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As we have held, "[s]trained relations must be demonstrated as a fact. The doctrine of strained relations
should not be used recklessly or applied loosely nor be based on impression alone" so as to deprive an
illegally dismissed employee of his means of livelihood and deny him reinstatement.

Since the application of this doctrine will result in the deprivation of employment despite the
absence of just cause, the implementation of the doctrine of strained relationship must be
supplemented by the rule that the existence of a strained relationship is for the employer to
clearly establish and prove in the manner it is called upon to prove the existence of a just cause;
the degree of hostility attendant to a litigation is not, by itself, sufficient proof of the existence
of strained relations that would rule out the possibility of reinstatement. (Advan Motor, Inc. vs.
Victoriano G. Veneracion, G.R. No. 190944, December 13, 2017)

The Court of Appeals correctly held that every labor dispute almost always results in "strained
relations," and the phrase cannot be given an overarching interpretation, otherwise, an unjustly
dismissed employee can never be reinstated. As to the finding of the NLRC that the respondent
had convinced it that the relations between him and management had become so strained by
describing in detail that he was repeatedly being offered a financial package in exchange for his
resignation and his being treated unfairly, the Court of Appeals found it absurd that the NLRC
would utilize petitioner's own statements to prop up the existence of "strained relationship"
when in fact it was respondent who had been pleading and praying that he be reinstated. On the
contrary, this showed that despite the perceived animosity between the parties, respondent was
still willing to get back to work. (Id)

As to the finding that management had declared that it had lost its trust and confidence on
complainant who, as a Sales Consultant, was a front line employee in whom respondents had
complete trust, we agree with the Court of Appeals that a sales consultant is not a position of
complete trust and confidence where personal ill will could foreclose an employee's
reinstatement. Moreover, as it is one of the just causes for dismissal under the Labor Code, to
affirm the allegation of loss of trust and confidence would lead to an illogical conclusion that
respondent was validly dismissed from service. (Id)

Constructive Dismissal

Here, IKSI never offered any evidence that would indicate the presence of a bona fide suspension
of its business operations or undertaking. IKSI’s paramount consideration should be the dire
exigency of its business that compelled it to put some of its employees temporarily out of work.
This means that it should be able to prove that it faced a clear and compelling economic reason
which reasonably constrained it to temporarily shut down its business operations or that of the
ACT Project, incidentally resulting in the temporary lay-off of its employees assigned to said

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particular undertaking. Due to the grim economic repercussions to the employees, IKSI must
likewise bear the burden of proving that there were no other available posts to which the
employees temporarily put out of work could be possibly assigned. Unfortunately, IKSI was not
able to fulfill any of the aforementioned duties. IKSI cannot simply rely solely on the alleged
decline in the volume of work for the ACT Project to support the temporary retrenchment of
respondents. Businesses, by their very nature, exist and thrive depending on the continued
patronage of their clients. Thus, to some degree, they are subject to the whims of clients who
may suddenly decide to discontinue patronizing their services for a variety of reasons. Being
inherent in any enterprise, employers should not be allowed to take advantage of this
entrepreneurial risk and use it in a scheme to circumvent labor laws. Otherwise, no worker could
ever attain regular employment status. In fact, IKSI still continued its operations and retained
several employees who were also working on the ACT Project even after the implementation of
the January 2010 forced leave. Much worse, it continued to hire new employees, with the same
qualifications as some of respondents, through paid advertisements and placements in Suns tar
Cebu, 43 a local newspaper, dated February 24, 2010 and March 7, 2010. The placing of an
employee on floating status presupposes, among others, that there is less work than there are
employees. But if IKSI continued to hire new employees then it can reasonably be assumed that
there was a surplus of work available for its existing employees. Hence, placing respondents on
floating status was unnecessary. If any, respondents - with their experience, knowledge, and
familiarity with the workings of the company - should be preferred to be given new projects and
not new hires who have little or no experience working for IKSI. (Innodata Knowledge Services,
Inc. vs. Socorro D’Marie T. Inting, et al., G.R. No. 211892, December 6, 2017)

