Rev4 Dean Abad 2023 Hernando Bar Labor Pre Week Notes 04sept2023

2023 HERNANDO BAR LABOR LAW PRE-WEEK HAND-OUTS
FOR 2022 ADAMSON LYCEUM FEU BAR OPERATIONS

THE ABAD NOTES (COMPLETED 04 SEPT 2023)
PRE-WEEK HAND-OUTS FOR

2023 HERNANDO SEPTEMBER
LABOR BAR EXAMINATIONS
From the notes of Adamson Dean Ada D. Abad
For 2023 Bar Examinations:

2nd day (Wednesday), 20 September 2023, 2:00 – 6:00 p.m.
Including decisions of Bar Chairman SC Justice
Ramon Paul L. Hernando in Labor Law. 1
REMINDERS FROM THE SUPREME COURT BAR BULLETINS
Based on Justice Hernando’s paper entitled: “Proposed Bar Reforms 2023 and Beyond:
A Briefer”, the Supreme Court approved on 19 July 2022 the following
recommendations for the 2023 Bar Examinations:
• Advancing the Bar month to September 2023

• Three non-consecutive days: September 17 (Sun); 20 (Wed); and 24 (Sun)
• The exam periods will be:
FIRST SUBJECT: 8:00 a.m. to 12:00
SECOND SUBJECT: 2:00 p.m. to 6:00 p.m.
• FOUR BAR EXAMINERS PER SUBJECT

• CUT-OFF PERIODS FOR THE 2022 NOVEMBER BAR EXAMS:
Laws, rules, issuances, and jurisprudence pertinent to these bar topics as of June 30,
2022 are examinable materials within the coverage of the 2023 Bar Examinations.
IMPT: TIME YOURSELF DURING THE BAR EXAM PROPER

 ASSUMING TWENTY (20) QUESTIONS SPREAD OVER FOUR HOURS:
Twelve (12) minutes to answer each question
 ASSUMING THIRTY (30) QUESTIONS SPREAD OVER FOUR HOURS:
Eight (8) minutes to answer each question
 Keep it short simple and straight to the point; Use key words and key phrases
1
With special thanks to my Ablelaw associate Atty. Nico Nunez, former Adamson Law student
Erikha Araneta, and the Adamson Bar Ops Team headed by Prof. Guiller Asido and Joie Monedo
for the some of the digests and encoding.
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A. GENERAL PRINCIPLES AND CONCEPTS
1. WHEN FACED WITH A PROBLEM SOLVING ESSAY-TYPE QUESTION IN THE

BAR EXAMINATIONS, REMEMBER:
• ALL relevant facts already given, but some facts may be immaterial. The intention of the
examiner here is to see if you can determine which facts are relevant or not, in answering
the question.
• Do NOT add to the facts at hand, except if it is an open-ended question.
• Most questions require you to decide on the issue as follows –
 Comment on the action of one party
 Decide if you were Labor Arbiter
 Comment on the decision of the Labor Arbiter (or Court)
How to answer bar question: “IF YOU WERE THE LABOR ARBITER, HOW WOULD
YOUR DECIDE?”
MEMORIZE ARTICLE 3, LABOR CODE: DECLARATION OF POLICY

(Mnemonic: PEE-SC-SSJ)
ART. 3. Declaration of basic policy. - The State shall afford Protection to labor,
promote full Employment, ensure Equal work opportunities regardless of sex, race
or creed and regulate the relations between workers and employers. The State
shall assure the rights of workers to Self-organization, Collective bargaining,
right to Strike, Security of tenure, and Just and humane conditions of work.
2. Principle of Social and Distributive Justice: Balancing of interests in case

workers’ and management’s rights collide. --
The present case likewise brings to the fore the perennial task of balancing of interests
between labor on the one hand, and management on the other. The law and jurisprudence
consistently echo the commitment to protect the working class in keeping with the principle of
social justice. In not a few instances, the Court struck down employer acts, even at the guise
of exercise of management prerogative, which undermine the worker's right to security of
tenure. Nevertheless, the law, in aiming to protect the rights of workers, does not thereby
authorize the oppression or self-destruction of the employer. |||(BDO Unibank, Inc. v. Nerbes,
G.R. No. 208735, [July 19, 2017], 813 PHIL 978-1000)
The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged. At best it may mitigate the penalty but it certainly will not
condone the offense. Compassion for the poor is an imperative of every humane society but
only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot
be permitted to be [a] refuge of scoundrels any more than can equity be an impediment to the
punishment of the guilty. Those who invoke social justice may do so only if their hands are
clean and their motives blameless, and not simply because they happen to be poor. This great
policy of our Constitution is not meant for the protection of those who have proved they are
not worthy of it, like the workers who have tainted the cause of labor with the blemishes of
their own character. (Tirazona vs. Phil. Eds Techno-Service (PET INC.), G.R. No. 169712, 20
January 2009).
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3. HOW TO BALANCE CONFLICTING INTERESTS IN PROBLEM SOLVING:

REMEMBER THE BASIC PRINCIPLES OF LABOR LAW
MANAGEMENT VS. LABOR
 Capital  Work
 Profit  Equitable share in the profits
 Management prerogatives  Worker’s rights

- hiring, employee - minimum standards
classification, - constitutional rights
- control of working methods security of tenure, unionize and
- right to make rules and to collective bargaining, strike
regulations
STATE
Police power/social justice
Interpretation in favor of labor
Paradigm shift towards mutual cooperation - It is high time that employer and
employee cease to view each other as adversaries and instead recognize that there is a
symbiotic relationship, wherein they must rely on each other to ensure the success of the
business. (Toyota Motor Phils. Workers vs. NLRC, 537 SCRA 171)
4. SIX (6) GENERAL RULES TO REMEMBER

FOR THE BALANCING OF INTEREST IN
ANSWERING PROBLEM SOLVING QUESTIONS
#1: The EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP IS A CONDITION

SINE QUA NON for the application of labor laws, and for labor courts to have jurisdiction.
#2: PRINCIPLE OF INCORPORATION.
#3: BURDEN OF PROOF IS ALWAYS UPON EMPLOYER to show validity of its exercise of
management prerogatives, especially as regards termination of employment.
#4: There must exist SUBSTANTIAL EVIDENCE to prove valid exercise of management
prerogatives, viz., just or authorized cause of termination.
#5: NO RETROACTIVE EFFECT OF LABOR LAWs, except when otherwise provided.
#6: IN CASES OF DOUBT OR AMBIGUITY, INTERPRET OR RULE IN FAVOR OF LABOR.
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4.1. GENERAL RULE #1: The existence of Employer-Employee relationship is a

condition sine qua non for the application of labor laws, and for labor courts to
have jurisdiction.
4.1.1 Four tests to determine the existence of an employer-employee relationship
(MEMORY AID: SOUTH WEST DISASTER CONTROL)
a. Selection and hiring;

b. payment of Wages;
c. power of Dismissal;
d. Control test.
4.1.2 HERNANDO, J. Parayday v. Shogun Shipping Co., Inc., G.R. No. 204555, [July
6, 2020]) citing Dy Keh Beng vs. Intl Labor Marine Union, G.R. No. L-32245. [May 25,
1979].
Control test: An employer-employee relationship exists "where the person for

whom the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end." xxx
An employer-employee relationship may cover peripheral or core activities of the

