Golden Beacon On Labor Law - 2019

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2019 GOLDEN BEACON

LABOR LAW
By:
Dean MANUEL R. BUSTAMANTE
1. SEXUAL HARASSMENT LAW (RA 7877)
To commit sexual harassment, the following elements must be present:
1). the employer, employee, manager, supervisor, agent of the

employer, teacher, instructor, professor, coach trainer, or any other
persons has authority, influence or moral ascendancy over
another;
2). the authority, influence or moral ascendancy exists in a

working environment:
3). he should have demanded, requested or otherwise required a

sexual favor from his employee.
Q: Can greeting by kissing on the cheek, in a beso-beso fashion, be

considered as sexual harassment?
A: A mere casual buss on the cheek is not a sexual harassment conduct

or favor and does not fall within the purview of the sexual harassment under
the Anti-Sexual Harassment Act, otherwise known as RA 7877. (Atty. Susan Aquino
vs. Hon. Ernesto Acosta, A.M. No. CTA-01-1, April 2, 2002).
2. EMPLOYER - EMPLOYEE RELATIONSHIP
Four-fold Test
The control test is the most crucial indication of the existence of an

employer-employee relationship (The Manila Hotel Corp. vs. NLRC, 343 SCRA 1, 2000) . In
determining whether a given set of circumstances constitute or exhibit an
employer-employee relationship, the accepted rule is that the elements or
circumstances relating to the following matters shall be examined and
considered:
a. the selection and engagement of the employees
b. the payment of wage
c. the power of dismissal; and
d. the power of control the employees’ conduct
and determinative indicator of the presence or absence of an employer-
employee relationship. (Great Pacific Life Assurance Corp. vs. NLRC, 187 SCRA 694, 1990).
The relationship between jeepney owners/operators on one hand and jeepney

drivers on the other under the boundary system is that of employer-employee
and not of lessor-lessee. (Jardin vs. NLRC, 326 SCRA 299, 2000) . By analogy, the
doctrine also applies to the relationship between bus owner/operator and bus
conductor, auto-calesa owner/operator and driver, taxi owners/operators and taxi
drivers.
There is no employer-employee relationship between a resident physician and

the training hospital (UERMMC Resident Doctors Union vs. Undersecretary of Labor, G.R. No.
125425-26, November 24, 1993).
Cases where employer-employee relationship exists (Control Test used):

a. Jeepney drivers on boundary system (NLM vs. Dinglasan, 98 Phil. 649)
b. Drivers or helpers of salesmen are employees of the Company
(Alhambra Industries vs. CIR, 355 SCRA 553, 1999)
c. Handicraft workers on “pakyaw” system (Dy Keh Beng vs. International
Labor, 90 SCRA 161, 1979)
d, Tailors, pressers and stitchers in COD tailoring department
(Rosario Bros. vs. Ople, 131 SCRA 72, 1984)
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Cases where there is no employer-employee relationship (but one of

independent contractor)
a. Insurance company vis-à-vis commission agents (Insular Life vs. NLRC,

179 SCRA 459, 1989)
b. Company vs. collecting agents on commission basis (Singer Sewing

Machine vs. Drilon, 193 SCRA 270, 1991).
c. Softdrinks company vs. independent contractors selling softdrinks

(Mafinco vs. Ople, 70 SCRA 139, 1976)
d. Shoe shine boys (Besa vs. Trajano, 146 SCRA 501, 1986)
DIFFERENCE BETWEEN AN EMPLOYEE AND INDEPENDENT CONTRACTOR
Of the four elements of the employer-employee relationship, the “control

test” is the most important. Compared to an employee, an independent
contractor is one who carries on a distinct and independent business
and undertakes to perform the job, work or service on its own
account and under its own responsibility according to its own manner
and method, free from the control and direction of the principal in all
matters connected with the performance of the work except as to the
results thereof. Hence, while an independent contractor enjoys independence
and freedom from the control and supervision of his principal , an
employee is subject to the employer’s power to control the means
and methods by which the employee’s work is to be performed
and accomplished.
ALEXANDER LOPEZ vs. MWSS

G.R. No. 154472, June 30, 2005
The control test merely calls for the existence of the right to control ,
and not the exercise thereof. It is not essential for the employer to actually
supervise the performance of duties of the employee , it is not enough that
the former has a right to wield the power . While petitioners were contract-
collectors and were even subject to disciplinary measures . Contrary to MWSS’
assertion that petitioners were free to adopt their own method/strategy in the
matter of collection, the Agreement clearly provided that the procedure and/or
manner of the collection of bills to be followed shall be in accordance
with the provisions of the Manual of Procedures.
ABIDING WITH EMPLOYER’S STANDARD
ALLAN BAZAR vs. CARLOS A. RUIZOL

G.R. No. 198782, October 19, 2016, 806 SCRA 496
FACTS: Respondent Carlos Ruizol was a mechanic at Norkis Distributors,

Inc. (NDI) and was assigned at the Surigao City Branch.
He filed a complaint for illegal dismissal against petitioner Allan

Bazar. He claimed that Bazar came from Tandag branch before he was
assigned as a new manager in the Surigao City branch and that he
was dismissed by Bazar because the latter wanted to appoint his protégé
as a mechanic.
Bazar countered that Ruizol is not an employee but a franchise

mechanic of NDI pursuant to a retainership agreement . He averred that
Ruizol, being the owner of a motor repair shop, performed repair warranty
service, back repair of Yamaha units, and ordinary repair of his own
shop and that NDI did not exercise control over respondent Ruizol
because he is free to use his own means and methods by which his
work is to be accomplished.
Respondent Ruizol asserted that he had to abide by the standard set

by NDI in conducting repair work on Yamaha motorbikes done in NDI’s
service shop.
ISSUE
Whether abiding by the employer’s standard justify the control test.
RULING
YES, it justifies the control test.
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The four-fold test used in determining the existence of employer-

employee relationship are: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d)
the employer’s power to control the employee with respect to the means
and methods by which the work is to be accomplished.
The control test is the most crucial and determinates indicator of

the presence or absence of an employer-employee relationship. Under the
control test, an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control not only
the end achieved, but also the manner and means to be used in
reaching the end.
Petitioner Bazar asserts that NDI did not exercise the power of
control test over respondent Ruizol because he is free to use his
own means and method by which his work is to be accomplished.
The records show the contrary. It was shown that respondent Ruizol
had to abide by the standards set by NDI in conducting repair work
on Yamaha motorbikes done in NDI’s service shop . As a matter of
fact, on allegations that respondent failed to live up to the demands of
the work, he was sent several memoranda by NDI.
PAKYAW WORKERS ARE REGULAR EMPLOYEES
A. NATE CASKET MAKER et. al. vs. ELIAS V. ARANGO et. al.
FACTS: Petitioners Spouses Nate are the owners/proprietors of A. Nate

Casket Maker. They employed respondents as carpenters , mascilladors and
painters in their casket making business from 1998 until their alleged
termination in March 2007.
Respondents claimed that they worked from Monday to Saturday, from

7:00 a.m. to 10:00 p.m. with no overtime pay and any monetary benefits.
Sometimes on March 15, 2007 , petitioners proposed a “Contract of

Employment” but the respondents were adamant and eventually refused to
sign said contract as it is unfavorable to them . Later, petitioners told
respondents to go home because their employment has been terminated.
Petitioners claimed that respondents are pakyaw workers who are paid
per job order. They are “stay-in” workers with free board and lodging.
ISSUE
Whether pakyaw workers are considered regular employees even when
their mode of compensation is on a per-piece basis.
RULING
YES, pakyaw workers are considered regular employees for as long as
their employers exercise power of control over them.
There is no dispute that the tasks performed by respondents as

carpenters, painters and mascilladors were necessary and desirable in the
usual business of the petitioners who are engaged in the manufacture and
selling of caskets.
The power of control by petitioners over respondents is clearly

present in this case. Respondents follow the steps in making a casket ,
as instructed by the petitioners , like carpentry, mascilla, rubbing and
painting. They had their own notebooks where they listed the work
completed with their signatures and the date completed. The same could
be checked by petitioners as basis for the compensation for the day.
It should be remembered that the control test merely calls for the
existence of the right to control, and not necessarily the exercise thereof.
It is not essential that the employers actually supervises the performance
of duties by the employees. It is enough that the former has a right
to wield the power.
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Hence, pakyaw workers are considered regular employees for as long

as their employers exercise control over them . Thus, while respondents’
mode of compensation was on a per-piece basis, the status and nature of
their employment was that of regular employees . As regular employees,
respondents were entitled to security of tenure and could be dismissed
only for just or authorized causes and after the observance of due
process.
3. KINDS OF EMPLOYMENT
Test in determining regular employment; reasonable connection rule
The primary standard of determining a regular employment is the reasonable

connection between the particular activity performed by the employee in relation
to the usual business or trade of the employer. The test is whether
the former is usually necessary or desirable in the usual business or
trade of the employer. The connection can be determined by considering
the nature of the work performed and its relation to the scheme of
the particular business or trade in its entirety. (De Leon vs. NLRC, 176 SCRA
615, 1989).
Repeated rehiring and the continuing need for the employee’s services
are sufficient evidence of the necessity and indispensability of his services
to the employer’s business or trade. (Baguio Country Club Corporation vs. NLRC,
206 SCRA 643, 1992)
PROBATIONARY EMPLOYMENT
Probationary period of employment; general rule and exception
Generally, the probationary period of employment is limited to six months .

The exception to this general rule is when the parties to an employment
contract may agree otherwise, such as when the same is established by
company policy or when the same is required by the nature of work to
be performed by the employee . In the latter case, there is recognition
of the exercise of managerial prerogatives in requiring a longer period of
probationary employment, especially where the employee must learn a
particular kind of work such as selling , or when the job requires
qualifications, skills, experience or training. (Busier vs. Leogardo, 131 SCRA 151, 1984).
In all cases involving employees on probationary status , the employer shall

make known to the employee at the time he is hired, the standards
by which he will qualify as a regular employee . (A. M. Oreta & Co. vs.
NLRC, 176 SCRA 218, 1989).
During the probationary period, the employee enjoys security of

tenure
Jurisprudence is rich in cases guaranteeing the security of tenure, limited

thought it may be, of probationary employees. Except for just cause as
provided by law or under the employment contract, a probationary
employee cannot be terminated. A probationary employee may be terminated
on two grounds: (a) for just cause; or (b) when he fails to qualify as
regular employee in accordance with reasonable standards made known by the
employer at the time of his engagement. (Biboso vs. Victorias Milling, 76 SCRA 250,
1977).
UNIVAC DEVELOPMENT, INC. vs. WILLIAM M. SORIANO

G.R. No. 182072, June 19, 2013, 699 SCRA 88
FACTS: Soriano was hired as legal assistant by Univac on probationary

basis. Eight (8) day prior to the completion of his six months
probationary period, the employer’s department head informed him that he
was being terminated from employment due to the company’s cost cutting
expenses.
On the other hand, Univac claimed that during the company’s

meeting, Soriano expressed his intention to leave the company because he
wanted to review for the bar examinations and also in that meeting , he
was informed of his unsatisfactory performance.
ISSUE: Whether the employer is guilty of illegal dismissal of a probationary

employee.
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HELD: YES. The power of the employer to terminate a probationary

employee is subject to three limitations , namely: (1) it must be
exercised in accordance with the specific requirements of the contract ; (2)
the dissatisfaction on the part of the employer must be real and in
good faith, not feigned so as to circumvent the contract or the law;
and (3) there must be no unlawful discrimination in the dismissal.
It is undisputed that Soriano was hired as a probationary employee .

