Bar Bar Bar Bar: Labor Law: Jurisprudence

1st ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.
Labor Law : Jurisprudence

CASESONTHEGENERALPROVISIONSOFTHELABORCODE
The principle "that employees are protected by law from unwarranted practices that
diminishtheircompensationwithouttheirknowledgeandconsent"isinaccordwiththe
constitutional principle of the State affording full protection to labor. (Carmelito L.
Palacolvs.PuraFerrerCalleja,G.R.No.85333,February26,1990)

Theconstitutionalmandatefortheprotectionoflaborisasexplicitasitisdemanding.
protec
rotec
r
Thepurposeistoplacetheworkingmanonanequalplanewithmanagement—withall
ingman
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itspowerandinfluence—innegotiatingfortheadvancementofhisinterestsandthe
negotia
r the po
p
otia
defenseofhisrights.Underthepolicyofsocialjustice,thelawbendsoverbackwardto
es
accommodatetheinterestsoftheworkingclassonthehumanejustificationthatthose
ests
ts of t
bl
with less privileges inn life

life should
sh have more privileges in in law. (PAL, Inc. vs. Santos, Jr.,
o
G.R.No.77875,February4,1993)
ebruary
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The rule thatatt there

there should be concern, sympathy pathy and solicitude for the rights and
mpat
es
welfare ofoff the
the working class, is meet and d proper.
prope That in controversies between a
h
laborer
err and
and his master, doubts reasonably nably arising from the evidence or in the
onably
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interpretation
etat of agreements and writings tings should
ritings s
sh be resolved in the former's
orme
rm favor, is
o
r
not an unreasonable or unfair rule. le. But
But to disregard the employer's r'ss own
own rights and
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interests solely on the basis of that concern and solicitude for labor
of that labor is unjust and
an
unacceptable. (Norberto Soriano ano vs.

riano v Offshore Shipping and Manning
vs Mann ng Corp., G.R. No.
Manni
es
78409,September14,1989) 89)
h

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Therightofalaborertosellhislabortosuchpersonsashemaychooseis,initsessence,
ell s he mam
o
r
the same as the right of an employer to purchase se labor
ase labo from any person whom it it
R
chooses.Theemployerandtheemployeehavethusanequalityofrightguaranteedby
thus
hus an
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ed by
an
theConstitution.'Iftheemployercancompeltheemployeetoworkagainstthelatter's
l the em e latter
latte
es
will,thisisservitude.Iftheemployeecancompeltheemployertogivehimworkagainst
compel ork ag
agaa
h
bl
the employer's will, this is oppression. (Pampanga

(Pamp Bus Company, Inc. vs. vs. Pambusco
s. Pam
C
Employees'Union,Inc.,G.R.No.46739,September23,1939)
t
o

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The law regards the worker with compassion. Our society is aa comp compassionate one.
an
Whereapenaltylesspunitivewouldsuffice,whatevermisstepsmaybecommittedby
eps
ps may
h
theworkershouldnot bevisitedbythesupremepenaltyofdismissal.Thisisnot
of dism only
because of the law's concern for the working man. There ree is
is in
i addition, his family to
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consider. After all, labor determinations should not only be secundum caritatem but
alsosecundumcaritatem.(Rubberworld(Phils.),Inc.vs.NLRC,G.R.No.75704,July19,
1989)

www.chanroblesbar.com : www.chanroblesbar.com.ph
2
Whentheconflictinginterestsoflaborandcapitalareweighedonthescalesofsocial
justice, the heavier influence of the latter must be counterbalanced by the sympathy
andcompassionthelawmustaccordtheunderprivilegedworker.Thisisonlyfairifheis
tobegiventheopportunity—andtheright—toassertanddefendhiscausenotasa
subordinatebutasapeerofmanagement,withwhichhecannegotiateonevenplane.
Labor is not a mere employee of capital but its active and equal partner. (Eastern
ShippingLines,Inc.vs.POEA,G.R.No.L76633,October18,1988)
L76
7

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It is wellsettled that "all doubts
bts inin the implementation and interpretation of the
provisionsoftheLaborCode...shallberesolvedinfavoroflabor."Andaspreviously
. . . sha
ha
es
stated,laborinthiscasereferstotheunionmembers,asemployeesoftheCompany.
refers
fers tot
(CarmelitoL.Palacolvs.PuraFerrerCalleja,G.R.No.85333,February26,1990)
. Pura Fe
F
bl

o
r
In carrying out and
and interpreting
int the Labor Code'ss provisions
prov
provi and its implementing
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regulations, the
he workingman's
wo
wor welfare should be be the
t
th primordial and paramount
an
consideration.(Songcovs.NLRC,G.R.No.5099951000,March23,1990)
on.
n. (Son
So 99510
51000
es

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bl
Itisabasicandirrefragablerulethatincarryingoutandininterpretingtheprovisionsof
basic a carrying
arrying
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theLaborCodeanditsimplementingregulations,theworkingman'swelfareshouldbe
or g regula elfa
elfare
o
r
theprimordialandparamountconsideration.(FernandoG.Manayavs.AlabangCountry
nsiderat
siderat vs. Alab
R
Club,Inc.,G.R.No.168988,June19,2007)
e 19, 20
Ba
an

es
Inemployeecompensation,personschargedbylawtocarryouttheConstitution'ssocial
on, pers y out the
th
h
bl
justiceobjectivesshouldadoptaliberalattitudeindecidingcompensabilityclaimsand
d ado iding
ing com
co
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should not hesitate to grant compensability where a a reasonable

reas
eas measure of work
o
r
connection can be inferred. Only this kind of interpretation
nterpret
terpre can give meaning and nd
R
substancetothelaw'scompassionatespiritasexpressedinArticle4oftheLaborCode
express
xpress
Ba
Code de
an
— that all doubts in the implementation and interpretation of the provisions
nd inte of th
nss of tthe
es
h
Labor Code, including their implementing rules and regulations, should be resolve
g rules resolved
esolve in
bl
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favoroflabor.(GSISvs.JeanE.Raoet,G.R.No.157038,December23,2009)
R No. 09)
9)

o
AnotherbasicprincipleisthatexpressedinArticle4oftheLaborCode—thatalldoubts
ode
de — th
R
an
in the interpretation and implementation of the Labor Code should hould
ould b be interpreted in
favor of the workingman. This principle has been extended by by jurisprudence
juris to cover
h
doubts in the evidence presented by the employer and the eemployee. (Manolo A.
d the
C
Peñaflorvs.OutdoorClothingManufacturingCorp.,etal.,G.R.No.177114,January21,
GR
G.R.
2010)

Regulationsadoptedunderlegislativeauthoritybyaparticulardepartmentmustbein
harmonywiththeprovisionsofthelaw,andforthesolepurposeofcarryingintoeffect
itsgeneralprovisions.Bysuchregulations,ofcourse,thelawitselfcannotbeextended.
3
Solong,however,astheregulationsrelatesolelytocarryingintoeffecttheprovisionsof
thelaw,theyarevalid.(Manuelvs.GeneralAuditingOffice,G.R.No.L28952,December
29,1971)

Administrativerulesandregulationsmustbepublishediftheirpurposeistoenforceor
implement existing law pursuant to a valid delegation., The only exceptions are
interpretativeregulations,thosemerelyinternalinnature, orthosesocalledlettersof
instructionsissuedbyadministrativesuperiorsconcerningtherulesandguidelinestobe
followedbytheirsubordinatesintheperformanceoftheirduties.(Tañadavs.Tuvera,
G.R.No.63915,April24,1985)

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CASESONEMPLOYEREMPLOYEERELATIONSHIP
E RELAT
es
Abasicfactorunderlyingtheexerciseofrightsandthefilingofclaimsforbenefitsunder
hee exer
the Labor Code and other
her presidential
pre issuances or labor legislations is the status and
bl
nature of one's employment.

loyme Whether an employeremployee
ploymen emp
empl relationship exists and
o
r
whethersuchemploymentismanagerialincharacterorthatofarankandfileemployee
mployme
ployme er or tha
th
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are primordiall considerations
consid
onsid before extending labor
abor benefits.
b (Elias Villuga vs. NLRC,
an
G.R.No.75038,August23,1993)
5038,
038, Au
es

h
bl
It is firmly

firmly
rmly settled that the existence e oror no
nonexistence of the employeremployee
C
relationshipiscommonlytobedeterminedbyexaminationofcertainfactorsoraspects
sh
h rmined
mined b actors
cto
o
r
ofthatrelationship.Theseinclude:(a)themannerofselectionandengagementofthe
e:: (a) th engage
R
dee of pa
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putativeemployee;(b)themodeofpaymentofwages;(c)thepresenceorabsenceofa
e ence
an
power to control the putative

tive employee's
ative em conduct, although h the
gh the latter is the most
es
importantelement.(PilipinasShellPetroleumCorporationvs.CourtofAppeals,G.R.No.
pinas Sh vs.
s. Cour
h
bl
104658,April7,1993)
C
r
Jurisprudence is firmly settled that whenever the the existence
e of an employment en
ent
R
relationship is in dispute, four elements constitute

titute the reliable yardstick: (a)
nstitute
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a)) the
he
an
selectionandengagementoftheemployee;(b)thepaymentofwages;(c)thepowerof
(b)
b) the power
es
h
dismissal;and(d)theemployer'spowertocontrolcontr theemployee'sconduct.Itistheso
o contro Itt is the
bl
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called "control test," and that is, whether

her the employer controls or has
er th reserved the
s reserv
righttocontroltheemployeenotonlyastotheresultoftheworktobedonebutalsoas
e done b
o
tothemeansandmethodsbywhichthesameistobeaccomplished,whichconstitute
hed,
ed, whi
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an
the most important index of the existence of the employeremployee
employ relationship.
Stated otherwise, an employeremployee relationship exists sts where the person for
ts whe
h
whomtheservicesareperformedreservestherighttocontrolnotonlytheendtobe
ontrol n
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achieved but also the means to be used in reaching suchh end.
en (Aurora Land Projects
Corporationvs.NLRC,G.R.No.114733,January2,1997)

4
Thefactthatitusedpayslipsdidnotevenprovethatitpaidtheworker'ssalaries;this
wasonlyforaccountingpurposes.(Leonardovs.CA,G.R.No.152459,June15,2006)

Whereprivaterespondentcompanyselectedandengagedtheservicesofpetitioneras
itsresidentagentinthePhilippines,paidthelatter'ssalary,heldthepowerofdismissal
asshownbythevariousmemorandumitissuedtopetitioner,hadthepowerofcontrol
overthemeansandmethodof petitionerinaccomplishinghiswork, itwasruledthat
employeremployeerelationshipexistedbetweentheparties.Exerciseofthepowerof
ed
d
controlbythecompanyconsistedofvariousdirectivesitissuedtopetitioner.(Mendiola
off variou
r
Ba
vs.CA,G.R.No.159333,July31,2006;Consultavs.CA,G.R.No.145443,March18,2005)
2006;Co

es
CASESONRECRUITMENTANDPLACEMENTOFWORKERS
AND
ND PL
bl
Thenumberofpersonsdealtwithisnotanessentialingredientoftheactofrecruitment
ons
ns deal
dea gre
gredi
o
r
andplacementofworkers.AnyoftheactsmentionedinthebasicruleinArticle13(b)
f worke ned
ed in t
R
Ba
will constitutee recruitment
recru
recrui and placement even n if
if only
o one prospective worker is
an
involved.Theprovisomerelylaysdownaruleofevidencethatwhereafeeiscollected
he prov e of ev
e id
d
es
in consideration
deratio of a promise or offer of
deration f employment
emplo to two or more prospective
h
bl
workers,
rs, the
ers, he individual or entity dealing
the ng with
with them
t shall be deemed to be engaged in
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the act of

o recruitment and placement. ent. The
ment. T
Th words "shall be deemed" ed" ccreate that
o
r
presumption. This is not unlike the
the presumption
pre in article 217 of the
f the
he ReRevised Penal
R
Code, for example, regarding the the

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failure of a public officer to produce
he fai produc upon lawful
an
demand funds or property entrust

entrusted to his custody. Such failureure sshall be prima facie
ilure
es
evidencethathehasputthemtopersonaluse;inotherwords,heshallbedeemedto
t them t words,
ords, he
h
h
bl
havemalversedsuchfundsorproperty.Intheinstantcase,theword"shallbedeemed"
unds
nd o ase,
e, the
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shouldbythesametokenbegiventheforceofadisputablepresumptionorof
isputable
sputabl prima
o
r
facieevidenceofengaginginrecruitmentandplacement.(PeopleofthePhil.vs.Panis,
cement.
ement nis
nis,
R
G.R.No.L5867477,July11,1986)
Ba
an

es
h
Inadditiontothecashandsuretybondsandtheescrowmoney,anappealbondinan
and the bond i
bl
C
amount equivalent to the monetary award ward is required to perfect an appeal
appea from a
appeal
decision of the POEA. Obviously, the appeal bond is intended to further urther insure the
o
paymentofthemonetaryawardinfavoroftheemployeeifitiseventuallyaffirmedon
ventually
entually
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an
appealtotheNLRC.

h
Itistruethatthecashandsuretybondsandthemoneyplacedinescrowaresupposed
placed
laced in
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toguaranteethepaymentofallvalidandlegalclaimsagainsttheemployer,butthese
ainst
inst
claims are not limited to monetary awards to employees whose contracts of
employment have been violated. The POEA can go against these bonds also for
violations by the recruiter of the conditions of its license, the provisions of the Labor
Codeanditsimplementingrules,E.O.247(reorganizingthePOEA)andthePOEARules,
aswellasthesettlementofotherliabilitiestherecruitermayincur.
5
As for the escrow agreement, it was presumably intended to provide for a standing
fund, as it were, to be used only as a last resort and not to be reduced with the
enforcementagainstitofeveryclaimofrecruitedworkersthatmaybeadjudgedagainst
theemployer.Thisamountmaynotevenbeenoughtocoversuchclaimsand,evenifit
could initially, may eventually be exhausted after satisfying other subsequent claims.
(JMMPromotions&Management,Inc.vs.NLRC,G.R.No.109835,November22,1993)

A person who violates any of the provisions under Article 13(b) and Article 34 of the
Labor Code can be charged and convicted ct separately of illegal recruitment and estafa
icte
[Revised Penal Code, Article 315, 2(a)] because illegal recruitment is a malum
5,, 2(a)
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prohibitum where the criminal intent
intent of the accused is not necessary for a conviction
while estafa is a malum in se where
e wh
w ere criminal intent of the accused is necessary for a
es
conviction.(PeopleofthePhil.vs.FernandoManungas,Jr.,G.R.No.91552,March10,
Phil. vs
1994)
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Theelementsofillegalrecruitmentinlargescaleare:
illegal
llegal re :
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(1.) TheaccusedundertookanyrecruitmentactivitydefinedunderArticle13(b)or
accused
ccuse ntt act
ac iv
es
anyprohibitedpracticeenumeratedunderArticle34oftheLaborCode;
any proh d under
h
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(2.) HeHe did not have the license oror

r authority
auth to lawfully engage in the
the rrecruitment
o
r
andplacementofworkers;and ; and
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(3.) He committed the same ame aagainst three or more persons,
same ons, iindividually or as a
sons,
es
group.
h
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AsstatedinthefirstsentenceofSection6ofRA8042,thepersonswhomaybe
RAA 8042
o
r
heldliableforillegalrecruitmentaretheprincipals,accomplicesandaccessories.
rincipals,
ncipals es
es.
R
Anemployeeofacompanyorcorporationengagedinillegalrecruitmentmaybe
on enga may
Ba
a be
an
heldliableasprincipal,togetherwithhisemployer,ifitisshownthatheactively
his emp
em e active
activ
es
h
and consciously participated in illegal

illegal recruitment. The existence ce of
nce of the
bl
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corporate entity does not shield from prosecution the corporate

d from ate agent who
te age
knowingly and intentionally causes the corporation to commit mit a a crime.
c The
o
corporation obviously acts, and can act, only by and throughugh its h
h its human agents
R
an
and it is their conduct that the law must deter. The employe
employee
mploye or agent of a
corporationengagedinunlawfulbusinessnaturallyaidsandabetsinthecarrying
dss and a
h
onofsuchbusinessandwillbeprosecutedasprincipalif,withknowledgeofthe
cipal
ipa if,
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business, its purpose and effect, he consciously contributes

cont his efforts to its
conduct and promotion, however slight his contribution may be. The law of
agency,asappliedincivilcases,hasnoapplicationincriminalcases,andnoman
canescapepunishmentwhenheparticipatesinthecommissionofacrimeupon
thegroundthathesimplyactedasanagentofanyparty.Theculpabilityofthe
employee therefore hinges on his knowledge of the offense and his active
6
participationinitscommission.Whereitisshownthattheemployeewasmerely
acting under the direction of his superiors and was unaware that his acts
constitutedacrime,hemaynotbeheldcriminallyliableforanactdoneforand
in behalf of his employer. (People of the Phil. vs. Bulu Chowdury, G.R. No.
129577,February15,2000)

Illegal recruitment is committed when two elements concur, namely: (1) the offender
has no valid license or authority required by law to enable one to lawfully engage in
recruitmentandplacementofworkers;and(2)heundertakeseitheranyactivitywithin
the meaning of "recruitment and placement"
acem
ce defined under Art. 13(b), or any of the
prohibitedpracticesenumeratedunderArt.34oftheLaborCode.(PeopleofthePhil.
nder Ar
r
Ba
vs.EvangelingOrdoño,G.R.No.129593,July10,2000)
129593,

es
Conviction under RA 8042 or th
2 or the Labor Code of the Philippines does not preclude
punishment under the e Revised
Revis Penal Code for the crime of estafa. The above
bl
mentionedfactsestablishedbytheprosecutionprovedthatthefollowingelementsof
ablis
blished
he edd th
t
o
r
estafa had been n committed
comm by accusedappellant, t, to
ant, to wit: (a) accusedappellant
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defraudedanotherbyabuseofconfidence,orbymeansofdeceit,and(b)theoffended
other
her by mean
means
an
partysuffereddamageorprejudicecapableofpecuniaryestimation.(PeopleofthePhil.
red
d dam f pecu
pec n
es
vs.MinaLibrero,G.R.No.132311,September28,2000)
Librero ber
er 28, 2
h
bl

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The lackk of criminal intent on the part

part of
o an accused is hardly a defe defense in the
def
o
r
prosecution for illegal recruitment.
nt. It m
t It must be emphasized that illegal recruitment in
egal rec
R
e Migra
Ba
largescalepenalizedundertheMigrantWorkersandOverseasFilipinosActof1995,a
Fi ipinos
an
special law, is malum prohibitum

ibitum and not malum in se. The
hibitum criminal intent of the
hee crim
cri
es
accusedisnotnecessaryandthefactalonethattheaccusedviolatedthelawwarrants
y and the ed
d viola
h
bl
herconviction.(Peopleofthe he Phil.vs.LourdesGamboa,G.R.No.135382,September29,
of the G.R.
R. No.
No
C
2000)
o
r

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The essential elements of the crime of illegal recruitment

recruit
Ba
in large scale are (1)
1)) the
the
he
an
accusedengagesinactsofrecruitmentandplacementofworkersdefinedunderArticle
placeme
laceme err Artic
Arti
es
h
13(b)orinanyprohibitedactivitiesunderArticle34oftheLaborCode;(2)theaccused
r Article the
he accu
ccu
bl
C
hasnotcompliedwiththeguidelinesissuedbytheSecretaryofLaborandEmployment,
ued
ed by
b d Emplo
particularly with respect to the securing of a license or an authority to rrecruit and
ity to
o
deploy workers, either locally or overseas; and (3) the accused commits mmits the unlawful
ommits
R
an
actsagainstthreeormorepersons,individuallyorasagroup.Whenillegalrecruitment
When
hen ille
ill
iscommittedinlargescaleorwhenitiscommittedbyasyndicate,i.e.,ifitiscarriedout
icate,
cate, i.e
h
byagroupofthreeormorepersonsconspiringand/orconfederatingwithoneanother,
nfedera
nfederat
C
itisconsideredasanoffenseinvolvingeconomicsabotage.(PeopleofthePhil.vs.Alona
(Pe
Bulie,G.R.No.123146June17,2003)

It can be gleaned from the language of Article 13 (b) of the Labor Code that the act of
recruitmentmaybeforprofitornot.Itissufficientthattheaccusedpromisesoroffers
7
forafeeemploymenttowarrantconvictionforillegalrecruitment.(PeopleofthePhil.
vs.JosephJamilosa,G.R.No.169076,January23,2007)

And even if it were true that no money changed hands, money is not material to a
prosecutionforillegalrecruitment,asthedefinitionof"recruitmentandplacement"in
theLaborCodeincludesthephrase,"whetherforprofitornot".We heldinPeoplev.
Jamilosa that it was "sufficient that the accused promises or offers for a fee
employment to warrant conviction for illegal recruitment." (People of the Phil. vs.
LourdesD.Valenciano,G.R.No.180926,December10,2008)

Illegal recruitment is committed when when
hen ththese two elements concur: (1) the offenders
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havenovalidlicenseorauthorityrequiredbylawtoenablethemtolawfullyengagein
y requi
therecruitmentandplacementofworkers,and(2)theoffendersundertakeanyactivity
entt of w
within the meaning of recruitment
ecruitme
ruitm and placement defined in Article 13 (b) or any
prohibitedpracticesenumeratedinArticle34
numerat
umerat oftheLaborCode.UnderArticle13(b),
recruitment and placement
cemen refers to "any act of canvassing,
acemen anv
anva enlisting, contracting,
r
transporting, utilizing,
lizing,
izing, hhiring or procuring workers and includes referrals, contract
rs and
Ba
services,promisingoradvertisingforemployment,locallyorabroad,whetherforprofit
mising
sing o t local
t, loca
ornot".Inthesimplestterms,illegalrecruitmentiscommittedbypersonswho,without
thee simp
sim ent
nt is co
es
authorityfromthegovernment,givetheimpressionthattheyhavethepowertosend
ty from mpressi
bl
workersabroadforemploymentpurposes.Thelawimposesahigherpenaltywhenthe
ers
rs abro
bro ses.
es. The
crimeiscommittedbyasyndicateasitisconsideredasanoffenseinvolvingeconomic
c s it is co volving
olving
o
r
sabotage. Illegal recruitment is deemed
eemed committed by a syndicate if if carried
carri out by a
R
sons
ons con
Ba
groupofthree(3)ormorepersonsconspiringand/orconfederatingwithoneanotherin
ng with
an
carryingoutanyunlawfulorillegaltransaction,enterpriseorschemedefinedunderthe
r illegal chem
cheme
es
firstparagraphofArticle38oftheLaborCode.(PeopleofthePhil.vs.NidaR.Adeser,
38 of t f the
th Phi
Ph
h
bl
G.R.No.179931,October26,2009;PeopleofthePhil.vs.RodolfoGallo,G.R.No.185277,
er 26, Rodolfo
C
March 18, 2010;People of the Phil. vs. Melissa Chua,G hua,G .R.
R No. 184058, March 10,
o
r
2010;PeopleofthePhil.vs.MaritessD.Martinez,G.R.No.158627,March5,2010)
G.R.
R. No.
R

Ba
an
CASESONLIABILITYOFPRIVATEEMPLOYMENTAGENCY ENT
NT AGE
es
h
bl
C
A private employment agency may be sue sued jointly and solidarily withith
th its
its foreign
principalforviolationsoftherecruitmentagreementandthecontractsofemployment.
tss of em
o
(Section10(a)(2)RuleV,BookI,RulestoImplementtheLaborCode. e..
R
an

Inacasewheretheemploymentagencyandtheforeignprincipalseveredtheiragency
ncipal
cipal se
h
agreement at the time the worker was injured, the agencyency may
m still be sued for a
C
violation of the employment contract if no notice of of tthe agency agreement's
terminationwasgiventothesaidworker.

Theobligationscovenantedintherecruitmentagreemententeredintobyandbetween
the local agent and its foreign principal are not coterminus with the term of such
agreement so that if either or both of the parties decide to end the agreement, the
8
responsibilitiesofsuchpartiestowardsthecontractedemployeesundertheagreement
do not at all end, but the same extends up to and until the expiration of the
employmentcontractsoftheemployeesrecruitedandemployedpursuanttothe said
recruitmentagreement.

Otherwise,thiswillrendernugatorytheverypurposeforwhichthelawgoverningthe
employment of workers for foreign jobs abroad was enacted. (Manuela S. Catan vs.
NLRC,G.R.No.L77279,April15,1988)

CASESONPROHIBITEDPRACTICESOFRECRUITMENTANDPLACEMENT
R
RE
r
Ba
The reason why the law requires es that
that the POEA should approve and verify a contract
underArticle34(i)oftheLaborCodeistoinsurethattheemployeeshallnottherebybe
orr Co
Code
de
es
placed in a disadvantageousous position
eous po and that the same are within the minimum
standards of the terms s and
and conditions
co of such employment contract set by the POEA.
bl
This is why a standard

dard format for employment contracts
ard for
fo rac has been adopted by the
tract
o
r
DepartmentofLabor.However,thereisnoprohibitionagainststipulatinginacontract
abor. Ho tion
on aga
ag
R
Ba
morebenefitstotheemployeethanthoserequiredbylaw.Thus,inthiscasewhereina
to the ed by l
an
"supplementarycontract"wasenteredintoaffordinggreaterbenefitstotheemployee
ntary co affordi
fford ngg
es
than thee previous
previo one, and although the same ame was
same w not submitted for the approval of
h
bl
the POEA,
OEA, ththe public respondents properly
operly considered said contract to be valid and
perly co
C
enforceable.Indeed,saidpronouncementsofpublicrespondentshavetheeffectofan
ab
b ements
ments the e
o
r
approvalofsaidcontract.Moreover,assaidcontractwasvoluntarilyenteredintobythe
ver,
er, as sa ente
ntered
red
R
parties the same is binding between

tween them. Not being contrary
etween
Ba
y to
to law,
law morals, good
an
customs,publicpolicyorpublicorder,itsvaliditymustbesustained.(SeagullMaritime
ublic
blic ord tained
ained
es
Corp.vs.NerryBalatongan,G.R.No.82252,February28,1989)
an, G.R. 989)
89)
h
bl

C
The purpose of Article 34,

4 paragraph 1 of the Labor Code iis clearly the protection of
r Code
o
r
both parties. In the instant case, the alleged amendment
endme served to clarify what was
endmen was
wa
R
agreed upon by the parties and approved by byy the
the Department of Labor. To
Ba
o rule
rule
ule
an
otherwise would go beyond the bounds of reason reason and justice. (Norberto Soriano iano vvs.
riano
es
h
OffshoreShippingandManningCorporation,G.R.No.78409,September14,1989)
ion,
on, G.R. 1989)
989)
bl
C

Pursuant to Article 38(b) in relation to Article 34 of the Code, the offense
offense of illegal
offens
o
recruitmenthastwoessentialelements,towit:(1)theaccusedmustbeengagedinthe
stt be en
R
an
recruitmentandplacementofworkers,whetherlocallyoroverseas;and(2)theaccused
eas;
as; and
hasnotcompliedwiththeguidelinesissuedbytheSecretaryofLaborandEmployment,
of Labo
h
particularly with respect to the securing of a license or r an
an authority
au
aut to recruit and
C
deploy workers, either locally or overseas. If it is committed
mitted against three or more
personsindividuallyorasagroup,thecrimebecomesillegalrecruitmentinlargescale
which is considered an offense involving economic sabotage in Article 38(b) and is
penalized under Article 39 of the Labor Code. Recruitment for overseas employment is
notinitselfnecessarilyimmoral orunlawful.Itisthelackofthenecessarilylicenseor
permit thatrenders such recruitment activities unlawful or criminal, which is qualified
9
intolargescalerecruitmentwhenthreeormorepersonsarevictimized.(Peopleofthe
Phils.vs.LucilleB.Sendon,G.R.No.10157982,December15,1993)

A person who violates any of the provisions under Article 13(b) and Article 34 of the
Labor Code can be charged and convicted separately of illegal recruitment and estafa
[Revised Penal Code, Article 315, 2(a)] because illegal recruitment is a malum
prohibitum where the criminal intent of the accused is not necessary for a conviction
while estafa is a malum in se where cri
criminal intent of the accused is necessary for a
cr
conviction.(PeopleofthePhils.vs.FernandoG.Manungas,Jr.,G.R.No.91552,March
Fernan
r
Ba
10,1994)

es
CASESONILLEGALRECRUITMENT ITMENT
TMENT
bl
Anyrecruitmentactivitiestobeundertakenbynonlicenseeornonholderofcontracts,
ivities
vities to
t ense
ns
o
r
oras inthepresentcase,anagencywithanexpiredlicense,shallbedeemedillegaland
ent
nt case license
icens
R
Ba
punishableunderArticle39oftheLaborCodeofthePhilippines.Andillegalrecruitment
derr Arti the Phi
Ph
an
is deemed committed

comm
omm in large scale if committed
mmitt
mitted d against three or more persons
es
individuallyorasagroup.(PeopleofthePhil.vs.MelissaChua,G.R.No.184058,March
ally or a hil.
il. vs. M
h
bl
10,2010)
010)
10
C

o
r
[A]ppellantwasnotalicenseeorholderofauthoritytodeployworkersabroad.Bythis
holder kers
rs abr
R
fact alone, she is deemed to have

ave engaged
have e
en
Ba
in illegal recruitment
ent and
and the same was
an
committed in large scale because

ecause it was carried out against
because st the
the four complainants.
es
(PeopleofthePhil.vs.MaritessD.Martinez,G.R.No.158627,March5,2010)
aritess D 7, March
Marc
h
bl

C

o
r
CASESONEMPLOYMENTOFNONRESIDENTALIENS NSS
R
Ba
an
es
h
In the first place, the second paragraph of

of Article
Artic 40 says: "[t]he employmentment ent permit
pe
bl
C
may be issued to a nonresident alien en or to the applicant employer
ien loyer after a
ployer
determination of the nonavailability of a person in the Philippines who
who is is ccompetent,
o
ableandwillingatthetimeofapplicationtoperformtheservicesforwhichthealienis
for
or whic
R
an
desired." The permissive language employed in the Labor Code iindicates
ode ind d that the
authoritygrantedinvolvestheexerciseofdiscretiononthepartoftheissuingauthority.
art of th
h
In the second place, Article 12 of the Labor Code sets forth
rth aa st
statement of objectives
C
thattheSecretaryofLaborshould,andindeedmust,takeintoaccountinexercisinghis
into
authorityandjurisdictiongrantedbytheLaborCode.

The Labor Code itself specifically empowers respondent Secretary to make a
determinationastotheavailabilityoftheservicesofa"personinthePhilippineswhois
competent,ableandwillingatthetimeofapplicationtoperformtheservicesforwhich
10
an alien is desired." In short, the Department of Labor is the agency vested with
jurisdictiontodeterminethequestionofavailabilityoflocalworkers.Theconstitutional
validityoflegalprovisionsgrantingsuchjurisdictionandauthorityandrequiringproofof
nonavailability of localnationals able to carryout the duties of the position involved,
cannotbeseriouslyquestioned.(GeneralMillingCorporation vs.RubenD.Torres,G.R.
No.93666,April22,1991)

Article40oftheLaborCodewhichrequiresemploymentpermitreferstononresident
aliens. The employment permit is required for entry into the country for employment
purposes and is issued after determination
na
nat of the nonavailability of a person in the
Philippineswhoiscompetent,ableandwillingatthetimeofapplicationtoperformthe
and wi
r
Ba
services for which the alien is desired.
desired. (Farle P. Almodiel vs. National Labor Relations
Commission,G.R.No.100641,June14,1993)
1, Jun
Ju e 1

es
CASESONAPPRENTICES S
bl
o
r
Article 57 of the e Labor
Labo
Labor Code provides that the State
State aims to "establish national
R
Ba
apprenticeship p program
prog through the participation
pation of employers, workers and
an
governmentandnongovernmentagencies"and"toestablishapprenticeshipstandards
nt and n andd "tt
es
for the protect
protection of apprentices." To translate
nslate such objectives into existence, prior
anslate
h
bl
approvaloftheDOLEtoanyapprenticeshipprogramhastobesecuredasacondition
va of t
val eship
ship p
C
sinequanonbeforeanysuchapprenticeshipagreementcanbefullyenforced.Therole
nticeship
iceship nforce
forc
o
r
of the DOLE in apprenticeship program
programs
rogram and agreements cannot be be debased. (Nitto
e deb
R
Enterprisesvs.NLRC,G.R.No.114337,September29,1995)
114337,
4337,
Ba
an

es
It is mandated that apprenticeship
prentice agreements entered into by the employer and
into by
b
h
bl
apprentice shall be entered

ered only in accordance with the
tered apprenticeship program duly
e appre
C
approvedbytheMinisterofLaborandEmployment.
o
r

R
Prior approval by the Department of Labor and Employment of the proposed
or and opo
Ba
posed
ed
an
apprenticeshipprogramis,therefore,aconditionsinequanonbeforeanapprenticeship
ition
tion sin enticesh
nticesh
es
h
agreementcanbevalidlyenteredinto.
bl
C

The act of filing the proposed apprenticeship program with the Department
partme of Labor
partmen
o
and Employment is a preliminary step towards its final approval oval and
roval an does not
R
an
instantaneously give rise to anemployerapprentice relationship. p. (Nitto

ip. (Nitt Enterprises vs.
(Nitto
NLRC,G.R.No.114337,September29,1995)
h

C
CASESONFIELDPERSONNEL
The definition of a "field personnel" is not merely concerned with the location where
theemployeeregularlyperformshisdutiesbutalsowiththefactthattheemployee's
performanceisunsupervisedbytheemployer.Weheldthatfieldpersonnelarethose
who regularly perform their duties away from the principal place of business of the
11
employer and whose actual hours of work in the field cannot be determined with
reasonable certainty. Thus, in order to determine whether an employee is a field
employee, it is also necessary to ascertain if actual hours of work in the field can be
determinedwithreasonablecertaintybytheemployer.Insodoing,aninquirymustbe
made as to whether or not the employee's time and performance are constantly
supervised by the employer. (Far East Agricultural Supply, Inc., et al. vs. Jimmy
Lebatique,etal.,G.R.No.162813,February12,2007)

CASESONHOURSOFWORK
BasicwageisdefinedbytheImplementingRulesofRA6727asfollows:
menting
enting
r
Ba

"BasicWage"meansallremunerationorearningspaidbyanemployer
allll remu
es
toaworkerforservicesrenderedonnormalworkingdaysandhoursbut
vices
ces re
does not include cost of living allowances, 13thmonth pay or other
dee cost
bl
monetarybenefitswhicharenotconsideredaspartoforintegratedinto
nefits
efits w par
part
o
r
theregularsalaryoftheworkers....
arr salary
R
Ba

an
TheforegoingdefinitionwasbasedonArticle83oftheLaborCodewhichprovidesthat
ing
ng defin
def 83
3 of
o th
es
"thenormalhoursofworkofanyemployeeshallnotexceedeight(8)hoursaday."This
mal hou
ho e shall
h
bl
meanss that the basic salary of an employee oyee for
ployee f the purpose of computing the 13th
C
monthpayshallincludeallremunerationsorearningspaidbyanemployerforservices
a ations
ions o loyer
oyer f
o
r
rendered during normal working hours. hours. (Letran Calamba Faculty and
nd Employees
Emp Assn.
R
vs.NLRC,etal.,G.R.No.156225,January29,2008)
5,Janua
Janu
Ba
an

es
Theprovisionthataworkerisentitledtotwicehisregularrateifheisrequiredtowork
ker is en rate
at if h
h
bl
onaholidayimpliesthattheprovisionentitlingaworkertohisregularrateonholidays
att the r to his
C
appliesevenifhedoesnotwork.(LiliaP.Labadanvs.ForestHillsAcademy,etal.,G.R.
s. Forest
o
r
No.172295,December23,2008)
R

Ba
an
CASESONWAGE;DEFINITIONS
es
h
bl
C
Article97(f)byitselfisexplicitthatcommissionisincludedinthedefinitionoftheterm
missio on of th
h
"wage".Ithasbeenrepeatedlydeclaredbythecourtsthatwherethelawspeaksinclear
aw spea
spe
o
and categorical language, there is no room for interpretation or construc
construction;
onstruc there is
R
an
only room for application. A plain and unambiguous statute speaks

peaks
eaks for
f itself, and any
fo
attempttomakeitclearerisvainlaborandtendsonlytoobscurity.
curity.
urity.
h

C
The ambiguity between Article 97(f), which defines the term

erm 'wage' and Article XIV of
the Collective Bargaining Agreement, Article 284 of the Labor Code and Sections 9(b)
and10oftheImplementingRules,whichmentiontheterms"pay"and"salary",ismore
apparent than real. Broadly, the word "salary" means a recompense or consideration
made to a person for his pains or industry in another man's business. Whether it be
derivedfrom"salarium,"ormorefancifullyfrom"sal,"thepayoftheRomansoldier,it
12
carries with it the fundamental idea of compensation for services rendered. Indeed,
there is eminent authority for holding that the words "wages" and "salary" are in
essence synonymous (Words and Phrases, Vol. 38 Permanent Edition, p. 44 citing
Hopkinsvs.Cromwell,85N.Y.S.839,841,89App.Div.481;38Am.Jur.496)."Salary,"
theetymologyofwhichistheLatinword"salarium,"isoftenusedinterchangeablywith
"wage", the etymology of which is the Middle English word "wagen". Both words
generally refer to one and the same meaning, that is, a reward or recompense for
servicesperformed.Likewise,"pay"isthesynonymof"wages"and"salary"(Black'sLaw
Dictionary,5thEd.).Inasmuchasthewords"wages","pay"and"salary"havethesame
meaning,andcommissionisincludedinthedefinitionof"wage",thelogicalconclusion,
in
nt
therefore,is,inthecomputationoftheseparationpayofpetitioners,theirsalarybase
f the se
r
Ba
should include also their earned d sales
sales commissions. (Jose Songco vs. National Labor
Relations Commission,G.R.No.5099951000,March23,1990)
o.. 50
5 99
es

Theterm"wage"wasdefinedinArticle97(f)oftheLaborCodeas"theremunerationor
efined
bl
earnings,however,designated,capableofbeingexpressedintermsofmoney,whether
designat
esigna essed
sse
o
r
fixed or ascertained
ned on
on a time, task, piece, or commission
missio basis, or other method of
mmissio
R
Ba
calculatingtheunwrittencontractofemploymentforworkdoneortobedone,orfor
e unwrit t for w
an
services rendered
dered or to be rendered and includes
ndered ude the fair and reasonable value, as
clude
es
determinedbytheSecretaryofLabor,ofboard,lodging,orotherfacilitiescustomarily
ned by board, l
h
bl
furnishedbytheemployertotheemployee.Wagesshallbepaidonlybymeansoflegal
hed
e by oyee.
yee.W
C
tender.Theonlyinstancewhenanemployerispermittedtopaywagesinformsother
Th employe
mploye ess in f
o
r
than legal tender, that is, by checks
hecks or money order, is when thethe circumstances
he cir
R
graph
aph of
Ba
prescribedinthesecondparagraphofArticle102arepresent.(NFLvs.CourtofAppeals,
FL vs. Co
an
G.R.No.149464,October19,2004)
9,, 2004)
es

h
bl
CASESONNONDIMUNITIONOFBENEFITS
NITION
ITION
C
r
Clearly, the prohibition against elimination or diminution
minution
nution of benefits set out in Article
cle
R
100 of the Labor Code is specifically concerned with benefits already enjoyed at
ed with
Ba
att the
the
he
an
time of the promulgation of the Labor Code. e. Article

de. Art
Arti 100 does not, in other words,
r word
wor
es
h
purport to apply to situations arising after

er the
the promulgation date of the Labor
abor Code.
Labor C
bl
C
Section 6 of the Rules Implementing Wageage Order

O No. 6 relates to "supplements
pplemen and
otherbenefits"whichemployeesarealready"enjoyingwithoutcostatthetimeofthe
at the t
o
effectivity of [Wage] Order [No. 6]." Such benefits which employees loyees are already
ployees
R
an
enjoying "without cost" could not, under Section 6, suddenly be ascribed
y be asc monetary
value so as to offset or diminish increases in the minimum wage
wage rates prescribed by
h
statute.(ApexMiningCompany,Inc.vs.NLRC,G.R.No.86200,February25,1992)
200,
00, Feb
C

