Labor Law Cases:

1. Escasinas et al., vs. Shangri-las Mactan Island Resort et al. G.R. No. 17882, March 4, 2009
FACTS: Petitioners were registered nurses engaged by respondent Dr. Pepito to work in her clinic at respondent
Shangri-la Resort in Cebu of which she was a retained physician. Later, petitioners filed for payment of their labor
standard benefits and regularization claiming they are regular employees of Shangri-la. Respondent contends that
petitioners were not its employees but of Dr. Pepito, while the latter claims that petitioners were already working for
the previous retained physicians of Shangri-la. The Labor Arbiter found for petitioners but was reversed on appeal by
the NLRC tribunal stating no employer-employee relationship existed between petitioners and Shangri-la. CA
affirmed. Petitioner further contends that Dr. Pepito cannot be a legitimate job contractor but a mere agent of
Shangri-la.

ISSUE: W/N there was an ee-er relationship.

HELD/RULING: NO.
The Court holds that, contrary to petitioners’ postulation, Art. 157 does not require the engagement of full-time
nurses as regular employees of a company employing not less than 50 workers. Thus, the Article provides:
ART. 157. Emergency medical and dental services. – It shall be the duty of every employer to furnish his employees in
any locality with free medical and dental attendance and facilities consisting of:
(a) The services of a full-time registered nurse when the number of employees exceeds fifty (50) but not more than
two hundred (200) except when the employer does not maintain hazardous workplaces, in which case the services of
a graduate first-aider shall be provided for the protection of the workers, where no registered nurse is available. The
Secretary of Labor shall provide by appropriate regulations the services that shall be required where the number of
employees does not exceed fifty (50) and shall determine by appropriate order hazardous workplaces for purposes of
this Article;
(b) The services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic, when the
number of employees exceeds two hundred (200) but not more than three hundred (300); and
(c) The services of a full-time physician, dentist and full-time registered nurse as well as a dental clinic, and an
infirmary or emergency hospital with one bed capacity for every one hundred (100) employees when the number of
employees exceeds three hundred (300).
Under the foregoing provision, Shangri-la, which employs more than 200 workers, is mandated to "furnish" its
employees with the services of a full-time registered nurse, a part-time physician and dentist, and an emergency
clinic which means that it should provide or make available such medical and allied services to its employees, not
necessarily to hire or employ a service provider. As held in Philippine Global Communications vs. De Vera: 8
x x x while it is true that the provision requires employers to engage the services of medical practitioners in certain
establishments depending on the number of their employees, nothing is there in the law which says that medical
practitioners so engaged be actually hired as employees, adding that the law, as written, only requires the employer
"to retain", not employ, a part-time physician who needed to stay in the premises of the non-hazardous workplace
for two (2) hours. (Emphasis and underscoring supplied)1avvphi1
The term "full-time" in Art. 157 cannot be construed as referring to the type of employment of the person engaged
to provide the services, for Article 157 must not be read alongside Art. 280 9 in order to vest employer-employee
relationship on the employer and the person so engaged. So De Vera teaches:
x x x For, we take it that any agreement may provide that one party shall render services for and in behalf of
another, no matter how necessary for the latter’s business, even without being hired as an employee. This set-up is
precisely true in the case of an independent contractorship as well as in an agency agreement. Indeed, Article 280 of
the Labor Code, quoted by the appellate court, is not the yardstick for determining the existence of an employment
relationship. As it is, the provision merely distinguishes between two (2) kinds of employees, i.e., regular and casual.
x x x10 (Emphasis and underscoring supplied)
The phrase "services of a full-time registered nurse" should thus be taken to refer to the kind of services that the
nurse will render in the company’s premises and to its employees, not the manner of his engagement.
The existence of an independent and permissible contractor relationship is generally established by considering the
following determinants: whether the contractor is carrying on an independent business; the nature and extent of the
work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified
piece of work; the control and supervision of the work to another; the employer’s power with respect to the hiring,
firing and payment of the contractor’s workers; the control of the premises; the duty to supply the premises, tools,
appliances, materials and labor; and the mode, manner and terms of payment. On the other hand, existence of an
employer- employee relationship is established by the presence of the following determinants: (1) the selection and
engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and (4) the power
to control the worker’s conduct, with the latter assuming primacy in the overall consideration.
Against the above-listed determinants, the Court holds that respondent doctor is a legitimate independent
contractor. That Shangri-la provides the clinic premises and medical supplies for use of its employees and guests
does not necessarily prove that respondent doctor lacks substantial capital and investment. As to payment of
wages, respondent doctor is the one who underwrites the salaries, SSS contributions and other benefits of the staff
as well as value added taxes and withholding taxes. It is unlikely that respondent doctor would report petitioners as
workers, pay their SSS premium as well as their wages if they were not indeed her employees. With respect to the
supervision and control of the nurses and clinic staff, it is not disputed that manual prepared by respondent
doctor and not the employee manual being followed by Shangri-la‘s regular workers, governs how they perform
their respective tasks and responsibilities.
____________________________________________________________________________
2. Legend Hotel (Manila) vs. Realuyo G.R. No. 153511 July 18, 2012
FACTS: This labor case for illegal dismissal involves a pianist employed to perform in the restaurant of a hotel.
Respondent, filed a complaint for alleged unfair labor practice, that he had worked as a pianist at the Legend Hotel’s
Tanglaw Restaurant from September 1992 with an initial rate of P400.00/night that was given to him after each
night’s performance; that his rate had increased to P750.00/night; and that during his employment, he could not
choose the time of performance, which had been fixed from 7:00 pm to 10:00 pm for three to six times/week. He
added that the Legend Hotel’s restaurant manager had required him to conform with the venue’s motif; that he had
been subjected to the rules on employees’ representation. on July 9, 1999, the management had notified him that
his services would no longer be required effective July 30, 1999.
In its defense, petitioner denied the existence of an employer-employee relationship with respondent.
Labor Arbiter (LA) dismissed the complaint for lack of merit finding an er-ee relationship. Respondent appealed, but
the (NLRC) affirmed the LA.5 Respondent assailed the decision of the NLRC in the Court of Appeals (CA) on certiorari
and set aside the NLRC ruling.
ISSUE: whether or not there is an ee-er relationship.
HELD/RULING: YES

