns from employment is not entitled to
separation pay, except when it is stipulated in the
employment contract or the CBA, or it is sanctioned
by established employer practice or policy. The cited
exceptions do not obtain in this case. As correctly
found by the CA, there was no employment contract,
much less a CBA, which contained the stipulation that
would grant separation pay to resigning employees.
Neither was there a company practice or policy that
was proven to exist in the instant case.
In his attempt to prove that there was a company
practice of giving separation pay to resigning
employees, petitioner presented the payslips of
Martinez and Legaspi showing that they received
separation pay after they resigned. We are not
convinced.
To be considered a company practice, the giving of
the benefits should have been done over a long
period of time, and must be shown to have been
consistent and deliberate. As records would show, the
giving of the monetary benefit by respondents in
favor of Legaspi and Martinez is merely an isolated
instance. From the beginning of respondents'
business and up until petitioner's resignation took
effect on October 7, 2009, there was no showing that
payments of such benefit had been made by
respondents to their employees who voluntarily
resigned. The first and only instance when such a
benefit was given to resigned employees was on or
after November 15, 2009 — not because it was a
company practice but only to pave the way for
Legaspi and Martinez's graceful exit, so to speak.
69 | P a g e

As explained by respondents, the said benefit was not
intended as a separation pay but more of a promise
or an assurance to Legaspi and Martinez that they
would be paid a benefit if they tender their
resignation. This was not the case for petitioner.
There was no promise given to him. Rather, petitioner
resigned on his own volition. Respondents did not
make any commitment to petitioner that he would be
paid after his voluntary resignation.
5. PRESCRIPTION OF CLAIMS
6. JURISDICTION OF THE LABOR ARBITER
CASES:
1. Cacho et al., vs. Balagtas, GR No. 202974,
February 7, 2018
Doctrine: Intra-corporate controversies are within
the jurisdiction of the regular courts, by contrast to
ordinary labor disputes that are within the jurisdiction
of the Labor Arbiter.
Facts: Balagtas sued Cacho, President of North Star
company, for constructive dismissal. Balagtas was a
Chief Executive Officer of North Star. Pursuant to a
board resolution, she was placed under preventive
suspension for some alleged questionable
transactions, and was later prevented from
reassuming her position.
Issue: Was the case an ordinary labor dispute that
the Labor Arbiter may take cognizance?
Ruling: No. It is an intra-corporate controversy as it
passed the Two-Tier Test: (1) Relationship Test; (2)
Nature of the Controversy Test.
A dispute is considered an intra-corporate controversy
under the relationship test when the relationship
between or among the disagreeing parties is any one
of the following: (a) between the corporation,
partnership, or association and the public; (b)
between the corporation, partnership, or association
and its stockholders, partners, members, or officers;
(c) between the corporation, partnership, or
association and the State as far as its franchise,
permit or license to operate is concerned; and (d)
among the stockholders, partners, or associates
themselves.
Labor Law Review Digests | Lourleth Lluz
In order to determine whether Balagtas was a
corporate officer, two conditions must be met: (1) the
position occupied was created by charter/by-laws,
and (2) the officer was elected (or appointed) by the
corporation's board of directors to occupy said
position. In the instant case, Balagtas’ position is one
of the corporate offices in the By-Laws of North Star.
She was appointed by the board. Hence, she was a
corporate officer. There is an intra-corporate
relationship between the parties.
The second tier is the Nature of the Controversy Test
that contemplates disagreement not only rooted in
the existence of an intra-corporate relationship, but
also pertain to the enforcement of the parties'
correlative rights and obligations under the
Corporation Code and the internal and intra-corporate
regulatory rules of the corporation. If the relationship
and its incidents are merely incidental to the
controversy or if there will still be conflict even if the
relationship does not exist, then no intra-corporate
controversy exists. To be considered an intra-
corporate controversy, the dismissal of a corporate
officer must have something to do with the duties and
responsibilities attached to his/her corporate office or
performed in his/her official capacity.
Because the transactions (misappropriations) were
alleged to have been committed by Balagtas as a
corporate officer that breached North Star’s trust and
confidence reposed in her, her dismissal is not a mere
labor dispute. Consequently, this case is outside the
Labor Arbiter’s jurisdiction.
2. Philippine Airlines Inc., vs. Airline Pilots
Association of the Phils., et al., GR No.
200088, February 26, 2018
Doctrine: The LA and the NLRC have jurisdiction
over actions for damages arising from employer-
employee relations. However, when the SOLE
assumes jurisdiction over a labor dispute, a claim for
damages should be asserted with the main case
before the SOLE.
Facts: ALPAP filed with the DOLE a notice of strike
alleging that PAL committed unfair labor practice. The
SOLE assumed jurisdiction and prohibited the strike.
Despite the prohibition, the strike was conducted. It
was declared by the SOLE to be illegal and such
70 | P a g e

resolution had attained its finality. After 8 months,
PAL filed before the LA a complaint for damages
against ALPAP and some of its officers and members.
PAL alleged that its striking pilots abandoned 3 PAL
aircrafts causing it to incur liability for violation of its
contract of carriage with its passengers.
Issue: Whether or not the Labor Arbiter and NLRC
have jurisdiction over actions for damages arising
from a labor strike?
Ruling: Yes. Under Art. 224, par. 4 of the Labor
Code, as amended, the LA and the NLRC have
jurisdiction over claims for actual, moral, exemplary
and other forms of damages arising from employer-
employee relations. To determine whether such
damages are cognizable by the Labor Arbiter,
jurisprudence has evolved the “reasonable connection
rule” where the claims for damages must have
reasonable causal connection with any of the claims
provided for in that article.
Applying the said rule, PAL’s claim for damages has
reasonable connection with its employer-employee
relationship with ALPAP. PAL’s cause of action is not
grounded on mere acts of quasi-delict but arose from
the illegal strike and acts committed during the same
which were in turn closely related and intertwined
with ALPAP’s allegations of unfair labor practices
against PAL.
However, PAL is no longer entitled to an award of
damages. The issue on damages is a controversy
which arose from the labor dispute between the
parties. Consequently, when the SOLE assumed
jurisdiction over the labor dispute, the claim for
damages was deemed included therein. Thus, the
issue on damages was also deemed resolved when
the SOLE decided the main controversy declaring the
strike to be illegal. To award damages to PAL would
be to sanction a relitigation of the issue of damages
separately from the main issue of the legality of the
strike from which it is intertwined. This runs counter
to the proscription against split jurisdiction. Likewise,
PAL’s claim for damages is barred under the doctrine
of immutability of final judgment. PAL should have
asserted its claim for damages before the SOLE and
to elevate the case to the CA when the SOLE failed to
rule on the matter of damages.
Labor Law Review Digests | Lourleth Lluz
3. Ellao y Dela vega vs. Batangas Electric
Cooperative Inc., GR No. 209166, July 9,
2018
Doctrine: (1) Illegal dismissal of an officer or other
employee of a private employer is cognizable by labor
arbiter under the Labor Code (Art.217-a-2), as
amended, except when the complaint involves
corporate officer in which the the jurisdiction belongs
to RTC. (2) Registration with SEC is not an operative
factor in determining the jurisdiction as it is relevant
only when a non-stock cooperative decides to convert
into a stock corporation.
Facts: Ellao was a general manager of an electric
cooperative. He alleged that he was illegally dismissed
by the cooperative and that since it’s not a
corporation registered with SEC, the jurisdiction
belongs to labor tribunals.
Issue: What court has jurisdiction?
Ruling: RTC. Registration with SEC is not an
operative factor in determining the jurisdiction as it is
relevant only when a non-stock cooperative decides
to convert into a stock corporation. Thus, even
without choosing to convert into a stock corporation,
cooperatives already are vested by law with juridical
personality enjoying corporate powers.
Only officers of a corporation were those given that
character either by the Corporation Code or by the
By-Laws so much so that the rest of the corporate
officers could be considered only as employees or
subordinate officials.
General manager is a position expressly provided
under the cooperative’s by-laws: the functions of the
office of the General Manager, i.e., management of
the Cooperative and to keep the Board fully informed
of all aspects of the operations and activities of the
Cooperative are specifically laid down under BATELEC
I's By-laws itself. It is therefore beyond cavil that
Ellao's position as General Manager is a cooperative
office. Accordingly, his complaint for illegal dismissal
partakes of the nature of an intra-cooperative
controversy; it involves a dispute between a
cooperative officer on one hand, and the Board of
Directors, on the other.
71 | P a g e

7. 2011 NLRC RULES OF PROCEDURE OF THE
NLRC
CASES:
1. C.I.C.M Mission Seminaries School of
Theology Inc. vs. Perez, GR No. 220506,
January 18, 2017
Doctrine: “In the event the aspect of reinstatement
is disputed, backwages, including separation pay,
shall be computed from the time of dismissal until the
finality of the decision ordering the separation pay.”
Facts: In an illegal dismissal case, the LA recognized
Perez’s right to receive backwages and separation pay
in lieu of reinstatement. The decision became final
and executory on Oct. 4, 2012. Perez moved for the
issuance of a writ of execution but opposed by CICM
alleging that their obligation has been satisfied by the
release of the cash bond. LA ruled that the cash bond
was insufficient. NLRC and CA affirmed the decision.
CICM argues that if the employer caused the delay in
satisfying the judgment award, the computation
should be up to the finality of the case. If it were the
employee's fault, as in this case, the computation
should only run until the time actual reinstatement is
no longer possible nor practicable.
Issue: What should be the legal basis for the
computation of the backwages and separation pay of
an illegally dismissed employee in a case where
reinstatement was not ordered?
Ruling: In the event the aspect of reinstatement is
disputed, backwages, including separation pay, shall
be computed from the time of dismissal until the
finality of the decision ordering the separation pay.
The reason for this is when there is an order of
separation pay, the employment relationship is
terminated only upon the finality of the decision.
Plainly, it does not matter if the delay caused by an
appeal was brought about by the employer or by the
employee.
Perez remained an employee pending her partial
appeal. Accordingly she is entitled to have her
backwages and separation pay computed until
Labor Law Review Digests | Lourleth Lluz
October 4, 2012, the date when the judgement
became final and executory.
2. Turks Shawarma Company vs. Pajaron, et
al., GR No. 207156, January 16, 2017
Doctrine: “The posting of cash or surety bond is
therefore mandatory and jurisdictional; failure to
comply with this requirement renders the decision of
the Labor Arbiter final and executory. This
indispensable requisite for the perfection of an
appeal”
Facts: Pajaron and Carbonilla claimed that there was
no just or authorized cause for their dismissal and
petitioners failed to comply with the requirements of
due process. On April 15, 2010, they filed their
respective Complaints.
The Labor Arbiter found credible Pajaron and
Carbonilla's version and held them constructively and
illegally dismissed. Then, petitioners appealed before
the NLRC. However, they failed to post in full the
required appeal bond. Thus, petitioners' appeal was
dismissed by the NLRC for non-perfection. It was
likewise, dismissed by the CA for the same reason.
Issue: Is the appeal bond a mandatory jurisdictional
requirement for appeal?
Ruling: YES. It is clear from both the Labor Code
(Article 223) and the NLRC Rules of Procedure
(Sections 4 and 6 of Rule VI) that there is legislative
and administrative intent to strictly apply the appeal
bond requirement, and the Court should give utmost
regard to this intention.
The posting of cash or surety bond is therefore
mandatory and jurisdictional; failure to comply with
this requirement renders the decision of the Labor
Arbiter final and executory. This indispensable
requisite for the perfection of an appeal ''is to assure
the workers that if they finally prevail in the case[,]
the monetary award will be given to them upon the
dismissal of the employer's appeal [and] is further
meant to discourage employers from using the appeal
to delay or evade payment of their obligations to the
employees.
72 | P a g e

3. Dutch Movers Inc. vs. Lequin, et al., GR
No. 210032, April 25, 2017
Doctrine: A basic principle that a corporation has a
separate and distinct personality from its stockholders
however, such personality may be disregarded or the
veil of corporate fiction may be pierced if it is used to
defeat public convenience, justify wrong, protect
fraud or defend crime or is used as a device to defeat
labor laws.
Facts: DMI, a domestic corporation engaged in
hauling liquefied petroleum gas, employed Lequin as
truck driver and the rest of respondents as helpers;
on December 28, 2004, Cesar Lee, through the
Supervisor Nazario Furio, informed them that DMI
would cease its hauling operation for no reason; as
such, they requested DMI to issue a formal notice
regarding the matter but to no avail. Later, upon
respondents' request, the DOLE NCR issued a
certification revealing that DMI did not file any notice
of business closure. Thus, respondents argued that
they were illegally dismissed as their termination was
without cause and only on the pretext of closure.
The Labor Arbiter ruled that there was lack of cause
of action. But the NLRC reversed the decision. It ruled
that respondents were illegally dismissed because
DMI simply placed them on standby, and no longer
provide them with work. The decision of the NLRC
became final and executory. Respondents filed a
motion for writ of execution. Pending resolution on
the motion, DMI ceased its operations without filing a
notice of business closure.
Issue: Can the NLRC decision be altered or modified
after it became final and executory?
Ruling: Yes, the principle of immutability of
judgment is not absolute. A judgment that has
become final and executor may be altered or modified
when there is a supervening event occurring after the
judgment becomes final and executory which renders
the decision unenforceable.
The supervening event in this case was the fact that
DMI ceased its operations after the decision had
become final and executory.
To note, a supervening event refers to facts that
transpired after a judgment has become final and
Labor Law Review Digests | Lourleth Lluz
executory, or to new situation that developed after
the same attained finality. Supervening events include
matters that the parties were unaware of before or
during trial as they were not yet existing during that
time.
In Valderrama, the supervening event was the closure
of Commodex, the company therein, after the
decision became final and executory, and without any
showing that it filed any proceeding for bankruptcy.
The Court held that therein petitioner, the owner of
Commodex, was personally liable for the judgment
awards because she controlled the company.
4. Doble, Jr. vs. ABB Inc. GR No. 215627,
June 5, 2017
Doctrine: “While as a general rule, only errors of law
are reviewed by the Court in petitions for review
under Rule 45, one of the well-recognized exceptions
to this rule is when the factual findings of the NLRC
contradict those of the labor arbiter.”
Facts: This is a petition for review on certiorari under
Rule 45 of the Rules of Court, seeking to reverse and
set aside the minute Resolution dated November 29,
2013 and Resolution dated November 28, 2014 issued
by the Court of Appeals, and to reinstate with
modification the Decision dated November 29, 2012
of the Labor Arbiter in NLRC-Case No. NCR-03-04889-
12.
Petitioner Luis S. Doble, Jr., a duly licensed engineer,
was hired by respondent ABB, Inc. as Junior Design
Engineer on March 29, 1993.
During almost nineteen (19) years of his employment
with the respondent ABB, Inc. prior to his disputed
termination, Doble rose through the ranks and was
promoted. On March 2, 2012, Doble was called by
respondent ABB, Inc. Country Manager and President
Nitin Desai, and was informed that his performance
rating for 2011 is one (1) which is equivalent to
unsatisfactory performance. Desai then raised the
option for Doble to resign as Local Division Manager
of the PS Division. Thereafter, HR Manager Miranda
told Doble that he would be paid separation pay
equivalent to 75% of his monthly salary for every
year of service, provided he would submit a letter of
resignation, and gave him until 12:45 p.m. within
which to decide.
73 | P a g e

On 23 March 2012, HR Manager Miranda and Mr.
Doble met at McDonald's Alabang Town Center
wherein he received his check for his resignation
benefit and signed all the pertinent documents,
including a Release and Quitclaim. On March 26,
2012, Doble filed a Complaint for illegal dismissal with
prayer for reinstatement and payment of backwages,
other monetary claims and damages. In a Decision
dated November 29, 2012, the Labor Arbiter held that
Doble was illegally dismissed because his resignation
was involuntary, and ordered ABB, Inc. and Desai to
pay his backwages and separation pay, since
reinstatement is no longer feasible.
Aggrieved by the Decision of the Labor Arbiter, ABB,
Inc. and Desai filed an appeal, whereas Doble filed a
partial appeal from the dismissal of his monetary
claims. In a Decision dated June 26, 2013, the two
(2) Commissioners of the NLRC Sixth Division voted to
grant the appeal filed by ABB, Inc. and Desai, and to
dismiss the partial appeal of Doble. They found that
the resignation of Doble being voluntary, there can be
no illegal
dismissal and no basis for the award of other
monetary claims, damages and attorney's fees.
Issue: Whether or not the NLRC committed grave
abuse of discretion for dismissing his complaint for
illegal dismissal.
Ruling: The petition is partly impressed with merit on
procedural grounds, but still devoid of substantive
merit.
While as a general rule, only errors of law are
reviewed by the Court in petitions for review under
Rule 45, one of the well-recognized exceptions to this
rule is when the factual findings of the NLRC
contradict those of the labor arbiter. On the
substantive issue of whether Doble was illegally
dismissed, the Court holds that he voluntarily
resigned, and was not constructively dismissed. The
test of constructive dismissal is whether a reasonable
person in the employee's position would have felt
compelled to give up his employment/position under
the circumstances.
Guided by these principles, the Court agrees with the
NLRC that ABB, Inc. and Desai were able to prove by
substantial evidence that Doble voluntarily resigned,
Labor Law Review Digests | Lourleth Lluz
as shown by the following documents (1) the affidavit
of ABB, Inc.'s HR Manager Miranda; (2) the
resignation letter; the letter of intent to purchase
service vehicle; and ABB, Inc.'s acceptance letter, all
dated March 13, 2012, (3) the Employee Clearance
Sheet; (4) the Certificate of Employment dated March
23, 2012; (5) photocopy of Bank of the Philippine
Islands manager's check in the amount of
P2,009,822.72, representing the separation benefit;
(6) Employee Final Pay Computation, showing
payment of leave credits, rice subsidy and bonuses,
amounting to P805,399.35; and (7) the Receipt,
Release and Quitclaim for a consideration of the total
sum of P2,815,222.07.
After a careful review of the records, the Court finds
that the NLRC has exhaustively discussed that Doble
was not coerced into submitting a resignation letter.
Finally, since the Decision of the NLRC finding Doble
to have voluntarily resigned is supported by
substantial evidence and in accord with law and
prevailing jurisprudence, no grave abuse of discretion,
amounting to lack or excess of jurisdiction may be
imputed against the NLRC for having dismissed his
complaint for illegal dismissal against ABB, Inc. and
Desai.
5. Philtranco Services Enterprises Inc. vs.
Cual, et al., GR No. 207684, July 17, 2017
Doctrine: Audited Financial Statements is the best
proof to show that company is suffering business
losses and must be shown and proved during the trial
not after. Hiring of new employees is an indication of
bad faith in retrenchment, thus, employer can be
liable for illegal dismissal.
Facts: Respondents were all included in a
retrenchment program embarked by Philtranco in
2006-2007 on the ground that it was suffering
business losses. Consequently, they filed a labor
complaint for illegal dismissal alleging that they were
not absorbed by Philtranco despite the fact that the
company was hiring new employees. LA only found
Olivar to have been illegally dismissed because of the
failure of the other respondents to sign the
verification and certification of non-forum shopping of
the complaint and position paper. Respondents then
filed a second NLRC case. LA found respondents to
have been illegally dismissed stating that the first
74 | P a g e

NLRC case is binding upon Philtranco. NLRC reversed
LA’s decision but CA reinstated LA’s decision.
Issue: Whether or not CA is correct in reinstating
LA’s decision that the first NLRC case is binding upon
Philtranco.
Ruling: The second NLRC case is not a continuation
of the first from which other respondents were
excluded. The matter of whether or not Philtranco
sufficiently proved its alleged business losses when it
embarked on its retrenchment program is a question
of fact. While both cases are separate, it does not
mean that previously decided cases has no bearing on
the second NLRC case. SC held that the LA’s decision
in the first NLRC case, finding Philtranco’s
retrenchment program to be illegal, constitutes res
judicata in the concept of collateral estoppel or issue
preclusion wherein it is defined as preclusion of
relitigation of a particular fact of issue in another
action between the same parties on a different claim
or cause of action. Conclusiveness of judgment finds
application when a fact or question has been squarely
put in issue, judicially passed upon and adjudged in a
former suit by a court of competent jurisdiction. The
dictum laid down in the earlier final judgment or order
becomes conclusive and continues to be binding
between the same parties. The invalidity of the
retrenchment in the first case has attained finality.
Moreover, records show that the decision was
adjudicated on the merits. Absolute identity of parties
Is not required, shared identity of interest is sufficient
to invoke the coverage of this principle. In both
cases, the issue of WON complainant were illegally
dismissed is hinged on the validity of Philtranco’s
retrenchment program. Without a doubt, the interests
of all the complainants are intertwined on that factual
question. The submission of Philtranco of its audited
financial statements for 2006 and 2007 in the second
case cannot be considered supervening event. At the
time retrenchment program was effected in 2007,
Philtranco had no basis and was unaware of the true
state of its finances. The records annexed to the case
showing that Philtranco hired new employees were
taken to belie Philtranco’s claim that it is exercised
the retrenchment of respondents in good faith.
6. Genpact Services Inc. vs. Santos-Falceso,
GR No. 227695, July 31, 2017
Doctrine: “A petition for certiorari under Rule 65 of
Labor Law Review Digests | Lourleth Lluz
the Rules of Court is a special civil action that may be
resorted to only in the absence of appeal qr any
plain, speedy, and adequate remedy in the ordinary
course of law”
Facts: Genpact is engaged in business process
outsourcing, particularly servicing various
multinational clients, including Allstate Insurance
Company (Allstate). On different dates spanning the
years 2007 to 2011, Genpact hired respondents Maria
Katrina Santos-Falceso, Janice Ann M. Mendoza, and
Jeffrey S. Mariano (respondents) to various positions
to service its Allstate account. However, on April 19,
2012, Allstate ended its account with Genpact,
resulting in respondents being placed on floating
status, and eventually, terminated from service. This
prompted respondents to file a complaint before the
National Labor Relations Commission (NLRC).
Respondents alleged that after Allstate terminated its
contract with Genpact, they were initially placed on
"benching" status with pay, and after five (5) months,
Genpact gave them the option to either "voluntarily
resign" or to "be involuntarily terminated on the
ground of redundancy" with severance pay of one-
half (1/2) month basic salary for every year of
service, in either case. Left without the option to
continue their employment with Genpact, respondents
chose the latter option and were made to sign
quitclaims as a condition for receiving any and all
forms of monetary benefits. In this light, respondents
argued that the termination of Genpact and Allstate's
agreement neither amounted to a closure of business
nor justified their retrenchment. Respondents further
contended that Genpact failed to observe the
requirements of procedural due process as there was
no showing that the latter served proper notice to the
Department of Labor and Employment (DOLE) thirty
(30) days before they were terminated from service,
and that they were not accorded the chance to seek
other employment opportunities
Petitioners justified respondents' termination of
employment on the ground of closure or cessation of
Allstate's account with Genpact as part of the former's
"[g]lobal [d]ownsizing due to heavy losses caused by
declining sales in North America." Petitioners pointed
out that respondents were properly given separation
pay, as well as unpaid allowances and 13th month
pay, thus, rendering the latter's monetary claims
bereft of merit.
75 | P a g e