There being no valid suspension of business operations, IKSI’s act amounted to constructive
dismissal of respondents since it could not validly put the latter on forced leave or floating status
pursuant to Article 301. And even assuming, without admitting, that there was indeed suspension
of operations, IKSI did not recall the employees back to work or place them on valid permanent
retrenchment after the period of six (6) months, as required of them by law. IKSI could not even
use the completion of the duration of the alleged project as an excuse for causing the termination
of respondents’ employment. It must be pointed out that the termination was made in 2010 and
the expected completion of the project in respondents' contracts was still in 2012 to 2014. Also,
if the Court would rely on IKSI’s own Notice of Partial Appeal and Memorandum on Partial
Appeal45 before the NLRC dated December 10, 2010, respondents might even had been put on
floating status for a period exceeding the required maximum of six (6) months. Evidence reveal
that the assailed forced leave took effect on January 7, 2010 and IKSI eventually sent its
termination letters four (4) months after, or on May 27, 2010, with the effectivity of said
termination being on July 7, 2010. But as of December 10, 2010, IKSI was still insisting that
respondents were never dismissed and were merely placed on forced leave. It was only in its
Comment on Complainants’ Motion for Reconsideration dated August 3, 2011 did IKSI admit the
fact of dismissal when it appended its own termination letters dated May 27, 2010. (Id)

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One-Month Notice Rule

Withal, in both permanent and temporary lay-offs, jurisprudence dictates that the one (1)-month
notice rule to both the DOLE and the employee under Article 298 is mandatory. Here, both the
DOLE and respondents did not receive any prior notice of the temporary lay-off. The DOLE Region
VII Office was only informed on January 11, 2010 or four (4) days after the forced leave had
already taken effect. On the other hand, respondents received the notice of forced leave on
January 7, 2010, after the business day of which the same forced leave was to take effect.
Respondents also pointed out that when they received said notice, they were told to no longer
report starting the next day, made to completely vacate their workstations and surrender their
company identification cards, and were not even allowed to use their remaining unused leave
credits, which gave them the impression that they would never be returning to the company ever
again. (Innodata Knowledge Services, Inc. vs. Socorro D’Marie T. Inting, et al., G.R. No. 211892,
December 6, 2017)

Article 227 of the Labor Code of the Philippines authorizes compromise agreements voluntarly agreed
upon by the parties, in conformity with the basic policy of the State “to promote and emphasize the
primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and
conciliation, as modes of settling labor or industrial disputes.”

A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or
put an end to one already commenced. It is an agreement between two or more persons, who, for
preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which
they agree on, and which everyone of them prefers to the hope of gaining, balanced by the danger of
losing. A compromise must not be contrary to law, morals, good customs and public policy; and must have
been freely and intelligently executed by and between the parties. Article 227 of the Labor Code of the
Philippines authorizes compromise agreements voluntarily agreed upon by the parties, in conformity with
the basic policy of the State “to promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or
industrial disputes.” (Sara Lee Philippines, Inc. vs. Macatlang, 745 SCRA 687, G.R. No. 180685 January 14,
2015 Sara Lee Philippines, Inc. vs. Macatlang, 745 SCRA 687, G.R. No. 180685 January 14, 2015)

The underlying purpose of the appeal bond is to ensure that the employer has properties on which he
or she can execute upon in the event of a final, providential award.