The issue of whether or not an employer-employee relationship existed between petitioner and respondent is
essentially a question of fact. The factors that determine the issue include who has the power to select the
employee, who pays the employee’s wages, who has the power to dismiss the employee, and who exercises control
of the methods and results by which the work of the employee is accomplished. Although no particular form of
evidence is required to prove the existence of the relationship, and any competent and relevant evidence to prove
the relationship may be admitted, a finding that the relationship exists must nonetheless rest on substantial
evidence, which is that amount of relevant evidence that a reasonable mind might accept as adequate to justify a
conclusion.
Petitioner could not seek refuge behind the service contract entered into with respondent. It is the law that
defines and governs an employment relationship, whose terms are not restricted to those fixed in the written
contract, for other factors, like the nature of the work the employee has been called upon to perform, are also
considered. The law affords protection to an employee, and does not countenance any attempt to subvert its spirit
and intent. Any stipulation in writing can be ignored when the employer utilizes the stipulation to deprive the
employee of his security of tenure. The inequality that characterizes employer-employee relations generally tips the
scales in favor of the employer, such that the employee is often scarcely provided real and better options.
The power of the employer to control the work of the employee is considered the most significant determinant of
the existence of an employer-employee relationship. This is the so-called control test, and is premised on whether
the person for whom the services are performed reserves the right to control both the end achieved and the
manner and means used to achieve that end.
____________________________________________________________________________
3. Star Paper Corp., vs. Simbol G.R. No. 164774 April 12, 2006
FACTS: Star Paper Corporation employed Ronaldo Simbol on Oct 1993. He met Alma Dayrit, also an employee of the
company, whom he married. Before marriage, Josephine Ongsitco the manager advised the couple that one of them
must resign if they decided to get married pursuant to a company policy to which Simbol complied. On February 5,
1997 Comia was hired by the company. She met Howard Comia, a co-employee, whom she married on June 1, 2000.
Ongsitco likewise reminded them the company policy, Comia resigned on June 30, 2000. Estrella was also hired on
July 29, 1994. She met Luisito Zuñiga also a co-worker. Petitioners stated that Zuñiga, a married man, got Estrella
pregnant. The company allegedly could have terminated her services due to immorality but she opted to resign on
December 21, 1999. Labor Arbiter dismissed the complaint and states that the company policy was decreed
pursuant to what the respondent corporation perceived as management prerogative. On appeal to the NLRC, the
Commission affirmed the decision of the Labor Arbiter. In its assailed Decision dated August 3, 2004, the Court of
Appeals reversed the NLRC decision.

ISSUE: whether the policy of the employer banning spouses from working in the same company violates the rights of
the employee under the Constitution and the Labor Code or is a valid exercise of management prerogative.

HELD/RULING: YES, a violation of the rights of the employees. NO, not a valid exercise of management prerogative.

The Labor Code is the most comprehensive piece of legislation protecting labor. The case at bar involves Article 136
of the Labor Code which provides:

Art. 136. It shall be unlawful for an employer to require as a condition of employment or continuation of employment
that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason of her marriage.

Petitioners failed to show how the marriage could be detrimental to its business operations. The policy is
premised on the mere fear that employees married to each other will be less efficient. If we uphold the
questioned rule without valid justification, the employer can create policies based on an unproven presumption of
a perceived danger at the expense of an employee’s right to security of tenure.
The questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect
and under the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it
is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a
legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free
from arbitrary discrimination based upon stereotypes of married persons working together in one company. 40

Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the
petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw
inferences from the legislature’s silence 41 that married persons are not protected under our Constitution and declare
valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a
reasonable business necessity, we rule that the questioned policy is an invalid exercise of management
prerogative.

Here petitioners has 2 types of employment policies banning only spouses from working in the same company (no-
spouse employment policies), and those banning all immediate family members, including spouses, from working in
the same company (anti-nepotism employment policies).

two theories of employment discrimination: the disparate treatment and the disparate impact. Under the disparate

