LABOR LAW REVIEW

CASE DOCTRINE

KINDS AND CLASSES OF EMPLOYMENT

And
DISCUSSION ON TERMINATION

_______________________

In partial fulfillment for the requirements in

Labor Law Review

___________________

Presented to
Labor Arbiter Abdul Aziz U. Metmug
Professorial Lecturer
Mindanao State University – College of Law
Iligan Extension

____________________

ASTILLERO, Princess EJ Lee N.

BALBIDO, Merliza Q.
BALINDONG, Abdul Barry B.
BANDING, Zainne S.
CAGALAWAN-ABDULGANI, Danica Bianca B.
CELESTE, Alizza Lyn Y.
CESAR, Mark Jason T.
DAHAB, Ruth Ana
DIMITIMAN, Irish Dale Louise M.
DIPATUAN, Norhaina
EDRIS, Abdullah M.
KWAN, Audrey Michelle C.
PANARES, Ann Scarlette E.
RICO, Vanessa Isabelle J.
TANEDO, Senica Rose L.
UMPA, Sittie Sohaila U.

October 2021

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 TABLE OF CONTENTS

CASE NUMBER PAGE NO.

1. G.R. No. 157966 January 31, 2008 3

2. G.R. No. 163033 October 2, 2009 6

3. G.R. No. 169170 August 8, 2010 14

4. GR. No. 183250 March 10, 2010 18

5. G.R. No. 149440 January 28, 2003 22

6. G.R. No. 158693 November 17, 2004 24

7. G.R. No. 141430 May 7, 2004 27

8. G.R. No. 167751 March 2, 2011 30

9. G.R. No. 167563 March 22, 2010 38

10. G.R. No. 128024 May 9, 2000 41

11. G.R. No. 121227 August 17, 1998 45

12. G.R. No. 161305 February 9, 2007 48

13. G.R. No. 89621 September 24, 1991 54

2
 (1)

G.R. No. 157966 January 31, 2008

EDDIE PACQUING, RODERICK CENTENO, JUANITO M. GUERRA,

CLARO DUPILAD, JR., LOUIE CENTENO, DAVID REBLORA and
RAYMUNDO ANDRADE,

vs.

COCA-COLA PHILIPPINES, INC.

Case Doctrine: The test to determine whether employment is regular or

not, is the reasonable connection between the particular activity performed
by the employee in relation to the usual business or trade of the employer.
The law deems the recurrent and ongoing demand for that activity to be
adequate proof of its need, if not indispensability, to the company if the
employee has been performing it for at least a year, even if the
performance is not continuous or simply intermittent.

Facts:

Petitioners were part of a three-person team for each delivery van,

which included a driver, a salesperson, and a normal route worker. They
were only employed by the respondent's facilities, sales offices, and
corporate headquarters.

Petitioners contended that they should be classed as respondent's

regular employees because their job as cargadores-pahinantes was vital or
desirable to respondent's regular business and was inextricably tied to
respondent's trade and business.

Labor Arbiter Adolfo C. Babiano delivered a judgment dismissing the

case on July 5, 2000. He argued that petitioners were temporary workers
employed through an independent contractor to supplement the company's
regular personnel and that their job as cargadores-pahinantes was neither
required nor desirable in respondent's soft drink manufacturing operation.

Issue:

3
 Whether or not respondent's sales route helpers, cargadores, or
pahinantes are regular workers.

Held:

Article 280 of the Labor Code governs the issue. The following are the
pertinent provisions:

Art. 280. Regular and Casual Employment. - The provisions of

written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by

the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.

The respondent's claim that its primary business or trade is soft drink
manufacture and that the employment supplied to workers as sales route
support is sole "post-production activities" not necessary in the creation of
its products is unlikely to be persuasive. Only workers whose labor is
directly engaged in the manufacturing of soft drinks may be delayed
executing responsibilities required and desirable in the petitioner
company's customary business or trade, and regular truck sales route
assistance is superfluous. Rather than a restricted scope, the nature of the
job accomplished must be assessed in the context of the broader business
or trade.

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 The Court of Appeals found each of the petitioners had worked for the
respondent for at least one year. The company's recurrent rehiring of the
petitioners, as well as the ongoing need for their services, testifies to the
need or desirability of their services in the normal conduct of its business or
trade.

The case of Brent School, Inc. vs. Zamora upheld the legality of fixed-
term employment, but it did so with the stern warning that if the period was
imposed to prevent the employee from obtaining tenurial security, it should
be struck down as being contrary to law, morals, good customs, public
order, and public policy. Hiring employees, workers, and laborers for a
short amount of time, rather than the customary six-month probationary
period, and thereafter hiring on a day-to-day basis, is a violation of the law.
Any overt breaking of the law will be punished severely. The fact that
responding employees chooses to be employed on this basis rather than
forego the benefits of tenure highlights the huge problem of poverty among
so many of our people, as well as the resulting imbalance between labor
and capital. The public interest is included in a contract of employment. The
parties are not free to contract with one another to protect themselves and
their relationships from the impact of labor laws and regulations, and they
are not free to contract with one another to insulate themselves and their
relationships from the impact of labor laws and regulations.

The Supreme Court ruled that petitioners are entitled to security of

tenure as regular workers of the respondent, as stipulated in Article 279 of
the Labor Code, and may only be fired for legitimate or approved reasons.
The petitioners were wrongfully fired since the respondent failed to
establish any reason, and they are consequently entitled to back pay and
reinstatement without loss of seniority rights or other benefits.

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 (2)

G.R. No. 163033 October 2, 2009

SAN MIGUEL CORPORATION

vs.
EDUARDO L. TEODOSIO

Case Doctrine:

1. The employment status of a person is defined and prescribed

by law and not by what the parties say it should be. The SC ratiocinated
that a contract of employment is impressed with public interest such that
labor contracts must yield to the common good. Provisions of applicable
statutes are deemed written into the contract, and the parties are not at
liberty to insulate themselves and their relationships from the impact of
labor laws and regulations by simply contracting with each other.

Article 280 of the Labor Code states:

ART. 280. REGULAR AND CASUAL EMPLOYMENT. - The
provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or
undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by

the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with

6
 respect to the activity in which he is employed and his employment
shall continue while such activity exists.

Thus, there are two kinds of regular employees, namely:

(1) those who are engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer;
and
(2) those who have rendered at least one year of service, whether
continuous or broken, with respect to the activity in which they are
employed.

2. Having gained the status of a regular employee, respondent is

entitled to security of tenure and could only be dismissed on just or
authorized causes and after he has been accorded due process.

Facts:

On September 5, 1991, respondent Eduardo Teodosio was hired by

San Miguel Corporation (SMC) as a casual forklift operator in its Bacolod
City Brewery tasked with loading and unloading pallet of beer cases within
the brewery premises. Respondent continuously worked as forklift operator,
though with periodic interruptions from September 5, 1991 until March
1992, after which he was "asked to rest" for a while. Again rehired in April
1992 and after serving for about five to six months, he was again "asked to
rest.” He continued to work as such until August 1993.

Sometime in August 1993, respondent was made to sign an

"Employment with a Fixed Period" contract by SMC, with a stipulation that
respondent’s employment would be "from August 7, 1993 to August 30,
1995, or upon cessation of the instability/fluctuation of the market demand,
whichever comes first." Thereafter, respondent worked at the plant without
interruption as a forklift operator.

On March 20, 1995, respondent was transferred to the plant’s bottling

section as a case piler. In a letter dated April 10, 1995, respondent
requested that he be transferred to his former position as a forklift operator

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asserting that he would be more effective as a forklift operator because he
had been employed as such for more than three years already. SMC did
not answer his letter.

In an undated letter, respondent informed SMC that he was applying

for the vacant position of bottling crew as he was interested in becoming a
regular employee of SMC.

On June 1, 1995, SMC notified the respondent that his employment

shall be terminated on July 1, 1995 in compliance with the Employment
with a Fixed Period contract due to the reorganization and streamlining of
its operations.

In a letter dated July 3, 1995, respondent expressing his dismay for

his dismissal informed SMC that the fact that he will receive his separation
pay and sign a waiver to that effect by a Receipt and Release document in
favor of SMC, should not mean his waiving his right to question his
dismissal and to claim employment benefits as provided in the Collective
Bargaining Agreement (CBA) and company policies.

On July 4, 1995, respondent filed a Complaint against SMC before

the National Labor Relations Commission (NLRC), Regional Arbitration
Branch No. VI, Bacolod City, for illegal dismissal and underpayment of
wages and other benefits.

The Labor Arbiter rendered a Decision dismissing the complaint for

lack of merit by concluding that the contract of employment with a fix period
signed by respondent was a legitimate exercise of management
prerogative. There was thus nothing illegal about respondent’s transfer to
the bottling section and the assignment of a regular employee to his former
position.

Aggrieved, respondent sought recourse before the NLRC, Fourth

Division, Cebu City.

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 On November 26, 1999, the NLRC rendered a Decision dismissing
the appeal and affirming the decision of the Labor Arbiter. The NLRC
anchored its decision on the fact that respondent signed a valid "Receipt
and Release" upon receiving his separation pay from SMC. The
respondent filed a motion for reconsideration, but it was denied in a
Resolution dated May 26, 2000.

Respondent then filed before the CA a petition for certiorari, docketed

as CA-G.R. SP No. 60334, seeking to annul and set aside the said
Decision and Resolution of the NLRC.