LA Ruling: dismissed respondents' complaint for lack
of merit; termination from service was due to the
untimely cessation of the operations of Genpact's
client, Allstate, wherein respondents were assigned
NLRC Ruling: affirmed the LA ruling;
CA: dismissed outright the petition for certiorari
purely on procedural grounds; failure to file a motion
for reconsideration before the NLRC prior to elevating
the case to the CA is a fatal infirmity which rendered
their petition for certiorari before the latter court
dismissible;
Issue: Whether or not the CA correctly dismissed
outright the certiorari petition filed by petitioners
before it on procedural grounds?
Ruling: NO. A petition for certiorari under Rule 65 of
the Rules of Court is a special civil action that may be
resorted to only in the absence of appeal qr any plain,
speedy, and adequate remedy in the ordinary course
of law. This notwithstanding, the foregoing rule
admits of well-defined exceptions.
A judicious review of the records reveals that the
exceptions in items (d- where, under the
circumstances, a motion for reconsideration would be
useless) and (e where petitioner was deprived of due
process and there is extreme urgency for relief-) are
attendant in this case.
Section 15, Rule VII [37] of the 2011 NLRC Rules of
Procedure, as amended, provides, among others, that
the remedy of filing a motion for reconsideration may
be availed of once by each party. In this case, only
respondents had filed a motion for reconsideration
before the NLRC. Applying the foregoing provision,
petitioners also had an opportunity to file such motion
in this case, should they wish to do so. However, the
tenor of such warning effectively deprived petitioners
of such opportunity, thus, constituting a violation of
their right to due process.
All told, petitioners were completely justified in
pursuing a direct recourse to the CA through a
petition for certiorari under Rule 65 of the Rules of
Court. To rule otherwise would be clearly antithetical
to the tenets of fair play, not to mention the undue
Labor Law Review Digests | Lourleth Lluz
prejudice to petitioners' rights. Thus, in light of the
fact that the CA dismissed outright the petition for
certiorari before it solely on procedural grounds, a
remand of the case for a resolution on the merits is
warranted
7. Jolo’s Kiddie Carts vs. Caballa, GR No.
230682, November 29, 2017
Facts: Caballa and Bautista were staff members of
JKC’s business. They claimed that they were never
paid the monetary value of their unused service
incentive leaves, 13th month pay, overtime pay, and
premium pay for work during holidays. They alleged
further that after JKC found out that they were
inquiring from DOLE about the prevailing minimum
wage, they were prohibited from reporting to their
work assignment without any justification. Hence,
they argued that they were illegally dismissed.
JKC, for its part, interposed the defense of
abandonment. The LA ruled in favor of respondents
awarding all the monetary benefits demanded. The
NLRC, however, modified the ruling by only awarding
wage differential and 13th month pay, deleting all
others. Petitioners directly filed a petition for certiorari
before the CA without moving for reconsideration
before the NLRC. CA denied the petition due to
petitioner’s failure to file motion for reconsideration.
Issues: (1) Was the CA correct in dismissing the
petition?; (2) Should the Petition be granted?;
(3)Were respondents illegally dismissed? Did they
abandon their work?
Ruling:
(1) No. Generally, the filing of a motion for
reconsideration is a condition sine qua non to the
filing of a petition for certiorari. However, there are
several recognized exceptions to the rule, one of
which is when the order is a patent nullity.
In this case, the amounts pertaining to the
backwages, wage differentials, and 13th month pay
which were then included in the Computation of
Monetary Award attached to the NLRC ruling, were no
longer reflected in the NLRC computation. Clearly,
such is a patent nullity as it is bereft of any factual
and/or legal basis.
(2) Yes. JKC must satisfactorily show that the court or
76 | P a g e

quasi-judicial authority gravely abused the discretion
conferred upon it to justify the grant of the
extraordinary remedy of certiorari.
In labor cases, grave abuse of discretion may be
ascribed to the NLRC when its findings and
conclusions are not supported by substantial
evidence. The NLRC committed grave abuse of
discretion amounting to lack or excess of jurisdiction
when it awarded respondents increased monetary
benefits without any factual and/or legal bases.
(3) No, in both instances. In cases of illegal dismissal,
the employer bears the burden of proof to prove that
the termination was for a valid or authorized cause.
However, the employees must first establish by
substantial evidence that indeed they were dismissed.
Moreover, to constitute abandonment, two elements
must concur: (1) failure to report for work or absence
without valid or justifiable reason; and (2) a clear
intention to sever the employer-employee
relationship, with the second element as the more
determinative factor and being manifested by some
overt acts.
In this case, Caballa and Bautista failed to prove their
allegation that JKC dismissed them from work, as
there was no indication as to how the latter
prevented them from reporting to their work stations;
nor did JKC perform any overt act that would suggest
that they indeed terminated both Caballa and
Bautista’s employment. In the same vein, JKC failed
to prove that Caballa and Bautista committed
unequivocal acts that would clearly constitute intent
to abandon their employment. Therefore, the JKC
must reinstate the both Caballa and Bautista.
8. Bugaoisan vs. Owi Group et al., GR No.
226208, February 7, 2018
Doctrine: The findings of fact of the LA, as affirmed
by the NLRC, are final and conclusive, in the absence
of proof that the latter acted without, in excess of or
with grave abuse of discretion amounting to lack or
excess of jurisdiction.
Facts: Petitioner was offered full time employment
for a term of 1 year as a chef in Australia but it was
modified upon arrival to a term of 2 years. She was
tasked to prepare breakfast buffet for 600 mining
employees all by herself. As a result, she was
diagnosed to be suffering from Carpal Tunnel
Labor Law Review Digests | Lourleth Lluz
Syndrome (CTS) and was declared unfit to work.
Since she had no other means to support her daily
sustenance and the required medication, she decided
to tender her resignation letter and left for the
Philippines.
Thus, a complaint for constructive illegal dismissal
and payment of salary for the unexpired portion of
the employment period, moral and exemplary
damages, and attorney's fees was filed against
respondents, OWI and Morris, before the NLRC.
The Labor Arbiter (LA) ruled that the petitioner was
illegally dismissed from employment. It was found
that the respondents committed gross
misrepresentation and bad faith in inducing petitioner
to work for them. Petitioner's Carpal Tunnel
Syndrome (CTS) was caused or at least aggravated
by respondents' oppressive acts. Furthermore, the
tenor of her resignation letter and the immediate
filing of the labor complaint evinced that she did not
voluntarily tender her resignation.
The NLRC sustained the findings of the LA with
regard to the existence of constructive dismissal, the
solidary liability of the respondents, and the award of
petitioner's salary for the unexpired portion of her
two-year employment contract.
In resolving the Petition for Certiorari under Rule 65,
the CA affirmed the findings of the NLRC, ruling that
no grave abuse of discretion could be attributed to
the latter. However, it modified the decision by
reducing the award of unpaid salaries due the
petitioner on the ground that the basis should be the
first contract of employment which had a duration of
only one (1) year.
Issue: Whether or not the CA is correct in modifying
the award of unpaid salaries?
Ruling: No. The supervisory jurisdiction of the CA
under Rule 65 was confined only to the determination
of whether or not the NLRC committed grave abuse
of discretion in its appreciation of factual issues
presented before it by any parties. The CA is not
given unbridled discretion to modify factual findings
of the NLRC and LA, especially when such matters
have not been assigned as errors nor raised in the
pleadings.
There being no finding of grave abuse of discretion,
the CA erred when it ruled that petitioner's
employment contract with Morris was for only one (1)
year.
The Court is precluded from doing an independent
review of this factual matter since it has already been
77 | P a g e

decided by the labor tribunals, unless the CA, in the
certiorari petition, ascertains that the NLRC acted with
grave abuse of discretion. Absent such determination,
factual findings of the NLRC are deemed conclusive
and binding even on this Court.
9. Gabriel vs. Petron Corp. et al., GR No.
194575, April 11, 2018
Doctrine: Motion for Extension to File Pleadings
under Rule 65
Facts: Gabriel worked for Petron and claimed he had
been constructively dismissed. The LA decided in his
favor but was thereafter reversed by the NLRC.
Aggrieved, Gabriel turns to the CA.
Before he could file his petition for certiorari, Gabriel
filed a motion for extension three (3) days before the
lapse of the 60-day reglementary period. Gabriel cites
time and distance constraints in his attempt to secure
an authentication from the Philippine Consular Office
in Australia. The CA denied this motion. Hence, this
case.
Issue: Did the CA commit a reversible error when it
denied Gabriel’s motion for extension?
Ruling: No. The general rule in Section 4, Rule 65 of
the ROC, is that a petition for certiorari must be filed
within 60 days from notice of the judgment. In case
of non-compliance, there should be an effort on the
part of the party invoking liberality to advance a
reasonable or meritorious explanation for his/her
failure to comply with the rules.
The Court did not find Gabriel's reason to meet the
deadline compelling enough to relax the rule for filing
a petition for certiorari under Rule 65. Here, his
counsel should have anticipated that Gabriel needed
to take his oath before the Philippine Consular Office.
By giving Gabriel only one week to comply, his lawyer
did not give him much time. On the other hand,
Gabriel, assuming he really wanted to pursue his case
against Petron, could have easily visited the Philippine
Consular Office as soon as possible. Instead, he opted
to wait for a few days thinking that time was not of
the essence.
10. Malcaba et al., vs. Prohealth Pharma
Phils., GR No. 209085, June 6, 2018
Doctrine: In appeals of illegal dismissal cases,
employers are strictly mandated to file an appeal
Labor Law Review Digests | Lourleth Lluz
bond to perfect their appeals. Substantial compliance,
however, may merit liberality in its application.
Facts: Petitioners Malcaba, Adona, Nepomuceno, and
Palit-Ang were employed as the President, Marketing
Manager, Business Manager, and Finance Officer of
ProHealth respectively. The petitioners filed
complaints for illegal dismissal, nonpayment of
salaries and 13th month pay, damages, and
attorney's fees.
The LA and NLRC ruled in favor of the petitioners.
ProHealth moved for reconsideration before the NLRC
but the same was denied. ProHealth then filed a
Petition for Certiorari before the CA. The CA reversed
the NLRC’ decision. Petitioners argue that the CA
should have dismissed outright the Petition for
Certiorari since respondents failed to post a genuine
appeal bond before the NLRC as the bond the filed
did not appear in the records of Alpha Insurance.
Issue: Whether or not ProHealth failed to perfect
their appeal when it was discovered that their appeal
bond was not genuine
Ruling: ProHealth substantially complied with the
requirement of an appeal bond. In this instance, the
NLRC certified that ProHealth filed a security deposit
in the amount of P6,512,524.84 under Security Bank
check no. 45245 showing that the premium for the
appeal bond was duly paid and that there was
willingness to post it. Respondents likewise attached
documents proving that Alpha Insurance was a
legitimate and accredited bonding company.
Despite petitioners’ failure to collect on the appeal
bond, they do not deny that they were eventually
able to garnish the amount from respondents' bank
deposits. This fulfills the purpose of the bond, that is,
to guarantee the payment of valid and legal claims
against the employer. Thus, respondents are
considered to have substantially complied with the
requirements on the posting of an appeal bond.
While the procedural rules strictly require the
employer to submit a genuine bond, an appeal could
still be perfected if there was substantial compliance
with the requirement.
11. Consolidated Distillers of far East vs.
Zaragosa, GR No. 229302, June 20, 2018
Doctrine: Backwages is computed from the time of
dismissal until the finality of the decision ordering
separation pay.
78 | P a g e

Facts:This case is an offshoot of the petition
entitled Consolidated Distillers of the Far East, Inc. v.
Rogel N. Zaragoza and docketed as G.R. No. 196038
(Illegal Dismissal Case). The Decision in G.R. No.
196038 became final and executory on March 30,
2012. As modified, the Decision awarded backwages
and directed Condis to reinstate Rogel. The LA ruled
in favor of Rogel and directed Condis to pay
backwages/reinstatement salaries, including
allowances, from December 3, 2007, the date of
Rogel's illegal dismissal, up to August 3, 2013, the
date of the LA resolution. However, Condis argues
that it should only be liable for backwages and
separation pay until the year 2007. It claims that the
execution of the Asset Purchase Agreement and the
termination of the subsequent Service Agreement
with EDI was the reason for its failure to reinstate
Rogel. It claims that the foregoing were supervening
events that made Rogel's position inexistent as of
2007 and argued that backwages should be computed
only until the finality of the Court's Resolution in the
Illegal Dismissal Case on March 30, 2012. 12
Issue: Whether backwages should be counted until
the finality of the decision awarding separation pay?
Ruling: Yes. The Supreme Court held therein that
when there is a supervening event that renders
reinstatement impossible, backwages is computed
from the time of dismissal until the finality of the
decision ordering separation pay, thus:
x x x when separation pay is ordered after
the finality of the decision ordering the
reinstatement by reason of a supervening
event that makes the award of reinstatement
no longer possible, backwages is computed
from the time of dismissal until the finality of
the decision ordering separation pay.
The Court explained that "when there is an order of
separation pay the employment relationship is
terminated only upon the finality of the decision
ordering the separation pay. The finality of the
decision cuts-off the employment relationship and
represents the final settlement of the rights and
obligations of the parties against each other." 22
Here, the award of separation pay in lieu of
reinstatement, which Condis does not question, was
made subsequent to the finality of the Decision in the
Labor Law Review Digests | Lourleth Lluz
Illegal Dismissal Case (G.R. No. 196038). Condis
cannot therefore evade its liability to Rogel for
backwages and separation pay computed until the
finality of this Decision which affirms the order
granting separation pay.
12. Maricalum mining Corp., vs. Florentino et
al, GR No. 221831, July 23, 2018
Doctrine: “Employees of a corporation have no
cause of action for labor-related claims against
another unaffiliated corporation, which does not
exercise control over them.”
Facts: G Holding bought 90% of Maricalum Mining's
shares and financial claims in the form of company
notes. Concomitantly, G Holdings also
assumed Maricalum Mining's liabilities in the form of
company notes.
Upon the signing of the PSA and paying the stipulated
down payment, G Holdings immediately took physical
possession of Maricalum Mining's
Sipalay Mining Complex, as well as its facilities, and
took full control of the latter's management and
operations.
On June 1, 2001, Maricalum Mining's Vice President
and Resident Manager Bermejo wrote a Memorandum
informing that Maricalum Mining has decided to stop
its mining and milling operations effective July 1,
2001 in order to avert continuing losses brought
about by the low metal prices and high cost of
production.
On September 23, 2010, some of Maricalum Mining's
workers, including complainants, filed a Complaint
with the LA against G Holdings, its president, and
officer-in-charge for illegal dismissal, underpayment
and nonpayment of salaries as well as damages.
Based on these factual claims, complainants posited
that: the manpower cooperatives were mere alter
egos of G Holdings organized to subvert the "tenurial
rights" of the complainants;
Issues: (1) What is the nature of a review
on certiorari under Rule 45 and appeal by certiorari
under Rule 65 in a labor case?; (2) May G Holdings be
made liable labor-related claims
against Maricalum Mining due to fraud?
Ruling: (1) It is basic that only pure questions of law
should be raised in petitions for review
on certiorari under Rule 45 of the Rules of Court. It
will not entertain questions of fact as the factual
findings of appellate courts are final, binding or
conclusive on the parties and upon this court when
supported by substantial evidence. In labor cases,
however, the Court has to examine the CA's Decision
from the prism of whether the latter had correctly
79 | P a g e

determined the presence or absence of grave abuse
of discretion in the NLRC's Decision.  clearly and convincingly — it cannot be presumed.
In this case, the principle that this Court is not a trier
of facts applies with greater force in labor cases.
Grave abuse must have attended the evaluation of
the facts and evidence presented by the parties. This
Court is keenly aware that the CA undertook a Rule
65 review — not a review on appeal — of the NLRC
decision challenged before it. It follows that this Court
will not re-examine conflicting evidence, reevaluate
the credibility of witnesses, or substitute the findings
of fact of the NLRC, an administrative body that has
expertise in its specialized field. It may only examine
the facts only for the purpose of resolving allegations
and determining the existence of grave abuse of
discretion.a
(2) The corporate veil may be lifted only if it has been
used to shield fraud, defend crime, justify a wrong,
defeat public convenience, insulate bad faith or
perpetuate injustice.
In this case, G Holdings cannot be held liable for the
satisfaction of labor-related claims
against Maricalum Mining under the fraud test for the
following reasons:
First, the transfer of some Maricalum Mining's assets
in favor G Holdings was by virtue of the PSA as part
of an official measure to dispose of the government's
non-performing assets — not to evade its monetary
obligations to the complainants.
Settled is the rule that where one corporation sells or
otherwise transfers all its assets to another
corporation for value, the latter is not, by that fact
alone, liable for the debts and liabilities of the
transferor. In other words, control or ownership of
substantially all of a subsidiary's assets is not by itself
an indication of a holding company's fraudulent intent
to alienate these assets in evading labor-related
claims or liabilities. Although there was proof that G
Holdings has an office in Maricalum Mining's premises
and that that some of their assets have been
commingled due to the PSA's unavoidable
consequences, there was no fraudulent diversion of
corporate assets to another corporation for the sole
purpose of evading complainants' claim.
No clear and convincing evidence was presented by
the complainants to conclusively prove the presence
of fraud on the part of G Holdings. Although the
quantum of evidence needed to establish a claim for
illegal dismissal in labor cases is substantial
evidence, the quantum need to establish the presence
of fraud is clear and convincing evidence. Thus, to
disregard the separate juridical personality of a
Labor Law Review Digests | Lourleth Lluz
corporation, the wrongdoing must be established
Here, the complainants did not satisfy the requisite
quantum of evidence to prove fraud on the part of G
Holdings. They merely offered allegations and
suppositions that, since Maricalum Mining's assets
appear to be continuously depleting and that the
same corporation is a subsidiary, G Holdings could
have been guilty of fraud. As emphasized
earlier, bare allegations do not prove anything.
There must be proof that fraud — not the inevitable
effects of a previously executed and valid contract
such as the PSA — was the cause of the latter's total
asset depletion. To be clear, the presence of
control per se is not enough to justify the piercing of
the corporate veil.
13. Pacios et al., vs. Tabanag Walang
Hagdanan, GR No. 229579, November
14, 2018
Facts:
Tahanang Walang Hagdanan (Tahanan) is a private
organization engaged in the business of producing
and marketing various handicrafts, utilizing employees
who are mostly physically disabled, without one or
both limbs.
Respondent Sister Valeriana Baerts (Baerts) is a nun
who recruited Bernardo B Pacios, Marilou T. Abedes,
Alexis L. Elinon, Armando V. Absedes, Gina P. Ariate,
Vivencia N. Buela, Hermenigilfo E. Cansino and
several others more (collectively called workers) to
work for Tahanan. They were dismissed last June 11,
2012.
The workers filed an amended complaint for illegal
dismissal, underpayment of salary, non-payment of
13th month pay, service incentive leave, separation
pay, retirement benefits, with claims for moral
damages, exemplary damages and attorney’s fees
against Tahanan, Pangarap Sheltered Home for
Disabled People, Inc. (Pangarap), Venus Amoncio
(Amoncio) and Baerts. The
Labor arbiter rendered a decision in favor of the
workers, and ordered that Tahanang Walang
Hagdanan, Pangarap, Amoncio, and Baerts pay them
P16,629,163.63.
Tahanan, Pangarap, Amoncio and Baerts appealed
before the NLRC but was denied due to non-
80 | P a g e

compliance to the payment of the appeal bond in the
amount of P40,000.00.
Their Motion for Reconsideration plus surety bond in
the amount of P1,622,916.37 as Supersedeas Bond
was also denied by the NLRC. Thus, Tahanan,
Pangarap, Amoncio and Baerts filed a Petition for
certiorari.
CA reversed the NLRC’s decision on dismissing the
Appeal based on the non-perfection of said appeal for
the lacking cash bond. The petitioner’s appeal was
reinstated. Meanwhile, the Labor Arbiter issued a writ
of Execution on March 30, 2015 to implement the
Labor Arbiter’s October 24, 2013 Decision awarding
P16,629,163.63 to the workers. Thus, the cash bond
of P40,000.00 was released to them. Thereafter they
filed a Motion to Release the Supersedeas Bond but
was opposed by Tahanan, Walang Hagdanan,
Pangarap, Amoncio and Baerts because the CA
Decision dated April 27, 2015 reinstating their appeal
before the NLRC.
The Labor Arbiter issued a Resolution suspending the
resolution of the workers’ Motion to Release the
Supersedeas Bond, as well as all subsequent motions
seeking its immediate release.
In view thereof, the workers assailed the refusal of
the labor Arbiter to the NLRC but fell on deaf ears.
As a result, the workers filed a motion for mandamus
before the CA which was denied by the CA citing the
2011 NLRC Rules of Procedure, Tule XI, Section 17
which states that:
“Sec 17. Effect of Reversal During Execution
Proceedings. – In case of total or partial reversal of
judgment by the CA, the execution proceedings shall
be suspended insofar as the reversal is concerned
notwithstanding the pendency of a motion for
reconsideration on such judgment.
However, where the judgment of the Court of Appeals
is reversed by the Supreme Court, execution
proceedings shall commence upon presentation of
certified true copy of the decision and entry of
judgment.”
Workers filed their Motion for Reconsideration which
was denied by CA.
Labor Law Review Digests | Lourleth Lluz
The workers then filed their Petition for Certiorari
before the SC. They claimed that it was a purely
ministerial act or duty of the NLRC to order the
release of the supersedes bond to them citing NLRC
Rule XI, Section 4 which provides:
“Section 4 – Effect of Petition for Certiorari on
Execution – A petition for certiorari with the CA or the
SC shall not stay the execution of the assailed
decision unless a restraining order is issued by said
courts.”
Workers pointed out that the CA did not include any
restraining order in its Decision dated April 27, 2015.
Thus, the execution proceedings of the labor arbiters
October 24, 2013 Decision should have continued.
Petitioners claim that there is conflict between
sections 4 and 17 of Rule XI of the NLRC Rules, and
that CA gave undue and preferential application to
Section 17. At the very least the CA should have
reconciled the two (2) provisions in accordance with
the tenet that full protection should be accorded tp
the labor sector. Thus, the Court of Appeals should
have applied Section 4 over Section 17.
Issue:
The sole issue for this Court’s resolution is whether or
not the CA erred in affirming the suspension of the
execution proceedings.
Held:
Ruling:
Petition for Review on Certiorari is GRANTED. The
Court of Appeals Decision and Resolution in CA-G.R.
SP No. 142199 are REVERSED and SET ASIDE.
The National Labor Relations Commission's cashier is
DIRECTED to RELEASE to petitioners the amount
deposited by respondents as supersedeas bond. The
Labor Arbiter is DIRECTED to immediately CONTINUE
the execution proceedings in the case before him,
and to ensure the speedy implementation of this
Decision.
Although the CA affirms the suspension of the
execution was incomplete. The CA pointed out that
RULE XI, Section 17 of the NLRC Rules “explicitly
mandates the suspension of the execution
proceedings in case of total or partial reversal of
judgment by the Court of Appeals. It held that
81 | P a g e