treatment analysis, the plaintiff must prove that an employment policy is discriminatory on its face. No-spouse
employment policies requiring an employee of a particular sex to either quit, transfer, or be fired are facially
discriminatory. For example, an employment policy prohibiting the employer from hiring wives of male employees,
but not husbands of female employees, is discriminatory on its face. 22
On the other hand, to establish disparate impact, the complainants must prove that a facially neutral policy has a
disproportionate effect on a particular class. For example, although most employment policies do not expressly
indicate which spouse will be required to transfer or leave the company, the policy often disproportionately affects
one sex.23
The courts narrowly25 interpreting marital status to refer only to a person's status as married, single, divorced, or
widowed reason that if the legislature intended a broader definition it would have either chosen different language
or specified its intent. They hold that the relevant inquiry is if one is married rather than to whom one is married.
They construe marital status discrimination to include only whether a person is single, married, divorced, or
widowed and not the "identity, occupation, and place of employment of one's spouse." These courts have upheld
the questioned policies and ruled that they did not violate the marital status discrimination provision of their
respective state statutes.
The courts that have broadly26 construed the term "marital status" rule that it encompassed the identity, occupation
and employment of one's spouse. They strike down the no-spouse employment policies based on the broad
legislative intent of the state statute. They reason that the no-spouse employment policy violate the marital status
provision because it arbitrarily discriminates against all spouses of present employees without regard to the actual
effect on the individual's qualifications or work performance. 27 These courts also find the no-spouse employment
policy invalid for failure of the employer to present any evidence of business necessity other than the general
perception that spouses in the same workplace might adversely affect the business. 28 They hold that the absence of
such a bona fide occupational qualification29 invalidates a rule denying employment to one spouse due to the
current employment of the other spouse in the same office. 30 Thus, they rule that unless the employer can prove
that the reasonable demands of the business require a distinction based on marital status and there is no better
available or acceptable policy which would better accomplish the business purpose, an employer may not
discriminate against an employee based on the identity of the employee’s spouse. 31 This is known as the bona fide
occupational qualification exception.
We note that since the finding of a bona fide occupational qualification justifies an employer’s no-spouse rule, the
exception is interpreted strictly and narrowly by these state courts. There must be a compelling business necessity
for which no alternative exists other than the discriminatory practice. 32 To justify a bona fide occupational
qualification, the employer must prove two factors: (1) that the employment qualification is reasonably related to
the essential operation of the job involved; and, (2) that there is a factual basis for believing that all or substantially
all persons meeting the qualification would be unable to properly perform the duties of the job. 33
The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We employ the standard
of reasonableness of the company policy which is parallel to the bona fide occupational qualification requirement. In
the recent case of Duncan Association of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines,
Inc.,34 we passed on the validity of the policy of a pharmaceutical company prohibiting its employees from marrying
employees of any competitor company. We held that Glaxo has a right to guard its trade secrets, manufacturing
formulas, marketing strategies and other confidential programs and information from competitors. We considered
the prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s
employees reasonable under the circumstances because relationships of that nature might compromise the
interests of Glaxo. In laying down the assailed company policy, we recognized that Glaxo only aims to protect its
interests against the possibility that a competitor company will gain access to its secrets and procedures. 35
The requirement that a company policy must be reasonable under the circumstances to qualify as a valid exercise of
management prerogative was also at issue in the 1997 case of Philippine Telegraph and Telephone Company v.
NLRC.36 In said case, the employee was dismissed in violation of petitioner’s policy of disqualifying from work any
woman worker who contracts marriage. We held that the company policy violates the right against discrimination
afforded all women workers under Article 136 of the Labor Code, but established a permissible exception, viz.:
[A] requirement that a woman employee must remain unmarried could be justified as a "bona fide occupational
qualification," or BFOQ, where the particular requirements of the job would justify the same, but not on the ground
of a general principle, such as the desirability of spreading work in the workplace. A requirement of that nature
would be valid provided it reflects an inherent quality reasonably necessary for satisfactory job
performance.37 (Emphases supplied.)
The cases of Duncan and PT&T instruct us that the requirement of reasonableness must be clearly established to
uphold the questioned employment policy. The employer has the burden to prove the existence of a reasonable
business necessity. The burden was successfully discharged in Duncan but not in PT&T.
____________________________________________________________________________
 4. Yrasuegui vs. Phil Air Lines G.R. No. 168081 October 17, 2008

FACTS: The case at bar portrays the peculiar story of an international flight steward who was dismissed because of
his failure to adhere to the weight standards of the airline company. He was given the period from 1985 to 1992 to
reduce his weight, but failed to do so. Notice of Administrative Charge for violation of company standards on weight
requirements. Petitioner insists that he is being discriminated as those similarly situated were not treated the same.
On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight, his
services were considered terminated “effective immediately.”

Labor Arbiter ruled that petitioner was illegally dismissed. The Labor Arbiter held that the weight standards of PAL
are reasonable in view of the nature of the job of petitioner. 15 However, the weight standards need not be complied
with under pain of dismissal since his weight did not hamper the performance of his duties. 16 Assuming that it did,
petitioner could be transferred to other positions where his weight would not be a negative factor. Both parties
appealed to the (NLRC).19 On March 6, 2000, PAL appealed the denial of its motion to quash to the NLRC. 23On June
23, 2000, the NLRC rendered judgment hereby AFFIRMED. the CA reversed31 the NLRC.

ISSUE/S:
a. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER’S DISMISSAL
FOR OBESITY CAN BE PREDICATED ON THE "BONA FIDE OCCUPATIONAL QUALIFICATION (BFOQ) DEFENSE";
HELD/RULING:
a. NO, the CA correctly dismissed the case based on the obesity of the petitioner as predicated on the BFOD.
The dismissal of petitioner can be predicated on the bona fide occupational qualification defense.
Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin
unless the employer can show that sex, religion, or national origin is an actual qualification for performing
the job. The qualification is called a bona fide occupational qualification (BFOQ).
in British Columbia Public Service Employee Commission (BSPSERC) v. The British Columbia Government and
Service Employee’s Union (BCGSEU),63 the Supreme Court of Canada adopted the so-called "Meiorin Test" in
determining whether an employment policy is justified. Under this test, (1) the employer must show that it
adopted the standard for a purpose rationally connected to the performance of the job; 64 (2) the employer
must establish that the standard is reasonably necessary 65 to the accomplishment of that work-related
purpose; and (3) the employer must establish that the standard is reasonably necessary in order to
accomplish the legitimate work-related purpose. Similarly, in Star Paper Corporation v. Simbol,66 this Court
held that in order to justify a BFOQ, the employer must prove that (1) the employment qualification is
reasonably related to the essential operation of the job involved; and (2) that there is factual basis for
believing that all or substantially all persons meeting the qualification would be unable to properly
perform the duties of the job.67
In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ. 68 BFOQ is
valid "provided it reflects an inherent quality reasonably necessary for satisfactory job performance." The
business of PAL is air transportation. As such, it has committed itself to safely transport its passengers. In
order to achieve this, it must necessarily rely on its employees, most particularly the cabin flight deck crew
who are on board the aircraft. The weight standards of PAL should be viewed as imposing strict norms of
discipline upon its employees. In other words, the primary objective of PAL in the imposition of the weight
standards for cabin crew is flight safety. The most important activity of the cabin crew is to care for the
safety of passengers and the evacuation of the aircraft when an emergency occurs. Passenger safety goes to
the core of the job of a cabin attendant. Being overweight necessarily impedes mobility. 

