Article 4. Construction in favor of labor .

All doubts in the implementation and interpretation of the provisions of this

Code, including its implementing rules and regulations, shall be resolved in favor of labor.

IBAA Employees Union vs. Inchiong

GR L52415, 23 October 1984 (132 SCRA 663)

Facts:

On June 20, 1975, the Union filed a complaint against the bank for the payment of holiday pay before the Department of
Labor, National Labor Relations Commission, Regional Office IV in Manila. Conciliation having failed, and upon the request of both
parties, the case was certified for arbitration on 7 July 1975. On 25 August 1975, Labor Arbiter Ricarte T. Soriano rendered a
decision in the above-entitled case, granting petitioner’s complaint for payment of holiday pay. Respondent bank did not appeal from
the said decision. Instead, it complied with the order of the Labor Arbiter by paying their holiday pay up to and including January
1976.

On 16 December 1975, Presidential Decree 850 was promulgated amending, among others, the provisions of the Labor
Code on the right to holiday pay. Accordingly, on 16 February 1976, by authority of Article 5 of the same Code, the Department of
Labor (now Ministry of Labor) promulgated the rules and regulations for the implementation of holidays with pay. The controversial
section thereof reads as “Status of employees paid by the month. — Employees who are uniformly paid by the month, irrespective
of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be presumed
to be paid for all days in the month whether worked or not.” On 23 April 1976, Policy Instruction 9 was issued by the then Secretary
of Labor (now Minister) interpreting the above-quoted rule.The bank, by reason of the ruling laid down by the rule implementing
Article 94 of the Labor Code and by Policy Instruction 9, stopped the payment of holiday pay to an its employees.

On 30 August 1976, the Union filed a motion for a writ of execution to enforce the arbiter’s decision of 25 August 1975,
which the bank opposed. On 18 October 1976, the Labor Arbiter, instead of issuing a writ of execution, issued an order enjoining the
bank to continue paying its employees their regular holiday pay. On 17 November 1976, the bank appealed from the order of the
Labor Arbiter to the NLRC. On 20 June 1978, the NLRC promulgated its resolution en banc dismissing the bank’s appeal, and
ordering the issuance of the proper writ of execution. On 21 February 1979, the bank filed with the Office of the Minister of Labor a
motion for reconsideration/appeal with urgent prayer to stay execution. On 13 August 1979,s the NLRC issued an order directing the
Chief of Research and Information of the Commission to compute the holiday pay of the IBAA employees from April 1976 to the
present in accordance with the Labor Arbiter dated 25 August 1975. On 10 November 1979, the Office of the Minister of Labor,
through Deputy Minister Amado G. Inciong, issued an order setting aside the resolution en banc of the NLRC dated 20 June 1978,
and dismissing the case for lack of merit. Hence, the petition for certiorari charging Inciong with abuse of discretion amounting to
lack or excess of jurisdiction.

Issues:

Whether or not the decision of a Labor Arbiter awarding payment of regular holiday pay can still be set aside on appeal by
the Deputy Minister of Labor even though it has already becone final and had been partially executed, the finality of which... was
affirmed by the National Labor Relations Commission sitting en banc, on the basis of an Implementing Rule and Policy Instruction
promulgated by the Ministry of Labor long after the said decision had become final and executory.

Ruling:

The petitioner's contention that Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued
by the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code's provisions on holiday pay, they in
effect amended them by enlarging the scope of their exclusion.

Article 4 of the Labor Code states that “All doubts in the implementation and interpretation of the provisions of this Code,
including its implementing rules and regulations, shall be resolved in favor of labor.”

Article 94 of the Labor Code provides very worker shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than ten (10) workers.

From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits of holiday pay.
However, the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes monthly paid employees from
the said benefits.

In the case at bar, the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit
it provides for both the coverage of and exclusion from the benefits and must be noted that the implementation must be in favour
with the employees. In Policy Instruction No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is
principally intended for daily paid employees, when the law clearly states that every worker shall be paid their regular holiday pay.
This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states that "All doubts in the
implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved
in favor of labor.
CENTRO PROJECT MANPOWER SERVICES CORPORATION, Petitioner, 
vs. AGUINALDO NALUIS and THE COURT OF APPEALS, Respondents.