because its April 27, 2015 Decision reversed the NLRC
Feb 25, 2014 Resolution, suspension of the execution
was mandated under the rules however, CA failed to
note that under the Rules, the execution proceedings
should be suspended only “insofar as the reversal is
concerned.” This omission leads to an incorrect
reading of the rule and suggests that any reversal on
appeal leads to the automatic suspension of execution
of the appealed decision. When used as basis for
suspending execution, the rule requires an extra step,
namely, the determination of what part of the
execution is affected by the reversal.
Based on Section 3. Effect of Perfection of Appeal on
Execution – The perfection of an appeal shall stay the
execution of the decision of the Labor Arbiter except
execution for reinstatement pending appeal. Under
this provision, the perfection of an appeal stays the
execution of a Labor Arbiter’s decision.
Thus, for clarity, the CA should have explained that
because its April 27, 2015 Decision deemed
respondents' appeal before the National Labor
Relations Commission as reinstated, the execution of
the Labor Arbiter's October 24, 2013 Decision was
stayed under Rule XI, Section 3 of the National Labor
Relations Commission Rules of Procedure. However,
despite the applicability of Rule XI, Section 3 of the
National Labor Relations Commission Rules to the
factual circumstances before the Court of Appeals as
of its assailed July 22, 2016 Decision and January 23,
2017 Resolution in CA-G.R. SP No. 142199, the
Petition must be granted.
This Motion for Reconsideration is the only procedural
incident preventing the execution of the Labor
Arbiter's October 24, 2013 Decision as it has stalled
the complete resolution of the reinstated appeal
before the National Labor Relations Commission.
However, execution may be authorized even pending
appeal. In Aris (Phil.), Inc. v. National Labor Relations
Commission, this Court explained the reasons for
authorizing execution of decisions reinstating
dismissed employees in labor cases pending appeal:
Before its amendment by Section 12 of R.A. No. 6716,
Article 223 of the Labor Code already allowed
execution of decisions of the NLRC pending their
appeal to the Secretary of Labor and Employment.
In authorizing execution pending appeal of the
reinstatement aspect of a decision of the Labor
Labor Law Review Digests | Lourleth Lluz
Arbiter reinstating a dismissed or separated
employee, the law itself has laid down a
compassionate policy which, once more, vivifies and
enhances the provisions of the 1987 Constitution on
labor and the workingman. These duties and
responsibilities of the State are imposed not so much
to express sympathy for the workingman as to
forcefully and meaningfully underscore labor as a
primary social and economic force, which the
Constitution also expressly affirms with equal
intensity. Labor is an indispensable partner for the
nation's progress and stability.
This Court finds that the principles allowing execution
pending appeal invoked in Aris are equally applicable
here as petitioners are poor employees, deprived of
their only source of livelihood for years and reduced
to begging on the streets. In view of their dire straits
and since the National Labor Relations Commission
has already ruled twice on the case in a way that
supports the release of the supersedeas bond, it is
proper to continue with execution proceedings in this
case despite a pending motion for reconsideration.
8. RIGHT TO SELF-ORGANIZATION
9. RIGHTS OF LEGITIMATE LABOR
ORGANIZATION
CASES:
1. Asian Institute of Management vs. Asian
Institute of Management Faculty
Association, GR No. 207971, January 23,
2017
Doctrine: "[i]n case of alleged inclusion of
disqualified employees in a union, the proper
procedure for an employer like petitioner is to directly
file a petition for cancellation of the union's certificate
of registration due to misrepresentation, false
statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as
amended."
Facts: Petitioner Asian Institute of Management
(AIM) is a duly registered non-stock, non-profit
educational institution. Respondent Asian Institute of
Management Faculty Association (AFA) is a labor
organization composed of members of the AIM
faculty.
82 | P a g e
 Labor Law Review Digests | Lourleth Lluz

ineligible to join any labor organization --- is, in a

Respondent filed a petition for certification election
seeking to represent a bargaining unit in AIM
consisting of forty (40) faculty members. Petitioner
opposed the petition, claiming that respondent's
members are neither rank-and-file nor supervisory,
but rather, managerial employees.
The Med-Arbiter denied the petition for certification
on the ground that AIM' s faculty members are
managerial employees but the DOLE reversed the
decision. Meanwhile, relative to DOLE Case No. NCR-
OD-0707-001-LRD or petitioner AIM's petition for
cancellation of respondent's certificate of registration,
petitioner filed on May 24, 20l0 a Petition for
Certiorari before the CA, questioning the BLR's
December 29, 2009 decision and March 18, 2010
resolution. The petition alleged that the BLR
committed grave abuse of discretion in granting
respondent's appeal and affirming its certificate of
registration notwithstanding that its members are
managerial employees who may not join, assist, or
form a labor union or organization. The CA denied
hence the petition.
sense, an accusation that respondent is guilty of
misrepresentation for registering under the claim that
its members are not managerial employees.
2. Sumifru (Phils) Corp vs. Nagkahiusang
Mamumuo sa Suyapa Farm. GR No.
202091, June 7, 2017
Doctrine: “Employer-employee relationship is a
requisite for a petition for certification election.”
“Findings of fact of quasi-judicial agencies are entitled
to great respect when they are supported by
substantial evidence and, in the absence of any
showing of a whimsical or capricious exercise of
judgment,”
Facts: Petitioner Sumifru is the surviving corporation
after its merger with Fresh Banana Agricultural
Corporation (FBAC). Respondent is a legitimate labor
organization affiliated with the National Federation of
Labor Unions and Kilusang Maayo Uno.

Respondent filed a petition for certification election

Issue: Whether or not the CA seriously erred in
before the DOLE to represent the rank-and-file
affirming the dispositions of the BLR and thus
employees of packing plant 90 (PP 90) of then FBAC.
validating the respondent's certificate of registration
The corporation opposed the petition alleging that
notwithstanding the fact that its members are all
there exists no employer-employee relationship
managerial employees who are disqualified from
between FBAC and the workers involved. Before the
joining, assisting, or forming a labor organization?
resolution of the case, FBAC was merged with
Sumifru.
Ruling: In Holy Child Catholic School v. Hon. Sto.
Tomas, this Court declared that "[i]n case of alleged
Later, the DOLE Med-Arbiter granted the petition for
inclusion of disqualified employees in a union, the
certification election of respondent and declared that
proper procedure for an employer like petitioner is to
Sumifru is the employer of the worker’s concerned. In
directly file a petition for cancellation of the union's
ruling so, the Med-Arbiter stated that the “four-fold
certificate of registration due to misrepresentation,
test” will show that FBAC is the employer of
false statement or fraud under the circumstances
respondent’s members. Sumifru appealed to the
enumerated in Article 239 of the Labor Code, as
DOLE Secretary, but the latter still affirmed the
amended."
decision of the Med-Arbiter ruling that Sumifru
exercised control over the workers in PP 90. The
On the basis of the ruling in the above-cited case, it Court of Appeals found that the DOLE Secretary did
can be said that petitioner was correct in filing a not commit grave abuse of discretion because the
petition for cancellation of respondent's certificate of ruling was anchored on substantial evidence.
registration. Petitioner's sole ground for seeking
cancellation of respondent's certificate of registration
Issue: Whether the Court of Appeals is correct in
- that its members are managerial employees and for
affirming the DOLE Secretary’s decision that the
this reason, its registration is thus a patent nullity for
workers have employer-employee relationship with
being an absolute violation of Article 245 of the Labor
Sumifru.
Code which declares that managerial employees are

83 | P a g e

Ruling: Yes. The Supreme Court ruled that did the
CA not commit any whimsical or capricious exercise of
judgment when it found substantial evidence to
support the DOLE Secretary's ruling that Sumifru was
the employer of the members of respondent.
As defined, substantial evidence is "that amount of
relevant evidence as a reasonable mind might accept
as adequate to support a conclusion, even if other
minds, equally reasonable, might conceivably opine
otherwise."
First, the Med-Arbiter found, based on documents
submitted by the parties, that Sumifru gave
instructions to the workers on how to go about their
work, what time they were supposed to report for
work, required monitoring sheets as they went about
their jobs, and provided the materials used in the
packing plant.
Then, the DOLE Secretary relied on documents
submitted by the parties and ascertained that Sumifru
indeed exercised control over the workers in PP 90,
such that petitioners required monitoring sheets and
imposed disciplinary actions for non-compliance with
personnel policy.
In turn, the CA, even as it recognized that the
findings of facts of the DOLE Secretary and the Med-
Arbiter were binding on it because they were
supported by substantial evidence, even went further
and itself reviewed the records — to arrive, as it did
arrive, at the same conclusion reached by the DOLE
Secretary and Med-Arbiter: that is, that Sumifru
exercised control over the workers in PP 90.
Finally, in a petition for review on certiorari, the Court
is limited to only questions of law. The Court cannot
re-calibrate the factual bases of the Med-Arbiter,
DOLE Secretary and the CA, contrary
3. United Polyresins, Inc. vs. Pinuela, GR No.
209555, July 31, 2017
Doctrine: “Respondent's expulsion from PORFA is
grounded on misappropriation which is found on
Article XV of the PORFA’s Constitution. However,
these provisions refer to impeachment and recall of
union officers, and not expulsion from union
Labor Law Review Digests | Lourleth Lluz
membership. In short, any officer found guilty of
violating these provisions shall simply be removed,
impeached or recalled, from office, but not expelled
or stripped of union membership.”
Facts: Respondent Pinuela was employed by
petitioner UPI in 1987. He became a member of
Polyresins Rank and File Association (PORFA), and
was later on elected President thereof. In the existing
CBA between UPI and PORFA, it provided that UPI
will loan 300k to the latter, as its capital for
establishing a cooperative and it shall be payable at
the same date the said CBA expires. The CBA
likewise contained a union security clause which
provided that employees who cease to be PORFA
members shall not be retained in the employ of UPI.
Several days before the 300k loan became due, both
parties met to discuss the proposed new CBA.
However, petitioners declined and told respondent to
pay the 300k loan first.
Because of the recurring threat of failed CBA
negotiations and salary deductions, union members
accused respondent of mismanagement and
demanded the holding of special election of union
officers. A new set of officers were elected and they
proceeded to investigate the fact that the union had
no funds remaining in its bank account. They have
found out that respondent is guilty of
misappropriation of union funds and property which
under the union’s constitution is a ground for the
impeachment and recall of union officers. PORFA then
expelled respondent from the union, and was later on
terminated by UPI pursuant to the union security
clause.
Issue: Did respondent’s misappropriation constitute a
just cause for his expulsion from the union?
(substantive due process)
Ruling: Respondent's expulsion from PORFA is
grounded on misappropriation which is found on
Article XV of the PORFA’s Constitution. However,
these provisions refer to impeachment and recall of
union officers, and not expulsion from union
membership. In short, any officer found guilty of
violating these provisions shall simply be removed,
impeached or recalled, from office, but not expelled
or stripped of union membership. It was therefore
error on the part of PORFA and petitioners to
84 | P a g e

terminate respondent's employment based on Article
XV.
The matter of respondent's alleged failure to return
petitioners' 300k may not be used as a ground to
terminate respondent's employment as well; It is
found in Art. 248 par. (d) of the Labor Code that it
prohibits employers to assist or interfere with any
labor organization, including the giving of financial or
other support to its organizers. Hence, such
contribution is illegal and constitutes unfair labor
practice.
4. Hongkong Bank Independent Labor Union
vs. Hongkong and Shanghai Banking
Corp., GR No. 218390, February 28, 2018
Doctrine: (1) It is the constitutional right of
employees to participate in matters affecting their
benefits and the sanctity of the CBA . (2) Unilateral
amendments to the CBA violate Article 253 of the
Labor Code
Facts: In 2001, the Bangko Sentral ng Pilipinas (BSP)
issued the Manual of Regulations for Banks (MoRB).
Relevant to the instant case is Section X338 thereof
reads:
Banks may provide financial assistance to
their officers and employees, as part of their
fringe benefits program, to meet housing,
transportation, household and personal
needs of their officers and
employees. Financing plans and
amendments thereto shall be with
prior approval of the BSP.
Hongkong and Shanghai Banking Corporation Limited
(HSBC), submitted its Financial Assistance Plan (Plan)
to the BSP for approval. The Plan allegedly contained
a credit checking proviso stating that "repayment
defaults on existing loans and adverse information on
outside loans will be considered in the evaluation of
loan applications." The BSP approved the Plan on May
5, 2003. The Plan was amended thrice, all of which
amendments were approved by the BSP.
Petitioner Hongkong Bank Independent Labor Union
(HBILU), the incumbent bargaining agent of HSBC's
rank-and-file employees, entered into a CBA with the
bank covering the period from April 1, 2010 to March
Labor Law Review Digests | Lourleth Lluz
31, 2012. Pertinent to the instant petition is Article XI
thereof, which reads:
Article XI: Salary Loans, “Section 4. Credit
Ratio. The availment of any of the foregoing
loans shall be subject to the BANK's credit
ratio policy.”
When the CBA was about to expire, the parties
started negotiations for a new one. During the
negotiations, HSBC proposed amendments to the
above quoted Article XI allegedly to align the
wordings of the CBA with its BSP approved Plan.
Particularly, HSBC proposed the deletion of Article XI,
Section 4 (Credit Ratio) of the CBA, and the
amendment of Sections 1 to 3.
HBILU vigorously objected to the proposed
amendments, claiming that their insertions would
curtail its members' availment of salary loans and that
they were not privy to the Plan. Thereafter, HBILU
member Vince Mananghaya (Mananghaya) applied for
a loan under the provisions of Article XI of the CBA.
His first loan application was approved, but adverse
findings from the external checks on his credit
background resulted in the denial of his September
application.  HSBC denied his claim due to the
external credit check conducted in line with
Mananghaya's loan application, they were merely
implementing the BSP-approved Plan. However, no
proof was offered that the Plan had been
disseminated to the employees prior to an e-mail
blast.
Issue: Whether or not HSBC could validly enforce the
credit-checking requirement under its BSP-approved
Plan in processing the salary loan applications of
covered employees even when the said requirement
is not recognized under the CBA?
Ruling: It is the constitutional right of employees to
participate in matters affecting
their benefits and the sanctity of the CBA , no less
than the basic law of the land guarantees the rights
of workers to collective bargaining and negotiations
as well as to participate in policy and decision-making
processes affecting their rights and benefits.
Although jurisprudence recognizes the validity of the
exercise by an employer of its management
85 | P a g e

prerogative and will ordinarily not interfere with such,
this prerogative is not absolute and is subject to
limitations imposed by law, collective bargaining
agreement, and general principles of fair play and
justice.
Indeed, being a product of said constitutionally-
guaranteed right to participate, the CBA is, therefore,
the law between the parties and they are obliged to
comply with its provisions.
Unilateral amendments to the CBA violate Article 253
of the Labor Code
Where the CBA is clear and unambiguous, it becomes
the law between the parties and compliance therewith
is mandated by the express policy of the law. The
provisions of the CBA must be respected since its
terms and conditions constitute the law between the
parties. And until a new CBA is 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.
This finds basis under Article 253 of the Labor Code.
It is clear that the Plan was never made part of the
CBA. HBILU vehemently rejected the Plan's
incorporation into the agreement. Due to this lack of
consensus, the bank withdrew its proposal and
agreed to the retention of the original provisions of
the CBA.
HSBC's conduct is tantamount to allowing a blatant
circumvention of Article 253 of the Labor Code. It
would contravene the express prohibition against the
unilateral modification of a CBA during its subsistence
and even thereafter until a new agreement is
reached. It would unduly license HSBC to add,
modify, and ultimately further restrict the grant of
Salary Loans beyond the terms of the CBA by simply
adding stringent requirements in its Plan, and having
the said Plan approved by BSP in the guise of
compliance with the MoRB. Further, the bank failed to
submit in evidence the very Plan that was supposedly
approved by the BSP in 2003.
On interpretation of CBAs
In United Kimberly-Clark Employees Union Philippine
Transport General Workers Organization (UKCEU-
PTGWO) v. Kimberly-Clark Philippines, Inc.,  this Court
emphasized that: “An arbitrator is confined to the
interpretation and application of the collective
Labor Law Review Digests | Lourleth Lluz
bargaining agreement. He does not sit to dispense his
own brand of industrial justice: his award is legitimate
only in so far as it draws its essence from the
CBA, i.e.,  when there is a rational nexus between the
award and the CBA under consideration. It is said that
an arbitral award does not draw its essence from the
CBA; there is an unauthorized amendment or
alteration thereof, if:
1. It is so unfounded in reason and
fact;
2. It is so unconnected with the
working and purpose of the
agreement;
3. It is without factual support in view
of its language, its context, and any
other indicia of the parties'
intention;
4. It ignores or abandons the plain
language of the contract;
5. It is mistakenly based on a crucial
assumption which concededly is a
nonfact;
6. It is unlawful, arbitrary or
capricious; and
7. It is contrary to public policy.
If the terms of a CBA are clear and leave no doubt
upon the intention of the contracting parties, the
literal meaning of its stipulation shall prevail.
However, if in a CBA, the parties stipulate that the
hires must be presumed of employment qualification
standards but fail to state such qualification standards
in said CBA, the VA may resort to evidence extrinsic
of the CBA to determine the full agreement
intended by the parties.  When a CBA may be
expected to speak on a matter, but does not, its
sentence imports ambiguity on that subject. The VA is
not merely to rely on the cold and cryptic words on
the face of the CBA but is mandated to discover the
intention of the parties. 
Recognizing the inability of the parties to anticipate or
address all future problems, gaps may be left to be
filled in by reference to the practices of the industry,
and the step which is equally a part of the CBA
although not expressed in it. In order to ascertain the
intention of the contracting parties, their
contemporaneous and subsequent acts shall be
principally considered The VA may also consider and
rely upon negotiating and contractual history of the
parties, evidence of past practices interpreting
ambiguous provisions. The VA has to examine such
practices to determine the scope of their agreement,
86 | P a g e
 Labor Law Review Digests | Lourleth Lluz

as where the provision of the CBA has been loosely

formulated. Moreover, the CBA must be construed
liberally rather than narrowly and technically and the
Court must place a practical and realistic construction
upon it.
In resolving issues concerning CBAs, the foremost
consideration is upholding the intention of both
parties as stated in the agreement itself, or based on
their negotiations. Should it appear that a proposition
or provision has clearly been rejected by one party,
and said provision was ultimately not included in the
signed CBA, then We should not simply disregard this
fact.”
5. Societe Internationale De
Telecommunications vs. Hulinganga, GR
No. 215504, August 20, 2018
 Doctrine: “To be considered a company practice or
policy, the act of extending benefits of the CBA to
managerial employees must have been practiced for
a long period of time and must be shown to be
consistent and deliberate.
Factual findings of labor officials who are deemed to
have acquired expertise in matters within their
respective jurisdictions are generally accorded not
only respect, but even finality, and are binding on the
courts.”
Issue: Whether or not respondent is entitled to
retirement benefits using the co-efficient of 2 months
as stated in the CBA?
Ruling: The court reaffirmed the findings of the LA
and NLRC which the CA disagreed with - Huliganga is
undeniably a managerial employee. As such, he is not
entitled to the retirement benefits exclusively granted
to rank and file employees by the CBA. Article 245 of
the Labor Code provides that managerial employees
are not eligible to join, assist or form any labor
organization. Thus, he is not entitled to the use of the
coefficient of 2 months in computing his retirement
benefits.
The exception is when managerial employees are
given such benefits through a stipulation in the CBA
or that it has become company practice.
Huliganga, failed to substantially establish that there
is an established company practice of extending CBA
concessions to managerial employees. Again, to be
considered a company practice or policy, the act of
extending benefits of the CBA to managerial
employees must have been practiced for a long
period of time and must be shown to be consistent
and deliberate.