employer's business. The determination of the existence of an employer-employee
relationship is defined by law according to the facts of each case, regardless of the
nature of the activities involved. Thus, even if a worker's task is not directly related,
or necessary and desirable to the business of the employer, this does not mean,
however, that no employer-employee relationship exists between the worker and
the employer. (Parayday v. Shogun Shipping Co., Inc., G.R. No. 204555, [July 6,
2020])
4.1.3 It must, however, be stressed that the "control test" merely calls for the existence
of the right to control, and not necessarily the exercise thereof. To be clear, the
test does not require that the employer actually supervises the performance of
duties by the employee. (Dynamiq Multi-Resources, Inc. v. Genon, G.R. No.
239349, [June 28, 2021])
As regards Shogun Ship's power of control over petitioners, respondent contended

that Shogun Ships did not direct the manner and method in which petitioners do
their work. It bears emphasis, however, that the control test calls merely for
the existence of the right to control the manner of doing the work and not
the actual exercise of the right. Thus, in Dy Keh Beng v. International Labor and
Marine Union of the Philippines, this Court held that an employer's power of
control, particularly over personnel working under the employer, is deemed
inferred, more so when said personnel are working at the employer's
establishment. (J. HERNANDO. Parayday v. Shogun Shipping Co., Inc., G.R.
No. 204555, [July 6, 2020])
4.1.4 Dusol v. Lazo, G.R. No. 200555, [January 20, 2021], M.V. Lopez, J
Note: No partnership; this is an employer-employee relationship
Facts: Pedro (Pedro) and Maricel Dusol (Maricel) were husband and wife, who
claimed to have worked for Emmarck A. Lazo (Emmarck) as the owner of Ralco
Beach and a fishpond. Pedro started working for Emmarck’s parents, as
caretaker, and given allowance. He eventually was asked to help out in the
fishpond, and will be paid a percentage of the harvest, but this lasted only for two
57
seasons. When Pedro married Maricel, she also started working in Ralco Beach.
She was paid P1,000.00/month plus 15% commission on cottage rentals.
Sometime in July 2008, Emmarck notified Pedro and Maricel that he will be leasing
out Ralco Beach because the business was not profitable. Thus, their services are
no longer needed. Due to this, on July 31, 2008, Pedro and Maricel no longer
reported for work. Subsequently, they filed a complaint asserting that they were
illegally dismissed and deprived of procedural due process.
Issue: Is there an employer-employee relationship between the spouses and the

beach resort/Emmarck?
Labor Arbiter: No employer-employee relationship

NLRC: There exists an employer-employee relationship
Court of Appeals: No employer-employee relationship.
Supreme Court:
FOR THE SPOUSES. There exists an employer-employee relationship between
the spouses and Emmarck/beach resort.
Rationale:
The best evidence to prove the existence of a partnership is the contract or articles
of partnership. Nevertheless, in its absence, its existence can be established by
circumstantial evidence.
Based on record, there is no proof that a partnership existed between Pedro or

Maricel, and Emmarck in relation to the beach resort. No documentary evidence
was submitted by Emmarck to even suggest a partnership. Emmarck relied
solely on his own statements that Pedro and Maricel did not receive wages, but
merely allowances and commission from the profits of their partnership.
Considering that no partnership exists, we proceed to determine whether Pedro

and Maricel were employees. The records show that all the elements of an
employer-employee relationship are present.
SELECTION AND HIRING: Ralco Beach engaged the services of Pedro as

caretaker and Maricel as a storekeeper. While Emmarck did not personally engage
the services of Pedro, he nonetheless retained his services.
PAYMENT OF WAGES: Emmarck paid their wages in the form of allowances and
commissions.
DISMISSAL: Emmarck terminated their employment when he notified them that

he will be leasing the beach Resort, and that their services were no longer needed.
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CONTROL TEST: Emmarck had the power to control their conduct in the
performance of their duties. The existence of control is manifestly shown by
Emmarck's express admission that he left the entire business operation of the
Resort to Pedro and Maricel.
It was Emmarck himself, who gave Pedro and Maricel immense flexibility in the
performance of their duties. This, alone, clearly shows that Emmarck had control
over the conduct of Pedro and Maricel in performing their duties.
The apparent high latitude of freedom is to be expected given that Pedro and
Maricel were the only employees, and this is coupled with the apparent
lackadaisical attitude of Emmarck in the management of the resort. XXX Thus,
contrary to the findings of the CA, the lack of guidelines or limitations, and close
supervision as to the conduct of operations of the resort cannot be construed as
evidence of lack of control. (Dusol v. Lazo, G.R. No. 200555, [January 20, 2021])
4.1.5 DISTINGUISH BETWEEN “RULES THAT FIX METHODOLOGY” VS. “RULES

THAT ARE MERE GUIDELINES.”
Not every form of control is indicative of employer-employee relationship. A

person who performs work for another and is subjected to its rules, regulations,
and code of ethics does not necessarily become an employee. As long as the
level of control does not interfere with the means and methods of
accomplishing the assigned tasks, the rules imposed by the hiring party on
the hired party do not amount to the labor law concept of control that is
indicative of employer-employee relationship. (J. Lazaro-Javier. Martinez v.
Magnolia Poultry Processing Plant, G.R. Nos. 231579 & 231636, [June 16, 2021])
4.2 GENERAL RULE #2: PRINCIPLE OF INCORPORATION.
Once an employer-employee relationship is deemed to exist, the Labor Code is

deemed automatically incorporated into said relationship. Under the PRINCIPLE OF
INCORPORATION, the minimum labor standards and benefits in Labor Code are
considered inherent in every employer-employee relationship even absent a written
employment contract.
4.3 GENERAL RULE #3: BURDEN OF PROOF IS ALWAYS UPON EMPLOYER to

show validity of its exercise of management prerogatives, especially as regards
termination of employment.
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TWO EXCEPTIONS when burden of proof is initially placed upon EMPLOYEE:
a) Fact of hiring.
No particular form of evidence is required to prove the existence of an employer-

employee relationship. Any competent and relevant evidence to prove the
relationship may be admitted. However, a finding that such relationship exists
must still rest on some substantial evidence. (Dusol v. Lazo, G.R. No. 200555, [January
20, 2021], citing Danilo “Bitoy” Javier vs. CA and FlyAce, G.R. No. 192558, 15 February
2012)
b) Fact of firing/dismissal.
J. HERNANDO. Tacis vs. Shields Security Services, Inc. G.R. No. 234575, [ July
7, 2021; see also: J. HERNANDO cases of Systems and Plan Integrator and
Development Corp. vs.Ballesteros, G.R. No. 217119 | April 25, 2022] and Efren
Santos vs. King Chef et al. G.R. No. 211073 [November 25, 2020].. -- Settled is
the rule that before the employer must bear the burden of proving that the dismissal
was legal, the employee must first establish by substantial evidence the fact of his
dismissal from service. If there is no dismissal, then there can be no question as to
its legality or illegality. Bare allegations of constructive dismissal, when
uncorroborated by the evidence on record, cannot be given credence.
Rodriguez v. Sintron Systems, Inc., G.R. No. 240254, [July 24, 2019] -- In illegal
dismissal cases, before the employer must bear the burden of proving that the
dismissal was legal, the employee must first establish by substantial evidence the
fact of his dismissal from service. Obviously, if there is no dismissal, then there can
be no question as to its legality or illegality.
As an allegation is not evidence, it is elementary that a party alleging a critical fact

must support his allegation with substantial evidence. Bare allegations of dismissal,
when uncorroborated by the evidence on record, cannot be given
credence. Moreover, the evidence to prove the fact of dismissal must be clear,
positive and convincing.
Geminiano, Jr. v. MGE Transportation Corp., G.R. No. 228345 (Notice), [March
22, 2017]. -- It is axiomatic that, in illegal dismissal cases, the employee must first
prove the fact of dismissal before the burden of evidence is shifted to the employer
to prove that the latter terminated the employment for just or authorized cause. The
fact of dismissal must be established by positive and overt acts of an employer
indicating the intention to dismiss, and the party alleging such critical fact must
support his allegation with substantial evidence, or such amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion
ADA’S NOTES ON RECENT TRENDING OF THE SUPREME COURT CASES:

 Complainant must prove fact of hiring or firing
 There must be substantial and corroborative evidence to support
the fact of actual hiring or firing.
 HOW TO PROVE FACT OF HIRING; TWO CONCEPTS:

'The burden of proof rests upon the party who asserts the affirmative of an
issue.'
- VERSUS –
“an employee is any person in the service of another under a contract for hire,
express, or implied, oral or written.”
57
 It is thus incumbent upon complainant-employee to proffer evidence to prove the

existence of employer-employee relationship between them.
 Where the complainant has shown the fact of hiring, and of the existence of
employer-employee relationship, employer company must then show the
contrary, e.g., independent contractor, stockholder or partnership if it
wishes to avoid liability
 CONTRA: INSTANCES WHERE THERE IS NO EMPLOYER-EMPLOYEE

RELATIONSHIP --
a) HERNANDO, J. Gesolgon v. CyberOne PH., Inc., G.R. No. 210741,

[October 14, 2020]. – No employment; complainants are stockholders
The four-fold test used in determining the existence of employer employee

relationship involves an inquiry into: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer’s power to control the employee with respect to the means and method
by which the work is to be accomplished. However the burden of proof is
initially placed upon the employee to show that he/she was hired.
Based on record, petitioners were requested by respondent Mikrut to become

stockholders and directors of CyberOne PH with each one of them subscribing to
one share of stock.
However, petitioners contend that they were hired as employees of CyberOne PH

as shown by the pay slips indicating that CyberOnePH paid them P10,000.00
monthly net of mandatory deductions. Other than the pay slips presented by
petitioners, no other evidence was submitted to prove their employment by
CyberOne PH. Petitioners failed to present any evidence that they rendered
services to CyberOne PH as employees thereof.
Based on the foregoing, this Court is convinced that petitioners are not
employees of CyberOne PH, but stockholders thereof. As it is established that
petitioners are not employees of CyberOne PH, there is no need for this Court to
delve into the issues of Petitioners’ illegal dismissal, their monetary claims and the
probative value of the pay slips presented by petitioners.
Neither did the Court acquire jurisdiction over CyberOne AU (Australia). CyberOne
PH is neither the resident agent nor the conduit of CyberOne AU upon which
summons may be served. Also, there existed no employer employee relationship
between petitioners and CyberOne PH. Hence, there is no dismissal to speak of,
much more illegal dismissal.
b) OUTSIDE THE COVERAGE, BUT GOOD TO KNOW): J. HERNANDO,

Bulanon v. Mendco Development Corp., G.R. No. 219637, [April 26, 2023].
- Where complainant failed to discharge burden of proof of the existence
of an employer-employee relationship.
It is difficult to fathom how petitioner managed to render work for five different
employers simultaneously in a span of one week. To Our minds, it is highly
improbable that an employer would permit an employee, regular at that, to joggle
from one workplace to another. Neither would an employee, who truly believes to
have attained a regular employment status, permit such kind of setup.
57
No matter how petitioner puts it, it is undeniable that he was engaged by the
respondents to perform work only when the need arose. As aptly held by the
NLRC and the CA, it is both legally and physically impossible for petitioner to be
a regular employee of all five respondents.
As to the element of control, petitioner again heavily relies on the DTRs he
submitted to prove that respondents effectively monitored his working time.
Significantly, as discussed above, the subject DTRs provide no evidentiary value
since the genuineness and due execution thereof are questionable. aScITE
In any case, the fact alone that respondent was subjected to definite working
hours does not necessarily mean the presence of the power of control.
Jurisprudence teaches that the power of control addresses the details of day to
day work like assigning the particular task that has to be done, monitoring the
way tasks are done and their results, and determining the time during which the
employee must report for work or accomplish his/her assigned task.
In this regard, it was not shown that petitioner was subjected to a set of
rules and regulations governing the performance of his duties. Neither can
it be said that he was required to devote his time exclusively to working for
any of the respondents considering that he admittedly worked for all five
respondents concurrently.
It is elementary that he who asserts an affirmative of an issue has the burden of
proof. Since it is petitioner here who is claiming to be an employee of
respondents, it is thus incumbent upon him to proffer evidence to prove the
existence of employer-employee relationship between them. Unfortunately,
petitioner failed to discharge this burden. (Bulanon v. Mendco Development Corp.,
G.R. No. 219637, [April 26, 2023]
c) Carmela Tiangco v. ABS-CBN Broadcasting Corp., G.R. No. 200434,

[December 6, 2021] citing Jose Sonza vs. ABS-CBN, G.R. 138051, 10
June 2004. -- Possession of unique skills, expertise, or talent is a
persuasive element of an independent contractor. It becomes
conclusive if it is established that the worker performed the work
according to his/her own manner and method and free from the
principal's control except to the result.
Facts: Petitioner Carmela C. Tiangco (petitioner) was initially engaged by

respondent ABS-CBN Corporation (ABS-CBN) as Talent Newscaster, on an
exclusive basis, on 22 July 1986 with a monthly talent fee of Php8,000.00 for a
period of 1 year. Contracts renewed several times. In 1991, an Agency Agreement
also entered into with the Mel and Jay Management and Development company
will provide the services of CARMELA C. Tiangco (Mel Tiangco) for the ABS-CBN
as exclusive talent for Radio and Television. As Talent she shall render the
following services:
a. Co-anchor TV Patrol news program aired Mondays to Fridays at 6:00-7:00 p.m.;
b. Co-host Mel & Jay radio program aired Mondays to Fridays at 8:00-10:00 a.m.;
c. Co-host Mel & Jay television program aired Sundays at 5:30 to 7:00 p.m.;
d. As executive director for Lingkod Bayan.
In Feb 1995, ABS-CBN issued a Memorandum prohibiting commercial

appearances of all on-air and/or on-camera talents and employees in the Radio
and the News and Public Affairs Departments on account of the "clear . . . need to
protect the integrity and credibility of the news and public affairs programs[,]" The
Memorandum further warned that violation thereof shall be considered a serious
breach of company rules and regulations.
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Unfortunately, Mel Tiangco appeared in a Tide commercial that aired sometime in

