Dennis Jay A.

Paras
JD-2 Block-C
Labor Law 1

Joeb M. Aliviado vs. Procter & Gamble Philippines, Inc.

G.R. No. 160506
March 9, 2010

Facts:

Herein petitioners (Aliviado, et. al.) were contractual workers that were employed by
respondent Procter & Gamble Phil., Inc. (P&G for brevity) from 1982, or as late as 1991 to
May 1993. They signed a five-month contract with either co-respondent Promm-Gem or
SAPS and were assigned as merchandisers in different supermarkets, stores and outlets where
they handled all the products of P&G. Herein petitioners were considered by Promm-Gem
and SAPS as part of those erring merchandisers for reasons such as habitual absenteeism,
dishonesty or changing day-off without prior notice. They were warned by the latter that their
contracts will not be renewed anymore.

Herein petitioners insisted that they are employees of P&G and were recruited by salesmen of
the same company and were engaged to undertake merchandising chores for P&G long
before Promm-Gem and SAPS had begun their operation. They also claimed that they were
made to sign a contract with either of the two agencies that were created by respondent P&G,
pursuant to its re-alignment program. They further averred that Promm-Gem and SAPS are
labor-only contractors and that P&G initiated their termination via letter to SAPS on
February 24, 1993.

On the other hand, respondent P&G averred that there exists no employer-employee
relationship with the petitioners, as it was Promm-Gem and SAPS who were the ones who
engaged their services, paid their salaries, had the prerogative to dismiss them and had the
control over the conduct of their work. Also, P&G argued that the act of outsourcing its
activities to any contractor, regardless if such activities is peripheral or core in nature is valid
under the Labor Code, as it did not define or limit such services that can be outsourced.

In December 19, 1991, herein petitioners filed a complaint against P&G before the LA for
regularization, service incentive leave pay (SIL), subsequent dismissal and other benefits
with damages. The LA ruled in favor of respondent P&G, which ruled to dismiss the petition
for lack of merit and the non-existence of the employer-employee relationship. Aggrieved by
the LA’s decision, the petitioners appealed before the NLRC. In its ruling, the NLRC
affirmed the LA’s decision. Petitioners filed a petition for certiorari under Rule 65 with the
CA. The CA ruled to affirm the decision of the NLRC with modification, ordering for the
award of SIL to the petitioners. Herein petitioners filed a motion for reconsideration but the
same was denied.

Hence, this petition.

Issues:
 (1) Whether or not P&G is the employer of petitioners
(2) Whether or not petitioners were illegally dismissed.
(3) Whether or not petitioners are entitled for payment of actual, moral and exemplary
damages

Ruling:

(1) The petitioners who signed the contract with Promm-Gem are not employees of P&G. As
a legitimate independent contractor, Promm-Gem was the one who exercised control over
the conduct of the employees. Thus, petitioners who are under Promm-Gem were not
employees of P&G. However, those petitioners who signed a contract with SAPS are
considered as the employees of respondent P&G, as it was found out that SAPS is a
labor-only contractor. Where labor-only contracting exists, the Labor Code itself
establishes an employer-employee relationship between the employer and the employees
of the labor-only contractor." The statute establishes this 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. Thus, petitioners who are under SAPS are considered as employees of P&G.

(2) While Promm-Gem had complied with the procedural aspect of due process in
terminating the employment of petitioners-employees, i.e., giving two notices and in
between such notices, an opportunity for the employees to answer and rebut the charges
against them, it failed to comply with the substantive aspect of due process as the acts
complained of neither constitute serious misconduct nor breach of trust. Hence, the
dismissal is illegal.rNeither SAPS nor P&G dispute the existence of these circumstances.
Parenthetically, unlike Promm-Gem which dismissed its employees for grave misconduct
and breach of trust due to disloyalty, SAPS dismissed its employees upon the initiation of
P&G. It is evident that SAPS does not carry on its own business because the termination
of its contract with P&G automatically meant for it also the termination of its employees
services. It is obvious from its act that SAPS had no other clients and had no intention of
seeking other clients in order to further its merchandising business. From all indications
SAPS, existed to cater solely to the need of P&G for the supply of employees in the
latter’s merchandising concerns only. Under the circumstances prevailing in the instant
case, we cannot consider SAPS as an independent contractor. In the instant case, P&G
failed to discharge the burden of proving the legality and validity of the dismissals of
those petitioners who are considered its employees. Hence, the dismissals necessarily
were not justified and are therefore illegal.