On October 30, 2003, the CA rendered a Decision granting the

petition, REVERSED and SET ASIDE the Decision dated November 29,
1999 and Resolution dated May 26, 2000 of the National Labor Relations
Commission, Fourth Division, Cebu City and Decision dated April 24, 1998
of the Labor Arbiter. Judgment is rendered ordering SMC:

1. To reinstate petitioner Eduardo Teodosio to his position as forklift

operator without loss of seniority rights.
2. Pay the full backwages of the petitioner from the day of his illegal
dismissal until actual reinstatement, to be be computed on the basis of
the basic salary, allowances and other benefits granted to regular
employees under the Collective Bargaining Agreement existing at the
time; The Court directed NLRC to make the computation of said full
backwages and inform soonest all parties as well as the Court, within
thirty days after receipt of this decision.
3. To pay the deficiency amount of salary, allowances and benefits
that petitioner should have received as a regular employee from the
time he attained the status of regular employee by operation of law on
September, 1996 to the time he was illegally dismissed. The Court
directed NLRC to make the necessary computation and inform all
parties and the Court within thirty (30) days after receipt of this
decision.
4. To pay petitioner the amount of FIFTY THOUSAND PESOS
(₱50,000.00) as moral damages, TEN THOUSAND PESOS
(₱10,000.00) as exemplary damages and ten percent (10%) of the

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 total amount awarded to petitioner by this Court as attorney’s fees.
Costs against private respondent San Miguel Corporation.

SMC filed a motion for reconsideration, which was denied in the

Resolution dated February 24, 2004.

Issues:

1) Whether the respondent was a regular employee of SMC;

2) Whether the respondent was illegally dismissed; and
3) whether the respondent is entitled to his monetary claims and
damages.

Held:

1. The Supreme Court found the petition bereft of merit. The Court
declared that the respondent is a regular employee. He became a regular
employee long before the “Employment with a Fixed Period” contract was
signed by the parties therefore the said contract is not binding and
controlling in this case. Since he is a regular employee, he is entitled to
security of tenure and his dismissal without just cause constitutes illegal
dismissal. And being a regular employee, he is entitled to the monetary
claims and benefits stated in the CBA and the Labor Code. The Petitioner
is ordered to pay the respondent his backwages, the deficiency amount of
salary, allowances and benefits that petitioner should have received as a
regular employee from the time he attained the status of regular employee
by operation of law on September, 1992 to the time he was illegally
dismissed. The Petitioner is also ordered to pay the respondent separation
pay in lieu of reinstatement, and attorney’s fees.

The Labor Code provides that a casual employee can be considered

as a regular employee if said casual employee has rendered at least one
year of service regardless of the fact that such service may be continuous
or broken. In the case at hand, Teodosio was hired by SMC and served as
forklift operator, an activity which is usually necessary and desirable in the
usual business or trade of SMC for at least one year. Section 3, Rule V,

10
Book II of the Implementing Rules and Regulations of the Labor Code
clearly defines the term "at least one year of service" to mean service
within 12 months, whether continuous or broken, reckoned from the date
the employee started working, including authorized absences and paid
regular holidays, unless the working days in the establishment, as a matter
of practice or policy, or as provided in the employment contract, is less than
12 months, in which case said period shall be considered one year. Since
Teodosio has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as sufficient evidence of
the necessity, if not indispensability, of that activity to the business of the
employer.

SMC would have wanted this Court to believe that circumstances

have transpired to force it to implement full automation of its brewery and
new marketing and distribution systems in its sales offices resulting in the
reduction of personnel and termination of employees with a fixed period
contract. However, even after the installation of the automated palletizers,
SMC did not leave the position of forklift operator vacant. SMC even
transferred one of its regular employees to the Bacolod City Brewery to
replace respondent who was in turn transferred to the bottling section of the
plant. This demonstrates the continuing necessity and indispensability of
hiring a forklift operator to the business of SMC.

2. Having gained the status of a regular employee, respondent is

entitled to security of tenure and could only be dismissed on just or
authorized causes and after he has been accorded due process.

SMC insists that the termination of respondent’s employment was in

accordance with the Employment with a Fixed Period contract; and that
respondent was given opportunities to become a regular employee when
he was transferred to the bottling section of the plant. However, considering
that respondent was already a regular employee of SMC at that time, the
reason advanced by SMC for his termination would not constitute a just or
authorized cause.

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Also, SMC cannot take refuge in the Receipt and Release document
signed by the respondent. Generally, deeds of release, waivers, or
quitclaims cannot bar employees from demanding benefits to which they
are legally entitled or from contesting the legality of their dismissal, since
quitclaims are looked upon with disfavor and are frowned upon as contrary
to public policy. Where, however, the person making the waiver has done
so voluntarily, with a full understanding thereof, and the consideration for
the quitclaim is credible and reasonable, the transaction must be
recognized as a valid and binding undertaking. The burden of proving that
the quitclaim or waiver was voluntarily entered into rests on the employer.

SMC failed to discharge this burden. This is buttressed by the fact that
before the respondent signed the document, he already informed SMC in
the letter dated July 3, 1995, that even if he would be compelled to receive
his separation pay and be forced to sign a waiver to that effect, he was not
waiving his right to question his dismissal and to claim employment
benefits. This clearly proves that respondent did not freely and voluntarily
consent to the execution of the document.

3. As to the award of attorney’s fees, by reason of his illegal

dismissal, respondent was forced to litigate and incur expenses to protect
his rights and interest. Moreover, in labor cases, although an express
finding of fact and law is still necessary to prove the merit of the award of
attorney’s fees, there need not be any showing that the employer acted
maliciously or in bad faith when it withheld the wages. There need only be
a showing that the lawful wages were not paid accordingly. Thus, it is but
just and proper that the same should be awarded to respondent.
Moral damages are recoverable where the dismissal of the employee was
attended by bad faith or fraud or constituted an act oppressive to labor, or
was done in a manner contrary to morals, good customs or public policy.
On the other hand, exemplary damages are proper when the dismissal was
effected in a wanton, oppressive or malevolent manner, and public policy
requires that these acts must be suppressed and discouraged. In the
present case, respondent failed to sufficiently establish that his dismissal
was done in bad faith; was contrary to morals, good customs or public

12
policy; and was arbitrary and oppressive to labor, thus entitling him to the
award of moral and exemplary damages.

The SC ruled further that, although the instant case calls for the
reinstatement of the respondent to his former position as forklift operator or
any equivalent position, the fact that his former position was already given
to another regular employee; the length of time that this case has been
pending; and the likely possibility that the protracted litigation may have
seriously marred the relationship of the parties beyond reconciliation, may
well have rendered reinstatement impossible. Accordingly, petitioner shall
be awarded separation pay in lieu of reinstatement.

13
 (3)

G.R. No. 169170 August 8, 2010

D.M. CONSUNJI, INC.

vs.
ANTONIO GOBRES, MAGELLAN DALISAY, GODOFREDO PARAGSA,
EMILIO ALETA and GENEROSO MELO

Case Doctrine:

If dismissal was for a cause under the Labor Code, the employer is
required by law to observe the standard of due process or the twin
requirements of notice and hearing as employees are entitled to know the
reason for their dismissal and to be heard on whatever claims they might
have. Non observance shall grant employees to nominal damages as
indemnification. But if the termination is brought about by the completion of
the contract or phase thereof as for project employees, no prior notice is
required and there shall be no basis for the payment of nominal damages.

In cases of project employment or employment covered by legitimate

contracting or sub-contracting arrangements, no employee shall be
dismissed prior to the completion of the project or phase thereof for which
the employee was engaged, or prior to the expiration of the contract
between the principal and contractor, unless the dismissal is for just or
authorized cause subject to the requirements of due process or prior
notice, or is brought about by the completion of the phase of the project or
contract for which the employee was engaged.

Prior or advance notice of termination is not part of procedural due

process if the termination is brought about by the completion of the contract
or phase thereof for which the employee was engaged. Petitioner,
therefore, did not violate any requirement of procedural due process by
failing to give respondents advance notice of their termination; thus, there
is no basis for the payment of nominal damages.

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Facts:

Respondents Antonio Gobres, Magellan Dalisay, Godofredo Paragsa,

Emilio Aleta and Generoso Melo worked as carpenters in the construction
projects of petitioner D.M. Consunji, Inc., a construction company, on
several occasions and/or at various times. Their termination from
employment for each project was reported to the DOLE, in accordance with
Policy Instruction No. 20 which was superseded by Department Order No.
19, series of 1993. Respondents' last assignment was at Quad 4-Project in
Glorietta, Ayala, Makati, where they started working on September 1, 1998.
On October 14, 1998, respondents saw their names included in the Notice
of Termination posted on the bulletin board at the project premises.

Respondents filed a Complaint with the Arbitration Branch of the

NLRC against petitioner D.M. Consunji, Inc. and David M. Consunji for
illegal dismissal, and non-payment of 13th month pay, five days service
incentive leave pay, damages and attorney's fees.

The Labor Arbiter dismissed the complaint. It found that respondents

were project employees that they were dismissed from the last project they
were assigned to when their respective phases of work were completed,
and that petitioner D.M. Consunji, Inc. and David M. Consunji reported their
termination of services to the DOLE in accordance with the requirements of
law. Respondents’ appealed to the NLRC. The latter affirmed the decision
of the LA, and dismissed the appeal for lack of merit.
Respondents’ filed a petition for certiorari with the CA. The CA affirmed the
decision of the NLRC with modification that private respondents (the
employers) are ordered to pay each of the petitioners (the employees) the
sum of P20, 000.00 as nominal damages for non-compliance with the
statutory due process.

