Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
1. National Labor Relations Commission
En Banc
They sit in En Banc only in the following
circumstances:
a. Purposes of promulgating rules and
regulations governing the hearing
and disposition of cases before any of
its division and regional branches;
b. Formulating policies affecting its
administration and operations.
c. Recommend to the President of the
Republic of the Philippines the
extension of service of
Commissioners and/or Labor Arbiters
up to the maximum age of 70 years
old.
2. Persons authorized to issue
injunctions
a. President of the Republic of the
Philippines
b. Secretary of Labor
c. Labor Arbiters
Only as an incident to the cases
pending before the LA, in order to
preserve the rights of the parties
during the pendency of the case, but
excluding labor disputes involving
strikes or lockouts in industries
indispensable to the national interest.
Injunction relative to labor disputes
involving strikes or lockouts in
industries indispensable to the
national interest is within the
jurisdiction of the NLRC (in certified
cases) or DOLE Secretary (in
assumed cases).
d. NLRC
e. DOLE Regional Directors
3. NLRC exclusive appellate jurisdiction
a. All cases decided by the Labor
Arbiter including contempt cases.
b. Cases decided by the DOLE
Regional Directors or his duly
authorized Hearing Officers (under
At. 129) involving recovery of wages,
simple money claims and other
benefits not exceeding P5,000 and
not accompanied by claim for
reinstatement.
4. Jurisdiction of the Labor Arbiters
a. Unfair Labor Practice (ULP) cases.
b. Termination disputes (or illegal
dismissal cases).
c. Cases that workers may file involving
wages, rates of pay, hours of work
and other terms and conditions of
employment, if accompanied with
claim for reinstatement.
d. Claims for actual, moral, exemplary
and other forms of damages arising
from the employer-employee
relations.
e. Cases arising from any violation of
Art. 279 of the Labor Code, including
questions involving the legality of
strikes and lockouts.
Except strikes and lockouts in
industries indispensable to the
national interest, in which case, either
NLRC (in certified cases) or DOLE
Secretary (in assumed cases) has
jurisdiction.
f. All other claims arising from
employer-employee relations,
including those of persons in
domestic or household involving an
amount exceeding P5,000 regardless
of whether accompanied with a claim
for reinstatement (Relate this to Art.
129).
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
g. Wage distortion disputes in
unorganized establishments not
voluntarily settled by the parties
pursuant to RA No. 6727.
h. Enforcement of compromise
agreements when there is non-
compliance by any of the parties
pursuant to RA No. 6727.
i. Enforcement of compromise
agreements when there is non-
compliance by any of the parties
pursuant to Article 233 (Compromise
Agreements) of the Labor Code as
amended.
j. Cases arising from the interpretation
and implementation of the CBA and
company personnel policies shall be
referred to the grievance machinery
and voluntary arbitration.
k. Claims arising out of an employer-
employee relationship or by virtue of
any law or contract involving Filipino
workers for overseas employment
including claims for actual, moral,
exemplary, and other forms of
damages.
5. Not included in the jurisdiction of the
Labor Arbiter
Claims for:
a. Employees’ compensation
b. Social Security
c. Medicare
d. Maternity Benefits.
6. Bureau of Labor Relations Original &
Exclusive Jurisdiction
The BLR has original and exclusive
jurisdiction over the following:
a. “Inter-union disputes”
“representation disputes”
Which refer to cases involving
petition for certification filed by a duly
registered labor organization which is
seeking to be recognized as the sole
and exclusive bargaining agent of the
rank-and-file employees in the
appropriate bargaining unit of a
company, firm or establishment.
b. “Intra-union disputes” or “Internal-
union disputes”
Which refer to disputes or grievances
arising form any violation of or
disagreement over any provision of
the constitution and by-laws of the
union, including any violation of the
rights and conditions of union
membership provided for in the Labor
Code.
c. All disputes, grievances or problems
arising from or affecting labor-
management relations in all
workplaces, except those arising
from the interpretation or
implementation of the CBA which are
subject of grievance procedure
and/or voluntary arbitration.
7. Administrative functions of BLR
a. Registration of labor unions
b. Keeping of registry of labor unions
c. Maintenance and custody of CBAs
8. National Conciliation and Mediation
Board’s Jurisdiction
Jurisdiction over:
a. Conciliation
b. Mediation
c. Voluntary Arbitration Cases
9. Contract Bar Rule
Contract bar rule prohibits the BLR or
Regional Director of the DOLE from
or entertaining any petition for certification
election while a valid collective
bargaining agreement is existing in an
industry.
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
Exceptions:
a. During freedom period – 60 days
prior to the expiration of the CBA; and
b. CBA is not registered with the BLR or
Regional Office of the DOLE.
10. Requisites for a valid dismissal under
a union security clause:
a. Union security clause applies to the
concerned employee;
b. Request to dismiss is made by the
contracting union; and
c. The employer verifies the ground for
expulsion.
11. Employment of a child
General Rule:
Minor aged below 15 cannot be
employed.
Exceptions:
a. Under the sole responsibility of his
parent/guardian; and
b. In a business where only family
members are employed.
12. Rights of family drivers are governed
by the Civil Code
According to the Supreme Court, a family
driver’s rights are governed by the Civil
Code and not by the Labor Code,
specifically the provisions on separation
pay for authorized causes.
In the case of Atienza vs Saluta (GR
233413, June 17, 2019), the high court,
through Associate Justice Jose Reyes
Jr., declared:
Due to the express repeal of the Labor
Code provisions pertaining to
househelpers, which includes family
drivers, by the Kasambahay Law; and the
non-applicability of the Kasambahay Law
to family drivers, there is a need to revert
back to the Civil Code provisions,
particularly Articles 1697 and 1698
thereof.
13. Requisites for facilities to be deducted
from employees’ wages
a. Authorized by the DOLE Regional
Director;
b. Accepted by the workers;
c. Value is reasonable; and
d. Salary deduction is authorized in
writing.
14. To be considered as a corporate
employee, the following requisites
must be present:
a. Office is not a creation of the
Corporation Code;
b. It is not shown that his office is not a
corporate position under the Articles
of Incorporation and/or By-Laws; and
c. It is not shown that there is a board
resolution investing his position with
the status of a corporate office, much
less appointing him thereto.
15. Principle of Grants requisites:
There is diminution of benefits when the
following requisites are present:
a. The grant or benefit is founded on a
policy or has ripened into a practice
over a long period of time;
b. The practice is consistent and
deliberate;
c. The practice is not due to error in the
construction or application of a
doubtful or difficult question of law;
and
d. The diminution or discontinuance is
done unilaterally by the employer.
16. In order for the beneficiaries of a
seafarer to be entitled to death
compensation from the employer, it
must be proven the death of the
seafarer is:
a. Work-related; and
b. Occurred during the term of his
contract.
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
In order to avail of death benefits, the
death of the employee should occur
during the effectivity of the employment
contract.
Menez v. Status Maritime Corp, G.R. No.
227523, August 29, 2018, SECOND
DIVISION, CAGUIOA, J.
17. Submission to post-employment
medical examination
20. Work-related injury
It is stated in Sec. 20(B) of the 2000
POEA-SEC that the seafarer shall submit
himself to post-employment medical
examination by a company-designated
physician within 3 working days upon
his return except when he is physically
incapacitated to do so, in which case a
written notice to the agency within the
same period is deemed as compliance.
Failure of the seafarer to comply with the
mandatory reporting requirement shall
result in his forfeiture of the right to claim
the above benefits.
Menez v. Status Maritime Corp, G.R. No.