(3) With regard to the employees of Promm-Gem, there being no evidence of bad faith, fraud
or any oppressive act on the part of the latter, we find no support for the award of
damages. As for P&G, the records show that it dismissed its employees through SAPS in
a manner oppressive to labor. The sudden and peremptory barring of the concerned
petitioners from work, and from admission to the work place, after just a one-day verbal
 notice, and for no valid cause bellows oppression and utter disregard of the right to due
process of the concerned petitioners. Hence, an award of moral damages is called for.

Star Paper Corporation vs. Ronaldo Simbol, Wilfreda Comia and Lorna
Estrella
G.R. No. 164774            
April 12, 2006

Facts:

Herein respondents were former employees of respondent Star Paper Corporation (Star Paper
for brevity). Due to a company policy which prohibits the marriage between co-workers for
the protection of the company’s interests, respondents Simbol and Comia had resigned from
their jobs pursuant to the condition that one of the spouses who are workers of the company
should voluntarily resign. Respondent Simbol is married to Alma Dayrit, while Wilfreda is
married to her co-employee, Howard Comia. Estrella on the other hand, was engaged in a
relationship with Zuniga, a married man, which resulted to her pregnancy. Simbol and Comia
were said to have resigned voluntarily, while Estrella was terminated due to immoral
conduct.

However, Simbol and Comia averred that they did not resign in their own volition, as they
were allegedly compelled to resign in view of an illegal company policy. As to respondent
Estrella, she was nonetheless dismissed by the company and was forced to submit a letter of
resignation in exchange for her thirteenth month pay, as she was in dire need of cash during
that time. Respondents later filed a complaint before the LA for unfair labor practice,
constructive dismissal, separation pay and attorney’s fees. They averred that the
aforementioned company policy is illegal and contravenes Article 136 of the Labor Code.
They also contended that they were dismissed due to their union membership.

In its ruling, the LA ruled in favor of herein petitioner, dismissing the respondents’ petition
for lack of merit. Upon appeal to the NLRC, the commission affirmed the ruling of the LA in
January 11, 2002. Aggrieved, the respondents appealed with the CA, which ruled in their
favor. The CA ruled that herein respondents were illegally dismissed and that they are
entitled for reinstatement and other money claims.

Hence, this appeal.

Issue:

(1) Whether or not the policy of the employer banning spouses from working in the same
company violates the rights of the employee under the Constitution and the Labor
Code.
Ruling:

Yes. Petitioners’ sole contention that "the company did not just want to have two (2) or more
of its employees related between the third degree by affinity and/or consanguinity” is lame.
That the second paragraph was meant to give teeth to the first paragraph of the questioned
rule is evidently not the valid reasonable business necessity required by the law.

It is significant to note that in the case at bar, respondents were hired after they were found fit
for the job, but were asked to resign when they married a co-employee. Petitioners failed to
show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then
an employee of the Repacking Section, could be detrimental to its business operations.
Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia,
then a Production Helper in the Selecting Department, who married Howard Comia, then a
helper in the cutter-machine. The policy is premised on the mere fear that employees married
to each other will be less efficient. If we uphold the questioned rule without valid
justification, the employer can create policies based on an unproven presumption of a
perceived danger at the expense of an employee’s right to security of tenure.

Petitioners contend that their policy will apply only when one employee marries a co-
employee, but they are free to marry persons other than co-employees. The questioned policy
may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect
and under the disparate impact theory, the only way it could pass judicial scrutiny is a
showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The
failure of petitioners to prove a legitimate business concern in imposing the questioned policy
cannot prejudice the employee’s right to be free from arbitrary discrimination based upon
stereotypes of married persons working together in one company.