Issue:

Whether or not respondents, as project employees, are entitled to

nominal damages for lack of advance notice of their dismissal.

15
Held:

The respondents as project employees, are not entitled to nominal

damages for lack of advance notice of their dismissal. The unanimous
finding that respondents are project employees is binding on the Court
except the modification made by the CA with regard to the award of the
nominal damages to each of the respondents. The appellate court cited the
case of Agabon v. NLRC as basis for the award.

In Agabon v. NLRC, it involved the dismissal of regular employees for

abandonment of work, which is a just cause for dismissal under Article 282
of the Labor Code. Although the dismissal was for a cause, the employer
therein was required to observe the standard of due process for termination
of employment based on just causes under Article 282 of the Labor Code,
which procedural due process requirements are enumerated in Section 2,
Rule 1, Book VI 21 of the Omnibus Rules Implementing the Labor Code.
The employer therein failed to comply with the twin requirements of notice
and hearing, thus the Court ordered the employer to pay the employees
nominal damages in the amount of P30, 000.00.

In the present case, respondents’ were not terminated for just cause
under Article 282 of the Labor Code. Instead, they were terminated due to
the completion of the phases of work for which their services were
engaged. As project employees, respondents' termination is governed by
Section 1 (c) and Section 2 (III), Rule XXIII (Termination of Employment),
Book V of the Omnibus Rules Implementing the Labor Code.

The rule provides that "If the termination is brought about by the
completion of the contract or phase thereof, no prior notice is required." In
the case of Cioco, Jr. v. C.E. Construction Corporation explained that this is
because completion of the work or project automatically terminates the
employment, in which case, the employer is, under the law, only obliged to
render a report to the DOLE on the termination of the employment. Hence,
the cited provision's requirements of due process or prior notice when an
employee is dismissed for just or authorized cause under Articles 282 and

16
283 of the Labor Code prior to the completion of the project or phase
thereof for which the employee was engaged do not apply to this case.

Petitioner, did not violate any requirement of procedural due process by

failing to give respondents advance notice of their termination; thus, there
is no basis for the payment of nominal damages.

17
 (4)
GR. No. 183250 March 10, 2010
WILLIAM UY CONSTRUCTION CORP. and/or TERESITA UY and
WILLIAM UY,
vs.
JORGE R. TRINIDAD

Case Doctrine:

The principal test for distinguishing a "project employee" from a

"regular employee" is whether or not he has been assigned to carry out a
"specific project or undertaking," with the duration and scope of his
engagement specified at the time his service is contracted.

"Project" may refer to a particular job or undertaking that is within the

regular or usual business of the employer, but which is distinct and
separate and identifiable as such from the undertakings of the company.
Such job or undertaking begins and ends at determined or determinable
times. (Alcatel Philippines, Inc. v. Relos, G.R. No. 164315, July 3, 2009.)

The employment of a project employee is co-terminous with the

completion of specific company projects; their employment ends on the
date specified in the employment contract.

DOLE Order 19 required employers to submit a report of termination

of employees every completion of construction project.

General Rule: The repeated and successive rehiring of project

employees do not qualify them as regular employees, as length of service
is not the controlling determinant of the employment tenure of a project
employee, but whether the employment has been fixed for a specific
project or undertaking, its completion has been determined at the time of
the engagement of the employee. (Caseres v. Universal Robina Sugar
Milling Corporation, G.R. No. 159343, September 28, 2007)

18
 Exemption: The length of service provides a fair yardstick for
determining when an employee initially hired on a temporary basis
becomes a permanent one, entitled to the security and benefits of
regularization. In Maraguinot, Jr. v. NLRC, the Supreme Court held:
“A project employee or a member of a work pool may acquire the status of
a regular employee when the following concur:
1) There is a continuous rehiring of project employees even after
the cessation of a project; and
2) The tasks performed by the alleged "project employee" are
vital, necessary and indispensable to the usual business or trade
of the employer.

Exemption to the exemption: The repeated and successive rehiring

of project employees of a Construction Company do not qualify them as
regular employees simply because construction firms cannot guarantee
work and funding for its payrolls beyond the life of each project. They do
not have control over the decisions and resources of project proponents or
owners. (Uy v. Trinidad, GR. No.183250, March 10, 2010)

Facts:

A complaint for illegal dismissal and unpaid benefits was filed by

respondent Jorge R. Trinidad against petitioner William Uy Construction
Corporation. Trinidad claimed that he had been working with the latter
company for 16 years since 1988 as driver of its service vehicle, dump
truck, and transit mixer. He had signed several employment contracts with
the company that identified him as a project employee although he had
always been assigned to work on one project after another with some
intervals.

He further alleged that after he was terminated in December 2004 by

the petitioner company because of lack of projects, but he later learned that
he was not hired back when a project in Batangas was opened. Petitioner
company countered that it was in the construction business. By the nature
of such business, it had to hire and engage the services of project

19
construction workers, whose employments had to be co-terminous with the
completion of specific company projects.

Petitioner company stressed that employment intervals or gaps were

inherent in the construction business. For this reason, its project employees
including Trinidad have to execute an employment contract every time the
company. It further alleged that when its Boni Serrano-Katipunan
Interchange Project was finished in December 2004, Trinidad’s work ended
as well. And that in compliance with labor rules, the company have
submitted an establishment termination report to the Department of Labor
and Employment (DOLE).

Labor Arbiter rendered a decision, dismissing respondent Trinidad’s

complaint for unjust dismissal. The Labor Arbiter, however, ordered
petitioner company to pay Trinidad ₱1,500.00 in unpaid service incentive
leave, taking into consideration the three-year prescriptive period for money
claims. However, the Labor Arbiter found no basis for granting Trinidad
overtime pay, holiday pay, and 13th month pay.

National Labor Relations Commission (NLRC) affirmed the Labor

Arbiter’s ruling. Trinidad elevated his case to the Court of Appeals (CA). CA
rendered a decision, reversing the NLRC’s findings. Petitioner company
moved for a reconsideration of the decision but the CA denied the motion.

Issue:
Whether or not the CA correctly ruled that petitioner company’s
repeated rehiring of respondent Trinidad over several years as project
employee for its various projects automatically entitled him to the status of
a regular employee.

Held:

No. The CA was incorrect. The repeated rehiring of respondent

Trinidad over several years as project employee in a construction business
does not automatically entitle him to the status of a regular employee.

20
 The length of service generally provides a fair yardstick for
determining when an employee initially hired on a temporary basis
becomes a permanent one, entitling the latter to the security and benefits of
regularization. However, this standard will not be fair, if applied to the
project employees of a construction industry. Simply because construction
firms cannot guarantee work and funding for its payrolls beyond the life of
each project. Construction companies have no control over the decisions
and resources of project proponents or owners. There is no construction
company that does not wish it has such control but the reality, understood
by construction workers, is that work depended on decisions and
developments over which construction companies have no say.

The Court held in Caseres v. Universal Robina Sugar Milling

Corporation, that the repeated and successive rehiring of project
employees do not qualify them as regular employees, as length of service
is not the controlling determinant of the employment tenure of a project
employee, but whether the employment has been fixed for a specific
project or undertaking, its completion has been determined at the time of
the engagement of the employee.

Respondent Trinidad’s series of employments with petitioner

company were co - terminous with its projects. When its Boni Serrano-
Katipunan Interchange Project was finished in December 2004, Trinidad’s
employment ended with it. He was not dismissed. His employment contract
simply ended with the project for which he had signed up. His employment
history belies the claim that he continuously worked for the company.
Intervals or gaps separated one contract from another.

21
 (5)
G.R. No. 149440 January 28, 2003

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO

VILLEGAS and CRISTINE SEGURA,
vs.
NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND
GENERAL TRADE,

Case doctrine:

If the employee has been performing the job for at least a year, even
if the performance is not continuous and merely intermittent, the law deems
the repeated and continuing need for its performance as sufficient evidence
of the necessity, if not indispensability, of that activity to the business.
Hence, the employment is considered regular, but only with respect to such
activity and while such activity exists.

Seasonal workers who are called to work from time to time are
temporarily laid off during off-season are not separated from service in the
said period, but merely considered on leave until re-employed (De Leon v.
NLRC).

Although the employers have shown that respondents performed

work that was seasonal in nature, they failed to prove that the latter worked
only for the duration of one particular season. In fact, petitioners do not
deny that these workers have served them for several years already.
Hence, they are regular — not seasonal — employees.

Facts:

When complainant union (respondents) was certified as the collective

bargaining representative, petitioners refused to sit down with the union for
the purpose of entering into a CBA. The workers, including complainants,

22
were not given work for more than one (1) month. In protest, they staged a
strike which was however settled upon the signing of a MOA.

Subsequently, alleging that complainants failed to load some wagons,

petitioners reneged on its commitment to bargain collectively and employed
all means including the use of private armed guards to prevent the
organizers from entering the premises. No work assignments were given to
complainants which forced the union to stage a strike.