227523, August 29, 2018, SECOND
DIVISION, CAGUIOA, J.
18. Seafarer’s sickness allowance
Upon signing-off from the vessel for
medical treatment, the seafarer is entitled
to sickness allowance equivalent to his
basic wage until he is declared fit to work
or the degree of permanent disability has
been assessed by the company-
designated physician but in no case shall
this period exceed 120 days.
Menez v. Status Maritime Corp, G.R. No.
227523, August 29, 2018, SECOND
DIVISION, CAGUIOA, J.
19. Certificate of Registration issued by
DOLE to a legitimate job contractor is
a conclusive proof of its legitimacy
The certification prevents the
presumption of labor-only contracting
from arising.
It gives rise to a disputable presumption
that the contractor’s operations are
legitimate.
Philippine Pizza Inc. v. Cayetano, G.R.
No. 230030, August 29, 2018, SECOND
DIVISION, PERLAS-BERNABE J.
The POEA-SEC defines a work-related
injury as "injury(ies) resulting in disability
or death arising out of and in the course
of employment," and a work-related
illness as "any sickness resulting to
disability or death as a result of an
occupational disease listed under
Section 32-A of this Contract with the
conditions set therein satisfied."
For illnesses not mentioned under
Section 32, the POEA-SEC creates a
disputable presumption in favor of the
seafarer that these illnesses are work-
related. However, notwithstanding the
presumption, We have held that on due
process grounds, the claimant-seafarer
must still prove by substantial evidence
that his work conditions caused or, at
least, increased the risk of contracting
the disease.
This is because awards of compensation
cannot rest entirely on bare assertions
and presumptions. In order to establish
compensability of a non-occupational
disease, reasonable proof of work-
connection is sufficient – direct causal
relation is not required.
Thus, probability, not the ultimate degree
of certainty, is the test of proof in
compensation proceedings.
Skippers United Pacific, Inc. v. Lagne,
G.R. No. 217036, August 20, 2018,
FIRST DIVISION, PERALTA, J.
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
21. Managerial employee is not entitled to
retirement benefits exclusively
granted to the rank-and-file
employees under the CBA
It is an indisputable fact that Huliganga
was a managerial employee of SITA and,
as such, he is not entitled to retirement
benefits exclusively granted to the rank-
and-file employees under the CBA.
It must be remembered that under Article
245 of the Labor Code, managerial
employees are not eligible to join, assist
or form any labor organization.
[T]o be entitled to the benefits under the
CBA, the employees must be members
of the bargaining unit, but not necessarily
of the labor organization designated as
the bargaining agent.
To be considered a company practice,
the giving of the benefits should have
been done over a long period of time, and
must be shown to have been consistent
and deliberate. The test or rationale of
this rule on long practice requires an
indubitable showing that the employer
agreed to continue giving the benefits
knowing fully well that said employees
are not covered by the law requiring
payment thereof.
Societe Internationale v. Huliganga, G.R.
No. 215504, August 20, 2018, FIRST
DIVISION, PERALTA, J.
22. Abandonment of work
Abandonment of work has been
construed as "a clear and deliberate
intent to discontinue one's employment
without any intention of returning back."
To justify the dismissal of an employee
on this ground, two (2) elements must
concur, namely:
(a) the failure to report for work or
absence without valid or justifiable
reason; and
(b) a clear intention to sever the
employer-employee relationship.
Mere failure to report to work is
insufficient to support a charge of
abandonment. The employer must
adduce clear evidence of the employee's
"deliberate, unjustified refusal . . . to
resume his [or her] employment," which
is manifested through the employee's
overt acts.
Intent to sever the employer-employee
relationship can be proven through the
overt acts of an employee. However, this
intent "cannot be lightly inferred or legally
presumed from certain ambivalent acts."
The overt acts, after being considered as
a whole, must clearly show the
employee's objective of discontinuing his
or her employment.
Petitioners point to respondent's
absences, non-compliance with the
return-to-work notices, and his alleged
act of crumpling the first return-to- work
notice as indicators of abandonment.
These acts still fail to convincingly show
respondent's clear and unequivocal
intention to sever his employment.
Demex Rattancraft Inc. v. Leron, G.R.
No. 204288, November 08, 2017, THIRD
DIVISION, LEONEN, J.
23. Twin-notice rule
Petitioners also failed to comply with
procedural due process, particularly the
twin-notice rule. They admitted that after
sending two (2) return-to-work notices,
they sent a notice to respondent
informing him of his dismissal.
Valid termination requires the employer
to send an initial notice to the employee,
stating the specific grounds or causes for
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
dismissal and directing the submission of
a written explanation answering the
charges. After considering the
employee's answer, the employer must
give another notice informing the
employee of the employer's findings and
reason for termination.
These are the operative acts that
terminate an employer-employee
relationship.
Demex Rattancraft Inc. v. Leron, G.R.
No. 204288, November 08, 2017, THIRD
DIVISION, LEONEN, J.
24. In cases where there is both an
absence of illegal dismissal on the
part of the employer and an absence
of abandonment on the part of the
employees, the remedy is
reinstatement but without backwages
However, considering that the
reinstatement was already impossible by
reason of the strained relations of the
parties, and the fact that petitioners
already found another employment, each
party must bear his or her own loss, thus,
placing them on equal footing.
Petition was dismissed. A new judgment
is rendered declaring petitioners' failure
to prove the fact of their dismissal; and
that respondent-company in turn, failed
to show abandonment on the part of the
petitioners. Thus, petitioners are not
entitled to their money claims, either in
the form of backwages or separation pay.
Layaona v. Ablaze Builders, G.R. No.
230791, November 20, 2017, FIRST
DIVISION, TIJAM, J.
25. Compensable Sickness (GSIS)
Presidential Decree No. 626, as
amended, defines compensable
sickness as "any illness definitely
accepted as an occupational disease
listed by the Commission, or any illness
caused by employment subject to proof
by the employee that the risk of
contracting the same is increased by the
working conditions.
For sickness or death of an employee to
be compensable, the claimant must show
either:
(1) that it is a result of an occupational
disease listed under Annex "A" of the
AREC with the conditions set therein
satisfied; or
(2) if not so listed, that the risk of
contracting the disease was
increased by the working conditions.
It is undisputed that Tañedo's medical
condition (i.e., varicosities in the left leg)
is not among the occupational diseases
listed under Annex "A" of the AREC.
Therefore, he is required by statute to
prove that the risk of contracting the said
ailment was increased by the nature of
his working conditions.
In his pleadings, Tañedo asserted that
his function of delivering documents to
various government offices, encoding,
printing as well as filing statements and
letters cannot be accomplished without
great leg exertion which caused the
varicosities on his left leg. Unfortunately,
his statements were not supported by
any substantial medical or credible proof.
Being such, they are mere speculations
or presumptions upon which an award of
compensation cannot be properly based.
It is axiomatic that the employee is
required to prove a positive proposition -
that the risk of contracting the disease is
increased by his working conditions.
GSIS v. Tanedo Jr., G.R. No. 193500,
November 20, 2017, FIRST DIVISION,
LEONARDO-DE CASTRO, J.
26. Occupational Disease (Sec. 32-A of
the POEA-SEC)
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
The correct approach in adjudging claims
of seafarers for death and disability
benefits is to determine whether the
claimants have proven the requisites of
compensability under Section 32-A of the
POEA-SEC, viz:
(1) the seafarer's work must have
involved the risks described therein;
(2) the disease was contracted as a
result of the seafarer's exposure to
the described risks;
(3) the disease was contracted within a
period of exposure and under such
factors necessary to contract it; and
(4) there was no notorious negligence on
the part of the seafarer.