As such, he did not enjoy a permanent status . Nevertheless, he is
accorded the constitutional protection of security of tenure which means
that he can only be dismissed from employment for a just cause or
when he fails to qualify as a regular employee in accordance with
reasonable standards made known to him by the employer at the time of
his engagement.
In this case, not only did the employer fail to show that Soriano
was apprised of the standards for regularization but it was likewise not
shown how these standards had been applied in his case.
JOCELYN HERRERA – MANAOIS vs. ST. SCHOLASTICA’S COLLEGE

G.R. No. 188914, December 11, 2013, 712 SCRA 418
FACTS: Manaois applied for a position as full-time instructor for school

year 2000-2001 at SSC. She mentioned in her application letter that she
had been taking masteral studies majoring in creative writing at UP
Diliman and she was completing her master’s thesis.
SSC approved her application on the basis that she finishes her
MA.
At the completion of her third year of probationary employment , SSC

terminated her services for failure to finish her master’s degree.
ISSUE: Whether the completion of a master’s degree is required in order

for a tertiary level educator to earn the status of permanency in a
private educational institution.
HELD: YES. The mere completion of the 3 year probationary period does
not guarantee that the employee will automatically acquire a permanent
status. Probationer can only qualify upon fulfillment of the reasonable
standards set for permanent employment as a member of the teaching
personnel.
Probationary employment refers to the trial stage or period during

which the employer examines the competency and qualification of job
applicants and determines whether they are qualified to be extended
permanent employment status. Such an arrangement allows an employer the
ability to scrutinize the fitness and competency of the probationary
employee while on the job.
Here, Manaois failed to comply with the stated academic requirements

for the position of a permanent full-time faculty member.
MARIA CARMELA P. UMALI vs. HOBBYWING SOLUTIONS, INC.

G.R. No. 221356, March 14, 2018, 859 SCRA 255
FACTS: Umali started working for the Hobbywing Solutions on June 19,
2012 as a Pitboss Supervisor. She never signed any employment contract
before the commencement of her service but regularly received her salary
every month.
On January 19, 2013, she was made to sign two contracts of

probationary employments, one covering the period from June 19, 2012 to
November 18, 2012, and the other purportedly extending the probationary
employment from November 19, 2012 to February 18, 2013.
On February 18, 2013, Umali was informed by Hobbywing that her

employment has already ended.
ISSUE
Whether Umali acquires regular employment after she worked beyond the
probational period.
RULING
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YES. Umali is a regular employee after she worked beyond the

probationary period of employment.
Petitioner Umali was able to establish her claim that she made note
of the actual date when she signed the two contracts , right beside her
signature. And indeed attached with the position paper submitted by
respondent Hobbywing itself, copies of the two contract of employment
signed by the petitioner clearly indicates the date “01.19.13” beside her
signature.
This substantiates the petitioner’s claim that the documents were signed
on the same day, that is, on January 19, 2013. Further, while the first
contract was undated, probationary contract extension was dated January 19,
2013, which was way beyond the end of the supposed period of
employment on November 18, 2012, therefore validating the petitioner’s claim
that she had already worked for more than six months when she was
asked to sign an employment contract and the purported extension.
The general rule remains that an employee who was suffered to work
for more than the legal period of six (6) months of probationary
employment, by operation of law, becomes a regular employee.
PROJECT EMPLOYMENT
Principal test for determining “project employees”
The principal test for determining whether particular employees are properly
characterized as “project employees” as distinguished from “regular employees”
is whether or not the “project employees” were assigned to carry out
a “specific project or undertaking,” the duration (and scope) of which were
specified at the time the employees were engaged for that project . (ALU-TUCP
vs. NLRC, 234 SCRA 678, 1994).
Project employees who worked for an aggregate period of at least

one year are deemed regular employees.
Although the work to be performed is only for a specific project or

seasonal, where a person thus engaged has been performing the job
for at least one year, “even if the performance is not continuous or
is merely intermittent, the law deems the repeated and continuing need
for its performance as being sufficient to indicate the necessity or
desirability of that activity to the business or trade of the employer.
The employment of such person is also then deemed to be regular with
respect to such activity and while such activity exists. (Magsalin vs. National
Organization Working Men, May 9, 2003).
Failure of the employer to report to the nearest employment office

the termination of workers everytime a project is completed proves that
the employees are not project employees (Fernandez vs. NLRC). Contrariwise, the
faithful and regular effort of the Company in reporting every completion
of its project and submitting the lay-off list of its employees proves the
nature of employment of the workers involved therein as project
employees.
D.M. CONSUNJI CORPORATION vs. ROGELIO P. BELLO

G.R. No. 159371, July 29, 2013, 702 SCRA 347
FACTS: Bello was employed by DMCI as a mason without any

interruption from February 1, 1990 until October 10, 1997 . He had been
a very diligent and devoted worker and his job as a mason had been
necessary and desirable in the usual business or trade of DMCI.
During his employment, he had been diagnosed to be suffering from

pulmonary tuberculosis, thereby necessitating his leave of absence.
Upon his recovery, he had reported back to work but DMCI had
refused to accept him and instead handed to him a termination paper.
ISSUE: Whether Bello is a regular employee and no longer a project

employee.
HELD: YES. Bello has already acquired the status of a regular

employee although he had started as a project employee of DMCI by
his having been employed as a mason who had performed tasks that
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had been usually necessary and desirable in the business or trade of

DMCI continuously from February 1, 1990 to October 5, 1997 . His repeated
re-hiring and the continuing need for his services over a long span of
time had undeniably made him a regular employee.
A project employee is one who is hired for specific project or

undertaking and the completion or termination of such project or
undertaking has been determined at the time of engagement of the
employee.
It is settled that the extension of the employment of a project

employee long after the supposed project has been completed removes
the employee from the scope of a project employee and makes him a
regular employee.
FAILURE TO INFORM DURATION OF EMPLOYMENT
ISIDRO QUEBRAL et. al. vs. ANGBUS CONSTRUCTION, INC.

G.R. No. 221897, November 7, 2016, 807 SCRA 176
FACTS: Petitioners Quebral et. al. are allegedly employed as construction

workers of respondent Angbus Construction, Inc. from 2008 to 2011 . They
alleged that they are regular employees since they were engaged to
perform tasks necessary and desirable to the usual business of Angbus
and that they rendered their services for several years already.
They were, however, summarily dismissed without just or authorized

cause and due process thus the filing of the complaint for illegal
dismissal.
Angbus maintains that Quebral et. al. were first employed by Angelfe
Management & Consultancy for a one-time project only. Two or three years
after the completion of the project, they were hired by Angbus.
However, no employment contracts with respect to Angelfe was produced

allegedly because these were destroyed by a flood.
The LA gave credence to the Establishment Employment Report

submitted to the DOLE which showed that the cause of petitioners’
termination was project completion.
ISSUE
Whether petitioners be considered regular employees based on the
evidence submitted.
RULING
YES. A project based employee is assigned to a project which

begins and ends at determined or determinable period of time.
In the case of Omni Hauling Services, Inc. vs. Bon, the Court ruled that
employers claiming that their workers are project based employees have
the burden to prove that (a) the employees were assigned to carry out
a specific project or undertaking and (b) the duration and scope of which
were specified at the time they were engaged for such project.
In this case, Angbus did not state the specified project or

undertaking to petitioners. As to the second requirement , not only was
Angbus unable to produce petitioners’ employment contract, it also failed to
present other evidence to show that it informed petitioners the duration
and scope of their work.
Although the absence of a written contract does not by itself grant

regular status to the employees, it is evidence that they were informed
of the duration and scope of their work and their status as project
employees at the start of their engagement. When no other evidence is
offered, the absence of employment contract raises a serious question of
whether employees were sufficiently apprised at the start of their
employment and their status as project employees.
Absent such proof, it is presumed that they are regular employees ,

thus can only be dismissed for just or authorized causes upon
compliance with procedural due process.
ROY D. PASOS vs. PNCC

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G.R. No. 192394, July 3, 2013, 700 SCRA 608
When the services of a project employee is extended without any

specification of as to the duration, he becomes a regular employee.
SUCCESSIVE REHIRING OF PROJECT EMPLOYEE

E. GANZON, INC. (EGI) vs. FORTUNATO B. ANDO, JR.
G.R. No. 214183, February 20, 2017, 818 SCRA 165
FACTS: Respondent Ando alleged that he was a regular employee working

as a finishing carpenter in the construction business of EGI . He was
repeatedly hired from January 21, 2010 until April 30, 2011 when he was
terminated without prior notice and hearing.
EGI countered that Ando was engaged as a project worker as

evidenced by three (3) project employment contracts. He was paid the
correct salary based on regional based wage order . He was adequately
notified of his employment status at the time of his services were
engaged by EGI.
ISSUE
Whether the repeated hiring of Ando confers him a regular employee
of EGI.
RULING
NO, the length of service through repeated and successive rehiring is

not the controlling determinant of the employment tenure of a project
employee. The rehiring of construction workers on a project – to - project basis
does not confer upon them regular employment status as it is only
dictated by the practical consideration that experienced workers are more
preferred.
Ando’s tenure as a project employee remained because there was

certainty of completion or termination of the projects. The project
employment contracts sufficiently apprised him that his security of tenure
with EGI would only last as long as the specific projects he was
assigned to were subsisting. When the projects were completed, he was
validly terminated from employment since his engagement was co-terminus
thereto.
The fact that Ando was required to render services necessary or

desirable in the operation of EGI’s business for more than a year does
not in any way impair the validity of his project employment contracts .
Ando was rehired precisely because of his previous experience working with
the other phase of the project . EGI took into account similarity of working
environment.
Finally, the second paragraph of Article 280 stating that an employee

who has rendered service for at least one (1) year shall be considered
a regular employee, is applicable only to a casual employee and not to
a project or a regular employee referred to in paragraph one thereof.
WILLIAM WENCESLAO et. al. vs. M D C

G.R. No. 230696, August 20, 2017, 838 SCRA 436
FACTS: Petitioners William Wenceslao et. al. were former construction workers
of MDC. They claimed that they were regular employees of MDC and
were illegally dismissed for refusing to apply and be transferred to another
contractor.
On the other hand, MDC submitted evidence to show that petitioners

had worked in several of its projects.
ISSUE
Whether petitioners repeated employment in MDC’s projects resulted to
regular employment.
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RULING
NO. Petitioners were not regular employees and were not illegally
dismissed.
Although petitioners had worked in several of its other projects before

being engaged in the West Tower @ One Serendra Project and the North
Triangle Building Project, their repeated re-employment does not make a
project employee a regular employee.
SEASONAL EMPLOYMENT
Seasonal workers who work for more than one season are deemed
to have acquired regular employment. (Hacienda Fatima vs. National Federation of
Sugarcane Workers, January 28, 2003).
Seasonal workers during the off-season are merely considered on leave .

(Hacienda Fatima, supra).
Effect of repeated re-hiring and length of service upon status of

seasonal employee
In this case, it may appear that the work in the company is seasonal ,
however, the records reveal that the employee was repeatedly re-hired , sufficiently
evidencing the necessity and indispensability of her services to the former’s
business or trade. Owing to her length of service , she became a regular
employee, by operation of law, one year after she was employed. Being a
regular employee, she enjoys security of tenure in the sense that she cannot
be dismissed from employment except for just and authorized cause. (Gaco vs.
NLRC, 230 SCRA 260, 1994).
JAIME N. GAPAYAO vs. ROSARIO FULO & SSS

G.R. No. 193493, June 13, 2013, 698 SCRA 485
FACTS: Jaime Fulo had been in the employ of Gapayao for 14

years, from 1983 to 1997 until his death while doing repairs at the
residence and business establishment of the latter . During that period, he
was made to work as a laborer in the agricultural landholdings , a
harvester in the abaca plantation and a repairman/utility worker in several
establishments owned by Gapayao.
On the other hand, Gapayao alleges that the deceased Fulo is a

freelance worker. Since he was engaged on a pakyaw basis and worked
for a short period of time, in the nature of a farm worker every
season, he was not precluded from working with other persons and in
fact worked for them. Citing Article 280 of the Labor Code , “seasonal
employees are not covered by the definition of regular and casual
employees.”
ISSUE: Whether the deceased Jaime Fulo be considered a regular

employee despite being a pakyaw worker.
HELD: YES. Pakyaw workers are considered employees for as long as

their employers exercise control over them . Here, Gapayao wielded control
over the deceased in the discharge of his functions . Being the owner
of the farm on which the deceased worked , Gapayao, on his own or
through his overseer, necessarily had the right to review the quality of
work produced by his laborers. It matters not whether the deceased
conducted his work inside Gapayao’s farm or not because the latter
retained the right of control him in his work.
Farm workers generally fall under the definition of seasonal employees .