December 1995, in contravention of the Memo. As such, ABS-CBN placed
petitioner under suspension for three months without pay from her co-anchor
positions in TV Patrol on Channel 2 and Mel & Jay radio program over at DZMM.
Mel Tiangco protested, stating that it was too harsh under the circumstances.
Despite efforts, ABS-CBN and Mel Tiangco failed to come up with an amicable
agreement, and the Agency Agreement lapsed without it being renewed. Hence,
this complaint against ABS-CBN and its officers for illegal dismissal, illegal
suspension, and claims for backwages, separation pay, 13th month pay, travel,
vacation benefits of Php150,000.00, shares of stocks, damages, and attorney's
fees.
Supreme Court: For ABS-CBN, citing extensively from Jay Sonza case.
Rationale: Mel Tiangco failed to establish that ABS-CBN controlled the manner
in which she performed her job as news anchor for TV Patrol. On the contrary, the
Court finds that Mel performed the job according to her own manner and method,
free from the network's control. Possession of unique skills, expertise, or talent is
a persuasive element of an independent contractor. It becomes conclusive if it is
established that the worker performed the work according to their own manner and
method and free from the principal's control except to the result.
Petitioner alleged that ABS-CBN controlled the manner she performed her job,
particularly as a news anchor of TV Patrol, as she merely read the news. As a
news anchor, petitioner is tasked to read or present a news copy that she or
another person wrote. Nothing on record, however, shows that petitioner
performed other tasks in relation to being an anchor, or that ABS-CBN dictated
how petitioner should read the news or perform her other related tasks, if any. As
a well-known veteran news anchor, petitioner's manner in delivering the news was
distinctly her own. Her voice, stature, aura, and representation, form part of the
unique qualities that impelled ABS-CBN to pick her for the job. Petitioner "reading
the news" is not the same as an average person reading the same news. The
impact would simply not be the same as there is premium that goes with
petitioner's stature.
As regards the other positions petitioner assumed, i.e., segment producer and
Director of Lingkod Bayan, there were no specifics presented in terms of job
description vis-à-vis ABS-CBN's control in its performance. As for the Director of
Lingkod Bayan, petitioner merely alleged that it was in job grade S4, a
supervisory position in ABS-CBN's company job classification. Nomenclatures
are not controlling in determining the nature of the job.
The Court notes that petitioner admitted that she was not under the control of
ABS-CBN in her role as co-host of the "Mel & Jay" show in her Petition, saying,
"unlike her job as 'co-host' of respondent ABS-CBN's television and radio
programs Mel & Jay, how petitioner performed her job as 'newscaster' for TV
Patrol was 100% under the sole and exclusive control of respondent ABS-
CBN." (Tiangco v. ABS-CBN Broadcasting Corp., G.R. No. 200434, [December
6, 2021])
4.4. GENERAL RULE #4: There must exist SUBSTANTIAL EVIDENCE to prove valid
exercise of management prerogatives, viz., just or authorized cause of
termination.
a) Proof beyond reasonable doubt is not required in administrative cases.
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b) Substantial evidence defined:
J. HERNANDO. JR Hauling Services v. Solamo, G.R. No. 214294, [September

30, 2020]. -- It is a well-established rule that the party-litigant who alleges the
existence of a fact or thing necessary to establish his/her claim has the burden of
proving the same by the amount of evidence required by law, which,
in labor proceedings, is substantial evidence, or "such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion."
To be clear, in the hierarchy of evidentiary values, "proof beyond reasonable doubt

is placed at the highest level, followed by clear and convincing evidence,
preponderance of evidence, and substantial evidence, in that order." Thus, in the
hierarchy of evidence, it is the least demanding.
Corollarily, the ground for the dismissal of an employee does not require proof
beyond reasonable doubt. The quantum of proof required is
merely substantial evidence — which only entails evidence to support a conclusion,
"even if other minds, equally reasonable, might conceivably opine
otherwise." Accordingly, requiring a quantum of proof that is over and
above substantial evidence is contrary to law
4.5 GENERAL RULE #5: No retroactive effect of labor laws.

Exception: Retroactive only if the law explicitly so provides.
4.6 GENERAL RULE #6: IN CASES OF DOUBT OR AMBIGUITY, INTERPRET OR

RULE IN FAVOR OF LABOR. -- “Where the contract of employment, being a contract
of adhesion, is ambiguous, any ambiguity therein should be construed strictly against
the party who prepared it.” (Price vs. Innodata Phils., 567 SCRA 122 [2008])
CASES ON INTERPRETATION OF LABOR PROCEDURES:
J. HERNANDO. Jovero v. Cerio, G.R. No. 202466, [June 23, 2021]. -- While this
Court is mindful that procedural lapses have been previously disregarded and appeals
filed beyond the reglementary period have been given due course, it necessitates
strong and compelling reasons to do so. In the present case, the CA correctly held
that the absence of such exceptional circumstances to justify the belated filing of an
appeal with the NLRC rendered Labor Arbiter Rivera's Decision final and executory.
J. HERNANDO. Reyes v. Rural Bank of San Rafael (Bulacan), Inc., G.R. No. 230597,
[March 23, 2022]. -- Relaxed and liberal interpretation of LABOR PROCEDURES —
mainly for the benefit of employee, and not the employer. Thus, the employer
should adequately explain any delay in the submission of evidence; and should
show substantial evidence to prove its allegations.
Facts:
Sometime in 2012, several stockholders of Rural Bank of San Rafael (Bulacan)
complained about the discrepancies in the amounts of the purchase price of stock
subscriptions appearing in the original receipts as against the duplicate copies issued
by the bank. The anomaly involved several millions of pesos collected from stockholders
of RBSR which, if not corrected, will certainly tarnish the image and integrity of the latter.
Acting on this anomaly, RBSR conducted an investigation and confirmed the

irregularities. Thus, in compliance with the Manual of Regulations for Banks mandating
57
the prompt report of anomalies to the Bangko Sentral ng Pilipinas (BSP), RBSR's Board
of Directors approved a Report on Crimes and Losses and directed Reyes — as
Compliance Officer — to certify the same.
However, Reyes refused to certify the report, reasoning that no independent

investigation was conducted, and that he cannot completely validate the same for lack
of material data and evidence. Reyes further remarked that he was being pressured to
certify the report.
Thereafter, Reyes claimed that instead of furnishing him the hard copies of the reports
and relevant attachments to enable him to verify and certify the same, the employer
bank issued him two show cause orders and put him on preventive suspension for
neglect of duty. Meanwhile, the employer bank contended that several administrative
hearings were scheduled to hear the side of Reyes, which he ignored.
Reyes filed a complaint against the employer bank for illegal suspension and money
claims. This complaint was subsequently amended to include illegal dismissal, in view
of the eventual termination of his employment.
The employer bank did not file a position paper during the proceedings before the Office
of the Labor Arbiter. Because of this, the Labor Arbiter ruled on the basis of the
evidence before it – e.g., Reyes was illegally dismissed without just cause and due
process compliance.
NLRC reversed the ruling of the Office of the Labor Arbiter. It adopted a liberal
interpretation of procedural rules, relaxed the same and held that substantial justice
must prevail over technicalities. Thus, it allowed the employer bank to submit
countervailing evidence even on appeal. On the substantial issue, the National Labor
Relations Commission found that Reyes was not illegally dismissed, since the employer
bank was able to discharge the burden of proving that it had a just cause to terminate
Reyes’ employment.
Court of Appeals affirmed the Decision of the National Labor Relations Commission.
ISSUE: Was the liberal application of the procedural rules in favor of the employer
bank warranted?
SC DECISION: NO. Principle of liberality is misapplied.
NLRC and CA erred in allowing Bank to present evidence on appeal. Bank was not
denied due process. Records reveal that it received copy of complaint. No explanation
as to why it failed to attend hearing and submit Position Paper.
The Supreme Court reiterated established principles from jurisprudence and

experts by stating that due process is a malleable concept anchored on fairness
and equity. At its core is simply the reasonable opportunity for every party to be heard.
What is required is not actual hearing but a real opportunity to be heard. Thus, one who
refuses to appear at a hearing is not thereby denied due process if a decision is reached
without waiting for him. Likewise, the requirement of due process can be satisfied by
subsequent due hearing.
In the present case, the Supreme Court ruled that the employer bank had been accorded
ample opportunity to present its side during the proceedings before the Office of the
Labor Arbiter based on the following findings:
57
• The employer bank unjustifiably missed at least two hearing dates