Facts:

Petitioner Centro Project Manpower Services Corporation (Centro Project), a local recruitment agency, engaged Naluis to
work abroad as a piufu6er· under Pacific Micronesia Corporation The work was covered by the primary Employment Contract
whereby his employment would last for 12 months, and would commence upon his arrival in Northern Marianasin Garapan, Saipan.
The work was covered by the primary Employment Contract, whereby his employment would last for 12 months, and would
commence upon his arrival in Northern Marianas.Naluis left for Northern Mariana on September 13, 1997, 9 the date of his actual
deployment, and his employment continued until his repatriation to the Philippines on June 3, 1998 allegedly due to the expiration of
the employment contract. Not having completed 12 months of work, he filed a complaint for illegal dismissal against Centro Project.

The Labor Arbiter found that Centro Project had been justified m repatriating Naluis, and accordingly dismissed the
complaint. Although complainant has not served the twelve (12) months period stated in the Contract of Employment, the Employer
has no other alternative but to repatriate complainant otherwise, the employer could be liable for violation of the Commonwealth's
Immigration Rules. and this was affirmed by the NLRC but in the CA it was reversed in favor of the petitioner.

Issue:
Whether or not the date contained in the AE issued by the Department of Labor and Immigration of Northern Mariana
Islands validly cut short Naluis' stay and thus justified the pre-termination of his work?

Ruling:

The NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in so concluding, the CA
observed.The document upon which the employer predicated its action to terminate and repatriate the petitioner i.e., the
Authorization of Entry issued by the immigration authorities of CNMI does not appear to limit the employee's stay in the said country.
The authorization upon its face simply shows that the person to whom it is issued should enter CNMI not later than May 13, 1998 as
a general rule or, if he is an employee, not later than three months from its issuance. We submit that an authorization of entry is
different from a limitation of stay in the country visited, which is not indicated in any of the documents submitted by the respondent.
The burden of proof to show that the employment contract had been validly terminated pertained to the employer.  To discharge its
burden, the employer must rely on the strength of its own evidence. However, Centro Project's reliance on the AE limiting. Naluis'
stay was unwarranted, and, worse, it did not discharge its burden of proof as the employer to show that Naluis' repatriation had
been justified

The Labor Code of the Philippines states,” it is fundamental that in the interpretation of contracts of employment, doubts
are generally resolved in favor of the worker”.  It is imperative to uphold this rule herein. Hence, any doubt or vagueness in the
provisions of the contract of employment should have been interpreted and resolved in favor of Naluis.

Although Centro Project alleges that it feared that Naluis would eventually be declared an illegal alien had he not been
repatriated, the records do not support the allegation. For one, Centro Project did not demonstrate that its fear was justified at all.
On the contrary, its fear was, at best, imaginary because it did not submit evidence showing that the Northern Marianas authorities
had ever moved to declare him an illegal alien. Moreover, had Centro Project been aware of any likelihood of him being soon
declared an illegal alien, it could have easily advised him thereof, and explained the situation to him in due course. Yet, he was not
at all informed of the likelihood.
 LEO T. MAULA vs XIMEX DELIVERY EXPRESS, INC.
G.R. No. 207838, January 25, 2017

FACTS

On May 12, 2009, petitioner Leo Maula filed a complaint against respondent Ximex Delivery Express, Inc. (Ximex) and its
officers, for illegal dismissal, among others. Petitioner is employed in Ximex as an operation staff. Petitioner’s employment was
uneventful until came February 18, 2009, when respondent’s HRD required him and other co-employees to sign a form subtitled
Personal Data for New Hires. When he inquired about it, he was told that it was nothing and that it was only for the twenty-peso
increase which the accompany owner allegedly wanted to see. 

On February 29, 2009, he, together with some other concerned employees, requested for a meeting with their manager
together with the HRD manager. They questioned the document and aired their apprehensions against the designation, “For New
Hires”, since they were long time regular employees earning monthly salary wages not daily wages, as against what was in the
form. The company’s manager (Amador Cabrera) retorted: “Ay wala yan walang kwenta yan”. When he disclosed that he consulted
a lawyer, respondent Cabrera insisted it was nothing and accordingly no lawyer could say that it really matters. Cabrera even dared
the petitioner to present the lawyer. The meeting was concluded. When Maula was about to exit the conference room, he was
addressed with the parting words of, “kung gusto mo mag labor ka”. He did not react. On March 4, 2009, the petitioner filed a
complaint before the National Conciliation and Mediation Board. During the hearing, it was agreed upon that shall be no retaliatory
action between petitioner and company arising from the complaint.