CASESONLABORCONTRACTINGRELATIONSHIP
Under the general rule set our in the first and second paragraphs of Article 106, an
employerwhoentersintoacontractwithacontractorfortheperformanceofworkfor
the employer, does not thereby create an employeremployee relationship between
13
himself and the employees of the contractor. Thus, the employees of the contractor
remain the contractor's employees and his alone. When a contractor fails to pay the
wages of his employees in accordance with the Labor Code, the employer who
contracted out the job to the contractor becomes jointly and severally liable with his
contractortotheemployeesofthelatter"totheextentoftheworkperformedunder
thecontract"asifsuchemployerweretheemployerofthecontractor'semployees.The
lawitself,inotherwords,establishesanemployeremployeerelationshipbetweenthe
employer and the job contractor's employees for a limited purpose, i.e., in order to
ensure that the latter get paid the wages due to them. (Philippine Bank of
Communicationsvs.NLRC,G.R.No.L66598,December19,1986)
6659
65

r
Ba
In order to be considered as a a job
job contractor it is enough that a contractor has
substantialcapital.Inotherwords,oncesubstantialcapitalisestablisheditisnolonger
word
ords o
es
necessary for the contractor or to
tor to show evidence that it has investment in the form of
tools, equipment, machineries,
hineries work premises, among others. The rational for this is
chineries
bl
that Article 106 of the

the
he Labor
Lab Code does not require that
Labo ha the contractor possess both
that
o
r
substantial capitaland
al and investment
in in the formof tools,
ools, eequipment, machineries,work
ols, eq
R
Ba
premises,amongothers.(VirginiaG.Nerivs.NLRC,G.R.No.9700809,July23,1993)
ongg othe C G.R. N
C,
an

es
Itwasnotenoughtoshowsubstantialcapitalizationorinvestmentintheformoftools,
ot enou pitalizatio
talizatio
h
bl
equipment,
ment, machinery and work premises, mises, eetc., to be considered an independent
C
contractor.
o In fact, jurisprudential holdings
dings were to the effect that in determining
oldings deter the
o
r
existenceofanindependentcontractorrelationship,severalfactorsmaybeconsidered,
ractor
actor re may be
R
such as, but not necessarily confined

nfined to, whether the contractor
onfined
Bao was
was carrying on an
an
independent business; the nature

nature
ature and extent of the work; the e skill
skill required; the term
es
anddurationoftherelationship;therighttoassigntheperformanceofspecifiedpieces
tionship; rformanc
orman
h
bl
of work; the control and

nd supervision of the workers; the
d sup power of the employer with
he powe
pow
C
respecttothehiring,firingandpaymentoftheworkersofthecontractor;thecontrolof
rs of
o th
o
r
the premises; the duty to supply premises, tools, appliances,
applian materials and labor; and
nd
R
themode,mannerandtermsofpayment.(AlexanderVinoyavs.NLRC,G.R.No.126586,
xander
nder V
Ba
265
6586,
86,
an
February2,2000)
es
h

bl
C
The test to determine the existence of f independent

ind
inde contractorship iss whether
wheth one
claiming to be an independent contractor has contracted to do the work rk according
work
wo a
ac to
o
hisownmethodsandwithoutbeingsubjecttothecontroloftheemployer,exceptonly
mploye
mployer
R
an
totheresultsofthework.

h
Inlegitimatejobcontracting,thelawcreatesanemployeremployeerelationshipfora
erremplo
C
limitedpurpose,i.e.,toensurethattheemployeesarepaidtheirwages.Theprincipal
aid t
employer becomes jointly and severally liable with the job contractor only for the
paymentoftheemployees'wageswheneverthecontractorfailstopaythesame.Other
than that, the principal employer is not responsible for any claim made by the
employees. (New Golden City Builders & Dev't. Corp. vs. Court of Appeals, G.R. No.
154715,December11,2003)
14
ThefirsttwoparagraphsofArticle106setthegeneralrulethataprincipalispermitted
bylawtoengagetheservicesofacontractorfortheperformanceofaparticularjob,but
theprincipal,nevertheless,becomessolidarilyliablewiththecontractorforthewages
ofthecontractor'semployees.ThethirdparagraphofArticle106,however,empowers
the Secretary of Labor to make distinctions between permissible job contracting and
"laboronly" contracting, which is a prohibited act further defined under the last
paragraph. A finding that a contractor is a "laboronly" contractor is equivalent to
declaring that there is an employeremployee relationship between the principal and
the employees of the supposed contractor,
cont
on and the "laboronly" contractor is
considered as a mere agent of the hee principal,
princ the real employer. (Mandaue Galleon
r
Ba
Trade,Inc.,etal.vs.VicenteAndales,etal.,G.R.No.159668,March7,2008;ArnulfoC.
dales, e
Acevedo vs. Advanstar Company, any Inc.,
pany, In G.R. No. 157656, November 11, 2005;Franklin
es
Baguiovs.NLRC,G.R.Nos.7900408,October4,1991)
79004

bl
This trilateral relationship

onship under a legitimate job contracting
ionship ont
ontra is different from the
o
r
relationship in a laboronly
laboro
labor contracting situation because
cause in the latter, the contractor
ecause
R
Ba
simply becomes es an
an agent
a of the principal; either
er directly
dire or through the agent, the
an
principal then
henn controls
con
cont the results as well as the
he means
the m and manner of achieving the
es
desired results.
results In other words, the party
results. tyy who
who would have been the principal in a
h
bl
legitimate
at job
mate jo contracting relationship and w
p and who has no direct relationship with the
C
contractor's
to employees simply becomes omes
mes th the employer in the laboronly only contracting
o
r
situationwithdirectsupervisionandcontroloverthecontractedemployees.
nd cont ployees
ployees.
R

Ba
an
The law allows contracting and

and sub
subcontracting involving services ices
ces bubut closely regulates
b
es
theseactivitiesfortheprotectionofworkers.Thus,anemployercancontractoutpartof
rotection loyer
oyer ca
h
bl
itsoperations,provideditcomplieswiththelimitsandstandardsprovidedintheCode
d it com
co standard
andar
C
andinitsimplementingrules.(CocaColaBottlersPhil.,Inc.vs.RickyE.delaCruz,etal.,
il.,, Inc. v
o
r
G.R.No.184977,December7,2009)
R

Ba
an
Clearly, the law and its implementing rules s allow

allow contracting arrangements s for
for the
t
th
es
h
performanceofspecificjobs,worksorservices.Indeed,itismanagementprerogativeto
rvices.
vices. In rerogativ
rogativ
bl
C
farmoutanyofitsactivities,regardlessofwhethersuchactivityisperipheralorcorein
of wh heral oro
nature. However, in order for such outsourcing to be valid, it must be m
t be made to an
o
independent contractor because the current labor rules expressly prohibit laboronly
y prohib
R
an
contracting. (Joeb M. Aliviado, et al. vs. Procter & Gamble Phils., ., Inc.,
ls., Inc., et al., G.R. No.
160506,March9,2010)
h

C
"Where 'laboronly' contracting exists, the Labor Code itself self establishes an employer
employee relationship between the employer and the employees of the 'laboronly'
contractor." The statute establishes this relationship for a comprehensive purpose: to
preventacircumventionoflaborlaws.Thecontractorisconsidered merely an agent of
theprincipalemployerandthelatterisresponsibletotheemployeesofthelaboronly
contractorasifsuchemployeeshadbeendirectlyemployedbytheprincipalemployer
15
(JoebM.Aliviado,etal.vs.Procter&GamblePhils.,Inc.,etal.,G.R.No.160506,March
9,2010)
Thejobofforwarding...consistsnotonlyofasingleactivitybutofseveralservicesthat
complement one another and can best be viewed as one whole process involving a
package of services. These services include packing, loading, materials handling and
supportclericalactivities,allofwhicharedirectedatthetransportofcompanygoods,
usuallytoforeigndestinations.
It is in the appreciation of these forwarder

w
wa services as one whole package of inter
related services that we discern a basic
basic misunderstanding
m that results in the error of
r
Ba
equatingthefunctionsoftheforwarders'employeeswiththoseofregularrankandfile
rwarder
employeesofthecompany.Aclericaljob,forexample,maysimilarlyinvolvetypingand
A cle
cl rica
ca
es
paper pushing activities and andd may
ma be done on the same company products that the
forwarders'employeesandcompanyemployeesmayworkon,butthesesimilaritiesdo
and co
bl
not necessarily mean n that

an that all these employees work k for
fo the company. The regular
o
r
company employees, to be sure, work for the compan
yees, to company
mpan under its supervision and
R
Ba
control, but forward
forwarder
ward employees work for the forwarder in the forwarder's own
e forw
an
operationthatisitselfacontractedworkfromthecompany.Thecompanycontrolsits
hat
at is it
i m the c
es
employeesinthemeans,methodandresultsoftheirwork,inthesamemannerthatthe
ees in th tss of the
h
bl
forwardercontrolsitsownemployeesinthemeans,mannerandresultsoftheirwork.
rder
d co n the m
C
Complicationsandconfusionresultbecausethecompanyatthesametimecontrolsthe
at ecause
cause ime
me c
o
r
forwarderintheresultsofthelatter'swork,withoutcontrollinghoweverthemeansand
er's wo ever
er the
R
manner of the forwarder employees'

empl
mploye
oye work. (Temic Automotive
Ba
otive Phil.
P vs. Temic
an
AutomotivePhil.,Inc.EmployeesUnionFFW,G.R.No.186965,December23,2009)
oyees
yees Un Decem
es

h
bl
[I]n Azucena's The Labor Code with Comments and Cases,

orr Cod ses, there are three parties in a
s, ther
C
legitimate contracting relationship,

l namely: the principal,
rincipal, the contractor, and the
o
r
contractor's employees. In this trilateral relationship, onship the principal controls the
tionship, the
R
contractor and his employees with respect to o the

the ultimate
u
ul
Ba
results or output of
off the
the
he
an
contract; the contractor, on the other hand, controls his employees with respect,
d, contro pect, n not
es
h
only to the results to be obtained, but with with respect to the means and manner manne of
bl
C
achievingthisresult.Thispervasivecontrolbythecontractoroveritsemployeesresults
rol
ol by mployees
ployees
inanemployeremployeerelationshipbetweenthem.(CocaColaBottlersPhil.,Inc.vs.ttlers Ph
P
o
RickyE.DelaCruz,etal.,G.R.No.184977,December7,2009)
R
an

This trilateral relationship under a legitimate job contracting ing is
ting is different from the
h
relationship in a laboronly contracting situation because e in

in the
the latter, the contractor
C
simply becomes an agent of the principal; either directly y o or through the agent, the
principal then controls the results as well as the means and manner of achieving the
desired results. In other words, the party who would have been the principal in a
legitimate job contracting relationship and who has no direct relationship with the
contractor's employees, simply becomes the employer in the laboronly contracting
situationwithdirectsupervisionandcontroloverthecontractedemployees.AsAzucena
16
astutely observed:inlaborcontracting,thereisreallynocontractingandnocontractor;
there is only the employer's representative who gathers and supplies people for the
employer; laborcontracting is therefore a misnomer. (CocaCola Bottlers Phil., Inc. vs.
RickyE.DelaCruz,etal.,G.R.No.184977,December7,2009)

CASEONLIABILITYOFINDIRECTEMPLOYER
. ..anindirectemployer(asdefinedbyArticle107)canonlybeheldsolidarilyliablewith
the independent contractor or subcontractor (as provided under Article 109) in the
eventthatthelatterfailstopaythewagesofitsemployees(asdescribedinArticle106).
ages
ge
Hence,whileitistruethatthepetitionerwastheindirectemployerofthecomplainants,
tioner
oner w
r
Ba
itcannotbeheldliableinthesamewayastheemployerineveryrespect.Thepetitioner
me way
wa
maybeconsideredanindirectemployeronlyforpurposesofunpaidwages.(MERALCO
ct em
mplo
plo
es
IndustrialEngineeringServicesCorp.vs.NLRC,
vices
ces Co etal.,G.R.No.145402,March14,2008)

bl
CASESONWORKERSPREFERENCEINCASEOFBANKRUPTCY
S PREFE UPTC
PT
o
r
R
Ba
Adistinctionshouldbemadebetweenapreferenceofcreditandalien.Apreference
should
ould b nce of
an
appliesonlytoclaimswhichdonotattachtospecificproperties.Aliencreatesacharge
y to
o clai
cla speci c
specif
es
on a particular
articula property. The right of first
articular first pr
preference as regards unpaid wages
h
bl
recognized
ized by
nized b Article 110 does not constitute
stitute a lien on the property of the insolvent
nstitute
C
debtorinfavorof
n workers.Itisbutapreferenceofcreditintheirfavor,apreferencein
a prefere r, a pre
o
r
application.Itisamethodadoptedtodetermineandspecifytheorderinwhichcredits
ed
d to de derr in w
R
ibution
Ba
shouldbepaidinthefinaldistributionoftheproceedsoftheinsolvent'sassets.Itisa
tribution solvent'
olvent
an
righttoafirstpreferenceinthedischargeofthefundsofthejudgmentdebtor.(DBPvs.
the disc judgme
udgm
es
NLRC,G.R.Nos.8276263,March19,1990)
3, March
h
bl
C
Pursuant to Art. 110 of the

h Labor Code as amended d by
by RA
RA 6715, whenever there is
o
r
liquidationproceedings,workersenjoyfirstpreferenceasregardswagesduethemfor
rence
ence a fo
for
R
servicesrenderedduringtheperiodincludingothermonetaryclaims(DBPv.NLRC,etal.
ther
er mo
Ba
, et al.
an
G.R.Nos.8276362,March19,1990),tobepaidinfullbeforeclaimsofthegovernment
paid
aid in f vernme
ernme
es
h
andothercreditorsmaybepaid.
bl
C

ItisquiteclearfromtheprovisionsofArticle110oftheLaborCodeandSection10,Rule
d Sectio
Secti
o
VIII,BookIIoftheRevisedRulesandRegulationsImplementingtheLaborCode,thata
e Labor
R
an
declarationofbankruptcyorajudicialliquidationmustbepresentbeforetheworker's
ent
nt befo
bef
preferencemaybeenforced.Thus,itwasheldthatArticle110oftheLaborCodeandits
0 of the
h
implementing rule cannot be invoked absent a formal declaration

eclaratio of bankruptcy or a
C
liquidationorder
Thereasonbehindthe necessityforajudicialproceedingoraproceedinginrembefore
the concurrence and preference of credits may be applied is to bind all interested
persons whether known to the parties or not. The claims of all credits whether
preferredornonpreferred,theidentificationofthepreferredonesandthetotalityof
17
the employer's assets should be brought into the picture. There can then be an
authoritative,fairandbindingadjudicationinsteadofthepiecemealsettlementwhich
wouldresultfromthequestioneddecisioninthiscase1(DBPv.LaborArbiter,supra).

Conversely,toholdthatArticle110isalsoapplicableinextrajudicialproceedingswould
beputtingtheworkerinabetterpositionthantheStatewhichcouldonlyassertitsown
prior preference in case of a judicial proceeding. Article 110 must not be viewed in
isolationandmustalwaysbereckonedwiththeprovisionsoftheCivilCode.(Bolinaovs.
Hon.Padolina,G.R.No.81415,June6,1990)

Article110oftheLaborCode,indeterminingthereachofitsterms,cannotbeviewedin
etermini
ermini
r
Ba
isolation.Rather,Article110mustbereadinrelationtotheprovisionsoftheCivilCode
st be re
concerning the classification,, concurrence
co cu
con u and preference of credits, which provisions
es
find particular application in
in insolvency proceedings where the claims of all creditors,
n inso
preferred or nonpreferred,
erred,
rred, mmay be adjudicated in a binding manner . . ." The reason
bl
behind the necessitytyy for

for a judicial proceeding or a pro proceeding in rem before the
pr
o
r
concurrenceandpreferenceofcreditsmaybeappliedistobindallinterestedpersons
prefere lied
ed is t
R
Ba
whetherknowntothepartiesornot.Theclaimsofallcreditswhetherpreferredornon
wn to the
th of all cr
c
an
preferred, the
the identification of the preferred
e iden
ide ones and the totality of the employer's
d ones
one
es
assetsshouldbebroughtintothepicture.Therecanthenbeanauthoritative,fairand
hould be
b There
h
bl
bindingadjudicationinsteadofthepiecemealsettlementwhichwouldresultfromthe
ngg adjud cee meal
C
questioneddecisioninthiscase.(Republicv.Peralta,G.R.No.L56568,May20,1987)
ne public
blic v.
v May 2
o
r

R

Ba
an
CASESONENTITLEMENTOFATTORNEY’SFEES
F ATTOR
es
h
bl
Inregardsattorney'sfees,thesameisgrantedonlyincaseofunlawfulwithholdingof
ees,
es, th case
se of
C
wages.(FilomenoN.Lantionvs.NLRC,G.R.No.82028,January29,1990)
, Januar
o
r

R
Itiswellsettledthataclaimforattorney'sfeesmaybeassertedeitherintheveryaction
may
ay be
Ba
acc ion
on
an
inwhichtheservicesofalawyerhadbeenrenderedorinaseparateaction.Attorney's
endered ttorne
torney
es
h
fees cannot be determined until after the main litigation has been decided
he main ded and
nd the
d and
bl
C
subjectoftherecoveryisatthedispositionofthecourt.Theissueoverattorney'sfees
ion
on of
o attorne
onlyariseswhensomethinghasbeenrecoveredfromwhichthefeeistobepaid.While to be p
o
a claim for attorney's fees may be filed before the judgment ntt is rendered, the
is re
R
an
determinationastotheproprietyofthefeesorastotheamountthereofwillhavetobe
t thereo
heldinabeyanceuntilthemaincasefromwhichthelawyer'sclaimforattorney'sfees
r'ss claim
h
mayarisehasbecomefinal.Otherwise,thedeterminationtobemadebythecourtswill
to be m
C
bepremature.Ofcourse,apetitionforattorney'sfeesmaybefiledbeforethejudgment
be f
in favor of the client is satisfied or the proceeds thereof delivered to the client. It is
apparentfromtheforegoingdiscussionthatalawyerhastwooptionsastowhentofile
his claim for professional fees. Hence, private respondent was well within his rights
when he made his claim and waited for the finality of the judgment for holiday pay
differential,insteadoffilingitaheadoftheaward'scompleteresolution.Todeclarethat
18
a lawyer may file a claim for fees in the same action only before the judgment is
reviewedbyahighertribunalwoulddeprivehimofhisaforestatedoptionsandrender
ineffectivetheforegoingpronouncementsofthisCourt.(TradersRoyalBankEmployees
Unionvs.NLRC,G.R.No.120592,March14,1997)

UnderArticle111oftheLaborCode,10%attorneysfeesmaybeassessedonlyincases
wherethereisanunlawfulwithholdingofwages,orunderArticle222—thosearising
fromcollectivebargainingnegotiationsthatmaybechargedagainstunionfundsinan
amounttobeagreeduponbytheparties.Noneofthesesituationsexistsinthecaseat
bar.(REAHSCorp.vs.NLRC,G.R.No.117473,April15,1997)
174
74

r
Ba
TheaforequotedArticle111isanexceptiontothedeclaredpolicyofstrictconstruction
an excep
intheawardingofattorney'sfees.Althoughanexpressfindingoffactsandlawisstill
s fee
fe s A
es
necessary to prove the merit
merit
rit of
of the award, there need not be any showing that the
employeractedmaliciouslyorinbadfaithwhenitwithheldthewages.Thereneedonly
ously
usly or
bl
be a showing that the

the lawful wages were not paid accor
he law accordingly.
cco (Pedrito F. Reyes vs.
o
r
CourtofAppeals,G.R.No.154448,August15,2003)
G.R. No
R
Ba

an
Withrespecttoattorney'sfees,inactionsforrecoveryofwagesorwhereanemployee
ect to att
at reco e
recov
es
wasforcedtolitigateandthusincurredexpensestoprotecthisrightsandinterests,a
ced to lil xpense
xpenses
h
bl
maximumoftenpercent(10%)ofthetotalmonetaryawardbywayofattorney'sfeesis
mum
u of otal
tal mo
C
justifiable
le under Article 111 of the Labor
Labor Code, Section 8, Rule VIII, I, Book
Bo III of its
Boo
o
r
Implementing Rules, and paragraph raph
aph 7,7, Article 2208 of the Civil Code.Code.
ode. A Although an
R
w is still
Ba
expressfindingoffactsandlawisstillnecessarytoprovethemeritoftheaward,there
r t of th
an
need not be any showing that

hat the employer acted maliciously
at the or in
lyy or iin bad faith when it
es
withheldthewages.Thereneedonlybeashowingthatthelawfulwageswerenotpaid
re need e lawful
h
bl
accordingly.(SMCvs.Aballa,G.R.No.149011,June28,2005)
balla,
alla, G 005)
05)
C

o
r
Adismissedemployeeisentitledtomoraldamageswhenthedismissalisattendedby
ges
es when
whe by
R
bad faith or fraud or constitutes an act oppressivesive tto labor, or is done in a manner
essive
Ba
a ner
an er
an
contrary to good morals, good customs or publicpublic policy. Exemplary damages s may
may be
b
es
h
awarded if the dismissal is effected in a a wanton,

wanto oppressive or malevolent manner.
entt man
bl
C
(Quadravs.CA,G.R.No.147593,July31,2006) 2006
2006)

o
UndertheLaborCode,a10%agreementforpaymentofattorney'sfeesbasedonthe y'ss fees

R
an
monetaryclaimofanemployeeisvalidandbinding.(MWSSvs.GenaroC.Bautista,et
. Genar
al.,G.R.No.171351,March14,2008)
h

C
InPCLShippingPhilippines,Inc.v.NationalLaborRelationsCommissioncitingDr.Reyes
Com
v. Court of Appeals, this Court enunciated that there are two commonly accepted
concepts of attorney's fees, the socalled ordinary and extraordinary. In its ordinary
concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client
for the legal services the former has rendered to the latter. The basis of this
compensationisthefactoftheattorney'semploymentbyandhisagreementwiththe
19
client.Initsextraordinaryconcept,attorney'sfeesaredeemedindemnityfordamages
orderedbythecourttobepaidbythelosingpartyinalitigation.Theinstancesinwhich
these may be awarded are those enumerated in Article 2208 of the Civil Code,
specificallyparagraph7thereof,whichpertainstoactionsforrecoveryofwages,andis
payablenottothelawyerbuttotheclient,unlesstheyhaveagreedthattheawardshall
pertaintothelawyerasadditionalcompensationoraspartthereof.Article111ofthe
LaborCode,asamended,contemplatestheextraordinaryconceptofattorney'sfees.

StillaccordingtoPCLShipping,Article111isanexceptiontothedeclaredpolicyofstrict
construction in the awarding of attorney's
ne fees. Although express findings of fact and
rney
lawarestillnecessarytoprovethemeritoftheaward,thereneednotbeanyshowing
merit
r
Ba
that the employer acted maliciouslyously oro in bad faith when it withheld the wages. In
carryingoutandinterpretingtheLaborCode'sprovisionsandimplementingregulations,
the
he Lab
ab
es
the employee's welfare shouldhould
ould b be the primordial and paramount consideration. This
kind of interpretation gives
gives m
meaning and substance to the liberal and compassionate
bl
spiritofthelawasprovidedinArticle4oftheLaborCode,whichstatesthat"alldoubts
provided
rovided ode
ode,
o
r
intheimplementationandinterpretationoftheprovisionsoftheLaborCodeincluding
tation
ation an
a ovisions
vision
R
Ba
itsimplementingrulesandregulations,shallberesolvedinfavoroflabor";andArticle
ing
ng rule esolve
an
1702oftheCivilCode,whichprovidesthat"incaseofdoubt,alllaborlegislationandall
e Civil Co
C n case o
es
labor contracts
ontracts shall be construed in favor or of
vor of the
t safety and decent living for the
h
bl
laborer."(JoseMaxS.Ortizvs.SanMiguelCorp.,G.R.Nos.15198384,July31,2008;PCL
er."
r. (Jos uel
el Corp
C
ShippingPhilippines,Inc.vs.NLRC,G.R.No.153031,December14,2006;PedritoF.Reyes
P R.. No.
No 1 6;Pedri
Pedri
o
r
vs.CourtofAppeals,G.R.No.154448,August15,2003)
448,
48, Aug
R

Ba
an
It is settled that in actions for

for re
recovery of wages or when the the employee
e
em is illegally
es
dismissedinbadfaithorwhereanemployeewasforcedtolitigateandincurexpenses
where o litigate
litigat
h
bl
toprotecthisrightsandinterestsbyreasonoftheunjustifiedactsofhisemployer,heis
d inter tified
fied ac
C
entitledtoanawardofattorney'sfees.ThisawardisjustifiableunderArticle111ofthe
justifiab
justifia b
o
r
Labor Code, Section 8, Rule VIII, Book III of its Implementing
mpleme
mplemen Rules; and paragraph 7,7
7,
R
Article2208oftheCivilCode.Moreover,incasesforrecoveryofwages,theawardof
sess for
Ba
ard of
an
attorney's fees is proper and thereneed not be an

ot be any showing that theemployeractedyer
er acte
act
es
h
maliciouslyorinbadfaithwhenitwithheldthewages.Thereneedonlybeashowing
eld the e a show
bl
C
that the lawful wages were not paid accordingly.

cordi
cordin (Baron Republic Theatrical,
rical, et
trical, e al. vs.
NormitaP.Peralta,etal.,G.R.No.170525,October2,2009)
o

R
an
Settled is the rule that in actions for recovery of wages, or where where
here an
a employee was
forced to litigate and, thus, incur expenses to protect his iss rights
right and interests, a
h
monetaryawardbywayofattorney'sfeesisjustifiableunderArticle111oftheLabor
nder Ar
C
Code; Section 8, Rule VIII, Book III of its Implementing Rules;
ules; and paragraph 7, Article
2208 of the CivilCode. The awardof attorney's fees is proper, and there need not be
any showing that the employer acted maliciously or in bad faith when it withheld the
wages.Thereneedonlybeashowingthatthelawfulwageswerenotpaidaccordingly.
(RTGConstruction,Inc.,etal.vs.RobertoFacto,G.R.No.163872,December21,2009)

20
CASESONSTANDARDS/CRITERIAFORMINUMUMWAGEFIXING
Theissueofwhetherornotawagedistortionexistsasaconsequenceofthegrantofa
wageincreasetocertainemployees,weagree,is,byandlarge,aquestionoffactthe
determination of which is the statutory function of the NLRC. Judicial review of labor
cases,wemayadd,doesnotgobeyondtheevaluationofthesufficiencyoftheevidence
upon which the labor officials' findings rest. As such, factual findings of the NLRC are
generally accorded not only respect bu but also finality provided that its decisions are
b
supportedbysubstantialevidenceanddevoidofanytaintofunfairnessorarbitrariness.
and
nd dev
r
Ba
When, however, the members of of the
the same labor tribunal are not in accord on those
aspectsofacase,asinthiscase,thisCourtiswellcautionednottobeassoconsciousin
ase,
se, this
es
passing upon the sufficiencyency of
iency o the evidence, let alone the conclusions derived
therefrom.(MetropolitanBank&TrustCompanyvs.NLRC,G.R.No.102636,September
tan
an Bank
bl
10,1993)
o
r

R
Ba
ItisimportanttonotethattheremedycontemplatedintheWageOrders,andnowin
t to not lated i
an
Article124oftheLaborCode,forawagedistortionconsistedofnegotiationsbetween
off the tortio
rtio
es
employerandemployeesfortherectificationofthedistortionbyreadjustingthewage
er and e on of th
h
bl
ratesofthedifferingclassesofemployees.Asapracticalmatter,
off thee d ees.
es. As a thisordinarilymeanta
C
wageincreaseforoneormoreoftheaffectedclassesofemployeessothatsomegapor
cr e affecte that
hat s
o
r
differentialwouldbereestablished.Therewasnolegalrequirementthatthehistorical
ed.
d. Ther nt that
hat t
R
gap which existed before the e implementation

imple of the Wage O
Ba
Orders
rders be restored in
an
precisely the same form or amount.

amoun (National Federation of Labor Labor vs. NLRC, G.R. No.
es
103586,July21,1994)
h
bl

C
TheWageOrdersissuedbytheRegionalTripartiteWagesProductivityBoardandArticle
b ages Pro
o
r
124 of the Labor Code of the Philippines, as amended,
ended, provide for the procedure to to
R
follow when the application of the prescribed ed minimum wage increase results
d min
Ba in
ultt in
an
distortions of the wage structure in any establishment.

stablish
tablish Hence, any wage distortion
distortio
storti
es
h
created by the wage increase granted to o specified

specif employees pursuant to the w
o the wage
bl
C
ordercanberemedied.(CapitolWireless,Inc.vs.Inc. VicenteS.Bate,G.R.No.104682,July
o.. 1046
14,1995)
o

R
an
Theissueofwhetherornotawagedistortionexistsasaconsequenceofthegrantofa
quence
uence
wageincreasetocertainemployeesisaquestionoffact;andasarule,factualfindings
d as a ru
h
inlaborcases,wheregroundedonsubstantialevidence,arenotreviewed.However,a
ar not
are
C
disharmonysuchasexistshere,betweenthefactualfindingsoftheLaborArbiterand
ngs
thoseoftheNLRC,opensthedoortoareviewthereofbythisCourt.(ManilaMandarin
EmployeesUnionvs.NLRC,G.R.No.108556,November19,1996)

21
Wagedistortionpresupposesanincreaseinthecompensationofthelowerranksinan
officehierarchywithoutacorrespondingraiseforhighertieredemployeesinthesame
region of the country, resulting in the elimination or the severe diminution of the
distinctionbetweenthetwogroups.Suchdistortiondoesnotarisewhenawageorder
givesemployeesinonebranchofabankhighercompensationthanthatgiventotheir
counterparts in other regions occupying the same pay scale, who are not covered by
saidwageorder.Inshort,theimplementationofwageordersinoneregionbutnotin
othersdoesnotinitselfnecessarilyresultinwagedistortion.

The four elements of wage distortion tion are: (1.) An existing hierarchy of positions with
on are
r
Ba
correspondingsalaryrates;(2)Asignificantchangeinthesalaryrateofalowerpayclass
signific
withoutaconcomitantincreaseinthesalaryrateofahigherone;(3)Theeliminationof
ase se in th
es
the distinction between the hee two
two levels; and (4) The existence of the distortion in the
sameregionofthecountry.(PrubankersAsso.vs.PrudentialBank&TrustCo.,G.R.No.
ntry. (
ntry.
bl
131247,January25,1999)
1999)
o
r

R
Ba
Wage distortion is aa factual and economic condition
on is dition that
t may be brought about by
an
differentcauses.Themerefactualexistenceofwagedistortiondoesnot,however,ipso
auses.
ses. Th
T of wage
es
facto result
sult to
to an obligation to rectify it, absent
absent a law or other source of obligation
h
bl
which requires
requi its rectification. (Bankard ard Employees
kard Em UnionWorkers Alliance Trade
C
Unionsvs.NLRC,G.R.No.140689,February17,2004)
s bruary
ruary 1
o
r

R
CASESONTHEVISITORIALANDENFORCEMENTPOWEROFTHEDOLE
D ENFOR
Ba DOLE
an
es
Elementsofjurisdictionofregionaldirectorsoverworkers'claims.
of region claims.
aims.
h
bl

C
Under prevailing jurisprudence,

d the socalled exception
ption
tion claclause in Art. 128 (b) of the
o
r
Labor Code has the following elements, which must
must all concur to divest the regional
ust all na
nal
R
directorofjurisdictionoverworkers'claims:
Ba
an

es
h
(a) thattheemployerconteststhefindingsofthelaborregulationsofficerandraises
dings of er and ra
bl
C
issuesthereon;
(b) that in order to resolve such issues, there is a need to examine
amine eevidentiary
o
matters;and
R
an
(c) that such matters are not verifiable in the normal course rse of
urse of inspection. (Bay
Haven,Inc.,etal.vs.FlorentinoAbuan,etal.,G.R.No.160859,July30,2008;Ex
. 16085
h
Bataan Veterans Security Agency, Inc. vs. Secretary ry of

of Labor,
La G.R. No. 152396,
C
November20,2007;BatongBuhayGoldMines,Inc.vs.DionisioDelaSerna,G.R.
vs
vs.
No.86963,August6,1999;SSKPartsCorporationvs.TeodoricoCamas,G.R.No.
85934,January30,1990)

22
Article128(b)oftheLaborCodeclearlyprovidesthattheappealbondmustbe"inthe
amount equivalent to the monetary award in the order appealed from". The records
showthatpetitionerfailedtoposttherequiredamountoftheappealbond.Hisappeal
wasthereforenotperfected.

The rule is that, to perfect an appeal of the Regional Director's order involving a
monetary award in cases which concern the visitorial and enforcement powers of the
Secretary of Labor and Employment, the appeal must be filed and the cash or surety
bondequivalenttothemonetaryawardmustbepostedwithintencalendardaysfrom
rd
d
receipt of the order. Failure either err to
to file
fi the appeal or post the bond within the
r
Ba
prescribed period renders the order order final and executory. (Secretary of Labor and
Employment, et al. vs. Panay y Veteran's
V tera
Ve era Security and Investigation Agency, Inc., et al.,
es
G.R.No.167708,August22,2008)
2, 2008)

bl
DOLE'spowerdoesnotapplywheretheemployeremployeerelationshiphasceased,or
not
ot app ploye
loy
o
r
hasneverexisted..
R
Ba

an
The provision
ion is qu
on is quite explicit that the visitorial
q al and
rial andd enforcement power of the DOLE
es
comesintoplayonly"incaseswhentherelationshipofemployeremployeestillexists".
nto play elationsh
ationsh
h
bl
This clause
ause signifies
lause s that the employeremployee
employ relationship must have existed even
C
beforetheemergenceofthecontroversy.Necessarily,theDOLE'spowerdoesnotapply
h
he versy.
rsy. Ne
N err doe
do
o
r
in two instances, namely: (a) where the employeremployee relationship
ere the ionship has ceased;
R
and(b)wherenosuchrelationshiphaseverexisted.
ship
hip has
Ba
an

es
The first situation is categorically
ategorica covered by Sec. 3, Rule ulee 11
11 of the Rules on the
h
bl
DispositionofLaborStandardsCases15issuedbytheDOLESecretary.Inthissituation,
andard
ndard OLE
LE Sec
C
theclaimhastobereferredtotheNLRCbecauseitistheNLRCwhichhasjurisdictionin
the
he NLR
NL
o
r
view of the termination of the employeremployee ee relationship.
relat The same procedure ure
R
has to be followed in the second situation since it is
ce it
Ba
is the NLRC that has jurisdiction
tion
o in
an
viewoftheabsenceofemployeremployeerelationshipbetweentheevidentiaryparties
relations
elations ryy parti
part
es
h
from the start. (People's Broadcasting (BomboBombo Radyo Phils., Inc.) vs. Secretary etary
ary ofof the
bl
C
DOLE,etal.,G.R.No.179652,May8,2009) 09)
9)

o
Thedeterminationoftheexistenceofemployeremployeerelationshipisstillprimarily
nship
ship is
R
an
lodgedwiththeNLRC.

h
ItcanbeassumedthattheDOLEintheexerciseofitsvisitorialandenforcementpower
torial
orial an
C
somehow has to make a determination of the existence e ofof an employeremployee
relationship.Suchprerogativaldetermination,however,cannotbecoextensivewiththe
visitorial and enforcement power itself. Indeed, such determination is merely
preliminary,incidentalandcollateraltotheDOLE'sprimaryfunctionofenforcinglabor
standards provisions. The determination of the existence of employeremployee
relationshipisstillprimarilylodgedwiththeNLRC.Thisisthemeaningoftheclause"in
23
caseswheretherelationshipofemployeremployeestillexists"inArt.128(b).(People's
Broadcasting (Bombo Radyo Phils., Inc.) vs. Secretary of the DOLE, et al.,G.R. No.
179652,May8,2009)

Regional directors have jurisdiction over labor standards violations based on findings
madeinthecourseofinspectionofanemployer'spremises.