Maersk-Filipinas Crewing, Inc. v.
Malicse, G.R. Nos. 200576 & 200626,
November 20, 2017, FIRST DIVISION,
SERENO, C.J.
27. Back payment of any compensation to
public officers and employees cannot
be done through a writ of execution
The COA has exclusive jurisdiction to
settle "all debts and claims of any sort
due from or owing to the Government or
any of its subdivisions, agencies, and
instrumentalities.”
The proper procedure to enforce a
judgment award against the government
is to file a separate action before the COA
for its satisfaction.
NPC Drivers v. NPC, G.R. No. 156208,
November 21, 2017, EN BANC,
LEONARDO-DE CASTRO, J.
28. The employer has the burden to prove
the factual and legal basis for the
termination of its employees
PAL has the duty to establish, clearly and
satisfactorily, all the elements for a valid
retrenchment. "Failure to do so
'inevitably results in a finding that the
dismissal is unjustified.”
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
29. Management prerogative cannot
justify violation of law or the pursuit of
any arbitrary or malicious motive
PAL's claim of management prerogative
does not automatically absolve it of
liability. Management prerogative is
not unbridled and limitless. Nor is it
beyond this court's scrutiny.
Where abusive and oppressive, the
alleged business decision must be
tempered to safeguard the constitutional
guarantee of providing "full protection to
labor[.]"
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
30. Procedural requirement for
redundancy or retrenchment
a. For either redundancy or
retrenchment, the law requires that
the employer give separation pay to
the affected employees.
b. The employer must also serve a
written notice on both the employees
and the Department of Labor and
Employment at least one (1) month
before the intended date of
redundancy or retrenchment.
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
31. There is no right to be heard in
dismissal for an authorized cause
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
As a rule, hearing is an unnecessary
condition in determining the legality
of dismissal due to redundancy or
retrenchment. PAL's dismissal of
Dawal, et al.'s services did not arise from
their fault or negligence, such as serious
misconduct, willful disobedience, or
gross and habitual neglect of duties.
Otherwise, this would have compelled
them to be heard to disprove the
allegations.
There is no right to be heard in dismissal
for an authorized cause. In terminating
the employees' services due to the:
a. installment of labor-saving
devices,
b. redundancy,
c. retrenchment to prevent losses, or
d. closure of business,
The employer has no obligation to
provide the employees the
opportunity to disprove the business
and financial reasons for termination.
Where there is no allegation of employee
misconduct or negligence that amounts
to a just cause for dismissal under Article
282 of the Labor Code, the employee
concerned has no right to be heard prior
to their dismissal.
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
32. Redundancy v. Retrenchment
In Sebuguero v. National Labor Relations
Commission, this court differentiated
redundancy from retrenchment:
Redundancy exists where the services
of an employee are in excess of what is
reasonably demanded by the actual
requirements of the enterprise. A position
is redundant where it is superfluous, and
superfluity of a position or positions may
be the outcome of a number of factors,
such as overhiring of workers, decreased
volume of business, or dropping of a
particular product line or service activity
previously manufactured or undertaken
by the enterprise.
Retrenchment, on the other hand, is
used interchangeably with the term "lay-
off." It is ... an act of the employer of
dismissing employees because of losses
in the operation of a business, lack of
work, and considerable reduction on the
volume of his business.
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
33. Redundancy requires good faith in
abolishing the redundant position
To establish good faith, the company
must provide substantial proof that it is
overmanned. This is absent here.
In General Milling Corporation v. Viajar,
we have held that the act of hiring new
employees while firing the old ones
"negat[es] the claim of redundancy."
PAL's acts effectively defeated its
employees' security of tenure and
seniority rights. The presence of bad faith
cancels out any claim of redundancy.
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
34. The employer has the burden of
showing by clear and satisfactory
evidence that there are existing or
imminent substantial losses, and that
"legitimate business reasons justif[y]
. . . retrenchment."
Mere showing of incurred or expected
losses does not automatically justify
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
retrenchment. The business losses must
be "substantial, serious, actual[,] and
real," not merely de minimis.
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
35. It is not enough for a company to
simply incur business losses or go
through rehabilitation to justify
retrenchment
While it can be argued that undergoing
corporation rehabilitation evinces its
substantial business losses, PAL must
still prove all the other elements for a
valid retrenchment.
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
36. Accepting separation pay does not
estop Dawal, et al. from questioning
their illegal dismissal
Accepting the amount of separation pay,
as stated in Dawal, et al.'s respective
Release, Waiver and Quitclaim, does
not prevent them from filing a
complaint for illegal dismissal. The law
looks at quitclaims and releases with
disfavor
PAL v. Dawal, G.R. No. 173921,
February 24, 2016, SECOND DIVISION,
LEONEN, J.
37. Termination due to disease – an
authorized cause for dismissal under
Article 284 of the Labor Code
As substantive requirements, the Labor
Code and its IRR require the presence of
the following elements:
1) An employer has been found to be
suffering from any disease.
2) His continued employment is
prohibited by law or prejudicial to
his health, as well as to the health
of his co-employees.
3) A competent public health
authority certifies that the disease
is of such nature or at such a stage
that it cannot be cured within a
period of six months even with
proper medical treatment.
With respect to the first and second
elements, the Court liberally construed
the phrase “prejudicial to his health as
well as to the health of his co-employees”
to mean “prejudicial to his health or to
the health of his co-employees.”
Deoferio v. Intel Technology, G.R. No.
202996, June 18, 2014, SECOND
DIVISION, BRION, J.
38. Without the medical certificate, there
can be no authorized cause for the
employee’s dismissal
The third element substantiates the
contention that the employee has indeed
been suffering from a disease that:
(1) is prejudicial to his health as well as
to the health of his co-employees;
and
(2) cannot be cured within a period of six
months even with proper medical
treatment.
Without the medical certificate, there can
be no authorized cause for the
employee’s dismissal. The absence of
this element thus renders the
dismissal void and illegal.
Deoferio v. Intel Technology, G.R. No.
202996, June 18, 2014, SECOND
DIVISION, BRION, J.
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
39. The medical certificate is not merely a
procedural requirement, but a 202996, June 18, 2014, SECOND
substantive one
The certification from a competent public
health authority is precisely the
substantial evidence required by law to
prove:
a. the existence of the disease itself,
b. its non-curability within a period of six
months even with proper medical
treatment, and
c. the prejudice that it would cause to
the health of the sick employee and
to those of his co-employees.
Deoferio v. Intel Technology, G.R. No.
202996, June 18, 2014, SECOND
DIVISION, BRION, J.
40. The twin-notice requirement applies
to terminations due to disease
In Sy v. Court of Appeals and Manly
Express, Inc. v. Payong, Jr., promulgated
in 2003 and 2005, respectively, the Court
finally pronounced the rule that the
employer must furnish the employee two
written notices in terminations due to
disease, namely:
(1) the notice to apprise the employee of
the ground for which his dismissal is
sought; and
(2) the notice informing the employee
of his dismissal, to be issued after
the employee has been given
reasonable opportunity to answer
and to be heard on his defense.
These rulings reinforce the State policy of
protecting the workers from being
terminated without cause and without
affording them the opportunity to explain
their side of the controversy.
Deoferio v. Intel Technology, G.R. No.
DIVISION, BRION, J.
41. Nominal damages when procedural
requirements are not complied with
In Jaka Food Processing Corp. v. Pacot,
we distinguished between terminations
based on Article 282 of the Labor Code
and dismissals under Article 283 of the
Labor Code.