10. REVISED GUIDELINES OF THE NCMB FOR

Facts: Huliganga is a Country Operating Officer for THE CONDUCT OF VOLUNTARY
petitioner Societe Internationale De ARBITRATION PROCEEDINGS
Telecommunications (SITA), the highest accountable
officer of SITA in the Philippines. He retired on
CASES:
December 31, 2008 and received his retirement
benefits computed at 1.5 months of basic pay for
1. Guagua National Colleges Vs. Court of
each year of service, or the total amount of
Appeals, GR No. 188493, August 28, 2018,
P7,495,102.84 in retirement and other benefits.
En Banc

Huliganga filed a case for unfair labor practices,

Doctrine:The 10-day period under Art. 274 of the
underpayment of wages, moral and exemplary
Labor Code is the time set for the aggrieved party in
damages, attorney's fees, underpayment of sick and
vacation leave and retirement benefits. He alleges
a decision of the Voluntary Arbitrator to file a motion
for reconsideration. Only after the resolution of such
that the coefficient/payment factor that applies to him
should be 2 months and not 1.5 months for every
motion will an appeal to the CA by the aggrieved
party through petition for review under Rule 43 of the
year of service in accordance with the 2005-2010
Collective Bargaining Agreement and that it has
Rules of Court be filed within 15 days from notice
pursuant to Sec. 4, Rule 43, ROC.
become a well-established company practice of SITA
to adopt, update and apply the new and/or additional
economic benefits arising from the CBA as Facts: Pursuant to Sec. 5 (2) of RA 6728
amendments to the Employee Regulations manual. (Government Assistance to Students and Teachers in

87 | P a g e

Private Education Act)’s mandate that 70% of the
increase in tuition fees shall go to the payment of
salaries, wages, allowances and other benefits of the
teaching and non-teaching personnel, petitioner GNC
imposed a 7% increase of its tuition fees for school
year 2006-2007. Shortly thereafter, its Board of
Trustees approved the funding of the retirement
program out of the 70% net incremental proceeds
arising from the tuition fee increases, in order to save
the depleting funds of GNC’s Retirement Plan.
The respondents GNC- Faculty Labor Union and GNC
Non-Teaching Maintenance Labor Union challenged
the petitioner’s unilateral decision by claiming that the
increase violated Sec. 5 (2) of RA 6728. The parties
thereafter referred the matter to voluntary arbitration.
The Voluntary Arbitrator decided in favor of GNC,
holding that the retirement benefits fell within the
category of “other benefits” that could be charged
against the 70% net incremental proceeds. The
respondents filed an Urgent Motion for Extension
praying that the CA grant them an extension of 15
days to file their petition for review. The CA granted
the same.
The respondents then filed their petition for review on
the on the said 15th day. Subsequently, the petitioners
filed a Motion to Dismiss claiming that the decision of
the VA was already final and executory. However, CA
denied the motion.
Issue: Whether the petition for review shall be filed
within 15 days pursuant to Sec. 4, Rule 43 of the
Rules of Court or within 10 days under Art. 274 of the
Labor Code.
Held: It must be clarified that the 10-day period set
in Art. 276 of the Labor Code should be understood
as the period within which the party adversely
affected by the ruling of the Voluntary Arbitrators or
Panel of Arbitrators may file a motion for
reconsideration. Only after the resolution of the
motion for reconsideration may the aggrieved party
appeal to the CA by filing the petition for review
under Rule 43 of the Rules of Court within 15 days
from notice pursuant to Sec. 4 of Rule 43.
11. UNFAIR LABOR PRACTICE
Labor Law Review Digests | Lourleth Lluz
12. OTHER IMPORTANCE LABOR PROVISIONS
A. CONTRACTING ARRANGEMENT
CASES:
1. Nestle Philippines Inc. vs. Puedan, Jr. GR
No. 220617, January 30, 2017
Doctrine: “The imposition of minimum standards
concerning sales, marketing, finance and operations
are nothing more than an exercise of sound business
practice to increase sales and maximize profits. This
do not operate to control or fix the methodology on
how ODSI should do its business as a distributor.”
Facts : On July 6, 2012, the respondents filed a
complaint against the petitioner for illegal dismissal
and demanding for separation pay, nominal damages
and attorney’s fees. The respondents alleged that
Ocho de Setiembre Inc. (ODSI) and Nestle Philippines
Inc. (NPI) hired them to sell various products of NPI
in the assigned covered area. After sometime, the
respondents demanded that they be considered
regular employees of NPI but they were directed to
sign contracts of employment with ODSI instead.
However, the respondents refused to comply with
such directives resulting from their dismissal from
their position. The contention of the respondents is
that ODSI is a labor-only contractor and, thus, they
should be deemed regular employees of NPI and
there was no just or authorized cause for their
dismissal. The ODSI averred that it is a company
engaged in the business of buying, selling,
distributing, and marketing of goods and commodities
of every kind and it enters into all kinds of contracts
for the acquisition thereof. According to ODSI the
respondents were hired as its employees to execute
the Distributorship Agreement with the NPI.
Unfortunately, the business relationship between the
NPI and ODSI turned sour and eventually NPI
downsized its marketing and promotional support
from ODSI and termination of the Distributorship
Agreement. Meanwhile, ODSI argues with the
respondents that they were not dismissed but merely
on floating status. However, the NPI did not file any
position paper or appear in the scheduled
conferences.
The Labor Arbiter concluded that all the impleaded
respondents therein (i.e. including NPI) should be
88 | P a g e

held liable for the payment of nominal damages plus
attorney’s fees.
The aggrieved respondents appealed to National
Labor Relation Commission (NLRC) and the NLRC
reversed and set aside the Labor Arbiter ruling. The
NLRC ordered ODSI and NPI to pay each of the
respondents and entitled to separation pay and to
nominal damages. The respondents moved for a
partial reconsideration arguing since it was ODSI that
closed down operations and not the NPI, therefore
NPI should reinstate them. However, the NLRC denied
the motion.
Moreover, the NPI was dissatisfied hence filed a
petition for certiorari before the Court of Appeals (CA)
which the CA affirmed the NLRC ruling.
Issue: Whether or not Nestle Philippines Inc. (NPI)
and Ocho de Setiembre Inc. (ODSI) are deemed
jointly and severely liable for the respondent’s
monetary claims.
Ruling: No. A closer examination of the
Distributorship Agreement reveals that the
relationship of NPI and ODSI is not that of a principal
and a contractor (regardless of whether labor-only or
independent), but that of a seller and a buyer/re-
seller.
As stipulated in the Distributorship Agreement, NPI
agreed to sell its products to ODSI at discounted
prices, which in turn will be re-sold to identified
customers, ensuring in the process the integrity and
quality of the said products based on the standards
agreed upon by the parties. As aptly explained by
NPI, the goods it manufactures are distributed to the
market through various distributors, e.g., ODSI, that
in tum, re-sell the same to designated outlets through
its own employees such as the respondents.
Therefore, the reselling activities allegedly performed
by the respondents properly pertain to ODSI, whose
principal business consists of the “buying, selling,
distributing, and marketing goods and commodities of
every kind” and “[entering] into all kinds of contracts
for the acquisition of such goods [and commodities].”
Thus, contrary to the CA’s findings, the
aforementioned stipulations in the Distributorship
Agreement hardly demonstrate control on the part of
NPI over the means and methods by which ODSI
Labor Law Review Digests | Lourleth Lluz
performs its business, nor were they intended to
dictate how ODSI shall conduct its business as a
distributor. Otherwise stated, the stipulations in the
Distributorship Agreement do not operate to control
or fix the methodology on how ODSI should do its
business as a distributor of NPI products, but merely
provide rules of conduct or guidelines towards the
achievement of a mutually desired result -which in
this case is the sale of NPI products to the end
consumer. In Steelcase, Inc. v. Design International
Selections, Inc., the Court held that the imposition of
minimum standards concerning sales, marketing,
finance and operations are nothing more than an
exercise of sound business practice to increase sales
and maximize profits.
Verily, it was only reasonable for NPI -it being a local
arm of one of the largest manufacturers of foods and
grocery products worldwide -to require its
distributors, such as ODSI, to meet various conditions
for the grant and continuation of a distributorship
agreement for as long as these conditions do not
control the means and methods on how ODSI does its
distributorship business, as shown in this case. This is
to ensure the integrity and quality of the products
which will ultimately fall into the hands of the end
consumer.
Thus, the foregoing circumstances show that ODSI
was not a labor only contractor of NPI; hence, the
latter cannot be deemed the true employer of
respondents. As a consequence, NPI cannot be held
jointly and severally liable to ODSI’ s monetary
obligations towards respondents.
2. Valencia vs. Classique Vinyl Products
Corp., GR No. 206390, January 30, 2017
Doctrine: “In labor-only contracting, the statute
creates an employer-employee relationship for a
comprehensive purpose: to prevent a circumvention
of labor laws. The contractor is considered merely an
agent of the principal employer and the latter is
responsible to the employees of the labor-only
contractor as if such employees had been directly
employed by the principal employer. The principal
employer therefore becomes solidarily liable with the
labor-only contractor for all the rightful claims of the
employees.”|
89 | P a g e

Facts: Valencia applied for work with Classique Vinyl
through the intervention of CMS, a local manpower
agency. He contended that he worked for respondent
for four years until his dismissal. Hence, by operation
of law, he had already attained the status of a regular
employee of Classique Vinyl. On the other hand,
Classique Vinyl asserted that there was no employer-
employee relationship, it insisted that Valencia’s true
employer was CMS.
Issue: Is Valencia an employee of respondent?
Ruling: No. The burden of proof rests upon the party
who asserts the affirmative of an issue. Since Valencia
is claiming to be an employee of Classique Vinyl, it is
thus incumbent upon him to proffer evidence to prove
the existence of employer-employee relationship
between them. He needs to show by substantial
evidence that he was indeed an employee of the
company against which he claims illegal dismissal. In
order to determine the existence of an employer-
employee relationship, the following elements had
been consistently applied: (1) the selection and
engagement; (2) payment of wages; (3) power of
dismissal and; (4) the power of control. The burden
to prove such elements lies upon Valencia, which in
this case, he failed to prove.
Valencia failed to present competent evidence,
documentary or otherwise, to support his claimed
employer-employee relationship between him and
Classique Vinyl. Also, the employment contract which
Valencia signed with CMS categorically states that the
latter possessed not only the power of control but
also of dismissal over him.
3. Mago et al., vs. Sunpower Manufacturing
Ltd., GR No. 210961, January 24, 2018
Doctrine: “In order to become a legitimate
contractor, the contractor must have substantial
capital or investment, and must carry a distinct and
independent business free from the control of the
principal.”|
Facts: Jobcrest and Sunpower entered into a Service
Contract Agreement, in which Jobcrest undertook to
provide business process services for Sunpower.
Jobcrest then trained its employees, including
petitioners, for purposes of their engagement in
Sunpower. After the completion of their training, they
Labor Law Review Digests | Lourleth Lluz
were assigned to Sunpowers plant in Laguna. Years
later, Sunpower decided to terminate the
Coinstacking/Material Handling segment and the
Visual Inspection segment, the departments where
petitioners were respectively assigned to. Both filed
an illegal dismissal complaint with the NLRC. When
Jobcrest insisted that petitioners were not dismissed
and that it would accept petitioners should they wish
to go back to work. However, petitioners argued that
they were employees of Sunpower and that Jobcrest
was engaged in labor-only contracting.
Issue: Is Jobcrest engaged in labor-only contracting?
Are petitioners employees of Jobcrest?
Ruling: No. Article 106 of the Labor Code defines
labor-only contracting as a situation where the person
supplying workers to an employer does not have
substantial capital or investment in the form of tools,
equipment, machineries, work premises, among
others, and the workers recruited and placed by such
person are performing activities which are directly
related to the principal business of such employer . In
other words, the contractor must not have substantial
capital or investment, and workers must not be free
from the control of the principal.
In this case, first, Jobcrest has substantial capital.
Substantial capital refers to paid-up capital
stocks/shares of at least Php3,000,000.00 in the case
of corporations. For the year ended December 31,
2011, the paid-up capital of Jobcrest increased to
Php8,000,000.00, notably more than the required
capital under DOLE DO No. 18-A. Second, Jobcrest
exercised control over petitioners because they
conducted training and certification program for the
latter before they were assigned to Sunpower. Their
attendance and punctuality were also monitored by
Jobcrest. They also filed their leave applications
before it.
Yes. The four-fold test to establish an employee-
employer relationship are the following: power to
control; hire; pay wages; and dismiss. In this case,
the contractor hired the workers; paid their wages,
SSS, Pag-ibig, and others; and dimissed the
petitioners as evidence by Notice to Explain issued by
Jobcrest to the petitioners.
4. Abuda et al., vs. L. Natividad Poultry
Farms, GR No. 200712, July 4, 2018
90 | P a g e

Doctrine: “The necessity or desirability of the work
performed by an employee can be inferred from the
length of time that an employee has been performing
this work. If an employee has been employed for at
least one (1) year, he or she is considered regular
employee by operation of law.”
Facts: Petitioners were working as a maintenance
personnels, they repaired and maintained L. Natividad
Poultry Farm’s livestock houses, facilities, and sales
outlets. They filed illegal dismissal against Natividad
Poultry Farms. Natividad Poultry Farms on the other
hand argues that the petitioners are not their
employees since they are independent contractors
and that the carpentry and masonry work cannot be
considered necessary or desirable in their business of
livestock and poultry production.
Issue: Whether petitioners are regular employees of
Natividad Poultry Farms?
Ruling: Yes. San Mateo and Del Remedios were not
independent contractors but labor-only contractors
since they did not have substantial investment in the
form of tools, equipments, or work premises. Resort
to the four (4) fold test will show that the employees
are Natividad’s employees. Natividad hired petitioners
directly or through Del Remedios, a supervisor at
Natividad’s farm. They likewise paid petitioner’s
wages. They had the power of dismissal inherent in
their power to select and engage their employees.
Most importantly though, they controlled petitioners
and their work output by maintaining an attendance
sheet and by giving them specific task and
assignments.
De Leon v. National Labor Relations Commission
instructs that "[t]he primary standard, therefore, of
determining a regular employment is the reasonable
connection between the particular activity performed
by the employee in relation to the usual business or
trade of the employer." The connection is determined
by considering the nature of the work performed vis-
à-vis the entirety of the business or trade. Likewise, if
an employee has been on the job for at least one (1)
year, even if the performance of the job is
intermittent, the repeated and continuous need for
the employee's services is sufficient evidence of the
indispensability of his or her services to the
employer's business.
Labor Law Review Digests | Lourleth Lluz
As maintenance personnel, petitioners performed
"repair works and maintenance services such as
livestock and poultry houses and facilities as well as
doing construction activities within the premises of [L.
Natividad's] farms and other sales outlets for an
uninterrupted period of three (3) to seventeen (17)
years." Respondents had several farms and places in
Quezon City and Montalban, including Patiis Farm,
where petitioners were regularly deployed to perform
repair and maintenance work.
Being regular employees, petitioners, who were
maintenance personnel, enjoyed security of tenure
and the termination of their services without just
cause entitles them to reinstatement and full
backwages, inclusive of allowances and other
benefits.
5. Phil. Pizza Inc., vs. Porras, GR No.
230030, August 29, 2018
Facts: On various dates, respondents Jenny Porras
Cayetano, Rizaldo G. Avenido, Pee Jay T. Gurion,
Rumel A. Recto, Rogelio T. Sumbang, Jr., and Jimmy
J. Deloso were hired by and Consolidated Building
Maintenance, Inc. (CBMI), a job contractor which
provides kitchen, delivery, sanitation, and allied
services to Philippine Pizza, Inc. (PPI)’s Pizza Hut
chain of restaurants, and were thereafter deployed to
the various branches of the latter. Cayetano and
Deloso worked as team members/service crew, while
Avenido, Gurion, Recto, and Sumbang, Jr. served as
delivery riders.
Respondents alleged that they rendered work for
Pizza Hut, ranging from 7 to 11 years, hence, they
were regular employees of PPI and not of CBMI. They
claimed to have been initially hired by PPI but were
subsequently transferred to CBMI so as to prevent
them from attaining their regular employment status.
Despite the transfer, they were still under the direct
supervision of the managers of Pizza Hut and had
been using its tools and machines for work.
Respondents, along with several others, filed separate
complaints for Illegal Dismissal against PPI and CBMI,
before the NLRC.
PPI denied any employer-employee relationship with
respondents, averring that it entered into several
Contracts of Serviceswith CBMI to perform janitorial,
91 | P a g e

bussing, kitchen, table service, cashiering,
warehousing, delivery, and allied services in PPI's
favor. It also contended that respondents were
assigned to various branches of Pizza Hut and were
performing tasks in accordance with CBMI's manner
and method, free from the direction and control of
PPI
CBMI admitted that respondents were its employees,
and that it paid their wages and remitted their SSS,
PhilHealth, and Pag-IBIG contributions. It insisted that
it is a legitimate job contractor. CBMI explained that it
had no choice but to recall and place respondents in
floating status, considering that PPI had reduced its
need for services in some Pizza Hut branches. Before
it had the opportunity to re-assign respondents, the
latter already filed their complaints.
LA found PPI and CBMI jointly and severally liable for
illegal dismissal and ordered them to immediately
reinstate respondents to their former positions
without loss of seniority rights and privileges and to
pay respondents their full backwages and moral and
exemplary damages.
NLRC reversed and set aside the LA's Decision and
found that CBMI is a legitimate job contractor. There
was no employer-employee relationship between PPI
and respondents.
CA annulled and set aside the NLRC ruling and
reinstated the LA's ruling. In holding PPI and CBMI
jointly and severally liable to respondents, the CA
applied the principle of stare decisis, relying on the
Court's ruling in Philippine Pizza, Inc. that CBMI is
engaged in prohibited labor-only contracting and
thus, PPI is the principal employer of respondents.
Issues:
Whether or not the CA correctly relied on the ruling in
Philippine Pizza, Inc. in concluding that CBMI is
engaged in a prohibited labor-only contracting
arrangement with PPI.
Whether or not respondents were illegally dismissed
from employment.
Ruling: The petition is meritorious.
No. CA's reliance on the Philippine Pizza, Inc.'s minute
resolution is misplaced. CBMI is a legitimate job
contractor, and thus, the employer of respondents.
Labor Law Review Digests | Lourleth Lluz
The Principle of Stare Decisis is not applicable
Although the Court's dismissal of a case via a minute
resolution constitutes a disposition on the merits, the
same could not be treated as a binding precedent to
cases involving other persons who are not parties to
the case, or another subject matter that may or may
not have the same parties and issues. In other words,
a minute resolution does not necessarily bind non-
parties to the action even if it amounts to a final
action on a case.
In this case, records do not bear proof that
respondents were also parties to the Philippine Pizza,
Inc.'s case or that they participated or were involved
therein. Moreover, there was no showing that the
subject matters of the two (2) cases were in some
way similar or related to one another, since the
minute resolution in the case of Philippine Pizza, Inc.
did not contain a complete statement of the facts, as
well as a discussion of the applicable laws and
jurisprudence that became the basis for the Court's
minute resolution therein. In this light, the principle of
stare decisis cannot be invoked.
CBMI is a legitimate job contractor
CBMI is a legitimate job contractor, and consequently,
the employer of respondents. CBMI is presumed to
have complied with all the requirements of a
legitimate job contractor, considering the Certificates
of Registration issued to it by the DOLE. Although not
a conclusive proof of legitimacy, the certification
nonetheless prevents the presumption of labor-only
contracting from arising. It gives rise to a disputable
presumption that the contractor's operations are
legitimate.
CBMI has substantial capital and investment. Based
on CBMI's 2012 General Information Sheet, it has an
authorized capital stock in the amount of
P10,000,000.00 and subscribed capital stock in the
amount of P5,000,000.00, P3,500,000.00 of which
had already been paid-up. Its audited financial
statements show that it has considerable current and
non-current assets amounting to P85,518,832.00.
Taken together, CBMI has substantial capital to
properly carry out its obligations with PPI, as well as
to sufficiently cover its own operational expenses.
CBMI retained control over respondents, as shown by
the deployment of at least 1 CBMI supervisor in each
Pizza Hut branch to regularly oversee, monitor, and
92 | P a g e

supervise the employees' attendance and
performance. Furthermore, the existence of the
element of control can also be inferred from CBMI's
act of subjecting respondents to disciplinary sanctions
for violations of company rules and regulations as
evidenced by the various Offense Notices and
Memoranda issued to them. CBMI employed measures
to ensure the observance of due process before
subjecting respondents to disciplinary action.
No employer-employee relationship between PPI and
respondents
No employer-employee relationship exists between
PPI and respondents. The latter were employees of
CBMI. Respondents applied for work with CBMI and
were consequently selected and hired by the latter.
They were required by CBMI to attend orientations
and seminars wherein respondents were apprised of
the working conditions, basic customer service, basic
good grooming, and company rules and regulations.
During the course of their employment, CBMI paid
their wages and remitted/paid their SSS, PhilHealth,
and Pag-IBIG contributions. CBMI also exercised the
power of discipline and control over them.
No. Respondents were not illegally dismissed from
work.
While PPI denied the existence of an employer-
employee relationship with respondents, CBMI
actually acknowledged that respondents were its
employees. CBMI likewise presented proof that it duly
informed respondents of their impending lay-off, yet
they immediately filed the complaints before it had
the chance to re-deploy them. On the other hand,
respondents did not even refute CBMI's claim that
they were informed of its decision to place them in
floating status pending their re-deployment. As such,
respondents could not have been illegally terminated
from work, for they were placed in a temporary lay-
off status when they prematurely filed the complaints.
There being no dismissal to speak of, respondents
were thus not illegally dismissed by CBMI, their actual
employer.
6. Lingnam Restaurant vs. Skills & Talent
Employment, GR 2146671, December
3, 2018
Labor Law Review Digests | Lourleth Lluz
Facts: Respondent (STEP) is a domestic corporation
engaged in manpower management and technical
services, and one of its clients is petitioner Lingnam
Restaurant. In a contract of employment, respondent
Jessie Colaste is a project employee of respondent
STEP assigned to work with petitioner Lingnam
Restaurant as assistant cook.
On May 21, 2008, Jessie Colaste filed with the Labor
Arbiter an Amended Complaint for illegal dismissal
against Lingnam Restaurant and STEP. In his Position
Paper, Jessie Colaste alleged that on December 21,
2006, he started working at Lingnam Restaurant as
an assistant cook/general utility.
On March 5, 2008, at about 10:00 a.m., Colaste
reported to the main office of STEP. There, he was
informed that his contract with Lingnam Restaurant
had expired. He was given a clearance form to be
signed by his supervisor at Lingnam Restaurant.
However, he reported for work as usual at Lingnam
Restaurant from 2:00 p.m. to 10:00 p.m.
On March 6, 2008, he was on day-off. On March 7,
2008, he reported for work at Lingnam Restaurant
however, the Chief Cook told him not to punch in his
time card because he was already terminated from
work. After a few minutes, the Chief Cook handed
him the telephone, and Supervisor Philipp Prado of
the main office of Lingnam Restaurant was on the line
and told him, "finish contract ka na, hindi kana pwede
pumasok sa trabaho mo, tanggal ka na."
Hence, Jessie Colaste filed a case for illegal dismissal
against Lingnam Restaurant and STEP.
Lingnam Restaurant denied that it is the employer of
complainant Jessie Colaste and alleged that STEP is
Colaste's real employer. Hence, it is not liable for the
claims and causes of action of Colaste, and that the
complaint should be dismissed insofar as it is
concerned.
STEP alleged that it is an independent contractor
engaged in the business of rendering management
and technical services. One of its project employees is
complainant Jessie Colaste who was assigned as
kitchen helper at Lingnam Restaurant, one of STEP's
clients. STEP averred that Colaste's employment was
co-terminus and dependent upon its contract with
Lingnam Restaurant, and STEP has the right to
transfer Colaste to another assignment, project or
client.
93 | P a g e