• The employer bank, at this point, had already obtained a copy of the amended
complaint which would have enabled it to intelligently respond. According to the
Court, the issuance of the summons would have been a mere superfluity;
• The employer bank’s absences were unexplained;
While commending the National Labor Relations Commission and the Court of Appeals
in upholding substantial justice, the Supreme Court reminded them such principle must
always be balanced with respect and honest efforts to comply with procedural rules. The
Court stated that it cannot always be about substantial justice, especially to the point of
disrespect and utter disregard to procedural rules.
In this regard, the Court emphasized the policy that although in labor cases, strict
adherence to the technical rules of procedure is not required, this liberal policy
should still be subject to rules of reason and fair play. The liberality of procedural
rules is qualified by two requirements:
 a party should adequately explain any delay in the submission of evidence; and
 a party should sufficiently prove the allegations sought to be proven.
J. HERNANDO. Regala v. Manila Hotel Corp., G.R. No. 204684, [October 5, 2020])
- Belated submission of evidence on appeal cannot be countenanced, especially
where the company seeks to change its theory from actual dismissal to non-
dismissal.
MHC is requesting this Court to receive belatedly submitted evidence and consider its
new theory that no actual dismissal took place.
This we shall not tolerate.
This Court does not make findings of facts particularly on evidence submitted for the
first time on appeal. It is well settled in this jurisdiction that "[p]oints of law, theories,
issues and arguments not brought to the attention of the lower court x x x need not be
considered by a reviewing court, as they cannot be raised for the first time at that late
stage. Basic considerations of fairness and due process impel this rule."
In the present case, MHC did not even provide any justifiable reason why it had failed
to present Regala's DTRs and Payroll Journals during the proceedings held before the
LA or the NLRC. It bears noting that the DTRs and Payroll Journals have been in
MHC's possession since January 2009, and yet it was only after more than seven (7)
years therefrom that it presented the same to this Court on appeal for its appreciation.
Not only does the unjustified belated submission of these records make a mockery of
this Court's judicial processes, but this also casts doubt on their credibility, more so
when they are not even newly discovered evidence. (Regala v. Manila Hotel Corp., G.R.
No. 204684, [October 5, 2020])
J. Lazaro-Javier. Agapito v. Aeroplus Multi-Services, Inc., G.R. No. 248304, [April

20, 2022]. – Labor tribunals, such as the NLRC, are not precluded from receiving
evidence submitted on appeal as technical rules are not binding in cases
submitted before them. However, any delay in the submission of evidence should
be adequately explained and should adequately prove the allegations sought to
be proven
But this liberal policy must still conform to the basic principles of fair play, justice, and
due process. In Wilgen Loon, et al. v. Power Master, Inc., et al., the Court ordained
that "the liberality of procedural rules is qualified by two requirements: (1) a party
should adequately explain any delay in the submission of evidence; and (2) a party
should sufficiently prove the allegations sought to be proven." For the liberal
application of the rules before quasi-judicial agencies cannot be used to perpetuate
57
injustice and hamper the just resolution of the case. Neither is the rule on liberal
construction a license to disregard the rules of procedure.
Guided by these principles, we hold that the Court of Appeals committed reversible
error when it affirmed the admission of and the weight assigned to the belatedly
submitted sworn statements of Constantino and Mendoza against petitioner.
(1) Aeroplus did not offer any explanation for the delayed submission of the
Sinumpaang Salaysay of Mendoza and Constantino.
Instead of presenting controverting evidence at the earliest opportunity before the
labor arbiter, Aeroplus simply kept mum and even manifested that it was not filing
a reply to petitioner's position paper. Verily, the delayed submission of the
supposed controverting affidavits of Constantino and Mendoza for the first time on
appeal, sans any valid justification is repugnant to the basic tenets of justice, fair
play, and due process. More so since these affidavits containing a plain denial of
the otherwise prompt, positive, and detailed narrative of petitioner are simply self-
serving, hence, devoid of any probative weight.
(2) There is illegal dismissal without just cause and due process in this case. As such,
complainant is entitled to full backwages, separation pay in lieu of reinstatement,
payment of monetary claims plus damages and attorney’s fees. (Agapito v.
Aeroplus Multi-Services, Inc., G.R. No. 248304, [April 20, 2022])
CASES ON INTERPRETATION OF LABOR CONTRACTS:

(ALSO FOR COLLECTIVE BARGAINING AGREEMENTS)
Del Monte Fresh Produce (Philippines), Inc. v. Del Monte Fresh Supervisors
Union, G.R. No. 225115, [January 27, 2020], J. REYES, J.C. JR.
Respondent Del Monte Fresh Supervisors Union (respondent) is the exclusive

bargaining representative of the supervisory employees of petitioner Del Monte Fresh
Produce (Philippines), Inc. (petitioner). Following unsuccessful attempts at mediation
and conciliation, respondent filed in behalf of 18 supervisor-members a Complaint with
the Voluntary Arbitrator as they were being paid salary rates below their respective
minimum rates at the time of their regularization.
LOCAL Policy Guidelines provide:

xxx xxx xxx
2.1.2.1 The minimum rate for a particular Hay Level is generally the starting
rate for a newly hired [employee]. However, experience, qualifications,
special skills, and other criteria may be considered. So newly hired
employee[s] may start at a salary higher than the set minimum, provided that the
starting salary is not more than 20% higher than the set minimum.
2.1.2.4 x x x the Company at the discretion of the hiring manager may offer below
the set minimum salary for the Hay Level provided that it shall not be lower than
10% of the set minimum. This applies to employees who undergo his/her
probationary period and when[,] upon becoming regular employees, his/her
salary shall be raised to the minimum level.
GLOBAL Policy Guidelines provide:
3.5 As a policy, the minimum rate of the particular Job Grade (or Hay Level)
is the starting rate for newly hired employees. However, a lower or higher
starting salary may be warranted when authorized by Corporate Human
Resources, with due consideration given to experience, qualifications,
special skills, and other criteria.
57
4.3 The head of the requesting department, in coordination with the local Human
Resources department, may recommend a salary up to 20% over the minimum rate
for the newly hired employee subject to approval by Corporate Human Resources.
Xxx
4.6 The performance of newly hired employees, who are on introductory period and
given below the minimum hiring rate, may be reviewed towards the end of
introductory period, and if warranted, may be eligible for a salary increase
sufficient to reach the minimum salary level upon regularization.
ISSUE: On the basis of the above company policies, is the employee who becomes
regular, automatically entitled to the payment of the minimum salary rate?
Voluntary arbitrator: For company.