____________________________________________________________________________
5. Our Haus Realty Development Corp., vs. Parian et al. GR No. 204651, August 6, 2014
FACTS: The respondents were all laborers working for the petitioner, Our Haus Realty Development Corporation
(Our Haus, for brevity), a company engaged in the construction business. Sometime in May 2010, Our Haus
experienced financial distress. To alleviate, petitioner suspended some of its construction projects and asked the
affected workers, including the respondents, to take vacation leave. When respondents were asked to report back to
work, they instead filed with the Labor Arbiter for underpayment of their daily wages. Our Haus primarily argued
that the respondents’ wages complied with the law’s minimum requirement, it also subsidized their meals and free
lodging and in determining the total amount of the respondents’ daily wages, the value of these benefits should be
considered, in line with Article 97(f) 11 of the Labor Code. The respondents pointed out that Our Haus never
presented any proof that they agreed in writing to the inclusion of their meals’ value in their wages. The LA ruled in
favor of Our Haus. CA and NLRC ruled in favor of respondents.

ISSUE: W/N the supplements and facilities are deemed included in the wages of the respondents.

HELD/RULING: NO.

In reality, deduction and charging both operate to lessen the actual take-home pay of an employee; they are two
sides of the same coin. In both, the employee receives a lessened amount because supposedly, the facility’s value,
which is part of his wage, had already been paid to him in kind. As there is no substantial distinction between the
two, the requirements set by law must apply to both.

As the CA correctly ruled, these requirements, as summarized in Mabeza v. National Labor Relations Commission,
271 SCRA 670 (1997), are the following:

a. proof must be shown that such facilities are customarily furnished by the trade;
b. the provision of deductible facilities must be voluntarily accepted in writing by the employee; and
c. the facilities must be charged at fair and reasonable value.

In a string of cases, we have concluded that one of the badges to show that a facility is customarily furnished by the
trade is the existence of a company policy or guideline showing that provisions for a facility were designated as part
of the employees’ salaries. To comply with this, Our Haus presented in its motion for reconsideration with the NLRC
the joint sinumpaang salaysay of four of its alleged employees. These employees averred that they were recipients
of free lodging, electricity and water, as well as subsidized meals from Our Haus. We agree with the NLRC’s finding
that the sinumpaang salaysay statements submitted by Our Haus are self-serving. For one, Our Haus only
produced the documents when the NLRC had already earlier determined that Our Haus failed to prove that it was
traditionally giving the respondents their board and lodging. This document did not state whether these benefits
had been consistently enjoyed by the rest of Our Haus’ employees. Moreover, the records reveal that the board
and lodging were given on a per project basis. Our Haus did not show if these benefits were also provided in its other
construction projects, thus negating its claimed customary nature.

As part of the project cost that construction companies already charge to their clients, the value of the housing of
their workers cannot be charged again to their employees’ salaries.—DOLE DO No. 56, Series of 2005, which sets
out the guidelines for the implementation of DOLE DO No. 13, mandates that the cost of the implementation of the
requirements for the construction safety and health of workers, shall be integrated to the overall project cost. The
rationale behind this is to ensure that the living accommodation of the workers is not substandard and is strictly
compliant with the DOLE’s OSH criteria. As part of the project cost that construction companies already charge to
their clients, the value of the housing of their workers cannot be charged again to their employees’ salaries. Our
Haus cannot pass the burden of the OSH costs of its construction projects to its employees by deducting it as
facilities. This is Our Haus’ obligation under the law.

Even if a benefit is customarily provided by the trade, it must still pass the purpose test set by jurisprudence.
Under this test, if a benefit or privilege granted to the employee is clearly for the employer’s convenience, it will
not be considered as a facility but a supplement. Here, careful consideration is given to the nature of the
employer’s business in relation to the work performed by the employee. This test is used to address inequitable
situations wherein employers consider a benefit deductible from the wages even if the factual circumstances show
that it clearly redounds to the employers’ greater advantage. While the rules serve as the initial test in characterizing
a benefit as a facility, the purpose test additionally recognizes that the employer and the employee do not stand at
the same bargaining positions on benefits that must or must not form part of an employee’s wage. In the ultimate
analysis, the purpose test seeks to prevent a circumvention of the minimum wage law.

Under the law, only the value of the facilities may be deducted from the employees’ wages but not the value of
supplements. Facilities include articles or services for the benefit of the employee or his family but exclude tools
of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the
employer’s business. The law also prescribes that the computation of wages shall exclude whatever benefits,
supplements or allowances given to employees. Supplements are paid to employees on top of their basic pay and
are free of charge. Since it does not form part of the wage, a supplement’s value may not be included in the
determination of whether an employer complied with the prescribed minimum wage rates. In the present case, the
board and lodging provided by Our Haus cannot be categorized as facilities but as supplements.