In 2002, STEP and Lingnam Restaurant entered into
an agreement wherein the former would provide the
latter with manpower to perform activities related to
the operation of its restaurant business. However, in
2007, Lingnam Restaurant reneged in paying the
agreed contract salary of the manpower staff detailed
at its business establishment or areas of operation.
STEP was compelled to use its funds to pay the
manpower staff until the time Lingnam Restaurant's
total unpaid obligation amounted to P2,907,690.55
covering the period from March 2007 up to February
19, 2008. Hence, in February 2008, STEP ceased its
manpower services to Lingnam Restaurant. STEP also
argued that the complaint for illegal dismissal has no
cause of action, since Jessie Colaste is still on floating
status and has yet to be enlisted to its other business
clients within a period of six months. STEP alleged
that it did not terminate complainant's services.
Hence, it prayed that the complaint be dismissed for
lack of merit.
Issue: Whether or not STEP is engaged in labor-only
contracting; hence, petitioner Lingnam Restaurant is
the employer of complainant-respondent Jessie
Colaste and it is liable for Colaste's illegal dismissal.
Ruling: The ascertainment of the liability of petitioner
Lingnam Restaurant and/or respondent STEP toward
complainant-respondent Jessie Colaste requires the
determination of the nature of the contracts between
them, specifically whether respondent STEP is
engaged in job-contracting or labor-only contracting.
The principal shall be deemed the employer of the
contractual employee in any of the following cases, as
declared by a competent authority:
(a) where there is labor-only contracting; or
(b) where the contracting arrangement falls within
the prohibitions provided in Section 6 (Prohibitions)
hereof.
As stated by the Court in PCI Automation Center, Inc.
v. NLRC,24 the legitimate job contractor provides
services, while the labor-only contractor provides only
manpower. The legitimate job contractor undertakes
to perform a specific job for the principal employer,
while the labor-only contractor merely provides the
personnel to work for the principal employer.25
Respondent STEP, in its Cautionary Pleading, stated
that it entered into an agreement with petitioner
Labor Law Review Digests | Lourleth Lluz
Lingnam Restaurant in 2002, wherein it agreed to
provide Lingnam Restaurant with manpower to
perform activities related to the operation of its
restaurant business. Thus, respondent STEP merely
acted as a placement agency providing manpower to
petitioner Lingnam Restaurant. The service rendered
by STEP in favor of Lingnam Restaurant was not the
performance of a specific job, but the supply of
personnel to work at Lingnam Restaurant.
In the Employment Contract27 between Jessie
Colaste and STEP from January 4, 2006 up to June 3,
2007, Colaste was assigned as kitchen helper at
petitioner Lingnam Restaurant, while in the
subsequent employment contracts28 from November
5, 2007 up to January 5, 2008; and from January 5,
2008 up to March 5, 2008, he was assigned as
assistant cook at petitioner Lingnam Restaurant. The
three employment contracts state that Jessie
Colaste's "work result performance shall be under the
Strict Supervision, Control and make sure that the
end result is in accordance with the standard
specified by client to STEP Inc." Hence, the work
performance of Colaste is under the strict supervision
and control of the client (petitioner Lingnam
Restaurant) as well as the end result thereof. As
assistant cook of petitioner Lingnam Restaurant,
respondent Colaste's work is directly related to the
restaurant business of petitioner. He works in
petitioner's restaurant and presumably under the
supervision of its Chief Cook. This falls under the
definition of labor-only contracting since the
contractor, STEP, merely supplied Jessie Colaste as
assistant cook to the principal, Lingnam Restaurant;
the job of Colaste as assistant cook is directly related
to the main business of Lingnam Restaurant, and
STEP does not exercise the right to control the
performance of the work of Colaste, the contractual
employee.
As respondent STEP is engaged in labor-only
contracting, the principal, petitioner Lingnam
Restaurant, shall be deemed the employer of
respondent Jessie Colaste, and he should be
considered a regular employee of petitioner.
The reason for the termination of Jessie Colaste was
his contract with petitioner Lingnam Restaurant
through respondent STEP had expired. Lingnam
Restaurant explained that Colaste's real employer is
STEP. But since respondent STEP is engaged in labor-
only contracting, petitioner Lingnam Restaurant is
94 | P a g e

deemed the employer of Colaste. Thus, the reason for
Colaste's termination is not a just or authorized cause
for his dismissal under the labor code.
As respondent Colaste was illegally dismissed, he is
entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his
compensation was withheld from him up to the time
of his actual reinstatement.
7. Superior Maintenance Services vs.
Bermeo, GR No. 203185, December 5,
2018
Facts: Superior Maintenance is a manpower agency
engaged in the business of supplying janitorial
services to its clients. Since 1991, it hired Bermeo as
a janitor for its clients wherein he was assigned to
several establishments. He was last stationed at
Trinoma Mall until the end of contract on March 30,
2008. On August 28, 2008, Bermeo was deployed to
French Baker one of Superior Maintenance's clients;
however, French Baker asked for a replacement upon
learning that Bermeo was already 54 years old. On
September 5, 2008, Bermeo filed a Complaint before
the Labor Arbiter (LA) against the petitioners for
constructive dismissal with claim for separation pay.
Issue: Whether Bermeo was constructively dismissed
from work.
Ruling: No, Bermeo was not constructively dismissed
from work.
In Salvaloza v. NLRC, temporary off-detail or floating
status was defined as that "period of time when
security guards are in between assignments or when
they are made to wait after being relieved from a
previous post until they are transferred to a new
one.”
There is no specific provision in the Labor Code which
governs the "floating status" or temporary "off-detail"
of workers employed by agencies. Thus, this situation
was considered by the Court in several cases as a
form of temporary retrenchment or lay-off, applying
by analogy the rules under Article 301 (then Article
286) of the Labor Code, viz.:
Labor Law Review Digests | Lourleth Lluz
ART. 301. [286] When Employment not Deemed
Terminated. — The bona fide suspension of the
operation of a business or undertaking for a period
not exceeding six (6) months, xxx
This situation applies not only in security services but
also in other industries, as in the present case, as
long as services for a specific job are legitimately
farmed out by a client to an independent contractor.
In all cases however, the temporary lay-off wherein
the employees cease to work should not exceed six
months, in consonance with Article 301 of the Labor
Code. After six months, the employees should either
be recalled to work or permanently retrenched
following the requirements of the law. Otherwise, the
employees are considered as constructively dismissed
from work and the agency can be held liable for such
dismissal.
In the present controversy, when Bermeo filed his
complaint for constructive dismissal on September 5,
2008, it was only a week after his unsuccessful
assignment in French Baker on August 28, 2008. Even
if the reckoning date would be his last assignment at
Trinoma Mall, which ended on March 30, 2008, it is
still less than the six-month period allowed by Article
301 for employees to be placed on floating status.
Thus, the filing of his complaint for constructive
dismissal is premature.
B. WORKER’S PREFERENCE
C. ATTORNEY’S FEES & APPEARANCE
OF LAWYERS
13. MISCELLANEOUS PROVISIONS
A. SPECIAL TYPES OF WORKERS
B. EMPLOYMENT OF WOMEN
C. EMPLOYMENT OF CHILDREN
D. EMPLOYMENT OF HOUSEHELPER
CASES:
1. Atienza vs. Saluta, GR No. 233413,
June 17, 2019
E. EMPLOYMENT OF HOMEWORKERS
F. EMPLOYMENT OF NON-RESIDENT
ALIENS
95 | P a g e

G. EMPLOYMENT OF STUDENTS &
WORKING SCHOLAR
H. EMPLOYMENT OF
ACADEMIC/NON-ACADEMIC
PERSONNEL IN PRIVATE
EDUCATIONAL INSTITUTIONS
I. MEDICAL, DENTAL AND
OCCUPATIONAL SAFETY
J. MIGRANT WORKER’S
ACT/RECRUITMENT AND
PLACEMENT
CASES:
2. Dagasdas vs. Grand Placement & General
Services Corp. GR No. 20527, January 18,
2017
Facts: GPGS and Aramco are recruitment agencies.
While ITM is the principal of GPGS, a company
existing in Saudi Arabia.
 
GPGS, on behalf of ITM, employed Dagasdas as
Network Technician and to be deployed in Saudi
Arabia. Dagasdas contended that although his
position under his contract was a Network Technician,
he actually applied for and was engaged as a Civil
Engineer.   employment is 6 months, and her salary is US$200
 
When Dagasdas arrived in Saudi Arabia, he signed an
employment contract which it stipulated that he shall
be placed under a three-month probationary period.
Dagasdas reported to the work site. However, he was
given tasks suited for Mechanical Engineer which
were foreign to him. So he reported the matter to his
supervisor. But later on, his employment was severed
with ITM.
 
Dagasdas returned to the Philippines and filed for an
illegal dismissal. GPGS, ITM and Aramco countered
that under the employment contract, ITM has the
right to terminate any employee within the three-
month probationary period. Furthermore, the
performance of Dagasdas was so poor.
 
Issue: Was Dagasdas validly dismissed?
Ruling: No. Filipinos working abroad are entitled with
security of tenure. However, ITM violated this right by
Labor Law Review Digests | Lourleth Lluz
not affording Dagasdas procedural due process. In
order for a probationary employee to be validly
dismissed, it must be for a valid cause or a reason to
conclude that the employee fails to qualify as regular
employee pursuant to reasonable standards made
known to the employee at the time of engagement.
Not only ITM failed to prove that it informed
Dagasdas of such standards, it dismissed him without
complying the twin notice requirement by only giving
him a notice of termination.
3. Princess Talent Center Production Inc., et
vs. Masagca, GR No. 191310, April 11,
2018
Doctrine: “The burden of proof lies to the one who
pleads payment.”
Facts: An employment contract was executed
between Masagca and PTCPI—as agent of SAENCO,
Korean principal. She signed 2 contracts but failed to
read them, and relied on Pres. Moldes’ (PTCPI)
representations. While in South Korea for 9 months,
SAENCO did not pay her. When Moldes demanded
payment for a fictitious loan, she sought counsel in
PH. They obtained her contract, which states that her
more. Moldes paid others except her, gave her a loan
document, and demanded termination of her counsel,
which Masagca refused. Then, SAENCO President
humiliated her. She got deported, and found out her
visa was not renewed. Masagca filed for illegal
dismissal against PTCPI and SAENCO.
PTCPI alleged Masagca signed and read one contract,
and was briefed before the PH labor office in SK. Also,
Masagca completed her term, and was paid fully.
Masagca herself extended her employment with
SAENCO. She violated club policies, so she was
repatriated. Lastly, PTCPI lent her money for personal
expenses. LA dismissed. NLRC on MR, reinstated LA’s
decision. CA reversed. PTCPI filed under Rule 45.
Issue: (1) Is Rule 45, the proper remedy?; (2) Was
Masagca illegally dismissed?; (3) Is she entitled to her
unpaid salaries?; (4) Is PTCPI liable?
Ruling: (1) Yes. This is an exception wherein factual
issues maybe reviewed even if exercising of judicial
96 | P a g e

review under Rule 45—when the findings of the LA,
NLRC, and/or the CA are conflicting.
(2) Yes. Masagca was illegally dismissed as there was
no valid cause, and twin-notice rule was not complied
with.
The contract, executed in the PH, is governed by the
PH Constitution and labor laws, which provides that
the dismissal must be for a just or authorized cause
coupled with due process of notice and hearing.
When Masagca was repatriated, SAENCO already
extended Masagca’s contract for another 6 months.
As such, both SAENCO and PTCPI are responsible for
renewing her visa. Also, PTCPI cannot feign ignorance
of the extension as Moldes went to South Korea,
showing they were aware Masagca continued working
with SAENCO. Also, there was no proof Masagca
knew club policies exists. Had Masagca violated any
policies, SAENCO would not have extended her
employment.
SAENCO likewise failed to comply Art. 227 Labor
Code, which provides the employer shall give two
notices to the employee: first, the opportunity of the
employee to be heard, and second, the decision if the
employee is dismissed.
(3) Yes but only equivalent to the unexpired term of
her extended contract plus legal interest, and
attorney’s fees, and reimbursement of her placement
fee.
The burden of proof lies to the one who pleads
payment. The vouchers presented containing
Masagca’s signatures, which were found to be
genuine, proved PTCPI paid Masagca. Had Masagca
not been paid since the beginning, then she would
not have extended her employment with SAENCO.
(4) Yes. PTCPI, a recruitment/placement agency, is
solidarily liable with SAENCO, principal/employer, for
the money claims and damages of Masagca, an
Overseas Filipino Worker as provided under Sec. 10
RA 8042.
Labor Law Review Digests | Lourleth Lluz
4. Augustin International Center vs.
Bartolome, GR No. 226578, January 28,
2019
Facts: In 2010, respondents Elfrenito B. Bartolome
and Rumby L. Yamat applied as carpenter and tile
setter, respectively, with petitioner Augustin
International Center, Inc. (AICI), an employment
agency providing manpower to foreign corporations.
They were engaged by Golden Arrow Company, Ltd.,
which had its office in Khartoum, Republic of Sudan.
Their employment contracts stated that they would
render services for a period not less than 24 months.
In their contracts, there was a provision on dispute
settlement.
Upon their arrival in Sudan sometime in March and
April 2011, Golden Arrow transferred their
employment to its sister company, Al Mamoun
Trading and Investment Company. In May 2, 2012, Al
Mamoun served Notices of Termination of Service to
respondents, causing them to return to the
Philippines. On May 22, 2012, they filed their
complaint before the NLRC seeking that AICI and Al
Mamoun be held liable for illegal dismissal, breach of
contract, and payment of the unexpired portion of the
contract.
For their part, AICI and Al Mamoun claimed that
respondents abandoned their duties by mid-2012,
based on the e-mail message from Golden Arrow.
LA held that respondents were illegally dismissed, and
ordered AICI and Al Mamoun to pay the salaries for
the unexpired portion of their contract. AICI and Al
Mamoun failed to prove that the dismissal was for a
just or authorized cause and failed to show that
respondents abandoned their duties. NLRC affirmed.
CA denied the petition for review.
Issues:
Whether or not the LA correctly took cognizance of
this case.
Whether or not AICI is liable for respondents' illegal
dismissal.
Ruling:
Yes. LA properly took cognizance of this case.
Preliminarily, it bears stressing that AICI does not
assail the CA's ruling of illegal dismissal but instead,
argues that the LA incorrectly took cognizance of the
case at the onset.
Section 10 of RA 8042, as amended by RA. 10022,
explicitly provides that LAs have original and exclusive
97 | P a g e

jurisdiction over claims arising out of employer-
employee relations or by virtue of any law or contract
involving Filipino workers for overseas deployment, as
in this case.
Settled is the rule that jurisdiction over the subject
matter is conferred by law and cannot be acquired or
waived by agreement of the parties. As herein
applied, the dispute settlement provision in
respondents' employment contracts cannot divest the
LA of its jurisdiction over the illegal dismissal case.
Moreover, issues not raised in the previous
proceedings cannot be raised for the first time at a
late stage. AICI failed to raise the issue of
respondents' supposed non-compliance with the
dispute settlement provision before the LA, as well as
before the NLRC. In fact, AICI only mentioned this
issue for the first time before the CA in its motion for
reconsideration. Therefore, such argument or defense
is deemed waived and can no longer be considered
on appeal.
The text of the contractual provision shows that the
designated person is tasked merely to participate in
the amicable settlement and not to decide the
dispute. The [Labor] Attaché or any [authorized]
representative of the Philippine[] Embassy nearest the
site of employment" was not called upon to act as a
Voluntary Arbitrator as contemplated under the Labor
Code. Considering that the parties did not submit the
present illegal termination case to the voluntary
arbitration mechanism, the dispute remained under
the exclusive and original jurisdiction of the LA, which
therefore correctly took cognizance of the case.
Yes. AICI's lack of an employee-employer relationship
with respondents cannot exculpate it from its liability
to pay the latter's money claims.
Section 10 of RA 8042, as amended, expressly
provides that a recruitment agency, such as AICI, is
solidarily liable with the foreign employer for money
claims arising out of the employee-employer
relationship between the latter and the overseas
Filipino worker.
Jurisprudence explains that this solidary liability is
meant to assure the aggrieved worker of immediate
and sufficient payment of what is due him, as well as
to afford overseas workers an additional layer of
protection against foreign employers that tend to
violate labor laws. Nevertheless, AICI can go after the
foreign employer for reimbursement of any payment
it has made to respondents to answer for the money
claims against the foreign employer.
Labor Law Review Digests | Lourleth Lluz
5. Aldovino et al. vs. Gold & Green
Manpower Management &
Development Services, GR No. 200811,
June 19, 2019
Facts: Aldovino and her co-applicants applied for work
at Gold and Green Manpower Management and
Development Services, Inc. (Gold and Green
Manpower), a local manning agency whose foreign
principal is Sage International Development Company,
Ltd. (Sage International). They were hired as sewers
for Dipper Semi-Conductor Company, Ltd. (Dipper
Semi-Conductor), a Taiwan-based company. Their
respective employment contracts provided an eight
(8)-hour working day, a fixed monthly salary, and
entitlement to overtime pay, among others.
Before they could be deployed for work, Gold and
Green Manpower required each applicant to pay a
P72,000.00 placement fee. But since the applicants
were unable to produce the amount on their own,
Gold and Green Manpower referred them to E-Cash
Paylite and Financing, Inc. (E-Cash Paylite), where
they loaned their placement fees. Once Aldovino and
her co-workers arrived in Taiwan, Gold and Green
Manpower took all their travel documents, including
their passports. They were then made to sign another
contract that provides that they would be paid on a
piece-rate basis instead of a fixed monthly salary.
During their employment, Aldovino and her co-
workers toiled from 8:00 a.m. to 9:00 p.m. for six (6)
days a week. At times, they were forced to work on
Sundays without any overtime premium. 9 Because
they were paid on a piece-rate basis, they received
less than the fixed monthly salary stipulated in their
original contract. When Aldovino and her co-workers
inquired, Dipper Semi-Conductor refused to disclose
the schedule of payment on a piece-rate basis.
Eventually, they defaulted on their loan obligations
with E-Cash Paylite. Aldovino and her co-workers,
except De Jesus, filed before a local court in Taiwan a
Complaint against their employers, Dipper Semi-
Conductor and Sage International. The parties met
before the Bureau of Labor Affairs for a dialogue.
There, Dipper Semi-Conductor ordered Aldovino and
her co-workers to return to the Philippines as it was
no longer interested in their services. Eventually, the
parties entered into a compromise agreement where
Aldovino and her co-workers, except De Jesus,
executed an Affidavit of Quitclaim and Release.
However, when all of them returned to the
Philippines, they eventually filed before the Labor
Arbiter a case for illegal termination, underpayment of
salaries, human trafficking, illegal signing of papers, 17
and other money claims such as overtime pay, return
of placement fees, and moral and exemplary
damages.
LA: dismissed the Complaint for illegal dismissal but
ordered Gold and Green Manpower and Sage
98 | P a g e

International to pay each of the workers P20,000.00
as financial assistance.
NLRC: affirmed the Labor Arbiter's Decision. It found
that Aldovino and her co-workers were not illegally
dismissed and that they voluntarily returned to the
Philippines. Moreover, the Compromise Agreement
barred any further claims arising from their
employment. It also deleted the award of financial
assistance for lack of factual and legal bases.
CA: ruled that Aldovino and her co-workers had been
illegally dismissed from service, but also declared that
the Compromise Agreement did not bar them from
filing an illegal dismissal case. The Court of Appeals
ordered Gold and Green Manpower and Sage
International to pay the workers their salaries "for the
unexpired portion of their contract or for three (3)
months for every year of the unexpired term,
whichever is less.”.
Issues:
Whether or not the Compromise Agreement barred all
other claims against respondents Gold and Green
Manpower Management and Development Services,
Inc. and Sage International Development Company,
Ltd., and Alberto C. Alvina.
Whether or not petitioners were illegally dismissed
and, consequently, entitled to the reimbursement of
their placement fees and payment of moral and
exemplary damages and attorney's fees.
Ruling:
Petition is meritorious.
No. As to the first issue, the compromise agreement
did not bar all other claims against Gold and Green
Manpower and Sage International.
Waivers and quitclaims executed by employees are
generally frowned upon for being contrary to public
policy. This is based on the recognition that
employers and employees do not stand on equal
footing. Quitclaims do not bar employees from filing
labor complaints and demanding benefits to which
they are legally entitled. They are "ineffective in
barring recovery of the full measure of a worker's
rights, and the acceptance of benefits therefrom does
not amount to estoppel.” The law does not recognize
agreements that result in compensation less than
what is mandated by law. These quitclaims do not
prevent employees from subsequently claiming
benefits to which they are legally entitled.
Paragraph 7 of the Compromise Agreement, which
stipulates that petitioners "shall give up other rights
of compensation . . . [and] shall not ask for any
compensation based on any other causes[,]" cannot
bar petitioners from filing this case and from being
indemnified should respondents be adjudged liable.
Blanket waivers exonerating employers from liability
on the claims of their employees are ineffective.
Besides, at the time the parties' Compromise
Agreement was executed, respondents had just
terminated petitioners from employment. Petitioners,
therefore, had no other choice but to accede to the
Labor Law Review Digests | Lourleth Lluz
terms and conditions of the agreement to recover the
difference in their salaries and overtime pay. With no
means of livelihood, they signed the Compromise
Agreement out of dire necessity.
Yes. As to the second issue, the employees were
illegally terminated. Under the Labor Code, employers
may only terminate employment for a just or
authorized cause and after complying with procedural
due process requirements.
The termination of petitioners' employment was
effected merely because respondents no longer
wanted their services. This is not an authorized or
just cause for dismissal under the Labor Code.
Employment contracts cannot be terminated on a
whim. Moreover, petitioners did not voluntarily sever
their employment when they signed the Compromise
Agreement, which, again, cannot be used to justify a
dismissal. Furthermore, petitioners were not accorded
due process. A valid dismissal must comply with
substantive and procedural due process: there must
be a valid cause and a valid procedure. The employer
must comply with the two (2)-notice requirement,
while the employee must be given an opportunity to
be heard.56 Here, petitioners were only verbally
dismissed, without any notice given or having been
informed of any just cause for their dismissal. As a
consequence of the illegal dismissal, petitioners are
also entitled to moral damages, exemplary damages,
and attorney's fees.
Petitioners are entitled to the award of salaries based
on the actual unexpired portion of their employment
contracts. The award of petitioners' salaries, in
relation to the three (3)-month cap, must be modified
accordingly. HENCE, The clause "or for three (3)
months for every year of the unexpired term,
whichever is less" as reinstated in Section 7 of
Republic Act No. 10022 is unconstitutional, and has
no force and effect of law. It violates due process as
it deprives overseas workers of their monetary claims
without any discernable valid purpose.
14. SOCIAL LEGISLATION
CASES:
1. SSS et al., vs. Alba, G.R. No. 165482, July
23, 2008
Doctrine: A hacienda administrator, acts as the legal
representative of the employer and is thus an
employer within the meaning of the law liable to pay
the SS contributions.
Facts:: Petitioner (Apolonio Lamboso) worked in Hda.
La Roca (owned by Far Alba) from 1960 to 1973 as
‘cabo’, in Hda. Alibasao from 1973 to 1979 as
overseer and in Hda. Kamandag from 1979 to 1984.
99 | P a g e