Regular seasonal employees are those called to work from time to time .
The nature of their relationship with the employer is that during the off
season, they are temporarily laid off, but reemployed during the summer
season or when their services may be needed. They are in regular
employment because of the nature of their job and not because of the
length of time they have worked.
Indeed the deceased was a farm worker who was in the regular
employ of Gapayao. From year to year, starting January 1983 up until
his death, the deceased had been working on Gapayao’s land by
harvesting abaca and coconut, processing copra and cleaning weeds. His
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employment was continuous in the sense that it was done for more than
one harvesting season. Moreover, no amount of reasoning could detract
from the fact that these tasks were necessary or desirable in the
usual business of Gapayao.
CASUAL EMPLOYMENT
Seafarers are contractual employees for a fixed term, governed by the
contracts they sign; an exception to Art. 280 of Labor Code . It is
clear that seafarers are considered contractual employees . Their
employment is governed by the contracts they sign every time they are
rehired and their employment is terminated when the contract expires.
Their employment is contractually fixed for a certain period of time.
They fall under the exception of Article 280 whose employment has
been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of 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 .
(Millares vs. NLRC, 385 SCRA 306, 2002).
JOB CONTRACTING AND LABOR-ONLY CONTRACTING
Permissible job contracting or subcontracting

Permissible job contracting or subcontracting refers to an arrangement
whereby a principal agrees to put out or farm out with a contractor or
subcontractor the performance or completion of a specific job, work or
service within a definite or predetermined period regardless of whether such job,
work or service is be performed within or outside the premises of the
principal. (Vinoya vs. NLRC, 324 SCRA 469, 2000).
Effect of a finding that a contractor is a “labor-only” contractor

A finding that a contractor is a “labor-only” contractor is equivalent to
declaring that there is an employer-employee relationship between the principal
and the employees of the “labor-only” contractor. (Associated Anglo-American Tobacco
Corp. vs. Clave, 189 SCRA 127) . In such cases, the person or intermediary shall be
considered merely as an agent of the employer, who shall be responsible to
the workers in the manner and extent as if the latter were directly employed
by him. (Sandoval Shipyards vs. Pepito, 359 SCRA 555, 2001) .
Liability of principal in legitimate job contracting

vis-à-vis employees of job contractor
In legitimate job contracting, the law creates an employer-employee

relationship for a limited purpose, i.e., to ensure that the employees are paid
their wages. The principal employer becomes jointly and severally liable with the
job contractor only for the payment of the employees’ wages whenever the
contractor fails to pay the same. Other than that, the principal employer is not
responsible to any claim made by the employees. (San Miguel Corporation vs.
MAERC-Integrated Services, Inc.)
4. MANAGEMENT PREROGATIVE
Exercised in good faith
The free will of management to conduct its own affairs to achieve its
purpose cannot be denied. (San Miguel Brewery Sales Force Union vs. Ople, 170 SCRA 25, 1989).
Although the employer has the prerogative to discipline or dismiss its

employee, such prerogative cannot be exercised wantonly, but must be
controlled by substantive due process and tempered by the fundamental
policy of protection to labor enshrined in the Constitution.
As a general rule, the employer has the inherent right to transfer or

assign an employee (PT&T vs. Laplana, 199 SCRA 485, 1991) . The employer has the
inherent right to transfer or assign an employee in the pursuance of its
legitimate business interest subject only to the condition that it not

motivated by discrimination or bad faith.
Where transfer may constitute constructive dismissal
To say that the employees were not constructively dismissed inasmuch

as the transfer was effected without demotion in rank or diminution of
11
salary benefits is, in this case, inaccurate. It is well to remember

that constructive dismissal does not always involve forthright dismissal
or diminution in rank, compensation, benefits and privileges. For an act
of clear discrimination, insensibility, or disdain by an employer may
become so unbearable on the part of the employee that it could
foreclose any choice by him except to forego his continued employment .
(Zafra vs. Court of Appeals, 389 SCRA 200, 2002)
Employment contracts providing for disclosure of marriages

An employment contract providing for a disclosure to management of
any existing or future relationship with competitor company is valid
exercise of management prerogatives . A company’s policy prohibiting an
employee from having relationship with an employee of a competitor
company is a valid exercise of management prerogative . The company
has a right to guard its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information from competitors .
(Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome Philippines, Inc. G. R. 162994, September
17, 2004).
ALILEM CREDIT COOPERATIVE, INC. vs. SALVADOR BANDIOLA, JR.

G.R. No. 173489, February 25, 2013, 691 SCRA 533
FACTS: Bandiola carried an illicit relationship with a married woman , not

his fellow worker in the office . He was dismissed based on one of
the grounds under Personnel Policy.
ISSUE: Whether Bandiola is validly dismissed.
HELD: YES. An employer is free to regulate all aspects of employment

it may make reasonable rules and regulations for the government of its
employees which become part of the contract of employment provided they
are made known to the employees.
6. SEPARATION PAY
Q: Will an employee who voluntarily resigns be granted separation pay?
A: An employee who voluntarily resigns may not be granted separation pay

as a general rule, however, there is an exception , that is, when it is
stipulated in the employment contract or CBA or such payment is
authorized by the employer’s practice or policy, as in this case (Hanford
Philippines, Inc. and Victor Te vs. Shirley Joseph, G.R. No. 158251, March 31, 2005).
Q: What are the instances when award of separation pay is proper?
A: Under the Code, separation pay may be awarded only in cases when
the termination of employment is due to:
a) installation of labor saving devices;
b) redundancy;
c) retrenchment;
d) closing or cessation of business operations;
e) disease of an employee and his continued employment is
prejudicial to himself or his co-employees; and
f) when an employee is illegally dismissed but reinstatement is
no longer feasible.
Q: When may an employer refuse to provide separation pay?
A: Separation pay shall be allowed as a measure of social justice only

in those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is an offense involving moral
turpitude, the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is called ,
on the ground of social justice . (Alan D. Gustilo vs. Wyeth Philippines, Inc., G.R.
No. 149629, October 4, 2004)
UNILEVER PHILIPPINES, INC. vs. MARIA RUBY M. RIVERA

G.R. No. 201701, June 3, 2013, 697 SCRA 136
FACTS: Rivera was dismissed from work because she intentionally

circumvented a strict company policy , manipulated another entity to carry
out her instructions without company’s knowledge and approval and
directed the diversion of funds, which she even admitted doing under the
12
guise of shortening laborious process of securing funds for promotional

activities from the head office. These transgressions were serious offenses
that warranted her dismissal from employment and proved that her
termination from work was for a just cause.
ISSUE: Whether she is entitled for separation pay.
HELD: YES. She was granted separation pay as an act of “social

justice” or on “equitable” grounds taking into considerations two (2) criteria
that it is required that a dismissal for a just cause (1) was not for
serious misconduct and (2) did not reflect on the moral character of the
employee.
7. RIGHT TO SELF - ORGANIZATION
Existence of employer-employee relationship is necessary

Existence of employer-employee relationship is essential for the determination
of whether or not one may exercise right of self-organization for purposes of
collective bargaining. It is a condition sine qua non for a bargaining unit that
it be composed of employees , failing which affects the legality of the union
itself and means the ineligibility of union membership to present a petition for
certification election, as well as to vote therein . (La Suerte Cigar & Cigarette Factory vs.
Director of BLR, 123 SCRA 769, 1983).
Who may unionize for purposes of collective bargaining negotiations?
General Rule: Any employee may be eligible to join and be a member of

a labor union, beginning on his first day of service , whether employed for a
definite period or not. (UST Faculty Union vs. Betonio, 318 SCRA 185, 1999).
Test to determine the constituency of a bargaining unit

The “community or mutuality of interests” test has provided the standard
in determining the proper constituency of a collective bargaining unit.
However, where the employer operates two enterprises engaged in two

different kinds of business (e.g., garment factory and cinema), the employees may
be separated into two (2) distinct bargaining units for purposes of certification
election. This is so because the employees in the two businesses do not
share community of interest as the work they perform are different from each
other. (Cruzvale vs. Laguesma, 238 SCRA 389, 1994).
8. CERTIFICATION ELECTION
Nature of Certification Election

A certification election is not a litigation but merely an investigation of a
non-adversarial fact-finding character in which the BLR plays the part of a
disinterested investigator seeking merely to ascertain the desires of the employees
as to the matter of their representation . (Airline Pilots Association vs. CIR, 76 SCRA
274, 1977).
Role of employer in certification election

General Rule: The employer is not a party in a certification election, which
activity is the sole concern of the workers.
Exception: Where the employer has to file a petition for certification

election pursuant to Art. 258 of the Labor Code because it was requested to
bargain collectively. Even then, it becomes a neutral bystander . (Asian Design and
Mfg. Corp. vs. Calleja, 174 SCRA 477, 1989).
Petition to cancel/revoke registration is not a prejudicial question

to petition for Certification Election
An order to hold a certification election is proper despite the pendency of

the petition for cancellation of the registration certificate of the union . The
rationale for this is that at the time the union filed its petition , it still had
the legal personality to perform such act absent an order directing the
cancellation. (Pepsi-Cola Products Phil. vs. Secretary of Labor, 312 SCRA 104, 1995).
Jurisdiction in determining employer-employee relationship in

certification election cases
13
The Med-Arbiter or the Secretary of Labor has the authority to determine

the existence of an employer-employee relationship between the parties in a
petition for certification election. (M.Y. San Biscuits, Inc. vs. Laguesma, 198 SCRA 256, 1991).
However, the decision of the Med-Arbiter or the Secretary of Labor in this

regard will not constitute res judicata in an illegal dismissal case ., i.e., the
principle of bar by prior judgment will not apply. (Manila Golf and Country Club, Inc. vs.
IAC, 237 SCRA 207, 1994).
Disaffiliation of the local union from the mother union
Generally, a labor union may disaffiliate from the mother union to form a
local union or independent union only during the 60-day freedom period
immediately preceding the expiration of the CBA. Even before the onset of the
freedom period (and despite the closed-shop provision in the CBA between the
mother union and management) disaffiliation may still be carried out, but such
disaffiliation must be affected by a majority of the members in the bargaining
unit. This happens when there is a substantial shift in allegiance on the part
of the majority of the member of the union . (Associated Labor Union-PTGWO vs.
NLRC, 188 SCRA 123, 1990).
Date of acquisition of legal personality of a union

The issuance of the certificate of registration by the Bureau or Regional
Office is not the operative act that vests legal personality upon a local/chapter
under Department Order No. 9. Such legal personality is acquired from the
filing of the complete documentary requirements enumerated in Section 1, Rule
VI. It could be discerned that the intention of the Labor Code and its
Implementing Rules that only those labor organizations that have acquired legal
personality are capacitated to file petitions for certification elections. Such is the
general rule. (SMC – Mandaue Packaging Products Plants vs. Mandaue Packing Plants- San Packaging
Products – SMC Monthlies Rank and file Union-FFF, G.R. No. 152356, August 16, 2005).
HERITAGE HOTEL MANILA vs. SECRETARY OF LABOR