In our Decision, the appeal bond was set at P725 Million after taking into consideration the interests of all
parties. To reiterate, the underlying purpose of the appeal bond is to ensure that the employer has

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properties on which he or she can execute upon in the event of a final, providential award. Thus,
nonpayment or woefully insufficient payment of the appeal bond by the employer frustrates these ends.
As a matter of fact, the appeal bond is valid and effective from the date of posting until the case is
terminated or the award is satisfied. Our Decision highlights the importance of an appeal bond such that
said amount should be the base amount for negotiation between the parties. As it is, the P342,284,800.00
compromise is still measly compared to the P725 Million bond we set in this case, as it only accounts to
approximately 50% of the reduced appeal bond. (Sara Lee Philippines, Inc. vs. Macatlang, 745 SCRA 687,
G.R. No. 180685 January 14, 2015 Sara Lee Philippines, Inc. vs. Macatlang, 745 SCRA 687, G.R. No. 180685
January 14, 2015)

Accepting an outrageously low amount of consideration as compromise defeats the complainants’

legitimate claim.

The complainants filed a motion for reconsideration asking this Court to modify its Decision on the ground
that the parties have entered into a compromise agreement. The complainants justified their
acquiescence to the compromise on the possibility that it will take another decade before the case may
be resolved and attained finality. We beg to disagree. In our Decision, we have already directed the NLRC
to act with dispatch in resolving the merits of the case upon receipt of the cash or surety bond in the
amount of P725 Million within 10 days from receipt of the Decision. If indeed the parties want an
immediate and expeditious resolution of the case, then the NLRC should be unhindered with technicalities
to dispose of the case. Accepting an outrageously low amount of consideration as compromise defeats
the complainants’ legitimate claim. x x x In fine, we will not hesitate to strike down a compromise
agreement which is unconscionable and against public policy. (Sara Lee Philippines, Inc. vs. Macatlang,
745 SCRA 687, G.R. No. 180685 January 14, 2015 Sara Lee Philippines, Inc. vs. Macatlang, 745 SCRA 687,
G.R. No. 180685 January 14, 2015)

In termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just
and valid cause and failure to do so would necessarily mean that the dismissal was illegal.

Upon this Court’s assessment, however, it finds that this burden has been discharged by respondents and
this Court agrees with the latter that petitioner Raza’s acts amounted to serious misconduct which falls
under the valid grounds for termination of the services of an employee as provided for in the Labor Code,
specifically Article 282(a) thereof. (Raza vs. Daikoku Electronics, Phils., Inc., 764 SCRA 132, G.R. No. 188464
July 29, 2015)

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For misconduct to justify dismissal under the law, (a) it must be serious; (b) must relate to the
performance of the employee’s duties; and (c) must show that the employee has become unfit to
continue working for the employer.

Misconduct is improper or wrongful conduct. It is the transgression of some established and definite rule
of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not
mere error of judgment. For misconduct to justify dismissal under the law, (a) it must be serious; (b) must
relate to the performance of the employee’s duties; and (c) must show that the employee has become
unfit to continue working for the employer. In the case at bar, it must be noted that Raza’s termination
came not as a result of a singular incident on July 21, 2003 of driving home the company car, keeping it
overnight and then lying about such act to the company president the next day. It came because such
incident launched a company investigation during which it was found out that the July 21, 2003 incident
was preceded by thirty-one (31) other instances in the previous two and a half (2 1/2) months (or from
May 1, 2003 to July 20, 2003) in which Raza similarly did not park the car in the assigned area but took it
home overnight without permission. Thus, the termination letter against Raza mentioned a “recurring act
of taking the subject vehicle without authority,” as a ground for his separation from service. This Court
finds and agrees with respondents that the above acts constitute serious misconduct which rendered
Raza’s termination valid. (Raza vs. Daikoku Electronics, Phils., Inc., 764 SCRA 132, G.R. No. 188464 July 29,
2015)

Use of a company vehicle for a driver’s personal needs is more of an exceptional privilege rather than
the norm. It cannot be presumed as bestowed on every employee, not even a chauffeur, so that one
who claims to have it has the obligation to provide proof of his authority, permission or privilege for the
use to be considered warranted.