The latter 2 haciendas are both owned by Ramon S.
Benedicto. When Lamboso filed a claim for retirement
pension benefit with the SSS, however, the same was
denied on the ground that he had 39 monthly
contributions to his credit and so he could not qualify
for monthly pension under R.A. No. 1161 ( the Social
Security Act of 1954). Lamboso appealed the denial of
his claim by filing a petition before the Commission
wherein he alleged that he should be entitled to
monthly retirement pension. He prayed for the
adjustment of the date of his Social Security (SS)
coverage and for the remittance of his delinquent
monthly contribution.
Private respondent Ramon S. Benedicto alleged that
he was only a lessee of Hdas. Albasao and
Kamandag. When he took over as lessee thereof,
there was no available records to support the
petitioner’s claim of employment. He also avers that
the petitioner was employed by him from 1973 to
1984 (1973 to 1979 in Hda. Alibasao and from 1979
to 1984 in Hda. Kamandag) and all of his employment
records were already destroyed and damaged by
termites. He prays that the petition be dismissed for
lack of cause of action. Respondent Far Alba (Hda. La
Roca) was motu propio declared in default for failure
to file his answer.
The Commission ordered Far Alba to pay to the SSS
the delinquent monthly contributions of Apolonio
Lamboso from June 18, 1960 to April; and
Respondent Ramon Benedicto to pay to SSS the
delinquent monthly contributions due the petitioner
for the period May 1973 to 1984. The SSS, on the
other hand, is ordered to pay Apolonio Lamboso his
retirement benefit upon the filing of the claim
therefore.
Far Alba moved for reconsideration of the
Commission’s resolution. The Commission denied the
motion. Alba filed a Petition for Review before the CA.
CA reversed and set aside both the resolution and the
order of the Commission. It held that Far Alba cannot
be considered as an employer of Lamboso prior to
1970 because as administrator of the family-owned
hacienda, he is not an employer under Section 8 (c)
of the Social Security Act of 1954; and that that since
it was Arturo Alba, Sr., Far Alba’s father, who had
failed to remit the SS contributions prior to 1970,
Lamboso should have asserted his claim before the
estate proceedings of his deceased employer
Issue: Whether an administrator could be considered
an employer within the scope of the Social Security
Act of 1954.
Ruling: YES. Section 8 (c), Social Security Act of
1954 (amended by P.D. No. 1202 and P.D. No. 1636)
Labor Law Review Digests | Lourleth Lluz
defines an employer as “any person, natural or
juridical, domestic or foreign, who carries on in the
Philippines any trade or business, industry,
undertaking, or activity of any kind and uses the
services of another person who is under his orders as
regards the employment, except the Government and
any of its political subdivisions, branches or
instrumentalities, including corporations owned or
controlled by the Government.” Section 8 (d) defines
an employee as “any person who performs services
for an employer in which either or both mental and
physical efforts are used and who receives
compensation for such services where there is an
employer-employee relationship.”
Based on the testimony of Lamboso and his witness it
is evidently that Far Alba had indeed served as
Lamboso’s employer from 1965 to 1970 or, at the
very least, he had served as the hacienda’s
administrator before 1970. Far Alba was no ordinary
administrator. He was no less than the son of the
hacienda’s owner and as such he was an owner-in-
waiting prior to his father’s death. He was a member
of the owner’s family assigned to actively manage the
operations of the hacienda. Far Alba and the owner’s
interests in the business where plainly and
inextricably linked by filial bond. He more than just
acted in the interests of his father as employer, and
could himself pass off as the employer, the one
carrying on the undertaking.
Applying the control test which is used to determine
the existence of employer-employee relationship for
purposes of compulsory coverage under the SSS law,
Far Alba is technically Lamboso’s employer. The
essential elements of an employer-employee
relationship are: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the power of control with
regard to the means and methods by which the work
is to be accomplished, with the power of control being
the most determinative factor.
Lamboso testified that he was selected and his
services were engaged by Far Alba himself. Far Alba
held the prerogative of terminating Lamboso’s
employment. Lamboso also testified in a direct
manner that he had been paid his wages by Far Alba.
This testimony was seconded by Lamboso’s co-
worker, Rodolfo Sales. It is not essential for the
employer to actually supervise the performance of
duties of the employee, it is sufficient that the former
has a right to wield the power (Power of Control).
Article 167(f) of the Labor Code which deals with
employees’ compensation and state insurance fund
defines and employer as ” any person, natural or
juridical, employing the services of the employee.” It
100 | P a g e

also defines a person as “any individual, partnership,
firm, association, trust, corporation or legal
representative thereof.” Plainly, Far Alba, as the
hacienda administrator, acts as the legal
representative of the employer and is thus an
employer within the meaning of the law liable to pay
the SS contributions.
Section 8 (c) of the Social Security Act of 1954 is
broad enough to include those persons acting directly
or indirectly in the interest of the employer. If under
Article 212 (e), persons acting in the interest of the
employer, directly or indirectly, are obliged to follow
the government labor relations policy, it could be
reasonably concluded that such persons may likewise
be held liable for the remittance of SS contributions
which is an obligation created by law and an is
employee’s right protected by law.
Far Alba’s is accountable to the SSS for Lamboso’s
unremitted contributions form 1960 to 1970. In any
event, the Court sustains the jurisdiction of the
Commission over disputes under the Social Security
Act “with respect to coverage, benefits, contributions
and penalties thereon or any other matter related
thereto.
2. Rodrin vs. GSIS et al., G.R. No. 162837,
July 28, 2008
Doctrine: Members of the police force can claim
compensation benefit even if their job was not
covered by the Letter-Orders. The nature of work of
a police officer who is an intelligence operative does
not confine him to specific places and hours, more so
with respect to a police officer involved in intelligence
work.
Facts: Marlene L. Rodrin filed a claim for
compensation benefits under Presidential Decree 626,
as amended, relative to the death of her husband
SPO1 Felixberto M. Rodrin before the GSIS but was
denied on the ground that the death of SPO1
Felixberto M. Rodrin did not arise out nor was it in the
course of his employment. It appeared that Felixberto
Rodrin, who was then conducting an intelligence
mission, was shot to death by a subdivision security
guard after a heated altercation. The wife questioned
the denial of the claim considering that she was able
to submit various documents evidencing that her
husband died in the line of duty or that his death
arose from or happened during the course of his
employment.  employee be absolutely disabled, or totally paralyzed.
Labor Law Review Digests | Lourleth Lluz
Issue: Whether or not the compensation benefit
claim is meritorious.
Ruling: YES. For the compensability of an injury to
an employee which results in his disability or death,
Section 1 (a), Rule III of the Amended Rules on
Employees' Compensation imposes the following
conditions:
1. The employee must have been injured at
the place where his work required him to be;
2. The employee must have been performing
his official functions; and 
3. If the injury was sustained elsewhere, the
employee must have been executing an
order of the employer.
The conditions have been met since members of the
national police, unless they are on official leave, are,
by the nature of their functions, technically on duty
24 hours a day, because policemen are subject to call
at any time and may be asked by their superiors or by
any distressed citizen to assist in maintaining the
peace and security of the community. Being
specifically assigned to conduct intelligence work in
Carmona and Biñan, SPO1 Rodrin is presumed to
have been performing his official duty when he was
shot to death by a security guard while trying to pass
though the Las Villas de Manila subdivision in Brgy.
San Francisco, Biñan, Laguna. 
With respect to the contention that San Pedro,
Laguna was a place which was not covered by the
subject Letter-Orders, the Court takes cognizance of
the fact that the nature of work of a police officer
who is an intelligence operative does not confine him
to specific places and hours, more so with respect to
a police officer involved in intelligence work. His
actions may not be compartmentalized, as they
depend to a large extent on the exigencies of the
assignment given him. Thus, in the absence of
contrary evidence, SPO1 Rodrin is presumed to be in
the performance of his official duties at the time of
his death.
3. GSIS vs. Casco, G.R. No. 173430, July 28,
2008
Doctrine: Total disability does not require that the
101 | P a g e

What is necessary is that the injury must be such that
he cannot pursue his usual work and earn therefrom.
Facts: Casco, employed as a teacher, was diagnosed
to be hypertensive and was admitted in the hospital.
He suffered another attack and was confined in the
hospital. This forced him to retire from government
service at an early age. Casco then applied for
disability benefits under PD 626 in which petitioner
GSIS granted him 38 months of permanent partial
disability(PPD).
The latest physical examination of Casco reveals that
he still experiences chest pain, limping accompanied
by lapse of memory and vertigo. Thus, he requested
GSIS to convert his permanent partial disability to
permanent total disability(PTD), but the same was
denied.
Issue: Whether or nor Casco’s claim for conversion
of his PPD benefits to PTD benefits should be
granted.
Ruling: YES. There is nothing in the law which
prohibits the conversion of PPD benefit to PTD benefit
if it is shown that the employee's ailment qualifies as
such.
Disability should be understood not singly through its
medical significance but, more importantly, in terms
of a person's loss of earning capacity. Total disability
does not require that the employee be absolutely
disabled, or totally paralyzed. What is necessary is
that the injury must be such that he cannot pursue
his usual work and earn therefrom.
By denying respondent, who had rendered more than
21 years of service but was forced to retire due to his
ailment, the PTD benefits to which he is indisputably
entitled would be contrary to the spirit of P.D. No.
626 and the social justice principle enshrined in our
Constitution.
4. SSS vs. Delos Santos, GR No. 164790, Aug
29, 2008, citing Aguas and 2005 Dycaico
Doctrine: An estranged wife who was not dependent
upon her deceased husband for support is not
qualified to be his beneficiary.
Facts: Antonio de los Santos and Gloria de los
Santos, both Filipinos, were married in 1964. Less
than a year after, Gloria left Antonio and contracted
Labor Law Review Digests | Lourleth Lluz
another marriage with a certain Domingo Talens. A
year later, Gloria went back to Antonio and lived with
him, and they had three children. In 1983, Gloria left
Antonio again and went to the US to file for divorce
against the latter, which was granted. Later, Antonio
married Cirila de los Santos and produced one child,
May-ann. On her part, Gloria married an American
citizen in the US.
Antonio amended his records at the SSS and changed
his beneficiaries. Antonio retired from employment
and began receiving monthly pension. Upon his death
because of respiratory failure, Cirila applied for and
began receiving his SSS pension benefit. Gloria filed a
claim for Antonio’s death benefits with the SSS but
was denied because she was not a qualified
beneficiary of Antonio.
Upon appeal, the SSC deemed that Gloria abandoned
Antonio when she obtained a divorce against him
abroad and subsequently married another man, thus,
she failed to satisfy the requirement of dependency
required of primary beneficiaries under the law.
Further, the divorce obtained by Gloria against the
deceased Antonio was not binding in this jurisdiction,
thus, it did not sever her marriage ties with Antonio.
The SSC added that since the marriage of Antonio to
Cirila was void, the latter was likewise not a qualified
beneficiary.
Issue: Who between respondent Gloria, the first wife
who divorced Antonio in the US, or Cirila, the second
wife, is his primary beneficiary entitled to claim death
benefits from the SSS?
Ruling: The Court recalled that in Dycaico v. Social
Security System, it ruled that the proviso "as of the
date of retirement" in Section 12-B (d) of Republic Act
No. 8282, which qualifies the term "primary
beneficiaries", is unconstitutional for it violates the
due process and equal protection clauses. It held that
death benefits should not be denied to the wife who
was married to the deceased retiree only after the
latter's retirement. The reckoning point in determining
the beneficiaries of the deceased Antonio should be
the time of his death.
On the main issue, although Gloria was the legal
spouse of the deceased, the Court found that she is
still disqualified to be his primary beneficiary under
102 | P a g e

the SS Law, as she fails to fulfill the requirement of
dependency upon her deceased husband Antonio.
The SS law specifically defines beneficiaries as “the
dependent spouse, until he or she remarries, the
dependent legitimate, legitimated or legally adopted
and illegitimate children who shall be the primary
beneficiary…” In SSS v. Aguas, the Court ruled that
although a husband and wife are obliged to support
each other, whether one is actually dependent for
support upon the other cannot be presumed from the
fact of marriage alone. It was pointed out by the
Court that a wife who left her family until her
husband died and lived with other men, was not
dependent upon her husband for support, financial or
otherwise, during the entire period.
Here, Gloria herself admits that she left the conjugal
abode on two (2) separate occasions, to live with two
different men. These uncontroverted facts remove her
from qualifying as a primary beneficiary of her
deceased husband.
5. Becmen Service Exporter and Promotion
Inc. vs. Cuaresma, GR No. 182978-79,
April 7, 2009
Doctrine: The relations between capital and labor
are so impressed with public interest, and neither
shall act oppressively against the other, or impair the
interest or convenience of the public. In case of
doubt, all labor legislation and all labor contracts shall
be construed in favor of the safety and decent living
for the laborer.
Facts: On January 6, 1997, Jasmin Cuaresma
(Jasmin) was deployed by Becmen Service Exporter
and Promotion, Inc. (Becmen) to serve as assistant
nurse in Al-Birk Hospital in the Kingdom of Saudi
Arabia (KSA), for a contract duration of three years,
with a corresponding salary of US$247.00 per month.
Over a year later, she died. Jessie Fajardo, a co-
worker of Jasmin, narrated that on June 21, 1998,
Jasmin was found dead by a female cleaner lying on
the floor inside her dormitory room with her mouth
foaming and smelling of poison.
Based on the police report and the medical report of
the examining physician of the Al-Birk Hospital, who
conducted an autopsy of Jasmin’s body, the likely
cause of her death was poisoning.
Labor Law Review Digests | Lourleth Lluz
Jasmin’s body was repatriated to Manila on
September 3, 1998. The following day, the City
Health Officer of Cabanatuan City conducted an
autopsy and the resulting medical report indicated
that Jasmin died under violent circumstances, and not
poisoning as originally found by the KSA examining
physician. The toxicology report of the NBI, however,
tested negative for non-volatile, metallic poison and
insecticides.
Simplicio and Mila Cuaresma (the Cuaresmas),
Jasmin’s parents and her surviving heirs, received
from the Overseas Workers Welfare Administration
(OWWA) the following amounts: P50,000.00 for death
benefits; P50,000.00 for loss of life; P20,000.00 for
funeral expenses; and P10,000.00 for medical
reimbursement.
On November 22, 1999, the Cuaresmas filed a
complaint against Becmen and its principal in the
KSA, Rajab & Silsilah Company (Rajab), claiming
death and insurance benefits, as well as moral and
exemplary damages for Jasmin’s death, Jasmin’s
death was work-related, having occurred at the
employer’s premises; that under Jasmin’s contract
with Becmen, she is entitled to “iqama insurance”
coverage; that Jasmin is entitled to compensatory
damages in the amount of US$103,740.00, which is
the sum total of her monthly salary of US$247.00 per
month under her employment contract, multiplied by
35 years (or the remaining years of her productive life
had death not supervened at age 25, assuming that
she lived and would have retired at age 60).
In their position paper, Becmen and Rajab insist that
Jasmin committed suicide, citing a prior unsuccessful
suicide attempt sometime in March or April 1998 and
relying on the medical report of the examining
physician of the Al-Birk Hospital. They likewise deny
liability because the Cuaresmas already recovered
death and other benefits totaling P130,000.00 from
the OWWA. They insist that the Cuaresmas are not
entitled to “iqama insurance” because this refers to
the “issuance” – not insurance – of iqama, or
residency/work permit required in the KSA. On the
issue of moral and exemplary damages, they claim
that the Cuaresmas are not entitled to the same
because they have not acted with fraud, nor have
they been in bad faith in handling Jasmin’s case.
103 | P a g e

While the case was pending, Becmen filed a
manifestation and motion for substitution alleging
that Rajab terminated their agency relationship and
had appointed White Falcon Services, Inc. (White
Falcon) as its new recruitment agent in the
Philippines. Thus, White Falcon was impleaded as
respondent as well, and it adopted and reiterated
Becmen’s arguments in the position paper it
subsequently filed.
Issue: WON the Cuaresmas are entitled to monetary
claims, by way of benefits and damages, for the
death of their daughter Jasmin.
Ruling: Article 19 of the Civil Code provides that
every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give
everyone his due, and observe honesty and good
faith. Article 21 of the Code states that any person
who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or
public policy shall compensate the latter for the
damage. And, lastly, Article 24 requires that in all
contractual, property or other relations, when one of
the parties is at a disadvantage on account of his
moral dependence, ignorance, indigence, mental
weakness, tender age or other handicap, the courts
must be vigilant for his protection.
Clearly, Rajab, Becmen and White Falcon’s acts and
omissions are against public policy because they
undermine and subvert the interest and general
welfare of our OFWs abroad, who are entitled to full
protection under the law. They set an awful example
of how foreign employers and recruitment agencies
should treat and act with respect to their distressed
employees and workers abroad. Their shabby and
callous treatment of Jasmin’s case; their uncaring
attitude; their unjustified failure and refusal to assist
in the determination of the true circumstances
surrounding her mysterious death, and instead finding
satisfaction in the unreasonable insistence that she
committed suicide just so they can conveniently avoid
pecuniary liability; placing their own corporate
interests above of the welfare of their employee’s –
all these are contrary to morals, good customs and
public policy, and constitute taking advantage of the
poor employee and her family’s ignorance,
helplessness, indigence and lack of power and
resources to seek the truth and obtain justice for the
death of a loved one.
Labor Law Review Digests | Lourleth Lluz
Giving in handily to the idea that Jasmin committed
suicide, and adamantly insisting on it just to protect
Rajab and Becmen’s material interest – despite
evidence to the contrary – is against the moral law
and runs contrary to the good custom of not
denouncing one’s fellowmen for alleged grave
wrongdoings that undermine their good name and
honor.
Whether employed locally or overseas, all Filipino
workers enjoy the protective mantle of Philippine
labor and social legislation, contract stipulations to
the contrary notwithstanding. This is in keeping with
the basic public policy of the State to afford
protection to labor, promote full employment, ensure
equal work opportunities regardless of sex, race or
creed, and regulate the relations between workers
and employers. This ruling is likewise rendered
imperative by Article 17 of the Civil Code which states
that laws which have for their object public order,
public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a
foreign country.
The relations between capital and labor are so
impressed with public interest, and neither shall act
oppressively against the other, or impair the interest
or convenience of the public. In case of doubt, all
labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for
the laborer.
The grant of moral damages to the employee by
reason of misconduct on the part of the employer is
sanctioned by Article 2219 (10) of the Civil Code,
which allows recovery of such damages in actions
referred to in Article 21.
Thus, in view of the foregoing, the Court holds that
the Cuaresmas are entitled to moral damages, which
Becmen and White Falcon are jointly and solidarily
liable to pay, together with exemplary damages for
wanton and oppressive behavior, and by way of
example for the public good.
6. GSIS vs. De Castro, GR No. 185035, July
15, 2009
104 | P a g e

Doctrine: “What the law requires is a reasonable
work connection and not direct causal relation.
Probability, not the ultimate degree of certainty, is
the test of proof in compensation proceedings”
Facts: De Castro rendered service in the Philippine
Air Force. He was admitted at the V. Luna General
Hospital, AFP Medical Center due to chest pains.  His
full diagnosis consisted of hypertensive cardiovascular
disease and coronary artery disease (CAD).
De Castro retired from the service with a " Certificate
of Disability Discharge. On this basis, he filed a claim
for permanent total disability benefits with the GSIS.
The GSIS denied De Castro’s claim based on the
finding that De Castro's illnesses were non-
occupational. De Castro appealed to the Employees’
Compensation Commission (ECC).
The ECC Board affirmed the GSIS ruling and
dismissed De Castro's claim for lack of merit. The
ECC, however, also held that, CAD is a form of
cardiovascular disease included in the list of
occupational diseases. The ECC still denied the claim
despite this observation because of "the presence of
factors which are not work-related, such as smoking
and alcohol consumption." It likewise noted that
manifestations of Cardiomyopathy in De Castro’s 2-D
echocardiography examination results could be
related to his drinking habits.
Issue: Whether an illness listed as an occupational
disease under the ECC Rules requires a proof of direct
causal relation between the work and illness.
Ruling: We find it strange that both the ECC and the
GSIS singled out the presence of smoking and
drinking as the factors that rendered De Castro’s
ailments to be non-compensable. To be sure, the
causes of CAD and hypertension that the ECC listed
and explained in its decision cannot be denied;
smoking and drinking are undeniably among these
causes. However, they are not the sole causes of CAD
and hypertension.
ECC has apparently failed to consider other factors
such as age and gender from among those that the
ECC itself listed as major and minor causes of
atherosclerosis and, ultimately, of CAD. While age and
gender are characteristics inherent in the person (and
thereby may be considered non-work related factors),
they also do affect a worker’s job performance and
may in this sense, together with stresses of the job,
contribute to illnesses such as CAD and hypertension.  abroad. Sto. Tomas then questioned the validity of
Labor Law Review Digests | Lourleth Lluz
De Castro’s service record and the medals, awards,
and commendations he earned, all attesting to 32
years of very active and productive service in the
military. Thus, the CAD and the hypertension came
while he was engaged in these endeavors. His long
years of military service, with its attendant stresses
and pressures, contributed in no small measure to the
ailments that led to his disability retirement. De
Castro's "illness was contracted during and by reason
of his employment, and any non-work related factor
that contributed to its aggravation is immaterial. "
What the law requires is a reasonable work
connection and not direct causal relation. Probability,
not the ultimate degree of certainty, is the test of
proof in compensation proceedings. For, in
interpreting and carrying out the provisions of the
Labor Code and its Implementing Rules and
Regulations, the primordial and paramount
consideration is the employee's welfare. To safeguard
the worker's rights, any doubt on the proper
interpretation and application must be resolved in
favor of labor.
7. Sto. Tomas vs. Salac, GR No. 152642, Nov.
13, 2012, En Banc
Doctrine: “Sections 29 and 30 of R.A. 804, which
commands the Department of Labor and Employment
(DOLE) to begin deregulating within one year of its
passage the business of handling the recruitment and
migration of overseas Filipino workers and phase out
within five years the regulatory functions of the
Philippine Overseas Employment Administration
(POEA), HAS BEEN REPEALED.”
Facts: In 2002, Rey Salac et al, who are recruiters
deploying workers abroad, sought to enjoin the
Secretary of Labor, Patricia Sto. Tomas, the POEA,
and TESDA, from regulating the activities of private
recruiters. Salac et al invoked Sections 29 and 30 of
the Republic Act 8042 or the Migrant Workers Act
which provides that recruitment agency in the
Philippines shall be deregulated one year from the
passage of the said law; that 5 years thereafter,
recruitment should be fully deregulated. RA 8042 was
passed in 1995, hence, Salac et al insisted that as
early as 2000, the aforementioned government
agencies should have stopped issuing memorandums
and circulars regulating the recruitment of workers
Sections 29 and 30.
105 | P a g e