G.R. No. 172132, July 23, 2014, 730 SCRA 400
FACTS: On October 11, 1995, National Union of Workers (NUWHRAIN) filed a

petition for certification election seeking to represent all the supervisory
employees of Heritage Hotel Manila.
On February 14, 1996, Heritage Hotel Manila filed an opposition on

the conduct of the certification election on the ground that the
membership of NUWHRAIN consisted of managerial , confidential and rank-in-
file employees.
On May 12, 2000, Heritage Hotel filed a petition for the cancellation of
NUWHRAIN’s registration as a labor union for failure to submit its annual
financial reports and an updated list of members as required by articles
238 and 239 of the Labor Code.
The opposition by the Heritage Hotel was denied by the Labor Med-arbiter
and finally DOLE directed the certification elections on June 23, 2000.
The certification election proceeded as scheduled and NUWHRAIN

obtained the majority votes of the bargaining unit.
ISSUES
(1) Whether the employer has the legal right to oppose the
certification election on the ground that the membership of
the union consisted of managerial, confidential and rank-and-file
employees.
(2) Whether the filing of the petition for the cancellation

of union’s registration bar the conduct of the certification
election.
RULINGS
(1) NO. Basic is the realm of labor union rights is that the certification
election is the sole concern of the workers, and the employer is deemed
an intruder as far as certification election is concern.
Thus, Heritage Hotel Manila lacked the legal personality to assail the
proceeding for the certification election, and should stand aside as a mere
bystander who could not oppose the petition , or even appeal the
Med-Arbiter’s order to the conduct of the certification election.
14
Except when it is requested to bargain collectively , an employer is

a mere bystander to any petition to any petition for certification
election, such proceeding is non-adversarial and merely investigative , for the
purpose thereof is to determine which organization will represent the
employees in their collective bargaining with the employer.
The choice of their representative is the exclusive concern of the

employees; the employer cannot have any partisan interest therein ; it cannot
interfere with, much less oppose, the process by filing a motion to
dismiss or an appeal from it , not even a mere allegation that some
employees participating in a petition for certification election are actually
managerial employees will lend an employer legal personality to block the
certification election.
The employer’s only right in the proceeding is to be notified or

informed thereof.
The employer’s meddling in the conduct of the certification election

among its employees unduly gave rise to the suspicion that it intended
to establish a company union.
(2) NO. Under the long established rule, the filing of the petition for the
cancellation of NUWHRAIN’s registration should not bar the conduct of the
certification election.
In that respect, only a final order for the cancellation of the registration
would have prevented NUWHRAIN from continuing to enjoy all the rights
conferred on it as a legitimate labor union , including the right to the
petition for the certification election.
The employer’s petition for cancellation of union registration can be

accused of interfering union activities.
Article XIII, Section 3 of the Constitution enumerates the fundamental

rights of the employees such as (1) the right of all workers to self-
organization, (2) collective bargaining and negotiations and (3) peaceful concerted
activities.
Thus, the cancellation of a certificate or registration is the equivalent of

snuffing out the life of a labor organization . For without such
registration, it loses as a rule - its right under the Labor Code.
Under RA 9481, it amended and inserted in the Labor Code Article

242-A on reportorial requirements shall not be a ground for cancellation
of union registration but shall subject the erring officers or members to
suspension, expulsion from membership or any appropriate penalty.
9. COLLECTIVE BARGAINING
The CBA is the law between the contracting parties and compliance
therewith is mandated by the express policy of the law . (Marcopper Mining
Corp. vs. NLRC, 255 SCRA 322).
Collective Bargaining Agreements are unenforceable against persons not

parties thereto. (Razon vs. Secretary of Labor, 222 SCRA 1, 1993).
The union representative need not be an employee of the company .

However, the union officer must be an employee in the bargaining unit of the
company. (Sec. 4(f), Rule III of the implementing rules of PD 1391).
The fundamental factors in determining the appropriate collective bargaining

unit are:
(1) will of the employees (Globe Doctrine)
(2) affinity and unity of the employees’ interest, such as substantial
similarity of work and duties, or similarity of compensation and
working conditions (Substantial Interests Rule)
(3) prior collective bargaining history;

(4) similarity of employment status.
(San Miguel Corporation vs. Laguesma, 236 SCRA 595, 1994)
The grievance handling and grievance procedure stipulated and provided for
in the collective bargaining agreement are binding upon both the contracting
parties. (Elizalde Rope Factory, Inc. vs. CIR, 8 SCRA 67, 1963)
15
GOOD FAITH BARGAINING AND CBA DEADLOCK

MAY CO-EXIST
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION vs.

PILIPINAS SHELL PETROLEUM CORPORATION
G.R. No. 170007, April 7, 2014, 720 SCRA 631
FACTS: The company and the union started negotiation for a new
CBA. After several negotiation, the company proposed the declaration of a
deadlock and recommended that the help of a third party be sought.
On that same day, the union filed a Notice of Strike in the

NCMB alleging bad faith bargaining on the part of the company . The
NCMB immediately summoned the parties for the mandatory conciliation
mediation proceedings but the parties failed to reach an amicable
settlement.
During the cooling off period, the union conducted the necessary
strike vote. The members of the union , who participated in the voting ,
unanimously voted for the holding of a strike.
Upon being aware of this development , the company filed a petition

for Assumption of Jurisdiction with the Secretary of Labor and
Employment.
ISSUE: Whether there is an absence of good faith on the part of

the company.
HELD: NO. While the purpose of collective bargaining is the reaching

of an agreement between the employer and the employees’ union
resulting in a binding contract between the parties , the failure to reach
an agreement after negotiation continued for a reasonable period does not
mean lack of good faith.
The laws invite and contemplate a collective bargaining contract but

do not compel one. For after all, a CBA, like any contract is a
product of mutual consent and not of compulsion . As such, the duty
to bargain does not include the obligation to reach an agreement.
As there was no bad faith on the part of Shell in its

bargaining with the union, deadlock was possible and did occur.
Each party found the other’s offer unacceptable and neither party
was willing to yield.
The company suggested seeking the assistance of a third party to

settle the issue but the union preferred the remedy of filing a notice
of strike. Each party was adamant in its position.
Because of the unresolved issue on wage increase , there was actually

a complete stoppage of the ongoing negotiation between the parties.
The absence of the parties’ mutual declaration of deadlock does not

mean that there was no deadlock. At most, it would have been simply
a recognition of the prevailing status quo between the parties.
What was lacking was the formal recognition or the existence of

such a deadlock because the union refused a declaration of deadlock.
As the term “assume jurisdiction” connotes, the intent of the law

is to give the Labor Secretary full authority to resolve all matters within
the dispute that give rise to or which arose out of the strike or
lockout.
It includes and extends to all questions and controversies arising from or

related to the dispute including cases over which the labor arbiter has
exclusive jurisdiction.
The employer, by its refusal to bargain, is guilty of violating the

duty to bargain collectively in good faith . Hence, the Union’s draft
CBA proposal may unilaterally be imposed upon the employer as
the collective agreement to govern their relationship . (Divine Word vs. Secretary of
Labor, 213 SCRA 759, 1992).
16
Although a CBA has expired, it continues to have legal effects

as between the parties until a new CBA has been entered into. (Pier
8 Arrastre & Stevedoring, Inc. vs. Roldan-Confesor, 241 SCRA 294, 1995).
10. UNFAIR LABOR PRACTICE
Test to determine whether or not employer is guilty of ULP
The test of whether an employer has interfered with and coerced

employees within the meaning of Art. 248 (a) of the Labor Code is
whether the employer has engaged in conduct which it may reasonably be
said tends to interfere with the free exercise of employee’s right to
self-organization and it is not necessary that there be direct evidence
that any employee was in fact intimidated or coerced by statement
of threats of the employer if there is a reasonable interference that
anti-union conduct of the employer does not have and adverse effect
of self-organization and collective bargaining. (Insular Life Assurance Co. Ltd. Employees
Association-NATU vs. Insurance Life Insurance Co., 37 SCRA 244, 1971).
ULP of Labor Organization

Unions are not entitled to arbitrarily exclude qualified applicants for
membership, and a closed-shop provision would not justify the employer
in discharging, or a union in insisting upon a discharge of an
employee whom the union thus refuses to admit to membership,
without any reasonable ground therefore . Needless to say, if said
unions may be compelled to admit new members , who have requisites
qualifications, with more reason may the law and the courts exercise
coercive power when the employee involved is a long standing union
member, who, owing to provocations of union officers, was impelled to tender
his resignation, which he forthwith withdrew or revoked. (Salunga vs. CIR, 21
SCRA 216, 1967)
Union Security Clause

Union Security clauses are also governed by law and by principles of
justice, fair play, and legality. Union security clauses cannot be used by union
officials against an employer, much less their own members, except with a
high sense of responsibility, fairness, prudence, and judiciousness. A union
member may not be expelled from her union , and consequently from her job,
for personal or impetuous reasons or for causes foreign to the closed-shop
agreement and in a manner characterized by arbitrariness and whimsically . (Manila
Mandarin Employees Union vs. NLRC, 154 SCRA 368, 1987).
11. STRIKES AND LOCKOUTS
Good faith no longer a defense

if no procedural compliance for valid strike
A union’s claim of good faith is
not a valid excuse to dispense with the
procedural steps for a lawful strike.
The Supreme Court’s previous rulings in
People’s Industrial & Commercial Employees & Workers Organization vs. PICC did not rule that
procedural requirements can be dispensed with, even if the Union believed in
good faith that ULP was being committed . The good faith defense invoked in
the Philippine Metal Foundries vs. CIR case had been decided in 1979, but with the
enactment of RA 6715, compliance with the procedural requirements for the
validity of a strike is now mandatory . (Grand Boulevard Hotel vs. Genuine Labor
Organizations in Hotel Restaurant & Allied Industries, G.R. No. 153654, July 18, 2003).
Lawful means in conducting strike
A strike though valid may be declared invalid where the means employed
are illegal. (Association of Independent Unions in the Philippines vs. NLRC, 305 SCRA 219, 1999).
Seven-day strike ban

The seven-day strike ban starts from the day after the results of the
strike vote is submitted to the Department of Labor . In computing the period
for the seven-day strike ban, the first day shall be excluded and the last day
included. A deficiency of one-day from the mandatory seven-day strike ban is a
fatal defect which renders the strike illegal -- strict adherence to the mandate
of the law is required as substantial compliance with a mandatory provision
will not suffice. (CCBPI Postmix Workers Union vs. NLRC, 299 SCRA 410, 1998).
17
Compensation of striking workers
The union members who were merely instigated to participate in

the illegal strike should be treated differently from their leaders . Part
of the benign consideration for labor is the policy of reinstating
rank-and-file workers who were merely misled in supporting illegal
strikes. Nonetheless, these reinstated workers shall not be entitled to
backwages as they should not be compensated for services skipped
during the illegal strike. (Lapanday Workers Union vs. NLRC, 248 SCRA 97, 1995).
Requisites for a valid lockout
All the requisites for a valid strike likewise apply for a lockout to
be valid. Thus, it must be for a lawful purpose, undertaken through
lawful means, and in compliance with the procedural requirements of law such
as: notice of lockout, cooling-off period, taking and filing of lockout vote , and
seven-day lock-out ban. (Association of Independent Unions in the Philippines vs. NLRC, 305 SCRA
219, 1999).
12. ASSUMPTION OF JURISDICTION BY THE SECRETARY OF LABOR