A company’s executive vehicle is usually for the personal service of the person to whom it is assigned and
is supposed to be available solely to the latter at any given time. It is rarely made available for the personal
use and service of the chauffeur even if the executive is already home and retired for the night and the
chauffeur himself has to go to his own residence that is away from his master’s residence. By taking the
vehicle out and driving it to his home, the driver exposes such company property to the risk of damage or
loss due to collisions, theft or even untoward incidents such as a fire or civil disturbance. There is also a
risk of company liability to third persons arising from such use. In addition, such use is not free of costs,
since the extra journey entails fuel use, wear and tear, and other allied expenses. Therefore, it can be
safely held that use of a company vehicle for a driver’s personal needs is more of an exceptional privilege
rather than the norm. It cannot be presumed as bestowed on every employee, not even a chauffeur, so
that one who claims to have it has the obligation to provide proof of his authority, permission or privilege
for the use to be considered warranted. (Raza vs. Daikoku Electronics, Phils., Inc., 764 SCRA 132, G.R. No.
188464 July 29, 2015)

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In the case at bar, the infractions of Raza were numerous enough that they already amount to an unlawful
taking of company resources and that they may be subsumed under the charge of serious misconduct
leveled against him. It has been held that “although as a rule this Court leans over backwards to help
workers and employees continue with their employment or to mitigate the penalties imposed on them,
acts of dishonesty in the handling of company property are a different matter.” Such may be penalized
with dismissal. It matters little that Raza claims that his record prior to this was clean or that he has yet to
cause substantial damage to the company or to its property in committing his acts. His transgressions are
too serious and too many to escape without heavy sanction. In the present situation wherein Raza has
already been found guilty of numerous acts of driving the company vehicle for his personal use without
prior authority, the Court cannot expect and require the employer company to wait for one more such
instance of unauthorized use or for actual damage to be caused by such use before the company can be
considered justified in penalizing the erring employee. This Court has held that a series of irregularities
when put together may constitute serious misconduct, which is a just cause for termination. In the case
at bar, the seriousness and volume of the prior incidents, committed in such a short period of time, are
already enough as ground to terminate petitioner. (Id)

This Court has previously upheld as legal the dismissal of employees for using the employer’s vehicle for
their own private purposes without prior permission or authority.

In Soco v. Mercantile Corporation of Davao, 148 SCRA 526 (1987), the Court held that “a rule prohibiting
employees from using company vehicles for private purposes without authority from management is a
reasonable one.” Thus, an employee who used the company vehicle twice in pursuing his own personal
interests, on company time and deviating from his authorized route, all without permission, was held to
have been validly dismissed, for, as the Court held, to condone the employee’s conduct will erode the
discipline that an employer should uniformly apply so that it can expect compliance to the same rules and
regulations by its other employees. In another case, Family Planning Organization of the Philippines v.
NLRC, 207 SCRA 415 (1992), the Court also affirmed the dismissal of an employee who used the company
vehicle twice without permission and for personal reasons, noting that employees must yield obedience
to the rule against unauthorized use of company vehicles because this is proper and necessary for the
conduct of the employer’s business or concern. (Raza vs. Daikoku Electronics, Phils., Inc., 764 SCRA 132,
G.R. No. 188464 July 29, 2015)

As to the allegation that the penalty of dismissal is too harsh, it is long established that an employer is
given a wide latitude of discretion in managing its own affairs, and in the promulgation of policies, rules
and regulations on work-related activities of its employees.

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The broad discretion includes the implementation of company rules and regulations and the imposition
of disciplinary measures on its workers. But for the management prerogative to be upheld, the exercise
of disciplining employees and imposing appropriate penalties on erring workers must be practiced in good
faith for the advancement of the employer’s interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements. (Raza vs.
Daikoku Electronics, Phils., Inc., 764 SCRA 132, G.R. No. 188464 July 29, 2015)

For the resignation of an employee to be a viable defense in an action for illegal dismissal, an employer
must prove that the resignation was voluntary, and its evidence thereon must be clear, positive, and
convincing.