Issue: Whether or not Sections 29 and 30 are valid.
Ruling: The issue became moot and academic. It
appears that during the pendency of this case in
2007, RA 9422 (An Act to Strengthen the Regulatory
Functions of the POEA) was passed which repealed
Sections 29 and 30 of RA 8042.
8. Great Southern Maritime Service Corp., et
al., vs. Surigao, GR No. 183646, Sept. 18,
2009, citing 2009 Becmen Service
Exporter & Promotions, Inc.
Doctrine: “The general rule is that the employer is
liable to pay the heirs of the deceased seafarer for
death benefits once it is established that he died
during the effectivity of his employment
contract. However, the employer may be exempted
from liability if he can successfully prove that the
seafarers death was caused by an injury directly
attributable to his deliberate or willful act. In sum,
respondents entitlement to any death benefits
depends on whether the evidence of the petitioners
suffices to prove that the deceased committed
suicide; the burden of proof rests on his employer.”
Facts: The late Salvador M. Surigao, husband of
respondent Leonila Surigao, was hired as Fitter by
[petitioner] Great Southern Maritime Services
Corporation, for and in behalf of [co-
petitioner] IMC Shipping Co. Pte., Ltd. (Singapore) for
a period of ten (10) months. In his pre-employment
medical examination, he was found fit for sea
duty. Thus, on April 29, 2001, he commenced his
work aboard MV Selendang Nilam.
However, on August 22, 2001, as per Ship Masters
advice, a doctor was sent on board the vessel to
medically attend to Salvador due to complaints of
extensive neuro dermatitis, neck region viral,
aetiology, urticaria, maculo popular, rash extending to
the face, chest and abdomen. After
examination, Salvador was advised to take a blood
test. His condition having worsened, he was confined
at the Seven Hills Hospital. Not long thereafter, the
Ship Master decided to sign him off from the vessel
on August 25, 2001 for treatment in the hospital and
for repatriation upon certification of the doctor that
he was fit to travel.
Prior to his repatriation, though, or on August 26,
2001, at around seven oclock in the
morning, Salvador was found dead inside the
Labor Law Review Digests | Lourleth Lluz
bathroom of his hospital room. Later, his body was
transferred to a government hospital, the Ling George
Hospital Mortuary Hall, for post-mortem
examination. The Post-Mortem Certificate issued by
the Department of Forensic
Medicine, Visakhapatnam City, stated that the cause
of death of Salvador was asphyxia due to hanging.
As an heir of the deceased seaman, Leonila Surigao,
for in behalf of her minor children, filed for death
compensation benefits under the terms of the
standard employment contract, but her claims were
denied by Great Southern and IMC Shipping, claiming
that the deceased Salvador committed suicide, which
disqualifies him from death benefits.
Issue: Whether or not private respondent is entitled
to death benefits for the death of her husband under
the POEA standard employment contract for
seafarers.
Ruling: NO, private respondents are not entitled to
death benefits. The pertinent provisions of
the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers On-Board Ocean-
Going Vessels, or the POEA Standard Employment
Contract, which Salvador and the petitioners
incorporated into their contract, provide that:
SECTION 20.
COMPENSATION AND BENEFITS
A. COMPENSATION AND BENEFITS
FOR DEATH
1. In case of death of the seafarer
during the term of his contract, the
employer shall pay his beneficiaries
the Philippine Currency equivalent
to the amount of Fifty Thousand US
dollars (US$50,000) and an
additional amount of Seven
Thousand US dollars (US$7,000) to
each child under the age of twenty-
one (21) but not exceeding four (4)
children at the exchange rate
prevailing during the time of
payment.
xxxx
D. No compensation and benefits
shall be payable in respect of any
injury, incapacity, disability or
death of the seafarer resulting from
his willful or criminal act or
intentional breach of his duties,
provided however, that the
employer can prove that such
injury, incapacity, disability or
106 | P a g e

death is directly attributable to the
seafarer.
The general rule is that the employer is liable to pay
the heirs of the deceased seafarer for death benefits
once it is established that he died during the
effectivity of his employment contract. However, the
employer may be exempted from liability if he can
successfully prove that the seafarers death was
caused by an injury directly attributable to his
deliberate or willful act.[6] In sum, respondents
entitlement to any death benefits depends on
whether the evidence of the petitioners suffices to
prove that the deceased committed suicide; the
burden of proof rests on his employer.
Petitioners insist that respondents are not entitled to
death benefits because Salvador committed
suicide. As proof, they presented the Death Certificate
issued by Dr. Butchi Raju stating that Salvador was
suspected to have committed suicide; the post-
mortem examination results stating that the deceased
appeared to have died of ASPHYXIA DUE TO
HANGING; the Indian Police Inquest Report also
stating that he died due to hanging; the affidavit of
the nurse on duty of Seven Hills hospital, Ms. P. V.
Ramanamma, wherein she stated that as the
entrance doors to the bathroom main room was
bolted from the inside and no other person was in the
near physical vicinity of the deceased, it was
concluded that seafarer committed suicide; as well as
photos taken immediately after the discovery of the
body with a belt around his neck.
The foregoing circumstances constitute substantial
evidence supporting a conclusion that Salvadors
death was attributable to himself:
1. Salvador was last seen alive by the
attending nurse in Room No. 1619 at
about 4:00 a.m. of August 26, 2001;
2. At 6:30 a.m. of the same day, when
no one answered to the repeated
knocks of the attending nurse, the
hospital staff forcibly opened the main
door of the room;
3. Things inside the room were found
in order;
4. The bathroom door was locked from
inside and the hospital staff gained
entrance therein only through a closed
door with a mesh leading to the ceiling
of the bathroom;
5. The window in the bathroom has
grills;
6. Salvador was found dead inside with
a belt tied around his neck;
7. A broken pipe and showerhead were
found near the body; and
Labor Law Review Digests | Lourleth Lluz
8. The post-mortem examination result
stating an opinion on the cause of
death as Asphyxia due to hanging.
The post-mortem examination conclusively
established that the true cause of death was asphyxia
or suffocation. The appellate courts ruling that while it
may be consistent with the theory that the deceased
hanged himself but it does not rule out the possibility
that he might have died of other causes, does not
persuade. Aside from being purely speculative, we
find it hard to believe that someone
strangled Salvador inside the bathroom then locked
the door thereof on his way out undetected. As
shown by the evidence presented by the petitioners,
the bathroom door was locked or bolted from the
inside and could not be opened from outside. In order
to gain entrance, the hospital staff had to pass
through a closed door with a mess leading to the
ceiling of the bathroom. Entry could not likewise be
effected through the bathroom window as it has grills.
Indeed, we are not unaware of our ruling in Becmen
Service Exporter and Promotion, Inc. v. Cuaresma ,
where we held that Jasmin Cuaresma, also an
overseas Filipino worker, did not commit suicide; that
Filipinos are resilient people, willing to take on
sacrifices for the good of their family; and that we do
not easily succumb to hardships and
difficulties. Nevertheless, the circumstances prevailing
in said case are totally different from this
case. In Becmen, the postmortem examination and
the police report did not state with specificity that
poisoning or suicide was the cause of Jasmins
death. In fact, both reports mentioned that the cause
of death of Jasmin was still under investigation. In
contrast, the postmortem examination and the police
report in this case, categorically mentioned
that Salvador died of asphyxia due to hanging.It was
also shown that no other individual could have caused
the death of Salvador because the bathroom door
was locked or bolted from the inside and could not be
opened from outside.
It is true that the beneficent provisions of the
Standard Employment Contract are liberally construed
in favor of Filipino seafarers and their dependents.
We commiserate with respondents for the
unfortunate fate that befell their loved one; however,
we find that the factual circumstances in this case do
not justify the grant of death benefits as prayed for
by them as beneficiaries of Salvador.
9. Kestrel Shipping Co. et al., vs. Munar, G.R.
No. 198501, Jan. 30, 2013
Doctrine: Provisions of the Labor Code and AREC on
disabilities are applicable to the case of seafarers; If
illness or injury prevents an empoyee from engaging
107 | P a g e

in gainful employment for more than 120 or 240
days, he shall be deemed totally and permanently
disabled.
Facts: Francisco Munar, entered into a 6-month
contract with Kestrel Shipping Co., in behalf of its
principal Atlantic Mannin, Ltd., as pump man for MV
Southern Unity. One day, while Munar assisted in
manually lifting the ship’s anchor windlass motor that
weighs about 350 kilograms, he started to limp and
experience severe pain in his lumbar region. He was
hospitalized and subsequently repatriated to the
Philippines for further treatment.
Meantime, Munar filed a complaint for total and
permanent disability benefits. He claimed that
the mere fact that his medical condition, which
incapacitated him to engage in any gainful
employment, persisted for more than 120 days
automatically entitles him to total and permanent
disability benefits. Pursuant POEA-SEC provisions he
was offered by Krestel Shipping Co. disability benefits
for Grade 8 disability as assessed by the company
designated doctor, contrary to the Grade 1
assessment of Dr. Chiu, an independent orthopedic
hired by Munar.
The LA awarded him with total and permanent
disability benefits. This was affirmed by the NLRC and
later by the CA with modification as to the attorney’s
fee, lowering it from 10% to 2%.
Issues: (1) Whether or not the Labor Code’s concept
of permanent total disability applicable to the case at
bar?;
(2) Whether or not the award of total and permanent
disability to Munar was proper?
Ruling: (1) Yes. It is settled that the provisions of
the Labor Code and AREC on disabilities are
applicable to the case of seafarers such that the
POEA-SEC is not the sole issuance that governs their
rights in the event of work-related death, injury or
illness.
Art. 192 (c). The following disabilities shall
be deemed total and permanent:
(1) Temporary total disability
lasting continuously for more than
one hundred twenty days, except
as otherwise provided in the Rules;
xxx
Labor Law Review Digests | Lourleth Lluz
Section 29 of the 1996 POEA SEC itself provides that
"all rights and obligations of the parties to the
Contract, including the annexes thereof, shall be
governed by the laws of the Republic of the
Philippines, international conventions, treaties and
covenants where the Philippines is a signatory." Even
without this provision, a contract of labor is so
impressed with public interest that the New Civil Code
expressly subjects it to "the special laws on labor
unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of
labor and similar subjects."
(2) Yes. Under Section 32 of the POEA-SEC, only
those injuries or disabilities that are classified as
Grade 1 may be considered as total and permanent.
However, if those injuries or disabilities with a
disability grading from 2 to 14, hence, partial and
permanent, would incapacitate a seafarer from
performing his usual sea duties for a period of more
than 120 or 240 days, depending on the need for
further medical treatment, then he is, under legal
contemplation, totally and permanently disabled. In
other words, an impediment should be characterized
as partial and permanent not only under the Schedule
of Disabilities found in Section 32 of the POEA-SEC
but should be so under the relevant provisions of the
Labor Code and the Amended Rules on Employee
Compensation (AREC) implementing Title II, Book IV
of the Labor Code. That while the seafarer is partially
injured or disabled, he is not precluded from earning
doing the same work he had before his injury or
disability or that he is accustomed or trained to do.
Otherwise, if his illness or injury prevents him from
engaging in gainful employment for more than 120 or
240 days, as the case may be, he shall be deemed
totally and permanently disabled. Moreover, the
company-designated physician is expected to arrive at
a definite assessment of the seafarer’s fitness to work
or permanent disability within the period of 120 or
240 days. That should he fail to do so and the
seafarer’s medical condition remains unresolved, the
seafarer shall be deemed totally and permanently
disabled.
In this case, when Munar filed his complaint, Dr. Chua
had not yet determined the nature and extent of
Munar’s disability. Also, Munar was still undergoing
physical therapy and his spine injury had yet been
fully addressed. Furthermore, when Munar filed a
claim for total and permanent disability benefits, more
than 120 days had gone by and the prevailing rule
then was that enunciated by this Court in Crystal
108 | P a g e

Shipping, Inc. v. Natividad that total and permanent
disability refers to the seafarer’s incapacity to perform
his customary sea duties for more than 120 days.
10. Sy vs. Phil Transmarine Carriers Inc. G.R.
No. 191740, Feb. 11, 2013
Doctrine: “The terms and conditions of a seafarer's
employment is governed by the provisions of the
contract he signs with the employer at the time of his
hiring, and deemed integrated in his contract is a set
of standard provisions set and implemented by the
POEA, called the Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on
Board Ocean-Going Vessels”
Facts: Alfonso N. Sy was hired by respondent
Philippine Transmarine Carriers Incorporated for and
in behalf of its foreign principal, co-respondent SSC
Ship Management Pte. Ltd. In their contract of
employment Sy was assigned to work as Able Seaman
(AB) on board the vessel M/V Chekiang.
On October 1, 2005, while the vessel was at the Port
of Jakarta, Indonesia, AB Sy went on shore leave and
left the vessel. Consequently, the vessel's agent
received an advice from the local police that one of
the vessel's crew members died ashore. The cadaver
was confirmed to be that of AB Sy. A forensic
pathologist certified that AB Sy's death was an
accident due to drowning, and that there was "alcohol
20mg%" in his urine.
AB Sy's body was repatriated to the Philippines. The
Medico-Legal Officer of the NBI conducted a post-
mortem examination on AB Sy's body and certified
that the cause of death was Asphyxia by drowning.
Petitioner Susana R. Sy, widow of AB Sy, demanded
from respondents payment of her husband's death
benefits and compensation. Respondents denied such
claim, since AB Sy's death occurred while he was on a
shore leave, hence, his death was not work-related
and, therefore, not compensable. As her repeated
demands were denied, petitioner filed, on March 1,
2006, a complaint against respondents for death
benefits, burial assistance, moral and exemplary
damages, and attorney's fees.
The Labor Arbiter rendered a Decision ordering
respondent to pay complainant the Philippine
Currency equivalent of $50,000.00 as death benefit
and S$1,000.00 as burial expenses. The LA found that
AB Sy was still under the respondents' employ at the
time he drowned although he was on shore leave;
Labor Law Review Digests | Lourleth Lluz
that while on shore leave, he was still under the
control and supervision of the master or captain of
the vessel.
Issue: Whether or not petitioner is entitled to death
compensation benefits from respondents.
Ruling: No. The terms and conditions of a seafarer's
employment is governed by the provisions of the
contract he signs with the employer at the time of his
hiring, and deemed integrated in his contract is a set
of standard provisions set and implemented by the
POEA, called the Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on
Board Ocean-Going Vessels, which provisions are
considered to be the minimum requirements
acceptable to the government for the employment of
Filipino seafarers on board foreign ocean-going
vessels. Section 20 (A) of the Contract provides:
SECTION 20. COMPENSATION AND
BENEFITS
A. COMPENSATION AND BENEFITS
FOR DEATH
1. In the case of work-related
death of the seafarer during the
term of his contract, the employer
shall pay his beneficiaries the
Philippine Currency equivalent to
the amount of Fifty Thousand US
dollars (US$50,000) and an
additional amount of Seven
Thousand US dollars (US$7,000) to
each child under the age of twenty-
one (21) but not exceeding four (4)
children, at the exchange rate
prevailing during the time of
payment.
Clearly, to be entitled for death compensation
benefits from the employer, the death of the seafarer
(1) must be work-related; and (2) must happen
during the term of the employment contract.
Under the 2000 POEA Amended Employment
Contract, work-related injury is defined as an
injury(ies) resulting in disability or death arising out of
and in the course of employment. Thus, there is a
need to show that the injury resulting to disability or
death must arise (1) out of employment, and (2) in
the course of employment.
As a matter of general proposition, an injury or
accident is said to arise "in the course of
employment" when it takes place within the period of
109 | P a g e

the employment, at a place where the employee
reasonably may be, and while he is fulfilling his duties
or is engaged in doing something incidental thereto.
AB Sy was hired as a seaman on board M/V Chekiang
on June 23, 2005 and was found dead on October 1,
2005, with drowning as the cause of death. Notably,
at the time of the accident, AB Sy was on shore leave
and there was no showing that he was doing an act in
relation to his duty as a seaman or engaged in the
performance of any act incidental thereto. It was not
also established that, at the time of the accident, he
was doing work which was ordered by his superior
ship officers to be done for the advancement of his
employer's interest. On the contrary, it was
established that he was on shore leave when he
drowned and because of the 20% alcohol found in his
urine upon autopsy of his body, it can be safely
presumed that he just came from a personal social
function which was not related at all to his job as a
seaman. Consequently, his death could not be
considered work-related to be compensable.
Petitioner argues that AB Sy's death happened in the
course of employment, because if not for
his employment he could be somewhere else and was
not on shore leave.
We are not persuaded. While AB Sy's employment
relationship with respondents did not stop but
continues to be in force even when he was on shore
leave, their contract clearly provides that it is not
enough that death occurred during the term of the
employment contract, but must be work-related to be
compensable. There is a need to show the connection
of AB Sy's death with the performance of his duty as
a seaman. As we found, AB Sy was not in the
performance of his duty as a seaman, but was doing
an act for his own personal benefit at the time of the
accident. The cause of AB Sy’s death at the time he
was on shore leave which was drowning, was not
brought about by a risk which was only peculiar to his
employment as a seaman.
WHERFORE, the petition is DENIED.
11. Nazareno vs. Maersk Filipinas Crewing Inc.
et al., G.R. No. 168703, Feb. 26, 2013 En
banc
Doctrine: “Under Section 20-B (3) of the 1996
POEA-SEC, it is mandatory for a claimant to be
examined by a company-designated physician within
three days from his repatriation. The unexplained
omission of this requirement will bar the filing of a
claim for disability benefits. However, in submitting
Labor Law Review Digests | Lourleth Lluz
himself to examination by the company-designated
physician, a claimant does not automatically bind
himself to the medical report issued by the company-
designated physician”
Facts: Petitioner Ramon G. Nazareno was hired by
Maersk Filipinas Crewing Inc. (MCI) as Chief Officer
for a period of six months.
On March 25, 2001,in Brazil , while petitioner was
working, he suddenly lost his balance and fell at a
height of two (2) meters. He was later examined in
the United States and was considered not fit for work
On August 8, 2001, at South Korea, petitioner was
brought to the hospital where he was treated and
given medication for his "frozen right shoulder”.
Consequently, petitioner was declared unfit to work
and was recommended to be signed off from duty.
On August 10, 2001, petitioner was repatriated to
Manila. He underwent a physical therapy program.
On October 31, 2001, Dr. Campana issued a Medical
Certificate stating that petitioner has been under their
medical care since August 13, 2001 and that after
treatment and physical therapy, petitioner was fit for
work as of October 21, 2001.
On December 27, 2001, petitioner consulted Dr.
Santiago a neurologist. Her Neurologic Summary
concluded that petitioner will no longer be able to
function as in his previous disease-free state and that
his condition would hamper him from operating as
chief officer of a ship.
Meanwhile, petitioner was also examined by Dr.
Vicaldo who diagnosed petitioner to be suffering from
Parkinson's disease and a frozen right shoulder
(secondary), with an "Impediment Grade VII
(41.8%). He concluded that petitioner is unfit to work
as a seafarer.
On the basis of the findings of his doctors, petitioner
sought payment of his disability benefits and medical
allowance from respondents, but was refused on the
contention that the disability of a seafarer can only be
assessed by the company-designated physician and
not by the seafarer's own doctor.
Issue: Whether or not, a seafarer can only be
assessed by the company designated physician.
110 | P a g e
 Labor Law Review Digests | Lourleth Lluz

submitted his explanation, he was handed his notice

Ruling: Yes. While it is the company-designated of dismissal on the ground of "poor performance";
physician who must declare that the seaman suffered and that complainant was dismissed effective 28 July
2003.
a permanent disability during employment, it does not
deprive the seafarer of his right to seek a second
Respondent Alfante submitted that he was dismissed
opinion.
without just cause. He also had a claim for the
alleged non-adjustment of longevity pay and burial
Under Section 20-B (3) of the 1996 POEA-SEC, it is
aid for the death of his parent.
mandatory for a claimant to be examined by a
company-designated physician within three days from
In case of Respondent Alfante, Petitioner averred in
his repatriation. The unexplained omission of this
defense that complainant was dismissed for "poor
requirement will bar the filing of a claim for disability
performance" after an evaluation by his superior, and
benefits. However, in submitting himself to
after being forewarned that complainant may be
examination by the company-designated physician, a
removed if there was no showing of improvement in
claimant does not automatically bind himself to the
his skills and knowledge on current technology.
medical report issued by the company-designated
physician
With respect to the alleged non-adjustment of
longevity pay and burial aid, Petitioner PJI pointed
The courts should be vigilant in their time-honored
out that it complies with the provisions of the CBA .
duty to protect labor, especially in cases of disability
Petitioner alleged that under the CBA, if the employee
or ailment. When applied to Filipino seamen, the
was already married, his/her parent will not anymore
perilous nature of their work is considered in
be considered as a "legal dependent" for the purpose
determining the proper benefits to be awarded. These
of this benefit. Alfante is not entitled to the burial aid
benefits, at the very least, should approximate the
because the legal dependent who died was his
risks they brave on board the vessel every single day.
parent.