We then pegged the nominal damages at
P30,000.00 if the dismissal is based on a
just cause but the employer failed to
comply with the twin-notice requirement.
On the other hand, we fixed the nominal
damages at P50,000.00 if the dismissal
is due to an authorized cause under
Article 283 of the Labor Code but the
employer failed to comply with the notice
requirement.
The reason is that dismissals for just
cause imply that the employee has
committed a violation against the
employer, while terminations under
Article 283 of the Labor Code are initiated
by the employer in the exercise of his
management prerogative.
Deoferio v. Intel Technology, G.R. No.
202996, June 18, 2014, SECOND
DIVISION, BRION, J.
42. Nominal damages if due to disease
With respect to Article 284 of the Labor
Code, terminations due to disease do not
entail any wrongdoing on the part of the
employee. It also does not purely involve
the employer’s willful and voluntary
exercise of management prerogative – a
function associated with the employer's
inherent right to control and effectively
manage its enterprise. Rather,
terminations due to disease are
occasioned by matters generally
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
beyond the worker and the employer's
control.
In fixing the amount of nominal damages
whose determination is addressed to our
sound discretion, the Court should take
into account several factors surrounding
the case, such as:
(1) the employer’s financial, medical,
and/or moral assistance to the sick
employee;
(2) the flexibility and leeway that the
employer allowed the sick employee
in performing his duties while
attending to his medical needs;
(3) the employer’s grant of other
termination benefits in favor of the
employee; and
(4) whether there was a bona fide
attempt on the part of the employer to
comply with the twin-notice
requirement as opposed to giving no
notice at all.
We award Deoferio the sum of
P30,000.00 as nominal damages for
violation of his statutory right to
procedural due process. In so ruling, we
take into account Intel’s faithful
compliance with Article 284 of the Labor
Code and Section 8, Rule 1, Book 6 of
the IRR.
Deoferio v. Intel Technology, G.R. No.
202996, June 18, 2014, SECOND
DIVISION, BRION, J.
43. Requisites for valid cessation of
business operations
Under Article 283 of the Labor Code,
three requirements are necessary for a
valid cessation of business operations:
(a) service of a written notice to the
employees and to the DOLE at
least one month before the intended
date thereof;
(b) the cessation of business must be
bona fide in character; and
(c) payment to the employees of
termination pay amounting to one
month pay or at least one-half month
pay for every year of service,
whichever is higher.
PNCC Skyway v. Sec. of Labor, G.R. No.
196110, February 06, 2017, SECOND
DIVISION, PERALTA, J.
44. Lay-off
Lay-off is defined as the severance of
employment, through no fault of and
without prejudice to the employee,
resorted to by management during the
periods of
a. business recession,
b. industrial depression,
c. seasonal fluctuations,
d. during lulls caused by lack of orders,
e. shortage of materials,
f. conversion of the plant to a new
production program,
g. the introduction of new methods or
more efficient machinery, or
h. of automation.
Elsewise stated, lay-off is an act of the
employer of dismissing employees
because of losses in the operation, lack
of work, and considerable reduction on
the volume of its business, a right
recognized and affirmed by the Court.
Tantamount to dismissal:
However, a lay-off would be tantamount
to a dismissal only if it is permanent.
Not dismissed:
When a lay-off is only temporary, the
employment status of the employee is
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not deemed terminated, but merely
suspended.
Lopez v. Irvine Construction, G.R. No.
207253, August 20, 2014, SECOND
DIVISION, PERLAS-BERNABE, J.
45. Temporary lay-off situation must not
exceed six (6) months
Within this six-month period, the
employee should either be recalled or
permanently retrenched. Otherwise, the
employee would be deemed to have
been dismissed, and the employee held
liable therefor.
Lopez v. Irvine Construction, G.R. No.
207253, August 20, 2014, SECOND
DIVISION, PERLAS-BERNABE, J.
46. In both permanent and temporary lay-
off, the one-month notice rule to both
the DOLE and the employee under
Article 283 of the Labor Code, is
mandatory
Also, in both cases, the lay-off, being an
exercise of the employer's management
prerogative, must be exercised in good
faith that is, one which is intended for the
advancement of employers' interest and
not for the purpose of defeating or
circumventing the rights of the
employees under special laws or under
valid agreements.
48. Grounds for which an employee may
Lopez v. Irvine Construction, G.R. No.
207253, August 20, 2014, SECOND
DIVISION, PERLAS-BERNABE, J.
47. Completion of construction projects
does not, by and of itself, amount to a
bona fide suspension of business
operations or undertaking
In invoking Article 286 of the Labor Code,
the paramount consideration should be
the dire exigency of the business of the
employer that compels it to put some of
its employees temporarily out of work.
This means that the employer should be
able to prove that it is faced with a clear
and compelling economic reason
which reasonably forces it to temporarily
shut down its business operations or a
particular undertaking, incidentally
resulting to the temporary lay-off of its
employees.
Due to the grim economic consequences
to the employee, case law states that the
employer should also bear the burden
of proving that there are no posts
available to which the employee
temporarily out of work can be
assigned.
Verily, Irvine cannot conveniently
suspend the work of any of its employees
in the guise of a temporary lay-off when it
has not shown compliance with the
legal parameters under Article 286 of
the Labor Code. With Irvine failing to
prove such compliance, the resulting
legal conclusion is that Lopez had been
constructively dismissed; and since the
same was effected without any valid
cause and due process, the NLRC
properly affirmed the LA's ruling that
Lopez's dismissal was illegal.
Lopez v. Irvine Construction, G.R. No.
207253, August 20, 2014, SECOND
DIVISION, PERLAS-BERNABE, J.
be validly terminated
Under the Labor Code, an employee may
be validly terminated on the following
grounds:
(1) just causes under Art. 282;
(2) authorized causes under Art. 283;
(3) termination due to disease under Art.
284, and
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(4) termination by the employee or
resignation under Art. 285.
(5) Dismissal from employment due to
the enforcement of the union security
clause in the CBA.
General Milling Corporation v. Casio,
G.R. No. 149552, March 10, 2010,
FIRST DIVISION, LEONARDO-DE
CASTRO, J.
49. Termination by employee/resignation
An employee may terminate without just
cause the employee-employer
relationship by serving a written notice on
the employer at least one (1) month in
advance. The employer upon whom no
such notice was served may hold the
employee liable for damages.
(Art. 300 of the Labor Code)
50. Instances when notice is dispensed
with
An employee may put an end to the
relationship without serving any notice on
the employer for any of the following just
causes:
a. Serious insult by the employer or his
representative on the honor and
person of the employee;
b. Inhuman and unbearable treatment
accorded the employee by the
employer or his representative;
c. Commission of a crime or offense by
the employer or his representative
against the person of the employee or
any of the immediate members of his
family; and
d. Other causes analogous to any of the
foregoing.
(Art. 300 of the Labor Code)
51. The 30-day notice requirement for an
employee’s resignation is actually for
the benefit of the employer who has
the discretion to waive such period
Its purpose is to afford the employer
enough time to hire another employee if
needed and to see to it that there is
proper turn-over of the tasks which the
resigning employee may be handling.
The rule requiring an employee to stay or
complete the 30-day period prior to the
effectivity of his resignation becomes
discretionary on the part of management
as an employee who intends to resign
may be allowed a shorter period before
his resignation becomes effective.
Hechanova v. Atty. Matorre, G.R. No.
198261, October 16, 2013, FIRST
DIVISION, VILLARAMA, JR., J.
52. Resignations, once accepted and
being the sole act of the employee,
may not be withdrawn without the
consent of the employer
Once an employee resigns and his
resignation is accepted, he no longer has
any right to the job.