UnderArticle128(b)oftheLaborCode,asamendedbyRepublicAct(RA)No.7730,the
DOLE Secretary and her representatives, the regional directors, have jurisdiction over
labor standards violations based on find
findings made in the course of inspection of an
fin
employer's premises. The said jurisdiction
isdictio is not affected by the amount of claim
risdictio
r
Ba
involved, as RA 7730 had effectively
ctively removed the jurisdictional limitations found in
Articles 129 and 217 of the Labor
La orr Code insofar as inspection cases, pursuant to the
Lab
es
visitorial and enforcementnt powers
pow of the DOLE Secretary, are concerned. The last
sentenceofArticle128(b)oftheLaborCoderecognizesanexceptiontothejurisdiction
(b) of t
bl
of the DOLE Secretary

ry and
ary and her representatives, but such
ch exception is neither an issue
uch
o
r
norapplicablehere.(TigerConstructionandDev't.Corp.vs.ReynaldoAbay,etal.,G.R.
ere.
re. (Tig Corp.
orp. v
R
Ba
No.164141,February26,2010)
ebruary
bruary
an

es
CASESONRECOVERYOFWAGES,SIMPLEMONEYCLAIMSANDOTHERBENEFITS
ON N RECO MONEY
h
bl
C
TheexclusivejurisdictionoftheLaborArbiter
lu orr Arbit isconfirmedbytheprovisionsofArticle
vision
ision
o
r
129whichexcludefromthejurisdictionoftheRegionalDirectororanyhearingofficerof
iction
ction of nyy heari
R
wer to
Ba
theDepartmentofLaborthepowertohearanddecideclaimsofemployeesarisingfrom
ower em
mploye
an
employeremployee relations exceeding the amount of P5,000.00

nss excee 0.00 ffor each employee.
00.00
es
(SSFBWAvs.SecretaryofLabor,G.R.No.93550,October4,1991)
f Labor, G 1991)
991)
h
bl

C
The principle of continuous jurisdiction of the regional

giona d
gional director, as applied by the
o
r
Secretary of Labor to the suit filed by herein private
ate respondents
vate res on March 14, 1989
989
R
prior to the effectivity of Republic Act No. 6715,6715,

715, is therefore incorrect. While
Ba
hi e aa
an
subsequent law can not generally produce a a retroactive

retro effect as to affect pending
pend
pendin
es
h
litigation (Article 4, New Civil Code), it is an

t is an equally accepted axiom in statutory
n statu
bl
C
construction that: where at the time an an ac

action is filed in court the latter
latter has no
jurisdiction over the subject matter thereof but a subsequent statute clothes it with
te cloth
clot
o
jurisdiction before the action is decided, the statute is in the nature ure of aa curative law
re of
R
an
with retroactive operation to pending proceedings and cures s thethe

he ddefect of lack of
jurisdiction of the court at the commencement of the action. n. ((Rajah
Raja Humabon Hotel,
h
Inc.vs.CresencianoB.Trajano,G.R.Nos.10022223,September14,1993)
ember
mber 14
C

24
The visitorial power of the Secretary of Labor to order and enforce compliance with
laborstandardlawscannotbeexercisedwheretheindividualclaimexceedsP5,000.00,
can no longer be applied in view of the enactment of R.A. No. 7730 amending Article
128(b)oftheLaborCode(FranciscoGuico,Jr.vs.SecretaryofLabor,G.R.No.131750,
November16,1998)

TheServandoruling,ineffect,expandedthejurisdictionallimitationprovidedforbyRA
6715astoincludelaborstandardscasesunderArticle128(b)andnolongerlimitedto
ordinarymonetaryclaimsunderArticle129.(BatongBuhayGoldMinesvs.DionisioDela
e1
Serna,G.R.No.86963,August6,1999) 999)
99)
r
Ba

The jurisdiction of the Regional
nal Director
onal Dir is upheld notwithstanding the fact that the
es
amountsawardedexceeded edd P5,000.
P5,00

bl
The present law, RA

RAA 7730,
7730 can be considered a curative
urati
ra statute to reinforce the
o
r
conclusionthattheRegionalDirectorhasjurisdictionoverthepresentlaborstandards
he Regi onn over
R
Ba
case.
an

es
Wellsettledistherulethatjurisdictionoverthesubjectmatterisdeterminedbythelaw
tled is t r the su
h
bl
inforcewhentheactionwascommenced,unlessasubsequentstatuteprovidesforits
cee whehe ced,
ed, unle
C
retroactiveapplication,aswhenitisacurativelegislation.
iv a curativ
o
r

R
Curative statutes are intended to

Ba
supply defects, abridge superfluities
to sup fluities iin existing laws
an
and curb certain evils. They are

y are intended to enable persons to
re in to ca
carry into effect that
es
whichtheyhavedesignedandintended,buthasfailedofexpectedlegalconsequence
ed and i expect
expecte
h
bl
by reason of some statutory

utor disability or irregularity in
tutory n their
their own action. They make
C
validthatwhich,beforetheenactmentofthestatute,wasinvalid.(BatongBuhayGold
h e,, was in
i
o
r
Minesvs.DionisioDelaSerna,G.R.No.86963,August6,1999)
ust 6, 19
R

Ba
an
CASEONSTIPULATIONINALABORCONTRACTAGAINSTMARRIAGE
CT AGA
es
h
bl
C
Petitioner'spolicyisnotonlyinderogationoftheprovisionsofArticle136oftheLabor
on of 366 of the
th
Codeontherightofawomantobefreefromanykindofstipulationagainstmarriagein
against
gainst m
o
connectionwithheremployment,butitlikewiseassaultsgoodmoralsandpublicpolicy,
als
ls and
R
an
tendingasitdoestodepriveawomanofthefreedomtochooseherstatus,aprivilege
e her st
that by all accounts inheres in the individual as an intangible
ble and
gible and inalienable right.
h
Hence, while it is true that the parties to a contract may
ay establish
estab any agreements,
C
terms,andconditionsthattheymaydeemconvenient,thesameshouldnotbecontrary
sam
to law, morals, good customs, public order, or public policy. Carried to its logical
consequences, it may even be said that petitioner's policy against legitimate marital
bonds would encourage illicit or commonlaw relations and subvert the sacrament of
marriage.(Phil.TelegraphAndTelephoneCo.vs.NLRC,G.R.No.118978,May23,1997)

25
CASEONPERMANENTTOTALDISABILITY
In accordance with the avowed policy of the State to give maximum aid and full
protectiontolabor,theCourthasappliedtheLaborCodeconceptofpermanenttotal
disabilitytoFilipinoseafarers,itholdingthatthenotionofdisabilityisintimatelyrelated
totheworker'scapacitytoearn,whatiscompensatedbeingnothisinjuryorillnessbut
hisinabilitytoworkresultingintheimpairmentofhisearningcapacity;hence,disability
should be understood less on its medical
c significance but more on the loss of earning
dica
capacity. (Rizaldy M. Quitoriano vs.
s. Jebsens
vs. Jebs Maritime, Inc., et al., G.R. No. 179868,
r
Ba
December23,2009)

CASEONPERMANENTTOTALDISABILITYASAPPLIEDTOSEAFARERS
TAL
AL DIS
le
ThestandardemploymentcontractforseafarerswasformulatedbythePOEApursuant
oyment
yment orm
r
to its mandate under
under E.O. No. 247 to "secure the the best terms and conditions of
he be
Ba
employment of of Filipi
Filipino contract workers and ensure
nsure compliance therewith" and to
"promote andand protect the wellbeing of Filipino
d pro pino workers
no w or overseas." Even without this
es
provision,
n, aa con
contract of labor is so impressed
co essed with public interest that the New Civil
ssed wi
bl
Code expressly
expres subjects it to "the special al laws
cial laws on labor unions, collective bargaining,
strikesandlockouts,closedshop,wages,workingconditions,hoursoflaborandsimilar
an ages,
es, wo abo
abor
o
r
subjects"(Art.1700).
R

Ba
an
Thus,theCourthasappliedtheLaborCodeconceptofpermanenttotaldisabilitytothe
the Lab nent
ent to
t
es
caseofseafarers.(JoelsonO.Iloretavs.Phil.TransmarineCarriers,Inc.,etal.,G.R.No.
on O. Ilo Carriers
Carriers,
h
bl
183908,December4,2009) 009)
09)
C

o
r
TherearethreekindsofdisabilitybenefitsundertheLaborCode,asamendedbyP.D.
the
he Lab .D
.D.
R
No.626:(1)temporarytotaldisability,(2)permanenttotaldisability,and(3)permanent
manent
nent to
Ba
maanent
an
partialdisability.Section2,RuleVIIoftheImplementingRulesofBookVoftheLabor
mpleme he Lab
es
h
Codedifferentiatesthedisabilitiesasfollows: ws:
bl
C

Sec.2.Disability.—(a)Atotaldisabilityistemporaryifasa as a
o
result of the injury or sickness the employee is unable
ble to
to
R
an
perform any gainful occupation for a continuous uss period

perio
notexceeding120days,exceptasotherwiseprovidedfor
provided
h
in Rule X of these Rules. (b) A disability tyy is

i total
is to and
C
permanent if as a result of the injury or r sickness

sic the
employeeisunabletoperformanygainfuloccupationfor
a continuous period exceeding 120 days, except as
otherwise provided for in Rule X of these Rules. (c) A
disability is partial and permanent if as a result of the
26
injury or sickness the employee suffers a permanent

partiallossoftheuseofanypartofhisbody.

Joelson O. Iloreta vs. Phil. Transmarine Carriers, Inc., et al., G.R. No. 183908,
December4,2009

[T]hetestofwhetherornotanemployeesuffersfrom'permanenttotaldisability'isa
showing of the capacity of the employee to continue performing his work
notwithstandingthedisabilityheincurred.Thus,ifbyreasonoftheinjuryorsicknesshe
sustained,theemployeeisunabletoperformhiscustomaryjobformorethan120days
perf
er
and he does not come within the coverage of Rule X of the Amended Rules on
hee cove
r
Ba
EmployeesCompensability(which,inmoredetailedmanner,describeswhatconstitutes
ch, in m
temporary total disability),, thent en
th n the said employee undoubtedly suffers from
es
'permanenttotaldisability'regardlessofwhetherornothelosestheuseofanypartof
y regard
hisbody.(JoelsonO.Iloretavs.Phil.TransmarineCarriers,Inc.,etal.,G.R.No.183908,
oreta
reta vs
v
bl
December4,2009)
o
r

R
Ba
A total disability does not require that the employee
lityy does
doe oyee b be absolutely disabled or totally
an
paralyzed.Whatisnecessaryisthattheinjurymustbesuchthattheemployeecannot
What
hat is ryy mus
mu t
es
pursue his
his usua
usual work and earn therefrom.
usu om. On the other hand, a total disability is
m. On
h
bl
consideredpermanentifitlastscontinuouslyformorethan120days....Permanent
dered
ered p uously
ously f
C
disabilityisinabilityofaworkertoperformhisjobformorethan120days,regardlessof
yi erfor
formmh ays,
ys, re
o
r
whetherornothelosestheuseofanypartofhisbody....Totaldisability,ontheother
f any pa ability,
R
of an em
Ba
hand,meansthedisablementofanemployeetoearnwagesinthesamekindofworkof
e same
ame
an
similarnaturethathewastrainedfor,oraccustomedtoperform,oranykindofwork
trained
rained form,
orm, o
es
which a person of his mentality
mentality and attainments could do.. ItIt doe
does not mean absolute
h
bl
helplessness.Indisabilitycompensation,itisnottheinjurywhichiscompensated,but
ty com jury
ury wh
C
ratheritistheincapacitytoworkresultingintheimpairmentofone'searningcapacity.
pairmen
o
r
(JoelsonO.Iloretavs.Phil.TransmarineCarriers,Inc.,etal.,G.R.No.183908,December
nc.,
c., et al
a be
ber
R
4,2009)
Ba
an

es
h
CASEDEFININGSTATEPOLICYONWORKERS’PARTICIPATIONINDECISIONANDPOLICY
ERS’ PA AND
ND PO
bl
C
MAKINGPROCESSES
o
It was only on March 2, 1989, with the approval of Republic Act No.
No. 6715,
671 amending
R
an
Article 211 of the Labor Code, that the law explicitly considered
ed
d it
it aa SState policy "(t)o
ensure the participation of workers in decision and policymaking
making processes affecting
h
theirrights,dutiesandwelfare."However,evenintheabsenceofsaidclearprovisionof
ence of
C
law,theexerciseofmanagementprerogativeswasneverconsideredboundless.Thus,in
onsid
Cruzvs.Medina(G.R.No.73053,September15,1989),itwasheldthatmanagement's
prerogatives must be without abuse of discretion. (Philippine Airlines, Inc. (PAL) vs.
NLRC,G.R.No.85985,August13,1993)

27
CASEONTHE JURISDICTIONOFLABORARBITERSANDCOMMISSION
Thejurisdictionofacourtorquasijudicialoradministrativeorganisdeterminedbythe
issuesraisedbytheparties,notbytheirsuccessorfailureinprovingtheallegationsin
theirrespective.Receptionofproofisnotaconditionprecedenttotheassumptionof
jurisdiction,forpreciselyjurisdictionmustexistbeforeevidencecanbetaken,sincethe
authoritytoreceiveitisinitselfanexerciseofjurisdiction.Toaffectthejurisdictionof
saidcourt,ororgan,themainrequirementisthattheissueraisedbeagenuineone.In
eme
me
otherwords,thequestionposedmustbeonethatismaterialtotherightofactionor
must
ust be
r
Ba
whichcouldaffecttheresultofthedisputeorcontroversy.(AssociatedLaborUnionvs.
the disp
JoseC.Borromeo,G.R.No.L26461,November27,1968)
2646
6461 N

Inconstruingtheaboveprovision,thejurisdictionoftheLaborArbiterandtheVoluntary
e provisi
Arbitrator or Panel of
of Voluntary
Volu Arbitrators over the cases
ca
cas enumerated in the Labor
r
Code, Articles 217, 261 and 262, can possibly include
17, 261 de money
lude m claims in one form or
Ba
another.

es
Whileavoluntaryarbitratorisnotpartofthegovernmentalunitorlabordepartment's
volunta the
he gov
bl
personnel,
nel, said
nnel, sa arbitrator renders arbitration
ration services provided for under labor laws.
tration
Generally,thearbitratorisexpectedtodecideonlythose
ly to
o decid questionsexpresslydelineated
ressly
essly
o
r
bythesubmissionagreement.Nevertheless,thearbitratorcanassumethathehasthe
everthele
verthele mee tha
R
nal
al settl
Ba
necessarypowertomakeafinalsettlementsincearbitrationisthefinalresortforthe
t e fina
an
adjudicationofdisputes.(Ludo&LuymCorp.vs.FerdinandSaornido,G.R.No.140960,
udo & L aornid
aornido
es
January20,2003)
h
bl

C
Asarule,laborarbitersandtheNationalLaborRelationsCommissionhavenopoweror
ons
ns Com
o
r
authority to grant reliefs from claims that do not not ari
arise from employeremployee
ar yee
R
relations. They have no jurisdiction over torts orts that have no reasonable ca
ts th
Bacausal
ausal
sal
an
connectiontoanyoftheclaimsprovidedforintheLaborCode,otherlaborstatutes,or
r in the atutes,
tutes,
es
h
collectivebargainingagreements.
bl
C

While it is true that labor arbiters and the NLRC have jurisdiction to
o award
awar not only
award
o
reliefs provided by labor laws, but also damages governed by the Civil Code, these
hee Civil
R
an
reliefsmuststillbebasedonanactionthathasareasonablecausalconnectionwiththe
usal
sal con
LaborCode,otherlaborstatutes,orcollectivebargainingagreements.(EvelynTolosavs.
eement
ement
h
NLRC,G.R.No.149578,April10,2003)
C

Not every controversy or money claim by an employee against the employer or vice
versaiswithintheexclusivejurisdictionofthelaborarbiter.Amoneyclaimbyaworker
against the employer or viceversa is within the exclusive jurisdiction of the labor arbiter
only if there is a "reasonable causal connection" between the claim asserted and
28
employeeemployerrelation.Absentsuchalink,thecomplaintwillbecognizablebythe
regularcourtsofjustice.

Actionsbetweenemployeesandemployerwheretheemployeremployeerelationship
is merely incidental and the cause of action precedes from a different source of
obligationiswithintheexclusivejurisdictionoftheregularcourt.(EduardoG.Eviotavs.
CourtofAppeals,G.R.No.152121,July29,2003)

Wedisfavordelayintheenforcementofthelaborarbiter'sdecision.Onceajudgment
becomesfinalandexecutory,theprevailingpartyshouldnotbedeniedthefruitsofhis
vaili
ai
victorybysomesubterfugedevisedbythelosingparty.Finalandexecutoryjudgments
d by the
r
Ba
canneitherbeamendednoralteredexceptforcorrectionofclericalerrors,evenifthe
ered ex
purpose is to correct erroneous
eous
o co conclusions of fact or of law. Trial and execution
es
proceedingsconstituteonewholeactionorsuitsuchthatacaseinwhichexecutionhas
e whole
been issued is regardedd as
ed as still
st pending so that all proceedings in the execution are
bl
proceedingsinthesuit.(MarmosyTrading,Inc.,etal.vs.CourtofAppeals,etal.,G.R.
suit.
uit. (Ma
(M vs
vs.
o
r
No.170515,May6,2010)
y 6, 2010
R
Ba

an
Alaborarbitermayonlytakecognizanceofacaseandawarddamageswheretheclaim
iter
er ma case
ase an
n
es
forsuchdamagesarisesoutofanemployeremployeerelationship.(RoniloSorredavs.
damag yer
erempl
empl
h
bl
CambridgeElectronics
ridge
idge El
E Corp.,G.R.No.172927,February11,2010)
72927,
2927, F
C

o
r
This provision [Article 217 (c)] requires
requires
equires labor arbiters to refer cases
ses involving
cases in the
R
e grieva
Ba
implementationofCBAstothegrievancemachineryprovidedthereinandtovoluntary
erein an
an
arbitration. (Miguela Santuyo,

yo et
yo, et al.
a vs. Remerco Garments Manufacturing,
Manufa
anufa Inc., et al.,
es
G.R.No.174420,March22,2010)
22, 2010
h
bl

C
CASE ON TECHNICAL RULES;NOT

R BINDING AND PRIORPRIOR RESORT TO AMICABLE
o
r
SETTLEMENT
R
Ba
an
In proceedings before the NLRC or a labor arbiter,

arbiter
arbiter, technical rules of procedure
dure an
aand
es
h
evidence are not binding. Even under the

he revis
revised rules of the NLRC an expedit
expeditious
xpedit
bl
C
procedureisprovidedfor.Simplificationofprocedure,withoutregardtotechnicalities
of pr
p o techn
oflaworprocedureandwithoutsacrificingthefundamentalrequisitesofdueprocess,is
of due
o
mandated to insure a speedy administration of social justice. This his Court
This Cou construed
R
an
Article221oftheLaborCodeastoallowtheNLRCoralaborarbitertodecideacaseon
biter
ter to d
the basis of position papers and other documents submitted ted without
tted wi resorting to
h
technical rules of evidence as observed in regular courts of jjustice. (Robusta Agro
rts of
C
MarineProducts,Inc.vs.BaltazarGorombalem,G.R.No.80500,July5,1989)
0500,
500

29
InproceedingsbeforeLaborArbitersandtheNationalLaborRelationsCommission,the
lawisexplicitthat"therulesofevidenceprevailingincourtsoflaworequityshallnotbe
controllinganditisthe(law's)spiritandintentionthattheCommissionanditsmembers
andtheLaborArbitersshalluseeveryandallreasonablemeanstoascertainthefactin
each case speedily and objectively and without regard to technicalities of law or
procedure,allintheinterestofdueprocess."Indeed,itisnottheRuleofCourtenacted
by the Supreme Court but rather the regulations promulgated by the National Labor
RelationsCommissionwhichgovern"thehearinganddispositionofcasesbeforeitand
itsregionalbranches..."The"RevisedRuleofCourtofthePhilippinesandprevailing
ed
d
jurisdiction," the law says, may be e applied
applie to labor cases only under quite stringent
r
Ba
limits,i.e.,"intheabsenceofanyapplicableprovision(intheRulesoftheCommission),
y applic
and in order to effectuate the he objectives
the obje
bje of the Labor Code . . ., in the interest of
es
expeditious labor justice and and whatever practicable and convenient, by analogy or in a
nd wha
wh
suppletory character and effect." Under these rules, the proceedings before a Labor
nd effe
bl
Arbiter are "nonlitigious

gious in
tigious i nature" in which, "subjectect tto the requirements of due
o
r
process,thetechnicalitiesoflawandprocedureandtherulesobtaininginthecourtsof
nicalitie d the ru
R
Ba
law . . . (do not)
ot) strictly
not) stri apply;" "trialtype" hearings
rings aare not required; cases may be
an
decideonthebasisof
thee basi
bas verifiedpositionpaperssubmittedbytheparties,accompanied
rs sub
su m
es
bytheaffidavitsoftheirwitnessesandsuchotherauthenticdocumentsasarerelevant.
ffidavits
ffidavits h other
h
bl
Such a
a procedure
proce has been sanctioned d by
by this
thi Court as not violative of due process.
this
C
Now,whetherornota"formaltrialorhearing"shouldbehadisamatterlyinginthe
h
he or hear atter
tte
o
r
discretionoftheLaborArbiter.TheArbitermayopttoholdahearing,e.g.,wherethe
hee Arbit ing, e.g
R
ayy and
Ba
affidavitsbeingactuallyhearsayanduntestedbycrossexaminationarenotenoughtoion are
an
satisfy the quantum of proof oof required by law especially where
of requ ree the
the statements of the
es
affiants are controverted.” (Shoemart, Inc. vs. NLRC, G.R. Nos.
d.” (Sho Nos. 9079596
9
90 & 9112526,
h
bl
August13,1993)
C

o
r
Administrative and quasijudicial bodies like the Nationa National
ationa Labor Relations Commission on
R
arenotboundbythetechnicalrulesofprocedureintheadjudicationofcases.However,
ure in the
Ba
wever,
er,
an
theruleonsubstitutionofcounseloremploymentofadditionalcounselisstillobserved
yment
ment o observe
bserv
es
h
inlaborcases.Thus,therecanbenovalidsubstitutionof
id subst counseluntiltheprescribed
e prescr
bl
C
procedure is followed, to wit 1) there re must

m be filed a written application
applicat
pplicat for
substitution;2)theremustbefiledthewrittenconsentoftheclienttothesubstitution;
o the su
o
3) there must be filed the written consent of the attorney to be substituted, if such
e substit
R
an
consentcanbeobtained;and4)incasesuchwrittenconsentcannotbeprocured,there
nnot
not be
b
mustbefiledwiththeapplicationforsubstitution,proofoftheserviceofnoticeofsuch
hee servic
servi
h
motioninthemannerrequiredbytherulesontheattorneytobesubstituted(Philippine
eyy to be
C
ApparelWorkersUnionv.NLRC,L50320,October27,1983). 3))

30
In a number of cases, this Court has construed Article 221 of the Labor Code as
permitting the National Labor Relations Commission (NLRC) or the Labor Arbiter to
decideacaseonthebasisofpositionpapersandotherdocumentssubmittedwithout
necessarilyresortingtotechnicalrulesofevidenceasobservedintheregularcourtsof
justice.Rulesofevidencearenotstrictlyobservedinproceedingsbeforeadministrative
bodiesliketheNLRC.(LepantoConsolidatedMiningCo.vs.MorenoDumapis,etal.,G.R.
No. 163210, August 13, 2008; Robusta
bus
u Agro Marine Products, Inc. vs. Baltazar
Gorobalem,G.R.No.80500,July5,1989;OmarO.Sevillanavs.I.T.Corp.,G.R.No.99047,
1989;O
989;O
r
Ba
April16,2001)

es
CASESREQUIRINGINDIVIDUALWRITTENAUTHORIZATIONFORWAGEDEDUCTIONS
DUAL
UAL W
bl
Article 222 of the Labor

Labor Code requiring an individual
dual
ua written authorization as a
o
r
prerequisite to wage
wage de
deductions seeks to protect thethe employee against unwarranted
he em
R
Ba
practices that would
would diminish his compensation withowithout his knowledge and consent.
an
However,forallintentsandpurposes,thedeductionsrequiredofthepetitionerandthe
or all int
in ductio
ctionss
es
employeesdonotruncountertotheexpressmandateofthelawsincethesamearenot
ees do n ess
ss mand
h
bl
unwarranted
ranted or without their knowledge
rranted ge and
dge and consent. Also, the deductions for the
C
unionservicefeeinquestionareauthorizedbylawanddonotrequireindividualcheck
erv horized
orized indivi
ndiv
o
r
off authorizations. (Radio Communications
municat of the Phils. vs. Sec.
Sec. of
of Labor and
R
Employment,G.R.No.77959,January9,1989)
anuary
nuary 9
Ba
an

es
The Court reads Article 222(b)
222(b) of the Labor Code as prohibit
222(b prohibiting
rohibit the payment of
h
bl
attorney'sfeesonlywhenitiseffectedthroughforcedcontributionsfromtheworkers
hen
en it i contribu
ontribu
C
fromtheirownfundsasdistinguishedfromtheunionfunds.(BankofthePhil.Islands
d on funds
o
r
EmployeesUnionvs.NLRC,G.R.No.6974647,March31,1989)
rch
ch 31, 1
R

Ba
an
Article222(b)prohibitsattorney'sfees,negotiationsfeesandsimilarchargesarisingout
otiations
tiations rising
ising o
es
h
of the conclusion of a collective bargaining

ning agagreement from being imposed ed on
osed on any
bl
C
individual union member. The collection on of

o the special assessment partly
of partly for
f the
paymentforservicesrenderedbyunionofficers,consultantsandothersmaynotbein
er may
ers ma
o
thecategoryof"attorney'sfeesornegotiationsfees.”Butthereisnoquestionthatitis
no
o ques
R
an
anexactionwhichfallswithinthecategoryofa"similarcharge,"and,therefore,within
, and, t
thecoverageoftheprohibitionintheaforementionedarticle.(CarmelitoL.Palacolvs.
e (Carm
e.
h
PuraFerrerCalleja,G.R.No.85333,February26,1990)
C

31
CASESONEXECUTIONPENDINGAPPEALOFNLRCDECISIONS
Executionpendingappealisinterlinkedwiththerighttoappeal.Onecannotbedivorced
fromtheother.Thelattermaybeavailedofbythelosingpartyorapartywhoisnot
satisfiedwithajudgment,whiletheformermaybeappliedforbytheprevailingparty
duringthependencyoftheappeal.Therighttoappeal,however,isnotaconstitutional,
natural or inherent right. It is a statutory privilege of statutory origin and, therefore,
available only if granted or provided by statute. The law may then validly provide
limitations or qualifications thereto or orr relief to the prevailing party in the event an
appealisinterposedbythelosingparty.Executionpendingappealisonesuchrelieflong
party.
rty. Ex
r
Ba
recognized in this jurisdiction. The
The Revised
Re Rules of Court allows execution pending
appealandthegrantthereofislefttothediscretionofthecourtupongoodreasonsto
iss leftt t
es
bestatedinaspecialorder.
r.

bl
Before its amendment nt by

ent by Section
S 12 of R.A. No. 6716, Article 223 of the Labor Code
6, A
o
r
already allowed execution
execut of decisions of the NLRC LRC pending
NLRC p
pe their appeal to the
R
Ba
SecretaryofLaborandEmployment.
abor
or and
an

es
Inauthorizingexecutionpendingappealofthereinstatementaspectofadecisionofthe
orizing ex
e the rein
h
bl
Labor Arbite
Arbiter reinstating a dismissed or or separated employee, the law itself has laid
r sepa
C
downacompassionatepolicywhich,oncemore,vivifiesandenhancestheprovisionsof
co once m the
he pr
p
o
r
the1987Constitutiononlaborandtheworkingman.(Aris(Phil.)Inc.vs.NationalLabor
ndd the w . vs.
s. Na
R
RelationsCommission,G.R.No.90501,August5,1991)
90501,
Ba
an

es
CASESONCOMPUTATIONOFTEN(10)DAYSPERIODFORAPPEAL
N OF TE APPEAL
PPEAL
h
bl
C
Sincethe10dayperiodprovidedinArticle223oftheLaborCodereferstotencalendar
Labor
abor C
o
r
days and not to ten working days, this means that S
that Saturdays, ega
egal
Sundays and Legal
R
Holidaysarenottobeexcluded,butincluded,inthecomputationofthe10dayperiod.
n the co per
Ba
er od.
an
r speed
Thisisinlinewiththeobjectiveofthelawforspeedydispositionoflaborcaseswiththewith th
t
es
h
end in view of protecting the interest of

f the
the working
w man. In subsequent t cases
cases, We
bl
C
ruledthatifthetenthdaytoperfectanappealfromthedecisionoftheLaborArbiterto
appea
ppea abor
bor Ar
the NLRC falls on a Saturday, the appeal shall be made on the nextt working
work
workin day, as
o
embodiedinSection1,RuleVIoftheNLRCRulesofProcedurepromulgatedonJanuary
omulgate
mulgate
R
an
14, 1992. …. This conclusion arrived at by the Court recognizes
gnizes
nizes th tthe fact that on
Saturdays the offices of NLRC and certain post offices are closed
closed.
osed.. ((Judy Phils., Inc. vs.
h
C

32
Alaborarbiter'sreinstatementorderisimmediatelyexecutoryevenpendingappeal.
Article223(3rdparagraph)oftheLaborCode,asamendedbySection12ofRepublicAct
No. 6715, and Section 2 of the NLRC Interim Rules on Appeals under RA No. 6715,
AmendingtheLaborCode,providethatanorderofreinstatementbytheLaborArbiter
is immediately executory even pending appeal. (Alejandro Roquero vs. Philippine
Airlines,Inc.,G.R.No.152329,April22,2003)

Filingofappealbondisindispensableforperfectionofappealbyemployer.
fo
for
r
Ba
The intention of the lawmakers s to
to make
ma the bond an indispensable requisite for the
perfectionofanappealbytheemployerisunderscoredbytheprovisionthatanappeal
e em mplo
plo
es
may be perfected "only upon
pon the
upon the posting of a cash or surety bond." The word "only"
makes it perfectly clear
r that
that the
t lawmakers intended the posting of a cash or surety
bl
bondbytheemployertobetheexclusivemeansbywhichanemployer'sappealmaybe
yerr to be hich
ch
o
r
consideredcompleted.Thelawhoweverdoesnotrequireitsoutrightpayment,butonly
pleted.
leted. T equire
uire it
R
Ba
thepostingofabondtoensurethattheawardwillbeeventuallypaidshouldtheappeal
a bond ll be ev
e
an
fail.Whatpetitionershavetopayisamoderateandreasonablesumforthepremiumof
petitione
etition te and
an
es
suchbond.
nd.
h
bl

C
(AccessoriesSpecialist,Inc.,etal.vs.
Ac al vs ErlindaB.Alabanza,G.R.No.168985,July
et al. No. 16
o
r
23, 2008;Metro Transit Organization,
rganizat
ganizat Inc., et al. vs. PIGLAS NFWUKMU,
NFWU
FWU et al.,
R
14,
4, 2008
Ba
G.R.No.175460,April14,2008;RoosIndustrialConstruction,Inc.,etal.vs.NLRC,
on Inc.,
an
etal.,G.R.No.172409,February4,2008;BorjaEstate,etal.vs.Sps.Rotilloand
409,
09, Feb et al.
es
RositaBallad,G.R.No.152550,June8,2005)
. No. 15
h
bl

C
Thepostingofacashorsuretybondisarequirementsinequanonfortheperfectionof
sine
n quq
o
r
an appeal from the labor arbiter's monetary award. d. The
rd. The posting of a bond within the
the
R
periodprovidedbylawisnotmerelymandatorybutjurisdictional.Failuretoperfectan
ry but ju
Ba
fect
ec an
an
appeal has the effect of rendering the judgment

gment final and executory. (Benjamin
dgment jamin S.
njamin
es
h
Santosvs.ElenaVelarde,G.R.No.140753,April30,2003)
, April 3
bl
C

CASESONAPPEALBONDASJURISDICTIONALREQUIREMENT,NOTJUSTPROCEDURAL. ST PROC
PRO
o
R
an
Therequirementforpostingthesuretybondisnotmerelyproceduralbutjurisdictional
cedural
edural b
andcannotbetrifledwith.Noncompliancewithsuchlegalrequirementsisfatalandhas
equireme
quireme
h
theeffectofrenderingthejudgmentfinalandexecutory.(HilarioS.Ramirezvs.Courtof
(Hilario
Hilario
C
Appeals,etal.,G.R.No.182626,December4,2009)

33
Contrary to petitioners' assertion, the appeal bond is not merely procedural but
jurisdictional. Without said bond, the NLRC does not acquire jurisdiction over the
appeal.Indeed,noncompliancewithsuchlegalrequirementsisfatalandhastheeffect
of rendering the judgment final and executory. It must be stressed that there is no
inherentrighttoanappealinalaborcase,asitarisessolelyfromthegrantofstatute.

Evidently,theNLRCdidnotacquirejurisdictionoverpetitioners'appealwithintheten
(10)dayreglementaryperiodtoperfecttheappealastheappealbondwasfiledeight
(8) days after the last day thereof. Thus,
Th
Thu the Court cannot ascribe grave abuse of
discretiontotheNLRCorerrortotheCourtofAppealsinrefusingtotakecognizanceof
hee Cour
r
Ba
petitioners'belatedappeal.

es
WhileindeedtheCourthasrelaxedtheapplicationofthisrequirementincaseswhere
as relax
thefailuretocomplywiththerequirementwasjustifiedorwheretherewassubstantial
with
th the
bl
compliancewiththerules,theoverpoweringlegislativeintent
e rules, t e int
in ofArticle223remainsto
o
r
be for a strict applicati
application of the appeal bond requirem
applicat requirement
quire as a requisite for the
R
Ba
perfectionofanappealandasaburdenimposedontheemployer.
an appea
appe on the
an

es
(Roos
Roos Industrial
In Construction, Inc., ., et
et al.
al. vs. NLRC, et al., G.R. No. 172409,
h
bl
February 4, 2008;Nationwide Security

Febru Security
ecurity and Allied Services, Inc. vs. Court of
C
Appeals,etal.,G.R.No.155844,July14,2008)
Ap 44,
4, July
o
r

R
The intention of the lawmakers rss to

to make
m
Ba
the bond an indispensable
sable requisite
re for the
an
perfectionofanappealbytheemployerisunderscoredbytheprovisionthatanappeal
he emp e provi
prov
es
maybeperfectedonlyuponthepostingofacashorsuretybond.Thelanguageofthe
upon the tyy bond.
bond
h
bl
lawisperfectlyclearthatthelawmakersintendedthepostingofacashorsuretybond
hat
at the posting
osting
C
by the employer to be an indispensable means by by which an employer's appeal is
y which
o
r
perfected or completed. While the use of the word ord may makes the perfection of an
rd ma an
R
appeal as optional on the part of the defeated d party,
party but to do so the posting o
Baof an
an
an
appealbondisrequiredbylaw.Evidentlythen,thepostingofabondismandatory,and
en,
n, the tory,
ory, an
a
es
h
theperfectionofanappealinthemannerandwithintheperiodprescribedbylawisnot
r and wit
wi byy law is
bl
C
onlymandatorybutjurisdictional.(Philux,Inc.,etal.vs.NLRC,etal.,G.R.No.151854,
ux,x, Inc R. No. 1
September3,2008;BorjaEstate,etal.vs.Sps.RotilloandRositaBallad,G.R.No.152550,
d, G.R. N
o
June8,2005)
R
an

h

C

34
Therequirementthattheemployerpostacashorsuretybondtoperfectits/hisappeal
is apparently intended to assure the workers that if they prevail in the case, they will
receivethemoneyjudgmentintheirfavoruponthedismissaloftheemployer'sappeal.
Itwasintendedtodiscourageemployersfromusinganappealtodelay,orevenevade,
theirobligationtosatisfytheiremployees'justandlawfulclaims.(Philux,Inc.,etal.vs.
NLRC, et al., G.R. No. 151854, September 3, 2008;Viron Garments Manufacturing Co.,
Inc.vs.NLRC,G.R.No.97357,March18,1992)

CASESONWHENBONDREQUIREMENTONAPPEALSMAYBERELAXED
NTT O
r
Ba
Whilethebondrequirementonappealsinvolvingmonetaryawardshasbeenrelaxedin
appeals
certaincases,thiscanonlybedonewheretherewassubstantialcomplianceoftheNLRC
e don
do e w

Rules of Procedure or where
where the
t appellants, atthe veryleast, exhibited willingness to
paybypostingapartialbondorwherethefailuretocomplywiththerequirementsfor
rtial
tial bon comp
om
r
perfectionofappealwasjustified.(Philux,Inc.,etal.vs.NLRC,etal.,G.R.No.151854,
peal
eal wa al. vs. N
Ba
September3,2008;MarianoOngvs.CourtofAppeals,G.R.No.152494,September22,
2008;M peals, G
2004)
es

bl
WhileSection6,RuleVIoftheNLRC'sNewRulesofProcedureallowstheCommissionto
Sectio
Section ew
w Rule
reducetheamountofthebond,theexerciseoftheauthorityisnotamatterofrighton
th
h exercise
xercise matter
atte
o
r
thepartofthemovant,butlieswithinthesounddiscretionoftheNLRCuponashowing
ithin
thin the LRC
C upo
R
aylight
ylightcc
Ba
ofmeritoriousgrounds.Itisdaylightclearfromtheforegoingthatwhilethebondmay
a while
an
bereduceduponmotionbytheemployer,thisissubjecttotheconditionsthat(1)the
y the em hee con
es
motiontoreducethebondshallbebasedonmeritoriousgrounds;and(2)areasonable
nd shall grounds;
ounds;
h
bl
amount in relation to the

the
he monetary
m award is posted byy the
the appellant;
ap otherwise, the
C
filingofthemotiontoreducebondshallnotstoptherunningoftheperiodtoperfectan
running
o
r
appeal.ThequalificationeffectivelyrequiresthatunlesstheNLRC
unless
nless t grantsthereduction
on
R
ofthecashbondwithinthe10dayreglementaryperiod,theemployerisstillexpected
aryy perio
Ba
pec
e ted
ed
an
topostthecashorsuretybondsecuringthefullamountwithinthesaid10dayperiod.
e full am ayy perio
es
h
(Hilario S. Ramirez vs. Court of Appeals, als, et

eals, et al., G.R. No. 182626, December
cembe 4,
ecembe
bl
C
2009;CollegeoftheImmaculateConceptionvs.NLRC,etal.,G.R.No.167563,March22,
ion
on vs 563, Ma
2010
o

R
an
Clearly, an appeal from a judgment as that involved in the present
esent case
resent c is perfected
"only"uponthepostingofacashorsuretybond.(MindanaoTimesCorp.vs.MitchelR.
o Times
h
Confesor,G.R.No.183417,February5,2010)
C

35
"Cash,"meansasumofmoney;cashbail(thesenseinwhichtheterm"cashbond"is
used)isasumofmoneypostedbyacriminaldefendanttoensurehispresenceincourt,
used in place of a surety bond and real estate. (Mindanao Times Corp. vs. Mitchel R.
Confesor,G.R.No.183417,February5,2010)

CASEONJURISDICTIONOFBUREAUOFLABORRELATIONS
The BLR has the original and exclusivevee jjurisdiction on all interunion and intraunion
conflicts. We said that since Article
e 226
226 o of the Labor Code has declared that the BLR
r
Ba
shall have original and exclusive ve authority
auth to act on all interunion and intraunion
conflicts,thereshouldbenomoredoubtastoitsjurisdiction.Asdefined,anintraunion
mo do
mor
es
conflict would refer to a conflict
onflict within or inside a labor union, while an interunion
conflict
controversyordisputeisoneoccurringorcarriedonbetweenoramongunions.(Emilio
iss one o
bl
E. Diokno, et al. vs. Hans

Hans Leo
L J. Cacdac, et al. G.R. No.o. 168475,
No. 1 July 4, 2007;Genaro
o
r
Bautistavs.CourtofAppeals,etal.,G.R.No.123375,February28,2005)
t of Appe
App 5, Februa
Febru
R
Ba

an
CASEONCOMPROMISEAGREEMENTS
OMPRO
MPRO
es
h
bl
Notallwaiversandquitclaimsareinvalidasagainstpublicpolicy.Iftheagreementwas
l waive id
d as ag
C
voluntarily
rily entered into and represents
nts aa reasonable settlement, it is
ents binding on the
s bind
o
r
parties and may not later be disowned
wned simply because of a change
owned of min
e of mind. It is only
R
he wai
wa
Ba
wherethereisclearproofthatthewaiverwaswangledfromanunsuspectingorgullible
the unsuspec
suspe
an
person,orthetermsofsettlementareunconscionableonitsface,thatthelawwillstep
lement
ement face,
ace, th
t
es
intoannulthequestionabletransaction,Butwhereitisshownthatthepersonmaking
able tran
tra own thath
h
bl
the waiver did so voluntarily,

ntarily with full understanding ofof what
what he was doing, and the
C
consideration for the quitclaim

i is credible and reasonable,
sonable the transaction must be
o
r
recognized as a valid and binding undertaking. (Corazon
Corazon Periquet vs. NLRC, G.R. No.
(Corazon No.
No
R
91298,June22,1990)
Ba
an

es
h
Whilenotallwaiversandquitclaimsareinvalidasagainstpublicpolicy,onemadeunder
nvalid a made
ade unu
bl
C
circumstancesofdireneedandwithagrossdisparitybetweentheactualclaimandthe
oss d l claim
amountofthesettlementcannotbecountenancedbythiscourt.(B.StaRitaAndCo.,Sta Rit
Ri
o
Inc.,vs.NLRC,G.R.No.119617,August14,1995)
R
an

Collusionisaspeciesoffraud.Article227oftheLaborCodeempowerstheNLRCtovoid
empowe
mpow
h
a compromise agreement for fraud . . . (Al Arellano, et al.

al.l. vs.
vs Powertech
vs. Po Corp., et al.,
C
G.R.No.150861,January22,2008)

36
In Olaybar v. NLRC, the Court, recognizing the conclusiveness of compromise
settlementsasameanstoendlabordisputes,heldthatArticle2037oftheCivilCode,
which provides that "[a] compromise has upon the parties the effect and authority of
resjudicata",appliessuppletorilytolaborcasesevenifthecompromiseisnotjudicially
approved. (JPhil Marine, Inc., et al. vs. NLRC, et al., G.R. No. 175366, August 11,
2008;AngelitoOlaybar,etal.vs.NLRC,etal.,G.R.No.108713,October28,1994)

Thatrespondentwasnotassistedbyhiscounselwhenheenteredintothecompromise
doesnotrenderitnullandvoid.

r
Ba
A compromise agreement is valid as lo
lid as llong as the consideration is reasonable and the
employee signed the waiver r voluntarily,
vo unt
vol with a full understanding of what he was
enteringinto.Allthatisrequiredforthecompromisetobedeemedvoluntarilyentered
equired
quired
into is personal and specific
specific individual consent. Thus, contrary to respondent's
specifi
contention, the employee's
loyee's counsel need not be present
ployee's ent at the time of the signing of
sent
r
thecompromiseagreement.(JPhilMarine,Inc.,etal.vs.NLRC,etal.,G.R.No.175366,
agreem al.l. vs. N
Ba
August11,2008;EurotechHairSystems,Inc.vs.AntonioS.Go,G.R.No.160913,August
08;Euro ntonio
31,2006)
s

e
bl
CASESONREQUIREMENTSOFREGISTRATIONOFLABORORGANIZATION
S ON
O RE ATION O
C
r
Article234oftheLaborCodemerelyrequiresa20%minimummembershipduringthe
erely
rely req mbershi
mbership
R
n. It do
d ion mu
Ba
applicationforunionregistration.Itdoesnotmandatethataunionmustmaintainthe
ion.
an
20% minimum membership p requirement

requir
equir all throughout its existe
existence. However, this
es
doesnotpreventanotherunionwithinthesamecompanyfromchallengingthestatus
er union y from c
h
bl
oftheunionasthelegitimatelabororganizationauthorizedtorepresenttheinterestsof
timate
mate zedd to re
C
the employees with the management. (Mariwasa Siam Ceramics, Inc. vs. DOLE
a Siam
o
r
Secretary,etal.,G.R.No.183317,December21,2009)
009)
09)
R