The contention of petitioners that Estrella was pressured to resign because she got
impregnated by a married man and she could not stand being looked upon or talked about as
immoral is incredulous. If she really wanted to avoid embarrassment and humiliation, she
would not have gone back to work at all. Nor would she have filed a suit for illegal dismissal
and pleaded for reinstatement. We have held that in voluntary resignation, the employee is
compelled by personal reason(s) to dissociate himself from employment. It is done with the
intention of relinquishing an office, accompanied by the act of abandonment. Thus, it is
illogical for Estrella to resign and then file a complaint for illegal dismissal. Given the lack of
sufficient evidence on the part of petitioners that the resignation was voluntary, Estrella’s
dismissal is declared illegal.

Decision: IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No.
73477 dated August 3, 2004 is AFFIRMED.
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.
TECSON vs. GLAXO WELLCOME PHILIPPINES, INC
G.R. No. 162994            
September 17, 2004

Facts:

Herein private petitioner (Tecson) was a medical representative of herein respondent Glaxo
Wellcome Philippines Inc. (Glaxo Wellcome for brevity) who was assigned at the Camarines
Sur-Camarines Norte sales area. During his employement with herein respondent, he met and
fell in love with Bettsy, a Branch Coordinator for Albay of Astra Pharmaceuticals (Astra),
which is a business rival of respondent Glaxo Wellcome. Tecson married Bettsy in 1998,
despite the repeated warnings of the District Manager regarding the conflict of interest which
his relationship with Bettsy might engender. In January 1999, petitioner Tecson was informed
by his superiors that his marriage with Bettsy gave rise to a conflict of interest.

His superiors reminded him that he and Bettsy should choose between themselves as to who
should resign from one’s job. Tecson explained that due to the planned merger of Astra with
Zeneca, Bettsy had taken advantage of the attractive redundancy package of her company.
Despite the news, Tecson’s superiors still proceeded to withdrew him from his current sales
area, and ordered him to be transferred to the Butuan City-Surigao City- Agusan del Norte
sales area, to which he disagreed. Tecson was subjected to a grievance committee hearing by
the respondent company. The order for his transfer was decided by the Grievance Committee.
He defied the order and continued to be a medical representative of respondent company for
the Camarines Sur-Camarines Norte sales area. During the pendency of the grievance
proceedings, Tecson was paid his salary, but was not issued samples of products which were
competing with similar products manufactured by Astra. He was also not included in product
conferences regarding such products.

Because of the failure to resolve the issue in the grievance committee, petitioner sought the
help of the National Conciliation and Mediation Board (NCMB). It rendered a decision in
favor of herein respondent Glaxo Wellcome. It ruled that the Glaxo’s policy in question is
valid and had affirmed Tecson’s transfer. Aggrieved, petitioner Tecson filed a petition for
review with the Court of Appeals. The CA affirmed the NCMB’s decision.

Hence, this petition.

Issue:

Whether or not Glaxo Wellcome’s policy prohibiting its employees from marrying
employees of any competitor company is valid.
Ruling:

Yes. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies
and other confidential programs and information from competitors, especially so that it and
Astra are rival companies in the highly competitive pharmaceutical industry. The prohibition
against personal or marital relationships with employees of competitor companies upon
Glaxo’s employees is reasonable under the circumstances because relationships of that nature
might compromise the interests of the company. In laying down the assailed company policy,
Glaxo only aims to protect its interests against the possibility that a competitor company will
gain access to its secrets and procedures.

That Glaxo possesses the right to protect its economic interests cannot be denied. No less
than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to
protect its right to reasonable returns on investments and to expansion and growth.20 Indeed,
while our laws endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be decided in favor of the
workers. The law also recognizes that management has rights which are also entitled to
respect and enforcement in the interest of fair play.

Notably, the Court did not terminate Tecson from employment but only reassigned him to
another area where his home province, Agusan del Sur, was included. In effecting Tecson’s
transfer, Glaxo even considered the welfare of Tecson’s family. Clearly, the foregoing dispels
any suspicion of unfairness and bad faith on the part of Glaxo.

Decision:

WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners.SO

ORDERED.
Remington Industrial Sales Corporation vs. Erlinda Castaneda
G.R. Nos. 169295-96            
November 20, 2006

Facts:

Herein respondent Castaneda was employed as a company cook by herein petitioner

Remington Industrial Sales Corp. (Remington for brevity), a company engaged in the
production of hardware materials from August 1983 up to her dismissal from service in
January 15, 1998. During her employment with Remington, Castaneda averred that she
regularly received a monthly salary of Php 4,000.00 and had worked for 6 days a week, from
as early as 6am up to 5:30pm or up until the employees had vacated the company’s premises.
She also averred that she is responsible for ensuring the availability of the lunch and snacks
of the employees.