If the employee later changes his mind,
he must ask for approval of the
withdrawal of his resignation from his
employer, as if he were re-applying for
the job. It will then be up to the employer
to determine whether or not his
service would be continued.
If the employer accepts said withdrawal,
the employee retains his job. If the
employer does not, as in this case, the
employee cannot claim illegal dismissal
for the employer has the right to
determine who his employees will be. To
say that an employee who has resigned
is illegally dismissed, is to encroach upon
the right of employers to hire persons
who will be of service to them.
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Intertrod Maritime v. NLRC, G.R. No.
81087, June 19, 1991, SECOND
DIVISION, PADILLA, J.
53. Assumption by the Secretary of Labor
and Employment and Employment
When a labor dispute causes or is likely
to cause a strike or lockout in an industry
indispensable to the national interest,
the Secretary of Labor and Employment
may assume jurisdiction over the dispute
and decide it or certify the same to the
National Labor Relations Commission for
compulsory arbitration.
Such assumption shall have the effect of
automatically enjoining an impending
strike or lockout.
If a strike/lockout has already taken place
at the time of assumption, all striking or
locked out employees and other
employees subject of the notice or
strike shall immediately return to work
and the employer shall immediately
resume operations and readmit all
employees under the same terms and
conditions prevailing before the strike or
lockout.
Notwithstanding the foregoing, parties to
the case may agree at any time to submit
the dispute to the Secretary of Labor or
his duly authorized representative as
Voluntary Arbitrator or to a panel of
Voluntary Arbitrators.
Sec. 15 of DO 40-03-A-I
54. Industries Indispensable to the
National Interest
For the guidance of the workers and
employers in the filing of petition for
assumption of jurisdiction, the following
industries/services are hereby
recognized as deemed indispensable to
the national interest:
a. Hospital Sector;
b. Electric Power Industry;
c. Water Supply Services, to exclude
small water supply services such as
Bottling and Refilling Refilling
Stations;
d. Air Traffic Control; and
e. Such other industries as maybe
recommended by the National
Tripartite Industrial Peace Council
(NTIPC).
Sec. 16 of DO 40-03-A-I
55. Requirement for Minimum Operational
Service
In labor disputes adversely affecting the
continued operation of hospitals, clinics
or medical institutions, it shall be the
duty of the striking union of locking-
out employer to provide and maintain
an effective skeletal workforce of
medical and other health personnel,
whose movement and services shall be
unhampered and unrestricted, as are
necessary to ensure the proper and
adequate protection of the life and health
of its patients, most especially
emergency cases, for the duration of the
strike or lockout.
Sec. 17 of DO 40-03-A-I
56. Wages shall be paid only by means of
legal tender
The only instance when an employer is
permitted to pay wages in forms other
than legal tender, that is by checks or
money order, is when the circumstances
prescribed in the second paragraph of
Article 102 are present.
Payment by check- payment of wages by
bank checks, postal checks or money
orders is allowed where such manner of
wage payment is customary on the date
of the effectivity of the Code, where it is
stipulated in a collective bargaining
agreement, or where all of the following
conditions are met:
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a. There is a bank or other facility for
encashment within a radius of one (1)
kilometer from the workplace;
b. The employer, or any of his agents or
representatives, does not receive any
pecuniary benefit directly or indirectly
from the arrangement;
c. The employee are given reasonable
time during banking hours to
withdraw their wages from the bank
which time shall be considered as
compensable hours worked if done
during the working hours; and
d. The payment by check is with the
written consent of the employees
concerned if there is no collective
agreement authorizing the payment
of wages by bank checks.
National Federation of Labor v. CA, G.R.
No. 149464, October 19, 2004, SECOND
DIVISION, CALLEJO, SR., J.
57. Telecommuting
"Telecommuting" refers to a work from an
alternative workplace with the use of
telecommunications and/or computer
technologies.
Sec. 3 of RA 11165
58. Is telecommuting mandatory?
NO.
An employer in private sector may offer a
telecommuting program to its employees
on a voluntary bases, and upon such
terms and conditions as they may
mutually agree upon.
Sec. 4 of RA 11165
59. Employer or employee may terminate
or change the telecommuting work
arrangement
In accordance with the telecommuting
policy or agreement, without prejudice to
employment relationship and working
conditions of the employee, at no cost to
the latter.
Sec. 3 of DO 202, series of 2019
60. Fair treatment
The employer shall ensure that the
telecommuting employee are given the
same treatment as that of comparable
employees are given the same treatment
as that of comparable employees
working at the time employer's premises.
Sec. 5 of RA 11165
61. Coverage of 105-Day Expanded
Maternity Leave Law (EMLL)
The 105-Day EMLL shall cover the
following:
a. Female workers in the Public Sector;
b. Female workers in the Private Sector;
c. Female workers in the Informal
Economy;
d. Female members who are voluntary
contributors to the SSS; and
e. Female national athletes.
Sec. 1 of IRR of RA 11210
62. Grant of Maternity Leave
All covered female workers in
government and the private sector,
including those in the informal economy,
regardless of civil status or the
legitimacy of her child, shall be granted
one hundred five (105) days maternity
leave with full pay and an option to
extend for an additional thirty (30) days
without pay.
Provided, That in case the worker
qualifies as a solo parent under Republic
Act No. 8972, or the "Solo Parents’
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Welfare Act", the worker shall be granted
an additional fifteen (15) days maternity
leave with full pay.
Maternity leave shall be granted to
female workers in every instance of
pregnancy, miscarriage or emergency
termination of pregnancy, regardless of
frequency: Provided, That for cases of
miscarriage or emergency termination of
pregnancy, sixty (60) days maternity
leave with full pay shall be granted.
Sec. 3 of RA 11210
63. Enjoyment of maternity leave cannot
be deferred
Enjoyment of maternity leave cannot be
deferred but should be availed of either
before or after the actual period of
delivery in a continuous and
uninterrupted manner, not exceeding one
hundred five (105) days, as the case may
be.
Sec. 3 of RA 11210
64. Allocation of Maternity Leave Credits
Any female worker entitled to maternity
leave benefits as provided for herein
may, at her option, allocate up to seven
(7) days of said benefits to the child’s
father, whether or not the same is
married to the female worker: Provided,
That in the death, absence, or incapacity
of the former, the benefit may be
allocated to an alternate caregiver who
may be a relative within the fourth degree
of consanguinity or the current partner of
the female worker sharing the same
household, upon the election of the
mother taking into account the best
interests of the child: Provided, further,
That written notice thereof is provided to
the employers of the female worker and
alternate caregiver: Provided,
furthermore, That this benefit is over and
above that which is provided under
Republic Act No. 8187, or the "Paternity
Leave Act of 1996": Provided, finally,
That in the event the beneficiary female
worker dies or is permanently
incapacitated, the balance of her
maternity leave benefits shall accrue to
the father of the child or to a qualified
caregiver as provided above.
65. The Labor Code classifies four (4)
kinds of employees
The Labor Code classifies four (4) kinds
of employees, as follows:
a. regular employees, or those who
have been engaged to perform
activities which are usually necessary
or desirable in the usual business or
trade of the employer;
b. project employees, or those whose
employment has been fixed for a
specific project or undertaking, the
completion or termination of which
has been determined at the time of
the employees' engagement;
c. seasonal employees, or those who
perform services which are seasonal
in nature, and whose employment
lasts during the duration of the
season; and
d. casual employees, or those who are
not regular, project, or seasonal
employees.
e. Jurisprudence added a fifth kind —
fixed-term employees, or those
hired only for a definite period of time.