If it is primarily for the employee’s gain, then the benefit is a facility; if its provision is mainly for the employer’s
advantage, then it is a supplement.—Ultimately, the real difference lies not on the kind of the benefit but on the
purpose why it was given by the employer. If it is primarily for the employee’s gain, then the benefit is a facility; if its
provision is mainly for the employer’s advantage, then it is a supplement. Again, this is to ensure that employees are
protected in circumstances where the employer designates a benefit as deductible from the wages even though it
clearly works to the employer’s greater convenience or advantage. Under the purpose test, substantial consideration
must be given to the nature of the employer’s business in relation to the character or type of work performed by the
employees involved.

A facility may only be deducted from the wage if the employer was authorized in writing by the concerned
employee.—In Mayon Hotel & Restaurant v. Adana, 458 SCRA 609 (2005), we reiterated that a facility may only be
deducted from the wage if the employer was authorized in writing by the concerned employee. As it diminishes the
take-home pay of an employee, the deduction must be with his express consent. Again, in the motion for
reconsideration with the NLRC, Our Haus belatedly submitted five kasunduans, supposedly executed by the
respondents, containing their conformity to the inclusion of the values of the meals and housing to their total wages.
Oddly, Our Haus only offered these documents when the NLRC had already ruled that respondents did not
accomplish any written authorization, to allow deduction from their wages. These five kasunduans were also
undated, making us wonder if they had really been executed when respondents first assumed their jobs. Moreover,
in the earlier sinumpaang salaysay by Our Haus’ four employees, it was not mentioned that they also executed a
kasunduan for their board and lodging benefits. Because of these surrounding circumstances and the suspicious
timing when the five kasunduans were submitted as evidence, we agree with the CA that the NLRC committed no
grave abuse of discretion in disregarding these documents for being self serving.

The valuation of a facility must be supported by relevant documents such as receipts and company records for it
to be considered as fair and reasonable.—Our Haus’ valuation cannot be plucked out of thin air. The valuation of a
facility must be supported by relevant documents such as receipts and company records for it to be considered as
fair and reasonable. In Mabeza, we noted: Curiously, in the case at bench, the only valuations relied upon by the
labor arbiter in his decision were figures furnished by the private respondent’s own accountant, without
corroborative evidence. On the pretext that records prior to the July 16, 1990 earthquake were lost or destroyed,
respondent failed to produce payroll records, receipts and other relevant documents, where he could have, as has
been pointed out in the Solicitor General’s manifestation, “secured certified copies thereof from the nearest regional
office of the Department of Labor, the SSS or the BIR.” [emphasis ours] In the present case, Our Haus never
explained how it came up with the values it assigned for the benefits it provided; it merely listed its supposed
expenses without any supporting document. Since Our Haus is using these additional expenses (cook’s salary, water
and LPG) to support its claim that it did not withhold the full amount of the meals’ value, Our Haus is burdened to
present evidence to corroborate its claim. The records however, are bereft of any evidence to support Our Haus’
meal expense computation. Even the value it assigned for the respondents’ living accommodations was not
supported by any documentary evidence. Without any corroborative evidence, it cannot be said that Our Haus
complied with this third requisite.
____________________________________________________________________________
6. Milan et al., vs. NLRC GR No. 202961, February 4, 2015
FACTS: Milan et.al are Solid Mills, Inc.’s (Solid Mills) employees represented by the National Federation of Labor
Unions (NAFLU) they and their families were allowed to occupy SMI Village, a property owned by Solid Mills as “[o]ut
of liberality and for the convenience of its employees . . . [and] on the condition that the employees would vacate
the premises anytime the Company deems fit.” In September 2003, Milan et.al were informed that effective October
10, 2003, Solid Mills would cease its operations due to serious business losses. NAFLU recognized its closure. They
were required to sign a memorandum of agreement with release and quitclaim before their vacation and sick leave
benefits, 13th
month pay, and separation pay would be released. Employees who signed the memorandum of agreement were
considered to have agreed to vacate SMI Village, and to the demolition of the constructed houses inside as condition
for the release of their termination benefits and separation pay. Milan et.al. refused to sign the documents and
demanded to be paid their benefits and separation pay. Hence, they filed complaints before the Labor Arbiter for
alleged nonpayment. They argued that their accrued benefits and separation pay should not be withheld. The Labor
Arbiter ruled in favor of Milan et.al.
The National Labor Relations Commission affirmed part of the decision but reversed and set aside another part and
decided that Milan et.al.’s monetary claims in the form of separation pay, accrued 13th month pay for 2003, accrued
vacation and sick leave pays are held in abeyance pending compliance of their accountabilities to respondent
company by turning over the subject
The Court of Appeals ruled that Solid Mills’ act of allowing its employees to make temporary dwellings in its property
was a liberality on its part. It may be revoked any time at its discretion.
ISSUE: Whether or not an employer is allowed to withhold terminal pay and benefits pending the employee’s return
of its properties.
HELD/RULING: YES.
Claims arising from an employer-employee relationship are not limited to claims by an employee. Employers may
also have claims against the employee, which arise from the same relationship. In Bañez v. Valdevilla, 331 SCRA
584 (2000), this court ruled that Article 217 of the Labor Code also applies to employers’ claim for damages, which
arises from or is connected with the labor issue. Thus: Whereas this Court in a number of occasions had applied the
jurisdictional provisions of Article 217 to claims for damages filed by employees, we hold that 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.

Requiring clearance before the release of last payments to the employee is a standard procedure among
employers, whether public or private. Clearance procedures are instituted to ensure that the properties, real or
personal, belonging to the employer but are in the possession of the separated employee, are returned to the
employer before the employee’s departure.