Ba
an
CASESONRIGHTSANDCONDITIONSOFMEMBERSHIPINALABORORGANIZATION
MBERSH TION
ION
es
h
bl
C
The use of the permissive "may" in the provision

prov
provi at once negates the notion
notion
otion that
t the
assent of 30% of all the members is mandatory. More decisive is the the fact
fa that the
fac
o
provisionexpresslydeclaresthatthereportmaybemade,alternativelyby"anymember
vely
ely by "
R
an
or members specially concerned." And further confirmation that att the
the aassent of 30% of
the union members is not a factor in the acquisition of jurisdiction
sdiction by the Bureau of
risdiction
h
LaborRelationsisfurnishedbyArticle226ofthesameLaborCode,whichgrantsoriginal
or Code
C
andexclusivejurisdictiontotheBureau,andtheLaborRelationsDivisionintheRegional
ation
OfficesoftheDepartmentofLabor,over"allinterunionandintraunionconflicts,and
all disputes, grievances or problems arising from or affecting labor management
relations," making no reference whatsoever to any such 30%support requirement.
Indeed,theofficialsmentionedaregiventhepowertoact"onallinterunionandintra
37
unionconflicts(1)"uponrequestofeitherorbothparties"aswellas(2)"attheirown
initiative."(Vercelesvs.BLR,G.R.No.152322,February15,2005)

…… attorney's fees may not be deducted or checked off from any amount due to an
employeewithouthiswrittenconsentexceptformandatoryactivitiesundertheCode.A
mandatoryactivityhasbeendefinedasajudicialprocessofsettlingdisputelaiddown
by the law. (Carlos P. Galvadores vs. Cresenciano B. Trajano, G.R. No. L70067,
September15,1986)

Unlike the NLRC which is explicitly vested
st with the jurisdiction over claims for actual,
este
moral,exemplaryandotherformsofdamages,theBLRisnotspecificallyempoweredto
off dama
r
Ba
adjudicateclaimsofsuchnaturearisingfromintraunionorinteruniondisputes.Infact,
arising
aris ing
Art.241oftheLaborCodeordainstheseparateinstitutionbeforetheregularcourtsof
rdain
da s t
es
criminalandcivilliabilitiesarisingfromviolationsoftherightsandconditionsofunion
s arising
membership.TheCourthasconsistentlyheldthatwherenoemployeremployeeexists
t has co
bl
betweenthepartiesandnoissueisinvolvedwhichmayberesolvedbyreferencetothe
and no ayy be
b
o
r
Labor Code, other labor statutes, or any collective
er labo vee bargaining
bar
barg agreement, it is the
R
Ba
regionaltrialcourtthathasjurisdiction.(Mariñovs.Gamilla,G.R.No.132400,January
court
urt th vs. Ga
an
31.2005)
s

e
h
bl
CASEONEMPLOYEES’RIGHTTOSELFORGANIZATION
ON EM RGANIZ
C
r
Theprotectionofworkers'righttoselforganizationinnowayinterferewithemployer's
o self
selfor eree with
R
freedom to enforce such ruless and

and orders
o
Ba
as are necessary to proper
proper
oper conduct of his
an
businesses,solongasemployer'ssupervisionisnotforthepurposeofintimidatingor
loyer's
oyer's purpose
urpos
es
coercinghisemployeeswithrespecttotheirselforganizationandrepresentation.Itis
with res tion
on and
h
bl
the functions of the court

ourt to
court t see that the rights of selforganization
self
lforga and collective
C
bargainingguaranteedbytheActareamplysecuredtotheemployee,butinitseffortto
o the em
o
r
preventtheprescribedunfairlaborpractice,thecourtmustbemindfulofthewelfareof
ourt
urt mu o
of
R
the honest employer. (Lakas Ng Manggagawang ang Makabayan vs. Marcelo Enterprises,
g Mak
Ba
pr ses,
pri es,
an
G.R.No.L38258,November19,1982)
es
h

bl
C
TheStateguaranteestherightofallworkerstoselforganization,collectivebargaining
rkers tive
ive bar
andnegotiations,aswellaspeacefulconcertedactivities,includingtherighttostrike,in
e right t
o
accordance with law. The right to strike, however, is not absolute.
te. It ha
e. It has heretofore
R
an
been held that a "no strike, no lockout" provision in the Collective Bargaining
e Collec
Colle
Agreement ("CBA") is a valid stipulation although the clause see may
ma be invoked by an
may
h
employeronlywhenthestrikeiseconomicinnatureoronewhichisconductedtoforce
nee which
C
wageorotherconcessionsfromtheemployerthatarenotmandatedtobegrantedby
t ma
thelawitself.Itwouldbeinapplicabletopreventastrikewhichisgroundedonunfair
laborpractice.Inthissituation,itisnotessentialthattheunfairlaborpracticeacthas,in
fact, been committed; it suffices that the striking workers are shown to have acted
honestlyonanimpressionthatthecompanyhascommittedsuchunfairlaborpractice
38
and the surrounding circumstances could warrant such a belief in good faith. (Panay
ElectricCompany,Inc.vs.NLRC,G.R.No.102672,October4,1995)

CASEONGOVERNMENTEMPLOYEES’RIGHTTOSELFORGANIZATION
With respect to other civil servants, that is, employees of all branches, subdivisions,
instrumentalities and agencies of the government including governmentowned or
controlled corporations with original charters and who are, therefore, covered by the
civilservicelaws,theguidelinesfortheexerciseoftheirrighttoorganizeisprovidedfor
under Executive Order No. 180. Chapterpt IV thereof, consisting of Sections 9 to 12,
apte
regulates the determination of thehee "sole
"sole and exclusive employees' representative."
r
Ba
(Trade Unions of the Philippines
s and
and Allied
A Services vs. National Housing Corporation,
G.R.No.49677,May4,1989) )
es

CASEONLEGALPERSONALITYOFLABORORGANIZATION
NALITY
bl
o
r
TheissuanceofthecertificateofregistrationbytheBureauorRegionalOfficeisnotthe
he certif Burea
Bureau
R
Ba
operativeactthatvestslegalpersonalityuponalocal/chapterunderDepartmentOrder
that
at ves ocal/c
ocal/ch
an
No. 9. Such legal

egal personality is acquired from
h legal the fi
m the filing of the complete documentary
es
requirementsenumeratedinSection1,RuleVI.(SanMiguelCorp.vs.MandauePacking
ments ene e VI
VI..(S
h
bl
ProductsPlants,G.R.No.152356,August16,2005)
cts Plan st 16, 20
C

o
r
CASE ON COVERAGE OF COMPROMISE PROMIS AGREEMENT BETWEEN N EMPLOYER
EMPL AND
R
EMPLOYEESUNION
Ba
an
es
Thecompromiseagreemententeredbetweentheunionandtheemployerappliesonly
ment ent nd
d the
he e
h
bl
to the members of the he bargaining

ba unit who agreed d to
to the
th termination of their
C
employment based on redundancy and received redundancy

edundan pay. It cannot bind an
o
r
employee who is not a member of the bargaining unit and who did not receive any
ngg unit any
R
redundancypayoranymonetarybenefitsundertheagreementorexecutedanydeed
er the a
Ba
y deed
ed
an
or waiver in favor of the company. (Dusit Hotel

Hotel Nikko vs. National Union of Worker
otel Ni Workers,
Worke
es
h
G.R.No.160391,August9,2005)
bl
C

CASE ON INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN IN ANY
OIN AN LABOR
o
ORGANIZATION;RIGHTOFSUPERVISORYEMPLOYEES
R
an
The rationale for this inhibition has been stated to be, because
cause if
iif these managerial
h
employeeswouldbelongtoorbeaffiliatedwithaUnion,thelattermightnotbeassured
he latte
C
oftheirloyaltytotheUnioninviewofevidentconflictofinterests.TheUnioncanalso
inte
become companydominated with the presence of managerial employees in Union
membership.(BulletinPublishingCorp.vs.AugustoS.Sanchez,G.R.No.74425,October
7,1986)

39
Determiningthestatusofsupervisoryandrankandfileemployeesisnotahardrowto
hoeinlaborlaw.Thetestofsupervisorystatusaswehaverepeatedlyrulediswhether
anemployeepossessesauthoritytoactintheinterestofhisemployer,whichauthority
shouldnotbemerelyroutinaryorclericalinnaturebutrequirestheuseofindependent
judgment.Corollarily,whatdeterminesthenatureofemploymentisnottheemployee's
title, but his job description. (Dunlop Slazenger(Phils.) vs. Secretary ofLabor, G.R.No.
131248,December11,1998)

While Article 245 (of the Labor Code) expressly prohibits supervisory employees from
joiningarankandfileunion,itdoesnotprovidewhatwouldbetheeffectifarankand
ott p
file union counts supervisory employees
oyees among its members, or viceversa. (Tagaytay
loyees
r
Ba
Highlands International Golf Club Incorporated vs. Tagaytay Highlands Employees
Club Inc
UnionPGTWO,G.R.No.142000,January22,2003)
000,
00, Janu
nu
es

CASEONCONFIDENTIALEMPLOYEESINELIGIBILITYTOJOINLABORUNIONS
ALL EMPL
bl
o
r
Confidential employees,
ployees, by the very nature of their
heir
eir functions,
fu
fun assist and act in a
R
Ba
confidentialcapacityto,orhaveaccesstoconfidentialmattersof,personwhoexercise
apacity
pacity ential
an
managerialfunctionsinthefieldoflaborrelations.Therefore,therationalebehindthe
functio
unctio tions.
ons T
es
ineligibility
lity of
of managerial employees to form,
orm, assist
form, as or join a labor union was held
h
bl
equallyapplicabletothem.
y appli
C

o
r
Animportantelementofthe"confidentialemployeerule"istheemployee'sneedtouse
fidentia
identia ployee's
R
labor relations information. Thus,

Ba
Thus, in determining the confidentiality
fid
dential of certain
an
employees,akeyquestionfrequentlyconsideredistheemployees'necessaryaccessto
frequen
requen oyees'
yees' n
es
confidentiallaborrelationsinformation.(SanMiguelCorp.Supervisorsvs.BienvenidoE.
ns infor Supervi
Supervis
h
bl
Laguesma,G.R.No.110399,August15,1997)
0399,
399, A
C

o
r
While Article 245 of the Labor Code limits the ineligibility
eligibilit to join, form and assist any
eligibility
R
labor organization to managerial employees, jurisprudence has extended

es, juri
Ba
d this
his
an
prohibition to confidential employees or those

hose
ose whwho by reason of their positions
w tions or
sitions
es
h
nature of work are required to assist or

or act
act in a fiduciary manner to manag
managerial
bl
C
employees and hence, are likewise privy y to

to sensitive and highly confidential
ential records.
(StandardCharteredBankEmployeesUnionvs.StandardCharteredBank,etal.,G.R.No.
ank,
nk et al
a
o
161933, April 22, 2008; Metrolab Industries, Inc. vs. Ma. Nieves Roldan
RoldanConfesor,
oldanC C G.R.
R
an
No.108855,February28,1996;RepublicofthePhil.vs.KawashimaTextileMfg.,Phil.,
hima
ima TeT
Inc.,G.R.No.160352,July23,2008)
h

C

40
CASESONCONCEPTOFUNFAIRLABORPRACTICEANDPROSECUTIONTHEREOF.
A finding of an unfair labor practice is not to be taken lightly for the Labor Code has
again criminalized these practices. (Magnolia Corporation vs. NLRC, G.R. No. 116813,
November24,1995)

Bytheverynatureofanunfairlaborpractice,itisnotonlyaviolationofthecivilrights
ofbothlaborandmanagementbutisalsoacriminaloffenseagainsttheStatewhichis
subject to prosecution and punishment. en (Hongkong and Shanghai Banking Corp. vs.
ent
NLRC,G.R.No.125038,November6,1997) 6, 1997)
r
Ba

Whatitsettledlaw,datingfromthecaseofStandardCigaretteWorkers'Unionv.Court
om
m thee
es
ofIndustrialRelations,decidedin1957,isthatifitwerealabororganizationobjecting
cided
ded in
totheparticipationinacertificationelectionofacompanydominatedunion,asaresult
a certific
bl
of which a complaintntt for

for aan unfair labor practice case against the employer was filed,
e aga
ag
o
r
the status of the latter
latter union must be first cleared d in such a proceeding before such
in suc
su
R
Ba
voting could take
akee place.
pla (Juan S. Barrera vs. Court
urt of
of Industrial
I Relations, G.R. No. L
an
32853,September25,1981)
tember
ember
es

h
bl
In labor jurisprudence,

or juris
uris it is wellestablished
shed that
ished th quitclaims and/or complete releases
C
executedbytheemployeesdonotestopthemfrompursuingtheirclaimsarisingfrom
d estop
top th ims
ms a
o
r
the unfair labor practice of the employer. The basic reason for
e emplo this iis that such
r this
R
quitclaims and/or complete releases

Ba
eases are against public policy and,
leases d therefore,
nd ther null and
an
void. The acceptance of termination

erminat
rminat pay does not divest aa labor
laborer of the right to
labo
es
prosecutehisemployerforunfairlaborpracticeacts.(ArmedForcesofthePhil.Mutual
for unfa ed
d Force
Forc
h
bl
BenefitAsso.,Inc.vs.AFPMBAIEU,G.R.Nos.L39140&39145,May17,1980)
FPPMBA 39145,
9145, M
C
r
Quitclaims and/or complete releases executed by y the
the employees
e
em do not estop them
em
R
frompursuingtheirclaimsarisingfromunfairlaborpracticesoftheemployer.Thebasic
bor
or pra e basic
sic
Ba
an
reasonforthisisthatsuchquitclaimsand/orcompletereleasesareagainstpublicpolicy
comple blic
lic poli
pol
es
h
and,therefore,nullandvoid.Theacceptanceofterminationdoesnotdivestalaborerof
ance
nce of t a labore
bl
C
therighttoprosecutehisemployerforunfairlaborpracticeacts.(LourdesG.Marcosvs.
nfair es G. Ma
NLRC,G.R.No.111744,September8,1995)
o

R
an
[Theemployer]hadanexistingCBAwithaunion,whichagreementmustberespected
ment
ent mu
inanymoveaffectingthesecurityoftenureofaffectedemployees;otherwise,itranthe
oyees; o
h
riskofcommittingunfairlaborpractice—bothacriminalandanadministrativeoffense.
and
nd an a
C
(Farley Fulache, et al. vs. ABSCBN Broadcasting Corp., G.R.

G.R.
G R No. 183810, January 21,
2010)

41
CASESONUNFAIRLABORPRACTICESOFEMPLOYERS
Thereasonthatjustifiesthepostponementofacertificationelectionpendinganinquiry
as to the bona fides of a labor union calls for a different conclusion where it is
management that would have an unfair labor practice case filed by it for illegal strike
engagedinbysomeofitsemployeesconcludedbeforeitwouldagreetotheholdingof
acertificationelection.Ifmanagementisallowedtohaveitsway,theresultmightbeto
diluteorfritterawaythestrengthofanorganizationbentonamorezealousdefenseof
labor'sprerogatives.Thedifficultiesandobstaclesthatmustbethenhurdledwouldnot
nddo
belostontherestofthepersonnel,whohadnotasyetmadeuptheirmindsonewayor
l, who h
r
Ba
the other. This is not to say thatmanagementis
t mana to be precluded from filing an unfair
laborpracticecase.(JuanS.Barreravs.CourtofIndustrialRelations,G.R.No.L32853,
Barr
ar era
ra
es
September25,1981)

bl
Itisthesettledjurisprudencethatitisanunfairlaborpracticeforanemployernotto
spruden
pruden r pra
pr
o
r
reinstate,orreemploymentto,membersofunionwhoabandontheirstrikeandmake
employm
mploym who ab
R
Ba
unconditional offer
ffer to
offer t return to work. (Lakas ng ng Manggagawang
M Makabayan vs.
an
MarceloEnterprises,G.R.No.L38258,November19,1982)
nterprise
terprise ber
er 19
1
es

h
bl
Thepivotalquestioninanycasewhereunfairlaborpracticeonthepartoftheemployer
votal q unfair
nfair la
C
isallegediswhetherornottheemployerhasexertedpressure,intheformofrestraint,
d loyer
yer ha orm o
o
r
interference or coercion, against his employee's right to institute concerted
his emp certe action for
oncerte
R
better terms and conditions of of employment. Without doubt, the

f emp
Ba the act
act of compelling
an
employeestosignaninstrumentindicatingthattheemployerobservedlaborstandards
ment in obser
observ
es
provisions of law when he he might
mig have not, together with the aact of terminating or
h the
h
bl
coercingthosewhorefusetocooperatewiththeemployer'sschemeconstitutesunfair
use to oyer's
yer's sc
C
labor practice. The first act clearly preempts the rightght of
off the
th hotel's workers to seek
o
r
bettertermsandconditionsofemploymentthroughconcertedaction.(NormaMabeza
ugh
gh conc eza
R
vs.NLRC,G.R.No.118506,April18,1997)
Ba
an

es
h
CASEONCHECKOFFFROMNONUNIONEMPLOYEES EMPLOY
bl
C
No requirement of written authorization from the nonunion employees

yees is
is needed to
o
effectavalidcheckoff.Article248(e)makesitexplicitthatArticle241,paragraph(o),
e 241, p
R
an
requiringwrittenauthorizationisinapplicabletononunionmembers,especiallyinthis
mbers,
casewherethenonunionemployeesreceiveseveralbenefitsundertheCBA.(DelPilar
s under
h
Academy,etal.vs.DelPilarAcademyEmployeesUnion,G.R.No.170112,April30,2008)
R. No. 1
C

42
The collection of agency fees in an amount equivalent to union dues and fees, from
employees who are not union members, is recognized by Article 248 (e) of the Labor
Code . . . (Del Pilar Academy, et al. vs. Del Pilar Academy Employees Union, G.R. No.
170112,April30,2008)

ItisStatepolicytopromoteunionismtoenableworkerstonegotiatewithmanagement
onanevenplayingfieldandwithmorepersuasivenessthaniftheyweretoindividually
and separately bargain with the employer. For this reason, the law has allowed
stipulationsfor"unionshop"and"closedshop"asmeansofencouragingworkerstojoin
ed
andsupporttheunionoftheirchoiceintheprotectionoftheirrightsandinterestvisà
cee in th
r
Ba
vistheemployer.(GeneralMillingCorp.vs.ErnestoCasio,etal.,G.R.No.149552,March
g Corp.
10,2010)
es

CASEONPROCEDUREINCOLLECTIVEBARGAINING
N COLL
bl
o
r
Whileitisamutualobligationofthepartiestobargain,theemployer,however,isnot
ual oblig rgain,
ain, th
t
R
Ba
under any legal
gal duty
dut to initiate contract negotiation.
duty otiation The mechanics of collective
an
bargaining is
is set
set in
i motion only when the following
followwinn jurisdictional preconditions are
es
present,, namely,
name
namel (1) possession of the status
status of majority representation of the
h
bl
employees'
yees' representative in accordance
oyees' nce with
wi any of the means of selection or
wit
C
designation
tio provided for by the Labor Code; (2) proof of majority representation;
orr Code presen
esen and
o
r
(3)ademandtobargainunderArticle251,par.(a)oftheNewLaborCode.(KiokLoyvs.
ticle
icle 251
25 Code.
ode. (
R
NationalLaborRelationsCommission,G.R.No.L54334,January22,1986)
mission,
ssion
Ba
22 1986
an

es
CASEDEFININGDUTYTOBARGAINCOLLECTIVELY
O BARGA
h
bl
C
Itisessentialtotherightofaputativebargainingagenttorepresenttheemployeesthat
nt to
t rep
re
o
r
and,
nd, con
itbethedelegateofamajorityoftheemployeesand,conversely,anemployerisunder de
der
R
duty to bargain collectively only when the bargaining

argaining
gaining agent is representative of
Ba
off the
the
he
an
sequen
equen
majority of the employees. A natural consequences that
hat the
of these principles is that t
th
es
h
employer has the right to demand of thethe asserted

as bargaining agent proofproof
oo o of its
bl
C
representationofitsemployees.Havingtherighttodemonstrationofthisfact,itisnot
the ri
r iss fact,
an 'unfair labor practice' for an employer to refuse to negotiate until
until the
the asserted
th
o
bargaining agent has presented reasonable proof of majority representation.

represe
eprese It is
R
an
necessaryhoweverthatsuchdemandbemadeingoodfaithandnotmerelyasapretext
not me
ordevicefordelayorevasion.Theemployer'srightishowevertoreasonableproof....
err to re
h
Although an employer has the undoubted right to bargain with a bargaining agent
gain wit
C
whose authority has been established, without the requirement

uirem
irem that the bargaining
agent be officially certified by the National Labor Relations Board as such, if the
informallypresentedevidenceleavesarealdoubtastotheissue,theemployerhasa
righttodemandacertificationandtorefusetonegotiateuntilsuchofficialcertification
ispresented.(LakasNgManggagawangMakabayanvs.MarceloEnterprises,G.R.No.L
38258,November19,1982)
43
In the bargaining process, the workers and employer shall be represented by their
exclusive bargaining representatives. The labor organization designated or selected by
the majority of employees in an appropriate collective bargaining unit, shall be the
exclusive representative of the employees in such unit for the purpose of collective
bargaining. (Balmar Farms, Inc. vs. National Labor Relations Commission, G.R. No.
73504, October 15, 1991;UFEDFAKMU vs. Nestlé Phil. Inc., G.R. Nos. 15893031 &
15894445,March3,2008)

CASES ON DUTY TO BARGAIN COLLECTIVELY
LEC
E WHEN THERE EXISTS A COLLECTIVE
BARGAININGAGREEMENT
r
Ba
UntilanewCBAisexecutedbyandbetweentheparties,theyaredutyboundtokeep
by and
es
thestatusquoandtocontinueinfullforceandeffectthetermsandconditionsofthe
tinue
nue in
existing agreement. The
hee law
law does
d not provide for any exception nor qualification on
bl
whicheconomicprovisionsoftheexistingagreementaretoretainitsforceandeffect.
ovisions
isions ree to
t
o
r

R
Ba
Therefore,itmustbeunderstoodasencompassingallthetermsandconditionsinthe
must
st be ng all t
an
saidagreement.(FAMITvs.CourtofAppeals,etal.,G.R.No.164060,June15,2007;New
ment. (FA
F et al., G
es
PacificTimber&SupplyCompany,Inc.v.NLRC,G.R.No.124224,March17,2000;UFE
Timber & NLRC,
LRC, G.
h
bl
DFAKMUvs.NestléPhil.Inc.,G.R.Nos.15893031&15894445,March3,2008)
KMU
M vs 158930
58930
C

o
r
CASEONTERMSOFACOLLECTIVEBARGAININGAGREMENT
E BARGA
R
Ba
an
Thefilingofapetitionforcertificationelectionduringthe60dayfreedomperiodgives
ertificat
rtificat day frefr
es
rise to arepresentation case
case thatmust
th
tha be resolved eventhough
hough a new CBA hasbeen
though
h
bl
enteredintowithinthatperiod.ThisisclearlyprovidedforintheaforequotedSection4,
t perio orr in the
C
RuleV,BookVoftheOmnibusRulesImplementingtheLaborCode.Thereasonbehind
he Labo
abo
o
r
this rule is obvious. A petition for certification election
lection is not necessary where the
election the
R
employees are one in their choice of a representative

presenta
esenta
Ba
in the bargaining process.
roc
ocess.
ss.
an
Moreover, said provision of the Omnibus Rules les manifests

ules ma the intent of the legislative
egislat
egislativ
es
h
authoritytoallow,ifnotencourage,thecontendingunionsinabargainingunittoholda
contendi
ontendi nitt to
t ho
bl
C
certification election during the freedom m period.

pe (Oriental Tin Can Laborbor Union
abor Un vs.
SecretaryofLabor,G.R.Nos.116751&116779,August28,1998)
o

R
an
Theagreementprematurelysignedbytheunionandthecompanyduringthefreedom
any
ny dur
period does not affect the petition for certification election filed by another union.
on filed
h
(WarrenManufacturingWorkersUnionvs.BureauofLaborRelations,G.R.No.L76185,
orr Relati
C
March30,1988)
44
Abargainingunitis"agroupofemployeesofagivenemployer,comprisedofallorless
than all of the entire body of employees, consistent with equity to the employer
indicate to be the best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law." The factors in determining the
appropriatecollectivebargainingunitare(1)thewilloftheemployees(GlobeDoctrine);
(2) affinity and unity of the employees' interest, such as substantial similarity of work
and duties, or similarity of compensation and working conditions (Substantial Mutual
InterestsRule);(3)priorcollectivebargaininghistory;and(4)similarityofemployment
status.Thebasictestofanassertedbargainingunit'sacceptabilityiswhetherornotitis
arga
rg
fundamentallythecombinationwhichwillbestassuretoallemployeestheexerciseof
hich
ch will
r
Ba
their collective bargaining rights.hts. (I
hts. (International School Alliance of Educators vs.
LeonardoA.Quisumbing,G.R.No.128845,June1,2000)
. No.
N 12
es

CASESONEXCLUSIVEBARGAININGREPRESENTATIONANDWORKERS’PARTICIPATION
BARGAIN
ARGAI
bl
INPOLICYANDDECISIONMAKINGPROCESS.
SION M
o
r
R
Ba
The Labor Code
de impo
imposes upon the employer and the the rerrepresentative of the employees
an
thedutytobargaincollectively.Sincethequestionofrightofrepresentationasbetween
bargai
bargain stion
tion of
es
competing
ing labor
labo organizations in a bargaining unit is imbued with public interest, the
ning un
h
bl
lawgovernsthechoiceofacollectivebargainingrepresentativewhichshallbetheduly
overns
verns bargainin
rgainin
C
certifiedagentoftheemployeesconcerned.Anofficialcertificationbecomesnecessary
da cerned.
erned. comes
om
o
r
where the bargaining agent fails s to present adequate and reasonable
to pr able proof of its
onable
R
majority authorization and where ere the

here th employer demands it, or
the
Ba when the employer
r when
an
honestlydoubtsthemajorityrepresentationofseveralcontendingbargaininggroups.In
tyy repres
epres ding bab
es
fact, Article 255 of the
e Labor
Labor Code allows the majority of th
tyy of tthe employees in an
h
bl
appropriate collective bargaining

barga
bargai unit to designate or select
select the labor organization
C
whichshallbetheirexclusiverepresentativeforthepurposeofcollectivebargaining.
i urpose
o
r

R
The designation or selection of the bargaining represe

representative
eprese
Ba
without, however, goggoing
oing
ng
an
through the process set out by law for the conduc
conduct of a certification election applies
n appli
appl
es
h
onlywhenrepresentationisnotinissue.Thereisnoproblemifaunionisunanimously
There is
i unanimo
animo
bl
C
chosen by a majority of the employees es as

a their bargaining representative,
ntative, but a
entative,
question of representation arising from the presence of more than one union in a
n one
o
bargaining unit aspiring to be the employees' representative, can only be resolved by
only be
R
an
holding a certification election under the supervision of the proper government
hee pro
pr
authority. (Oriental Tin Can Labor Union vs. Secretary of Labor, abor, G.R.
G Nos. 116751 &
h
116779,August28,1998)
C

Therightofanyemployeeorgroupofemployeesto,atanytime,presentgrievancesto
the employer does not imply the right to submit the same to voluntary arbitration.
(JuanitoTabigue,etal.vs.INTERCO,G.R.No.183335,December23,2009)

45
CASEINVOLVINGPURPOSEOFACERTIFICATIONELECTION
The purpose of certification election is to give the employees true representation in
their collective bargaining with an employer because certification election is the most
democratic and expeditious method by which the laborers can freely determine the
unionthatshallactastheirrepresentativeintheirdealingwiththeestablishmentwhere
theyareworking.Itisthemosteffectivewayofdeterminingwhichlabororganization
cantrulyrepresenttheworkingforce.(BalmarFarms,Inc.vs.NationalLaborRelations
. (B
(
Commission,G.R.No. 73504October15,1991)
ber
er 15,
r
Ba

CASEONGRIEVANCEMACHINERY NE Y
NER
s
[A]rticle260oftheLaborCodeclarifiesthatsuchdisputesmustbereferredfirsttothe
or Code
grievance machinery y and,
and, if
iif unresolved within seven days,
day
days, they shall automatically be
r
referred to voluntary
ntary aarbitration. (Miguela Santuyo,
untary yo, et
uyo, et al. vs. Remerco Garments
Ba
Manufacturing,Inc.,etal.,
g,, Inc., e G.R.No.174420,March22,2010)
h 22, 20
2

es
CASEONJURISDICTIONOFVOLUNTARYARBITRATORS
N JURISD
JURIS RBITRAT
BITRAT
h
bl
C
Article261oftheLaborCodeprovidesthatviolationsofaCBA,exceptthosewhichare
26 dess that tho
those
o
r
gross in character, shall no longer
ger be ttreated as unfair labor practice
er be actice and
a shall be
R
resolved as grievances under thehe parties'

the pa CBA. Moreover, "gross
Ba
oss violations
viola of CBA"
an
underthesameArticlereferredtoflagrantand/ormaliciousrefusaltocomplywiththe
rred
red to efusal
fusal
es
economic provisions of such
such ag
agreement, which is not the issue
sue in the instant case.
e issue
h
bl
(FlightAttendantsandStewardsAss'n.ofthePhil.vs.Phil.Airlines,Inc.,etal.,G.R.No.
Stewa hil.l Airlin
C
178083,July22,2008)
o
r

R
Under this provision [Article 261], voluntary arbitrat

arbitrators
rbitrat
Ba
have original and exclusive
clu
usive
ive
an
jurisdiction over matters which have not been resolved by the grievance machinery.
ee res
een achin
chinere
es
h
(Miguela Santuyo, et al. vs. Remerco Garments

arments Manufacturing, Inc., et al., al., G.R.
G.R. No.
bl
C
174420,March22,2010)

o
CASESONSTRIKES,PICKETINGANDLOCKOUTS
R
an
Astrikeotherwise valid,ifviolentincharacter,maybeplacedbeyondthepale.Careis
ed
d beyon
h
to be taken, however, especially where an unfair labor practice
practice is involved, to avoid
C
stamping it with illegality just because it is tainted by such
uch acts. To avoid rendering
illusory the recognition of the right to strike, responsibility in such a case should be
individualandnotcollective.Adifferentconclusionwouldbecalledfor,ofcourse,ifthe
existence of force while the strike lasts is pervasive and widespread, consistently and
deliberately resorted to as a matter of policy. It could be reasonably concluded then
46
that even if justified as to ends, it becomes illegal because of the means employed.
(JuanS.Barreravs.CourtofIndustrialRelations,G.R.No.L32853,September25,1981)

Government employees may, therefore, through their unions or associations, either
petition the Congress for the betterment of the terms and conditions of employment
whicharewithintheambitoflegislationornegotiatewiththeappropriategovernment
agencies for the improvement of those which are not fixed by law. (Social Security
SystemEmployeesAssociationvs.CourtofAppeals,G.R.No.85279,July28,1989)

TherighttostrikeisoneoftherightsrecognizedandguaranteedbytheConstitutionas
rec
reco
aninstrumentoflaborforitsprotectionagainstexploitationbymanagement.Byvirtue
ection
ction aga
r
Ba
of this right, the workers are e able
able to press their demands for better terms of
employment with more energy gy adpersuasiveness,
rgy ad p poising the threat to strike as their
es
reactiontotheemployer'sintransigence.Thestrikeisindeedapowerfulweaponofthe
s intrans
ntrans
workingclass.Butpreciselybecauseofthis,itmustbehandledcarefully,likeasensitive
cisely
sely bec
be
bl
explosive,lestitblowupintheworkers'ownhands.Thus,itmustbedeclaredonlyafter
w up in hus,
us, i
o
r
themostthoughtfulconsultationamongthem,conductedintheonlywayallowed,that
tful
ful cons ducted
ucted
R
Ba
is,peacefully,andineverycaseconformablytoreasonableregulation.Anyviolationof
and
nd in eason
easona
an
the legal requirements

equirem
quirem and strictures, such ass aa d
defiance
eff of a returntowork order in
es
industriesaffectedwithpublicinterest,willrenderthestrikeillegal,tothedetrimentof
es affect
affec l render
ender
h
bl
the veryry workers

ery wor it is supposed to protect.
ect. Even
tect. Ev war must be lawfully waged. A labor
Eve
C
dispute d demands no less observance cee of the rules, for the benefit of
of th all concerned.
f all
al
o
r
(Batangas Laguna Tayabas Bus Co. o vs.
Co. vs. National
N Labor Relations Commission,
ommissi
ommissio G.R. No.
R
101858,August21,1992)
Ba
an

es
TheStateguaranteestherightofallworkerstoselforganization,collectivebargaining
e right ization,
zation,
h
bl
andnegotiations,aswellaspeacefulconcertedactivities,includingtherighttostrike,in
elll as p s, includ
C
accordance with law. The right to strike, however, is is not
not aabsolute. It has heretofore
o
r
been held that a "no strike, no lockout" provision vision in the Collective Bargaining
ovision ing
R
Agreement ("CBA") is a valid stipulation although oughgh the

th clause may be invoked by
the
Baby an
an
an
employeronlywhenthestrikeiseconomicinnatureoronewhichisconductedtoforce
n nature d to forc
for
es
h
wageorotherconcessionsfromtheemployerthatarenotmandatedtobegrantedby
ployer
loyer th e grante
bl
C
thelawitself.Itwouldbeinapplicabletopreventastrikewhichisgroundedonunfair
o pre nded o
laborpractice.Inthissituation,itisnotessentialthattheunfairlaborpracticeacthas,in
practice
o
fact, been committed; it suffices that the striking workers are shown own tto have acted
hown
R
an
honestlyonanimpressionthatthecompanyhascommittedsuchunfairlaborpractice ch unfa
and the surrounding circumstances could warrant such a belief lief in
elief in good faith. (Panay
h
ElectricCompany,Inc.vs.NLRC,G.R.No.102672,October4,1995) 4, 1995)
C

It is the settled rule in this jurisdiction that employees in the public service may not
engageinstrikes.WhiletheConstitutionrecognizestherightofgovernmentemployees
toorganize,theyareprohibitedfromstagingstrikes,demonstrations,massleaves,walk
outs and other forms of mass action which will result in temporary stoppage or
disruptionofpublicservices.Therightofgovernmentemployeestoorganizeislimited
47
onlytotheformationofunionsorassociations,withoutincludingtherighttostrike.The
ability to strike is not essential to the right of association. In the absence of statute,
publicemployeesdonothavetherighttoengageinconcertedworkstoppagesforany
purpose. As a general rule, even in the absence of express statutory prohibition like
MemorandumCircularNo.6,publicemployeesaredeniedtherighttostrikeorengage
in a work stoppage against a public employer. The right of the sovereign to prohibit
strikesorworkstoppagesbypublicemployeeswasclearlyrecognizedatcommonlaw.
Indeed,itisfrequentlydeclaredthatmodernruleswhichprohibitsuchstrikes,eitherby
statuteorbyjudicialdecision,simplyincorporateorreassertthecommonlawrule.To
grantemployeesofthepublicsectortherighttostrike,theremustbeaclearanddirect
hee
legislative authority therefore. In the the aabsence of any express legislation allowing
r
Ba
government employees to strike, ke, recognizing
reco their right to do so, or regulating the
exercise of the right, employees yees in
oyee i the public service may not engage in strikes,
es
walkouts and temporary work work stoppages like workers in the private sector. (Delia
Bangalisanvs.CourtofAppeals,G.R.No.124678,July31,1997)
f Appeals
bl

o
r
THERIGHTTOSTRIKEisoneoftherightsrecognizedandguaranteedbytheConstitution
RIKE is and
nd gu
R
Ba
asaninstrumentoflaborforitsprotectionagainstmanagementexploitation.Byvirtue
entt of la st man
an
ofthisrighttheworkersareabletopresstheirdemandsforbettertermsandconditions
t the
he wo r deman n
es
of employment
oyment with more energy and persuasiveness,
ersuasive
rsuasive poising the threat to strike as
h
bl
theirreactiontotheiremployer'sintransigence.Thestrikeis
reaction
eaction nsigence
igence indeedapowerfulweapon
C
ofthe woworkingclass.Butprecisely,ifnotbecauseofthis,itmustbehandledcarefully,
f not be andle
nd
o
r
likeasensitiveexplosive,lestitblowsupintheworkers'ownhands.Simplyput,astrike
ows
ws up Simply
R
y our lab
la
Ba
isrecognizedandprotectedbyourlaborlawsonlywhenwagedonaccountofalabor n acc
an
dispute. In the absence thereof,

hereof, the employees who engage age themselves
gage t
th in work
es
stoppage commit an illegal illegal strike and should face the the
he co consequences thereof.
h
bl
(Pasvil/PascualLinervs.NLRC,G.R.No.124823,July28,1999)
NLRC
NLRC, 1999)
99)
C

o
r
Article 263 of the Labor Code speaks of the right of wo
ht of workers to engage in concertedted
R
activitiesfortheirmutualbenefitandprotection.Concertedactivities,liketheholdingof
n. Conce
Ba
din
ing of
an
astrike,areresortedtobyemployeesintheirefforttoobtainmorefavorabletermsand
r effort erms
rms an
a
es
h
conditionsofworkforthemselves.Duetoitsimportance,theexerciseofsuchrightis
too its im such
uch rig
bl
C
limited only by the demands of national interest under paragraph (g) of
all inte of said
said article.
(PhimcoIndustriesvs.JoseBrillantes,G.R.No.120751,March17,1999) 9)
o

R
an
ThepowersgrantedtotheSecretaryunderArticle263(g)oftheLaborCodehavebeen
e Labor
abor
characterizedasanexerciseofthepolicepoweroftheState,aimedatpromotingthe
e aime
e,
h
publicgood.WhentheSecretaryexercisesthesepowers,heisgranted"greatbreadthof
hee is gra
C
discretion"tofindasolutiontoalabordispute.Themostobviousofthesepowersisthe
obvio
bvio
automatic enjoining of an impending strike or lockout or its lifting if one has already
takenplace.(SteelCorp.ofthePhil.vs.SCPEmployeesUnionNFLU,G.R.Nos.169829
30, April 16, 2008;Philcom Employees Union v. Philippine Global Communications and
PhilcomCorporation,G.R.No.144315,July17,2006)

48
Article 263(g) was devised to maintain the status quo between the workers and
management in a labor dispute causing or likely to cause a strike or lockout in an
industryindispensabletothenationalinterest,pendingadjudicationofthecontroversy.
(UniversityofSto.Tomasvs.NLRC,G.R.No.89920,October18,1990)

TheSecretarywasexplicitlygrantedbyArticle263(g)oftheLaborCodetheauthorityto
assumejurisdictionoveralabordisputecausingorlikelytocauseastrikeorlockoutin
an industry indispensable to the national interest, and decide the same accordingly.
Necessarily, this authority to assume jurisdiction over the said labor dispute must
includeandextendtoallquestionsandcontroversiesarisingtherefrom,includingcases
dc
overwhichthelaborarbiterhasexclusivejurisdiction.
clusive
usive j
r
Ba

Plainly,Article263(g)oftheLaborCodewasmeanttomakeboththeSecretary(orthe
Labo
ab C
es
various regional directors)) and
and the
th labor arbiters share jurisdiction, subject to certain
conditions. Otherwise, the
the Secretary
Se would not be able to effectively and efficiently
bl
disposeoftheprimarydispute.Toholdthecontrarymayevenleadtotheabsurdand
ary
ry disp may
o
r
undesirable resultlt wherein
whe the Secretary and labor
bor arbiter
abor a
ar concerned may have
R
Ba
diametrically opposed
oppose rulings. (International Pharmaceuticals,
harma
harmac Inc. vs. Secretary of
an
Labor,G.R.No.9298183,January9,1992)
No.
o. 929
92
es

h
bl
Areturntoworkorderisa"statutorypartandparcel"oftheSecretary'sassumptionor
urn
rntoow
w part
rt and
C
certification
tio order. Article 263 (g) succinct
succinctly
ccinct provides that: . . . Such assumption or
h assu
o
r
certificationshallhavetheeffectofautomaticallyenjoiningthe
of auto intendedorimpending
ended
ded o
R
the ass
Ba
strikeorlockoutasspecifiedintheassumptionorcertificationorder.Ifonehasalready
der. If o
an
taken place at the time of of assumption or certification, all
f assu striking or locked out
ll strik
stri
es
employeesshallimmediatelyreturntoworkandtheemployerresumeoperationsand
ately re oyer re
h
bl
readmitallworkersunderthesametermsandconditionsprevailingbeforethestrikeor
der
er the s preva
C
lockout.Thus,followinganassumptionorcertificationorder,returningtowork,onthe
n order
o
r
part of a worker, is "not a matter of option or voluntar
voluntariness
olunta but of obligation." The
The
R
sanctionforfailuretocomplywithsuchobligation,underthelaw,islossofemployment
ion,
n, und
Ba
yment
an
status. Case law likewise provides that by y staging

staging a strike after the assumption
ption of
mption
es
h
jurisdictionorcertificationforarbitration,workersforfeitedtheirrighttobereadmitted
, worker readmi
eadmi
bl
C
to work, having abandoned their employment,

ploym
loym and so could be validly
alidly
lidly rereplaced.
(MarcopperMiningCorporationvs.JoseBrillantes,G.R.No.119381,March11,1996)
arch 11,
11
o

R
an
The foregoing article clearly does not interfere with the workers'
kers' right to strike but
ers' rig
merely regulates it, when in the exercise of such right, national
nationa interests will be
h
affected.TherightsgrantedbytheConstitutionarenotabsolute.Theyarestillsubject
bsolute
C
tocontrolandlimitationtoensurethattheyare notexercisedarbitrarily.Theinterests
cised
of both the employers and employees are intended to be protected and not one of
themisgivenunduepreference.(PhiltreadWorkersUnionvs.NievesR.Confesor,G.R.
No. 117169, March 12, 1997)

49
OneofthesubstantiveevilswhichArticle263(g)oftheLaborCodeseekstocurbisthe
exacerbation of a labor dispute to the further detriment of the national interest. The
SecretaryofLaborandEmploymentmaythereforeordertheemployer(auniversity)to
suspend the effect of the termination of the employment of the employees, which
terminationwasthereasonofoneofthenoticesofstrikefiledbytheunion.