The Secretary of Labor is not precluded from assuming jurisdiction
over a labor dispute in a vital industry even if there is no notice of
strike or a formal complaint. He need not wait for a notice of
strike or a formal complaint about a strike already in progress
before he could exercise the powers given him by law to avoid
the strikes, picketing or lockouts contemplated in the grant of power.
(Saulog Transit vs. Lazaro, 128 SCRA 591, 1984) .
While termination by reason of an illegal strike requires hearing ,

replacement by reason of violation of a return-to-work order does not
need one. (Free Telephone Workers Union vs. PLDT, 113 SCRA 663, 1982).
The authority of the Secretary of Labor to assume jurisdiction in

accordance with Art. 263 (g) of the Labor Code necessarily includes
and extends to all questions and controversies arising from the labor
dispute, including cases over which the labor arbiter has exclusive jurisdiction.
(International Pharmaceuticals, Inc. vs. Secretary of Labor, 205 SCRA 59, 1992).
13. TERMINATION OF EMPLOYMENT
As an Exercise of Management Prerogative

The discipline of employees is a management prerogative . If this
prerogative is exercised in good faith for the advancement of employer’s
interest and need not for the purpose of defeating the rights of the
employees by law or contract, the court will uphold it . (SMB Sales Force
Union vs. Ople, 170 SCRA 25, 1989).
Illegality in the Manner of Dismissal

(Dismissal without Due Process)
The Supreme Court has apparently abandoned the Serrano ruling and
reverted to the Wenphil ruling . In so far as it ruled that in cases
where there was substantial evidence proving just cause BUT that due
process was not followed , the termination will be upheld but the
employer will be penalized the amount of P30,000.00. The Supreme Court
stated that “it would not be right to order either reinstatement of the
dismissed employee or payment of backwages to the employee. But for
failing to comply with the procedure prescribed by law in terminating the
services of an employee, the employer should be made liable for payment of
separation pay. (Agabon vs. NLRC, G.R. No. 158693, November 17, 2004).
If the dismissal is based on a just cause under Article 282 but the
employer failed to comply with the notice requirement , the sanction to be
imposed upon him should be tempered because the dismissal process was , in
effect, initiated by an act imputable to the employee; and
If the dismissal is based on an authorized cause under Article 283 but

the employer failed to comply with the notice requirement , the sanction
should be stiffer because the dismissal process was initiated by the
employer’s exercise of his management prerogative . (Jaka Food Processing Corporation vs.
Darwin Pacot, G.R. No. 151378, March 28, 2005) .
18
Constructive Dismissal
After 30-day period of preventive suspension , the employee must be

reinstated to his former position because suspension beyond this maximum
period amounts to constructive dismissal. (Hyatt Taxi Services vs. Catinoy, 359 SCRA
686, 2001).
Temporary Lay-off
There is no specific provision of law which treats of a temporary
retrenchment or lay-off and provides for the requisites in effecting it or a
period or duration therefore. These employees cannot however be forever
“temporary” laid-off. To remedy this situation, Article 286 may be applied but
only by analogy to set a specific period that employees may remain
temporarily laid-off or in a floating status for only a period of six months .
After six months, the employees should either be recalled to work or
permanently retrenched in accordance with the requirements of law . Failing to
comply with this would be tantamount to dismissing the employees without
cause, and holding employer liable for such illegal dismissal . (Sebuguero vs. NLRC,
245 SCRA 532, 1995)
Suspension of operations
Article 286 of the Labor Code is clear -- there is termination of

employment when an otherwise bona fide suspension of work exceeds 6
months. The cessation of employment for more than six months was patent
and the employer has the burden of proving that the termination was for a
just or authorized cause. (Mayon Hotel & Restaurant vs. Rolando Adana, G.R. No. 157634, May
16, 2005).
14. JURISDICTION
Money Claim
The “money claims of workers” referred to in par. 3 of Article 217
embraces money-claims which arises out of or in connection with the
employer-employee relationship, or some aspect or incident of such
relationship. (San Miguel Corp. vs. NLRC, 161 SCRA 719, 1988)
Factors in determining jurisdiction
It is the character of the principal relief sought that appears essential

in this connection. 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 NLRC . (San Miguel Corp. vs. NLRC, 161 SCRA 719,
1988).
The general rule is that an employer-employee relationship must exist

between the party litigants for the labor courts to exercise jurisdiction over a
particular case. The exception to the rule is found in Article 212 (i) of the
Labor Code where a labor dispute can nevertheless exist regardless of whether
the disputants stand in the proximate relationship of employer and employee
provided the controversy concerns, among others, the terms and conditions of
employment or a change or arrangement thereof. The existence of a labor
dispute is not negatived by the fact that the plaintiffs and defendants do not
stand in the proximate relation of employer and employee. (San Miguel Corporation
Employees Union-PTGWO vs. Bersamira, 186 SCRA 496)
Jurisdiction of Labor Arbiters

Complaints for illegal dismissal filed by the employees who were
terminated pursuant to the CBA’s union security clause falls within the
jurisdiction of the Labor Arbiter and not the Grievance Machinery . (Sanyo Phil.
Workers Union-PSSLU vs. Cañizares, 211 SCRA 361, 1994) .
Jurisdiction of Regional Director
The Regional Director exercises both visitorial and enforcement power over
labor standard cases, and is therefore empowered to adjudicate uncontested
money claims of persons still employed . (Maternity Children’s Hospital vs. Secretary of
Labor, 174 SCRA 632, 1989).
15. REMEDIES
Appeal
19
The requirement to perfect the appeal from the Labor Arbiter to the
NLRC within 10 calendar days (Art. 223) is mandatory and jurisdictional .
Failure to do so renders the questioned decision final and executory , and is
deprive the appellate court or body of the legal authority to alter the final
judgment, much less to entertain, the appeal. (Sublay vs. NLRC, 324 SCRA 188, 2000).
An appeal is perfected to the NLRC once an appellant files the

memorandum of appeal, pays the required appeal fee and, where an employer
appeals and a monetary award is involved , the latter posts an appeal bond
or submits a surety bond issued by a reputable bonding company. (Soliman
Security Services, Inc. vs. Court of Appeals, 384 SCRA 514, 2000)
Where the decision of the Labor Arbiter involves a monetary award , the
appeal is deemed perfected only upon the posting of a cash or surety bond
but also within ten (10) days from receipt to such decision in an amount
equivalent to the monetary award . (Mary Abigalis Food Services vs. Court of Appeals, G.
R. No. 140294, May 9, 2005)
Motion for Reconsideration

Before a petition for certiorari under Rule 65 of the Rules of Court may
be availed of, the filing of a motion for reconsideration is a condition sine
qua non to afford an opportunity for the correction of the error or mistake
complained of (ABS-CBN Supervisors Employees Union Members vs. ABS CBN Broadcasting Corp.,
304 SCRA 199). However, as an exception, the failure of an appellant to file a
motion for reconsideration may be excused where the error sought to be
reviewed is a patent nullity. (Zurbano vs. NLRC, 228 SCRA 556, 1993)
A second motion for reconsideration is a prohibited pleading which should

not be entertained at all. (Jardin vs. NLRC, 326 SCRA 299, 2000)
Petition for Certiorari under Rule 65

The period or manner of appeal from the NLRC to the Court of Appeals
is governed by Rule 65 pursuant to the ruling in the case of St. Martin Funeral
Homes vs. NLRC, 295 SCRA 494, 1998 . It states that the petition may be filed not
later than 60 days from notice of the judgment , or resolution sought to be
assailed.
The fact that the assailed decision becomes final and executory after a
ten-day period does not preclude the adverse party from challenging it by way
of an original action for certiorari under Rule 65 of the Rules of Court. He
may even further pray for the issuance of a restraining order or a temporary
injunction to prevent the immediate execution of the assailed decision. (Caramol vs.
NLRC, 225 SCRA 582, 1993).
Petition for Review under Rule 45

From the Court of Appeals, the aggrieved party may appeal to the
Supreme Court thru a verified petition for review on certiorari under Rule 45
of the Rules of Court. Questions of facts cannot be raised in a petition for
review on certiorari. (Abalos vs. Philex Mining Corp., November 27, 2002).
Review of decision of Secretary of Labor

In conformity with the case of St. Martin Funeral Homes vs. NLRC, the remedy
of an aggrieved party is to timely file a motion for reconsideration with the
Office of the Secretary of Labor as a precondition for any further or
subsequent remedy, and then seasonably file a special civil action for certiorari
to the Court of Appeals under Rule 65 of the Rules of Court.
Finality of BLR decision in petitions for cancellation of union registration
If the petition for cancellation is directly filed with BLR , its decision
canceling union registration is not yet final and executory as it may still be
appealed to the Office of the Secretary . However, if the petition for cancellation
was filed with the Regional Office , the decision of the BLR resolving an
appeal of the said Regional Office is final and executory . (Abbot Laboratories
Philippines, Inc. vs. Abbot Laboratories Employees Union, 323 SCRA 392, 2000).
Review of decision of Voluntary Arbitrators
Sections 1, 3 and 4 of the Rule 43 of the 1997 Rules of

Civil Procedure provides the rule on appeals. In consonance with Rule 43,
the petitioner, upon receipt of a copy of the Voluntary Arbitrator’s Decision,
20
should have filed with the CA , within the 15-day reglementary period , a petition
for review, not a petition for certiorari, which is not a substitute for a lapsed
appeal. Without an appeal (petition for review) seasonably filed, the questioned
Decision of the Voluntary Arbitrator became final and executory after ten
calendar days from notice. Moreover, Article 262-A of the Labor Code provides
that the award or decision of the Voluntary Arbitrator or panel of Voluntary
Arbitrator shall be final and executory after ten calendar days from receipt of
the copy of the award or decision by the parties. Indeed, once a decision or
resolution becomes final and executory, it is the ministerial duty of the court
or tribunal to order its execution. Such order is not appealable. (Manila Midtown
Hotel vs. Voluntary Arbitrators Borromeo, G. R. No. 138305, September 22, 2004).
16. EXECUTION OF JUDGMENTS

The general rule is that when a decision becomes final and
executory, it is the ministerial of the court to issue a writ of execution to
enforce the judgment. (Torres vs. NLRC, 330 SCRA 311, 2000) . As an exception to the
rule, a writ of execution may be refused on equitable grounds as when there
was a change in the situation of the parties that would make execution
inequitable or when certain circumstances, which transpired after judgment became
final, rendered execution of judgment unjust. (Baclayan vs. Court of Appeals, 181 SCRA 761,
1990).
Under Rule 39, Section 6 of the 1997 Rules of Civil Procedure , a final
and executory judgment may be executed on motion within 5 years from the
date of its entry. After the lapse of such time, and before it is barred by
the statute of limitations, a judgment may be enforced by action. This rule
applies to labor cases as the Rules of Court are applicable to labor cases in
a suppletory capacity. (Tag Fibers vs. NLRC, 344 SCRA 29, 2000).
17. DOCTRINES
Q: Explain the principle of “A Fair day’s wage for a fair day’s labor”?
A: The age-old rule governing the relation between labor and capital , or
management and employee of a “fair day’s wage for a fair day’s labor”
remains as the basic factor in determining employees’ wages . If there is no
work performed by the employee, there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work, but was illegally
locked out, suspended or dismissed, or otherwise illegally prevented from
working (Caltex Refinery Employees Association (CREA) vs. Brillantes, 279 SCRA 218) , a
situation which we find is not present in the instant case. It would neither
be fair nor just to allow private respondents to discover something they have
not earned and could not have earned because they did not render services at
the Kalibo office during the stated period . ( Aklan Electric Cooperative vs. NLRC, G.R. No.
121439, January 25, 2000.)
Q: What is the “Equal pay for equal work” principle?”
A: Persons who work with substantially equal qualifications , skills, effort and
responsibility, under similar conditions should be paid similar salaries . (International
School Alliance of Educators vs. Quisumbing, 333 SCRA 13, 2000).
Q: What is a “Red Circle Rate?”
A: Red Circle Rate allowance is an amount, not included in the basic salary,
that is granted by the company to an employee who is promoted to a higher
position grade but whose equal actual basic salary at the time of the
promotion already exceeds the maximum salary for the position to which he or
she is promoted. It applies to specific individuals whose salary levels are
unique with respect to their new and higher positions . (Meralco vs. Secretary
of Labor).
Q: Are non-Muslim entitled to Muslim Holiday pay?
A: Yes. While Article 3 (3) of the Code of Muslim Laws provides that the
provisions of the Code shall be applicable only to Muslims, there should no
distinction between Muslims and non-Muslims as regard the payment of benefits
of Muslim Holidays. Otherwise, Muslims throughout the Philippines are also not
entitled to holiday pays on Christian Holidays as declared by law as regular
holidays. (San Miguel Corp. vs. Court of Appeals, 30 January 2002).
Q: What is “surface bargaining” or “blue sky bargaining?”