   Consequently, events happened in the workplace which, to the petitioner, were frame-ups and malicious accusations of
things he was not guilty of. A total of three memorandums was served to him. The first being that a supposed problem which
cropped up when he was accused responsible of an erroneous label in the cargo which led to its rerouting the third being the
dismissal order. The second was when he was reassigned, without clear explanation, to another department and was tasked to train
the one taking over his prior assignment. He was accused of not attending to his new assignment. His apprehensions were thus
confirmed.

On April 8, 2009, he filed a new complaint with the NCMB. Hearings were scheduled but the respondents never appeared.
On May 4, 2009, he reported to the office only to be denied entry. Instead a dismissal letter was handed to him. The case was
brought to the National Labor Relations Commission (NLRC) for arbitration. Efforts were exerted by the Labor Arbiter (LA) to
encourage the parties to amicably settle but without success. The LA ruled for the petitioners. On appleal NLRC affirmed LA’s
decision. Respondents elevated the case to the CA, which reversed and set aside the decision of the NLRC. Hence the petition for
review on certiorari.

ISSUE

Whether or not the petitioner committed serious misconduct justifying his dismissal.

RULING:

Yes. The CA erred when it made its own factual determination of the matters involved, and, on that basis, reversed the
NLRC ruling that affirmed the findings of the LA. 

Under the law, when in doubt, the case should be resolved in favour of labor pursuant to the social justice policy of our
Labor laws and the 1987 Constitution.

The unsubstantiated suspicions, accusations, and conclusions of the employer do not provide legal justification for
dismissing the employee. The exercise of disciplining and imposing appropriate penalties on erring employees must be practiced in
good faith and for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements. Respondents manifestly failed to prove that petitioner’s alleged act
constitutes serious misconduct. For misconduct or improper behaviour 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 employer.

In this case the admittedly insulting and unbecoming language uttered by petitioner to the HR Manager should be viewed
with reasonable leniency in light of the fact that it was committed under an emotionally charged state. As decided by the LA and
NLRC that the on-the-spur-of-the-moment outburst of petitioner, he having reached his breaking point, was due to what he
perceived as successive retaliatory and orchestrated actions of respondent. Indeed, there was only lapse in judgment rather than a
premeditated defiance of authority.

Furthermore, respondent cannot invoke the principle of totality of infractions considering that petitioner’s alleged previous
acts of misconduct were not established in accordance with the requirements of procedural due process. The court finds the penalty
of dismissal too harsh. Petitioner’s termination for employment is also inappropriate considering that he had been with respondent
company for seven years and he had no previous derogatory record. Petitioner’s preventive suspension of 30 days was also
inappropriate. Hence, the petition is granted. The CA’s decision is reversed and set aside. The LA is directed to re-compute the
proper amount of back wages and separation pay due to petitioner in accordance with this decision.

SAMSON VS NLRC
(330 SCRA 460) 2000

FACTS:

This is a petition for review on certiorari under rule 65 , herein petitioner Ismael Samson assails the decision of public
respondent NLRC dated November 29, 1993, which declared that he was a project employee, in effect reversing the earlier finding
of Labor Arbiter Felipe T. Garduque II that he is actually a regular employee.

Petitioner has been employed with private respondent AGPC Manila in a various construction projects since April 1965.
On November, petitioner filed a complaint for the conversion of his employment status from project employee to regular employee.
Petitioner alleged therein that on the basis of his considerable and continuous length of service with AGP, he should be considered
a regular employee therefore entitled to the benefits and privileges appurtenant thereto.

Labor Arbiter, declared in his decision that petitioner should be considered a regular employee on the ground that it has
not been shown that AGP&P had made the corresponding report to the nearest Public Employment Office every time a project
wherein petitioner assigned had been completed and his employment contract terminated as required under DOLE Policy
Instruction No. 20. Furthermore, petitioner was not free to leave anytime and to offer his services to other employees, he should
considered an employee for an indefinite period because he is a member of work pool from AG&P draws its project employees and
is considered employee thereof during his membership therein, hence the completion of project does not mean termination of the
employer-employee relationship.