Due to conciliation efforts by the DOLE, another MOA was signed by

the parties and they met in a conciliation meeting. When the petitioners
again reneged on its commitment, complainants filed a complaint.
Petitioners accused respondents of refusing to work and being choosy in
the kind of work they have to perform.

The NLRC ruled that petitioners were guilty of unfair labor practice
and that the respondents were illegally dismissed. The CA affirmed that
while the work of the respondents was seasonal in nature, they were
considered to be merely on-leave during the off-season and were therefore
still employed by petitioners.

Issue:

Whether or not the CA erred in holding that respondents, admittedly

seasonal workers, were regular employees.

Held:

No. For respondents to be excluded from those classified as regular

employees, it is not enough that they perform work or services that are
seasonal in nature. They must have also been employed only for the
duration of one season. The evidence proves the existence of the first, but
not of the second, condition. The fact that respondents repeatedly worked
as sugarcane workers for petitioners for several years is not denied by the
latter. Evidently, petitioners employed respondents for more that one
season. Therefore, the general rule of regular employment is applicable.

23
 (6)

G.R. No. 158693 November 17, 2004

JENNY M. AGABON and VIRGILIO C. AGABON

vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA
HOME IMPROVEMENTS, INC. and VICENTE ANGELES

Case Doctrine:

In cases involving dismissals for cause but without observance of the

twin requirements of notice and hearing, the dismissal may be upheld but
the employer will be penalized to pay an indemnity to the employee. The
indemnity to be imposed should be stiffer to discourage the abhorrent
practice of "dismiss now, pay later".

The violation of the petitioners' right to statutory due process by the

private respondent warrants the payment of indemnity in the form of
nominal damages. The amount of such damages is addressed to the sound
discretion of the court, taking into account the relevant circumstances.

The Supreme Court fixes the amount of nominal damages at P30,

000.00 this form of damages would serve to deter employers from future
violations of the statutory due process rights of employees. At the very
least, it provides a vindication or recognition of this fundamental right
granted to the latter under the Labor Code and its Implementing Rules.

Facts:

Private respondent Riviera Home Improvements, Inc. employed

petitioners Virgilio Agabon and Jenny Agabon as gypsum board and
cornice installers on January 2, 1992 until February 23, 1999 when they
were dismissed for abandonment of work. Petitioners then filed a complaint
for illegal dismissal and payment of money claims and on December 28,
1999, the Labor Arbiter rendered a decision declaring the dismissals illegal
and ordered private respondent to pay the monetary claims. On appeal, the

24
NLRC reversed the Labor Arbiter because it found that the petitioners had
abandoned their work, and were not entitled to back wages and separation
pay. The other money claims awarded by the Labor Arbiter were also
denied for lack of evidence.

It was found out from the investigations that the abandonment from
work by the petitioners was because they subcontracted with another
company to which they have been remanded before when they committed
the same initially. The petitioners alleged that due process has not been
observed.

Issue/s:

1. Whether or not the petitioners were illegally dismissed.

2. Whether or not the dismissal violate their right to due process.

Held:
Yes, the dismissal is valid. It was found that the Agabons did in fact
abandoned their work, said situation is a termination for just and authorized
cause under Article 279 of the Labor Code. However, private respondents
failed to comply with the due process requirement of notice. In such a case,
the dismissal should be upheld but the employer is liable for non-
compliance with the procedural requirements of due process. Even if the
sending of the notice is useless because the Agabons did not reside in the
last known address anymore, such is not a valid excuse because the law
mandates the twin notice requirements to the employee’s last known
address, which is a written notice specifying the ground of termination and
another one indicating the justification of their termination. (Book VI, Rule I,
Section 2(d) of the Omnibus Rules Implementing the Labor Code).

Where the employer had a valid reason to dismiss an employee but

did not follow the due process requirement, the dismissal may be upheld
but the employer will be penalized to pay an indemnity to the employee. An
employer is liable to pay indemnity in the form of nominal damages to an
employee who has been dismissed. The amount of such damages is

25
addressed to the sound discretion of the court, taking into account the
relevant circumstances.

The Supreme Court fixes the amount of nominal damages at P30,

000.00 this form of damages would serve to deter employers from future
violations of the statutory due process rights of employees. At the very
least, it provides a vindication or recognition of this fundamental right
granted to the latter under the Labor Code and its Implementing Rules.

Discussion on Due Process

Due process under the Labor Code, like Constitutional due process,
has two aspects: substantive, i.e., the valid and authorized causes of
employment termination under the Labor Code; and procedural, i.e., the
manner of dismissal. Procedural due process requirements for dismissal
are found in the Implementing Rules of P.D. 442, as amended, otherwise
known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as
amended by Department Order Nos. 9 and 10. Breaches of these due
process requirements violate the Labor Code. Therefore statutory due
process should be differentiated from failure to comply with constitutional
due process.

Constitutional due process protects the individual from the

government and assures him of his rights in criminal, civil or administrative
proceedings; while statutory due process found in the Labor Code and
Implementing Rules protects employees from being unjustly terminated
without just cause after notice and hearing.

26
 (7)

G.R. No. 141430 May 7, 2004

PHILIPPINE JOURNALISTS, INC.

vs.
MICHAEL MOSQUEDA,

Case Doctrine:

An employee who is unjustly dismissed is entitled to reinstatement,

without loss of seniority rights and other privileges, and to the payment of
his full backwages, inclusive of allowances, and other benefits or their
monetary equivalent, computed from the time his compensation was
withheld from him (which, as a rule, is from the time of his illegal dismissal)
up to the time of his actual reinstatement.

Facts:
After the 1986 EDSA revolution, Philippine Journalists, Inc. (PJI),
petitioner, was sequestered by the Presidential Commission on Good
Government (PCGG).3 By virtue of the writs of sequestration issued by the
Sandiganbayan, PJI was placed under the management of PCGG, through
its nominees to the Board of Directors.

During that stockholders’ meeting, the Olivares group passed

Resolution No. 92-2 designating Michael Mosqueda, respondent, as
Chairman of a Task Force, along with five (5) other members, to protect the
properties, funds and assets of PJI and enforce or implement directives,
instructions and orders of the Olivares group. Respondent was also tasked
to post copies of the Resolution4 dated February 3, 1992 of the
Sandiganbayan, "Notice to all PJI employees" of its elected board
members and officers, and the Secretary’s Certificate issued by Andrea de
la Cueva.

Meanwhile, in a Memorandum dated February 8, 1992, petitioner’s

new management placed respondent and other members of the Task

27
Force under preventive suspension pending the investigation of the formal
charges against them.

Upon recommendation of Officer-in-charge Buenaluz, petitioner

terminated the services of respondent and the other members of the Task
Force on March 10, 1992.

This prompted the union to file, on March 25, 1992, with the Labor
Arbiter an amended complaint for illegal dismissal, unfair labor practices
and damages.

The Court of Appeals unequivocally ruled that "both the Labor Arbiter
and the NLRC have the same finding that the petitioner (herein private
respondent) and the other complainants were illegally dismissed."
Evidently, there is no cogent reason why we should not also accord
deference and finality to such factual finding made by two independent
labor tribunals. Indeed, they aptly concluded that following instructions to
safeguard the assets of petitioner is not a ground for dismissal of an
employee from the service, and that respondent is a victim of "power play
in the corporation.

Issue:
Whether the award of backwages to respondent is proper with the
Illegal Termination of Mr. Mosqueda?

Held:
Under Art. 279 of the Labor Code, an employee who is unjustly
dismissed is entitled to reinstatement, without loss of seniority rights and
other privileges, and to the payment of his full backwages, inclusive of
allowances, and other benefits or their monetary equivalent, computed from
the time his compensation was withheld from him (which, as a rule, is from
the time of his illegal dismissal) up to the time of his actual reinstatement.

Similarly, under R.A. 6715,8 employees who are illegally dismissed

are entitled to full backwages, inclusive of allowances and other benefits or
their monetary equivalent, computed from the time their actual

28
compensation was withheld from them up to the time of their actual
reinstatement. If reinstatement is no longer possible, the backwages shall
be computed from the time of their illegal termination up to the finality of the
decision.

This Court does not see any reason to depart from the foregoing rule
in the case of herein respondent who, as held by three (3) independent
bodies, was illegally dismissed, and thus, rightfully entitled to an award of
full backwages, inclusive of allowances and other benefits or their monetary
equivalent, computed from March 10, 1992, the date of his illegal dismissal
(and not from March 11, 1992 as erroneously held by the Court of Appeals)
up to the time of his actual reinstatement.

29
 (8)
G.R. No. 167751 March 2, 2011
HARPOON MARINE SERVICES, Inc. and JOSE LIDO T. ROSIT
vs.
FERNAN H. FRANCISCO

Case Doctrines:

“Satisfactory evidence of a valid or just cause of dismissal is

indispensably required in order to protect a laborer’s right to security of
tenure.”

“Jurisprudence provides for two essential requirements for

abandonment of work to exist. The "failure to report for work or absence
without valid or justifiable reason" and "clear intention to sever the
employer-employee relationship x x x manifested by some overt acts"
should both concur. The employee’s deliberate and unjustified refusal to
resume his employment without any intention of returning should be
established and proven by the employer.”

“Even if an opposing party failed to effectively dispute the veracity

and genuineness of documents, if such documents contain very scant
details and can hardly be considered as sufficient and substantial evidence.
Patent vagueness makes it unworthy of any credence to be used as basis
for awarding any entitlement or claims.”