21
A: Surface Bargaining as defined as “going through the motions of

negotiating” without any legal intent to reach an agreement. (Standard Chartered Bank
Employees Union vs. Confesor, G.R. No. 114974, June 16, 2004).
Q: What is a yellow dog contract?
A: It is a promise exacted from workers as a condition of employment

that they are not to belong to or attempt to foster a union during
their period of employment.
Q: What is a substitutionary doctrine?
A: This doctrine holds that since the CBA is binding on the parties for
the period therein specified, the employees cannot validly revoke the same
by the simple expedient of changing their bargaining representative. If the
employees do change their representative , the CBA nonetheless continues to
bind the parties, though the new agent may bargain for the shortening
of the contract period.
Q: What is the Doctrine of INNOCENT BY-STANDER?
A: The right to picket is not absolute. The courts can confine the
sphere of communication or demonstration to the disputants and insulate
establishments or persons with no industrial connection or interest to the
dispute.
Q: What is the Successor-in-interest Doctrine?
A: The rule is that employment contracts and collective bargaining

agreements are not enforceable against a transferee of an enterprise , labor
contracts being in personal, thus binding only between the parties.
Exceptions:
(1) When expressly assumed by the transferor;
(b) When transfer was done with intent to circumvent the law;
(c) When transfer was clothed with bad faith.
Q: What is the Doctrine of MEANS and PURPOSES?
A: A strike is legal when lawful means concur with lawful purpose or

a strike may be legal at the start but it may be declared illegal
when the means used in attaining the same are illegal.
Q: What is “featherbedding”?
A: Featherbedding refers to the practice of the union or its agents in

causing or attempting to cause an employer to pay or deliver or agree
to pay or deliver money or other things of value, in the nature of an
action, for services which are not performed or not to be performed. The
essence of featherbedding is the exaction of money , or other things of
value from the employer by the union . It is not featherbedding where
work is performed no matter how unnecessary or useless it may be.
SOCIAL SECURITY ACT OF 1997 (R.A. 8282)

YOLANDA SIGNEY vs. SOCIAL SECURITY SYSTEM
G.R. No. 173582, January 28, 2008, 542 SCRA 629
FACTS: Rodolfo Signey died on May 21, 2001, in his SSS member records, he had
designated his common-law wife, Yolanda as primary beneficiaries and his four
illegitimate children as secondary beneficiaries. The deceased had a legal wife,
Editha, while their only legitimate child predeceased him.
ISSUE: Who is entitled to the death benefits?
HELD: YOLANDA is disqualified to be a beneficiary being a common-law

wife while it follows that the dependant illegitimate minor children of the
deceased, because the legitimate child of the deceased predeceased him , as
22
the only qualified primary beneficiaries of the deceased , are entitled to

100% of the death benefits.
PREMIUM PAYMENTS OF PERIOD OF SERVICE TO GSIS

INCLUDED IN THE RETIREMENT COMPUTATION
G.S.I.S. vs. APOLINARIO C. PAUIG
FACTS: Pauig was the Municipal Agriculturist of San Pedro , Isabela. He

started in the government service as Emergency Laborer on casual status .
Later, he became a temporary employee from 1972 to 1977. He thereafter
became a permanent employee and he also became a GSIS employee as
indicated in his information for membership.
On November 3, 2004, he retired from the service upon reaching the

mandatory retirement age of sixty five (65) years old. But when he filed
his retirement papers with the GSIS , the latter processed his claim based
on a Record of Creditable Service (RCS) and a total length of service
of only 27 years.
Disagreeing with the computation, Pauig wrote a letter-complaint to the

GSIS arguing that his first fourteen (14) years in the government service
had been erroneously omitted.
The GSIS ratiocinated that Pauig’s fourteen (14) years in the

government were excluded in the computation of his retirement benefits
because during those years, as no premium payments were remitted to it.
ISSUE
Whether Pauig is correct in asserting that his first fourteen (14) years
of service should be included to the computation of his retirement
benefits.
RULING
NO. Based on the records, Pauig began his career in the government
as Emergency Laborer on a casual status . Then he became a temporary
employee from 1972 to 1977 . The Court noted that it was not until 1997
that the compulsory membership in the GSIS was extended to employees
other than those on permanent status.
The law provides under Sec. 3 of RA 4968 that membership in the

GSIS shall be compulsory for all employees receiving compensation who
have not reached the compulsory retirement age irrespective of employment
status.
The primordial reason why there were no deductions during the

fourteen (14) years was because Pauig was not yet a GSIS member at
that time. There was thus no legal obligation to pay the premium as no
basis for the remittance of the same existed. And since only periods of
service when premium payments were actually made and duly remitted to
the GSIS shall be included in the computation of retirement benefits, said
period of fourteen (14) years must necessarily be excluded from Pauig’s
creditable service for retirement purposes.
WHEN EMPLOYMENT NOT DEEMED TERMINATED
LAGONOY BUS CO., INC. vs. COURT OF APPEALS

G.R. No. 165598, August 14, 2007, 530 SCRA 121
An employer may bona fide suspend the operations of its business

for a period not exceeding six months. In such a case, there is
no termination of the employment of the employees , but only a temporary
displacement. When the suspension of the business operations exceeds six
months, then the employment of the employees could be deemed
terminated. If the operation of the business is resumed within six
months, it shall be the duty of the employer to reinstate his
employees to their former positions without the loss of seniority rights ,
if the latter would indicate their desire to resume work within one
month from such resumption of operations.
EXTRA-MARITAL AFFAIRS WITH CO-TEACHER

23
A JUST CAUSE FOR DISMISSAL
DANILO OGALISCO vs. HOLY TRINITY COLLEGE OF GENSAN

G.R. 172913, August 9, 2007, 529 SCRA 672
Substantial evidence existing on record showed convincingly the extra-

marital affairs of Ogalisco with his co-teacher . Hence, his termination is
valid and legal under Article 282 of the Labor Code.
MOTION TO REDUCE APPEAL BOND
COLBY CONSTRUCTION CORP. vs. COURT OF APPEALS

ISSUE: Whether or not an appeal is perfected by its timely filing of a

motion to reduce bond?
HELD: NO. An employer who files a motion to reduce the appeal bond
is still required to post the full amount of cash or surety bond within
the ten-day reglementary period, even pending resolution of his motion.
HERITAGE HOTEL MANILA vs. NLRC, RAÑON & VILLA

G.R. Nos. 180478-79, September 3, 2009, 598 SCRA `127
No motion to reduce bond shall be entertained except on meritorious

grounds, and only upon the posting of a bond in a reasonable amount
in relation to the monetary award. The mere filing of a motion to
reduce bond without complying with the requisites shall not stop the
running of the period to perfect an appeal . The payment of the appeal
bond is a jurisdictional requisite for the perfection of an appeal to
the NLRC.
UNIVERSITY PLANS, INC. vs. BELINDA P. SOLANO

G.R. No. 170416, June 22, 2011
The Supreme Court ruled that although the requirement of an appeal

bond is indispensable in the perfection of an appeal as clearly provided
for in Art. 223 of the Labor Code , and as emphasized in the Rules
of Procedure of the NLRC. It is likewise provided that reduction of the
same is allowed in very specific instances.
The NLRC was not precluded from making a preliminary

determination of the employer’s financial capacity to post the required
bond without necessarily passing upon the merits of the justification for
the reduced bond, the evidence for the purpose would necessarily be
less than the evidence required for a ruling on the merit.
UNION REGISTRATION
20% of the Bargaining Unit
TAKATA PHILIPPINES vs. BUREAU OF LABOR RELATIONS

G.R. No. 196276, June 4, 2014, 725 SCRA 61
FACTS: On July 7, 2009, Takata filed with DOLE Regional Office a petition
for cancellation of the certificate of union registration of SALAMAT on the
ground of misrepresentation, false statement and fraud with respect to the
numbers who participated in the organization meeting on May 1, 2009.
During the organizational meeting of SALAMAT , only 68 attendees

signed the attendance sheet and which number comprised only 17% of
the total number of 396 regular rank-in-file employees . Takata claimed that
the union failed to comply the 20% minimum membership requirement.
Takata further insisted that only 119 union members were listed in the
union registration instead of 396 rank-and-file employees.
On the other hand, SALAMAT claimed that the 119 union members
were more than the 20% required for union registration and further
argued that the 68 attendees to the organizational meeting constituted
more than 50% of the total union membership of 119.
24
ISSUES:
(1) Whether the 68 attendees in the organization meeting was
obviously less than 20% of the total number of 396
regular rank-and-file employees.
(2) Whether the 119 union members with no signature

properly represented the 396 members of the rank-and-file
employees.
HELD: (1) The 68 attendees to the organizational meeting represents more

than 50% of the total union membership.
The list of employees who participated in the organization meeting

was a separate and distinct requirement from the list of the name of
members comprising at least 20% of the employees in the bargaining
unit.
(2) YES. There was no requirement for signatures opposite the names
of the 119 union members.
The 119 union members were more than the 20% for union
registration as well the requirement for petition for certification election.
Therefore, no ground of misrepresentation was present to warrant the

cancellation of the union registration
Retraction
MARIWASA SIAM CERAMICS, INC. vs. SECRETARY OF LABOR

FACTS: SMMSC was issued a Certificate of Registration as a legitimate labor

organization by the DOLE. A month later, Mariwasa filed a petition for
Cancellation of Union Registration against SMMSC for failure to comply with
the 20% union membership requirement for its registration as a legitimate
labor organization because 102 employees had executed affidavits of
recantation of their union membership.
ISSUE: Whether the Union Registration should be cancelled by reason of

the affidavits executed by the employees recanting their union membership.
HELD: NO. Withdrawals made before the filing of the petition for
certification election are presumed voluntary unless there is a convincing
proof to the contrary, whereas withdrawals made after the filing of the
petition are deemed involuntary, because then the employees supporting the
petition become known to the employer since their names are attached
to the petition. Thus, the employer may use foul means for said
employees to withdraw their support.
The fact remains that at the time of the union’s application for
registration, the affiants were members of SMMSC and they comprised
more than the required 20% membership for purposes of registration as a
labor union. Article 234 of the Labor Code merely requires a 20%
minimum membership during the application for union membership . It does
not mandate that a union must maintain the 20% minimum membership
requirement all throughout its existence.
Cancellation
STA. LUCIA EAST COMMERCIAL CORPORATION

vs. THE SECRETARY OF LABOR
G.R. No. 162355, August 14, 2009, 596 SCRA 92
ISSUE: Whether the inclusion of disqualified employees is the ground for

cancellation for registration as legitimate labor organization.
HELD: NO. The inclusion in the union of disqualified employees is not

among the grounds for cancellation of registration unless such inclusion
is due to misrepresentation, false statement or fraud under the Labor
Code. Thus, CLUP having been validly issued a certificate of registration ,
25
should be considered as having acquired juridical personality which may not

be attacked collaterally.
Collateral Attack on Legal Personality
SAMAHANG MANGGAGAWA (SMCC-SUPER) vs. CHARTER

CHEMICAL AND COATING CORPORATION
G.R. No. 169717, March 16, 2011, 645 SCRA 538
The legal personality of the union cannot be collaterally attacked in

the certification election proceedings.
Except when it is requested to bargain collectively, an employer is a

mere bystander to any petition for certification election , such proceeding is
non-adversarial and mere investigation, for the purpose thereof is to
determine which organization will represent the employees in their collective
bargaining with the employer. The choice of their representative is the
exclusive concern of the employees; it cannot interfere with, much less
oppose, the process by filing a motion to dismiss or an appeal from
it, not even a mere allegation that some employees participating in a
petition for certification election are actually managerial employees , will lend
an employer legal personality to block the certification election . The
employer’s only right in the proceeding is to be notified or informed
thereof.
CONSTRUCTIVE DISMISSAL
NELSON GAN vs. GALDERMA PHILIPPINES, INC.