Court of Appeals: For employees.
SUPREME COURT: Interpretation in favor of employee, who is automatically entitled

to the minimum salary rate upon regularization.
RATIONALE: Note that the textual interpretations cannot be glossed over in favor of a
mere contextual approach. Both global and local policies are clear that “at the point of
hiring and during the newly- employee's probationary period," discretion is given to the
hiring manager to determine the starting rate.
HOWEVER, Section 2.1.2.4 of the Local Policy gives "no discretion x x x to the hiring
manager since [it] uses the word 'shall' in providing that "upon regularization or
successful completion of the probationary or 'introductory' period, the regular employee
shall be granted a salary increase to raise his salary before regularization to the
minimum rate."
Company’s second argument: This is an impairment of contracts because

supervisors signed the contracts allowing for the decreased rates.
Supreme Court: This is a worn-out defense in labor cases. As the Court has repeatedly
stated, labor contracts are no ordinary private contracts; rather, they are imbued with
public interest and a proper subject matter of police power measures.
In this case, the CA sought to uphold rather than impair the contract between petitioner
and its employees by requiring implementation of a policy that is adjunct to the contract.
Company’s third argument on procedural issue:

HOW MANY DAYS TO APPEAL FROM DECISION OF VOLUNTARY ARBITRATOR?
57
Company’s argument is based on Art. 276 [Art 262-A], 4th par: “The award or decision
of the Voluntary Arbitrator xxx shall be final and executory after ten (10) calendar days
from receipt of the copy of the award or decision by the parties.” It argues that the
petition was filed out of time, having been filed on the 12th day upon receipt of the Motion
for Reconsideration. On the other hand, petitioner argues that it was timely filed.
Reiterating the En Banc Decision in Guagua National Colleges v. Court of Appeals et

al., the Supreme Court ruled to wit: “The 10-day period stated in Article 276 should be
understood as the period within which the party adversely affected by the ruling of the
Voluntary Arbitrators or Panel of Arbitrators may file a motion for reconsideration. Only
after the resolution of the motion for reconsideration may the aggrieved party
appeal to the CA by filing the petition for review under Rule 43 of the Rules of
Court within 15 days from notice pursuant to Section 4 of Rule 43.
The foregoing ruling applies to a petition for review under Rule 43 that is not preceded
by a motion for reconsideration with the Voluntary Arbitrator, for, at that time, such
motion was a prohibited pleading under the procedural rules of the Department
of Labor and Employment and the National Conciliation and Mediation Board.
It should be emphasized that the Court En Banc adopted the foregoing interpretation
precisely to put an end to conflicting rulings that have been adopted over the period
1984 through 2015. Accordingly, respondent's petition for review with the CA was
filed on time on the 12th day from notice of the decision of the Labor Arbiter.” (Del
Monte Fresh Produce (Philippines), Inc. v. Del Monte Fresh Supervisors Union, G.R.
No. 225115, [January 27, 2020])
B. EMPLOYER-EMPLOYEE RELATIONSHIP
Vis-à-vis Issues of Jurisdiction
1. TWO ELEMENTS TO DETERMINE JURISDICTION OF LABOR COURTS:
(a) There exists an employer-employee relationship

(b) There must be a REASONABLE CAUSAL CONNECTION between the parties’
employer-employee relations, as well as the claim asserted, in order for labor courts
to have jurisdiction.
 In the absence of such nexus, it is the regular courts that have jurisdiction.
• J. HERNANDO, Esico v. Alphaland Corp., G.R. No. 216716, [November 17, 2021])
citing San Miguel Corporation vs. NLRC, 244 Phils 741 (1988). -- The important
principle that runs through [Article 217] is that where the claim to the principal relief
sought is to be resolved not by reference to the Labor Code or other labor
relations statute or a collective bargaining agreement but by the general civil
law, the jurisdiction over the dispute belongs to the regular courts of justice and
not to the Labor Arbiter and the NLRC. In such situations, resolution of the dispute
requires expertise, not in labor management relations nor in wage structures and other
terms and conditions of employment, but rather in the application of the general civil
law. Clearly, such claims fall outside the area of competence or expertise ordinarily
ascribed to Labor Arbiters and the NLRC and the rationale for granting jurisdiction over
such claims to these agencies disappears.
• Navarro v. The Philodrill Corp., G.R. No. 245822 (Notice), [October 6, 2021]. --
As it now stands, a dispute must first satisfy both (1) the relationship test and (2) the
nature of the controversy test, before it can be regarded as an intra-corporate
57
controversy. Thus, in a long line of cases, the Court has held that the concurrence of
the two-tier test renders the case an intra-corporate dispute, the jurisdiction over which
is properly lodged in the RTC acting as a special commercial court. Conversely, the
absence of any one of these factors deprives the trial court of jurisdiction.
With respect to the relationship test, the Court ruled in Reyes v. Regional Trial Court
of Makati, Branch 142, that if the dispute is between or among the following parties,
the test is satisfied: (a) between the corporation, partnership, or association and the
public; (b) between the corporation, partnership, or association and its stockholders,
partners, members, or officers; (c) between the corporation, partnership, or
association and the State as far as its franchise, permit or license to operate is
concerned; and (d) among the stockholders, partners, or associates themselves.
ADA’S NOTES: In short, aside from the existence of an ER-EE relationship, the claim
or relief prayed for can be answered by referring to the Labor Code or other labor laws,
in order for Labor Courts to have jurisdiction,
In determining the nature of the case, check the principal relief sought by the
complainant. That is the main factor that determines jurisdiction.
GOOD EXAMPLE OF A CASE WHERE THERE IS AN EMPLOYER-EMPLOYEE

RELATIONSHIP BUT THERE IS NO REASONABLE CAUSAL CONNECTION BETWEEN
THE CLAIM AND THE ER-EE RELATIONSHIP: Indophil Textile Mills Vs. Adviento,
G.R. No. 171212, 04 August 2014
Facts: Adviento was hired as Civil Engineer (for maintenance of facilities) of Indophil,
whose primary business is the manufacture of textiles. Adviento developed a chronic
allergy on account of the textile dust. He was eventually dismissed from employment,
for which reason he filed two cases against the company, viz: (a) NLRC for illegal
termination; and (b) Regional Trial Court for damages arising from gross negligence
and failure of company to provide a safe, workable and healthy environment.
Company sought to dismiss the RTC case on account of litis pendencia and lack of
jurisdiction, considering that the claim arises from an employer-employee relationship.
Question: Whether or not RTC has jurisdiction?
Answer: YES. No reasonable causal connection between claim and employer-

employee relationship.
Although Adviento contracted the occupational disease during his employment with
the company, there is no reasonable causal connection between the claim asserted
and the employer-employee relations. As such, the case does not fall within the
jurisdiction of the labor courts; but rather with the regular courts that have jurisdiction.
While the maintenance of a safe and healthy workplace may be a subject of a labor
case, note that the cause of action is one for torts/quasi-delict and that relief prayed
for is the payment for damages arising from alleged gross negligence on the part of
the company to provide a safe, healthy and workable environment for its employees.
De Roca v. Dabuyan, G.R. No. 215281, 05 March 2018 -- "Contracts take effect only
between the parties, their assigns and heirs, except in case where the rights and
obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law." The contract of employment between respondents,
on the one hand, and Oceanic and Ewayan on the other, is effective only between
them; it does not extend to petitioner, who is not a party thereto. His only role is
as lessor of the premises which Oceanic leased to operate as a hotel; he cannot
be deemed as respondent's employer — not even under the pretext that he took
over as the "new management" of the hotel operated by Oceanic. There simply is no
truth to such claim. Thus, to allow respondents to recover their monetary claims from
petitioner would necessarily result in their unjust enrichment.
57
2. CORPORATE OFFICER OR ORDINARY EMPLOYEE?
2.1 Sub-issue: IS THE TERMINATION OF A HIGHER MANAGEMENT OFFICER

“ASST. VICE-PRESIDENT” “EXECUTIVE VICE-PRESIDENT”, OR SIMPLY
“VICE-PRESIDENT” A LABOR CASE OR A CORPORATE CASE?
• If the complainant is named as a corporate officer per Articles and/or by-laws,

then the removal of the person is an intra-corporate controversy and within the
jurisdiction of the ordinary courts.
• If not, then the person is an ordinary employee who may only be terminated for
just or authorized cause, and after due process compliance.
2.2 IMPORTANT J. HERNANDO CASE: Philippine National Bank v. Bulatao, G.R.