“Obligations incurred by corporate officers, acting as such corporate

agents, are not theirs but the direct accountabilities of the corporation they
represent." As such, they should not be generally held jointly and solidarily
liable with the corporation.”

Facts:

Petitioner Harpoon, a company engaged in ship building and ship

repair, with petitioner Rosit as its President and Chief Executive Officer

30
(CEO), rehired respondent, after he left in 1998, as its Yard Supervisor
tasked to oversee and supervise all projects of the company..

On June 15, 2001, respondent averred that he was unceremoniously

dismissed by petitioner Rosit. He was informed that the company could no
longer afford his salary and that he would be paid his separation pay and
accrued commissions. Respondent nonetheless continued to report for
work. A few days later, however, he was barred from entering the company
premises. Relying on the promise of petitioner Rosit, respondent went to
the office on June 30, 2001 to receive his separation pay and commissions,
but petitioner Rosit offered only his separation pay. Respondent refused to
accept it and also declined to sign a quitclaim. After several unheeded
requests, respondent, through his counsel, sent a demand letter dated
September 24, 2001 to petitioners asking for payment of ₱70,000.00, which
represents his commissions for the seven boats constructed and repaired
by the company under his supervision. Respondent filed an illegal
dismissal complaint praying for the payment of his backwages, separation
pay, unpaid commissions, moral and exemplary damages and attorney’s
fees.

Petitioners presented a different version of the events and refuted the

allegations of respondent. They explained that petitioner Rosit indeed
talked to respondent on June 15, 2001 not to dismiss him but only to
remind and warn him of his excessive absences and tardiness, as evinced
by his Time Card covering the period June 1-15, 2001.Instead of improving
his work behavior, respondent continued to absent himself and sought
employment with another company engaged in the same line of business,
thus, creating serious damage in the form of unfinished projects. Petitioners
denied having terminated respondent as the latter voluntarily abandoned
his work after going on Absence Without Official Leave (AWOL) beginning
June 22, 2001. Petitioners contended that when respondent’s absences
persisted, several memoranda informing him of his absences were sent to
him by ordinary mail and were duly filed with the Department of Labor and
Employment (DOLE) on August 13, 2001. Upon respondent’s continuous
and deliberate failure to respond to these memoranda, a Notice of
Termination dated July 30, 2001was later on issued to him.Petitioners, on

31
the other hand, contended that respondent was hired as a regular
employee with a fixed salary and not as an employee paid on commission
basis. Petitioners denied that it owed respondent any commission,
asserting that they never entered into any contract or agreement for the
payment of commissions.

Respondent, however, denied his alleged tardiness and excessive

absences. He claimed that the three-day absence appearing on his time
card cannot be considered as habitual absenteeism. Respondent further
denied having received the memoranda that were allegedly mailed to him,
asserting that said documents were merely fabricated to cover up and
justify petitioners’ act of illegally terminating him on June 15, 2001.
Respondent absolved himself of fault for defective works, justifying that he
was illegally terminated even before the company projects were completed.
As regards the commissions claimed, respondent insisted that in addition to
his fixed monthly salary of, he was paid a commission of ₱10,000.00 for
every ship repaired or constructed by the company. As proof, he presented
two check vouchersissued by the company showing payment thereof.
Ruling of the Labor Arbiter.

On May 17, 2002, the Labor Arbiter rendered a Decision holding that
respondent was validly dismissed due to his unjustified absences and
tardiness and that due process was observed when he was duly served
with several memoranda relative to the cause of his dismissal. The Labor
Arbiter also found respondent entitled to the payment of commissions by
giving credence to the check vouchers presented by respondent as well as
attorney’s fees for withholding the payment of commissions pursuant to
Article 111 of the Labor Code.

Both parties appealed to the NLRC. Petitioners alleged that the Labor
Arbiter erred in ruling that respondent is entitled to the payment of
commissions and attorney’s fees. They questioned the authenticity of the
check vouchers for being photocopies bearing only initials of a person who
remained unidentified.

32
 Respondent, on the other hand, maintained that his dismissal was
illegal because there is no sufficient evidence on record of his alleged
gross absenteeism and tardiness. He likewise imputed bad faith on the part
of petitioners for concocting the memoranda for the purpose of providing a
semblance of compliance with due process requirements.

Ruling of the NLRC

The NLRC affirmed the LaborArbiter’s award of commissions in favor

of respondent for failure of petitioners to refute the validity of his claim. The
NLRC, however, deleted the award of attorney’s fees for lack of evidence
showing petitioners’ bad faith in terminating respondent.

As the NLRC only resolved petitioners’ appeal, respondent moved

before the NLRC to resolve his appeal of the Labor Arbiter’s Decision. For
their part, petitioners filed a Verified Motion for Reconsideration reiterating
that there was patent error in admitting, as valid evidence, photocopies of
the check vouchers without substantial proof that they are genuine copies
of the originals.

The NLRC, in its Decision dated June 30, 2003,21 modified its
previous ruling and held that respondent’s dismissal was illegal. According
to the NLRC, the only evidence presented by the petitioners to prove
respondent’s habitual absenteeism and tardiness is his time card for the
period covering June 1-15, 2001. However, said time card reveals that
respondent incurred only three absences for the said period, which cannot
be considered as gross and habitual. With regard to the award of
commissions, the NLRC affirmed the Labor Arbiter because of petitioners’
failure to question the authenticity of the check vouchers in the first
instance before the Labor Arbiter. It, nevertheless, sustained the deletion of
the award of attorney’s fees in the absence of proof that petitioners acted in
bad faith. Thus, for being illegally dismissed, the NLRC granted respondent
backwages and separation pay in addition to the commissions.
Ruling of the Court of Appeals

33
 Petitioners filed a petition for certiorari with the CA, which affirmed the
findings and conclusions of the NLRC. The CA agreed with the NLRC in
not giving any probative weight to the memoranda since there is no proof
that the same were sent to respondent. It also upheld respondent’s right to
the payment of commissions on the basis of the check vouchers and
declared petitioners solidarily liable for respondent’s backwages,
separation pay and accrued commissions.

Petitioners moved for reconsideration which was denied by the CA. Hence,
this petition.

Issues:
a. Whether or not Respondent is illegally dismissed?
b. Whether or not Respondent is entitled to the payment of
commission?
c. Whether or not Rosit is solidarily liable with Harpoon for the
Respondent’s backwages, separation pay & accrued commisions?

Held:

a. Yes, Respondent was illegally dismissed. The court finds no merit

in petitioners’ contention that respondent incurred unexplained and habitual
absences and tardiness. A scrutiny of the time card and payroll discloses
that respondent incurred only three days of absence and no record of
tardiness. As aptly held by the NLRC, the time card and payroll presented
by petitioners do not show gross and habitual absenteeism and tardiness
especially since respondent’s explanation of his three-day absence was not
denied by petitioners at the first instance before the Labor Arbiter. No other
evidence was presented to show the alleged absences and tardiness. On
the other hand, Solares, a co-worker of respondent has stated under oath
that, as their supervisor, respondent was diligent in reporting for work until
June 20, 2001 when they heard the news concerning respondent’s
termination from his job.

Likewise, we are not persuaded with petitioners’ claim that

respondent incurred additional absences, went on AWOL and abandoned

34
his work. It is worthy to note at this point that petitioners never denied
having offered respondent his separation pay.. Oddly, petitioners deemed it
fit to give respondent his separation pay despite their assertion that there is
just cause for his dismissal on the ground of habitual absences. This
inconsistent stand of petitioners bolsters the fact that they wanted to
terminate respondent, thus giving more credence to respondent’s
protestation that he was barred and prevented from reporting for work.

Jurisprudence provides for two essential requirements for

abandonment of work to exist. The "failure to report for work or absence
without valid or justifiable reason" and "clear intention to sever the
employer-employee relationship x xx manifested by some overt acts"
should both concur. Further, the employee’s deliberate and unjustified
refusal to resume his employment without any intention of returning should
be established and proven by the employer.

Petitioners failed to prove that it was respondent who voluntarily

refused to report back for work by his defiance and refusal to accept the
memoranda and the notices of absences sent to him. The CA correctly
ruled that petitioners failed to present evidence that they sent these notices
to respondent’s last known address for the purpose of warning him that his
continued failure to report would be construed as abandonment of work.
The affidavit of petitioner Harpoon’s liaison officer that the
memoranda/notices were duly sent to respondent is insufficient and self-
serving. Despite being stamped as received, the memoranda do not bear
any signature of respondent to indicate that he actually received the same.
There was no proof on how these notices were given to respondent.
Neither was there any other cogent evidence that these were properly
received by respondent.