FACTS: Nelson was hired by Galderma as Product Manager for its Consumer
Products Division to handle the marketing of CBPL . With his satisfactory
performance since during the first year, Nelson was acknowledged and
rewarded by Galderma through positive performance appraisal, salary and
benefits increases, and informal notations on his marketing reports.
Nelson’s above-average performance in handling CBPL continued in the first

quarter of 2002. On April 11, 2002, feeling he was harassed, coerced and
intimated by his superior, Nelson severed his employment ties with Galderma.
On the same day, his immediate superior at the time accepted the resignation
tendered.
ISSUE: Whether Nelson was illegally or constructively dismissed.
HELD: NO. Constructive dismissal is defined as quitting of work because

continued employment is rendered impossible, unreasonable or unlikely.
The test of constructive dismissal is whether a reasonable person in

the employee’s position would have felt compelled to give up his
employment/position under the circumstances. Since Nelson submitted a
resignation letter, it is incumbent upon him to prove with clear , positive,
and convincing evidence that his resignation was not voluntary but was
actually a case of constructive dismissal , that it is a product of
coercion or intimidation. Nelson could not have been coerced.
The acts of “harassment,” if true, do not suffice to be considered

as “peculiar circumstances” material to the execution of the subject
resignation letter that is couched in a clear , concise and categorical
language. Its content confirmed his unmistakable intent to resign.
Further, Nelson is no ordinary laborer with limited education and

skills, he is not a rank and file employee with inadequate
understanding such that he would be easily beguiled or forced into doing

something against his will. He was a management employee holding a
responsible position.
GIRLY G. ICO vs. SYSTEM TECHNOLOGY INSTITUTE, INC.

G.R. No. 185100, July 9, 2014, 729 SCRA 439.
When another employee is soon after appointed to a position which

the employer claims has been abolished , while the employee who had
to vacate the same is transferred against her will to a position
which does not exist in the corporate structure , there is evidently a
case of illegal constructive dismissal.
26
MCMER CORPORATIONS, INC. vs. NLRC & FELICIANO LIBUNAO

G.R. No. 193421, June 4, 2014, 725 SCRA 1
Constructive dismissal is defined as a 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.
The test of constructive dismissal is whether a reasonable person

in the employer’s position would have felt compelled to give up his
position under the circumstances. It is an act amounting to dismissal
but made to appear as if is were not . Constructive dismissal, is
therefore, a dismissal in disguise.
As maybe gleaned from the records, what transpired on July 20,

2007 was not merely an isolated outburst on the part of the employer .
The latter’s behavior towards his employee shows a clear insensibility
rendering the working condition of Libunao unbearable.
Libunao had reason to dawdle and refuse to comply with the

summons of his employer out of severe fear that he will be physically
harmed.
In fact, the same w as clearly manifested by his immediate reaction

to the situation by going to the Valenzuela Police to report the
incident.
VICENTE ANG vs. CEFERINO SAN JOAQUIN, JR.

G.R. No. 185549, August 7, 2013, 703 SCRA 269
FACTS: San Joaquin testified in court relative to the 41 criminal cases

filed by his former co-employees against his employer , Vicente Ang. The
latter began treating him with hostility and antagonism.
Later on, a heated argument ensued between them and led Ang
tearing his Daily Time Record.
The following day, he received a Memorandum from Ang placing him

under preventive suspension.
ISSUE: Whether the act of tearing employee’s time card constitutes

constructive dismissal.
HELD: YES. By destroying his time card, Ang discontinued his relationship
with San Joaquin. The purpose of a time card is to show an
employee’s attendance in office for work and to be paid accordingly ,
taking into account the policy of “no work, no pay.”
A daily time record is primarily intended to prevent damage or loss

to the employer which could result in instances where it pays an
employee for no work done.
VENANCIO S. REYES vs. RP GUARDIANS SECURITY AGENCY

G.R. No. 193756, April 10, 2013, 695 SCRA 620
There is an illegal dismissal when employees were placed on floating

status beyond the reasonable six-month period.
ORCHARD GOLF & COUNTRY CLUB vs. AMELIA R. FRANCISCO

G.R. No. 178125, March 18, 2013, 693 SCRA 497
Demotion in rank constitutes constructive dismissal.
VOLUNTARY ARBITRATOR
7K CORPORATION vs. EDDIE ALBANICO

G.R. No. 182295, June 26, 2013, 699 SCRA 700
The voluntary arbitrator has jurisdiction over the legality of the

dismissal and entitlement to backwages only when made through the
agreement of the parties.
27
DEATH OF SEAFARER - INSTANCE WHEN DEATH

BENEFITS MAY BE DENIED
AGILE MARITIME RESOURCES, INC. vs. APOLINARIO N. SIADOR

FACTS: Dennis, son of Apolinario, was hired as ordinary seaman by

petitioner Agile.
Apolinario filed a complaint for death benefits against petitioner

Agile for the death of Dennis who fell from the vessel and died
in the high seas.
According to Apolinario, Dennis’ actuation a few days and moments

before the incident point to the conclusion that Dennis was already
mentally disturbed a few days before he plunged into and drowned in
the ocean and cannot be considered willful.
Although the unfortunate incident was undisputed , Agile contends that

someone saw Dennis jumped overboard. Additionally, Agile argues that
because of the personal circumstances of Dennis characterized by heavy
personal and psychological problems may have driven him to take his
own life.
This was also backed up by statements of crew members and as

found by LA in dismissing the complaint. On appeal, NLRC affirmed the
LA’s ruling.
The CA reversed the NLRC and sustained the position that prior
to his death, Dennis had been suffering from mental instability and
could not be considered to have intentionally taken his life.
ISSUE: Whether Apolonio is entitled to the death benefits.
HELD: NO. Under the POEA-SEC, no compensation shall be payable in

respect of any injury, incapacity, disability or death of the seafarer
resulting from his willful or criminal act or intentional breach of his
duties, provided however, that the employer can prove that such injury,
incapacity, disability or death is directly attributable to the seafarer.
As a claimant, Apolinario has the burden of proving that the

seafarer’s death (1) is work-related and (2) happened during the term of
the employment.
Sufficient proof of insanity or mental sickness may be presented to

negate the requirement of willfulness as a matter of counter - defense.
Since the willfulness may be inferred from the physical act itself
of the seafarer, the insanity or mental illness required to be proven
must be one that deprived him of the full control of his senses . In
this regard, selected circumstances prior to and surrounding his death
might have provided substantial evidence of the existence of such
insanity or mental sickness.
Thus, having proved that the death of Dennis was through his
own fault, his father, Apolinario, is not entitled to death benefits.
SEPARATION PAY UNDER THE CBA
BENSON INDUSTRIES EMPLOYEES UNION vs. BENSON INDUSTRIES

G.R. No. 200746, August 6, 2014, 732 SCRA 318
FACTS: Benson Industries sent its employees a notice of their intended

termination from employment on the ground of closure and/or cessation of
business operations.
The employees were paid of their separation pay computed at 15

days for every year of service.
28
Despite receipt of their separation pay , the employees were still

claiming for the payment of additional separation pay at the rate of four
(4) days for every year of service based on the provision of the
collective bargaining agreement (CBA) granting separation pay equivalent to
not less than nineteen (19) days pay for every year of service.
Benson opposed its employees claim averring that the separation pay
already paid to them was already more than what the law requires.
ISSUES: (1) Whether Benson is still liable to pay the additional

separation pay.
(2) What is a collective bargaining agreement ? Is it the law between

the parties?
(3) Whether serious business losses generally exempt the employer from
paying separation benefits.
HELD: (1) YES, it is undisputed that a CBA was forged by the

employer, Benson, and its employees, through the union, to govern their
relations.
It is equally undisputed that Benson agreed to and was thus

obligated under the CBA to pay its employees who had been terminated
without any fault attributable to them separation benefits at the rate of
19 days for every year of service.
(2) A collective bargaining agreement refers to the negotiated contract

between a legitimate labor organization and the employer concerning wages ,
hours of work and all other terms and conditions of employment in a
bargaining unit.
Where the CBA is clear and unambiguous , it becomes the law

between the parties and compliance therewith is mandated by the express
policy of the law.
(3) YES. Serious business losses generally exempt the employer from
paying separation benefits under Article 297 of the Labor Code.
A FACEBOOK POST WITHOUT DIVULGING COMPANY’S

INFORMATION IS NOT A GROUND FOR DISMISSAL
INTERADENT ZAHNTECHNIC PHIL., INC. vs. REBECCA SIMBILLO

FACTS: Respondent Rebecca Simbillo was petitioner Interadent Zahntechnic

Phil., Inc.’s treasurer.
Petitioner, through a Notice to Explain , required Simbillo to explain and

to attend an administrative hearing regarding a message she posted on
her Facebook account referring to company concerns with the BIR.
Respondent Simbillo wrote a reply-letter arguing that she was already

constructively dismissed prior to her receipt of the notice.
Petitioner argued that the act alleged to have caused their lost and
confidence in Simbillo was her Facebook post disclosing confidential
information that gives the impression that Interadent is under investigation
by the BIR for irregular transactions.
Respondent Simbillo asserts that her dismissal was without just cause .
She averred that the Facebook entry cannot support the breach of trust
since it did not mention Interadent.
ISSUE
Whether the Facebook post of the respondent Simbillo referring to the
company concerns with the BIR constitutes a valid ground for dismissal.
RULING
NO, it is not a valid ground for dismissal.
29
As a managerial employee, the existence of a basis for believing that

Simbillo has breached the trust of petitioner justifies her dismissal .
However, to be a valid ground, loss of trust and confidence must be
based on willful breach of trust , that is, done intentionally, knowingly and
purposely without justifiable excuse , as distinguished from an act done
carelessly, thoughtlessly, heedlessly, or inadvertently.
The Facebook entry of Simbillo did not contain any corporate record
or any confidential information. No company information or corporate record
was divulged by Simbillo.
Respondent Simbillo can only be said to have acted carelessly in

making such a comment on Facebook, however, such would not amount
to loss of trust and confidence as to justify her termination from
employment.
When the breach of trust or loss of confidence conjectured upon is

not borne by clearly established facts, such dismissal on the ground of
loss and trust and confidence cannot be upheld.
CIVIL SERVICE EMPLOYEE INVALIDLY DISMISSED IS

ENTITLED FOR BACKWAGES AND REINSTATEMENT
JULIUS B. CAMPOL vs. MAYOR RONALD S. BALAO-AS et. al.
FACTS: Campol served as Secretary of the Sanggunian Bayan (SB) of the