Del Rosario v. ABS-CBN, G.R. NO.
202481, September 08, 2020, EN BANC,
CAGUIOA, J
66. Production assistants who were
repeatedly hired but treated as talents
are regular employees
In ABS-CBN Broadcasting Corporation v.
Nazareno (Nazareno), the workers
involved were production assistants who
were repeatedly hired but treated as
talents. The Court therein ruled that the
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production assistants were regular
employees as follows:
The principal test 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.
In this case, it is undisputed that
respondents had continuously
performed the same activities for an
average of five years. Their assigned
tasks are necessary or desirable in the
usual- business or trade of the
petitioner. The persisting need for their
services is sufficient evidence of the
necessity and indispensability of such
services to petitioner's business or trade.
While length of time may not be a sole
controlling test for project employment, it
can be a strong factor to determine
whether the employee was hired for a
specific undertaking or in fact tasked to
perform functions which are vital,
necessary and indispensable to the usual
trade or business of the employer. We
note further that petitioner did not
report the termination of respondents'
employment in the particular "project"
to the Department of Labor and
Employment Regional Office having
jurisdiction over the workplace within 30
days following the date of their
separation from work, using the
prescribed form on employees'
termination/dismissals/suspensions.
As gleaned from the records of this case,
petitioner itself is not certain how to
categorize respondents. In its earlier
pleadings, petitioner classified
respondents as program employees, and
in later pleadings, independent
contractors. Program employees, ox:
project employees, are different from
independent contractors because in the
case of the latter, no employer-employee
relationship exists.
Del Rosario v. ABS-CBN, G.R. NO.
202481, September 08, 2020, EN BANC,
CAGUIOA, J
67. Distinction between a talent and a
regular employee
Parenthetically, the main distinction
between a talent and a regular employee
in the broadcast industiy was explained
in the landmark case of Sonza v. ABS-
CBN Broadcasting Corp. (Sonza).
Talent:
In Sonza, Jose Sonza (Sonza) was a
talent who was engaged on the basis of
his expertise in his craft. His
possession of unique skills and celebrity
status gave him the distinct privilege to
bargain with ABS-CBN's officials on
the terms of his agreement with the latter.
These negotiations resulted to a hefty
talent fee. Also, the payment of his
salaries did not depend on the amount of
work he performed or the number of
times he reported for duty, but was
based solely on the terms of the
agreement. More than this, ABS-CBN
was duty-bound to continue paying him
his talent fees during the lifetime of
the agreement, regardless of any
business losses it may suffer, and
even if it ceased airing his programs.
More importantly, ABS-CBN was bereft
of any power to terminate or discipline
Sonza, even if the means and methods
of the performance of his work did not
meet its approval. Similarly, ABS-CBN
did not control his work schedule, or
regulate the manner in which he
"delivered his lines, appeared on
television, and sounded on radio, or had
any say over the contents of his script.
The only instruction given by ABS-CBN
was a simple warning that Sonza
should refrain from criticizing ABS-
CBN and its interests. In short, Sonza
enjoyed an untrammeled artistic
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creativity on the contents and delivery of
his lines and spiels.
Regular Employee:
In stark contrast, the workers here were
hired through ABS-CBN's Human
Resources Department. Their
engagement did not involve a
negotiation with ABS-CBN's high-
level officials. They did not possess
any peculiar skills or talents or a well-
nigh celebrity status that would have
given them the power to negotiate the
terms of their employment. In fact, their
only choice over their engagement was
limited to either accepting or rejecting the
standard terms of employment prepared
by ABS-CBN. In the same manner, they
received a basic salary and were
granted benefits such as SSS,
Medicare, and 13th month pay
benefits customarily given to regular
employees.
Equally telling, the workers did not enjoy
the same level of impunity granted to
Sonza. It bears stressing that an
independent contractor is endowed with
a certain level of skill and talent that is not
available on-the-job. Obviously, the
workers do not hold this level of
distinction.
Del Rosario v. ABS-CBN, G.R. NO.
202481, September 08, 2020, EN BANC,
CAGUIOA, J
68. Program employees are project
employees under Article 280 of the
Labor Code, since their employment
is fixed for a specific project or
undertaking, the completion or
termination of which has been
determined at the time of their
engagement
Essentially, in a project-based
employment, the employee is assigned
to a particular project or phase, which
begins and ends at a determined or
determinable time. Consequently, the
services of the project employee may
be lawfully terminated upon the
completion of such project or phase.
For employment to be regarded as
project-based, it is incumbent upon the
employer to prove that:
a. the employee was hired to carry out a
specific project or undertaking, and
b. the employee was notified of the
duration and scope of the project.
Here, ABS-CBN failed to adduce any
evidence to establish that the
requirements for project employment
were complied with. There is nothing in
the records that would prove that the
employees were notified beforehand of
the duration and scope of their projects.
Neither was there confirmation of
compliance with the contract-registration
requirement, or evidence of the
submission of a notice of termination or
completion of project. It is basic that
project or contractual employees shall be
apprised of their project under a written
contract, specifying inter alia the nature
of work to be performed and the rates of
pay and the program in which they will
work. Surely, ABS-CBN was in the best
position to present these documents. Its
failure to present them is therefore
taken against it.
Del Rosario v. ABS-CBN, G.R. NO.
202481, September 08, 2020, EN BANC,
CAGUIOA, J
69. In the extreme end, workers who
possess a distinct level of skill and
artistry may be engaged as
independent contractors
In this regard, cameramen may, in
special instances, be regarded as
talents if they possess a distinct level
of artistry and creativity and work
under, minimal guidelines set by the
director or producer.
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In this instance, the director works simply
to coordinate the end result, with the
cameramen executing the shots and
angles on their own accord and
discretion. In this respect, a distinction
must be drawn between the cameramen
who are talents, versus the cameramen
in the instant case, who are regular
employees of ABS-CBN.
Del Rosario v. ABS-CBN, G.R. NO.
202481, September 08, 2020, EN BANC,
CAGUIOA, J
70. The creation of a work pool is a valid
exercise of management prerogative
It is a privilege inherent in the employer's
right to control and manage its enterprise
effectively, and freely conduct its
business operations to achieve its
purpose. However, in order to ensure
that the work pool arrangement is not
used as a scheme to circumvent the
employees' security of tenure, the
employer must prove that
a. a work pool in fact exists, and
b. the members therein are free to
leave anytime and offer their
services to other employers.
These requirements are critical in
defining the precise nature of the
workers' employment.
Furthermore, in Raycor Aircontrol
Systems, Inc. v. NLRC, the Court
explained that members of a work pool
could either be project employees or
regular employees. Specifically,
members of a work pool acquire regular
employment status if:
a. they were continuously, as opposed
to intermittently, re-hired by the
same employer for the same tasks
or nature of tasks; and
b. the tasks they perform are vital,
necessary and indispensable to
the usual business or trade of the
employer.
In the case at bar, the continuous
rehiring of the members of the DM
System work pool from one program
to another bestowed upon them
regular employment status. As such,
they cannot be separated from the
service without cause as they are
considered regular, at least with respect
to the production of the television
programs. This holds true
notwithstanding the fact that they were
allowed to offer their services to other
employers.
As in Tomas Lao Construction v. NLRC,
the Court affirmed that the members of a
work pool shall still be regarded as
regular employees, even if they are
allowed to seek employment elsewhere
during lulls in the business. The Court
stressed that, during the cessation of
work, the employees shall simply be
treated as being on leave of absence
without pay until their next project.
Correlatively, the employer shall not be
obliged to pay the employees during the
suspension of operations.