The fact that respondent never prayed for reinstatement and has
sought employment in another company which is a competitor of petitioner
Harpoon cannot be construed as his overt acts of abandoning employment.
Neither can the delay of four months be taken as an indication that the
respondent’s filing of a complaint for illegal dismissal is a mere
afterthought. Records show that respondent first attempted to get his

35
separation pay and alleged commissions from the company. It was only
after his requests went unheeded that he resorted to judicial recourse.
In fine, both the NLRC and the CA did not commit manifest error in finding
that there was illegal dismissal. The award of backwages and separation
pay in favor of respondent is therefore proper.

b. No, Respondent is not entitled to any commission. The Court ruled

in favour of petitioner. Examination of the check vouchers presented by
respondent alleged as commissions were paid to respondent. Although the
veracity and genuineness of these documents were not effectively disputed
by petitioners, nothing in them provides that commissions were paid to
respondent on account of a repair or construction of a vessel. It cannot also
be deduced from said documents for what or for how many vessels the
amounts stated therein are for. In other words, the check vouchers contain
very scant details and can hardly be considered as sufficient and
substantial evidence to conclude that respondent is entitled to a
commission of ₱10,000.00 for every vessel repaired or constructed by the
company. At most, these vouchers only showed that respondent was paid
on two occasions but were silent as to the specific purpose of payment.
The list of vessels supposedly repaired/constructed by the company neither
validates respondent’s monetary claim as it merely contains an
enumeration of 17 names of vessels and nothing more. No particulars,
notation or any clear indication can be found on the list that the repair or
complete construction of seven of the seventeen boats listed therein was
supervised or managed by respondent. Worse, the list is written only on a
piece of paper and not on petitioners’ official stationery and is unverified
and unsigned. Verily, its patent vagueness makes it unworthy of any
credence to be used as basis for awarding respondent compensations as
alleged commissions. Aside from these documents, no other competent
evidence was presented by respondent to determine the value of what is
properly due him, much less his entitlement to a commission. Respondent’s
claim cannot be based on allegations and unsubstantiated assertions
without any competent document to support it.

c. No, Petitioner Rosit is not solidarily liable with petitioner Harpoon

for the payment of respondent’s backwages and separation pay.

36
Obligations incurred by corporate officers, acting as such corporate agents,
are not theirs but the direct accountabilities of the corporation they
represent." As such, they should not be generally held jointly and solidarily
liable with the corporation.The general rule is grounded on the theory that a
corporation has a legal personality separate and distinct from the persons
comprising it. To warrant the piercing of the veil of corporate fiction, the
officer’s bad faith or wrongdoing "must be established clearly and
convincingly" as bad faith is never presumed.

In the case at bench, the CA’s basis for petitioner Rosit’s liability was
that he acted in bad faith when he approached respondent and told him
that the company could no longer afford his salary and that he will be paid
instead his separation pay and accrued commissions. This finding,
however, could not substantially justify the holding of any personal liability
against petitioner Rosit. The records are bereft of any other satisfactory
evidence that petitioner Rosit acted in bad faith with gross or inexcusable
negligence, or that he acted outside the scope of his authority as company
president. Indeed, petitioner Rosit informed respondent that the company
wishes to terminate his services since it could no longer afford his salary.
Moreover, the promise of separation pay, according to petitioners, was out
of goodwill and magnanimity. At the most, petitioner Rosit’s actuations only
show the illegality of the manner of effecting respondent’s termination from
service due to absence of just or valid cause and non-observance of
procedural due process but do not point to any malice or bad faith on his
part. Besides, good faith is still presumed. In addition, liability only attaches
if the officer has assented to patently unlawful acts of the corporation.

Thus, it was error for the CA to hold petitioner Rosit solidarily liable
with petitioner Harpoon for illegally dismissing respondent.

37
 (9)
G.R. No. 167563 March 22, 2010
COLLEGE OF THE IMMACULATE CONCEPTION
vs.
NATIONAL LABOR RELATIONS COMMISSION and ATTY. MARIUS F.
CARLOS, PH.D

Case doctrine:

“Even if the order of reinstatement of the Labor Arbiter is reversed on

appeal, it is obligatory on the part of the employer to reinstate and pay the
wages of the dismissed employee during the period of appeal until reversal
by the higher court. On the other hand, if the employee has been reinstated
during the appeal period and such reinstatement order is reversed with
finality, the employee is not required to reimburse whatever salary he
received for he is entitled to such, more so if he actually rendered services
during the period”.

Facts:

The Petitioner College of the Immaculate Conception (CIC) appointed

Respondent Atty. Marius F. Carlos (Atty. Carlos) as Dean of the
Department of Business Administration and Accountancy. College of
Immaculate Concepcion reminded Atty. Carlos that upon the expiration of
his term as Dean, he will be appointed as full-time professor of Law and
Accounting without diminution of his teaching salary as Dean. After his
term, Atty. Carlos was given eight (8) teaching loads as full-time professor,
but he requested for the payment of overload pay. He argued that the
regular full time load of a faculty member is only six. CIC denied Atty.
Carlos’ claim, stating that a full time faculty member is one who teaches at
least eight (8) loads per semester. Further, CIC directed Atty. Carlos to
explain why no disciplinary action should be taken against him for engaging
in the practice of law and teaching law in another law school without prior
permission from CIC. Exchanges of letters between the parties were made
arguing their respective claims. Their contradicting claims resulted to Atty.
Carlos not being assigned any teaching load for the succeeding semester.

38
Thus, Atty. Carlos filed a complaint against CIC for unfair labor practice and
illegal dismissal. The Labor Arbiter (LA) ruled that Atty. Carlos was illegally
dismissed. CIC then appealed to the National Labor Relations Commission
(NLRC). The NLRC reversed the LA’s decision. Further, it deleted the
award of moral damages and exemplary damages for lack of factual and
legal basis. CIC, then, filed a motion for Clarification and/or Partial
Reconsideration praying that since Atty. Carlos was not illegally dismissed,
he should be directed to refund the petitioner all the amounts he received
by way of payroll reinstatement. The NLRC denied said motion. Thus, CIC
filed a petition for certiorari with the Court of Appeals (CA). The CA
dismissed the petition and sustained the NLRC ruling. Hence, this petition.

Issue:
Does the subsequent reversal of the LA's findings mean that
respondent should reimburse petitioner all the salaries and benefits he
received pursuant to the immediate execution of the LA's erroneous
decision ordering his reinstatement as Department Dean?

Held:

We rule in the negative. It is not disputed at this point that the LA

erred in ordering respondent's reinstatement as Dean. The NLRC ruled that
respondent should have been merely reinstated as a full-time law
professor, because the term of his appointment as Dean had long expired.
However, such mistake on the part of the LA cannot, in any way, alter the
fact that during the pendency of the appeal of his decision, his order for
respondent's reinstatement as Dean was immediately executory. Article
223 of the Labor Code explicitly provides that:
Art. 223. - Appeal. – x x x
xxxx
In any event, the decision of the Labor Arbiter reinstating a dismissed
or separated employee, insofar as the reinstatement aspect is concerned,
shall immediately be executory, even pending appeal. The employee shall
either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at the option of the

39
employer, merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement provided therein.

Therefore, petitioner could not validly insist that it is entitled to

reimbursement for the payment of the salaries of respondent pursuant to
the execution of the LA's decision by simply arguing that the LA's order for
reinstatement is incorrect. The pertinent law on the matter is not concerned
with the wisdom or propriety of the LA's order of reinstatement, for if it was,
then it should have provided that the pendency of an appeal should stay its
execution. After all, a decision cannot be deemed irrefragable unless it
attains finality.

An employee cannot be compelled to reimburse the salaries and

wages he received during the pendency of his appeal, notwithstanding the
reversal by the NLRC of the LA's order of reinstatement. In this case, there
is even more reason to hold the employee entitled to the salaries he
received pending appeal, because the NLRC did not reverse the LA's order
of reinstatement, but merely declared the correct position to which
respondent is to be reinstated, i.e., that of full-time professor, and not as
Dean.

40
 (10)

G.R. No. 128024 May 9, 2000

BEBIANO M. BAÑEZ,
vs.
HON. DOWNEY C. VALDEVILLA and ORO MARKETING, INC.

Case Doctrine:

Article 217 of the Labor Code, as amended, bestows upon the Labor
Arbiter original and exclusive jurisdiction over claims for damages arising
from employer-employee relations. In the case at bar, the Labor Arbiter has
jurisdiction to award not only the reliefs provided by labor laws, but also
damages governed by the Civil Code. Congress had second thoughts
about depriving the Labor Arbiters and the NLRC of the jurisdiction to
award damages in labor cases because that setup would mean duplicity of
suits, splitting the cause of action and possible conflicting findings and
conclusions by two tribunals on one and the same claim.

Jurisdiction of regular courts was upheld where the damages, claimed for
were based on tort, malicious prosecution, or breach of contract, as when
the claimant seeks to recover a debt from a former employee or seeks
liquidated damages in enforcement of a prior employment contract. This is
from cases of actions for damages where the employer-employee
relationship is merely incidental and the cause of action proceeds from a
different source of obligation.

Facts:

Bebiano Banez (petitioner) was the sales operations manager of

Oro Marketing Inc. (private respondent). Private respondent indefinitely
suspended petitioner and the latter filed a complaint for illegal dismissal
with the NLRC.

41
 Labor Arbiter found petitioner to have been illegally dismissed and
ordered the payment of separation pay in lieu of reinstatement, and of
backwages and attorney’s fees.

On appeal, the NLRC dismissed the same for having been filed out
of time. Elevated by petition for certiorari before this Court, the case was
dismissed on technical grounds and for failure to show grave abuse of
discretion on the part of the NLRC.

Private respondent then filed a complaint for damages before the

RTC. Petitioner filed a motion to dismiss the above complaint stating that
the action for damages, having arisen from an employer-employee
relationship, was squarely under the exclusive original jurisdiction of the
NLRC under the Labor Code and is barred by reason of the final judgment
in the labor case. He accused private respondent of splitting causes of
action, stating that the latter could very well have included the instant claim
for damages in its counterclaim before the Labor Arbiter and pointed out
that the civil action of private respondent is an act of forum-shopping and
was merely resorted to after a failure to obtain a favorable decision with the
NLRC.