Itisnotaquestionanymoreofwhetherornottheterminatedemployees,theindividual
respondents herein, are part of the bargaining unit. Any act committed during the
pendencyofthedisputethattendstogiverisetofurthercontentiousissuesorincrease
the tensions between the parties should
ou be considered an act of exacerbation and
shouldnotbeallowed.
r
Ba

CASEONPAYROLLREINSTATEMENT EME
M NT
es
"Payrollreinstatement"oftheemployees,asanexceptiontotheactualreinstatement
of the
bl
required by a returnn to

to work
wo order, may be allowed,, pen p
pending final resolution of the
o
r
validityoftheirdismissal,inviewofa"supersedingcircumstance,"i.e.,thefinaldecision
ismissal
smissal circums
rcums
R
Ba
ofthepanelofarbitrationsastotheconfidentialnatureofthepositions.(Universityof
f arbitra
arbitr natur
nature
an
ImmaculateConcepcionvs.Sec.ofLabor,G.R.No.151379,January14,2005
e Concep
Conce No.
o. 15
1511
es

h
bl
The discretion
scretio to assume jurisdiction may
iscretio may be exercised by the Secretary of Labor and
ay be
C
Employmentwithoutthenecessityofpriornoticeorhearinggiventoanyoftheparties.
me f prior n nyy of
o t
o
r
The rationale for his primary assumption
mption of jurisdiction can justifiably
umption rest on his own
bly rest
R
consideration of the exigency y of

of the
the situation in relation to th
Ba
the national interests.
e nat
an
(CapitolMedicalCentervs.Trajano,G.R.No.155690,June30,2005)
Trajano,
rajano, 2005)
005)
es

h
bl
ThepowersgrantedtotheSecretaryunderArticle263(g)havebeencharacterizedasan
the
he Se g) have b
C
exerciseofthepolicepoweroftheState,withtheaimofpromotingpublicgood.When
m of
o pro
o
r
the Secretary exercises these powers, he is grantednted “great breadth of discretion” in
ted “gr in
R
order to find a solution to a labor dispute. The

he most
mos obvious of these powers is
most
Ba
iss the
the
he
an
automatic enjoining of an impending strike or or lock

lockout or its lifting if one has already
s alread
alrea
es
h
takenplace.
bl
C

A strike declared on the basis of grievances which have not been submitted
submit
submitt to the
o
grievance committee as stipulated in the CBA of the parties is premature
ematur and illegal.
rematur
R
an
(PhilcomEmployeesUnionvs.PhilippineGlobalCommunications,144315,July17,2006)
, 144315

h
TheSecretary'sassumptionofjurisdictionpowernecessarilyincludesmatters
rily
ly inclu
nclu incidental
C
tothelabordispute,thatis,issuesthatarenecessarilyinvolvedinthedisputeitself,not
olved
just to those ascribed in the Notice of Strike; or otherwise, submitted to him for
resolution.(UnionofFiliproEmployeesDrugvs.NestlePhilippines,15894445,August
22,2006)
50
CASEONRETURNTOWORKORDER
Article263(g)oftheLaborCodeisexplicitthatifastrikehasalreadytakenplaceatthe
time of assumption of jurisdictionor certification, all striking or locked out employees
shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing
beforethestrikeorlockout.(UniversityoftheSanAgustinEmployeesUnionFFWvs.CA,
169632,March28,2006)

CASESONREQUISITESOFAVALIDSTIKE STIKE
TIKE
r
Ba
Inorderforastriketobevalid,thefollowingrequirementslaiddowninparagraphs(c)
lid,
d, thee f
es
and (f) of Article 263 of the Labor Code must be complied with: (a) a notice of strike
hee Labo
mustbefiled;(b)astrikevotemustbetaken;and(c)theresultsofthestrikevotemust
keevote
bl
be reported to the DOLE.

DOLE. It bears stressing that these see requirements
re are mandatory,
o
r
meaning, noncompliance
mplianc therewith makes the strike
omplianc ikee illegal.
ille
illeg The evident intention of
R
Ba
thelawinrequiringthestrikenoticeandstrikevotereportistoreasonablyregulatethe
uiring
iring th ote rep
an
right to strike,

rike, which is essential to the attainment
ike, wh
w ainme of legitimate policy objectives
ttainm
es
embodiedinthelaw.(BukluranngManggagawasaClothmanKnittingCorp.vs.CA,G.R.
ed in the
th agawa
gawa s
h
bl
No.158158,January17,2005)
58158,
8158, J
C

o
r
AsidefromthemandatorynoticesembeddedinArticle263,paragraphs(c)and(f)ofthe
embed phs (c) a
R
too stag
Ba
LaborCode,aunionintendingtostageastrikeismandatedtonotifytheNCMBofthe
notify th
an
meeting for the conduct of strike vote, at least twentyfour (24)
f strike (24) hours
h prior to such
es
meeting.UnlesstheNCMBisnotifiedofthedate,placeandtimeofthemeetingofthe
MB is no d time
h
bl
union members for the conduct of a strike vote, the

hee con NCMB would be unable to
e NCM
C
supervise the holding of the same, if and when it decides decides
ecides to exercise its power of
o
r
supervision.(CapitolMedicalCentervs.NLRC,G.R.No.147080,April26,2005)
No. 147
R

Ba
an
CASESONILLEGALSTRIKE
es
h
bl
C
Whiletheemployerisauthorizedtodeclareaunionofficerwhoparticipatedinanillegal
are a ted
ed in a
strikeashavinglosthisemployment,his/itsoptionisnot aswidewithrespecttounion
h respec
respe
o
members or workers for the law itself draws a line and makes a distinction
distinct between
R
an
union officers and members/ordinary workers. An ordinary striking

triking
riking worker
w or union
membercannot,asarule,beterminatedformereparticipationinanillegalstrike;there
on in an
a
h
mustbeproofthathecommittedillegalactsduringthestrike.Andlestitbeforgotten,
trike.
rike. An
C
the law invests the Secretary of Labor and Employment the
the prerogative of tempering
the consequence of the defiance to the assumption order. The Secretary may thus
merely suspend rather than dismiss the employee involved. (Nissan Motors Phils., Inc.
vs. Secretary of Labor, 15819091, June 21, 2006)
51
CASESONBACKWAGES
Jurisprudentiallaw,however,recognizesseveralexceptionstothe“nobackwagesrule,”
towit:whentheemployeeswereillegallylockedtothuscompelthemtostageastrike;
whentheemployerisguiltyofthegrossestformofULP;whentheemployercommitted
discriminationintherehiringofstrikersrefusingtoreadmitthoseagainstwhomthere
were pending criminal cases while admitting nonstrikers who were also criminally
charged in court; or when the workers who staged a voluntary ULP strike offered to
returntoworkunconditionallybuttheemployerrefusedtoreinstatethem.(Philippine
ee
DiamondHotelandResortvs.ManilaDiamondHotelEmployeesUnion,158075,June30,
la
a Diam
r
Ba
2006)

es
CASESONASSUMPTIONOFJURISDICTIONBYSECRETARYOFLABOR
OFF JURIS
bl
The Secretary of the

e DOLE
DOLE has been explicitly granted d by
b
by Article 263 (g) of the Labor
o
r
Codetheauthoritytoassumejurisdictionoveralabordisputecausingorlikelytocause
ty to as borr disp
R
Ba
astrikeorlockoutinanindustryindispensabletothenationalinterest,anddecidethe
kout
ut in
n o the n
an
sameaccordingly.And,asamatterofnecessity,itincludesquestionsincidentaltothe
rdingly.
dingly. sity,
ty, it in
n
es
labordispute;thatis,issuesthatarenecessarilyinvolvedinthedisputeitself,andnot
spute; t essarily
ssarily i
h
bl
justtothatascribedintheNoticeofStrikeorotherwisesubmittedtohimforresolution.
o that a ke or ot
C
(UnionofFiliproEmployees—Drug,FoodandAlliedIndustriesUnions—KilusangMayo
off Food
ood an — Kilu
o
r
vs.NestléPhilippines,Inc.,G.R.Nos.15893031,March
s 15893
s. 3,2008)
R

Ba
an
Assumption and certification orders are executory in character

n order ter and are to be strictly
er and
an
es
complied with by the parties,
arties, eeven during the pendency of of any
any petition questioning
h
bl
their validity. Regardless

sss therefore
the
he of its motives, or off the
the validity
va of its claims, the
C
employermustreadmitallstrikingemployeesandgivethembacktheirrespectivejobs.
l ve them
o
r
Accepting back the workers in this case is not a matter
matte of option, but of obligation ion
R
mandatedbylawfortheemployertofaithfullycomplywith.Itscompulsorycharacteris
comply
omply
Ba
ctter is
an
mandated,nottocatertoanarrowsegmentofsociety,ortofavorlaborattheexpense
t of soci expen
es
h
of management, but to serve the greater ater interest

eater int of society by maintaining
aining the
ntaining
bl
C
economicequilibrium.(YSSEmployeesUnionPhil.TransportandGeneralWorkersOrg.
Union
nion l Worke
vs.YSSLaboratories,Inc.,G.R.No.155125,December4,2009)
o

R
an
Thedeterminationofwhoamongthestrikerscouldbeadmittedbacktoworkcannotbe
back to
t
made to depend upon the discretion of employer, lest we e strip
strip the certification or
h
assumptionofjurisdiction orders of the coercive power that hat is necessary for attaining
is n
C
their laudable objective. The returntowork order does oes not interfere with the
management'sprerogative,butmerelyregulatesitwhen,intheexerciseofsuchright,
national interests will be affected. The rights granted by the Constitution are not
absolute. They are still subject to control and limitation to ensure that they are not
exercisedarbitrarily.Theinterestsofboththeemployersandemployeesareintended
tobeprotectedandnotoneofthem isgivenunduepreference.(YSSEmployeesUnion
52
Phil. Transport and General Workers Org. vs. YSS Laboratories, Inc., G.R. No. 155125,
December4,2009)

ThegrantoftheseplenarypowerstotheSecretaryofLabormakesitincumbentupon
him to bring about soonest, a fair and just solution to the differences between the
employerandtheemployees,sothatthedamagesuchlabordisputemightcauseupon
the national interest may be minimized as much as possible, if not totally averted, by
avoidingstoppageofworkoranylagintheactivitiesoftheindustryorthepossibilityof
thosecontingenciesthatmightcausedetrimenttothenationalinterest.

Inordertoeffectivelyachievesuchend,theassumptionorcertificationordershallhave
end, th
r
Ba
the effect of automatically enjoiningoining the intended or impending strike or lockout.
Moreover,ifonehasalreadytakenplace,allstrikingworkersshallimmediatelyreturn
y tak
ta en n
es
towork,andtheemployershallimmediatelyresumeoperationsandreadmitallworkers
r shall im
under the same terms s and
and conditions
c prevailing before the strike or lockout. (YSS
bl
Employees UnionPhil. Transport and General Workers

hil.l. Tran Org. vs. YSS Laboratories, Inc.,
s Org
O
o
r
Decemb
R
Ba

an
Plainly,Article263(g)oftheLaborCodewasmeanttomakeboththeSecretary(orthe
clee 263 mean
ean
es
various regiona
regional directors) and the labor arbiters
rbiters share jurisdiction, subject to certain
arbiters
h
bl
conditions.
tions.
ons. OOtherwise, the Secretary would would
ould nnot be able to effectively and efficiently
C
disposeoftheprimarydispute.Toholdthecontrarymayevenleadtotheabsurdand
of old
ld the o the
o
r
undesirable result wherein the Secretary
ecretar and the labor arbiter concerned
Secretar cerne may have
oncerned
R
As we h
Ba
diametricallyopposedrulings.Aswehavesaid,"(i)tisfundamentalthatastatuteisto
ntal that
an
bereadinamannerthatwouldbreathelifeintoit,ratherthandefeatit.(YSSEmployees
ould
uld bre defea
es
UnionPhil. Transport and nd General
Gene Workers Org. vs. YSS Laboratories,
Labora
Laborat Inc., G.R. No.
h
bl
155125, December 4, 2009, 2009, citing International Pharmaceuticals,

maceutic
ceutic Inc. v. Secretary of
C
Labor,G.R.Nos.9298183,9January1992)
o
r

R
The very nature of a returntowork order issued ued

Ba
in aa certified case lends itself to
d in tto no
an
otherconstruction.Thecertificationatteststotheurgencyofthematter,affectingasit
to
o the u cting
ting as
es
h
does an industry indispensable to the national

nationa interest. The order is issued ued in
sued in the
bl
C
exerciseofthecourt'scompulsorypowerofarbitration,andthereforemustbeobeyed
r of a must
ust be
untilsetaside....(YSSEmployeesUnionPhil.TransportandGeneralWorkersOrg.vs.
l Worke
Work
o
YSS Laboratories, Inc., G.R. No. 155125, December 4, 2009 citing ngg Philippine
Philip Airlines
R
an
EmployeesAssociationv.PhilippineAirlines,Inc.,148Phil.386,392(1971)) 92
2 (1971
(197

h
Certainly,the determinationofwhoamongthestrikerscouldbeadmittedbacktowork
uld be
C
cannot be made to depend upon the discretion of employer, empl lest we strip the
certificationorassumptionofjurisdictionordersofthecoercivepowerthatisnecessary
forattainingtheirlaudableobjective.Thereturntoworkorderdoesnotinterferewith
the management's prerogative, but merely regulates it when, in the exercise of such
right,nationalinterestswillbeaffected.TherightsgrantedbytheConstitutionarenot
absolute. They are still subject to control and limitation to ensure that they are not
53
exercisedarbitrarily.Theinterestsofboththeemployersandemployeesareintended
tobeprotectedandnotoneofthemisgivenunduepreference.(YSSEmployeesUnion
Phil. Transport and General Workers Org. vs. YSS Laboratories, Inc., G.R. No. 155125,
December4,2009)

CASESONPROHIBITEDACTIVITIESDURINGSTRIKES
Astrikeisalegitimateweaponintheuniversalstruggleforexistence.Itisconsideredas
the most effective weapon in protecting the rights of the employees to improve the
terms and conditions of their employment.
yme
m But to be valid, a strike must be pursued
withinlegalbounds.Therighttostrikeasike as ameansfortheattainmentofsocialjusticeis
rike
r
Ba
nevermeanttooppressordestroytheemployer.Thelawprovideslimitsforitsexercise.
oy th
thee
Among such limits are the prohibited
roh bite activities under Article 264 of the Labor Code,
prohi
es
particularlyparagraph(e).(AIUPvs.NLRC,G.R.No.120505,March25,1999)
(AIUP v

bl
This Court has held d that

that strikes staged in violation n oof agreements providing for
o
r
arbitrationareillegal,sincetheseagreementsmustbestrictlyadheredtoandrespected
egal, sin bee stric
R
Ba
iftheirendsaretobeachieved.TherationaleoftheprohibitionunderArticle264isthat
re to be he proh
pro
an
once jurisdiction
iction over the labor dispute has
diction been
s bee n properly acquired by competent
es
authority, that jurisdiction should not be
ty, that interfered
e interfe
nterfe with by the application of the
h
bl
coerciveprocessesofastrike.(SukhothaiCuisinevs.CA,150437,July17,2006)
ve pro
ro ai Cuisin
C

o
r
...aunionofficermaybedeclaredtohavelosthisemploymentstatusifheknowingly
ed
d to ha atus
us if h
R
, wher
wheree
Ba
participatesinanillegalstrike,whereasaunionmembermaybesimilarlyfaultedifhe
e similar
an
knowingly participates in thehee commission

com of illegal acts during
ng the
ing th strike. (Chuayuco
the
es
SteelMfg.Corp.,etal.vs.BuklodngManggagawasaChuayucoSteelMfg.Corp.,G.R.
s. Buklo uayuco
ayuco S
h
bl
No.167347,January31,2007;ElizabethC.Bascon,etal.vs.CourtofAppeals,etal.,G.R.
1 2007 vs.
s Cour
C
No.144899,February5,2004) 0
o
r

R
The effects of illegal strikes, as outlined in Article

ticle 264
Article 2 of the Labor Code, make
Ba
a e aa
ak
an
distinctionbetweenordinaryworkersandunionofficerswhoparticipatetherein.Under
nion
on offi n. Und
es
h
established jurisprudence, a union officer er may

may be terminated from employment yment for
loyment
bl
C
knowinglyparticipatinginanillegalstrike.Thefateofunionmembersisdifferent.Mere
The differen
ifferen
participationinan illegalstrikeisnotasufficientgroundforterminationoftheservices
on of tht
o
oftheunionmembers.TheLaborCodeprotectsordinary,rankandfileunionmembers
dfile
file un
R
an
who participated in such a strike from losing their jobs provided vided
ded ththat they did not
commit illegal acts during the strike. (Piltel Corp. vs. Piltel Employee
Employees
mploye Ass'n., G.R. Nos.
h
160058 & 160094 June 22, 2007; CCBPI Postmix Workers Union v. NLRC, G.R. No.
kers Un
C
114521,November27,1998)

54
Itbearsstressingthatthelawmakesadistinctionbetweenunionmembersandunion
officers.Aworkermerelyparticipatinginanillegalstrikemaynotbeterminatedfrom
employment. It is only when he commits illegal acts during a strike that he may be
declaredtohavelostemploymentstatus.Forknowinglyparticipatinginanillegalstrike
orparticipatinginthecommissionofillegalactsduringastrike,thelawprovidesthata
union officer may be terminated from employment. The law grants the employer the
optionofdeclaringaunionofficerwhoparticipatedinanillegalstrikeashavinglosthis
employment.Itpossessestherightandprerogativetoterminatetheunionofficersfrom
service. Otherwise, theworkers will simp simply
m refuse to return to their work and cause a
standstill in the company operations tions
ons w while retaining the positions they refuse to
r
Ba
dischargeandpreventingmanagementfromfillinguptheirpositions.(SteelCorp.ofthe
gemen
gement
Phil. vs. SCP Employees UnionNFLU,
on
nNF LU G.R. Nos. 16982930, April 16, 2008;Santa Rosa
NFLU
es
CocaColaPlantEmployeesUnionv.CocaColaBottlersPhils.,Inc.,G.R.Nos.16430203,
es Union
January 24, 2007;Stamford
mford Marketing
M Corp. vs. Josephine Julian, G.R. No. 145496,
bl
February24,2000)
o
r

R
Ba
Returning to work
work in this situation is not a matter
ork in ter of
of option or voluntariness but of
an
obligation.Theworkermustreturntohisjobtogetherwithhiscoworkerssothatthe
The
he wo b togeth h
es
operationsofthecompanycanberesumedanditcancontinueservingthepublicand
ons of th ed
d and i
h
bl
promoting
oting its interest. This extraordinary
ting it ary authority given to the Secretary of Labor is
ry auth
C
aimed atat arriving at a peaceful and nd speedy

and spe solution to labor disputes,
spute without
ispute
o
r
jeopardizing national interests. Regardless
Reegardle of their motives, or the validity of their
he valid
R
claims, the striking workers must must ccease and/or desist from any
Ba anyy and
and all acts that
an
undermine or tend to undermineermine this authority of the Secretaryetary of Labor, once an
retary
es
assumptionand/or certificationorderisissued.Theycannot,forinstance,ignorereturn
ication t, for ins
in
h
bl
toworkorders,citingunfairlaborpracticesonthepartofthecompany,tojustifytheir
unfair
nfair l off the c
C
action. (Steel Corp. of the Phil. vs. SCP Employees UnionNFLU,
Union
ionN G.R. Nos. 16982930,
o
r
April16,2008;ManilaHotelEmployeesAssociationvs.ManilaHotelCorporation,G.R.
on n vs. M .R
.R.
R
No.154591,March5,2007)
Ba
an

es
h
CASESINVOLVINGVISITORIALPOWERSOFSECRETARYOFLABOR
OF SECRE
SECR
bl
C
To construe the visitorial power of the Secretary of Labor to orderorder and enforce
R
an
compliance with labor laws as including the power to hear and d decide
decide cases involving
employees' claims for wages, arising from employeremployee yee relations,
rela even if the
h
amount of said claims exceed P5,000.00 for each employee,yee, would, in our considered
ee, wo
C
opinion, emasculate and render meaningless, if not useless,ess the provisions of Article
ess,
217(a) (6) and Article 129 of the Labor Code which, as abovepointed out, confer
exclusive jurisdiction on the Labor Arbiter to hear and decide such employees' claims
(exceeding P5,000.00 for each employee). (Servando's Incorporated vs. Secretary of
LaborandEmployment,G.R.No.85840,June5,1991)

55
TheprotestationsofETSI,etal.thattherighttobeinformedoftherighttocounseldoes
notapplytoinvestigationsbeforeadministrativebodiesandthatlawandjurisprudence
merelygivetheemployeetheoptiontosecuretheservicesofcounselinahearingor
conferencefallinlightoftheclearprovisionofArticle277(b)oftheLaborCode...and
this Court's explicit pronouncement that "[a]mple opportunity connotes every kind of
assistance that management must accord the employee to enable him to prepare
adequatelyforhisdefenseincludinglegalrepresentation."(LornaDisingPunzalvs.ETSI
Technologies,Inc.,etal.,G.R.Nos.17038485,March9,2007;ChristopherMañebovs.
NationalLaborRelationsCommission,etal.,G.R.No.107721,January10,1994)
ett a

r
Ba
Thereisnodisputethatincasesofabandonmentofwork,noticeshallbeservedatthe
of aba
worker's last known address.. Wh While
W le petitioner presented the envelopes of the alleged
ile
es
noticessenttorespondent'slastknownaddress,thecontentsthereofwerenotoffered
nt's
t's last k
in evidence. Thus, the records are wanting of proof that respondent was properly
e record
bl
apprised of the charges

ges against
arges ag her and given an opportunity
pportu
por to explain her side, as
o
r
petitioner maintains.
ains. Evidently,
Ev it is clear that respondent's
esponde
pond dismissal was effected
R
Ba
without the notice
ice required
otice r
re by law. Thus, petitioner
ioner ffailed to satisfy the twonotice
an
requirement. (CocaCola Bottlers Phil., Inc. vs.

nt. (Coc s. Valentina
vs. Va
Va Garcia, G.R. No. 159625,
es
January31,2008)
31, 2008
200
h
bl

C
UnderArticle277(b)oftheLaborCode,theemployermustsendtheemployeewhois
Art ode,
de, the emplo
mplo
o
r
abouttobeterminated,awrittennoticestatingthecause/sforterminationandmust
n notice rminatio
inatio
R
give the employee the opportunity unity to be heard and to defend
rtunity
Ba himself. (Universal
nd hims
him
an
StaffingServices,Inc.vs.NLRC,etal.,G.R.No.177576,July21,2008;WilfredoM.Baron,
RC et a
RC, , 2008;
2008
es
etal.vs.NLRC,etal.,G.R.No.182299,February22,2010)
. No. 18
h
bl

C
CASESONSECURITYOFTENURE E
o
r
R
Article 280 of the Labor Code has construed security

security
Ba
urity of tenure as referring to regular
egular
lar
an
ployer
oyer sh
employmentandasmeaningthat"theemployershallnotterminatetheservicesofan ces
es of a
es
h
employee except for a just cause or whenhen au

authorized by "the Code." (Domingo
(Doming
oming F.
bl
C
Bondocvs.People'sBankandTrustCompany,G.R.No.L43835,March31,1981)
any, G , 1981)

o
Article279oftheLaborCode,asamendedbyR.A.No.6715,whichtookeffectonMarch
took
ook eff
R
an
21, 1989, provides that an illegally dismissed employee is entitled
tled to
itled t full backwages,
to
inclusive of allowances, and to his other benefits or their eir monetary
heir m
mo equivalent
h
computedfromthetimehiscompensationwaswithheldfromhimuptothetimeofhis
rom him
C
actualreinstatement.

ThepolicyoftheStatetoassuretherightof"workers"tosecurityoftenure(Section9,
ArticleII,Constitution)isanactofsocialjustice.Whenapersonhasno property,hisjob
may possibly be his only possession or means of livelihood. Therefore, he should be
56
protectedagainst anyarbitraryandunjustdeprivationofhisjob. (JaimeD.Viernesvs.


There can be no dispute that the constitutional guarantee of security of tenure
mandated under Section 9, Article 2, 1973 Constitution applies to all employees and
laborers, whether in the government service or in the private sector. The fact that
petitionerisamanagerialemployeedoesnotbyitselfexcludehimfromtheprotection
of the constitutional guarantee of security of tenure. Even a manager of a private
concern has the right to be secure in his position to decline a promotion where,
although the promotion carries an increase
ncr
c in his salary and rank but results in his
transfertoanewplaceofassignmentorstationandawayfromhisfamily.Suchanorder
ent
nt or st
r
Ba
constitutesremovalwithoutjustcauseandisillegal.Norcantheremovalbejustifiedon
cause
the ground of loss of confidence
en as
denc a now claimed by Private respondent Northwest,
es
insistingasitdoesthatbypetitioner'sallegedcontumaciousrefusaltoobeythetransfer
petition
order, said petitioner was
was guilty
guil of insubordination. (Helmut Dosch vs. National Labor
bl
RelationsCommission,G.R.No.L51182,July5,1983)
on,
n, G.R.
o
r

R
Ba

an
CASESINVOLVINGTERMINATIONOFEMPLOYMENT
OLVING
VING YMEN
MENT
es
h
bl
C
Itmustbeborneinmindthatthebasicprincipleinterminationcasesis
b
be sicc princ tha
that
thattheburden
o
r
ofproofrestsupontheemployertoshowthatthedismissalisforjustcauseandfailure
to show ust caus
R
to do so would necessarily mean

an that
ean
Ba
that the dismissal is not justified
fied and,
and therefore the
an
employeeisentitledtobereinstatedinaccordancewiththemandateofArticle280of
reinstate
einstate manda
es
theNewLaborCodeonsecurityoftenure.(PolymedicGeneralHospitalvs.NLRC,G.R.
security neral
eral Ho
H
h
bl
No.64190,January31,1985)
1985)
C
r
Thelawrequiresthatanemployeesought tobedismissedmustbeservedtwowritten
ismisse
smisse te
ten
R
notices before termination of his employment. t The

ent.
Ba
The first notice is to apprise
see the
he
an
employeeoftheparticularactsoromissionsbyreasonofwhichhisdismissalhasbeen
s by rea has
as bee
be
es
h
decided upon; and the second notice is s to inform the employee of the employer's
to inf employ
bl
C
decisiontodismisshim.Failuretocomplywiththerequirementoftwonoticesmakes
ply
ly wit
wi notices
thedismissalillegal.Theprocedureismandatory.Nonobservancethereofrendersthe
ereof re
r
o
dismissal of an employee illegal and void. (Viola Cruz vs. NLRC, C,, G.R.
G.R. No. 116384,
R
an
February7,2000)

h
[w]here there is valid or authorized cause for the dismissal
ssal of tthe employee, but the
sal of
C
employer failed to comply with statutory due process in in effecting the same, the
dismissalisnotillegal.Logically,ifthereisnoillegaldismissalinsuchacase,thenwecan
deducethatthedismissedemployeecannotavailhimselfoftherightsunderArticle279
of the Labor Code, i.e., reinstatement and full backwages. What the employee can
demandfromtheemployer,accordingtoAgabon,isthepaymentofnominaldamages
asindemnificationfortheviolationoftheformer'sstatutoryrights.(VictoryLiner,Inc.
57
vs.PabloRace,G.R.No.164820,December8,2008;JennyM.Agabonvs.NationalLabor
RelationsCommission,G.R.No.158693,November17,2004)

CASESWHENDISMISSALWASDONEINGOODFAITH
In San Miguel Corporation v. Javate, Jr., we affirmed the consistent findings and
conclusions of the Labor Arbiter, National Labor Relations Commission (NLRC), and
Court of Appeals that the employee was illegally dismissed since he was still fit to
resumehiswork;buttheemployer'sliabilitywasmitigatedbyitsevidentgoodfaithin
terminating the employee's services ba based on the terms of its Health, Welfare and
Retirement Plan. Hence, the employee
oyeeyee was
w ordered reinstated to his former position
r
Ba
withoutlossofseniorityandotherprivilegesappertainingtohimpriortohisdismissal,
her priv
but the award of backwages was lilimited to only one year considering the mitigating
s wa
w
circumstanceofgoodfaithattributedtotheemployer.(VictoryLiner,Inc.vs.PabloRace,
h attribu
G.R.No.164820,December8,2008;SanMiguelCorporationvs.ErnestoJavate,Jr.,G.R.
mber 8,
No.54244,January27,1992)
27,
7, 1992
r

Ba
The employee e was
was terminated for her continuous nuous absence without permission.
Althoughwefoundthattheemployeewasindeedguiltyofbreachoftrustandviolation
we found
foun deeded gu
es
ofcompanyrules,westilldeclaredtheemployee'sdismissalillegalasitwastooseverea
pany rule ployee's
loyee's
bl
penaltyconsideringthatshehadservedtheemployercompanyfor21years,itwasher
tyy cons d the em
firstoffense,andherleavetostudytheFrenchlanguagewouldultimatelybenefitthe
en y the
he Fre ately
tely
o
r
employer who no longer had to spend
spend for translation services. Even ven so, other than
n so
R
ordering the employee's reinstatement,

stateme
ateme
Ba
we awarded the said employemployee backwages
an
limitedtoaperiodoftwoyears,giventhattheemployeractedwithoutmaliceorbad
years,
ears, gi
g edd wit
es
faithinterminatingtheemployee'sservices.(VictoryLiner,Inc.vs.PabloRace,G.R.No.
employe In vs.
Inc.
h
bl
164820,December8,2008;MilagrosI.Doloresvs.NationalLaborRelationsCommission,
008;M nal
al Labo
C
G.R.No.87673,January24,1992)
4
o
r

R
TheemployeeinItogonSuyocMines,Inc.v.NationalLaborRelationsCommission,was
ational
onal L
Ba
n,, was
as
an
found guilty of breach of trust for stealing highgrade stones from his employe
ngg high employer.
mploy
es
h
However, taking into account the employee's

ployee's 23 years of previously unblemished
nblemis
blemis
bl
C
servicetohisemployerandabsentanyshowingthathiscontinuedemploymentwould
showi
how loyment
oyment
result in the employer's oppression or selfdestruction, we considered ed the eemployee's
d the
o
dismissaladrasticpunishment.Wedeemedthattheendsofsocialandcompassionate
l and co
R
an
justicewouldbeservedbyorderingtheemployeereinstatedbutwithoutbackwagesin
utt witho
view of theemployer'sobviousgoodfaith.(VictoryLiner,Inc.vs.PabloRace,G.R.No.
c. vs. Pa
P
h
164820, December 8, 2008;ItogonSuyoc Mines, Inc. vs. vs. National Labor Relations
s. Nati
C
Commission,G.R.No.L54280,September30,1982)

InSanMiguelCorporationv.SecretaryofLabor,theemployeewasdismissedafterhe
wascaughtbuyingfromhiscoworkersmedicinesthatweregivengratistothembythe
employer company, and reselling said medicines, in subversion of the employer's
effortstogivemedicalbenefitstoitsworkers.Welikewisefoundinthiscasethatthe
58
employee'sdismissalwastoodrasticapunishmentinlightofhisvoluntaryconfession
thathecommittedtraffickingofcompanysuppliedmedicinesoutofnecessity,aswell
as his promise not to repeat the same mistake. We ordered the employee's
reinstatement but without backwages, again, in consideration of the employer's good
faithindismissinghim.(VictoryLiner,Inc.vs.PabloRace,G.R.No.164820,December8,
2008;SanMiguelCorporationvs.SecretaryofLabor,G.R.No.L39195,May16,1975)

ReferencemayalsobemadetothecaseofManilaElectricCompanyv.NationalLabor
Relations Commission, wherein the employee was found responsible for the
irregularities in the installation of electrical
lec
e connections to a residence, for which
reason, his services were terminated ated by
b the employer's company. We, however,
r
Ba
affirmedthefindingsofthe NLRCandtheLaborArbiterthattheemployeeshouldnot
RC and
have been dismissed consideringring his
ering his 20 years of service to the employer without any
es
previousderogatoryrecordandhisbeingawardedinthepasttwocommendationsfor
rd and h
honesty. We thus ruled uled that the employee's reinstatement is proper, without
ed tha
bl
backwages, bearing g in

in mind
min the employer's good faith ith in terminating his services.
aith
o
r
(Victory Liner, Inc.
c. vs.
vs. Pablo
Pa Race, G.R. No. 164820,
0, December
Dece
Decem 8, 2008;Manila Electric
R
Ba
Companyvs.NationalLaborRelationsCommission,G.R.No.78763,July12,1989)
National
tional n G.R. N
n,
an

es

h
bl
CASESCONSTRUINGREINSTATEMENT
S CONST
CONS
C
r
The legal consequences of an illegal
illegal
legal ddismissal are reinstatement t of
of the
th
the employee
R
andnd oth
Ba
withoutlossofseniorityrightsandotherprivileges,andpaymentofhisfullbackwages,
t of his f
an
inclusiveofallowances,andotherbenefitsortheirmonetaryequivalent.Clearly,thelaw
other b quival
quivale
es
intended reinstatement to to be
be tthe general rule. It is only when reinstatement is no
y when
h
bl
longer feasible that payment

ymen of separation pay is awarded
aymen rded to
arded t an illegally dismissed
C
employee.
o
r

R
Reinstatement is the restoration to a state or or condi

condition from which one had b
Ba been
een
en
an
removed or separated. In providing foremost os for

most for the reinstatement of an illegally
illega
es
h
dismissedemployee,theLaborCodenotonlyrecognizesthesecurityoftenuregranted
only rec ure
re gra
bl
C
by law to regular employees, but also gives

ves substance and meaning to the
ives he protection
the pro
accordedbytheConstitutiontolabor.Employmentissignificanttoeveryworkingman.
very wor
wo
o
Itisthemeansbywhichhesustainshimselfandhisfamily,hence,thelawmandatesthe
hee law
R
an
reinstatement of an illegally dismissed employee to his former err position.
posit
positi Payment of
separation pay as a substitute for reinstatement is allowed d only
ed only under exceptional
h
circumstances.(PheschemIndustrialCorp.vs.Moldez,G.R.No.161158,May9,2005)
No 161
No.
C

59
CASESONREINSTATEMENTANDBACKWAGES
RepublicActNo.6715,whichtookeffectonMarch21,1989,amendedArticle279ofthe
LaborCode,providesthatanillegallydismissedemployeeisentitledtofullbackwages,
inclusive of allowances, and to his other benefits or their monetary equivalent
computedfromthetimehiscompensationwaswithheldfromhimuptothetimeofhis
actualreinstatement.Wehaveruled,however,thatthisamendmenthasnoretroactive
effect. In such case, the award of backwages
ackw
ck to an employee whose illegal dismissal
occurred before March 21, 1989, is is limi
limited to a period of three (3) years without
r
Ba
deductionorqualification.(JudyPhils.,Inc.vs.NLRC,G.R.No.111934,April29,1998)
Phils., I

es
Under the law, an employee yee who
who is unjustly dismissed from work shall be entitled to
reinstatement without loss loss o
of seniority rights and other privileges and to his full
bl
backwages, inclusive e of

of allowances,
a and to his other
er benefits or their monetary
her
o
r
equivalentcomputedfromthetimehiscompensationwaswithheldfromhimuptothe
uted fro on
n was
R
Ba
time of his actual
tualal reinstatement.
re
rei It must be emphasized,
phasiz
phasize though, that recent judicial
an
pronouncements
ments distinguish between employees oyee illegally dismissed prior to the
ployee
es
effectivity
ty of
of Republic
R Act No. 6715 on March
March 21, 1989, and those whose illegal
h
bl
dismissals
sa were
ssals w effected after such date.e. Thus,
te. Thus employees illegally dismissed prior to
C
March21,1989,areentitledtobackwagesuptothree(3)yearswithoutdeductionor
21 kwages
wages out
ut de
o
r
qualification,whilethoseillegallydismissedafterthatdatearegrantedfullbackwages
y dismiss nted ful
R
inclusiveofallowancesandotherbenefits
her
er ben
Ba
ortheirmonetaryequivalentfromthetime
u valent
an
their actual compensation was was wi

withheld from them up to the
w the
he tittime of their actual
es
reinstatement. The legislative
slative policy behind Republic Act ctt No.
No. 6715 points to "full
h
bl
backwages" as meaning ngg exactly

exa that, i.e., without deducting
ductin from backwages the
educting
C
earningsderivedelsewherebytheconcernedemployeeduringtheperiodofhisillegal
yee dur
o
r
dismissal.ConsideringthatpetitionerswereterminatedfromworkonAugust1,1991,
nated f 91
91,
R
theyareentitledtofullbackwagesonthebasisoftheirlastdailyearnings.(AngelJardin
off their
Ba
Ja
ardin
din
an
vs.NLRC,G.R.No.119268,February23,2000) 0)
es
h

bl
C
UnderArticle279oftheLaborCode,anemployeewhoisunjustlydismissedfromwork
empl
emplo ssed
sed from
fro
shall be entitled to reinstatement without loss of seniority rights and d other
othe privileges
other
o
and to his full backwages, inclusive of allowances, and to his other er benefits
her ben or their
R
an
monetaryequivalentcomputedfromthetimehiscompensationwaswithheldfromhim
was wii
up to the time of his actual reinstatement. (Rodelia S. Fungo ngo vs.
ungo vs Lourdes School of
vs.
h
Mandaluyong,etal.,G.R.No.152531,July27,2007;GloryPhil.,Inc.vs.BuenaventuraB.
Phil., In
C
Vergara,etal.,G.R.No.176627,August24,2007)

60
Thus,havingbeenillegallydismissed,privaterespondentsshouldbereinstatedtotheir
formerpositionswithoutlossofseniorityrightsandotherprivileges.Theyshouldalso
be paid their full backwages, inclusive of allowances, and the monetary equivalent of
otherbenefits,computedfromthetimetheircompensationwaswithheldfromthemup
tothetimeoftheiractualreinstatement.(SilvestreP.Ilaganvs.CourtofAppeals,etal.,
G.R.No.162089,July9,2008)

Under Article 279 of the Labor Code, as amended, an employee who is unjustly
dismissedfromworkshallbeentitledtoreinstatementwithoutlossofseniorityrights
t
to
andotherprivileges;tohisfullbackwages,inclusiveofallowances;andtootherbenefits
kwages,
wages,
r
Ba
ortheirmonetaryequivalentcomputedfromthetimehiscompensationwaswithheld
mputed
from him up to the time of of
f h his
s actual reinstatement. Thus, Lactao is entitled to
es
reinstatement and backwages ages aas a necessary consequence. (Megaforce Security and
wages
AlliedServices,Inc.,etal.vs.HenryLactao,etal.,G.R.No.160940,July21,2008)
al.l. vs. He
bl

o
r
Illegallydismissedemployeesareentitledtobackwagesthatshouldnotbediminished
d empl
emplo o wages
ges th
t
R
Ba
or reduced by y the
the amount
a they have earned from
rom another
a
an employment during the
an
periodoftheirillegaldismissal.Ontheotherhand,thecomputationoftheseparation
heir
ir illeg
ille hand t
es
payandthecircumstancesshowingtheexistenceofanemployeremployeerelationship
the circ stence
tence
h
bl
arequestions
estion offactthataregenerallynotproperinapetitionforreviewoncertiorari.
uestions not
ot prop
C

o
r
AsprovidedbyArticle279oftheLaborCode,anillegallydismissedemployeeisentitled
Labor
abor Co employe
R
to the twin reliefs of 1) either reinsta

Ba
reinstatement or separation pay, if
f reinstatement
reins is no
an
longer feasible; and 2) back ckk wages.

wage These are distinct and separate
separ
separa reliefs given to
es
alleviatetheeconomicsetbackbroughtaboutbytheemployee'sdismissal.Theawardof
etback b yee's
ee's dis
di
h
bl
one does not bar the other.

other.
ther. Back wages may be awarded edd without
with reinstatement, and
C
reinstatementmaybeorderedwithoutawardingbackwages. k wages
wage
o
r

R
However,thecomputationofthecorrectamountofseparationpayisafactualissue.Its
nt of se
Baue Its
an
resolution entails a review of the factual conclusions

onclusio of the appellate court and and the
t
th
es
h
evidentiary basis thereof. This kind of assessment

ssessme is not, as a rule, proper in app
r in appeals
bl
C
from theCA. Such appeals should be confined nfine to a determination onlyof
onfine legal issues,
of legal
becausetheappellatecourt'sfindingsoffactaregenerallyconclusive.Inapetitionfor
e. In
nap
o
reviewon,certiorari,thisCourt'sjurisdictionis limitedtoreviewingerrorsoflawinthe
g errors
error
R
an
absenceofanyshowingthatthefactualfindingscomplainedofaredevoidofsupportin
are
r devo
dev
the records or are glaringly erroneous. (Jacinto Retuya vs. Salic Salic B. Dumarpa, G.R. No.
alic B.
h
148848,August5,2003)
C

[T]he award of separation pay is inconsistent with a finding that there was no illegal
dismissal,forunderArticle279oftheLaborCodeandasheldinacatenaofcases,an
employee who is dismissed without just cause and without due process is entitled to
backwagesandreinstatementorpaymentofseparationpayinlieuthereof:
61
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement. The two reliefs provided are separate and distinct. In instances where
reinstatementisnolongerfeasiblebecauseofstrainedrelationsbetweentheemployee
andtheemployer,separationpayisgranted.Ineffect,anillegallydismissedemployeeis
entitledtoeitherreinstatement,ifviable,orseparationpayifreinstatementisnolonger
viable,andbackwages.