Del Rosario v. ABS-CBN, G.R. NO.
202481, September 08, 2020, EN BANC,
CAGUIOA, J
71. Retrenchment in order to avert
serious business losses
To justify such retrenchment, the
following conditions must be present,
namely:
1. The retrenchment must be
reasonably necessary and likely to
prevent business losses;
2. The losses, if already incurred, are
not merely de minimis, but
substantial, serious, actual and real,
or, if only expected, are reasonably
imminent;
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3. The expected or actual losses must
be proved by sufficient and
convincing evidence;
4. The retrenchment must be in good
faith for the advancement of its
interest and not to defeat or
circumvent the employees' right to
security of tenure; and
5. There must be fair and reasonable
criteria in ascertaining who would be
dismissed and who would be retained
among the employees, such as
status, efficiency, seniority, physical
fitness, age, and financial hardship
for certain workers.
The presentation of the audited
financial statements should not the
sole means by which to establish the
employer's serious financial losses.
The presentation of audited financial
statements, although convenient in
proving the unilateral claim of financial
losses, is not required for all cases of
retrenchment. The evidence required for
each case of retrenchment really
depends on the particular circumstances
obtaining.
To require a distressed corporation
placed under rehabilitation or
receivership to still submit its audited
financial statements may become
unnecessary or superfluous.
At any rate, even assuming that serious
business losses had not been proved by
PAL, it would still be justified under
Article 298 of the Labor Code to
retrench employees to prevent the
occurrence of losses or its closing of
the business, provided that the
projected losses were not merely de
minimis, but substantial, serious,
actual, and real, or, if only expected,
were reasonably imminent as
perceived objectively and in good
faith by the employer.
In the latter case, proof of actual financial
losses incurred by the employer would
not be a condition sine qua non for
retrenchment.
FASAP v. PAL, G.R. No. 178083, March
13, 2018, EN BANC, BERSAMIN, J.
72. Two kinds of regular employment
(1) Regular employees by nature of
work
Refers to those employees who
perform a particular activity which is
necessary or desirable in the usual
business or trade of the employer,
regardless of their length of
service.
(2) Regular employees by years of
service
Refers to those employees who have
been performing the job, regardless
of the nature thereof, for at least a
year.
Basan v. Coca-cola Bottlers, G.R. Nos.
174365-66, February 4, 2015, THIRD
DIVISION, PERALTA, J.
73. In determining whether an
employment should be considered
regular or non-regular, the applicable
test is the reasonable connection
between the particular activity
performed by the employee in relation
to the usual business or trade of the
employer
Basan v. Coca-cola Bottlers, G.R. Nos.
174365-66, February 4, 2015, THIRD
DIVISION, PERALTA, J.
74. The repeated rehiring of respondent
workers and the continuing need for
their services clearly attest to the
necessity or desirability of their
services in the regular conduct of the
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
business or trade of petitioner
company
Basan v. Coca-cola Bottlers, G.R. Nos.
174365-66, February 4, 2015, THIRD
DIVISION, PERALTA, J.
75. The services of an employee who has
been engaged on probationary basis
may be terminated for any of the
following:
a. a just or
b. an authorized cause; and
c. when he fails to qualify as a regular
employee in accordance with
reasonable standards prescribed by
the employer.
Abbott Laboratories v. Alcaraz, G.R. No.
192571, July 23, 2013, EN BANC,
PERLAS-BERNABE, J.
76. Section 6(d), Rule I, Book VI of the
Implementing Rules of the Labor Code
provides that if the employer fails to
inform the probationary employee of
the reasonable standards upon which
the regularization would be based on
at the time of the engagement, then
the said employee shall be deemed a
regular employee
In other words, the employer is made to
comply with two (2) requirements when
dealing with a probationary employee:
1. First, the employer must
communicate the regularization
standards to the probationary
employee; and
2. Second, the employer must make
such communication at the time of
the probationary employee’s
engagement.
If the employer fails to comply with either,
the employee is deemed as a regular and
not a probationary employee.
Abbott Laboratories v. Alcaraz, G.R. No.
192571, July 23, 2013, EN BANC,
PERLAS-BERNABE, J.
77. Keeping with these rules, an employer
is deemed to have made known the
standards that would qualify a
probationary employee to be a regular
employee when it has exerted
reasonable efforts to apprise the
employee of what he is expected to do
or accomplish during the trial period
of probation
This goes without saying that the
employee is sufficiently made aware of
his probationary status as well as the
length of time of the probation.
Abbott Laboratories v. Alcaraz, G.R. No.
192571, July 23, 2013, EN BANC,
PERLAS-BERNABE, J.
78. A different procedure is applied when
terminating a probationary employee;
the usual two-notice rule does not
govern
Section 2, Rule I, Book VI of the
Implementing Rules of the Labor Code
states that “[i]f the termination is brought
about by the x x x failure of an employee
to meet the standards of the employer in
case of probationary employment, it shall
be sufficient that a written notice is
served the employee, within a
reasonable time from the effective
date of termination.”
Abbott Laboratories v. Alcaraz, G.R. No.
192571, July 23, 2013, EN BANC,
PERLAS-BERNABE, J.
79. Case law has settled that an employer
who terminates an employee for a
valid cause but does so through
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
invalid procedure is liable to pay the
latter nominal damages
Agabon v. NLRC – dismissal is for a just
cause, nominal damage is P30,000.
Jaka Food Processing Corporation v.
Pacot – dismissal is for an authorized
cause, nominal damage is P50,000.
Abbott Laboratories v. Alcaraz, G.R. No.
192571, July 23, 2013, EN BANC,
PERLAS-BERNABE, J.
80. An employer’s contractual breach of
its own company procedure – albeit
not statutory in source – has the
parallel effect of violating the laborer’s
rights
Abbott Laboratories v. Alcaraz, G.R. No.
192571, July 23, 2013, EN BANC,
PERLAS-BERNABE, J.
81. When an employee’s dismissal
proceeded from his/her failure to
comply with the standards required
for the employee’s regularization, it is
undeniable that the dismissal process
was, in effect, initiated by an act
imputable to the employee
Anent the proper amount of damages to
be awarded, the Court observes that
Alcaraz’s dismissal proceeded from
her failure to comply with the
standards required for her
regularization. As such, it is undeniable
that the dismissal process was, in effect,
initiated by an act imputable to the
employee, akin to dismissals due to just
causes under Article 296 of the Labor
Code.
Therefore, the Court deems it
appropriate to fix the amount of nominal
damages at the amount of P30,000.00,
consistent with its rulings in both Agabon
and Jaka.
Abbott Laboratories v. Alcaraz, G.R. No.
192571, July 23, 2013, EN BANC,
PERLAS-BERNABE, J.
82. According to jurisprudence, the
principal test for determining whether
particular employees are properly
characterised as “project[-based]
employees” as distinguished from
“regular employees,” is whether or
not the employees were assigned to
carry out a “specific project or
undertaking,” the duration (and
scope) of which were specified at the
time they were engaged for that
project
The project could either be:
(1) a particular job or undertaking that is
within the regular or usual business
of the employer company, but
which is distinct and separate, and
identifiable as such, from the other
undertakings of the company; or
(2) a particular job or undertaking that is
not within the regular business of
the corporation.
In order to safeguard the rights of
workers against the arbitrary use of the
word “project” to prevent employees from
attaining a regular status, employers
claiming that their workers are project[-
based] employees should not only prove
that the duration and scope of the
employment was specified at the time
they were engaged, but also, that there
was indeed a project.