No. 200972, [December 11, 2019] -- Corporate officer termination or resignation;
and the Doctrine of Promissory Estoppel.
Facts: SVP-IT Bulatao filed an application for availment of the special retirement
plan, on account of a proposed buy-in of an Indian group. In said letter, he likewise
said that he was going to take a TERMINAL leave and did not report for 81 days.
Neither did the bank question his extended leave of absence.
After 81 days, he returned to work purportedly after having been asked by Chair Lucio
Tan to do so, and revoked his application for early retirement. Within a month from
his return, Bulatao was surprised to learn that the Board had accepted his application
for retirement but considered this as a “resignation.”
Issue: Was this illegal (constructive) dismissal or a valid dismissal due to

abandonment?
Supreme Court: This was an illegal dismissal.
The situation calls for the application of the doctrine of promissory estoppel,
which is "an exception to the general rule that a promise of future conduct does
not constitute an estoppel.”
In some jurisdictions, in order to make out a claim of promissory estoppel, a party

bears the burden of establishing the following elements: (1) a promise reasonably
expected to induce action or forbearance; (2) such promise did in fact induce such
action or forbearance[;] and (3) the party suffered detriment as a result."
In the case at bench, Bulatao was constrained to apply for early retirement due to the
announcement of its availability and because of the unfavorable future working
conditions he would face after the supposed JVA with the "Indian" group and the
conduct of the International Competitive Test.
As the CA ruled, the circumstances in which the bank expected Bulatao to work
impelled him to apply for retirement, and not because he actually wished to sever his
employment ties with PNB.
Bulatao withdrew his application for early retirement since Mr. Tan purportedly asked
him to work in a different capacity in the bank. Hence, he manifested such withdrawal
through a Memorandum three days before PNB's Board released Resolution No. 38
accepting his supposed resignation. In effect, the Board did not have any basis
for its resolution since Bulatao already withdrew his application.
57
The Court finds without justification PNB's treatment of Bulatao's letter as one for
resignation and its subsequent "acceptance" of the same to ultimately terminate his
employment. Neither was there any basis to charge him with abandonment for his
failure to report for work. (J. Hernando. Philippine National Bank v. Bulatao, G.R. No.
200972, [December 11, 2019]).
2.3 Supreme Court Cases
• Navarro v. The Philodrill Corp., G.R. No. 245822 (Notice), [October 6, 2021]).
-- It becomes necessary to distinguish between a "corporate officer" and a
"regular employee."
In Wesleyan University-Philippines v. Maglaya, Sr., citing Tabang v. National

Labor Relations Commission, the Court explained that an "office" is created by
the charter of the corporation and the officer is elected by the directors or
stockholders, while an "employee" usually occupies no office and generally is
employed not by action of the directors or stockholders but by the managing officer
of the corporation who also determines the compensation to be paid to such
employee.
Hence, for an individual to be considered as a "corporate officer," as against an

ordinary employee or officer, it must be shown that: (1) the creation of the position
is under the corporation's charter or by-laws; and (2) the election of the officer is
by the directors or stockholders.
• Tan v. PNB Life Insurance Co., G.R. No. 242374 (Notice), [July 15, 2020],
citing Wesleyan University-Philippines v. Maglaya, Sr. 803 Phil. 722 (2017).
“A corporate officer's dismissal is always a corporate act, or an intra-corporate

controversy which arises between a stockholder and a corporation, and the nature
is not altered by the reason or wisdom with which the Board of Directors may have
in taking such action.
The issue of the alleged termination involving a corporate officer, not a mere
employee, is not a simple labor problem but a matter that comes within the area of
corporate affairs and management and is a corporate controversy in contemplation
of the Corporation Code.
The long-established rule is that the jurisdiction over a subject matter is conferred
by law. Perforce, Section 5 (c) of PD 902-A, as amended by Subsection 5.2,
Section 5 of Republic Act No. 8799, which provides that the regional trial courts
exclusive jurisdiction over all controversies in the election or appointment of
directors, trustees, officers or managers of corporations, partnerships or
associations, applies in the case at bar.
To emphasize, the determination of the rights of a corporate officer dismissed from

his employment, as well as the corresponding liability of a corporation, if any, is an
intra-corporate dispute subject to the jurisdiction of the regular courts.”
57
3. RECAPITULATION ON CASES REGARDING JURISDICTION:
In determining the nature of the case, check the principal relief sought by
the complainant. That is the main factor that determines jurisdiction.
In the Smart case, the case filed was one of replevin, and hence, jurisdiction lies with the
regular courts. Same also with the Indophil case, which was a case for damages arising
from alleged negligence on the part of the company to provide a safe, healthy and
workable environment for its employees. As such, jurisdiction properly lies with the
regular courts.
In the Margallo case, the principal case was one of illegal termination with claim for
reimbursement as well as damages, and hence, properly falls within the jurisdiction of
the Labor Arbiter.
As regards termination of an employee who is a corporate officer, or vice-versa: It is only

when the dismissed employee is actually classified as a corporate officer, that the issue
may be considered an intra-corporate dispute and hence, cognizable by the regular
courts and NOT the labor courts.
CASE RELIEF JURISDICTION

SMART VS. REPLEVIN; RETURN OF THE CAR OF REGIONAL TRIAL
ASTORGA THE MANAGER COURT
GRANDTEQ VS. ILLEGAL TERMINATION WITH PRAYER LABOR ARBITER
MARGALLO FOR REIMBURSEMENT OF
DOWNPAYMENT FOR CAR
INDOTEXTILE VS. DAMAGES FOR COMPANY’S FAILURE REGIONAL TRIAL
ADVIENTO TO PROVIDE SAFE AND HEALTHY COURT
WORKING ENVIRONMENT
MATLING VS. TERMINATION OF VP FOR FINANCE LABOR ARBITER
COROS AND ADMINISTRATION, WHICH
POSITION IS NOT IN ARTICLES OR BY-
LAWS
COSARE VS TERMINATION OF ASST VICE- LABOR ARBITER
BROADCOM PRESIDENT FOR SALES, WHO WAS
ALSO A STOCKHOLDER. AVP-SALES
NOT A CORP OFFICER
MALAYAN VS REPLEVIN; RETURN OF THE CAR OF REGIONAL TRIAL
ALIBUDBUD THE MANAGER COURT
4. LIABILITY OF CORPORATE OFFICERS
GENERAL RULE:
Corporate officer cannot be held personally liable for corporate debts arising from illegal
termination cases (e.g., payment of full backwages, monetary claims and damages).
EXCEPTION:
Corporate Officer may be held liable when two elements are established:
(A) Bad faith of corporate officer must be established clearly and convincingly; and
(B) Can be individually attribued to the corporate officer.
Nature of Liability of Corporate Officer: JOINT LIABILITY ONLY. To make it solidary