As a general rule, employers are prohibited from withholding wages from employees. The Labor Code provides: Art.
116. Withholding of wages and kickbacks prohibited.—It shall be unlawful for any person, directly or indirectly, to
withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth,
intimidation, threat or by any other means whatsoever without the worker’s consent.

The Labor Code also prohibits the elimination or diminution of benefits. Thus: Art. 100. Prohibition against
elimination or diminution of benefits.—Nothing in this Book shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of promulgation of this Code. However, our law
supports the employers’ institution of clearance procedures before the release of wages. As an exception to the
general rule that wages may not be withheld and benefits may not be diminished, the Labor Code provides: Art. 113.
Wage deduction.—No employer, in his own behalf or in behalf of any person, shall make any deduction from the
wages of his employees, except: 1. In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium on the insurance; 2. For union
dues, in cases where the right of the worker or his union to check off has been recognized by the employer or
authorized in writing by the individual worker concerned; and 3. In cases where the employer is authorized by law or
regulations issued by the Secretary of Labor and Employment.

The return of the property’s possession became an obligation or liability on the part of the employees when the
employer-employee relationship ceased. Thus, respondent Solid Mills has the right to withhold petitioners’ wages
and benefits because of this existing debt or liability.
____________________________________________________________________________
7. Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo G.R. No. 188169, November 28, 2011
FACTS:
ISSUE, HELD/RULING:
1. W/N the petitioner’s policy of requiring its employee-goldsmiths to post cash bonds or deposits is valid - NO.
Article 113 of the Labor Code is clear that there are only three exceptions to the general rule that no deductions
from the employees’ salaries can be made. The exception which finds application in the instant petition is in cases
where the employer is authorized by law or regulations issued by the Secretary of Labor to effect the deductions.
On the other hand, Article 114 states that generally, deposits for loss or damages are not allowed except in cases
where the employer is engaged in such trades, occupations or business where the practice of making deposits is a
recognized one, or is necessary or desirable as determined by the Secretary of Labor in appropriate rules or
regulations. the posting of cash bonds should be proven as a recognized practice in the jewelry manufacturing
business, or alternatively, the petitioners should seek for the determination by the Secretary of Labor through the
issuance of appropriate rules and regulations that the policy the former seeks to implement is necessary or desirable
in the conduct of business. The petitioners failed in this respect. 

2. whether or not the petitioners constructively dismissed the respondents – NO. Constructive dismissal occurs when
there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when
there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by
an employer becomes unbearable to the employee.
____________________________________________________________________________
8. Philippine Airlines vs. NLRC G.R. No. 132805 February 2, 1999
FACTS: Private respondent Dr. Fabros was employed as flight surgeon at petitioner company. He was assigned at the
PAL Medical Clinic and was on duty from 4:00 in the afternoon until 12:00 midnight. On Feb.17, 1994, at around 7:00
in the evening, Dr. FAbros left the clinic to have his dinner at his residence, which was about 5minute drive away. A
few minutes later, the clinic received an emergency call from the PAL Cargo Services. One of its employees had
suffered a heart attack. The nurse on duty, Mr. Eusebio, called private respondent at home to inform him of the
emergency. The patient arrived at the clinic at 7:50 in the evening and Mr. Eusebio immediately rushed him to the
hospital. When Dr. Fabros reached the clinic at around 7:51 in the evening, Mr. Eusebio had already left with the
patient to the hospital. The patient died the following day. Upon learning about the incident, PAL Medical Director
ordered the Chief Flight Surgeon to conduct an investigation. In his explanation, Dr. Fabros asserted that he was
entitled to a thirty minute meal break; that he immediately left his residence upon being informed by Mr. Eusebio
about the emergency and he arrived at the clinic a few minutes later; that Mr. Eusebio panicked and brought the
patient to the hospital without waiting for him.

Finding private respondent’s explanation unacceptable, the management charged private respondent with
abandonment of post while on duty and was given a suspension for three months. Private respondent filed a
complaint for illegal suspension. On July 16, 1996, the Labor Arbiter rendered a decision declaring the suspension of
private respondent illegal. Petitioner appealed to the NLRC. The NLRC, however, dismissed the appeal.

ISSUE: W/N the suspension is valid on the ground that the private respondent's act of leaving the company premises
to take his meal at home constituted abandonment of post.

HELD/RULING: NO.

The facts do not support petitioner’s allegation that private respondent abandoned his post on the evening of
February 17, 1994. Private respondent left the clinic that night only to have his dinner at his house, which was only a
few minutes’ drive away from the clinic. His whereabouts were known to the nurse on duty so that he could be
easily reached in case of emergency. Upon being informed of Mr. Acosta’s condition, private respondent
immediately left his home and returned to the clinic. These facts belie petitioner’s claim of abandonment.

The eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that
employees must take their meals within the company premises. Employees are not prohibited from going out of
the premises as long as they return to their posts on time. Private respondent’s act, therefore, of going home to
take his dinner does not constitute abandonment.
____________________________________________________________________________
9. San Miguel Corp., vs. CA G.R. No. 146775, Jan. 30, 2002
FACTS: On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan District Office, conducted a
routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the course of the
inspection, it was discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees.
SMC contested the findings and DOLE conducted summary hearings. Still, SMC failed to submit proof that it was
paying regular Muslim holiday pay to its employees. Hence, Alan M. Macaraya, Director IV of DOLE Iligan District
Office issued a compliance order, directing SMC to consider Muslim holidays as regular holidays and to pay both its
Muslim and non-Muslim employees holiday pay within thirty (30) days from the receipt of the order.
Its motion for reconsideration having been denied for lack of merit, SMC filed a petition for  certiorari before this
Court

ISSUE: whether or not Muslim holiday pay should be granted to nonmuslims

HELD/RULING: YES

The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides:

Art. 94. Right to holiday pay. -

(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate; x x x.

Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that “(t)he provisions of this Code shall
be applicable only to Muslims x x x.” However, there should be no distinction between Muslims and non-Muslims
as regards payment of benefits for Muslim holidays. The Court of Appeals did not err in sustaining Undersecretary
Español who stated: Assuming arguendo that the respondent’s position is correct, then by the same token, Muslims
throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular
holidays. We must remind the respondent-appellant that wages and other emoluments granted by law to the
working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the
worker’s faith or religion. At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that “x x x nothing
herein shall be construed to operate to the prejudice of a non-Muslim.” San Miguel Corporation vs. Court of Appeals,
375 SCRA 311, G.R. No. 146775 January 30, 2002
____________________________________________________________________________
10. Universal Robina Sugar Milling Corp. vs. Caballeda G.R. No. 156644, July 28, 2008
FACTS: Petitioner Universal Robina Sugar Milling Corporation (URSUMCO) is a domestic corporation engaged in the
sugar milling business and petitioner Renato Cabati 4 is URSUMCO's manager. Respondent Agripino Caballeda
(Agripino) worked as welder from 1989 until 1997, while respondent Alejandro Cadalin (Alejandro) worked as crane
operator from 1976 up to 1997.
On April 24, 1991, President of URSUMCO, issued a Memorandum 5 establishing the company policy on "Compulsory
Retirement" (Memorandum) of its employees. Agripino and Alejandro (respondents), having reached the age of 60,
were allegedly forced to retire by URSUMCO. Agripino was then forced to retire upon reaching the age of 60, where
he accepted his pay and retirement benefits. Alejandro was forced to retire the same but alleges that he was given
only 15 days per year of service by way of retirement benefits. They both filed a complaint for illegal dismissal
afterwards. LA ruled in favor of the respondents. NLRC set aside the LA ruling and ruled in favor of the petitioners.
CA made a partial ruling in favor of respondents.

ISSUE: Whether respondents were illegally terminated on account of compulsory retirement or the same voluntarily
retired.

HELD/RULING: YES.
Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former.
The age of retirement is primarily determined by the existing agreement between the employer and the
employees. However, in the absence of such agreement, the retirement age shall be fixed by law. Under Art. 287
of the Labor Code as amended, the legally mandated age for 117compulsory retirement is 65 years, while the set
minimum age for optional retirement is 60 years.

In the absence of any provision on optional retirement in a collective bargaining agreement, other employment
contract, or employer’s retirement plan, an employee may optionally retire upon reaching the age of 60 years or
more, but not beyond 65 years, provided he has served at least five years in the establishment concerned.—In this
case, it may be stressed that the CBA does not per se specifically provide for the compulsory retirement age nor
does it provide for an optional retirement plan. It merely provides that the retirement benefits accorded to an
employee shall be in accordance with law. Thus, we must apply Art. 287 of the Labor Code which provides for two
types of retirement: (a) compulsory and (b) optional. The first takes place at age 65, while the second is primarily
determined by the collective bargaining agreement or other employment contract or employer’s retirement plan.
That prerogative is exclusively lodged in the employee.

We find no reversible error and, thus, sustain the ruling of the CA that respondents did not voluntarily retire but
were rather forced to retire, tantamount to illegal dismissal.

Same; When Quitclaims Valid; Requisites.—In exceptional cases, the Court has accepted the validity of quitclaims
executed by employees if the employer is able to prove the following requisites: (1) the employee executes a deed of
quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the
quitclaim is credible and reasonable; and (4) the contract 118is not contrary to law, public order, public policy,
morals or good customs or prejudicial to a third person with a right recognized by law. In this case, petitioners failed
to establish all the foregoing requisites.

Same; Burden of Proof; It is the employer, not the employee who has the burden of proving that a quitclaim was
voluntarily entered into;
____________________________________________________________________________
11. Remington Industrial Sales Corp. vs., Castaneda G.R. No. 169295-96, Nov. 20, 2006
FACTS: Castaneda, worked as a company cook to petitioner, instituted a complaint for illegal dismissal, &
underpayment of wages. She averred that she reported for work at the new site in Caloocan City only to be informed
that Remington no longer needed her services. Remington denied that it dismissed Erlinda illegally. It posited that
Erlinda was a domestic helper, not a regular employee; In a Decision the labor arbiter dismissed the complaint and
ruled that the respondent was a domestic helper under the personal service of Antonio Tan, finding that her work as
a cook was not usually necessary and desirable in the ordinary course of trade and business of the petitioner
corporation. Upon appeal, the (NLRC) rendered a Decision, reversing the labor arbiter. Petitioner moved to
reconsider this decision but the NLRC denied the motion.

ISSUE: WON is Castaneda a regular employee or a domestic servant?

HELD/RULING: REGULAR.