Municipality of Baliney, Abra since 1999.
During the 2004 elections , Balao-as and Sianen won as mayor and
vice mayor, respectively. Thereafter their assumption to office, The SB
passed a resolution terminating Campol as SB Secretary on the ground
that he was absent without approved leave from August 1, 2004 to
September 30, 2004.
Campol challenged his dismissal before the CSC-CAR which ruled in

his favor, however, Vice Mayor Sianen issued a Memorandum dropping
Campol from the rolls.
The CSC granted his appeal and ruled that Campol was properly
dropped from the rolls.
The CA ruled that Campol was illegally dropped from the rolls ,
however, it refused his reinstatement as he was gainfully employed with
the PAO since October 2005 . He was awarded backwages only from the
time of his dismissal until October 2005 , prior to his employment with
another government agency.
ISSUES
1) Whether Campol is entitled to reinstatement.
2) Whether Campol should be awarded backwages only for the period

covering his illegal dismissal until his new employment with the PAO.
RULINGS
1) YES, Campol should be reinstated to his position as SB Secretary.
In the event that another person has already been appointed to his
post, that person has to give way to the employee whose right to the
office has been recognized by the competent authorities.
In the eyes of the law , the position never became vacant since
Campol was illegally dropped from the rolls.
2) NO. Campol is entitled to the payment of backwages from the time

of his illegal dismissal until he is reinstated to his position . The CA
erred in ruling that the backwages should only cover the period of his
illegal dismissal until his new employment with the PAO.
An employee of the civil service who is ordered reinstated is also

entitled to the full payment of his backwages during the entire period
that he was wrongfully prevented from performing the duties of his position
and from enjoying its benefits. This is necessarily so because, in the
eyes of the law, the employee never truly left the office.
30
In cases like this, the twin award of reinstatement and payment of

full backwages as dictated by the constitutional mandate to protect civil
service employee’s right to security of tenure. Anything less that this fails
short of the justice due to government employee unfairly removed from
office.
DISEASE NOT A GROUND FOR TERMINATION IN THE

ABSENCE OF PUBLIC HEALTH AUTHORITY
CERTIFICATION
MARINA’S CREATION INTERPRISES et. al. vs. ROMEO V. ANCHETA
FACTS: Marina is engaged in the business of making shoes and bags .

In January 2010, Marina hired respondent Ancheta as a sole attacher in
Marina.
In March 2011, Ancheta suffered an intra-cranial hemorrhage (stroke) and

was placed under home care. On May 12, 2011, he suffered a second
stroke and was confined at St. Victoria Hospital for four days.
On May 26, 2011, Ancheta filed a Sickness Notification with the SSS
and was paid sickness benefits. The physician who physically examined him
stated that Ancheta would be fit to resume work after ninety (90) days.
On August 13, 2011, Ancheta reported for work, Marina, however,

wanted him to submit a new medical certificate before he could resume
his work in Marina. Ancheta did not comply and was not able to
resume his work in Marina. Ancheta filed a complaint for illegal dismissal
against Marina.
Ancheta alleged that after he recovered from his illness, he reported

for work in Marina but was advised by Marina to just wait for the
company’s call. When Ancheta went back to Marina , he was told to take
more rest. Ancheta claimed that Marina had employed two new workers as
his replacement. Ancheta alleged that he was not served a notice for his
termination and a subsequent notice for hearing as mandated by the Labor
Code.
Marina claimed that Ancheta was employed on a piece rate basis and
was not terminated but instead was refused job assignments due to his
failure to submit a medical clearance showing that he was fit to resume
his work.
ISSUE
Whether Marina properly terminated Ancheta in the absence of medical
clearance showing that he was fit to resume his work.
RULING
NO. The employer shall not terminate his employment unless there is
a certification by a competent public health authority that the disease is
of nature or such a stage that it cannot be cured within a period of
six months even with proper medical treatment.
The implementing Rules of the Labor Code imposes upon the

employer the duty not to terminate an employee until there is a
certification by a competent public health authority that the employee’s
disease is of such nature or such a stage that it cannot be
cured within a period of six (6) months even with proper medical
treatment.
In this case, Marina terminated Ancheta from employment without

seeking a prior certification from a competent public health authority that
Ancheta’s disease is of such nature or of such stage that it cannot
be cured within a period of six (6) months even with proper medical
treatment. Hence, Ancheta was illegally dismissed.
BAD FAITH OF CORPORATE OFFICER MAKES

HIM SOLIDARILY LIABLE WITH THE COMPANY
31
RAMIL R. VALENZUELA vs. ALEXANDRA MINING AND OIL

VENTURES INC. and CESAR E. DETERA
FACTS: Valenzuela was hired as a company driver of Alexandra Mining

on January 12, 2008, with an eight-hour work shift from 8 a.m. to 5:00
p.m. He did not just suffer to work for the company but also drove
for the members of the Detera family.
On June 15, 2013, after five years and five months of service , he
was prevented to report for work by Detera who told him that his
service is no longer needed as there were no funds forthcoming for his
salary.
Respondents alleged that Valenzuela was actually hired as a family

driver of the Deteras. They alleged that the monthly salary of Valenzuela
was charged to Alexandra Mining account for convenience.
ISSUE
Whether a corporate officer Detera is solidarily liable with the company
for money claims of illegally dismissed corporate employee.
RULING
YES, a corporate officer is solidarily liable with the company for

money claims of illegally dismissed corporate employee.
As a rule, “a corporate officer is not personally liable for the money

claims of discharged corporate employees unless he acted with evident
malice and bad faith in terminating their employment.”
Here, Detera’s bad faith was manifested by his persistent assertion that
Valenzuela was merely a family driver in order to justify his unceremonious
dismissal. He repeatedly insisted that as a family driver or member of
the household service, Valenzuela may be terminated at will , which was
exactly what he did.
He unreasonably sent Valenzuela home when the latter reported for

work, the latter unaware of what he had done to merit such an abrupt
termination. Detera’s admission on the reckless manner of Valenzuela’s
dismissal justifies holding him solidarily liable with Alexandra Mining.
RETIREMENT
AN EMPLOYEE WHO IS QUALIFIED FOR OPTIONAL
RETIREMENT DIES BEFORE THE OPTION TO RETIRE
UDMC vs. CESARIO BERNADAS

FACTS: Cesario started working as an orderly in UDMC’s housekeeping

department and he was eventually promoted as a utility man.
UDMC and its rank-and-file employees had a collective bargaining

agreement (CBA), under which rank-and-file employees were entitled to optional
retirement benefits. Under the optional retirement policy, an employee who
has rendered at least 20 years of service is entitled to retirement.
However, Cesario died from a “freak accident” while working in a

doctor’s residence. Leonila, representing her deceased husband, filed a
complaint for payment of retirement benefits.
UDMC argues that Cesario’s beneficiaries do not have legal capacity to

apply for Cesario’s optional retirement benefits since Cesario himself never
applied for it in his lifetime.
On the other hand, Leonila counters that had her husband died “under
normal circumstances,” he would have applied for optional retirement.
ISSUE
32
Whether Cesario is entitled to receive his optional retirement benefits

despite his untimely death through his surviving spouse.
RULING
YES. Cesario is entitled to receive his optional retirement benefits

despite his untimely death through his surviving spouse.
Cesario was already qualified to receive his retirement benefits , having

been employed by UDMC for 23 years. While the choice to retire before
the compulsory age of retirement was within Cesario’s control , his death
foreclosed the possibility of his making that choice.
UDMC’s optional retirement plan is premised on length of service , not

upon reaching a certain age. It rewards loyalty and continued service by
granting an employee an earlier age to claim his retirement benefits even
if the employee has not reached his twilight years.
It would be the height of inequity to withhold Cesario’s retirement benefits

despite being qualified to receive it , simply because he died before he
could apply for it.
Retirement benefits are the property interests of the retiree and his
beneficiaries. The CBA does not prohibit the employee’s beneficiaries from
claiming retirement benefits if the retiree dies before the proceeds could
be released.
Thus, Leonila, being the surviving spouse of Cesario , is entitled to

claim the optional retirement benefits on his behalf.
****GOD’S WAY IS THE BEST WAY****

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2019 GOLDEN BEACON

1. SEXUAL HARASSMENT LAW (RA 7877)

To commit sexual harassment, the following elements must be present:

1). the employer, employee, manager, supervisor, agent of the

2). the authority, influence or moral ascendancy exists in a

3). he should have demanded, requested or otherwise required a

Q: Can greeting by kissing on the cheek, in a beso-beso fashion, be

A: A mere casual buss on the cheek is not a sexual harassment conduct

2. EMPLOYER - EMPLOYEE RELATIONSHIP

The control test is the most crucial indication of the existence of an

The relationship between jeepney owners/operators on one hand and jeepney

There is no employer-employee relationship between a resident physician and

Cases where employer-employee relationship exists (Control Test used):

Cases where there is no employer-employee relationship (but one of

a. Insurance company vis-à-vis commission agents (Insular Life vs. NLRC,

b. Company vs. collecting agents on commission basis (Singer Sewing

c. Softdrinks company vs. independent contractors selling softdrinks

DIFFERENCE BETWEEN AN EMPLOYEE AND INDEPENDENT CONTRACTOR

Of the four elements of the employer-employee relationship, the “control

ALEXANDER LOPEZ vs. MWSS

ABIDING WITH EMPLOYER’S STANDARD

ALLAN BAZAR vs. CARLOS A. RUIZOL

FACTS: Respondent Carlos Ruizol was a mechanic at Norkis Distributors,

He filed a complaint for illegal dismissal against petitioner Allan

Bazar countered that Ruizol is not an employee but a franchise

Respondent Ruizol asserted that he had to abide by the standard set

The four-fold test used in determining the existence of employer-

The control test is the most crucial and determinates indicator of

PAKYAW WORKERS ARE REGULAR EMPLOYEES

FACTS: Petitioners Spouses Nate are the owners/proprietors of A. Nate

Respondents claimed that they worked from Monday to Saturday, from

Sometimes on March 15, 2007 , petitioners proposed a “Contract of

There is no dispute that the tasks performed by respondents as

The power of control by petitioners over respondents is clearly

Hence, pakyaw workers are considered regular employees for as long

Test in determining regular employment; reasonable connection rule

The primary standard of determining a regular employment is the reasonable

Probationary period of employment; general rule and exception

Generally, the probationary period of employment is limited to six months .

In all cases involving employees on probationary status , the employer shall

During the probationary period, the employee enjoys security of

Jurisprudence is rich in cases guaranteeing the security of tenure, limited

UNIVAC DEVELOPMENT, INC. vs. WILLIAM M. SORIANO

FACTS: Soriano was hired as legal assistant by Univac on probationary

On the other hand, Univac claimed that during the company’s

ISSUE: Whether the employer is guilty of illegal dismissal of a probationary

HELD: YES. The power of the employer to terminate a probationary

It is undisputed that Soriano was hired as a probationary employee .

JOCELYN HERRERA – MANAOIS vs. ST. SCHOLASTICA’S COLLEGE

FACTS: Manaois applied for a position as full-time instructor for school

At the completion of her third year of probationary employment , SSC

ISSUE: Whether the completion of a master’s degree is required in order

Probationary employment refers to the trial stage or period during

Here, Manaois failed to comply with the stated academic requirements

MARIA CARMELA P. UMALI vs. HOBBYWING SOLUTIONS, INC.

On January 19, 2013, she was made to sign two contracts of

On February 18, 2013, Umali was informed by Hobbywing that her

YES. Umali is a regular employee after she worked beyond the

Project employees who worked for an aggregate period of at least

Although the work to be performed is only for a specific project or

Failure of the employer to report to the nearest employment office