The respondent court declared itself as having jurisdiction over the

subject matter of the instant controversy. The complaint for damages does
not ask for any relief under the Labor Code. It seeks to recover damages
as redress for defendant’s breach of his contractual obligation to plaintiff
who was damaged and prejudiced and believes such cause of action is
within the realm of civil law, and jurisdiction over the controversy belongs to
the regular courts.

Issues:

Whether or not the RTC of Misamis Oriental has jurisdiction over the
complaint for damages filed by private respondent.

Held:

42
 Petition has no merit. The RTC has no jurisdiction over the complaint
for damages filed by private respondent.

ARTICLE 217of the Labor Code provides that jurisdiction of Labor

Arbiters and the Commission. This also includes claims for actual, moral,
exemplary and other forms of damages arising from the employer-
employee relations.

The SC in a number of occasions had applied the jurisdictional

provisions of Article 217 to claims for damages filed by employees. By the
designating clause "arising from the employer-employee relations", Article
217 should apply with equal force to the claim of an employer for actual
damages against its dismissed employee, where the basis for the claim
arises from or is necessarily connected with the fact of termination, and
should be entered as a counterclaim in the illegal dismissal case.

There is no mistaking the fact that in the case before us, private
respondent’s claim against petitioner for actual damages arose from a prior
employer-employee relationship. In the first place, private respondent
would not have taken issue with petitioner’s doing business of his own had
the latter not been concurrently its employee. Thus, the damages alleged in
the complaint below are: first, those amounting to lost profits and earnings
due to petitioner’s abandonment or neglect of his duties as sales manager,
having been otherwise preoccupied by his unauthorized installment sale
scheme; and second, those equivalent to the value of private respondent’s
property and supplies which petitioner used in conducting his business.

To allow respondent court to proceed with the instant action for

damages would be to open anew the factual issue of whether petitioner’s
installment sale scheme resulted in business losses and the dissipation of
private respondent’s property. This issue has been duly raised and ruled
upon in the illegal dismissal case, where private respondent brought up as
a defense the same allegations now embodied in his complaint, and
presented evidence in support thereof. The Labor Arbiter, however, found
to the contrary that no business losses may be attributed to petitioner as in
fact, it was by reason of petitioner’s installment plan that the sales of the

43
Iligan branch of private respondent (where petitioner was employed)
reached its highest record level to the extent that petitioner was awarded
the 1989 Field Sales Achievement Award in recognition of his exceptional
sales performance, and that the installment scheme was in fact with the
knowledge of the management of the Iligan branch of private Respondent.
In other words, the issue of actual damages has been settled in the labor
case, which is now final and executory.

Clearly, respondent court’s taking jurisdiction over the instant case

would bring about precisely the harm that the lawmakers sought to avoid in
amending the Labor Code to restore jurisdiction over claims for damages of
this nature to the NLRC. This is distinguish from cases of actions for
damages where the employer-employee relationship is merely incidental
and the cause of action proceeds from a different source of obligation.
Thus, the jurisdiction of regular courts was upheld where the damages,
claimed for were based on tort, malicious prosecution, or breach of
contract, as when the claimant seeks to recover a debt from a former
employee or seeks liquidated damages in enforcement of a prior
employment contract.

Article 217(a) of the Labor Code, as amended, clearly bestows upon

the Labor Arbiter original and exclusive jurisdiction over claims for
damages arising from employer-employee relations. In the case at bar, the
Labor Arbiter has jurisdiction to award not only the reliefs provided by labor
laws, but also damages governed by the Civil Code.

Private respondent’s remedy is not in the filing of this separate action

for damages, but in properly perfecting an appeal from the Labor Arbiter’s
decision. Having lost the right to appeal on grounds of untimeliness, the
decision in the labor case stands as a final judgment on the merits, and the
instant action for damages cannot take the place of such lost appeal.

44
 (11)

G.R. No. 121227 August 17, 1998

VICENTE SAN JOSE,

vs.
NATIONAL LABOR RELATIONS COMMISSION and OCEAN TERMINAL
SERVICES, INC.

Case Doctrine:

The original and exclusive jurisdiction of the Labor Arbiter under

Article 217 (c), for money claims is limited only to those arising from
statutes or contracts other than a Collective Bargaining Agreement.

The Voluntary Arbitrator or Panel of Voluntary Arbitrators will have

original and exclusive jurisdiction over money claims "arising from the
interpretation or implementation of the Collective Bargaining Agreement
and, those arising from the interpretation or enforcement of company
personnel policies", under Article 261.

Facts:
Complainant San Jose was hired as a stevedore by Ocean Terminal
Service, Inc. He continuously worked there until he was advised in April
1991 to retire from service considering that he already reached 65 years
old. He applied for retirement pay and was paid Php 3,156.39 The
separation differential payment in this case was provided in the CBA.
He filed then a complaint for retrenchment pay differential to the
Labor Arbiter. He argued that since his wage was Php 200 his
retrenchment pay differential must be Php 25, 443.70.

The Labor Arbiter decided the case in favor of the complainant solely
on the merits of the complaint. Nowhere in the Decision is made mention of
or reference to the issue of jurisdiction of the Labor Arbiter

The NLRC reversed the decision of the Labor Arbiter on the ground
of lack of jurisdiction.

45
Issue:

Whether or not the Labor Arbiter has jurisdiction to hear and decide
the case.

Held:

The Labor Arbiter had no jurisdiction over the case, because the case
involved an issue "arising from the interpretation or implementation" of a
Collective Bargaining Agreement.

The original and exclusive jurisdiction of Labor Arbiters is qualified by

an exception as indicated in the introductory sentence of Article 217 (a), to
wit:
Art. 217. Jurisdiction of Labor Arbiters . . . (a) Except as otherwise
provided under this Code the Labor Arbiter shall have original and
exclusive jurisdiction to hear and decide . . . the following cases involving
all workers. . . .
The phrase "Except as otherwise provided under this Code" refers to the
following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters . . .
xxx xxx xxx
(c) Cases arising from the interpretation or implementation of
collective bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator as may be provided in said agreement.
B. Art. 262. Jurisdiction over other labor disputes. — The Voluntary
Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties,
shall also hear and decide all other labor disputes including unfair labor
practices and bargaining deadlocks.

Parenthetically, the original and exclusive jurisdiction of the Labor

Arbiter under Article 217 (c), for money claims is limited only to those
arising from statutes or contracts other than a Collective Bargaining

46
Agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators will
have original and exclusive jurisdiction over money claims "arising from the
interpretation or implementation of the Collective Bargaining Agreement
and, those arising from the interpretation or enforcement of company
personnel policies", under Article 261.

In addition, a close reading of Article 261 indicates that the original

and exclusive jurisdiction of Voluntary Arbitrator or Panel of Voluntary
Arbitrators is limited only to:
. . . unresolved grievances arising from the interpretation or implementation
of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies . . .
Accordingly, violations of a collective bargaining agreement, except those
which are gross in character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under the Collective
Bargaining Agreement.

Thus, the Labor Arbiter had no jurisdiction to hear and decide

petitioner's money-claim-underpayment of retirement benefits, as the
controversy between the parties involved an issue "arising from the
interpretation or implementation" of a provision of the collective bargaining
agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators has
original and exclusive jurisdiction over the controversy under Article 261 of
the Labor Code, and not the Labor Arbiter.

Note: However in this case the SC did not remand the case to
Voluntary arbitrators and ruled on the merit because according to them:
“This case has dragged on far too long — eight (8) years. Any further delay
would be a denial of speedy justice to an aged retired stevedore. There is
further the possibility that any Decision by the Voluntary Arbitrator or Panel
of Voluntary Arbitrators will be appealed to the Court of Appeals, and finally
to this Court.”

47
 (12)

G.R. No. 161305 February 9, 2007

MILAGROS PANUNCILLO,
vs.
CAP PHILIPPINES, INC.

Case Doctrines:

That the [employer] suffered no damage resulting from the acts of

[the employee] is inconsequential. The lack of resulting damage was
unimportant, because "the heart of the charge is the crooked and anarchic
attitude of the employee towards his employer. Damage aggravates the
charge but its absence does not mitigate nor negate the employee’s
liability."

The employer cannot be compelled to continue the employment of a

person who was found guilty of maliciously committing acts which are
detrimental to his interests. It will be highly prejudicial to the interests of the
employer to impose on him the charges that warranted his dismissal from
employment.

Before terminating the services of an employee, the law requires two

written notices:
(1) one to apprise him of the particular acts or omissions for
which his dismissal is sought; and
(2) the other to inform him of his employer’s decision to
dismiss him. As to the requirement of a hearing, the essence of
due process lies in an opportunity to be heard, and not always and
indispensably in an actual hearing. Parenthetically, when an
employee admits the acts complained of, as in petitioner’s case, no
formal hearing is even necessary.

The third paragraph of Article 223 of the Labor Code is clear,

however – the employee, who is ordered reinstated, must be accepted

48
back to work under the same terms and conditions prevailing prior to his
dismissal or separation.

San Miguel Brewery vs. National Labor Union, "an employer cannot
legally be compelled to continue with the employment of a person who
admittedly was guilty of misfeasance or malfeasance towards his employer,
and whose continuance in the service of the latter is patently inimical to his
interest.”