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

The determination of the existence of an employer employee relationship is defined by law according to the facts
of each case, regardless of the nature of the activities involved.—It is wrong to say that if the work is not directly
related to the employer’s business, then the person performing such work could not be considered an employee of
the latter. Indeed, it would be the height of injustice if we were to hold that despite the fact that respondent was
made to cook lunch and merienda for the petitioner’s employees, which work ultimately redounded to the benefit of
the petitioner corporation, she was merely a domestic worker of the family of Mr. Tan.
____________________________________________________________________________
 12. Herrera-Mananois vs. St. Scholasticas College G.R. No. 188914, December 11, 2013
FACTS: Josie Herrera Manaois taught in St. Scholastica College (SSC) as an English teacher (part-time). She was
recommended to become a full-time faculty member. In her application, she mentioned that she was taking her
masters in UP and that her oral defense was scheduled for June 2000. This was approved and SSC hired her as a
probationary full time employee. She failed to acquire her MA degree on time and she requested for an extension.
SSC denied and subsequently opted not to rehire her. LA and NLRC ruled for Josie stating that she was not informed
of the requirement to finish her MA degree and that the minimum requirement is finishing 25% of her MA studies
only. CA reversed saying that the requirement cited by LA is for ranking purposes and not a qualification for
permanency.

ISSUE: W/N the petitioner holds a permanent employment status.

HELD/RULING: NO.

Probationary employment refers to the trial stage or period during which the employer examines the competency
and qualifications of job applicants, and determines whether they are qualified to be extended permanent
employment status. Such an arrangement affords an employer the opportunity — before the full force of the
guarantee of security of tenure comes into play — to fully scrutinize and observe the fitness and worth of
probationers while on the job and to determine whether they would become proper and efficient employees. It also
gives the probationers the chance to prove to the employer that they possess the necessary qualities and
qualifications to meet reasonable standards for permanent employment.

At this juncture, we reiterate the rule that mere completion of the three-year probation, even with an above-
average performance, does not guarantee that the employee will automatically acquire a permanent employment
status. It is settled jurisprudence that the probationer can only qualify upon fulfillment of the reasonable
standards set for permanent employment as a member of the teaching personnel. In line with academic freedom
and constitutional autonomy, an institution of higher learning has the discretion and prerogative to impose
standards on its teachers and determine whether these have been met. Upon conclusion of the probation period,
the college or university, being the employer, has the sole prerogative to make a decision on whether or not to
rehire the probationer. The probationer cannot automatically assert the acquisition of security of tenure and force
the employer to renew the employment contract. In the case at bar, Manaois failed to comply with the stated
academic qualifications required for the position of a permanent full-time faculty member.

Pursuant to the 1992 Manual, private educational institutions in the tertiary level may extend “full-time faculty”
status only to those who possess, inter alia, a master’s degree in the field of study that will be taught. For all intents
and purposes, this qualification must be deemed impliedly written in the employment contracts between private
educational institutions and prospective faculty members. A part-time member of the academic personnel cannot
acquire permanence of employment and security of tenure under the Manual of Regulations in relation to the Labor
Code. In the light of the failure of Manaois to satisfy the academic requirements for the position, she may only be
considered as a part-time instructor pursuant to Section 45 of the 1992 Manual.
____________________________________________________________________________
13. Tolosa vs. NLRC G.R. No. 149578, April 10, 2003
FACTS: Evelyn Tolosa, was the widow of Captain Virgilio Tolosa who was hired by Qwana-Kaiun, through its manning
agent, Asia Bulk, to be the master of the Vessel named M/V Lady Dona. At the time of embarkation, CAPT. TOLOSA
was drenched with rainwater. The following day he had a slight fever and in the succeeding twelve (12) days Nov. 7-
18, 1992, his health rapidly deteriorated resulting in his death. It was alleged that the request for emergency
evacuation of Capt Tolosa was too late. Because of the death of Capt. Tolosa, his wife, Evelyn filed a
Complaint/Position Paper before the POEA against Qwana-Kaiun, thru its resident-agent, Mr. Fumio Nakagawa, ASIA
BULK, Pedro Garate and Mario Asis, as respondents. The case was however transferred to the NLRC, when the
amendatory legislation expanding its jurisdiction, and removing overseas employment related claims from the ambit
of POEA jurisdiction. Petitioner argues that her cause of action is not predicated on a quasi delict or tort, but on the
failure of private respondents -- as employers of her husband (Captain Tolosa) -- to provide him with timely,
adequate and competent medical services under Article 161 of the Labor Code. Respondents aver that the Labor
Arbiter has no jurisdiction over the subject matter, since her cause did not arise from an employer-employee
relation, but from a quasi delict or tort.
LA awarded the damages. NLRC dismissed for lack of jurisdiction CA ruled that the labor commission had no
jurisdiction over the subject matter of the action filed by petitioner.
ISSUE: Whether or not the NLRC and the Labor Arbiter has jurisdiction over the subject matter.
HELD/RULING: NO JURISDICTION.
Time and time again, we have held that the allegations in the complaint determine the nature of the action and,
consequently, the jurisdiction of the courts. After carefully examining the complaint/position paper of petitioner,
we are convinced that the allegations therein are in the nature of an action based on a quasi delict or tort. It is
evident that she sued Pedro Garate and Mario Asis for gross negligence.
The jurisdiction of labor tribunals is limited to disputes arising from employer-employee relations, as we ruled in
Georg Grotjahn GMBH & Co. v. Isnani: “Not every dispute between an employer and employee involves matters that
only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The
jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an
employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or
their collective bargaining agreement.”
While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided by labor laws,
but also damages governed by the Civil Code, these reliefs must still be based on an action that has a reasonable
causal connection with the Labor Code, other labor statutes, or collective bargaining
It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in which the employer-
employee relation is merely incidental, and in which the cause of action proceeds from a different source of
obligation such as a tort. Since petitioner’s claim for damages is predicated on a quasi delict or tort that has no
reasonable causal connection with any of the claims provided for in Article 217, other labor statutes, or collective
bargaining agreements, jurisdiction over the action lies with the regular courts—not with the NLRC or the labor
arbiters.