At that time, Remington transferred their base of operations to a new site in Edsa, Caloocan
City. When respondent Castaneda reported for work in Remington’s new location on January
15, 1998, she was informed that the company does not need her services anymore.
Aggrieved, Castaneda filed a complaint for illegal dismissal, underpayment of wages, non-
payment of overtime services, non-payment of service incentive leave pay and non-payment
of 13th month pay against Remington on March 2, 1998.

In its statement, petitioner Remington maintained that Castaneda was not considered as a
regular employee as she was a domestic helper. It also argued that Castaneda’s service has
nothing to do with the functions of Remington in producing hardware supplies. It also
contended the claims of Castaneda for working 8 hours a day, as she was allegedly free to
read magazines, take a nap and roam around the premises of Remington when she is not
cooking. Lastly, petitioner Remington averred that it was Castaneda who refused to report on
its new location at Caloocan City.

In its January 19, 1999 decision, the LA ruled in favor of Remington and dismissed the
complaint of Castaneda, stating that she was a domestic helper under the personal service of
Mr. Antonio Tan, the Managing Director of Remington. However, this decision was reversed
by the NLRC, which ruled in favor of Castaneda. The NLRC ruled that she is not a domestic
helper of Tan and that her work as cook had solely benefitted the employees of the company.
The NLRC issued a second ruling which granted the award of Castaneda’s money claims to
the tune of Php 62, 437.50.00 against herein petitioner Remington.

Aggrieved, Remington filed a Petition for Certiorari under Rule 65 of the Rules of Court
before the Court of Appeals for the decisions of the NLRC. In its ruling, the CA dismissed
the petition for lack of merit, stating that the assailed decisions are without grave abuse of
discretion. It also affirmed the rulings of the NLRC.
Hence, this petition for review.

Issues:

(1) Whether or not Castaneda was Remington’s regular employee or domestic helper
(2) Whether or not the petitioner is guilty of illegal dismissal.

Ruling:

(1) Castaneda is Remington’s regular employee. In the case at bar, the petitioner itself
admits in its position paper that respondent worked at the company premises and her
duty was to cook and prepare its employees’ lunch and merienda. Clearly, the situs, as
well as the nature of respondent’s work as a cook, who caters not only to the needs of
Mr. Tan and his family but also to that of the petitioner’s employees, makes her fall
squarely within the definition of a regular employee under the doctrine enunciated in
the Apex Mining case. That she works within company premises, and that she does
not cater exclusively to the personal comfort of Mr. Tan and his family, is reflective
of the existence of the petitioner’s right of control over her functions, which is the
primary indicator of the existence of an employer-employee relationship.

(2) Yes. As a regular employee, respondent enjoys the right to security of tenure under
Article 279 of the Labor Code and may only be dismissed for a just or
authorized cause, otherwise the dismissal becomes illegal and the employee becomes
entitled to reinstatement and full backwages computed from the time compensation
was withheld up to the time of actual reinstatement. Abandonment is the deliberate
and unjustified refusal of an employee to resume his employment. It is a form of
neglect of duty; hence, a just cause for termination of employment by the employer
under Article 282 of the Labor Code, which enumerates the just causes for
termination by the employer. For a valid finding of abandonment, these two factors
should be present: (1) the failure to report for work or absence without valid or
justifiable reason; and (2) a clear intention to sever employer-employee relationship,
with the second as the more determinative factor which is manifested by overt acts
from which it may be deduced that the employee has no more intention to work. The
intent to discontinue the employment must be shown by clear proof that it was
deliberate and unjustified. This, the petitioner failed to do in the case at bar.

Decision:

IN VIEW WHEREOF, the petition is DENIED for lack of merit. The assailed Decision dated
January 31, 2005, and the Resolution dated August 11, 2005, of the Court of Appeals in CA-
G.R. SP Nos. 64577 and 68477 are AFFIRMED. Costs against petitioner.

SO ORDERED.