On appeal, NLRC reversed the decision of the labor arbiter and dismissed the complaint for lack of merit. NLRC ruled that
the evidence shows that petitioner was engaged for a fixed and determinable period, and there was no evidence presented nor any
allegation made by petitioner to support the labor arbiter’s decision. According to NLRC Policy Instruction No. 20 was superseded
by D.O No. 19, Series of 1993, which provides that non-compliance with the required report to the nearest PEO no longer affixes a
prescription of regular employment, and that the repeated constant hiring of project workers for subsequent projects is permitted
without such workers being considered regular employees.

ISSUE: W/N Petitioner is a project or regular employee.

RULING:

Yes the petitioner is a regular employee and supported by evidence. It shows that he performed the same kind of work as
rigger throughout his period of employment, and his task is necessary and desirable to private respondent’s usual trade or business.

Article 4 of the Labor Code that "all doubts in the implementation and interpretation of the provisions of the Labor Code
including its implementing rules and regulations shall be resolved in favor of labor."

It is a basic and irrefragable rule that in carrying out and interpreting the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the primordial and paramount consideration. The interpretation
herein handed down gives meaning and substance to the liberal and compassionate spirit of the law.

In the case at bar, it is not disputed that petitioner had been working for private respondent for approximately twenty-eight (28)
years as of the adjudication of his plaint by respondent NLRC, and that his "project-to-project" employment was renewed several
times. With the successive contracts of employment wherein petitioner continued to perform virtually the same kind of work, i.e., as
rigger, throughout his period of employment, it is manifest that petitioner's assigned tasks were usually necessary or desirable in the
usual business or trade of private respondent. 8 The repeated re-hiring and continuing need for his services are sufficient evidence of
the necessity and indispensability of such services to private respondent's business or trade. Where from the circumstances it is
apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck
down as contrary to public policy, morals, good customs or public order. As observed by the Solicitor General, the record of this
case discloses, as part of petitioner's position paper, a certification duly issued by private respondent clearly showing that the
former's services were engaged by private respondent on a continuing basis since 1965. The certification indubitably indicates that
after a particular project has been accomplished, petitioner would be re-hired immediately the following day save for a gap of one (1)
day to one (1) week from the last project to the succeeding one. There can, therefore, be no escape from the conclusion that
petitioner is a regular employee of private respondent. Thus, the questioned decision of respondent National Labor Relations
Commission, dated November 29, 1993, is hereby REVERSED AND SET ASIDE, and the decision of Labor Arbiter Felipe T.
Garduque II.
CHARTERED BANK EMPLOYEES ASSOCIATION v. OPLE
GR. No. L-44717 28 August 1985

FACTS:
On May 20, 1975, the Chartered Bank Employees Association instituted a complaint with the Department of Labor against
private respondent Chartered Bank, for the payment of ten (10) unworked legal holidays, as well as for premium and overtime
differentials for worked legal holidays from November 1, 1974. Both the arbitrator and the National Labor Relations Commission
(NLRC) ruled in favor of the petitioners. On appeal, the Minister of Labor set aside the decision of the NLRC and dismissed the
petitioner's claim for lack of merit basing its decision on the provisions of Book III of the Integrated Rules and Policy Instruction No.
9.
Hence this petition. 

ISSUE:
Whether or not the respondent Secretary of Labor acted contrary to law and abused his discretion in denying the claim of
petitioners 

Ruling:
Yes, Secretary of Labor erred in dismissing the case.

Article 4 of the Labor Code of the Philippines states that, “All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.”

In the case at bar, the Minister of Labor set aside the decision of the NLRC and dismissed the petitioner’s claim for lack of
merit basing its decision on Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction 9, claiming the rule that “If the
monthly paid employee is receiving not less than P240, the maximum monthly minimum wage, and his monthly pay is uniform from
January to December, he is presumed to be already paid the 10 paid legal holidays. While it is true that the respondent Minister has
the authority in the performance of his duty to promulgate rules and regulations to implement, construe and clarify the Labor Code,
such power is limited by provisions of the statute sought to be implemented, construed or clarified. An administrative interpretation
which diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires. Any slight doubts
must be resolved in favor of the workers. This is in keeping with the constitutional mandate of promoting social justice and affording
protection to labor.