The normal consequences of respondents' illegal dismissal, then, are reinstatement
without loss of seniority rights, and payment of backwages computed from the time
compensation was withheld up to o the date of actual reinstatement. Where
reinstatement is no longer viable as as an
an o
option, separation pay equivalent to one (1)
r
Ba
month salary for every year of of service
servi should be awarded as an alternative. The
payment of separation pay is in
y is n addition to payment of backwages. (Golden Ace
es
Builders, et al. vs. Jose A. Talde, G.R. No. 187200, May 5, 2010, citing Macasero v.
A. Talde,
Talde
SouthernIndustrialGasesPhilippines,G.R.No.178524,January30,2009)
es Philip
bl

o
r
CASESINVOLVINGSEPARATIONPAY
G SEPAR
R
Ba
an
The acceptedted
ed doctrine
doc is that separation pay
pay
ay may
m y avail in lieu of reinstatement if
ma
es
reinstatementisnolongerpracticalorinthebestinterestoftheparties.Separationpay
ement is i hee best
h
bl
u of
in lieu o rei
of reinstatement bee awar
may likewise be awarded if the employee decides not to be
C
reinstated.(GoldenAceBuilders,etal.vs.JoseA.Talde,G.R.No.187200,May5,2010,
ed al. vs.
s. Jo 00,
0, M
o
r
citingVelascov.NationalLaborRelationsCommission)
elations
lations
R

Ba
an
By jurisprudence derived from

rom this provision, separation pay
om this y may
may be awarded to an
es
illegally dismissed employee
oyee in
in lieu of reinstatement. Recourse
course to the payment of
ecourse
h
bl
separation pay is madee when

whe continued employment is is no
no longer
lo possible, in cases
C
where the dismissed employee's position is no longer onge av

onger available, or the continued
o
r
relationship between the employer and the employee oyee is
ployee is no longer viable due to the
R
strained relations between them, or when the e dismissed

dismi
dismis employee opted not to
Ba
to be
be
an
reinstated,orpaymentofseparationbenefitswillbeforthebestinterestoftheparties
tss will be
b e parti
part
es
h
involved.(SessionDelightsIceCreamandFastFoodsvs.CourtofAppeals,etal.,G.R.No.
Fast Foo al.,
l., G.R.
G.R
bl
C
172149,February8,2010)

o
The basis for the payment of backwages is different from that for the
at for t award of
R
an
separation pay. Separation pay is granted where reinstatement t is

is no
n longer advisable
no
because of strained relations between the employee and the the employer.
em Backwages
h
representcompensationthatshould havebeenearnedbutwerenotcollectedbecause
utt were
C
oftheunjustdismissal.Thebasisforcomputingbackwagesisusuallythelengthofthe
es is
employee's service while that for separation pay is the actual period when the
employeewasunlawfullypreventedfromworking.(GoldenAceBuilders,etal.vs.Jose
A.Talde,G.R.No.187200,May5,2010)

62
CASESWHENREINSTATEMENTISNOLONGERPOSSIBLE
ThebackwagesthatshouldbeawardedtoDomingoshallbereckonedfromthetimehis
constructivedismissaltookeffectuntilthefinalityofthisdecision.Thisisinconformity
with Article 279 of the Labor Code which provides that an employee who is unjustly
dismissedfromworkshallbeentitledtofullbackwages,inclusiveofallowances,andto
his other benefits or their monetary equivalent, computed from the time his
compensationwaswithheldfromhimuptothetimeofhisactualreinstatement.Since
reinstatement of Domingo is no longer er possible
p due to his strained relations with the
management of Siemens Philippines, es, and
nes, an considering the position he held in the
r
Ba
company,heislawfullyentitledtoreceivebackwages.Forthesamereasoncitedabove,
to rece
consultancy fees shall be exclu
excluded
xc ded in the computation of Domingo's backwages.
es
(SiemensPhil.,Inc.,etal.vs.EnricoA.Domingo,G.R.No.150488,July28,2008)
s. Enrico

bl
Underthedoctrineofstrainedrelations,thepaymentofseparationpayisconsideredan
off strain off sep
s
o
r
acceptablealternativetoreinstatementwhenthelatteroptionisnolongerdesirableor
ative to atter
ter op
R
Ba
viable.Ononehand,suchpaymentliberatestheemployeefromwhatcouldbeahighly
e hand, emplo
employ
an
oppressive work
work
ork eenvironment. On the other hand
hand, it releases the employer from the
es
grosslyunpalatableobligationofmaintaininginitsemployaworkeritcouldnolonger
unpalat
unpalata ing
ng in it
h
bl
trust.(GoldenAceBuilders,etal.vs.JoseA.Talde,G.R.No.187200,May5,2010)
(Golden
Golden e A. Tald
C

o
r
CASEINVOLVINGDOCTRINEOFSTRAINEDRELATIONS
TRAINED
RAINED
R
Ba
an
In order for the doctrine off strain

strained
train relations to apply, it should
hould
ould be
b proved that the
es
employee concerned occupies
cupies a a position where he enjoys thethe tru
th trust and confidence of
h
bl
his employer and that itit is

is
s llikely that if reinstated, an atmosphere
atmos of antipathy and
C
antagonismmaybegeneratedastoadverselyaffecttheefficiencyandproductivityof
the
he eff
o
r
the employee concerned. (Reynaldo G. Cabigting g vs.
vs. San
San Miguel Foods, Inc., G.R. No.
No.
No
R
167706,November5,2009)
Ba
an

es
h
CASEONINDEMNITYFORILLEGALLYDISMISSEDOFW MISSED
bl
C
AseafarerisnotaregularemployeeasdefinedinArticle280oftheLaborCode.Hence,
abor Cod
Co
o
he is not entitled to full backwages and separation pay in lieu of
of reinstatement
rein as
R
an
providedinArticle279oftheLaborCode.Seafarersarecontractualemployeeswhose
ctual em
rights and obligations are governed primarily by the POEA EA Standard Employment
A Stan
h
Contract for Filipino Seamen, the Rules and Regulations ations Governing Overseas
ulations
C
Employment,and,moreimportantly,byRepublicActNo.8042.(SkippersUnitedPacific
8042
vs.NLRC,148893,July12,2006)

63
CASESONWHENDISMISSALDEEMEDHARSH
Where two (2) orderlies had served the hospital for a long period of time with
unblemished records, their dismissal by reason of pilferage of some hospital supplies
was held to be too harsh. Suspension is sufficient. Their reinstatement without
backwagesisordered.(Perezvs.MedicalCityGeneralHospital,150198,March6,2006
JoebM.Aliviado,etal.vs.Procter&GamblePhils.,Inc.,etal.,G.R.No.160506,March
9,2010;DanielP.Javellana,Jr.vs.AlbinoBelen,G.R.Nos.181913&182158,March5,
2010;Sargasso Construction and Development Corp. vs. NLRC, et al., G.R. No. 164118,
February 9, 2010; Farley Fulache, et
t aal. vs. ABSCBN Broadcasting Corp., G.R. No.
183810,January21,2010)
r
Ba

CASESONRECOMPUTATIONOFMONETARYCONSEQUENCESOFILLEGALDISMISSAL
OF MO
M
es
[U]nderthetermsofthedecisionunderexecution,noessentialchangeismadebyare
hee decisi
decis
bl
computationasthisstepisanecessaryconsequencethatflowsfromthenatureofthe
step is hat
o
r
illegality of dismissal
missal declared
d in that decision. A A recomputation
rec
re (or an original
R
Ba
computation, if if no
no previous
p computation has been been made)
m is a part of the law —
an
specifically,, Article
Article 279 of the Labor Code and nd the
d th e established jurisprudence on this
es
provision—thatisreadintothedecision.Bythenatureofanillegaldismissalcase,the
n — tha By the
h
bl
reliefs continue
contin to add on until full satisfaction,
sfaction as expressed under Article 279 of the
isfaction
C
LaborCode.Therecomputationoftheconsequencesofillegaldismissaluponexecution
od
d hee cons
ons l upon
o
r
of the decision does not constitute ute an aalteration or amendment of
te an f the
the final
fi decision
R
being implemented. The illegal al dismissal

gal dism ruling stands; only
Ba
y the
the ccomputation of
an
monetary consequences of this this dis

dismissal is affected and this isis not
no a violation of the
not
es
principleofimmutabilityoffinaljudgments.(SessionDelightsIceCreamandFastFoods
y of final hts
ts Ice
ce C
h
bl
vs.CourtofAppeals,etal.,G.R.No.172149,February8,2010)
al., G.R
G. 2010)
010)
C

o
r
Article 279 provides for the consequences of illegal egal dismissal in no uncertain terms,
gal dism
dis ms
ms,
R
qualified only by jurisprudence in its interpretationtation

Ba
of when separation pay in lieu
ion of iee of
an
reinstatement is allowed. When that happens, pens, tthe finality of the illegal dismissal
ppens, dismis
dismiss
es
h
decision becomes the reckoning point instead instead of the reinstatement that hatt the
he law
the
bl
C
decrees. In allowing separation pay, the final decision effectively declares
hee fin clares that the
ares th
employment relationship ended so that separation pay and backwages kwages are to be
o
computed up to that point. The decision also becomes a judgment mentnt for
for money from
R
an
whichanotherconsequenceflows—thepaymentofinterestincaseofdelay.(Session
n case o
DelightsIceCreamandFastFoodsvs.CourtofAppeals,etal.,G.R.No.172149,February
G.R No
G.R.
h
8,2010)
C

64
CASESONREGULARANDCASUALEMPLOYMENT
The primary standard, therefore, of determining a regular employment is the
reasonable connection between the particular activity performed by the employee in
relationtotheusualbusinessortradeoftheemployer.

Thetestiswhethertheformerisusuallynecessaryordesirableintheusualbusinessor
tradeoftheemployer.Theconnectioncanbedeterminedbyconsideringthenatureof
n ca
c
theworkperformedanditsrelationtotheschemeoftheparticularbusinessortradein
n to the
r
Ba
its entirety. Also, if the employeeee has
has been performing the job for at least one year,
even if the performance is not ot continuous
not cont
nt or merely intermittent, the law deems the
es
repeatedandcontinuingneedforitsperformanceas
eed
ed for sufficientevidenceofthenecessity
if not indispensability of of that activity to the business. Hence, the employment is also
f that
bl
consideredregular,butonlywithrespecttosuchactivityandwhilesuchactivityexists.
butut only tyy an
a
o
r
Whatdetermineswhetheracertainemploymentisregularorcasualisnotthewilland
s wheth regular
egula
R
Ba
word of the employer,
mploye to which the desperate worker
employe worke often accedes, much less the
worker
an
procedureofhiringtheemployeeorthemannerofpayinghissalary.Itisthenatureof
of hiring
hirin ner
er o
es
the activities performed in relation to the
vities pe
p particular business or trade considering all
e particu
h
bl
circumstances,
stance and in some cases the
mstance length of time of its performance and its
e lengt
C
continuedexistence.(MoisesDeLeonvs.NationalLaborRelationsCommission,G.R.No.
edd n vs.
vs Na missio
o
r
70705,August21,1989;RandyAlmeda,etal.vs.AsahiGlassPhil.,Inc.,G.R.No.177785,
meda, e c., G.R.
R
September3,2008)
Ba
an

es
Aregularemployeeisonewhoisengagedtoperformactivitieswhicharenecessaryand
e who is ties
ie whi
wh
h
bl
desirable in the usual business

busine or trade of the employer er as
yer as against
a those which are
C
undertakenforaspecificprojectorareseasonal.Evenintheselattercases,wheresuch
n in
n the
o
r
personhasrenderedatleastoneyearofservice,regardlessofthenatureoftheactivity
regardles
egardle vityy
vit
R
performedor ofwhetheritiscontinuousorintermittent,theemploymentisconsidered
ermitten
mitten
Bad red
de ed
an
regularaslongastheactivityexists,itnotbeingindispensablethathebefirstissueda
being
eing ind issued
es
h
regularappointmentorbeformallydeclaredassuchbeforeacquiringaregularstatus.
ared as gular
ular sta
bl
C
(Efren P. Paguio vs. NLRC, G.R. No. 147816,7816, May 9, 2003;Shipping Limited mited vvs. NLRC,
ited vs
148130,June16,2006)
o

R
an
Anemploymentisdeemedregularwhentheactivitiesperformedbytheemployeeare
edd by th
usually necessary or desirable in the usual business of the e employer.
emplo However, any
h
employee who has rendered at least one yearof service,, even even tthough intermittent, is
C
deemedregularwithrespecttotheactivityperformedandwhilesuchactivityactually
dw
exists.(ThePeninsulaManila,etal.vs.ElaineM.Alipio,G.R.No.167310June17,2008
;MoisesDeLeonvs.NLRC,G.R.No.70705,August21,1989)

65
As can be gleaned from this provision, there are two kinds of regular employees,
namely:(1)thosewhoareengagedtoperformactivitieswhichareusuallynecessaryor
desirable in the usual business or trade of the employer; and (2) those who have
renderedatleastoneyearofservice,whethercontinuousorbroken,withrespecttothe
activityinwhichtheyareemployed.Simplystated,regularemployeesareclassifiedinto:
regular employees by nature of work; and regular employees by years of service. The
formerreferstothoseemployeeswhoperformaparticularactivitywhichisnecessary
ordesirableintheusualbusinessortradeoftheemployer,regardlessoftheirlengthof
rad
ad
service;whilethelatterreferstothoseemployeeswhohavebeenperformingthejob,
hose
ose em
r
Ba
regardless of the nature thereof, for at least a year. If the employee has been
eof, for
performingthejobforatleastoneyear,eveniftheperformanceisnotcontinuousor
stt o e
es
merely intermittent, the law law deems
d the repeated and continuing need for its
performance as sufficient
ent evidence
evi of the necessity, if not indispensability, of that
bl
activity to the business.

ness. (Bienvenido D. Goma vs. Pamplona
ess. (B mp
mplo Plantation Inc., G.R. No.
o
r
160905,July4,2008)
008)
R
Ba

an
There are two

wo kinds
two ki
kin of regular employees, namely:
namely
name l (1) those who are engaged to
es
performactivitieswhichareusuallynecessaryordesirableintheusualbusinessortrade
activiti
activitie sary
ar or d
h
bl
oftheemployer;and(2)thosewhohaverenderedatleastoneyearofservice,whether
emplo e rende
C
continuousorbroken,withrespecttotheactivityinwhichtheyareemployed.Simply
ou to
o the a employ
mploy
o
r
stated,regularemployeesareclassifiedinto(1)regularemployees—bynatureofwork
ssified
sified in
i — by na
R
by years
Ba
and(2)regularemployees—byyearsofservice.Theformerreferstothoseemployees
ers to th
an
whoperformaparticularactivitywhichisnecessaryor
ctivity
tivity wh
w desirableintheusualbusinessor
lee in th
t
es
trade of the employer, regardless
regardle of their length of service; ce; while the latter refers to
e; while
whil
h
bl
thoseemployeeswhohavebeenperformingthejob,regardlessofthenaturethereof,
have
ave b egardles
gardles
C
foratleastayear.Iftheemployeehasbeenperformingthejobforatleastoneyear,
ming the
o
r
even if the performance is not continuous or merely erely intermittent, the law deems the
rely inte
int the
R
repeated and continuing need for its performance mance as sufficient evidence of
ormance
Ba
off the
the
he
an
necessity, if not indispensability, of that activity

vity to
tivity to the business. (San MiguelCorp.
Corp. vs.
v
es
h
EduardoL.Teodosio,G.R.No.163033,October2,2009)
tober 2,
bl
C

Seafarersnotcoveredbytheterm"regularemployment"
o
R
an
Itiswelltoremindbothpartiesthat,asearlyasBrentSchool,Inc.v.Zamora,wealready
c.. v. Zam
heldthatseafarersarenotcoveredbythetermregularemployment,asdefinedunder
oyment,
yment,
h

C
Article280oftheLaborCode.ThiswasreiteratedinCoyocav.NationalLaborRelations
ca v
Commission. Instead, they are considered contractual employees whose rights and
obligations are governed primarily by the POEA Standard Employment Contract for
Filipino Seamen (POEA Standard Employment Contract), the Rules and Regulations
Governing Overseas Employment, and, more importantly, by Republic Act No. 8042,
otherwiseknownasTheMigrantWorkersandOverseasFilipinosActof1995.Eventhe
66
POEAStandardEmploymentContractitselfmandatesthatinnocaseshallacontractof
employment concerning seamen exceed 12 months. (Dante D. De La Cruz vs. Maersk
Filipinas Crewing, Inc., et al., G.R. No. 172038, April 14, 2008;Brent School, Inc. vs.
Ronald Zamora, G.R. No. 48494, February 5, 1990;Pablo A. Coyoca vs. NLRC, G.R. No.
113658March31,1995)

Art.280findsnoapplicationinatrilateralrelationship
The Court agrees with Purefoods' argument that Art. 280 of the Labor Code finds no
hip involving a principal, an independent job
application in a trilateral relationship
contractor,andthelatter'semployees.Indeed,theCourthasruledthatsaidprovisionis
ees.
es. Ind
r
Ba
nottheyardstickfordeterminingtheexistenceofanemploymentrelationshipbecause
g the ex
it merely distinguishes between
en two
een tww kinds of employees, i.e., regular employees and
es
casual employees, for purposes
rposes of determining the right of an employee to certain
urposes
benefits,tojoinorformaunion,ortosecurityoftenure;itdoesnotapplywherethe
m a unio
uni
bl
existenceofanemploymentrelationshipisindispute.(PurefoodsCorp.vs.NLRC,etal.,
ploymen
oymen (Pur
Pu
o
r
G.R. No. 172241,, Nove
November
Novemm 20, 2008;CocaCola Bottlers
ottlers
tlers PPhils., Inc. vs. NLRC, G.R. No.
R
Ba
120466,May17,1999)
17,, 1999
an

es
CASESONWORKPOOL
ONN WOR
h
bl
C
Aworkpoolmayexistalthoughtheworkersinthepooldonotreceivesalariesandare
po workers
orkers sala
salar
o
r
freetoseekotheremploymentduringtemporarybreaksinthebusiness,providedthat
uring te iness, p
R
the worker shall be available when

when called
c
Ba
to report for a project.
ect Although
Alth primarily
an
applicable to regular seasonal

a workers,
nal wor this setup can likewise
ise be applied to project
se be
es
workers insofar as the effect
effect of temporary cessation of workwork iis concerned. This is
h
bl
beneficial to both the employer

emplo and employee for it prevents
events the unjust situation of
prevents
C
"coddlinglaborattheexpenseofcapital"andatthesametimeenablestheworkersto
same
me tii
o
r
attain the status of regular employees. (Tomas Lao
Lao Co
Construction vs. NLRC, G.R. No.
No.
No
R
116781,September5,1997)
Ba
an

es
h
CASESONPROJECTEMPLOYMENT
bl
C
A project employee or a member of a work pool may acquire the status
tatus of
o
of a regular
o
employee when the following concur: (1) There is a continuous s rehirin
rehiring of project
R
an
employeesevenaftercessationofaproject;and(2)Thetasksperformedbythealleged
erforme
rforme
"projectemployee"arevital,necessaryandindispensabletotheusualbusinessortrade
the
he usua
usu
h
of the employer. However, the length of time during which the employee was
g which
C
continuously rehired is not controlling, but merely serves

rves as a badge of regular
employment.(AlejandroMaraguinotvs.NLRC,G.R.No.120969,January22,1998)

67
The principal test for determining whether particular employees are properly
characterized as "project employees" as distinguished from "regular employees" is
whetherornottheprojectemployeeswereassignedtocarryouta"specificprojector
undertaking",thedurationandscopeofwhichwerespecifiedatthetimetheemployees
were engaged for that project. (Hanjin Heavy Industries and Construction Co. Ltd. vs.
Felicito Ibañez, et al., G.R. No. 170181, June 26, 2008;ALUTUCP vs. NLRC, G.R. No.
109902,2August1994)

CASESINVOLVINGPROBATIONARYEMPLOYMENT MPL
P
r
Ba
Generally, the probationary period riod of
of employment is limited to six (6) months. The
exceptiontothisgeneralruleiswhenthepartiestoanemploymentcontractmayagree
iss when
es
otherwise,suchaswhenthesameisestablishedbycompanypolicyorwhenthesameis
hee sam
required by the naturee of
of work
wor to be performed by the employee. In the latter case,
bl
there is recognition of

of the
the exercise of managerial prerogatives
rerog
ero in requiring a longer
o
r
periodofprobationaryemployment,suchasinthepresentcasewheretheprobationary
onary em
e present
esent
R
Ba
periodwassetforeighteen(18)months,i.e.fromMay,1980toOctober,1981inclusive,
t for
or eig May, 1
an
especiallywheretheemployeemustlearnaparticularkindofworksuchasselling,or
where
ere th
t parti ull
partic
es
whenthejobrequirescertainqualifications,skills,experienceortraining.(IluminadaVer
e jo
job
b re s,, skills,
h
bl
Buiservs.VicenteLeogardo,Jr.,G.R.No.L63316,July31,1984)
r vs.
vs Vic L63316
6331
C

o
r
The provision of Art. 280 * that "proba
"probationary employment shall not ot exceed
not ex six (6)
R
tionary
onary
Ba
months"meansthattheprobationaryemployeemaybedismissedforcauseatanytime
d for ca
an
beforetheexpirationofsix(6)monthsafterhiring.Ifafterworkingforlessthansix(6)
(6) mon orking
rking
es
months,heisfoundtobeunfitforthejob,hecanbedismissed.Butifhecontinuesto
e unfit missed.
ssed. B
h
bl
beemployedlongerthansix(6)months,heceasestobeaprobationaryemployeeand
ann six e a prob
C
becomesaregularorpermanentemployee.(ManilaElectricCompanyvs.NLRC,etal.,
Electric
lectric
o
r
G.R.No.83751,September29,1989)
R

Ba
an
Probationaryemploymentshallnotexceedsix(6)monthsfromthedatetheemployee
sixx (6)
6) m employe
mploy
es
h
started working, unless it is covered by y an

an apprenticeship
ap agreement stipulating
pulatin a
stipulatin
bl
C
longer period. The services of an employeeyee w who has been engaged on aa proba
probationary
basis may be terminated for a just cause or when he fails to qualify alify as
a a regular
as
o
employeeinaccordancewithreasonablestandardsmadeknownbytheemployertothe
y the em
R
an
employeeatthetimeofhisengagement.Anemployeewhoisallowedtoworkaftera
allowed
llowed
probationary period shall be considered a regular employee." ee." (Mar
yee." (M K. AlEsayi And
h
Company,Ltd.vs.HerminioFlores,G.R.Nos.8621415,March21,1990) rch 21,

C

68
Articles280and281ofourLaborCode,supra,putanendtotheperniciouspracticeof
makingpermanentcasualsofourlowlyemployeesbythesimpleexpedientofextending
to them probationary appointments, ad infinitum. Thus, Article 281, supra, placed a
ceilingonprobationaryemployment,i.e.,nottoexceedsix(6)monthsfromthedatethe
employee started working. On the other hand, Article 280, supra, defined when an
employmentshallberegularnotwithstandinganywrittenagreementtothecontrary.In
otherwords,thegraduationofanemployeefromcasualorprobationarytoregulardoes
notdependonthearbitrarywillofhisemployer.(CentralNegrosElectricCoop.,Inc.vs.
s em
e
NLRC,G.R.No.106246,September1,1994)1,, 1994)
r
Ba

While it is true that the decision
sio to
cision to dismiss or lay off an employee is management's
es
prerogative,itmustbemadewithoutabuseofdiscretion,forwhatisatstakeisnotonly
adee with
the employee's position on but also his means of livelihood. Therefore, he should be
n but
bl
protectedagainstanyarbitrarydeprivationofhisjob.Atanyrate,
nyy arbitr
arbit At an whereapenaltyless
o
r
punitivewouldsuffice,whatevermisstepsmaybecommittedbylaboroughtnottobe
uffice, w committ
ommit
R
Ba
visitedwithaconsequencesosevere.Itisnotonlybecauseofthelaw'sconcernforthe
conseq
onseq y beca
an
workingmen.Thereis,inaddition,
en. There
Ther hisfamilytoconsider.
to
o conss Unemploymentbringsabout
es
hardships and ssorrows on those dependent
ps and on th
nt on the wageearner. The misery and pain
h
bl
attendanttothelossofjobsthencouldbeavoidediftherebeacceptanceoftheview
dant
a to d be avo
C
that under
d all circumstances of a case
de se the
ase the workers should not be deprived
eprive of their
deprive
o
r
meansof livelihood.(JudyPhils.,Inc.vs.NLRC,G.R.No.111934,April29,1998)
nc.
c. vs. N 29, 199
R

Ba
an
Reinstatement means restoration ration to a state or condition from

oration om
m whwhich one had been
w
es
removed or separated. In n case
case of probationary employment, nt, Article
ent, Art
Arti 281 of the Labor
h
bl
Coderequirestheemployertomakeknowntohisemployeeatthetimeofthelatter's
loyer
oyer t loyee
oyee at
C
engagement of the reasonable standards under which hich he may qualify as a regular
ch he
o
r
employee.(JaimeD.Viernesvs.NLRC,G.R.No.108405,April4,2003)
8405,
405, Ap
R

Ba
an
Itissettledthataprobationaryemployeeenjoysatemporaryemploymentstatus,nota
njoys
oys a t tus,
us, not
no
es
h
permanent status. In general terms, he he is

is terminable
t anytime as long as
ngg ass such
bl
C
termination is made before the expiration on of

o the sixmonth probationary
of ry period.
ary perio The
employment of a probationary employee may only be terminated either ther (1)
(1 for a just
(1)
o
cause; or (2) when the employee fails to qualify as a regular employee
oyee in
ployee i accordance
R
an
withthereasonablestandardsmadeknowntohimbytheemployeratthestartofhis
ployer
oyer a
employment.(CathayPacificAirwaysvs.Marin,148931,September12,2006)
ember 1
h

C

69
There are two kinds of regular employees, namely: (1) those who are engaged to
performactivitieswhicharenecessaryordesirableintheusualbusinessortradeofthe
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 they are
employed.

Article 280 also recognizes project employees, those whose "employment has been
fixedforaspecificprojectorundertaking." ing.
ng

r
Ba
Project employment is distinct from from casual employment referred to in the second
paragraph of Article 280 for. .. .. the
he proviso that "any employee who has rendered at
es
leastoneyearofservice...shallbeconsideredaregularemployee"doesnotapplyto
. . shall
projectemployees,butonlytocasualemployees.
only to
bl

o
r
AlthoughArticle280doesnotexpresslyrecognizeemploymentforafixedperiod,which
280 doe mploym
ploym
R
Ba
isdistinctfromemploymentwhichhasbeenfixedforaspecificprojectorundertaking,.
m emplo for a
an
..employmentforafixedperiodisnotinitselfillegal...(PureFoodsCorp.vs.NLRC,et
ment for
fo elff illegaa
es
al.,G.R.No.122653December12,1997;FortunatoMercado,Sr.,etal.vs.NLRC,etal.,
No. 122 Fortunat
ortunat
h
bl
G.R.No.79869,September5,1991;BrentSchool,Inc.,etal.vs.RonaldoZamora,etal.,
No.
o. 798 ntt Schoo
Scho
C
G.R.No.48494,February5,1990;NoelitoFabela,etal.vs.SanMiguelCorp.,etal.,G.R.
4 oelito
lito Fa Corp.,
orp.,
o
r
No.150658February9,2007)
R

Ba
an
Article 280 of the Labor Code,

Code, as amended does not proscri proscribe
roscr or prohibit an
es
employmentcontractwithafixedperiod.Itdoesnotnecessarilyfollowthatwherethe
th a fixe ssarily
sarily fo
f
h
bl
duties of the employee consist of activities usually necessary

e consi
cons ssary or
essary o desirable in the usual
C
businessoftheemployer,thepartiesareforbiddenfromagreeingonaperiodoftime
from
om ag
o
r
for the performance of such activities. There is iss nothing
noth essentially contradictory
ory
R
betweenadefiniteperiodofemploymentandthenatureoftheemployee'sduties.
hee natu
Ba
.
an

es
h
What Article 280 of the Labor Code, as amended,

amende seeks to prevent is the practice
practic of
bl
C
some unscrupulous and covetous employers oyer who wish to circumvent
loyers the la
t the law that
protectslowlyworkersfromcapriciousdismissalfromtheiremployment.Theaforesaid ent. The
Th
o
provision, however,shouldnotbeinterpretedinsuchawayastodepriveemployersof
deprive
eprive
R
an
the right and prerogative to choose their own workers if they have have sufficient
su basis to
refuse an employee a regular status. Management has rights ghts which should also be
hts wh
h
protected.(RowellIndustrialCorp.vs.CourtofAppeals,etal.,G.R.No.167714,March7,
al., G.R.
C
2007;PantrancoNorthExpress,Inc.vs.NLRC,G.R.No.106654,December16,1994)
54 D
54,

70
Itis settledthatquestionsrespectingaprivateschoolteacher'sentitlementtosecurity
of tenure are governed by the Manual of Regulations for Private Schools and not the
LaborCode.(AklanCollege,Inc.,etal.vs.RodolfoP.Guarino,G.R.No.152949,August
14,2007)

Theprovisionwhichstatesthat"theprobationaryperiodshallnotexceedsixmonths"
meansthattheprobationaryemployeemaybedismissedforcauseatanytimebefore
theexpirationofsixmonthsafterhiring.If,afterworkingforlessthansixmonths,heor
she is found unfit for the job, he or she can be dismissed. On the other hand, if such
workercontinuestobeemployedlongerthansixmonths,heorsheisconsideredasa
nger
ge
regularemployeeandceasestobeaprobationaryemployee.(JenniferFabelloPasamba
a proba
r
Ba
vs.NLRC,etal.,G.R.No.168421,June8,2007)
June 8,

es
CASESONTERMINATIONBYEMPLOYER
BY Y EMP
bl
Toconstituteavaliddismissalfromemployment,tworequisitesmustbemet,namely:
d dismis req
requ
o
r
(1)theemployeemustbe b affordeddueprocess,and(2)thedismissalmustbeforavalid
must be d (2)
2) the
R
Ba
cause.(RomeoLagaticvs.NLRC,G.R.No.121004,January28,1998)
o Lagatic Janua
Januar
an

es
Itisnowsettledthatwherethedismissalofanemployeeisinfactforajustandvalid
w settled
settle o an e
of
h
bl
causeandissoproventobebutheisnotaccordedhisrighttodueprocess,i.e.,hewas
an is
and ott accor
C
not furnished
nis the twin requirementsts of
of notice
no and the opportunity to be heard, the
o be
b
o
r
dismissalshallbeupheldbuttheemployermustbesanctionedfornoncompliancewith
employe
mploye oncom
R
uree to ob
Ba
therequirementsoforforfailuretoobservedueprocess.Thesanction,inthenatureof
nction, i
an
indemnification or penalty, depends

depend on the facts of each case see and
and the gravity of the
es
omission committed by the the em
employer. (Fe S. Sebuguero vs.
vs. NLRC,
NLR G.R. No. 115394,
h
bl
September27,1995)
C

o
r
Itisnowsettledthatwherethedismissalofoneemployeeisinfactforajustandvalid
employe
mploye alid
R
causeandissoproventobebutheisnotaccordedhisrighttodueprocess,i.e.,hewas
rded
ed his
Ba
e wasas
an
not furnished the twin requirements of noticeotice and opportunity to be heard,
notice ard, the
eard, t
th
es
h
dismissalshallbeupheldbuttheemployermustbesanctionedfornoncompliancewith
er must pliance
iance
bl
C
therequirementsof,orforfailuretoobserve,dueprocess."
erve,

o
The rule reversed a long standing policy theretofore followed that at even
hat ev though the
eve
R
an
dismissalisbasedonajustcauseortheterminationofemploymentisforanauthorized
ment
ent is fo
f
cause,thedismissalorterminationisillegalifeffectedwithoutnoticetotheemployee.
utt notic
h
(RubenSerrano vs.NLRC,G.R.No.117040,January27,2000) 00)

0)
C

71
Withrespectto Art.283oftheLaborCode,theemployer'sfailuretocomplywiththe
notice requirement does not constitute a denial of due process but a mere failure to
observeaprocedurefortheterminationofemploymentwhichmakesthetermination
ofemploymentmerelyineffectual.Itissimilartothefailuretoobservetheprovisionsof
Art.1592,inrelationtoArt.1191,oftheCivilCodeinrescindingacontractforthesale
ofimmovableproperty.Indeed,undertheLaborCode,onlytheabsenceofajustcause
fortheterminationofemploymentcanmakethedismissalofanemployeeillegal.