For the resignation of an employee to be a viable defense in an action for illegal dismissal, an employer
must prove that the resignation was voluntary, and its evidence thereon must be clear, positive, and
convincing. The employer cannot rely on the weakness of the employee’s evidence. In this case,
petitioners, as employers, were able to present sufficient evidence to establish that respondent’s
resignation was voluntary. As borne out by the Financial Statements for 2005 of petitioner BEMI, there
was ground for the company to implement a retrenchment of its employees at the time respondent
resigned. Under Article 283 of Presidential Decree No. 442, otherwise known as the Labor Code of the
Philippines, as amended, retrenchment is one of the authorized causes for termination of employment
which the law accords an employer who is not making good in its operations in order to cut back on
expenses for salaries and wages by laying off some employees. The purpose of retrenchment is to save a
financially ailing business establishment from eventually collapsing.

The condition of business losses justifying retrenchment is normally shown by audited financial
documents like yearly balance sheets and profit and loss statements as well as annual income tax
returns.

Proof of financial losses becomes the determining factor in proving the legitimacy of retrenchment. In
establishing a unilateral claim of actual or potential losses, financial statements audited by independent
external auditors constitute the normal method of proof of profit and loss performance of a company.
The condition of business losses justifying retrenchment is normally shown by audited financial
documents like yearly balance sheets and profit and loss statements as well as annual income tax returns.

In Revidad v. National Labor Relations Commission, 245 SCRA 356 (1995), the Supreme Court (SC)
declared that “proof of actual financial losses incurred by the company is not a condition sine qua non
for retrenchment,” and retrenchment may be undertaken by the employer to prevent even future losses.

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That petitioners were not able to present financial statements for years prior to 2005 should not be
automatically taken against them. Petitioner BEMI was organized and registered as a corporation in 2004
and started business operations in 2005 only. While financial statements for previous years may be
material in establishing the financial trend for an employer, these are not indispensable in all cases of
retrenchment. The evidence required for each case of retrenchment will still depend on its particular
circumstances. In fact, in Revidad v. National Labor Relations Commission, 245 SCRA 356 (1995), the Court
declared that “proof of actual financial losses incurred by the company is not a condition sine qua non for
retrenchment,” and retrenchment may be undertaken by the employer to prevent even future losses: In
its ordinary connotation, the phrase “to prevent losses” means that retrenchment or termination of the
services of some employees is authorized to be undertaken by the employer sometime before the
anticipated losses are actually sustained or realized. It is not, in other words, the intention of the lawmaker
to compel the employer to stay his hand and keep all his employees until after losses shall have in fact
materialized. If such an intent were expressly written into the law, that law may well be vulnerable to
constitutional attack as unduly taking property from one man to be given to another. (Blue Eagle
Management, Inc. vs. Naval, 790 SCRA 328, G.R. No. 192488 April 19, 2016)

In Samaniego v. National Labor Relations Commission, 198 SCRA 111 (1991), the Supreme Court (SC)
accorded weight to the resignation letters of the employees because although said letters were
prepared by the company, the employees signed the same.

It is inconsequential that the contents of respondent’s resignation letter was dictated by petitioner Dela
Rama and, per the Labor Arbiter’s observation, reads more of a quitclaim rather than a resignation letter,
for as long as respondent wrote down and signed said letter by her own volition. In Samaniego v. National
Labor Relations Commission, 198 SCRA 111 (1991), the Court accorded weight to the resignation letters
of the employees because although said letters were prepared by the company, the employees signed
the same voluntarily. Granted that the employees in Samaniego were managerial employees, while
respondent in the present case was a rank and file employee, the financial situation of petitioner BEMI,
the need for retrenchment, and the option to voluntarily resign and the financial package which
respondent could avail herself of were duly explained to respondent during the meeting on February 20,
2006; and respondent’s resignation letter was in Filipino, using simple terms which could be easily
understood. (Blue Eagle Management, Inc. vs. Naval, 790 SCRA 328, G.R. No. 192488 April 19, 2016)

The crime of illegal recruitment is defined and penalized under Sections 6 and 7 of RA 8042, or the
Migrant Workers and Overseas Filipinos Act of 1995.