Gadia v. Sykes Asia, G.R. No. 209499,
January 28, 2015, FIRST DIVISION,
PERLAS-BERNABE, J.
83. For an employee to be considered
project-based, the employer must
show compliance with two (2)
requisites, namely that:
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
(a) the employee was 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.
Gadia v. Sykes Asia, G.R. No. 209499,
January 28, 2015, FIRST DIVISION,
PERLAS-BERNABE, J.
86. Repeated
84. Submission of an Establishment
Employment Report and an
Establishment Termination Report to
the Department of Labor and
Employment is an indication that the
employment was indeed project-
based
The Court likewise notes the fact that
Sykes Asia duly submitted an
Establishment Employment Report
and an Establishment Termination
Report to the Department of Labor and
Employment Makati-Pasay Field Office
regarding the cessation of the Alltel
Project and the list of employees that
would be affected by such cessation. As
correctly pointed out by the CA, case law
deems such submission as an
indication that the employment was
indeed project-based.
Gadia v. Sykes Asia, G.R. No. 209499,
January 28, 2015, FIRST DIVISION,
PERLAS-BERNABE, J.
87. Not all quitclaims are per se invalid or
85. Performance by project-based
employees of tasks necessary and
desirable to the usual business
operation of the employer will not
automatically result in their
regularization
It is settled, however, that project-based
employees may or may not be
performing tasks usually necessary or
desirable in the usual business or
trade of the employer. The fact that the
job is usually necessary or desirable in
the business operation of the employer
does not automatically imply regular
employment; neither does it impair the
validity of the project employment
contract stipulating fixed duration of
employment.
Herma Shipyard v. Oliveros, G.R. No.
208936, April 17, 2017, FIRST
DIVISION, DEL CASTILLO, J.
rehiring of project
employees to different projects does
not ipso facto make them regular
employees
Case law states that length of service
(through rehiring) is not the
controlling determinant of the
employment tenure [of project-based
employees but, as earlier mentioned],
whether the employment has been fixed
for a specific project or undertaking, with
its completion having been determined at
the time of [their] engagement.
Stated otherwise, the rule that
employees initially hired on a temporary
basis may become permanent
employees by reason of their length of
service is not applicable to project-
based employees.
Herma Shipyard v. Oliveros, G.R. No.
208936, April 17, 2017, FIRST
DIVISION, DEL CASTILLO, J.
against public policy
Indeed, there are legitimate waivers that
represent the voluntary and reasonable
settlements of laborers’ claims that
should be respected by the Court as the
law between the parties. Where the party
has voluntarily made the waiver, with a
full understanding of its terms as well
as its consequences, and the
consideration for the quitclaim is
credible and reasonable, the
transaction must be recognized as a valid
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.
and binding undertaking, and may not
later be disowned simply because of a
change of mind.
Radio Mindanao v. Amurao III, G.R. No.
167225, October 22, 2014, FIRST
DIVISION, BERSAMIN, J.
88. A quitclaim is invalid or contrary to
public policy only:
(1) where there is clear proof that the
waiver was wrangled from an
unsuspecting or gullible person; or
(2) where the terms of settlement are
unconscionable on their face.
In instances of invalid quitclaims, the law
steps in to annul the questionable waiver.
Radio Mindanao v. Amurao III, G.R. No.
167225, October 22, 2014, FIRST
DIVISION, BERSAMIN, J.
89. The general rule is that when just
causes for terminating the services of
an employee under Art. 282 of the
Labor Code exist, the employee is not
entitled to separation pay
The apparent reason behind the
forfeiture of the right to termination pay is
that lawbreakers should not benefit from
their illegal acts.
Toyota Motor v. NLRC, G.R. Nos.
158786 & 158789, October 19, 2007,
SECOND DIVISION, VELASCO, JR., J.
90. One exception where separation pay
is given even though an employee is
validly dismissed (just cause) is when
the court finds justification in
applying the principle of social justice
well entrenched in the 1987
Constitution
Toyota Motor v. NLRC, G.R. Nos.
158786 & 158789, October 19, 2007,
SECOND DIVISION, VELASCO, JR., J.
91. The other exception: The Court laid
down the rule that severance
compensation shall be allowed only
when the cause of the dismissal is
other than serious misconduct or that
which reflects adversely on the
employee’s moral character
Toyota Motor v. NLRC, G.R. Nos.
158786 & 158789, October 19, 2007,
SECOND DIVISION, VELASCO, JR., J.
92. In addition to serious misconduct, in
dismissals based on other grounds
under Art. 282 like willful
disobedience, gross and habitual
neglect of duty, fraud or willful breach
of trust, and commission of a crime
against the employer or his family,
separation pay should not be
conceded to the dismissed employee
In analogous causes for termination
like inefficiency, drug use, and others, the
NLRC or the courts may opt to grant
separation pay anchored on social
justice in consideration of the length of
service of the employee, the amount
involved, whether the act is the first
offense, the performance of the
employee and the like, using the
guideposts enunciated in PLDT on the
propriety of the award of separation pay.
Toyota Motor v. NLRC, G.R. Nos.
158786 & 158789, October 19, 2007,
SECOND DIVISION, VELASCO, JR., J.
93. Example of cases where the court
granted separation pay anchored on
social justice
a. In Soco v. Mercantile Corporation of
Davao and Firestone Tire and
Rubber Company of the Philippines
v. Lariosa, separation pay was
granted to the dismissed employees,
as they were mere rank-and-file
employees who did not have any
previous derogatory record with
Labor Law – Important Doctrines & Jurisprudence (2020-2021 BAR)
By: Ernesto N. Dayao, Jr.

their companies and in equitable As we held in Central Pangasinan

regard for their long years of
service spanning more than ten (10)
years.
b. In Farrol v. Court of Appeals,
separation pay was awarded
because the penalty of dismissal
was held to be harsh and
disproportionate to the offense
committed and the dismissed
employee had been at the service of
the company for twenty four (24)
years.
c. In Negros Navigation Co. Inc. v.
National Labor Relations
Commission, separation pay was
awarded to the employee dismissed,
as it was the employer itself that
prayed for the award of the same,
in lieu of the employee's
reinstatement.
d. Lastly, in Philippine Commercial
International Bank v. Abad,
separation pay was ordered granted
to a dismissed managerial employee
because there was an express
finding that the violation of the bank
policies was not perpetrated for the
employee's self-interest, nor did
the employee exhibit any lack of
moral depravity. The employee had
also been in the service of the
company for twenty-five (25) years.
Electric Cooperative, Inc. v. NLRC:
Although long years of service might
generally be considered for the award of
separation benefits or some form of
financial assistance to mitigate the
effects of termination, this case is not the
appropriate instance for generosity x x x.
The fact that private respondent served
petitioner for more than twenty years with
no negative record prior to his dismissal,
in our view of this case, does not call for
such award of benefits, since his
violation reflects a regrettable lack of
loyalty and worse, betrayal of the
company. If an employee’s length of
service is to be regarded as a justification
for moderating the penalty of dismissal,
such gesture will actually become a
prize for disloyalty, distorting the
meaning of social justice and
undermining the efforts of labor to
cleanse its ranks of undesirables.
Immaculate Conception v. Camilon, G.R.
No. 188035, July 02, 2014, FIRST
DIVISION, VILLARAMA, JR., J.

Tirazona v. PET Inc, G.R. No. 169712,

January 20, 2009, THIRD DIVISION,
CHICO-NAZARIO, J.

94. Respondent’s 12 years of service and

clean employment record cannot
simply erase her gross and habitual
negligence in her duties

Length of service is not a bargaining chip

that can simply be stacked against the
employer.