The third paragraph of Article 223 of the Labor Code directs that –
"the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal.”

The order of reinstatement is immediately executory. The unjustified

refusal of the employer to reinstate a dismissed employee entitles him to
payment of his salaries effective from the time the employer failed to
reinstate him despite the issuance of a writ of execution. Unless there is a
restraining order issued, it is ministerial upon the Labor Arbiter to
implement the order of reinstatement.

Even if the order of reinstatement of the Labor Arbiter is reversed on

appeal, it is obligatory on the part of the employer to reinstate and pay the
wages of the dismissed employee during the period of appeal until reversal
by the higher court. On the other hand, if the employee has been reinstated
during the appeal period and such reinstatement order is reversed with
finality, the employee is not required to reimburse whatever salary he
received for he is entitled to such, more so if he actually rendered services
during the period.

Unlike then the order for reinstatement of a Labor Arbiter which is

self-executory, that of the NLRC is not. There is still a need for the
issuance of a writ of execution.

The provision of Article 223 is clear that an award [by the Labor
Arbiter] for reinstatement shall be immediately executory even

49
 pending appeal and the posting of a bond by the employer shall
not stay the execution for reinstatement. On appeal, however, the
appellate tribunal concerned may enjoin or suspend the
reinstatement order in the exercise of its sound discretion.

If a Labor Arbiter does not issue a writ of execution of the NLRC

order for the reinstatement of an employee even if there is no restraining
order, he could probably be merely observing judicial courtesy, which is
advisable "if there is a strong probability that the issues before the higher
court would be rendered moot and moribund as a result of the continuation
of the proceedings in the lower court.”

In sum, while under the sixth paragraph of Article 223 of the Labor
Code, the decision of the NLRC becomes final and executory after the
lapse of ten calendar days from receipt thereof by the parties, the adverse
party is not precluded from assailing it via Petition for Certiorari under Rule
65 before the Court of Appeals and then to this Court via a Petition for
Review under Rule 45. If during the pendency of the review no order is
issued by the courts enjoining the execution of a decision of the Labor
Arbiter or NLRC which is favorable to an employee, the Labor Arbiter or the
NLRC must exercise extreme prudence and observe judicial courtesy when
the circumstances so warrant if we are to heed the injunction of the Court.

Facts:

Milagros Panuncillo (petitioner) worked as an Office Senior Clerk of

CAP Philippines Inc. (CAP). Panuncillo procured an educational plan which
she had fully paid from the respondent but which she later sold to Josefina
Pernes for P37,000. Before the actual transfer of the plan could be
effected, however, Panuncillo pledged it for P50,000 to John Chua who,
however, sold it to Benito Bonghanoy. Bonghanoy in turn sold the plan to
Gaudioso R. Uy for P60,000. Because of the subsequent transactions,
Josefina informed CAP that Panuncillo had "swindled" her but that she was
willing to settle the case amicably as long as Panuncillo will pay the amount
involved and the interest.

50
 Acting on Josefina’s letter, the Integrated Internal Audit Operations
(IIAO) of respondent required petitioner to explain in writing why the plan
had not been transferred to Josefina and was instead sold to another.
Complying, petitioner proffered the following explanation: I admit, I had
defrauded Ms. J. Pernes, but I didn’t do it intentionally.

A show-cause memorandum6 dated February 23, 1999 was

thereupon sent to petitioner, giving her 48 hours from receipt thereof to
explain why she should not be disciplinarily dealt with. Petitioner did not
comply, however.

The IIAO of respondent thus conducted an investigation on the

matter. By Memorandum of April 5, 1999,7 the IIAO recommended that,
among other things, administrative action should be taken against
petitioner for violating Section 8.4 of respondent’s Code of Discipline
reading:

Committing or dealing any act or conniving with co-employees or

anybody to defraud the company or customer/sales associates.

A review of the petitioner’s case was made per her request, and the
respondent notes that it was not just a single case but multiple cases

CAP Philippines Inc. terminated the services of Panuncillo. Panuncillo

then filed a complaint for illegal dismissal, 13th month pay, service
incentive leave pay, damages and attorney's fees against CAP Philippines
Inc.

The Labor Arbiter, while finding that the dismissal was for a valid
cause, found the same too harsh. He thus ordered the reinstatement of
petitioner to a position one rank lower than her previous position.

On appeal, the National Labor Relations Commission (NLRC), by

Decision of October 29, 2001, reversed that of the Labor Arbiter, it finding
that petitioner’s dismissal was illegal and accordingly ordering her
reinstatement to her former position. In so deciding, the NLRC held that the

51
transaction between petitioner and Josefina was private in character and,
therefore, respondent did not suffer any damage, hence, it was error to
apply Section 8.4 of respondent’s Code of Discipline.

The appellate court reversed the NLRC Decision and held that the
dismissal was valid and that CAP Philippines Inc. complied with the
procedural requirements of due process. Hence, the present petition.

Issue:

Whether or not Milagros Panuncillo has been illegally dismissed?

Held:

No, In fine by petitioner's repeated violation of Section 8.4 of

respondent's Code of Discipline, she violated the trust and confidence of
respondent and its customers. To allow her to continue with her
employment puts respondent under the risk of being embroiled in
unnecessary lawsuits from customers similarly situated as Josefina, et al.
Clearly, respondent exercised its management prerogative when it
dismissed petitioner.

This Court has upheld a company’s management prerogatives so

long as they are exercised in good faith for the advancement of the
employer’s interest and not for the purpose of defeating or circumventing
the rights of the employees under special laws or under valid agreements.

Under the Labor Code, the employer may terminate an employment

on the ground of serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or representative in
connection with his work. Infractions of company rules and regulations
have been declared to belong to this category and thus are valid causes for
termination of employment by the employer.

52
 Petitioner was given ample opportunity to explain her side.
Parenthetically, when an employee admits the acts complained of, as in
petitioner's case, no formal hearing is even necessary.

It also does not appear that a writ of execution was issued for the
implementation of the NLRC order for reinstatement. Had one been issued,
respondent would have been obliged to reinstate petitioner and pay her
salary until the said order of the NLRC for her reinstatement was reversed
by the Court of Appeals, and following Roquero, petitioner would not have
been obliged to reimburse respondent for whatever salary she received in
the interim.

This Court affirms the challenged decision of the Court of Appeals

finding that petitioner was validly dismissed and accordingly reversing the
NLRC Decision that petitioner was illegally dismissed and should be
reinstated, petitioner is not entitled to collect any backwages from the time
the NLRC decision became final and executory up to the time the Court of
Appeals reversed said decision.

53
 (13)
G.R. No. 89621 September 24, 1991
PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC.
vs.
HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO
OLIVA, WILFREDO CABAÑAS & FULGENCIO LEGO

Case Doctrine:

In cases where the claim of principal relief sought is to be resolved

not by reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the jurisdiction
over the dispute belongs to the regular courts of justice and not to the
Labor Arbiter and the NLRC.

It is the character of the principal relief sought that appears essential.

Where such principal relief is to be granted under labor legislation or a
collective bargaining agreement, the case should fall within the jurisdiction
of the Labor Arbiter and the NLRC, even though a claim for damages might
be asserted as an incident to such claim.

The Court believes and holds that the 'money claims of workers"
referred to in paragraph 3 of Article 217 embraces money claims which
arise out of or in connection with the employer-employee relationship, or
some aspect or incident of such relationship. Money claims of workers
which fall within the original and exclusive jurisdiction of Labor Arbiters are
those money claims which have some reasonable causal connection with
the employer-employee relationship.

Facts:

Private respondents who were employees of the petitioner, Pepsi

Cola, were suspected of complicity in the irregular disposition of its empty
Pepsi bottles. Petitioners filed a criminal complaint for theft against them
but was later withdrawn and substituted with a criminal complaint for

54
falsification of private documents. The complaint was dismissed after a
preliminary investigation in MTC Leyte and was affirmed by the Office of
the Provincial Prosecutor.

Respondents filed a complaint for illegal dismissal of the NLRC in

Tacloban City and a separate civil complaint in RTC Leyte for damages
arising from petitioners’ malicious prosecution.
Petitioners moved to dismiss the civil complaint on the ground that
the trial court had no jurisdiction over the case because it involved
employee-employer relations that were exclusively cognizable by the labor
arbiter.

Issue:

Whether or not the labor arbiter has jurisdiction over the case.

Held:

No. Not every controversy involving workers and their employers can
be resolved only by the labor arbiters. This will be so only if there is a
"reasonable causal connection" between the claim asserted and employee-
employer relations to put the case under the provisions of Article 217.
Absent such a link, the complaint will be cognizable by the regular courts of
justice in the exercise of their civil and criminal jurisdiction.

The case at bar involves a complaint for damages for malicious

prosecution which does not appear that there is a "reasonable causal
connection" between the complaint and the relations of the parties as
employer and employees. The complaint did not arise from such relations
and in fact could have arisen independently of an employment relationship
between the parties. No such relationship or any unfair labor practice is
asserted. What the employees are alleging is that the petitioners acted with
bad faith when they filed the criminal complaint intended "to harass the
poor employees" and the dismissal "for lack of evidence." This is a matter
wherein labor arbiter has no competence to resolve as the applicable law is
not the Labor Code but the Revised Penal Code.

55
56