12. Philippine Journalist Inc. vs. Journal

The Labor Arbiter and NLRC dismissed Alfante's Case
Employees Union et al., G.R. No. 192601,
for lack of Merit
June 3, 2013

Doctrine: The civil status of the employee as either
married or single is not the controlling consideration
in order that a person may qualify as the employee’s
legal dependent. What is rather decidedly controlling
is the fact that the spouse, child, or parent is actually
dependent for support upon the employee.
Facts: Respondent Michael L. Alfante alleged that he
started to work with Petitioner PIJ as computer
technician at Management Information System under
manager Neri Torrecampo on 16 May 2000; that on
15 July 2001, he was regularized receiving a monthly
salary of P9,070.00 plus other monetary benefits; that
sometime in 2001, Rico Pagkalinawan replaced
Torrecampo, which was opposed by complainant and
three other co-employees; that Pagkalinawan took
offense of their objection; that on 22 October 2002,
complainant Alfante received a memorandum from
Pagkalinawan regarding his excessive tardiness; that
on 10 June 2003, complainant Alfante received a
memorandum from Executive Vice-President Arnold
Banares, requiring him to explain his side on the
evaluation of his performance submitted by manager
Pagkalinawan; that one week after complainant
Alfante went to CA and his petition was PARTLY
GRANTED.
His dismissal was affirmed by CA. NLRC's decision
was MODIFIED ONLY insofar as the funeral or
bereavement aid is concerned, which was GRANTED,
but only after submission of conclusive proofs that the
deceased is a parent, either father or mother, of the
employees concerned, as well as the death certificate
to establish the fact of death of the deceased legal
dependent.
PJI alleged that hi deceased parent is not covered by
the term "legal dependent" under the law because he
was already married and that the persons covered by
the term "legal dependent" are only his spouse and
children.
Issue: Whether or not the term "legal dependent" in
connection with the grant of funeral and bereavement
aid to a regular employee under the CBA should

111 | P a g e

include the employee's parents even if the said
employee's civil status was married.
Ruling: The petition for review lacks merit. The
nature and force of a CBA are delineated in Honda
Phils., Inc. v. Samahan ng Malayang Manggagawa sa
Honda,20 thuswise:
A collective bargaining agreement (or CBA) refers to
the negotiated contract between a legitimate labor
organization and the employer concerning wages,
hours of work and all other terms and conditions of
employment in a bargaining unit. As in all contracts,
the parties in a CBA may establish such stipulations,
clauses, terms and conditions as they may deem
convenient provided these are not contrary to law,
morals, good customs, public order or public policy.
Thus, where the CBA is clear and unambiguous, it
becomes the law between the parties and compliance
therewith is mandated by the express policy of the
law.
Accordingly, the stipulations, clauses, terms and
conditions of the CBA, being the law between the
parties, must be complied with by them. The literal
meaning of the stipulations of the CBA, as with every
other contract, control if they are clear and leave no
doubt upon the intention of the contracting parties.22
Here, a conflict has arisen regarding the
interpretation of the term legal dependent in
connection with the grant of funeral and bereavement
aid to a regular employee under Section 4, Article XIII
of the CBA,23 which stipulates as follows:
SECTION 4. Funeral/Bereavement Aid. The COMPANY
agrees to grant a funeral/bereavement aid in the
following instances:
a. Death of a regular employee in line of
duty – P50,000
b. Death of a regular employee not in line of
duty – P40,000
c. Death of legal dependent of a regular
employee – P15,000. (Emphasis supplied)
Petitioner insists that notwithstanding the silence of
the CBA, the term legal dependent should follow the
definition of it under Republic Act (R.A.) No. 8282
(Social Security Law),24 so that in the case of a
married regular employee, his or her legal
Labor Law Review Digests | Lourleth Lluz
dependents include only his or her spouse and
children, and in the case of a single regular employee,
his or her legal dependents include only his or her
parents and siblings, 18 years old and below; and
that the term dependents has the same meaning as
beneficiaries as used in Section 5, Article XIII of the
CBA.
We cannot agree with petitioner’s insistence.
Social legislations contemporaneous with the
execution of the CBA have given a meaning to the
term legal dependent. First of all, Section 8(e) of the
Social Security Law provides that a dependent shall
be the following, namely: (a) the legal spouse entitled
by law to receive support from the member; (b) the
legitimate, legitimated, or legally adopted, and
illegitimate child who is unmarried, not gainfully
employed and has not reached 21 of age, or, if over
21 years of age, is congenitally or while still a minor
has been permanently incapacitated and incapable of
self-support, physically or mentally; and (c) the
parent who is receiving regular support from the
member. Secondly, Section 4(f) of R.A. No. 7875, as
amended by R.A. No. 9241,25 enumerates who are
the legal dependents, to wit: (a) the legitimate
spouse who is not a member; (b) the unmarried and
unemployed legitimate, legitimated, illegitimate,
acknowledged children as appearing in the birth
certificate; legally adopted or step-children below 21
years of age; (c) children who are 21 years old and
order but suffering from congenital disability, either
physical or mental, or any disability acquired that
renders them totally dependent on the member of our
support; and (d) the parents who are 60 years old or
older whose monthly income is below an amount to
be determined by the Philippine Health Insurance
Corporation in accordance with the guiding principles
set forth in Article I of R.A. No. 7875. And, thirdly,
Section 2(f) of Presidential Decree No. 1146, as
amended by R.A. No. 8291,dependent for support
upon the member or pensioner; (b) the legitimate,
legitimated, legally adopted child, including the
illegitimate child, who is unmarried, not gainfully
employed, not over the age of majority, or is over the
age of majority but incapacitated and incapable of
self-support due to a mental or physical defect
acquired prior to age of majority; and (c) the parents
dependent upon the member for support
It is clear from the statutory definitions of dependent
112 | P a g e

that the civil status of the employee as either married
or single is not the controlling consideration in order
that a person may qualify as the employee’s legal
dependent. What is rather decidedly controlling is the
fact that the spouse, child, or parent is actually
dependent for support upon the employee.
Considering that existing laws always form part of any
contract, and are deemed incorporated in each and
every contract, the definition of legal dependents
under the aforecited social legislations applies herein
in the absence of a contrary or different definition
mutually intended and adopted by the parties in the
CBA. Accordingly, the concurrence of a legitimate
spouse does not disqualify a child or a parent of the
employee from being a legal dependent provided
substantial evidence is adduced to prove the actual
dependency of the child or parent on the support of
the employee.
The coverage of the term legal dependent as used in
a stipulation in a collective bargaining agreement
(CBA) granting funeral or bereavement benefit to a
regular employee for the death of a legal dependent,
if the CBA is silent about it, is to be construed as
similar to the meaning that contemporaneous social
legislations have set. This is because the terms of
such social legislations are deemed incorporated in or
adopted by the CBA.
Pursuant to Article 100 of the Labor Code, petitioner
as the employer could not reduce, diminish,
discontinue or eliminate any benefit and supplement
being enjoyed by or granted to its employees. This
prohibition against the diminution of benefits is
founded on the constitutional mandate to protect the
rights of workers and to promote their welfare and to
afford labor full protection.
13. Mitsubishi Motors Phils Salaried
Employees Union vs. Mitsubishi Motors
Phils Corp., G.R. No. 175773, June 17,
2013
Doctrine: “The CBA constitutes a contract between
the parties; hence, should be strictly construed for
the purpose of limiting the amount of the employer’s
liability.”
Facts: The CBA of the parties provides that the
company shall shoulder the hospitalization expenses
Labor Law Review Digests | Lourleth Lluz
of the dependents of covered employees subject to
certain limitations and restrictions. The covered
employees pay part of the insurance through a
monthly deduction. When some of the employees
claimed for the benefits under the insurance, the
company only paid a portion refusing to pay the
portion of hospital expenses already shouldered by
the dependent’s own health insurance hence, the
petition.
Issue: Are the covered employees entitled to the
whole and undiminished amount of said hospital
expenses under the collateral source rule?
Ruling: No. The collateral source is applied so that
the wrongdoer should not benefit from the
expenditures made by the injured party. It does not
find application in no-fault insurances. Here, the
company is not a no- fault insurer hence, it cannot be
obliged to pay the hospitalization expenses of its
dependents which had already been paid by separate
health insurance providers of said dependents.
Further, the conditions set forth in the CBA provision
indicate an intention to limit the company’s liability to
actual expenses incurred by the employees’
dependents, that is, excluding the amounts paid by
dependent’s other health insurance providers as
evidenced by a condition that payment should be
direct to the hospital and doctor. It is well to note at
this point that the CBA constitutes a contract between
the parties and as such, it should be strictly construed
for the purpose of limiting the amount of the
employer’s liability.
14. Philman Marine Agency Inc. et al., vs.
Cabanban G.R. No. 186509, July 28, 2013
Doctrine: It is the company-designated physician
who primarily assesses the degree of the seafarer’s
disability, however, he should make the declaration or
determination within 120 days, otherwise, the law
considers the seafarer’s disability as total and
permanent and the latter shall be entitled to disability
benefits. Should the seafarer require further medical
treatment, the period granted to the company-
designated physician to make the declaration may be
extended, but not to exceed 240 days.
Facts: Armando entered into a contract of
employment with DOHLE, through its local agent
PTCI. Armando underwent the requisite pre-
113 | P a g e

employment medical examination and was found fit
for sea service. While on board, Armando felt dizzy
and complained of chest pain. He was immediately
brought to a port clinic, there he was diagnosed with
Microvascular Unstable Angina Class III B.
Armando was recommended for Repatriation on
Medical ground. Upon his arrival in the Philippines, he
proceeded to PTCI’s company designated physician
and was then declared Armando “fit to work” after 92
days.
Despite the declaration, Armando demanded payment
of permanent disability benefits under the POEA-SEC.
The petitioners did not heed Armando’s demand,
prompting him to file a claim for injury/illness
compensation benefit under a disability grade of 7,
according to the POEA- SEC.
Issue: Whether or not Armando is entitled to total
and permanent disability benefits on account of his
medical condition?
Ruling: No. Section 20-B of the POEA-SEC laid out
two primary conditions which the seafarer must meet
in order for him to claim disability benefits – that the
injury or illness is work-related and that it occurred
during the term of the contract. When read together
with Articles 191 to 193, of the Labor Code and
Section 2, Rule X of the IRR, Section 20-B of the
POEA-SEC shows that it is the company-designated
physician who primarily assesses the degree of the
seafarer’s disability. Upon the seafarer’s repatriation
for medical treatment, and during the course of such
treatment, the seafarer is under total temporary
disability and receives medical allowance until the
company-designated physician declares his fitness to
work resumption or determines the degree of the
seafarer’s permanent disability. The company-
designated physician should, however, make the
declaration or determination within 120 days,
otherwise, the law considers the seafarer’s disability
as total and permanent and the latter shall be entitled
to disability benefits. Should the seafarer require
further medical treatment, the period granted to the
company-designated physician to make the
declaration may be extended, but not to exceed 240
days. At anytime during this latter period, the
company-designated physician may make the
declaration or determination: either the seafarer will
no longer be entitled to any sickness allowance as he
Labor Law Review Digests | Lourleth Lluz
is already declared fit to work, or he shall be entitled
to receive disability benefits depending on the degree
of his permanent disability.
The petitioners’ designated physician declared
Armando fit for sea service 92 days from the time he
disembarked from the vessel. While Armando was
initially under temporary total disability, he was
declared him fit to work well within the 120-day mark.
15. Bartolome vs. Social Security System, GR
No. 192531, November 12, 2014
Doctrines: “Legitimate parents pertain to those who
exercise parental authority over the employee
enrolled under the Employees Compensation
Program.” “Even though parental authority is severed
by virtue of adoption, the ties between the adoptee
and the biological parents are not entirely
eliminated.”
Facts: John Colcol was employed as electrician by
Scanmar Maritime Services on board the vessel
Maersk Danville since February 2008 so he was
enrolled under the government’s Employees
Compensation Program (ECP).
On June 2, 2008, steel plates fell on John while on
board causing his untimely death the next day. Being
unmarried, his biological mother Bernardita
Bartolome, filed a claim for death benefits under PD
626 with SSS in La Union. However, SSS La Union
denied the claim since she was not anymore
considered as his parent since John was legally
adopted by Cornelio Colcol.
Upon appeal, the Employees’ Compensation
Commission (ECC) affirmed the SSS decision on the
ground that she was no longer the primary
beneficiary. The MR was likewise denied.
Issue: Are the biological parents of the covered, but
legally adopted, employee considered secondary
beneficiaries and, thus, entitled, in appropriate cases,
to receive the benefits under the ECP?
Ruling: Petitioner qualifies as John’s dependent
parent. Nowhere in the law nor in the rules does it
say that "legitimate parents" pertain to those who
exercise parental authority over the employee
114 | P a g e

enrolled under the ECP. It was only in the assailed
Decision wherein such qualification was made.
When Cornelio died less than 3 years after the
adoption decree, John was still a minor (4 years old).
In such case, parental authority should be deemed to
have reverted in favor of the biological parents. Even
though parental authority is severed by virtue of
adoption, the ties between the adoptee and the
biological parents are not entirely eliminated.
Biological parents retain their rights of succession to
the estate of their child who was the subject of
adoption. While the benefits arising from the death of
an SSS covered employee do not form part of the
estate of the adopted child, the pertinent provision on
legal or intestate succession at least reveals the policy
on the rights of the biological parents and those by
adoption vis-à-vis the right to receive benefits from
the adopted. Thus, Cornelio’s death at the time of
John’s minority resulted in the restoration of
petitioner’s parental authority over the adopted child.
Moreover, John, in his SSS application, named
petitioner as one of his beneficiaries for his benefits.
Since the parent by adoption already died, then the
death benefits under the Employees' Compensation
Program shall accrue solely to herein petitioner,
John's sole remaining beneficiary.
16. Austria vs. Crystal Shipping GR No.
206256, Feb. 24, 2016
Doctrine: “For disabilities to be compensable under
Section 20(B) of the POEA-SEC, two elements must
concur, namely: (1) the injury or illness must be
work-related; and (2) the work-related injury or
illness must have existed during the term of the
seafarer’s employment contract.; The pre-existence
of the illness does not irrevocably bar compensability
because the disability laws still grant the same
provided seaferer’s working conditions bear a causal
connection with the employee’s illness.”
Facts: Crystal Shipping is a foreign company
engaged in the maritime industry. Larvik on the other
hand is Crystal’s manning agent in the Philippines.
Albert was employed as Chief Cook aboard one of
Crystal shipping’s vessles, M/V Yara Gas. The parties
executed a CBA covering Albert’s employment
contract.
Labor Law Review Digests | Lourleth Lluz
While on board the vessel, Albert experienced heavy
coughs and recurring throat irritations. He was
eventually diagnosed with Bronchitis while at a
stopover at Germany. His symptoms however
persisted. About a year later, he was diagnosed with
Dilated Cardiomypoathy, a congenital disease which
weakens the heart. The report finds that the harsh
working conditions exacerbated said congenital
disease. Due to this illness, Albert was repatriated.
Albert then claimed compensation under the CBA. He
is claiming 110,000 USD plus damages. The
employers, for their part, argue that Albert is not
entitled to disability benefits under the CBA because
his illness, Dilated Cardiomyopathy, is not work-
related since it is congenital in nature.
Both the LA and the NRLC ruled in favor of Albert and
awarded him disability benefits. The CA on appeal,
however, reversed the NLRC’s decision and agreed
with the employers ruling that Albert’s illness cannot
be considered “work-related” due to the fact that it is
congenital.
Issue: Whether or not Albert’s Dilated
Cardiomyopathy, a congenital illness by nature, may
satisfy the requisite of “work-relatedness” thereby
making it compensable.
Ruling: Yes, Albert’s illness satisfies the requisite of
“work-relatedness”.
For disabilities to be compensable under Section
20(B) of the POEA-SEC, two elements must concur,
namely: (1) the injury or illness must be work-related;
and (2) the work-related injury or illness must have
existed during the term of the seafarer’s employment
contract.
To this end, it is important to note that the pre-
existence of the illness does not irrevocably bar
compensability because the disability laws still grant
the same provided seaferer’s working conditions bear
a causal connection with the employee’s illness.
Although the employer is not the insurer of the health
of his employees, he takes them as he finds them and
assumes the risk of liability.
In the present case, due to Albert’s employment as
Chief Cook, he was constantly exposed to heat
naturally causing exhaustion, which in turn increased
115 | P a g e

the burden on his heart and interfered with the
normal functioning of his cardio-vascular system.
Since his employment contributed
17. Dizon vs. Naess Shipping Phils GR No.
201834, June 1, 2016
Doctrine: Entitlement of seamen on overseas work
to disability benefits is a matter governed, not only by
medical findings, but by law and by contract
Facts: Since 1976, respondents Naess Shipping
Phils., Inc. and DOLE UK (Ltd.) hired petitioner
Andres L. Dizon as cook for its various vessels until
the termination of his contract in 2007.|Dizon
disembarked after completing his contract on
February 2007. He underwent pre-employment
medical examination in March 2007 and was declared
unfit for sea duties due to uncontrolled hypertension
and coronary artery disease as certified by the
doctors of the Marine Medical and Laboratory
Clinic (MMLC).
Dizon filed a complaint against respondents for
payment of total and permanent disability benefits,
sickness allowance, reimbursement of medical,
hospital and transportation expenses, moral damages,
attorney's fees and interest before the Labor Arbiter.
He alleged that he incurred his illness while on board
the respondents' vessel and that his working
conditions on board were characterized by stress,
heavy work load, and over fatigue. He also asserted
that he disclosed his hypertension prior to his last
contract in 2006, but was certified fit for duty for the
nine-month employment contract.
Respondents disavowed liability for Dizon's illness
maintaining that he finished and completed his
contract on board their vessel Dole Colombia without
any incident, and that his sickness was not work-
related. 
Issue: Whether or not Dizon is entitled to disability
benefits.
Ruling: No. Entitlement of seamen on overseas work
to disability benefits is a matter governed, not only by
medical findings, but by law and by contract. For the
seaman's claim to prosper, however, it is mandatory
that he should be examined by a company-designated
physician within three days from his repatriation.
Failure to comply with this mandatory reporting
requirement without justifiable cause shall result in
Labor Law Review Digests | Lourleth Lluz
forfeiture of the right to claim the compensation and
disability benefits provided under the  Philippine
Overseas Employment Administration-Standard
Employment Contract(POEA-SEC).
Reporting the illness or injury within three days from
repatriation fairly makes it easier for a physician to
determine the cause of the illness or injury.
Ascertaining the real cause of the illness or injury
beyond the period may prove difficult. Furthermore,
for disability to be compensable under Section 20 (B)
of the 2000 POEA-SEC, two elements must concur:
(1) the injury or illness must be work-related; and (2)
the work-related injury or illness must have existed
during the term of the seafarer's employment
contract.
POEA-SEC expressly considers Cardiovascular
Disease as an occupational disease if it was
contracted under any of the following instances, to
wit:
a. If the heart disease was known to
have been present during
employment, there must proof that
an acute exacerbation was clearly
precipitated by the unusual strain by
reasons of the nature of his work.
b. The strain of work that brings about
an acute attack must be sufficient
severity and must be followed within
24 hours by the clinical signs of
cardiac insult to constitute causal
relationship.
c. If a person who was apparently
asymptomatic before being
subjected to strain at work showed
signs and symptoms of cardiac injury
during the performance of his work
and such symptoms and signs
persisted, it is reasonable to claim a
causal relationship.
As can be gleaned from the above provision, it
is incumbent upon the seafarer to show that he
developed the cardiovascular disease under any of
the three conditions to constitute the same as an
occupational disease for which a seafarer may claim
compensation. It is crucial that Dizon present
concrete proof showing that he indeed acquired or
contracted the illness which resulted in his disability
during the term of his employment contract.
18. Haveria vs. SSS et al., GR No. 181154,
August 22, 2018
116 | P a g e

Facts
Haveria was employed with the SSS from May 1958
to July 1984. During his employment, he became a
member of, and was elected as an officer/treasurer of
the SSS Employees' Association (SSSEA). He was
reported by the SSSEA as an employee for SSS
coverage and Haveria's membership was approved.
Thereafter, the SSSEA remitted his monthly
contributions from May 1966 to December 1981.
After his employment with the SSS, Haveria was
employed with private entities, Stop Light Diners from
July 1989 to December 1996 and then with First Ivory
Pharma Trade from January to March 1997. He
earned a total of 281 monthly contributions. Haveria
reached retirement age (60 years old) on August 8,
1997. During his coverage under the SSS, Haveria
was able to obtain salary loans, a housing loan in
1968, partial disability benefits in 1995, and
retirement benefits from August 1997 until July 2002.
In June 2002, Haveria received a letter from the SSS
which ordered the suspension of Haveria's retirement
benefits. The letter cited a legal opinion in a separate
claim for SSS benefits of Genaro Ledesma and
Filemon Pahuyo rendered by the SSS Legal and
Collection Group. Similar to Haveria, Ledesma and
Pahuyo were former employees of the SSS and
officers of the SSSEA. The SSS had denied the claim
of Ledesma and Pahuyo for their pension benefits.
The SSS held that they were not entitled to any
benefits under the Social Security Act of 1997 or
Republic Act (R.A.) No. 8282 as there was no
employment relationship between the two and the
SSSEA.
This prompted Haveria to file a letter-petition with the
Social Security Commission (SSC) for the declaration
of validity of his SSS membership and restoration of
his monthly pension. He argued that his monthly
contributions to the SSS were valid as he was an
employee of the SSSEA. He also averred that the SSS
had registered him as a member and accepted his
monthly contributions. Assuming that his registration
was erroneous, he held that he is entitled to
retirement pension on grounds of equity and
estoppel.
Labor Law Review Digests | Lourleth Lluz
The SSS contends that the SSSEA is not an employer
but a mere labor association within the SSS. It does
not undertake any kind of business or service. It
merely acts as a representative of the members of
the association. Haveria's relationship with the SSSEA
did not pass the four-fold test. He was not hired by
SSSEA but merely elected by its members as an
officer/treasurer. He was not receiving a salary but
merely an honorarium. Moreover, Haveria was
employed with the SSS. He could not have been an
employee of the SSSEA at the same time as he was a
full-time government employee.
Issue
Whether Haveria's inclusion as a compulsory member
of the SSS was valid and consequently, whether he is
entitled to receive monthly pensions.
Ruling
R.A. No. 1161 was amended by R.A. No. 8282 in
1997. Haveria was registered with the SSS in May
1966 when R.A. No. 1161 was still effective.
Under R.A. No. 1161, there are two kinds of
coverage: compulsory coverage and voluntary
coverage. compulsory members are those employees
in the private sector between the ages of 18 to 60
years old whose employer is required to register
under the SSS. Voluntary coverage applies to
employees of private employers who volunteer to be
members although not required by the law, and
employees of government agencies and corporations,
and any individual employed by a private entity not
subject to compulsory membership.
For compulsory members, both the employer and
employee contribute to the employee's monthly
premium contributions. Voluntary members pay for
their own monthly premiums; as such, they are
required to pay twice the amount of the employee's
contribution prescribed in Section 19 of R.A. No.
1161.
Haveria was reported by the SSSEA as an employee,
and he claims coverage as a compulsory member of
the SSS. As correctly held by the SSC and CA, the
SSSEA, a labor organization, cannot be considered an
employer under the law. The Labor Code expressly
excludes labor organizations from the definition of an
117 | P a g e
 Labor Law Review Digests | Lourleth Lluz

employer, except when they directly hire employees

to render services for the union or association.

Thus, Haveria's compulsory coverage with the SSS

validly started only in 1989 when he was reported as
an employee of a private employer, Stop Light Diners
until his retirement with his second private employer,
First Ivory Pharma Trade, Inc. in 1997.

The Court agrees with the ruling of the SSC, that, in

the interest of justice and equity, Haveria's
contributions remitted by the SSSEA shall be
considered as voluntary contributions so that his
contributions can reach the minimum 120 monthly
contributions for qualification to a retirement pension.
The remainder shall be returned to Haveria, subject
to offsetting of the pensions paid to him in excess, if
any. The SSS shall make a recomputation of all paid
monthly pensions of Haveria and make necessary
adjustments thereto.

WHEREFORE, The SSS is ORDERED to

(1) CREDIT Haveria with a total of 120 monthly

contributions;

(2) RECOMPUTE all paid monthly pensions in

accordance with No. 1; and

(3) RETURN the remainder of 167 monthly premium

contributions, subject to offsetting against the
monthly pensions paid to him in excess of what he is
entitled to, if any, in accordance with the computation
in No. 2.

---Nothing Follows--

118 | P a g e
Labor Law Review Digests | Lourleth Lluz

119 | P a g e