Thus,onlyiftheterminationofemploymentisnotforanyofthecausesprovidedbylaw
ploymen
loymen
r
Ba
is it illegal and, therefore, the employ
employee should be reinstated and paid backwages.
(RubenSerrano vs.NLRC,G.R.No.117040,January27,2000)
. No.
No 11
es

Forseriousmisconducttoexist,theactcomplainedofshouldbecorruptorinspiredby
to exis
bl
an intention to violatete the

ate the law or a persistent disregard
rd of
ard o wellknown legal rules. On
o
r
the other hand, in in loss
loss of trust and confidence, it must
must b
be shown that the employee
R
Ba
concerned is responsible
respons
espons for the misconduct or infract
infraction and that the nature of his
infrac
an
participationon therein
ther
there rendered him absolutely elyy unworthy
unwo
unw o of the trust and confidence
es
demandedbyhisposition.(MitsubishiMotorsPhils.Corp.vs.RolandoSimon,etal.,G.R.
ed by h ors Phils
h
bl
No.164081,April16,2008)
64081,
4081, A
C

o
r
Under Article 282 of the Labor Code,Code, gross
g and habitual neglect of of dutie
duties is a valid
R
minate
Ba
groundforanemployertoterminateanemployee.Grossnegligenceimpliesawantor
ennce im
an
absenceoforafailuretoexerciseslightcareordiligence,ortheentireabsenceofcare.
xercise
ercise s hee enti
ent
es
Itevincesathoughtlessdisregardofconsequenceswithoutexertinganyefforttoavoid
disregar exertin
h
bl
them.Habitualneglectimpliesrepeatedfailuretoperformone'sdutiesforaperiodof
implie orm
m one
C
time,dependinguponthecircumstances.(SchooloftheHolySpiritofQuezonCity,etal.
he Holy
o
r
vs. Corazon P. Taguiam, G.R. No. 165565, July y 14, 2008;Asian Terminals, Inc. vs.
14, 20
2 vs
R
NepthallyB.Sallao,etal.,G.R.No.166211,July14,2008)
14,
4 2008
Ba
an

es
h
In any event, under Article 282 of the Labor

Labor Code,
C an employer may terminate
minate an
erminate
bl
C
employeeforgrossandhabitualneglectofduties.Neglectofduty,tobeagroundfor
of du
d e a gro
dismissal,mustbebothgrossandhabitual.Grossnegligenceconnoteswantofcarein es want
wan
o
the performance of one's duties. Habitual neglect implies repeated d failure
ed failur to perform
R
an
one'sdutiesforaperiodoftime,dependinguponthecircumstances.Asingleorisolated
nces.
ces. A
act of negligence does not constitute a just cause for the dismissa
dismissal
smissa of the employee.
h
(JuanitoTalidanovs.FalconMaritime&AlliedServices,Inc.,etal.,G.R.No.172031,July
c.,
., et al.,
C
14,2008)

72
Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for
dismissalonlyifitamountstogrossandhabitualneglectofduties.Thus,thefactthatan
employee's performance is found to be poor or unsatisfactory does not necessarily
mean that the employee is grossly and habitually negligent of his duties. Gross
negligenceimpliesawantorabsenceoforfailuretoexerciseslightcareordiligence,or
theentireabsenceofcare.Itevincesathoughtlessdisregardofconsequenceswithout
exertinganyefforttoavoidthem.(UniversalStaffingServices,Inc.vs.NLRC,etal.,G.R.
No.177576,July21,2008)

r
Ba
Ofcourse,ordinarymisconductwouldnotjustifytheterminationoftheservicesofan
would
employee.Thelawisexplicitthatthemisconductshouldbeserious.Itissettledthatin
th th
that
es
orderformisconducttobeserious,"itmustbeofsuchgraveandaggravatedcharacter
e seriou
andnotmerelytrivialorunimportant".Asamplifiedbyjurisprudence,themisconduct
orr unim
bl
must (1) be serious; (2) re

s; (2) relate to the performance of the employee's duties; and (3)
f the
th
o
r
show that the employe
employee
mploye has become unfit to continue ntinue working for the employer.
ontinue
R
Ba
(PhilippineNationalBankvs.RamonBrigidoL.Velasco,G.R.No.166096,September11,
tional
nal B lasco,
an
2008;RenoFoods,Inc.,etal.vs.NagkakaisangLakasngManggagawa(NLM)Katipunan,
Foods, I g Laka
aka
es
G.R. No. 16401
164016, March 15, 2010;Wilfredo do M. Ba
o M. Baron, et al. vs. NLRC, et al., G.R. No.
h
bl
182299,February22,2010;KulasIdeas&Creations,etal.vs.JulietAlcoseba,etal.,G.R.
99,
9, Febr
ebr & Creat
C
No. 180123,
01 February 18, 2010;Jimmymmy Areno, Jr. vs. Skycable PCCBaguio,
my Are aguio G.R. No.
Baguio
o
r
180302, February 5, 2010;Hilton Heavy
Heavy EEquipment Corp., et al. vs. Ananias
nanias P. Dy, G.R.
Ananias
R
No.164860,February2,2010)
Ba
an

es
In Gustilo v. Wyeth Philippines,
ippines, Inc., we held that a series of irr
ess of irregularities when put
h
bl
together may constitute tee serious

seri misconduct. We also heldheld that gross neglect of duty
eld tha
C
becomes serious in character due to frequency of instances.

ances (Arsenio S. Quiambao vs.
stances
o
r
ManilaElectricCompany,G.R.No.171023,December18,2009)
ber
er 18, 2
R

Ba
an
ToreiterateourrulinginToyota,laboradjudicatoryofficialsandtheCAmustdemurthe
dicatory
catory emur
mur th t
es
h
awardofseparationpaybasedonsocialjusticewhenanemployee'sdismissalisbased
justice ssal
al iss ba
bl
C
onseriousmisconductorwillfuldisobedience;grossandhabitualneglectofduty;fraud
ience;
ence t of duty
orwillfulbreachoftrust;orcommissionofacrimeagainstthepersonoftheemployer
n of the
th
o
or his immediate family — grounds under Art. 282 of the Labor r Code
Code that sanction
R
an
dismissals of employees. They must be most judicious and circumspect rcumsp in awarding
separation pay or financial assistance as the constitutional al policy
nal poli to provide full
h
protection to labor is not meant to be an instrument to oppress
oppre the employers. The
C
commitmentoftheCourttothecauseoflaborshouldnotembarrassusfromsustaining
emb
the employers when they are right, as here. In fine, we should be more cautious in
awarding financial assistance to the undeserving and those who are unworthy of the
liberality of the law. (Arsenio S. Quiambao vs. Manila Electric Company, G.R. No. 171023,
December18,2009)

73
Constructivedismissalexistswhenanactofcleardiscrimination,insensibilityordisdain
byanemployerhasbecomesounbearabletotheemployeeleavinghimwithnooption
but to forego with his continued employment. (Ramon B. Formantes vs. Duncan
Pharmaceuticals,Phil.,Inc.,G.R.No.170661,December4,2009)

Wellsettledisthedictumthatthetwin requirementsofnoticeandhearingconstitute
theessentialelementsofdueprocessinthedismissalofemployees.Itisacardinalrule
in our jurisdiction that the employer must furnish the employee with two written
noticesbeforetheterminationofemploymentcanbeaffected:(a)thefirstapprisesthe
ploy
lo
employee of the particular acts oromissions
omissio for which his dismissal is sought; and (b)
r
Ba
thesecondinformstheemployeeoftheemployer'sdecisiontodismisshim.(RamonB.
ee of th
Formantesvs.DuncanPharmaceuticals,Phil.,Inc.,G.R.No.170661,December4,2009)
aceu
ceutica
ica
es
As a general rule, an employee

employ who has been dismissed for any of the just causes
bl
enumeratedunderArticle282oftheLaborCodeisnotentitledtoseparationpay.
Article
rticle 2 ent
enti
o
r

R
Ba
Although by way
way ofof exception, the grant of separation
paratio pay or some other financial
an
assistance may
may be
be allowed to an employee dismissed
sm se for just causes on the basis of
dismi
es
equity.
h
bl

C
Thereasonthatthelawdoesnotstatutorilygrantseparationpayorfinancialassistance
o atutorily
utorily anc
ancia
o
r
in instances of termination due to to aa ju
just cause is precisely because
ause the cause for
se th
R
off the
Ba
terminationisduetotheactsoftheemployee.Insuchinstances,however,thisCourt,
s, howe
an
inspired by compassionate e and

and social justice, has in the pastpast awarded financial
es
assistance to dismissed employ
employees when circumstances warran warranted such an award.
h
bl
(SolidbankCorp.vs.NLRC,etal.,G.R.No.165951,March30,2010)
RC,
C, et 30,
0, 201
C

o
r

R
CASES ON TERMINATION BY EMPLOYER: SERIOU SERIOUS

ERIO MISCONDUCT OR WILLFUL
Ba
LLFUL
UL
an
DISOBEDIENCE
es
h
bl
C
Willfuldisobedienceoftheemployer'slawfulorders,asajustcauseforthedismissalof
wful he dism
anemployee,envisagestheconcurrenceofatleasttworequisites:(1)theemployee's
1) the e
o
assailed conduct must have been willful or intentional, the e willfulness
willf
willfu being
R
an
characterized by a "wrongful and perverse attitude;" and (2) the

he orde
order violated must
have been reasonable, lawful, made known to the employee and m
eee and must pertain to the
h
dutieswhichhehadbeenengagedtodischarge.(TeodoricoRosariovs.VictoryRicemill,
co
o Rosar
C
G.R.No.147572,February19,2003;Mcdonald's(KatipunanBranch),etal.vs.Ma.Dulce
Bra
Alba,G.R.No.156382,December18,2008)

74
CASESONSERIOUSMISCONDUCT
Misconduct is a transgression of some established and definite rule of action, a
forbiddenact,aderelictionofduty,willfulincharacter,andimplieswrongfulintentand
not mere error in judgment. Themisconductto be serious must be of such grave and
aggravated character and not merely trivial and unimportant. Such misconduct,
however serious, must, nevertheless, be in connection with the employee's work to
constitutejustcauseforhisseparation.

A female employees’ absence for 16 16 day
days, considering that she had just delivered a
r
Ba
child,canhardlybeconsideredaforbiddenact,aderelictionofduty;muchlessdoesit
a forbid
imply wrongful intent on thee part
part of
o the employee. Her failure to formally inform the
es
company of her pregnancy cy cannot
ncy cann also be considered as grave misconduct directly
connectedtoherworkastoconstitutejustcauseforherseparation.(LakpueDrugvs.
as to c
bl
Belga,G.R.No.166379,October20,2005)
379,
79, Octo
Oct
o
r

R
Ba
CASESONDISOBEDIENCE
OBEDIE
BEDIE
an
es
The offense
ense of
of willful disobedience requires
res
es the
the concurrence of 2 requisites: (1) the
h
bl
employee’sassailedconductmusthavebeenwillful,thatischaracterizedbyawrongful
oyee’s
yee’s a been w
C
and perverse
ve attitude; and (2) the order
order
der violated
vi must have been reasonable,
asona
sona lawful,
o
r
made known to the employee and nd must
and mu pertain to the duties which ich he
which h had been
R
engaged to discharge. (Asian Terminals

ermina Inc. vs. Marbella, G.R. No.
Termina
Ba
o 149074,
1490 August 10,
an
2006)
es

h
bl
Willful disobedience requires

quires the concurrence of two requisit
equires requisites: (a) the employee's
requisi
C
assailed conduct must have been willful, that is, characterized

characte
aract by a wrongful and
o
r
perverseattitude;and(b)theorderviolatedmusthavebeenreasonable,lawful,made
have b ade
R
knowntotheemployee,andmustpertaintothedutieswhichhehadbeenengagedto
he dutie
Ba
ged to
ged
an
discharge.(CrislyndonT.Sadagnotvs.ReinierPacificInt'l.Shipping,Inc.,etal.,G.R.No.
err Pacific G.R. N
es
h
152636,August8,2007)
bl
C

o

R
an

h

C

75
CASEONGROSSINSUBORDINATION
Forgrossinsubordination,alsocalled"willfuldisobedienceof alawfulorder,"tolie,two
(2)requisitesarealsonecessary.First,theassailedconductmusthavebeenintentional
andcharacterizedbyawrongfulandperverseattitude.Second,theorderviolatedmust
havebeenreasonable,lawful,andmadeknowntotheemployeeandshouldpertainto
the duties which he has been engaged to discharge. (Cosmos Bottling Corp. vs. Pablo
Nagrama, Jr., G.R. No. 164403, March 4, 2008;Jackqui R. Moreno vs. San Sebastian
CollegeRecoletos, G.R. No. 175283, March
M
Ma 28, 2008;San Miguel Corp. vs. Angel C.
Pontillas,G.R.No.155178,May7,2008)
2008)
008)
r
Ba

CASESONGROSSANDHABITUALNEGLECT;TERMINATIONBYEMPLOYER
TUAL
UA NE
s
Habitualneglectimpliesrepeatedfailuretoperformone'sdutiesforaperiodoftime.
ess repea
The employee’s repeated
peated
eated acts of absences without leave
eave
av and her frequent tardiness
r
reflectherindifferentattitudetoandlackofmotivationinherwork.Herrepeatedand
erent att ation
ion in
Ba
habitualinfractions,committeddespiteseveralwarnings,constitutegrossmisconduct.
ctions,
tions, c warnin
warning
Habitual absenteeism
bsentee
entee without leave constitute
utee gross
g o negligence and is sufficient to
gr
es
justifyterminationofanemployee.
erminat
erminati
bl

Her repeated
pea negligence is not tolerable;
erable neither should it merit the
olerable; the penalty of
o
r
suspensiononly.Therecordofanemployeeisarelevantconsiderationindetermining
n emplo tion
on in
R
the penalty that should be meted ted out.

eted o
Ba
An employee's past misconduct
scondu and present
an
behavior must be taken togethergether in determining the proper

ogether imposable penalty. The
r impo
es
totality of infractions or the number
r the n of violations committed
itted during
mitted d the period of
h
bl
employment shall be conside

considered
onside in determining the penalty
nalty to
enalty t be imposed upon an
C
erring employee. The offenses

f committed by him should
hould not be taken singly and
should
o
r
separately but in their totality. Fitness for continucontinued
ontinu employment cannot be
R
compartmentalizedintotightlittlecubiclesofaspectsofcharacter,conduct,andability
aspects
pects
Ba
ability
ity
an
separate and independent of each other. other. It is the totality, not not
ot thtthe
es
h
compartmentalization, of such company any infractions

inf that she had consistently
consiste
onsiste
bl
C
committedwhichjustifiedherdismissal.(ChallengeSocksCorp.vs.CA,G.R.No.165268,
(Chal R. No. 1
November8,2005)
o

R
an
Gross negligence under Article 282 of the Labor Code, as amended, ded, connotes
nded, co want of
careintheperformanceofone'sduties,whilehabitualneglectimpliesrepeatedfailure
ect
ct impli
impl
h
to perform one's duties for a period of time, depending upon
upon th the circumstances. The
C
employee’srepeatedfailuretosubmithisdailycoveragereportsontime,aswellashis
epo
failuretosubmitthedoctors'callcardsconstitutehabitualneglectofduties.(Chuavs.
NLRC,G.R.No.146780,March11,2005)

76
Theactofthemasterofafishingvesselindelegatinghisdutiestoanotherthenleaving
the vessel to seek medical emergency treatment cannot be the gross neglect of duty
contemplated by the law to warrant dismissal. And although he had in two previous
occasions disembarked from the vessel despite instruction that he should do so only
after certain things have been completed, these cannot render the neglect habitual
since he had already been adequately penalized for the same. Finally, the master’s
servicefor24yearsmakesthepenaltyofdismissaldisproportionatetothegravityofthe
offensecommitted.(Tingvs.CA,G.R.No.146174,July12,2006)

Abandonment of work, or the deliberate
berate and unjustified refusal of an employee to
liberate
r
Ba
resumehisemployment,maybeajustcausefortheterminationofemploymentunder
e a just
jus
paragraph (b) of Article 282 of
of tthe
he Labor Code since it is a form of neglect of duty.
es
(VictoryLiner,Inc.vs.PabloM.Race,G.R.No.164820,March28,2007)
o M. Ra

bl
CASESONABANDONMENT NMENT
MENT
o
r
R
Ba
Abandonment of off work,
wo or the deliberate and unjustified
unjusti
unjustif refusal of an employee to
an
resume hiss employment,

emplo is a just cause forr the
the termination
te of employment under
es
paragraph(b)ofArticle282oftheLaborCode,sinceitconstitutesneglectofduty.The
ph (b) o Code,
ode, sin
h
bl
jurisprudentialruleisthatabandonmentisamatterofintentionthatcannotbelightly
rudenti
udenti ntt is a m
C
presumedfromequivocalacts.Toconstituteabandonment,twoelementsmustconcur:
edd nstitute
stitute nts
ts m
o
r
(1)thefailuretoreportforworkorabsencewithoutvalidorjustifiablereason,and(2)a
orr absen ble reas
R
clear intent, manifested throughough overt acts, to sever the

rough
Ba
employeremployee
e empl
an
relationship. The employer bears

bears tthe burden of showing a deliberate
deliber
elibe and unjustified
es
refusalbytheemployeetoresumehisemploymentwithoutanyintentionofreturning.
to resum any int
h
bl
(CRCAgriculturalTrading,etal.vs.NLRC,etal.,G.R.No.177664,December23,2009)
ng,
g, et a 177664,
77664,
C

o
r
Dismissal from employment on the ground of abandonment
bandonm
andonm is legal and valid if it iis
t is
R
shown that there is a clear and deliberate intentent on

ntent o the part of the employee
Ba
e to
yee to
an
discontinue his employment without any intention

ntentio of returning back to work.
intentio ork. The
T
Th
es
h
employee's deliberate unjustified refusal to to con

continue his employment must st be
be clearly
cle
bl
C
evidencedbyovertactsunerringlypointingtothefactthattheemployeesimplydoes
ting
ing t ee simp
not want to work anymore. (Hermenegildo L. Santos vs. Nationall Labor Labo Relations
Labor
o
Commission,G.R.No.L76991,October28,1988)
R
an

Abandonment, as a just and valid ground for termination, n, means
on, me
mea the deliberate,
h
unjustifiedrefusalofanemployeetoresumehisemployment.Theburdenofproofison
ent The
ent.
C
the employer to show a clear and deliberate intent on thethe part of the employee to
discontinueemployment.Theintentcannotbelightlyinferredorlegallypresumedfrom
certain equivocal acts. For abandonment to be a valid ground for dismissal, two (2)
elements must be proved: the intention of an employee to abandon, coupled with an
overt act from which it may be inferred that the employee has no more intent to
resumehiswork.(DelMontePhilippinesvs.NLRC,G.R.No.126688,March5,1998)
77
Grossandhabitualneglectofdutybytheemployeeofhisdutiesisajustcauseforthe
terminationofthelatter'semployment.Towarrantremovalfromservice,however,the
negligence should not merely be gross but also habitual. (Acebedo Optical, et al. vs.
NLRC,etal.,G.R.No.150171,July17,2007)

The charge of drug abuse inside the company's premises and during working hours
against petitioner constitutes serious mi
misconduct, which is one of the just causes for
m
termination.Misconductisimproperorwrongconduct.Itisthetransgressionofsome
perr or w
r
Ba
establishedanddefiniteruleofaction,aforbiddenact,aderelictionofduty,willfulin
action,
character, and implies wrongful
gfu intent
ngful in and not merely an error in judgment. The
es
misconduct to be serious within
within the meaning of the Act must be of such a grave and
aggravatedcharacterandnotmerelytrivialorunimportant.Suchmisconduct,however
nd not
bl
serious,mustnevertheless,inconnectionwiththeworkoftheemployee,constitutejust
theless,
heless, k of
o
r
causeforhisseparation.(EduardoBughaw,Jr.vs.TreasureIslandIndustrialCorp.,G.R.
paration.
aration. Treasure
easur
R
Ba
No.173151,March28,2008;BelleCorp.vs.ArturoN.Macasusi,G.R.No.168116,April
March
rch 28
2 ro N. M
an
22,2008)
es
h
bl
Themerefactthatpetitionerfailedtoreportforworkrightaftertheendofhisvacation
mere
er fac eport
port fo
C
leave is not

n enough reason to conclude
clude that he had decided to abandon
ude th ndo his work.
andon
o
r
Besides,settledistherulethatthemereabsenceorfailuretoreportforworkdoesnot
e mere rt for
or wo
R
amount to abandonment. (Aliten

en vs.
ten vs.. Uneed Lumber & Hardware,
vs
Ba
re 168931,
1689 September
an
12,2006)
es

h
bl

C
CASESONLOSSOFTRUSTANDCONFIDENCEASGROUNDFORTERMINATION
T UND
N FO
o
r
R
Thedoctrineoflossofconfidencerequirestheconcurrenceofthefollowing:(1)lossof
concur
oncur
Ba
o of
os
an
ould no
confidenceshouldnotbesimulated;(2)itshouldnotbeusedasasubterfugeforcauses orr caus
es
h
which are improper, illegal, or unjustified;

d; (3)
(3) it
it may not be arbitrarily asserted
erted
rte in in the
bl
C
face of overwhelming evidence to the contrary;

contr (4) it must be genuine,
e, not
ne, not a mere
afterthought to justify an earlier action taken in bad faith; and (5) (5) the
the employee
o
involvedholdsapositionoftrustandconfidence.
R
an

Lossofconfidence,asajustcauseforterminationofemployment,ispremisedonthe
oyment,
yment,
h
fact that the employee concerned holds a position of of resp

responsibility, trust and
res
C
confidence. He must be invested with confidence on delicate elica matters, such as the
custody, handling, care, and protection of the employer's property and/or funds. In
order to constitute a just cause for dismissal, the act complained of must be "work
related"suchaswouldshowtheemployeeconcernedtobeunfittocontinueworking
fortheemployer.(RolandoP.Anchetavs.DestinyFinancialPlans,Inc.,etal.,G.R.No.
179702,February16,2010)
78
As a rule, employers are allowed a wide latitude of discretion in terminating the
employmentofmanagerialpersonnelorthosewho,whilenotofsimilarrank,perform
functionswhichbytheirnaturerequiretheemployers'fulltrustandconfidence.Proof
beyondreasonabledoubtisnotrequired.Itissufficientthatthereissome basisforloss
of confidence, such as when the employer has reasonable ground to believe that the
employeeconcernedisresponsibleforthepurportedmisconduct,andthenatureofhis
participation therein renders him unworthy of the trust and confidence demanded by
hisposition.

This must be distinguished from the case of ordinary rankandfile employees, whose
hee case
r
Ba
terminationonthebasisofthesesamegroundsrequiresahigherproofofinvolvement
e same
sam
in the events in question; mere me uncorroborated
mere u assertions and accusations by the
es
employer will not suffice. (Roland
(Rolando P. Ancheta vs. Destiny Financial Plans, Inc., et al.,
(Rolan
ary 16, 2
bl

o
r
UnderArticle282(c)oftheLaborCode,lossoftrustandconfidenceisoneofthejust
2 (c) of stt and
R
Ba
causesfordismissinganemployee.Itisanestablishedprinciplethatlossofconfidence
missing ished
an
mustbepremisedonthefactthattheemployeeconcernedholdsapositionoftrustand
emised yee
ee concc
es
confidence. nce. This
Th situation obtains where a
Thi a person
per
pers is entrusted with confidence on
h
bl
delicate tee matters,

mat such as care and protection,
ection, handling or custody of the employer's
otection,
C
property. y But, in order to constitutee a

a just
just cause for dismissal, the act ctt complained
com of
o
r
must be "workrelated" such as would would show the employee concerned rneed toto be unfit to
R
oyer.
yer. Be
Ba
continueworkingfortheemployer.Besides,forlossofconfidencetobeavalidground
ce to be
an
for dismissal, such loss of confide

confidence must arise from particular cular proven facts. (Ma.
icular
es
WenelitaTirazonavs.CourtofAppeals,etal.,G.R.No.169712,March14,2008;Jardine
urt of A 9712,
712, Ma
M
h
bl
Davies,Inc.vs.NLRC,G.R.No.76272,July28,1999)
R. No.
C

o
r

R

Ba
an
Law and jurisprudence have long recognized nized

zed ththe right of employers to dismiss dism
dismi
es
h
employeesbyreasonoflossoftrustandconfidence.AsprovidedforintheLaborCode,
confide
confiden Labor
abor C
bl
C
"Art.282.Anemployermayterminateanemploymentforanyofthefollowingcauses:.
emp owing c
. . (c) Fraud or willful breach of the trust reposed in him by his employerployer or his duly
o
authorized representative. . . ." In the case of supervisors or personn personnel
ersonn occupying
R
an
positions of responsibility, this Court has repeatedly held that that lloss of trust and
hat los
confidencejustifiestermination.Obviously,asajustcauseprovidedbylaw,thisground
rovided
ovided
h
forterminatingemployment,springsfromthevoluntaryorwillfulactoftheemployee,
orr willfu
C
or"byreasonofsomeblameworthyactoromissiononthepartoftheemployee".
part

Lossofconfidenceasajustcauseforterminationofemploymentispremisedfromthe
factthatanemployeeconcernedholdsaposition of trust and confidence. This situation
holds where a person is entrusted with confidence on delicate matters, such as the
custody, handling, or care and protection of the employer's property. But, in order to
79
constituteajustcausefordismissal,theactcomplainedofmustbe"workrelated"such
as would show the employee concerned to be unfit to continue working for the
employer.(AlejandroY.Caoilevs.NLRC,G.R.No.115491,November24,1998)

Theruleissettledthatiftheemployeeisguiltyofbreachoftrustorthathisemployer
hasjustifiablereasontodistrusthim,thelabortribunalcannotjustlydenythefreedom
andauthoritytodismisshisemployee.Thebasicpremisefordismissalonthegroundof
loss of confidence is that the employee concerned holds a position of trust and
confidence.Itisthebreachofthistrustthatresultsintheemployer'slossofconfidence
intheemployee.
r
Ba
UnderArt.282oftheLaborCode,asamended,lossofconfidencewouldbetheresultof
e, as am
"fraudorwillfulbreachbytheemployeeofthetrustreposedinhimbyhisemployeror
e emplo
es
dulyauthorizedrepresentative,"ajustcausefortermination.Itcannotbegainsaidthat
ative,"
the breach of trust must st be
ust be related
r to the performance of the employee's functions.
bl
(NationalSugarRefineriesCorp.vs.NLRC,G.R.No.122277,February24,1998)
ineries
eries C 277,
77
o
r

R
Ba
It has oft been
n held
held that loss of confidence should uld not
no be used "as a subterfuge for
an
causes which h are

ch are illegal, improper and unjustified.
stified It must be genuine, not a mere
ustified
es
afterthought
ought toto justify an earlier action taken
ken in
in bad
b faith." Be it remembered that at
h
bl
stake here
here are the sole means of livelihood,
lihood the name and the reputation of the
elihood,
C
employee.ee Thus, petitioner must prove rove

v an an actual breach of duty founded
nde on clearly
unded
o
r
established facts sufficient to warrant
arrant his loss of employment. (Philippi
(Philippine National
R
ConstructionCorp.vs.RolandoMatias,G.R.No.56283,May6,2005)
Matias,
Ba
055)
an

es
Petitioner’s acceptance of of com
commissions and rebates from m aa cu
customer, without the
h
bl
knowledge and consent ntt of

of tthe employer and without said aid rebates
said re and commissions
C
being reportedandturnedoverto
d thelatter,areactswhichcanclearlybeconsideredas
which
hich c
o
r
awillfulbreachoftrustandconfidencereposedbytheemployeruponhim.Settledis
byy the e d is
i
R
therulethatanemployercannotbecompelledtoretainanemployeewhoisguiltyof
d to ret
Ba
uilty
lt of
an
acts inimical to the interests of the employer.yer. A ccompany has the right to dismiss
er. A smiss iits
ismiss
es
h
employeesifonlyasameasureofselfprotection.Thisisallthemoretrueinthecaseof
otection n the ca
bl
C
supervisors or personnel occupying positions tions of responsibility. (Felix Cruz
itions uzz vs.
vs. CA,
C G.R.
No.148544,July12,2006)
o

R
an
Lossoftrustandconfidencemustbebasedonwillfulbreachofthetrustreposedinthe
the
he trus
employee by his employer. Ordinary breach will not suffice; it mu
e; it must be willful. Such
h
breachiswillfulifitisdoneintentionally,knowingly,andpurposely,withoutjustifiable
purpos
purpose
C
excuse, as distinguished from an act done carelessly, thoughtlessly,

thou heedlessly or
inadvertently.Morespecificallythelossoftrustmustbefoundedonclearlyestablished
facts. (Norsk Hydro (Phils.), Inc., et al. vs. Benjamin S. Rosales, Jr., G.R. No. 162871,
January31,2007)

80
It is clear that Article 282 (c) of the Labor Code allows an employer to terminate the
services of an employee for loss of trust and confidence. The right of employers to
dismiss employees by reason of loss of trust and confidence is well established in
jurisprudence.

Thefirstrequisitefordismissalonthegroundoflossoftrustandconfidenceisthatthe
employeeconcernedmustbeoneholdingapositionoftrustandconfidence.Verily,We
mustfirstdetermineifrespondentholdssuchaposition.

There are two (2) classes of positions of trust. The first class consists of managerial
nss o
employees. They are defined as those ose vested
hose ve with the powers or prerogatives to lay
r
Ba
down management policies and d to
to hire,
hi transfer suspend, layoff, recall, discharge,
assign or discipline employees oreffectivelyrecommendsuch
ess or
o ef
eff managerial actions. The
es
secondclassconsistsofcashiers,auditors,propertycustodians,etc.Theyaredefinedas
ashiers,
shiers,
those who in the normal rmal and routine exercise of their functions, regularly handle
mal an
bl
significantamountsofmoneyorproperty.
off mon
o
r

R
Ba
In this case, respondent
responde
espond was employed as district manager for Cagayan de OroNorth
ct man
an
Mindanaoanditsimmediatevicinities.Itisnotthejobtitlebuttheactualworkthatthe
andd its i ot the o
es
employee ee performs.
perf He was employed d to
to handle
h
ha pharmaceutical products for
h
bl
distributiontomedicalpractitionersandsaletodrugoutlets.Asaresultofhishandling
bution
ution t d sale to
C
of large amounts

a of petitioner's samples,
ples, rrespondent is, by law, an emplo
mples, employee
mplo with a
o
r
positionoftrust,fallingunderthesecondclass.
second
R

Ba
an
Thesecondrequisiteisthattheremustbeanactthatwouldjustifythelossoftrustand
there m ustify
stify t
es
confidence.Lossoftrustandconfidencetobeavalidcausefordismissalmustbebased
and con fo dism
for dis
h
bl
onawillfulbreachoftrustandfoundedonclearlyestablishedfacts.Thebasisforthe
trust
rust a blished
lished
C
dismissal must be clearly and convincingly established hed but proof beyond reasonable
d but
o
r
doubtisnotnecessary.
R

Ba
an
Respondent's act of stapling a thank you note ote from

note fro his father warrants the e loss
loss of
es
h
petitioner's trust and confidence. As the supervsupervisor of fellow medical representatives,
resentat
sentat
bl
C
he had the duty to set a good example ple tto his colleagues. A higher
mple standard of
err stand
confidencewasreposedinhim.
o

R
an
Thereisnodoubtthatrespondentwillfullybreachedthetrustandconfidencereposed
and
nd con
in him by not asking for permission before using company property for his own or
y prope
h
another's benefit, as required in the Company Standards dards of Business Conduct.
C
Moreover,whenrespondentfailedtoturnoverthesamplesleftinhiscareand
es le stapled
the political "thank you" note with the intention of distributing them to his father's
supporters, he had, in effect appropriated company property for personal gain and
benefit. (Bristol Myers Squibb (Phils.), Inc. vs. Richard Nixon A. Baban, G.R. No. 167449,
December17,2008)
81
Tobeginwith,thereisnodenyingthatlossoftrustandconfidenceisavalidgroundfor
terminationofemployment.Thus,thebasicrequisitefordismissalonthegroundofloss
ofconfidenceisthattheemployeeconcernedholdsapositionoftrustandconfidence
orisroutinelychargedwiththecareandcustodyoftheemployer'smoneyorproperty.
Moreover,thebreachmustberelatedtotheperformanceoftheemployee'sfunction.
Also, it must be shown that the employee is a managerial employee, since the term
"trust and confidence" is restricted to said class of employees. (Rolia Villanueva vs.
NLRC,G.R.No.129413,July27,1998)

Proof beyond reasonable doubt of their i misconduct is not required, it being sufficient
eir
that there is some basis for the samem or
ame or that the employer has reasonable ground to
r
Ba
believe that they are responsible for the misconduct and their participation therein
ble for
rendered them unworthy of tthe ttrust and confidence demanded of their position.
f the
es
(Central Pangasinan Electric ic Cooperative
tric Coo vs. Geronima Macaraeg, G.R. No. 145800,
January22,2003)
bl

o
r
In case of a constructive
structive dismissal, the employer has as the
has the burden of proving that the
R
Ba
transfer and demotion
motio of an employee are for valid
demotio valid and
a legitimate grounds such as
an
genuine business
iness necessity . Particularly, for
usiness forr a
a transfer
t not to be considered a
es
constructive
tive dismissal,
ctive dis the employer must t be
be able
ab to show that such transfer is not
h
bl
unreasonable,
onable inconvenient, or prejudicial
sonable cial to
dicial to the employee; nor does it involve a
C
demotioninrankordiminutionofhissalaries,privilegesandotherbenefits.Failureof
on is salari nefi
nefits
o
r
the employer to overcome this burden burden of proof, the employee's de demotion
emot shall no
R
doubt be tantamount to unlawful awful

wful co
Ba
constructive illegal constructive
c ive dismissal.
dis (Jarcia
an
MachineShopandAutoSupplyvs.NLRC,G.R.No.118045,January2,1997)
pply
ply vs. N uary
ary 2,
es

h
bl
There is a constructive dismissal when the reassignment

e dism ent
nt ofof an employee involves a
C
demotioninrankoradiminutioninpay.(OscarLedesmaandCompanyvs.NLRC,G.R.
esma
ma an
o
r
No.110930,July13,1995)
R

Ba
an
The employer has the prerogative to transfer er an

fer an employee when the interest stt of
of the
t
th
es
h
business so requires. When the transfer fer is

is not unreasonable, discriminatory,
natory or
minatory
bl
C
attendedbyademotioninrankoradiminutioninpay,suchtransfercannotbedeemed
inutio
nutio not
ot be d
aconstructivedismissal.Furthermore,sanctionsmustbeimposeduponanemployerfor
on an em
o
failure to observe the requirements of due process in effecting g a
a lawful
law dismissal.
R
an
(EliseoB.Tanvs.NLRC,G.R.No.128290,November24,1998)

h
Constructive dismissal is defined as a "quitting because continued

see cont
ont employment is
C
renderedimpossible,unreasonableorunlikely;asanofferinvolvingademotioninrank
invo
and diminution in pay." On the other hand, abandonment of work means a clear,
deliberateandunjustifiedrefusalofanemployeetoresumehisemploymentandaclear
intention to sever the employeremployee relationship. Abandonment is incompatible
with constructive dismissal. (Philippine Industrial Security Agency Corp. vs. Virgilio
Dapiton,G.R.No.127421,December8,1999)
82
The transfer of an employee ordinarily lies within the ambit of management
prerogatives.However,atransferamountstoconstructivedismissalwhenthetransfer
is unreasonable, inconvenient, or prejudicial to the employee, and it involves a
demotioninrankordiminutionofsalaries,benefitsandotherprivileges.Inthecaseat
bench,nowhereintherecorddoesitshowthatthatthetransferofprivaterespondent
wasanythingbutdoneingoodfaith,withoutgraveabuseofdiscretion,andinthebest
interestofthebusinessenterprise.(OSSSecurity&AlliedServices,Inc.vs.NLRC,G.R.No.
112752,February9,2000)

CASESONCONSTRUCTIVEDISMISSAL AL
r
Ba
Clearly,constructivedismissalhadalreadysetinwhenthesuspensionwentbeyondthe
l had
h d al
es
maximum period allowed by by law.
aw Section 4, Rule XIV, Book V of the Omnibus Rules
law
provides that preventive suspension cannot be more than the maximum period of 30
vee suspe
bl
days. Hence, we have

vee ruled
ruled that after the 30day periodod of
riod o suspension, the employee
o
r
must be reinstated to h
ed to his former position because suspension beyond this maximum
e suspen
suspe
R
Ba
period amounts
nts to
to constructive dismissal. (Hyatt Taxi Services Inc. vs. Rustom M.
att Tax
Ta
an
Catinoy,G.R.No.143204,June26,2001)
R. No. 1
es

h
bl
Constructivedismissalexistswhenanactofcleardiscrimination,insensibilityordisdain,
ructive
uctive ctt of cle
C
onthepartofanemployerhasbecomesounbearableastoleaveanemployeewithno
pa me so u mploy
o
r
choicebuttoforegocontinuedemployment.Thetemporary"offdetail"ofrespondent
mploym etail"
il" of
R
(Solima
Solima
Ba
Valenzuelaisnotsuchacase.(SolimanSecurityServicesvs.CourtofAppeals,G.R.No.
r of Ap
an
143215,July11,2002)
es

h
bl
Constructive dismissal exists

exists where there is cessation of work
n of wo because "continued
C
employment is rendered iimpossible, unreasonable or or unlike

unlikely, as an offer involving a
o
r
demotioninrankandadiminutioninpay.(GlobeTelecomvs.JoanFlorendoFlores,G.R.
Telecom
elecom G.R
G.R.
R
No.150092,September27,2002)
Ba
an

es
h
Case law defines constructive dismissal as as a

a cessation of work because e continued
contin
bl
C
employmenthasbeenrenderedimpossible,unreasonable,orunlikely,aswhenthereis
ble, u s when
a demotion in rank or diminution in pay or both or when a clear discrimination,
ar discr
disc
o
insensibility,ordisdainbyanemployerbecomesunbearabletotheemployee.Thetest
e emplo
R
an
of constructive dismissal is whether a reasonable person in the hee employee's
emp position
wouldhavefeltcompelledtogiveuphispositionunderthecircumstances.Itisanact
circum
h
amounting to dismissal but is made to appear as if it were not.
ot In fact, the employee
re not.
C
who is constructively dismissed might have been allowed ed to

t keep coming to work.
Constructive dismissal is therefore a dismissal in disguise. The law recognizes and
resolvesthissituationinfavorofemployeesinordertoprotecttheirrightsandinterests
fromthecoerciveactsof theemployer.(CRCAgriculturalTrading,etal.vs.NLRC,etal.,

83
Loss of confidence as a just cause for termination of employment is premised on the
fact that the employee concerned holds a position of responsibility, trust and
confidence.Inordertoconstituteajustcausefordismissal,theactcomplainedofmust
be so related to the performance of the duties of the dismissed employee as would
showthatheorsheisunfittocontinueworkingfortheemployer.

The position of project controller of a construction company required trust and
confidence,foritrelatedtothehandlingofbusinessexpendituresorfinances.However,
hisactallegedlyconstitutingbreachoftrustandconfidencewasnotinanywayrelated
to his official functions and responsibilities
bil
bilit as controller. In fact, the questioned act,
disposing of property belonging to the company
o the co but placed in his name to avoid the
r
Ba
effectsofagrarianreformlawspertainedtoanunlawfulschemedeliberatelyengagedin
ertaine
bythecompanyinordertoevadeaconstitutionalandlegalmandate.
vade
ad a c
Abreachiswillfulifitisdoneintentionally,knowinglyandpurposely,withoutjustifiable
s done i
excuse, as distinguished
shed from
uished f
fr an act done carelessly, ly, thoughtlessly, heedlessly or
sly,
r
inadvertently. It must
must rest on substantial grounds unds
ds anaand not on the employer's
Ba
arbitrariness, whims,
whims, caprices or suspicion; otherwise,
erwise, the employee would eternally
remain at the mercy of the employer. It should
thee me oulduld be
bee genuine and not simulated; nor
es
shoulditappearasamereafterthoughttojustifyanearlieractiontakeninbadfaithora
t appea justify
ustify a
bl
subterfuge
fuge for
rfuge f causes which are improper, oper, illegal
roper, ili or unjustified. It has never been
intendedtoaffordanoccasionforabusebecauseofitssubjectivenature.Theremust,
d buse
use be ure.
re. T
o
r
therefore, be an actual breach of of duty committed by the employee
f duty which must be
yee whi
wh
R
established by substantial evidence.

ence. In
dence.
Ba
I this case, Aboitiz utterly ffailed
ailed tto establish the
an
requirementsprescribedbylawandjurisprudenceforavaliddismissalonthegroundof
y law
aw and dismiss
smis
es
breach of trust and confidence.
fidence (Oligario Salas vs. Aboitiz z One,
One, Inc., et al., G.R. No.
h
bl
178236,June27,2008)
C

o
r
CASESONTERMINATIONOFEMPLOYMENT:OTHERANALOGOUSCASES ER
R ANAL
ANA
R
Ba
an
An employee who cannot get along with his his co

coemployees is detrimentall to to th
tthe
es
h
companyforhecanupsetandstraintheworkingenvironment.Withoutthenecessary
workin e neces
nece
bl
C
teamwork and synergy, the organization canncannot function well. Thus, management
can anagem
nagem has
the prerogative to take the necessary action to correct the situation
n and
and protect its
o
organization. When personal differences between employees and manag management affect
R
an
the work environment, the peace of the company is affected. d.. Thus,
Thus an employee's
Thus,
attitudeproblemisavalidgroundforhistermination. Itisasituationanalogoustoloss
situatio
ituatio
h
oftrustandconfidencethatmustbedulyprovedbytheemployer.Similarly,compliance
mployer
C
withthetwinrequirementofnoticeandhearingmustalsobeprovenbytheemployer.
be p
But the employee's supposed “attitude problem” must be shown by clear and
convincingevidence.Themerementionofnegativefeedbackfromtheemployee'steam
members is not sufficient proof of her attitude problem. And her failure to refute the
employer'sallegationofhernegativeattitudedoesnotamounttoadmission.(Heavylift
Manilavs.CA,G.R.No.154410,October20,2005)
84
Nonetheless,Article282(e)oftheLaborCodetalksofotheranalogouscausesorthose
which are susceptible of comparison to another in general or in specific detail. For an
employeetobevalidlydismissedforacauseanalogoustothoseenumeratedinArticle
282,thecausemustinvolveavoluntaryand/orwillfulactoromissionoftheemployee.
(John Hancock Life Insurance Corp., et al. vs. Joanna Cantre Davis, G.R. No. 169549,
September 3, 2008;Eugenio Nadura vs. Benguet Consolidated, Inc., G.R. No. L17780,
August24,1962)

A cause analogous to serious misconductu is a voluntary and/or willful act or omission
duc
attestingtoanemployee'smoraldepravity.Theftcommittedbyanemployeeagainsta
depra
epravity
vity
r
Ba
personotherthanhisemployer,ifprovenbysubstantialevidence,isacauseanalogous
if prov
pro
toserious misconduct.(JohnHancockLifeInsuranceCorp.,etal.vs.JoannaCantreDavis,
Hanc
an ock
es
G.R.No.169549,September3,2008;AlfredoL.Oaniavs.NLRC,G.R.Nos.9716264,June
berer 3, 20
1,1995)
bl

o
r
CASESONCLOSUREANDREDUCTIONOFPERSONNEL
RE AND ELL
R
Ba
an
SMART's assertion
ssertion
ertio that Astorga cannot complain
ompla
mpla n of lack of notice because the
es
organizationalrealignmentwasmadeknowntoalltheemployeesasearlyasFebruary
ational r wn to a
h
bl
fails
ai to knowle
knowled
1998failstopersuade.Astorga'sactualknowledgeofthereorganizationcannotreplace
C
theformalandwrittennoticerequiredbythelaw.Inthewrittennotice,theemployees
ma ed
d by th e,, the
th
o
r
are informed of the specific date
e of
of the
th termination, at least a month
the onth prior to the
month
R
effectivity of such termination,

n, to
to give
g them sufficient time to
Ba
t find
find other suitable
an
employmentortomakewhateverarrangementsareneededtocushiontheimpactof
hatever
atever to cus
cu
es
termination. In this case,
e, notwithstanding
notwi Astorga's knowledge
edge of
wledge o the reorganization,
h
bl
she remained uncertain about the status of her employment

n abo oyment until SMART gave her
loyment
C
formalnoticeoftermination.
o
r

R
ButsuchnoticewasreceivedbyAstorgabarelytwo(2)weeksbeforetheeffectivedate
y two
wo (2)
Ba
e date
an
of termination, a period very much shorter rter than that required by law.. (Smart
ter th (Sm
(Sma
es
h
Communications,Inc.vs.ReginaM.Astorga,G.R.No.148132,January28,2008)
ga, G.R. 008)
8)
bl
C

WithrespecttoArt.283oftheLaborCode,theemployer'sfailuretocomplywiththe
o compl
comp
o
notice requirement does not constitute a denial of due process but
but
ut aa m
mere failure to
R
an
observeaprocedurefortheterminationofemploymentwhichmakesthetermination
makes
ofemploymentmerelyineffectual.Itissimilartothefailuretoobservetheprovisionsof
o observ
h
Art.1592,inrelationtoArt.1191oftheCivilCodeinrescindingacontractforthesaleof
nding
ding a
C
immovable property. Under these provisions, while the power

owe of a party to rescind a
contractisimpliedinreciprocalobligations,nonetheless,incasesinvolvingthesaleof
immovable property, the vendor cannot exercise this power even though the vendee
defaults in the payment of the price, except by bringing an action in court or giving
noticeofrescissionbymeansofanotarialdemand.Consequently,anoticeofrescission
85
givenintheletterofanattorneyhasnolegaleffect,andthevendeecanmakepayment
evenaftertheduedatesincenovalidnoticeofrescissionhasbeengiven.