The crime of illegal recruitment is defined and penalized under Sections 6 and 7 of RA 8042, or the Migrant
Workers and Overseas Filipinos Act of 1995, to wit: SEC. 6. Definition.—For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or

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procuring workers, and includes referring, contract services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a nonlicensee or nonholder of authority
contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines: Provided, That any such nonlicensee or nonholder who, in any manner,
offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It
shall likewise include the following acts, x x x: x x x x Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one
another. It is deemed committed in large scale if committed against three (3) or more persons individually
or as a group. The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having control, management or direction of their
business shall be liable. (People vs. Salvatierra, 725 SCRA 200, G.R. No. 200884 June 4, 2014)

Elements of Illegal Recruitment

It is necessary that the prosecution prove the concurrence of the following elements: (1) the offender
undertakes any of the activities within the meaning of “recruitment and placement” under Article 13(b)
of the Labor Code, or any of the prohibited practices enumerated under Article 34 of the Labor Code (now
Section 6 of Republic Act [RA] No. 8042) and (2) the offender has no valid license or authority required by
law to enable him to lawfully engage in recruitment and placement of workers. In the case of illegal
recruitment in large scale, a third element is added: that the offender commits any of the acts of
recruitment and placement against three or more persons, individually or as a group.—It is necessary that
the prosecution prove the concurrence of the following elements: (1) the offender undertakes any of the
activities within the meaning of “recruitment and placement” under Article 13(b) of the Labor Code, or
any of the prohibited practices enumerated under Article 34 of the Labor Code (now Section 6 of RA 8042)
and (2) the offender has no valid license or authority required by law to enable him to lawfully engage in
recruitment and placement of workers. In the case of illegal recruitment in large scale, a third element is
added: that the offender commits any of the acts of recruitment and placement against three or more
persons, individually or as a group. In this case, appellant engaged in recruitment when she represented
herself to be capable of deploying workers to South Korea upon submission of the pertinent documents
and payment of the required fees. As appellant claimed to be the liaison officer of Llanesa Consultancy
Services, the victims believed that she indeed had the capability to deploy them abroad. All the witnesses
and the supposed victims identified appellant as the one who made such representation and received the
payments they made evidenced by the petty cash vouchers and receipts she signed. Moreover, appellant
was caught in an entrapment operation when she received the amount demanded allegedly as additional
requirement before they can be deployed abroad. It was, likewise, certified to by the Philippine Overseas
Employment Administration Licensing Division that neither appellant nor Llanesa Consultancy Services
were licensed to recruit workers for overseas employment. It is also clear from the evidence presented
that the crime of illegal recruitment was committed by appellant against five persons.

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The very same evidence proving appellant’s criminal liability for illegal recruitment also established her
criminal liability for estafa.

We likewise agree with the appellate court that appellant may also be held liable for estafa. The very same
evidence proving appellant’s criminal liability for illegal recruitment also established her criminal liability
for estafa. The elements of estafa are: (a) that the accused defrauded another by abuse of confidence or
by means of deceit, and (b) that damage or prejudice capable of pecuniary estimation is caused to the
offended party or third person. In this case, as testified to by the victims/witnesses, appellant defrauded
the victims by making them believe that she has the capacity to deploy them to South Korea as workers,
even as she did not have the authority or license for the purpose. Because of this enticement, the victims
parted with their money in varying amounts as placement fees to appellant. Consequently, the victims
suffered damages as the promised employment abroad never materialized and the money they parted
were never recovered. (People vs. Salvatierra, 725 SCRA 200, G.R. No. 200884 June 4, 2014)

Article 217(c) of the Labor Code provides that the Labor Arbiter (LA) shall refer to the grievance
machinery and voluntary arbitration as provided in the Collective Bargaining Agreement (CBA) those
cases that involve the interpretation of said agreements.