Indeed,undertheLaborCode,onlytheabsenceofajustcausefortheterminationof
employmentcanmakethedismissalofanemployeeillegal.

Insum,weholdthatifinproceedingsforreinstatementunderArt.283,itisshownthat
the termination of employment was due to an authorized cause, then the employee
concernedshouldnotbeorderedreinstatedeventhoughthereisfailuretocomplywith
the 30day notice requirement. Instead,stea
te he must be granted separation pay in
accordancewithArt.283(RubenSerranovs.NLRC,G.R.No.117040,January27,2000)
rrano
rano v
r
Ba

Itisrequiredthattoeffectsuchterminationofanyemployee,theemployermustserve
uch
ch term
rm
es
a written notice on the workers
workers and the DOLE at least one (1) month before the
worker
intendeddatethereof.ThepurposeofsuchpreviousnoticetoDOLEmustbetoenable
The pu
bl
ittoascertaintheverityofthecauseforterminationofemployment.
erity
rity of t em
emp
o
r

R
Ba
Incaseofterminationduetotheinstallationoflaborsavingdevicesorredundancy,the
mination
nation borsa
bor
an
workeraffectedtherebyshallbeentitledtoaseparationpayequivalenttoatleasthis
ected
ted th a sepa
sep ra
es
one(1)monthpayortoatleastone(1)monthpayforeveryyearofservice,whichever
month p onth
nth pa
h
bl
ishigher.However,incaseofretrenchmenttopreventlossesandincasesofclosuresor
her.
er How
Ho ment
ent to
C
cessation n of operations of establishment

ment or
o undertaking not due to serious
seriou
eri business
o
r
lossesorfinancialreverses,theseparationpayshallbeequivalenttoone(1)monthpay
eparatio
paratio o one
ne (1
R
or at least onehalf (1/2) month

nth
Ba
pay for every year of service,
th pay whichever is higher.
e, which
an
(InternationalHardware,Inc.vs.NationalLaborRelationsCommission,G.R.No.80770,
c. vs. Na mmissi
mmissio
es
August10,1989)
h
bl

C
CASESONREDUNDANCY
o
r
R
Redundancy exists where the services of an n employee

emplo are in excess of what
Ba
haat is
is
an
irement
rement of the enterprise. A position
reasonably demanded by the actual requirements osition
sition is
es
h
redundantwhereitissuperfluous,andsuperfluityofapositionorpositionsmaybethe
uperfluit may be
bl
C
outcome of a number of factors, such as

s overhiring
ove of workers, decreased
sed volume
vol of
business, or dropping of a particular product line or service activity
activity previously
o
manufactured or undertaken by the enterprise. Retrenchment, on the o

n the other hand, is
R
an
used interchangeably with the term "layoff." It is the termination
nation of employment
ination
initiatedbytheemployerthroughnofaultoftheemployee'sandwithoutprejudiceto
s and w
h
thelatter,resortedtobymanagementduringperiodsofbusinessrecession,industrial
busines
C
depression, or seasonal fluctuations, or during lulls occasioned

casio by lack of orders,
shortage of materials, conversion of the plant for a new production program or the
introductionofnewmethodsormoreefficientmachinery,orofautomation.Simplyput,
itisanactoftheemployerofdismissingemployeesbecauseoflossesintheoperation
ofabusiness,lackofwork,andconsiderablereductiononthevolumeofhisbusiness,a
86
rightconsistentlyrecognizedandaffirmedbythisCourt(FeS.Sebuguerovs.NLRC,G.R.
No.115394,September27,1995)

The installation of laborsaving devices contemplates the installation of machinery to
effecteconomyandefficiencyinitsmethodofproduction.(EdgeApparel,Inc.vs.NLRC,

Redundancyexistswhentheservicecapabilityoftheworkforceisinexcessofwhatis
reasonablyneededtomeetthedemandsontheenterprise.Aredundantpositionisone
rendered superfluous by any number e of factors, such as overhiring of workers,
ber
decreased volume of business, droppingroppin of a particular product line previously
droppin
r
Ba
manufacturedbythecompanyorphasingoutofaserviceactivitypriorlyundertakenby
or phasi
thebusiness.Undertheseconditions,theemployerhasnolegalobligationtokeepinits
nditi
dit ons
ns
es
payroll more employees than than
an are
ar necessary for the operation of its business. (Asian
AlcoholCorp.vs.NLRC,G.R.No.131108,March25,1999)
G.R. No
bl

o
r
Thegeneralruleisthatthecharacterizationbyanemployerofanemployee'sservicesas
s that th mployer
ploye
R
Ba
nolongernecessaryorsustainableisanexerciseofbusinessjudgmentonthepartofthe
essary
ssary o of busin
busi
an
employer. TheThe
e wisdom
wi
wis or soundness of such characterization
h char
cha ac or decision is not, as a
es
generalrule,subjecttodiscretionaryreviewonthepartoftheLaborArbiter,theNLRC
rule, su w on th
h
bl
andtheCA.Suchcharacterizationmay,however,berejectedifthesameisfoundtobe
hee CA.A. S howeve
C
inviolationofthelaworisarbitraryormalicious.(LopezSugarCorp.vs.LeonitoFranco,
io orr malic . Leon
Leo
o
r
G.R.No.148195,May16,2005)
R

Ba
an
CASESONVALIDRETRENCHMENT MENT
es
h
bl
Retrenchment is valid only

only when the following requisites
ites
es have
hav been met: a) it is to
C
prevent losses; b) written notices were served on the

he workers
work and DOLE at least one
o
r
monthbeforetheeffectivedateoftheretrenchment;andc)separationpayispaidto
ment;
ent; an to
R
the affected workers. (Union of Filipino Workers

rs vs.
ers vs NLRC, G.R. No. 98111, Apri
vs. April
Ba
pr l 7,
7,
an
1993)
es
h

bl
C
Under theaforequoted Article 283 of the

hee Labor
Lab Code, there are threebasic
basic requisites
asic req
re
foravalidretrenchment:
o

R
an
(1) theretrenchmentisnecessarytopreventlossesandsuchlossesareproven;
h losses
(2) written notice to the employees and to the Department
Departm
epartm of Labor and
h
Employmentatleastonemonthpriortotheintendeddateofretrenchment;and
ed date
C
(3) paymentofseparationpayequivalenttoonemonthpayoratleast
th p 1/2month
payforeveryyearofservice,whicheverishigher.

(FeS.Sebuguerovs.NLRC,G.R.No.115394,September27,1995)

87
Retrenchment,tobevalid,threerequisitesmustconcur,asprovidedforunder
Article 283 of the Labor Code, namely: (1) The retrenchment is necessary to prevent
lossesandthesameisproven;(2)WrittennoticetotheemployeesandtotheDOLEat
leastonemonthpriortotheintendeddatethereof;and(3)Paymentofseparationpay
equivalenttoonemonthoratleast½monthpayforeveryyearofservice,whicheveris
higher.(TrendlineEmployeesASSN.SPFLvs.NLRC,G.R.No.112923,May5,1997)

A layoff, used interchangeably with "re "retrenchment,"
r is a recognized prerogative of
management.Itistheterminationofemploymentresortedtobytheemployer.through
off empl
r
Ba
no fault of nor with prejudice to the eemployees, during periods of business recession,
o the
industrialdepression,seasonalfluctuations,orduringlullsoccasionedbylack
all fluctu oforders,
shortage of materials, conversion
version of the plant for a new production program, or the
nversion
introductionofnewmethodsormoreefficientmachinery,orofautomation.Simplyput,
ethods
thods o
itisanactoftheemployerofdismissingemployeesbecauseoflossesinoperationofa
mployer
ployer ecau
ca
r
business,lackofwork,andconsiderablereductiononthevolumeofhisbusiness,aright
work, an on the vo
v
Ba
consistently recogniz
recognized
ecogniz and affirmed by this Cour Court. The requisites of a valid
Cou
retrenchment are covered by Article 283 of
entt are of tthe
f th e Labor Code. When a layoff is
es
temporary, the employment status of the
ary, the employee is not deemed terminated, but
e emplo
bl
merelyy suspended.
suspe Article 286 of the Labor
abor Code provides, in part, that the bona fide
bor Co
suspensionoftheoperationofthebusinessorundertakingforaperiodnotexceeding
io business
usiness od
d not
n
o
r
sixmonthsdoesnotterminateemployment.Thestandardthenbywhichtojudgethe
mploym which
hich t
R
aspect
pect o
Ba
validityoftheexerciseofthisaspectofmanagementprerogativeisgoodfaith.(GloriaS.
good
an
DelaCruzvs.NLRC,G.R.No.119536,February17,1997)
119536
es

h
bl
Retrenchment is a management

anagem
nage prerogative, a means s to protect and preserve the
to pro
pr
C
employer'sviabilityandensurehissurvival.Itisoneoftheeconomicgroundstodismiss
of the ec
o
r
anemployeeresortedtobyanemployerprimarilytoavoidorminimizebusinesslosses.
y to avoi
avo es
es.
R
In this regard, the employer bears the burden to to prove his allegation of economic
o pro
Ba
m or
mi or
an
business reverses, otherwise, it necessarily means means that the dismissal of an employe
employee
mploy
es
h
wasnotjustified.
bl
C

Under this provision, there are three basic requisites for a valid retrenchment.
renchm
renchme These
o
are:(a)theretrenchmentisnecessarytoprevent lossesand suchlossesareproven;(b)

osses
sses a
R
an
written notice to the employees and to the DOLE at least one ne month
mon prior to the
intended date of retrenchment, and (c) payment of separation ion pay
tion pa equivalent to one
pay
h
monthpayoratleastonehalf(1/2)month'spayforeveryyearofservice,whicheveris
y year o
C
higher.

88
To justify retrenchment, the "loss" referred to in Art. 283 cannot be just any kind or
amountofloss;otherwise,acompanycouldeasilyfeignexcusestosuititswhimsand
prejudices or to rid itself of unwanted employees. To guard against this possibility of
abuse,theCourthaslaiddownthefollowingstandardwhichacompanymustmeetto
justifyretrenchment.(PolymartPaperIndustriesvs.NLRC,G.R.No.118973,August12,
1998)

Retrenchment is the termination of eemployment effected by management during
f em
periodsofbusinessrecession,industrialdepression,seasonalfluctuations,lackofwork
strial
trial d
r
Ba
orconsiderablereductioninthevolumeoftheemployer'sbusiness.Resortedtobyan
volum
employer to avoid or minimize mi b
mize business losses, it is a management prerogative
es
consistentlyrecognizedbythisCourt.(BogoMedellinSugarcanePlantersAssn.vs.NLRC,
y this
his Co
G.R.No.97846September25,1998)
mber 25,
bl
o
r
Therequirementsforvalidretrenchmentwhichmustbeprovedbyclearandconvincing
s for val st be prp
R
Ba
evidence are: (1)
(1) that
tha the retrenchment is reasonably
that nably necessary and likely to prevent
an
business losses
sses which, if already incurred, are
es wh
w e not
not merely
m de minimis, but substantial,
es
serious, actual
actual and real, or if only expected,
ted, are
cted, a reasonably imminent as perceived
ar
h
bl
objectively
vely and
tively a in good faith by the employe
employer;
mploye (2) that the employer served written
C
noticebothtotheemployeesandtotheDepartmentofLaborandEmploymentatleast
ot the
he De ployme
oyme
o
r
onemonthpriortotheintendeddateofretrenchment;(3)thattheemployerpaysthe
date of employ
R
ion
on pay
Ba
retrenchedemployeesseparationpayequivalenttoonemonthpayoratleast½month
pay or at
an
pay for every year of service,

ce, whichever is higher; (4) that the
e whic hee employer
em exercises its
es
prerogativetoretrenchemployeesingoodfaithfortheadvancementofitsinterestand
employe vanceme
ancem
h
bl
nottodefeatorcircumventtheemployees'righttosecurityoftenure;and(5)thatthe
mvent
vent t urity
rity of
C
employerusedfairandreasonablecriteriainascertainingwhowouldbedismissedand
ining wh
o
r
who would be retained among the employees, such uch
ch asas status (i.e., whether they are
are
R
temporary, casual, regular or managerial employees),oyees efficiency, seniority, physical

mployees
Ba
hys
y ical
cal
an
fitness,age,andfinancialhardshipforcertainworkers.(AsianAlcoholCorp.vs.NLRC,
in
n work vs.
s. NLR
es
h
G.R.No.131108,March25,1999)
bl
C

Even assuming that the employers' losses warranted retrenchment, nt, and
ent, an that the
and
o
employer seasonably served written notices of retrenchment to the he workers
the wor and the
R
an
DOLE,butitfailedtoimplementtheretrenchmentprograminajustandpropermanner
just
ust and
asitdidnotuseareasonableandfairstandardinthecomputationoftheemployees'
putation
utation
h
demerits points for purposes of determining who among mong the workers should be
ong the
th
C
dismissed, the retrenchment program is invalid. The employer’s

emp failure to use a
reasonable and fair standard in the selection of the workers to be dismissed is not
merely a procedural but a substantive defect which invalidates the employee’s
dismissal.(Ariolavs.Philex,G.R.No.147756,August9,2005)

89
Where the employees had barely two weeks' notice of the intended retrenchment
program,theonemonthnoticerulewasviolated.Suchrule ismandatoryregardlessof
whether the retrenchment is temporary or permanent. (PT&T vs. NLRC, G.R. No.
147002,April15,2005)

Tojustifyretrenchment,theemployermustproveseriousbusinesslosses.Indeed,not
all business losses suffered by the employer would justify retrenchment under Article
283oftheLaborCode.35The"loss"referredtoinArticle283cannotbejustanykindor
amountofloss;otherwise,acompanycouldeasilyfeignexcusestosuititswhimsand
prejudicesortoriditselfofunwantedemployees.
em

r
Ba
Inanumberofcases,theCourthasidentifiedthenecessaryconditionsforthecompany
has iden
losses to justify retrenchment: nt (1)
ent: 1) the losses incurred are substantial and not de
(1)
es
minimis; (2) the losses are actual or reasonably imminent; (3) the retrenchment is
ree actu
reasonablynecessaryandislikelytobeeffectiveinpreventingtheexpectedlosses;and
nd is lik
bl
(d)theallegedlosses,ifalreadyincurred,ortheexpectedimminentlossessoughttobe
es,, if alre ted
ed i
o
r
forestalled,areprovenbysufficientandconvincingevidence.(AMAComputerCollege,
proven
roven b g eviden
evide
R
Ba
Inc.vs.ElyGarcia,etal.,G.R.No.166703,April14,2008)
rcia,
cia, et a 2008)
an

es
Retrenchment
hment or layoff is the termination of em
n of employment initiated by the employer,
h
bl
throughnofaultoftheemployeesandwithoutprejudicetothelatter,duringperiodsof
gh
h noo fa without
C
business recession, industrial depression,ssion, or seasonal fluctuations, or

ression, or during
d lulls
o
r
occasionedby lack of orders, shortage
rtage of
ortage o materials, conversion of thethe plant for anew
e plan
R
oductio
ductio
Ba
productionprogramortheintroductionofnewmethodsormoreefficientmachinery,or
efficien
an
ofautomation.
es

h
bl
ItisanexerciseofmanagementprerogativewhichtheCourtupholdsifcompliantwith
nagem
agem Court
ourt up
C
certainsubstantive andproceduralrequirements,namely: mely

mely:
o
r

R
1. Thatretrenchmentis necessarytopreventlossesanditisproven,bysufficient
ventnt loss
Ba
ficc ent
an
andconvincingevidencesuchastheemployer'sfinancialstatementsauditedby
employ udited
dited b
es
h
an independent and credible externalernal auditor,

au that such losses are substa
substantial
bl
C
and not merely flimsy and actua actual or reasonably imminent; ent;
nt; anand that
retrenchmentis theonlyeffectivemeasuretopreventsuchimminentlosses;
minent l
o

R
an
2. ThatwrittennoticeisservedontotheemployeesandtheDOLEatleastone(1)
hee DOLE
monthpriorto theintendeddateofretrenchment;and d
h
C
3. That the retrenched employees receive separation n pay

p equivalent to one (1)
month pay or at least onehalf (1/2) month pay for every year of service,
whicheverishigher.

The employer must prove compliance with all the foregoing requirements. Failure to
provethefirstrequirementwillrendertheretrenchmentillegal andmaketheemployer
90
liableforthereinstatementofitsemployeesandpaymentoffullbackwages.However,
weretheretrenchmentundertakenbytheemployerisbonafide,thesamewillnotbe
invalidatedbythelatter'sfailuretoservepriornoticeontheemployeesandtheDOLE;
theemployerwillonlybeliableinnominaldamages,thereasonablerateofwhichthe

CourtEnBanchassetatP50,000.00foreachemployee.

Closure or cessation of business is the complete or partialcessation of the operations
and/orshutdownoftheestablishmentoftheemployer.Itiscarriedouttoeitherstave
offthefinancialruinorpromotethebusinessinterestoftheemployer.
usin
s

r
Ba
Unlike retrenchment, closure or or cess
cessation of business, as an authorized cause of
termination of employment,, need
n d not depend for validity on evidence of actual or
nee
es
imminent reversal of the e employer's
emplo fortune. Article 283 authorizes termination of
employment due to business
busines closure, regardless of the underlying reasons and
bl
motivationstherefor,beitfinanciallossesornot.(EastridgeGolfClub,Inc.vs.Eastridge
r, be it f tridge
rid
o
r
GolfClub,Inc.LaborUnionSuper,etal.,G.R.No.166760,August22,2008)
bor Unio 6760,
760, Au
A
R
Ba

an
CASESONVALIDRETRENCHMENT
VALID
ALID R
es
h
bl
Retrenchmentistheterminationofemploymentinitiatedbytheemployerthroughno
nchmen
chmen mployme
ployme
C
fault of and

a without prejudice to the
hee employees.
emp It is resorted to during
uring periods of
o
r
business recession, industrial depression,
epressio or seasonal fluctuations or during lulls
ns or
R
occasionedby lack of orders, shortage

hortage of materials, conversion o
shortage
Ba
of the plant for anew
f the
an
productionprogramortheintroductionofnewmethodsormoreefficientmachineryor
ntroduc ore
re eff
ef
es
of automation. It is a manage
management prerogative resorted d to,
to, to
t avoid or minimize
to
h
bl
business losses, and is recognized by Article 283 of the
s reco the Labor Code, as amended.
he Lab
C
(Virgilio G. Anabe vs. Asian Construction (Asiakonstrukt),

nstrukt), et al., G.R. No. 183233,
o
r
December23,2009)
R

Ba
an
To effect a valid retrenchment, the following

wing elelements must be present: (1) (1) the
t
th
es
h
retrenchment is reasonably necessary andnd likely

likely to prevent business losses which, if
ess whic
bl
C
alreadyincurred,arenotmerelydeminimis,butsubstantial,serious,andreal,oronlyif
mis, b real, o
expected, are reasonably imminent as perceived objectively and in good good fa
ffaith by the
o
employer; (2) the employer serves written notice both to the employee/s
ployee concerned
mployee/
R
an
and the Department of Labor and Employment at least a month th before the intended
h befo
dateofretrenchment;(3)theemployerpaystheretrenchedemployeeseparationpayin
employe
mploye
h
an amount prescribed by the Code; (4) the employer exercises
exercis its prerogative to
C
retrench in good faith; and (5) the employer uses fair an and reasonable criteria in
ascertaining who would be retrenched or retained. (Virgilio G. Anabe vs. Asian
Construction(Asiakonstrukt),etal.,G.R.No.183233,December23,2009

91
CASESONCESSATION/CLOSUREOFBUSINESS
The existence of business losses is not required to justify the closure or cessation of
establishment or undertaking as a ground to terminate employment of employees.
Abolitionorclosurecouldbejustifiedonothergroundssuchasextinctdemand.Butthe
employer must present sufficient and convincing evidence to support such claim of
extinct demand. (Capitol Medical Center vs. Meris, G.R. No. 155098, September 16,
2005)
WheretherubberandbananaplantationsweretakenoverbytheDARpursuanttothe
ntations
tations
r
Ba
government’s CARP, resulting in in the severance of the employees’ services due to
n the
cessationoftheplantationsbusinessoperations,itwasruledthattheemployeeswere
busin
us ess
es
notentitledtoseparationpayasthecessationofbusinesscameaboutinvoluntarily.The
pay as t
closureofbusinessoperationscontemplatedunderArticle283referstoavoluntaryact
erations
rations
bl
ordecisiononthepartoftheemployer,notoneforceduponit,asinthiscase,byanact
art
rt of th d upo
up
o
r
of the Law or State
ate to
to benefit
b the workers by making ng them
king the agrarian lot beneficiaries.
R
Ba
(Manabanvs.SarphilCorp.,G.R.No.150915,April11,2005)
Sarphil l 11, 20
an

es
[T]hreerequirementsareenumeratedincasesofcessationofbusinessoperationsofan
require
requirem ases
ses of
h
bl
employercompanynotduetobusinessreverses:(1)serviceofawrittennoticetothe
oyer
ye co s revers
C
employeesandtotheMOLE(nowtheSecretaryofLaborandEmployment)atleastone
ee e Secre ment)
ent) a
o
r
month before the intended date e thereof;
there (2) the cessation of or withdrawal from
r withd
R
ona
na fide
Ba
businessoperationsmustbebonafideincharacter;and(3)paymenttotheemployees
ment to
an
ofterminationpayamountingtoatleastonehalfmonthpayforeachyearofservice,or
ng to at orr each
eac
es
onemonthpay,whicheverishigher.(ELCEEFarmsInc.,etal.vs.NLRC(FourthDivision),
er is hig al.l. vs.
s NL
N
h
bl
etal.,G.R.No.126428,January25,2007)
Janua
C

o
r
[T]he phrase “closure or cessation not due to serious
serious business losses or financial cia
cial
R
reverses”recognizestherightoftheemployertocloseorceaseitsbusinessoperations
to close
Ba
rati
at ons
an
orundertakingevenintheabsenceofseriousbusinesslossesorfinancialreverses,as
ous
us busi
bus verses,
erses,
es
h
long as he pays his employees their termination

mination pay in the amount correspondingpondin to
spondin
bl
C
theirlengthofservice.(PilarEspina,etal.vs.CourtofAppeals,etal.,G.R.No.164582,
all vs. R. No. 1
March28,2007)
o

R
an
ThedeterminationtoceaseoperationsisaprerogativeofmanagementwhichtheState
gement
ement
does not usually interfere with, as no business or undertaking aking
king m must be required to
h
continue operating simply because it has to maintain its worker
workers in employment, and
C
suchactwouldbetantamounttoatakingofpropertywithoutdueprocessoflaw.
out d

PilarEspina,etal.vs.CourtofAppeals,etal.,G.R.No.164582,March28,2007

92
In fact, even granting arguendo that respondent was not experiencing losses, it is still
authorizedbyArticle283oftheLaborCodetoceaseitsbusinessoperations.Explicitin
thesaidprovisionisthatclosureorcessationofbusinessoperationsisallowedevenif
thebusinessisnotundergoingeconomiclosses.Theowner,foranybonafidereason,
canlawfullycloseshopanyone.Justasnolawforcesanyonetogointobusiness,nolaw
cancompelanybodytocontinueinit.Itwouldindeedbestretchingtheintentandspirit
ofthelawifweweretounjustlyinterferewiththemanagement'sprerogativetoclose
orceaseitsbusinessoperations,justbecausesaidbusinessoperationsarenotsuffering
anylossorsimplytoprovidetheworker'scontinuedemployment.(JuvyM.Manatadvs.
er's
r
Phil.TelegraphandTelephoneCorp.,G.R.No.172363March7,2008;MacAdamsMetal
p.,G.R.
,G.R. N
r
Ba
Engineering Workers UnionIndependent
ependen vs. Mac Adams Metal Engineering, G.R. No.
141615,October24,2003)
es

BasedonArticle283,incaseofcessationofoperations,theemployerisonlyrequiredto
case of
bl
payhisemployeesaseparationpayofonemonthpayoratleastonehalfmonthpayfor
separa
separat orr at
a
o
r
every year of service,
vice, whichever
rvice, w
wh is higher. That is all
alll that
that the law requires. (Solidbank
R
Ba
Corp.vs.NLRC,etal.,G.R.No.165951,March30,2010)
C, ett al., 2010)
an

es
Looking now now at
a Article 283, this Court holdsholds that the same was drafted by the
h
bl
legislature,takingthebestinterestoflaborersinmind.Itisclearthatthecausesofthe
ture, ta aborers
borers
C
termination
tio of an employee under Article
rticle 283
Article 2 are due to circumstances es beyond
ces be their
o
r
control, such as when management ment d decides to reduce personnel nel based
base on valid
R
grounds, or when the employer yerr decides

decid to cease operations. Thus,
Ba the bias towards
Thus, th
an
laborisveryapparent,astheemployerisstatutorilyrequiredtopayseparationpay,the
e emplo to
o pay
es
amountofwhichisalsostatutorilyprescribed.(SolidbankCorp.vs.NLRC,etal.,G.R.No.
statutor Corp.
rp vs.
h
bl
165951,March30,2010) 0)
C

o
r
Retrenchmentistheterminationofemploymentinitiatedbytheemployerthroughno
nitiated no
R
fault of and without prejudice to the employees.yees. It is resorted to during periods
es. It
Ba
odsd of
of
an
business recession, industrial depression, or or sea

seasonal fluctuations or during ring
ing lululls
es
h
occasionedby lack of orders, shortage of f materials,

mater conversion of the plant for aanew
nt for
fo
bl
C
productionprogramortheintroductionofnewmethodsormoreefficientmachineryor
of ne t machi
of automation. It is a management prerogative resorted to, to avoid void or
o minimize
or
o
businesslosses,andisrecognizedbyArticle283oftheLaborCode,asamended. ass amen

R
an

To effect a valid retrenchment, the following elements must must be
b present: (1) the
be
h
retrenchment is reasonably necessary and likely to prevent ent business
vent bus losses which, if
C
alreadyincurred,arenotmerelydeminimis,butsubstantial,serious,andreal,oronlyif
al se
al,
expected, are reasonably imminent as perceived objectively and in good faith by the
employer; (2) the employer serves written notice both to the employee/s concerned
and the Department of Labor and Employment at least a month before the intended
dateofretrenchment;(3)theemployerpaystheretrenchedemployeeseparationpayin
an amount prescribed by the Code; (4) the employer exercises its prerogative to
93
retrench in good faith; and (5) the employer uses fair and reasonable criteria in
ascertainingwhowouldberetrenchedorretained.
CASESONDISEASEASGROUNDFORTERMINATION
TherequirementforamedicalcertificateunderArticle284oftheLaborCodecannotbe
dispensedwith;otherwise,itwouldsanctiontheunilateralandarbitrarydetermination
bytheemployerofthegravityorextentoftheemployee'sillnessandthusdefeatthe
publicpolicyontheprotectionoflabor.(TripleEightIntegratedServices,Inc.vs.NLRC,

r
Ba
Being regular employees, the dismissal
ismissa effected by petitioner must comply with the
dismissa
requirementsofArticle284oftheLaborCode.Itisnotdisputedthatanemployermay
off th
t La
terminate the services of his his em
employee who has been found to be suffering from a
diseasewhenthelatter'scontinuedemploymentisprohibitedbylaworisprejudicialto
r'ss conti
hishealthaswellastothehealthofhiscoemployees.However,thedismissalmaynot
to the . How
Ho
r
be summarily carried
arried out. The employer must comply comply
omply with certain prerequisites
Ba
containedinSec.8,RuleI,BookVI,oftheOmnibusRulesImplementingtheLaborCode.
ec. 8, Ru
R us Rule
(ATCIOverseasCorp.vs.CourtofAppeals,G.R.No.143949,August9,2001)
seas
as Cor
Co . No. 14 4
es

bl
For a dismiss
dismissal on the ground of disease
dismis to b
se to be considered valid, two requisites must
concur:(a)theemployeemustbesufferingfromadiseasewhichcannotbecuredwithin
(
(a ffering
ering f t be c
o
r
six months and his continued employment
mploym is prohibited by law or prejudicial to his
or preju
R
oemplo
emplo
Ba
healthortothehealthofhiscoemployees;and(b)acertificationtothateffectmustbe
o that
an
issuedbyacompetentpublichealthauthority.Theburdenfallsupontheemployerto
blic
ic healt alls
ls upo
up
es
establish these requisites, and iin the absence of such certification,
s, and ficatio the dismissal must
tification
h
bl
necessarilybedeclaredillegal.(CrayonsProcessing,Inc.vs.FelipePula,etal.,G.R.No.
d illega vs. Feli
C
167727,July30,2007;ManlyExpress,Inc.vs.RomualdoPayong,Jr.G.R.No.167462,25
do Payo
o
r
October 2005;Phil. Employ Services & Resources, Inc. v. Joseph Paramio, G.R. No.
s,, Inc. No.
No
R
144786, April 15, 20005; ATCI Overseas Corporation ration v. Court of Appeals, G.R.
poration
Ba
R. No.
No.
an
143949,August9,2001
es
h

bl
C

CASESWHENEMPLOYMENTDEEMEDTERMINATED
o
R
an
UnderArticle286oftheLaborCode,anemployermaybonafidesuspendtheoperation
e suspen
of its business for a period not exceeding six months. In such
such aa case, there is no
h
terminationoftheemploymentoftheemployees,butonlyatemporarydisplacement.
nly
ly a tem
C
When the suspension of the business operations exceeds eeds six months, then the
employment of the employees could be deemed terminated. Worth stressing, if the
operation of the business is resumed within six months, it shall be the duty of the
employer to reinstate his employees to their former positions without loss of seniority
rights,ifthelatterwouldindicatetheirdesiretoresumeworkwithinonemonthfrom
such resumption of operations. (Nasipit Lumber Company v. National Organization of
94
Workingmen,G.R.No.146225,November25,2004;LagonoyBusCo.,Inc.,etal.vs.Court
ofAppeals,etal.,G.R.No.165598,August14,2007)

Under Article 286 of the Labor Code, the bona fide suspension of the operation of a
business or undertaking for a period not exceeding six months shall not terminate
employment. Consequently, when the bona fide suspension of the operation of a
business or undertaking exceeds six months, then the employment of the employee
shallbedeemedterminated.Bythesametokenandapplyingsaidrulebyanalogy,ifthe
employeewasforcedtoremainwithoutworkorassignmentforaperiodexceedingsix
months, then he is in effect constructively
uctiv
cti dismissed. (Fernandito P. De Guzman vs.
NLRC,etal.,G.R.No.167701,December12,2007)
mber 12
r
Ba

es
CASESONRETIREMENT
bl
o
r
It is at once every
very
ery year,
ye that Article 287 does not not its
it
itself purport to impose any
R
Ba
obligatioon employers
mployer to set up a retirement schemecheme for their employees over and
an
above that already established under existing

t alread
alrea ting laws.
sting a
aw In other words, Article 287
es
recognizesthatexistinglawsalreadyprovideforaschemebywhichretirementbenefits
zes that dee for a
h
bl
may be
bee earned
arn or accrue in favor of employe
earn employees,
mploye as part of a broader social security
C
system that
th provides not only for retirem
retirement benefits but also death th aand funeral
ath
o
r
benefits,permanentdisabilitybenefits,sicknessbenefitsandmaternityleavebenefits.
efits, sic ity leave
R
;LloraMotors,Inc.vs.FranklinDrilon,G.R.No.82895,November7,1989)
Drilon,
rilon, G
Ba 7, 1989)
an

es
There are three kinds ofof retirement
reti schemes. The first type
ype is compulsory and
stt type
h
bl
contributory in character.

er. The
ter. Th second type is one set up upp by
by agreement
a between the
C
employerandtheemployeesincollectivebargainingagreementsorotheragreements
g agreem
o
r
betweenThethirdtypeisonethatisvoluntarilygivenbytheemployer,expresslyasin
given
ven by s in
R
an announced company policy or impliedly as in n a

in a failure
fa
Ba
to contest the employee's
oyee's
oye e's
an
claim for retirement benefits. (GVM Security and Protective

ty and P Agency vs. NLRC, G.R.
G.R. N
No.
es
h
102157,July23,1993)
bl
C

Wherethesecurityguardworkedwithtwo(2)securityagencieswhichwereownedby h were
o
thesamefamilyandhisemploymentthereatwascontinuousanduninterrupted,both uninter
R
an
agenciesareliablefortheformer'sretirementbenefits.Andinthecomputationofhis
the com
co
retirement benefit, the whole five (5) days of service incentive entive leave is included.
centive
h
(EnriquezSecurityServicesvs.Cabotaje,147993,July21,2006) 006
006)
C

UnderArt.287oftheLaborCodeasamended,thelegallymandatedageforcompulsory
retirementis65years,whilethesetminimumageforoptionalretirementis60years.
30.
95
Inthiscase,itmaybestressedthattheCBAdoesnotpersespecificallyprovideforthe
compulsoryretirementagenordoesitprovideforanoptionalretirementplan.Itmerely
providesthattheretirementbenefitsaccordedtoanemployeeshallbeinaccordance
withlaw.Thus,wemustapplyArt.287oftheLaborCodewhichprovidesfortwotypes
ofretirement:(a)compulsoryand(b)optional.Thefirsttakesplaceatage65,whilethe
second is primarily determined by the collective bargaining agreement or other
employmentcontractoremployer'sretirementplan.Intheabsenceofanyprovisionon
optional retirement in a collective bargaining agreement, other employment contract,
oremployer'sretirementplan,anemployeemayoptionallyretireuponreachingtheage
of60yearsormore,butnotbeyond65years,providedhehasservedatleastfiveyears
5y
intheestablishmentconcerned.Thatprerogativeisexclusivelylodgedintheemployee.
att prero
r
Ba
URSUMCO,etal.vs.AgripinoCaballeda,etal.,G.R.No.156644,July28,2008
balleda,
Implementation of a company ny retirement
pany ret plan visavis the Retirement Pay Law
es
(RepublicActNo.7641,amendingArticle287oftheLaborCode).(NayAlbertoP.Oxales
mending
vs.UnitedLaboratories,Inc.,G.R.No.152991,July21,2008
, Inc., G
bl

o
r
tionedunderArticle281,nowArticle292,oftheLaborCode,referstoand"islimitedto
cle 281, bor
or Cod
R
Ba
moneyclaims,allothercasesofinjurytorightsofaworkingmanbeinggovernedbythe
, alll othe
oth f a wor
wo
an
CivilCode."Accordingly,thisCourtruledthatpetitionerwhosoughtreinstatement,had
Accord petit on
petiti n
es
four[4]yearswithinwhichtofilehercomplaintfortheinjurytoherrightsasprovided
years w mplaint
plaint fo
f
h
bl
underArticle1146oftheCivilCode.
Articlee
Articl
C

o
r
VirgilioCallantavs.CarnationPhilippines,Inc.,G.R.No.70615,October28,1986
on Phili 5,, Octob
R

Ba
an
Art.291oftheLaborCodeappliestomoneyclaimsingeneralandprovidesfora3year
applies
pplies t and p
es
prescriptiveperiodtofilethem.
them.
h
bl

C
Ontheotherhand,respondentemployees'moneyclaimsinthiscasehadbeenreduced
aims
m in t
o
r
toajudgment,intheformofaWageOrder,whichhasbecomefinalandexecutory.The
has bec
be The
R
prescriptionapplicable,therefore,isnotthegeneralonethatappliestomoneyclaims,
eneral
eral o
Ba
clai
a ms,
an
but the specific one applying to judgments. Thus, the right to enforce the judgment,
s. Thus, udgmen
dgme
es
h
havingbeenexercisedwithinfiveyears,hasnotyetprescribed.
as not y
bl
C

Statedotherwise,aclaimanthasthreeyearstopressamoneyclaim.Oncejudgmentis
Once juj
o
renderedinherfavor,shehasfiveyearstoaskforexecutionofthejudgment,counted
e judgm
R
an
fromitsfinality.Thisisconsistentwiththeruleonstatutoryconstructionstructio thatageneral
provision should yield to a specific one and with the mandatedate ofof social justice that
h
doubts should be resolved in favor of labor J. K. MercadoMercado
ercado & Sons Agricultural
C
Enterprises,Inc.vs.PatriciaA.Sto.Tomas,etal.,G.R.No.158084,August29,2008,
5808

Theterm"moneyclaims"coversallmoneyclaimsarisingfromanemployeremployee
relation. Intercontinental Broadcasting Corp. vs. Ireneo Panganiban, G.R. No. 151407,
February6,2007;AmadoDeGuzman,etal.vs.CourtofAppeals,etal.,G.R.No.132257,
October12,1998)

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1st ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.

Labor Law : Jurisprudence

with less privileges inn life

The rule thatatt there

unacceptable. (Norberto Soriano ano vs.

the employer's will, this is oppression. (Pampanga

should not hesitate to grant compensability where a a reasonable

nature of one's employment.

It is firmly

power to control the putative

relationship is in dispute, four elements constitute

called "control test," and that is, whether

the act of

Code, for example, regarding the the

demand funds or property entrust

(2.) HeHe did not have the license oror

and consciously participated in illegal

corporate entity does not shield from prosecution the corporate

business, its purpose and effect, he consciously contributes

The lackk of criminal intent on the part

special law, is malum prohibitum

The essential elements of the crime of illegal recruitment

This is why a standard

parties the same is binding between

The purpose of Article 34,

is deemed committed

fact alone, she is deemed to have

committed in large scale because

In the first place, the second paragraph of

apprentice shall be entered

instantaneously give rise to anemployerapprentice relationship. p. (Nitto

only room for application. A plain and unambiguous statute speaks

The ambiguity between Article 97(f), which defines the term

time of the promulgation of the Labor Code. e. Article

purport to apply to situations arising after

Section 6 of the Rules Implementing Wageage Order

that Article 106 of the

such as, but not necessarily confined

independent business; the nature

of work; the control and

The test to determine the existence of f independent

This trilateral relationship

The law allows contracting and

Clearly, the law and its implementing rules s allow

It is in the appreciation of these forwarder

not necessarily mean n that

manner of the forwarder employees'

[I]n Azucena's The Labor Code with Comments and Cases,

legitimate contracting relationship,

contractor and his employees with respect to o the

relationship in a laboronly contracting situation because e in

Pursuant to Art. 110 of the

implementing rule cannot be invoked absent a formal declaration

behind the necessitytyy for

be a showing that the

need not be any showing that

awarded if the dismissal is effected in a a wanton,

UndertheLaborCode,a10%agreementforpaymentofattorney'sfeesbasedonthe y'ss fees

It is settled that in actions for

attorney's fees is proper and thereneed not be an

that the lawful wages were not paid accordingly.

gap which existed before the e implementation