Article 217(c) of the Labor Code provides that the Labor Arbiter shall refer to the grievance machinery and
voluntary arbitration as provided in the CBA those cases that involve the interpretation of said
agreements. Article 261 of the Labor Code further provides that all unresolved grievances arising from the
interpretation or implementation of the CBA, including violations of said agreement, are under the original
and exclusive jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators. Excluded from this
original and exclusive jurisdiction is gross violation of the CBA, which is defined in Article 261 as “flagrant
and/or malicious refusal to comply with the economic provisions” of the CBA. (University of Santo Tomas
Faculty Union vs. University of Santo Tomas, 731 SCRA 456, G.R. No. 203957 July 30, 2014)

Article 290 of the Labor Code provides that unfair labor practices (ULP) prescribe within one year “from
accrual of such ULP; otherwise, they shall be forever barred.” Article 291 of the same Code provides that
money claims arising from employer-employee relations prescribe “within three (3) years from the time
the cause of action accrued; otherwise they shall be forever barred.

USTFU’s claims under the 1996--2001 CBA, whether characterized as one for unfair labor practice or for
money claims from employer-employee relations, have already prescribed when USTFU filed a complaint
before the LA. (University of Santo Tomas Faculty Union vs. University of Santo Tomas, 731 SCRA 456, G.R.
No. 203957 July 30, 2014)

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Without necessarily resulting to a termination of employment, an employer may at any rate, bona fide
suspend the operation of its business for a period of not exceeding six (6) months under Article 286 of
the Labor Code.

Without necessarily resulting to a termination of employment, an employer may at any rate, bona fide
suspend the operation of its business for a period of not exceeding six months under Article 286 of the
Labor Code. While the employer is, on the one hand, duty-bound to reinstate his employees to their
former positions without loss of seniority rights if the operation of the business is resumed within six
months, employment is deemed terminated where the suspension exceeds said period. Not having
resumed its operations within six months from the time it suspended its operations on 27 July 2001, it
necessarily follows that petitioner is liable to pay respondents’ separation pay computed at one (1) month
pay or at least one-half (1/2) month pay for every year of service, whichever is higher, as well as the
damages and attorney’s fees adjudicated by the Labor Arbiter. Without proof of the serious business
losses it allegedly sustained and/or compliance with the reportorial requirements under Article 283 of
the Labor Code, petitioner cannot expediently plead exemption from said liabilities due to the supposed
financial reverses which led to the eventual closure of its business. It is essentially required that the
alleged losses in business operations must be proven for, otherwise, said ground for termination would
be susceptible to abuse by scheming employers who might be merely feigning business losses or reverses
in their business ventures in order to ease out employees. The condition of business losses justifying
retrenchment is normally shown by audited financial documents like yearly balance sheets and profit and
loss statements as well as annual income tax returns which were not presented in this case. (Manila
Mining Corporation vs. Amor, 756 SCRA 15, G.R. No. 182800 April 20, 2015)

To the mind of the Supreme Court (SC), respondents’ repeated hiring of petitioners for its long-running
news program positively indicates that the latter were ABS-CBN’s regular employees.

The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or Project
Assignment Forms and the terms and condition embodied therein, petitioners are regular employees of
ABS-CBN. Time and again, it has been ruled that the test to determine whether employment is regular or
not is the reasonable connection between the activity performed by the employee in relation to the
business or trade of the employer. As cameramen/editors and reporters, petitioners were undoubtedly
performing functions necessary and essential to ABS-CBN’s business of broadcasting television and radio
content. It matters little that petitioners’ services were engaged for specified periods for TV Patrol Bicol
and that they were paid according to the budget allocated therefor. Aside from the fact that said program
is a regular weekday fare of the ABS-CBN’s Regional Network Group in Naga City, the record shows that,
from their initial engagement in the aforesaid capacities, petitioners were continuously rehired by
respondents over the years. To the mind of the Court, respondents’ repeated hiring of petitioners for its
long-running news program positively indicates that the latter were ABS-CBN’s regular employees.
(Begino vs. ABS-CBN Corporation (formerly ABS-CBN Broadcasting Corporation), 756 SCRA 236, G.R. No.
199166 April 20, 2015)

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LABOR LAW
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If the employee has been performing the job for at least one (1) year, even if the performance is not
continuous or merely intermittent, the law deems the repeated or continuing performance as sufficient
evidence of the necessity, if not indispensability of that activity in the business.

Indeed, an employment stops being coterminous with specific projects where the employee is
continuously rehired due to the demands of the employer’s business. When circumstances show,
moreover, that contractually stipulated periods of employment have been imposed to preclude the
acquisition of tenurial security by the employee, this Court has not hesitated in striking down such
arrangements as contrary to public policy, morals, good customs or public order. The nature of the
employment depends, after all, on the nature of the activities to be performed by the employee,
considering the nature of the employer’s business, the duration and scope to be done, and, in some cases,
even the length of time of the performance and its continued existence. In the same manner that the
practice of having fixed-term contracts in the industry does not automatically make all talent contracts
valid and compliant with labor law, it has, consequently, been ruled that the assertion that a talent
contract exists does not necessarily prevent a regular employment status. (Begino vs. ABS-CBN
Corporation (formerly ABS-CBN Broadcasting Corporation), 756 SCRA 236, G.R. No. 199166 April 20, 2015)

As cameramen/editors and reporters, it also appears that petitioners were subject to the control and
supervision of respondents which, first and foremost, provided them with the equipment essential for
the discharge of their functions.

Prepared at the instance of respondents, petitioners’ Talent Contracts tellingly provided that ABS-CBN
retained “all creative, administrative, financial and legal control” of the program to which they were
assigned. Aside from having the right to require petitioners “to attend and participate in all promotional
or merchandising campaigns, activities or events for the Program,” ABS-CBN required the former to
perform their functions “at such locations and Performance/Exhibition Schedules” it provided or, subject
to prior notice, as it chose determine, modify or change. Even if they were unable to comply with said
schedule, petitioners were required to give advance notice, subject to respondents’ approval. However
obliquely worded, the Court finds the foregoing terms and conditions demonstrative of the control
respondents exercised not only over the results of petitioners’ work but also the means employed to
achieve the same. (Begino vs. ABS-CBN Corporation (formerly ABS-CBN Broadcasting Corporation), 756
SCRA 236, G.R. No. 199166 April 20, 2015)

In finding that petitioners were regular employees, the NLRC further ruled that the exclusivity clause
and prohibitions in their Talent Contracts and/or Project Assignment Forms were likewise indicative of
respondents’ control over them.

Brushing aside said finding, however, the CA applied the ruling in Sonza v. ABS-CBN Broadcasting
Corporation, 431 SCRA 583 (2004), where similar restrictions were considered not necessarily

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determinative of the existence of an employer-employee relationship. Recognizing that independent

contractors can validly provide his exclusive services to the hiring party, said case enunciated that
guidelines for the achievement of mutually desired results are not tantamount to control. As correctly
pointed out by petitioners, however, parallels cannot be expediently drawn between this case and that
of Sonza case which involved a well-known television and radio personality who was legitimately
considered a talent and amply compensated as such. While possessed of skills for which they were
modestly recompensed by respondents, petitioners lay no claim to fame and/or unique talents for which
talents like actors and personalities are hired and generally compensated in the broadcast industry.
(Begino vs. ABS-CBN Corporation (formerly ABS-CBN Broadcasting Corporation), 756 SCRA 236, G.R. No.
199166 April 20, 2015)

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