liability, the Decision itself must state so.
 Kay Products, Inc. vs. Honorable Court Of Appeals, , G.R. NO. 162472 July 28,
2005 -- In labor cases, particularly, corporate directors and officers are solidarily liable
with the corporation for the termination of employment of corporate employees done
with malice or in bad faith.
57
 J. Jardeleza, Montealegre v. Spouses De Vera, G.R. No. 208920, [July 10, 2019]).
Facts: Employee Servandil filed a complaint for illegal dismissal against A. De Vera
Corporation (Corporation). LA rendered a Decision against the Corporation, finding it
guilty of illegal dismissal and holding it for full backwages, separation pay and unpaid
salary. NLRC dismissed appeal due to failure to post bond and also denied Motion for
Recon. Court of Appeals and Supreme Court affirmed NLRC dismissal.
A writ of execution was thus issued and attaching a piece of property, which happened
to be the conjugal property of Abraham de Vera. This property was levied upon and
sold to petitioners Jaime Bilan Montealegre and Chamon'te, Inc. (petitioners) at a
public auction. As no redemption was made during the period provided by law,
petitioners filed an omnibus motion seeking the issuance of a final deed of sale,
cancellation of title in the name of respondents, and the issuance of a new title in their
names.
NLRC: Abraham de Vera’s property can be levied. While the officers and members of
a corporation are not personally liable for acts done in performance of their duties, an
exceptional circumstance exists in this case, i.e., the corporation is no longer existing
and is unable to satisfy the judgment in favor of the employee. Moreover, the SC
decision has become final and executory, and hence, can no longer be questioned.
Issue: Whether the levy of Abraham de Vera’s property is valid.
Supreme Court: NO. It is undisputed that the Labor Arbiter’s decision adjudged the
corporation guilty of illegal dismissal and ordered it to pay Servandil separation pay
and backwages. It did not mention respondents' liability. Nevertheless, the Writ of
Execution dated May 22, 2007 and the Alias Writ of Execution dated February 11,
2008 were directed against the movable and immovable properties of both the
corporation and respondent Abraham. Clearly, the writs of execution here
exceeded the terms of the final and executory judgment of the LA.
Consequently, the CA correctly set aside the levy and sale of the subject
property, for being the offshoot of a void execution
Contrary to petitioners' assertions, the piercing of the veil of corporate fiction is

unwarranted in this case. The doctrine of piercing the corporate veil applies only in
three basic areas, namely:
1) defeat of public convenience as when the corporate fiction is used as a
vehicle for the evasion of an existing obligation;
2) fraud cases or when the corporate entity is used to justify a wrong,
protect fraud, or defend a crime; or
3) alter ego cases, where a corporation is merely a farce since it is a mere
alter ego or business conduit of a person, or where the corporation is so
organized and controlled and its affairs are so conducted as to make it
merely an instrumentality, agency, conduit or adjunct of another
corporation. In the absence of malice, bad faith, or a specific provision
of law making a corporate officer liable, such corporate officer cannot be
made personally liable for corporate liabilities.
The general rule is corporate officers are not held solidarily liable with the corporation
for separation pay because the corporation is invested by law with a personality
separate and distinct from those persons composing it as well as from that of any other
legal entity to which it may be related.
To hold a director or officer personally liable for corporate obligation is the

exception and it only occurs when the following requisites are present:
57
(1) the complaint must allege that the director or officer assented to the
patently unlawful acts of the corporation, or that the director or officer
was guilty of gross negligence or bad faith; and
(2) there must be proof that the director or officer acted in bad faith.
Here, the two requisites are wanting. Servandil's complaint failed to allege or impute
bad faith or malice on the part of respondent Abraham De Vera.
There was likewise nothing in the November 27, 2003 LA Decision that would establish
that respondent Abraham De Vera acted in bad faith when Servandil was dismissed
from the service. There was likewise no invocation of bad faith on the part of
respondent Abraham De Vera to evade any judgment against the corporation.
(Montealegre v. Spouses De Vera, G.R. No. 208920, [July 10, 2019])
5. DOCTRINE OF PIERCING VEIL OF CORPORATE FICTION
5.1 General Rule: Each corporation has a separate juridical personality.

Exception: Under the doctrine of "piercing the veil of corporate fiction," the court
looks at the corporation as a mere collection of individuals or an
aggregation of persons undertaking business as a group, disregarding
the separate juridical personality of the corporation unifying the group
5.2 However, while the veil of corporate fiction may be pierced under certain instances,
mere ownership of a subsidiary does not justify the imposition of liability on the
parent company. It must further appear that to recognize a parent and a subsidiary
as separate entities would aid in the consummation of a wrong. Thus, a holding
corporation has a separate corporate existence and is to be treated as a separate
entity; unless the facts show that such separate corporate existence is a mere sham,
or has been used as an instrument for concealing the truth.
5.3 In labor cases, the corporate veil may be lifted only if it has been used to shield fraud,
defend crime, justify a wrong, defeat public convenience, insulate bad faith or
perpetuate injustice.
5.4 J. HERNANDO. Esico v. Alphaland Corp., G.R. No. 216716, [November 17, 2021].
– Where an employee was rendering services to several corporations under a group
of companies, the veil of corporate fiction may be pierced considering the strong
ambiguity in the three employment contracts as to which among in the respondent’s
group of companies will compensate him for the services he had rendered.
It must be emphasized that Esico had rendered services for his concurrent
designation as pilot and RSMO which he understood would be separately
compensated by either of the two corporations that are part of respondents' group of
companies, PhilWeb or ADI. However, by December 2011, while still performing
functions as RSMO of PhilWeb and expecting to draw salaries therefrom, Esico
could no longer access his payroll account as he was transferred to ADI's payroll
account.
Here, the totality of the circumstances evince fraud on the part of respondents' group
of companies to evade an existing obligation. Undoubtedly, respondents' group of
companies availed of Esico's services, both as a pilot and as a security officer, for
which he was not properly compensated. As we have repeatedly pointed out herein,
the arrangement set up by respondents Alphaland, reflected in the ambiguous
employment contracts, worked for Esico's disadvantage who was given the run
around by respondents each time he attempted to ascertain the true nature of the
terms and conditions of his employment.||| (Esico v. Alphaland Corp., G.R. No.
216716, [November 17, 2021])
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C. INDEPENDENT CONTRACTING VERSUS

LABOR-ONLY CONTRACTING:
1. JOB-CONTRACTING IS OF TWO FORMS:

 BILATERAL (example: Company and retainer lawyer)
 TRILATERAL (example: Company and security agency with security guards)
In BOTH arrangements, the company must have NO CONTROL over the manner and method
by which the contractor will do the job.
But note: DOLE Dept Orders Nos. 18 s 2002, 18-A s 2011 and 174 s 2017 (on registration
requirements and other matters) applies only to trilateral arrangements.
2. VALID INDEPENDENT CONTRACTING

OR SUB-CONTRACTING ARRANGEMENTS
Article 106, LB; IRR S8R8B3; Dept Order No. 174 s 2017
ELEMENTS: (MEMORY AID: I ARM FREE CAPITAL TEMWORK R&B)
 There is a job-contracting permissible by law where the contractor/agency carries on an

INDEPENDENT business and undertakes the contract work on his ACCOUNT, under
his own RESPONSIBILITY, using his own MANNER AND METHODS, FREE from
the control of the principal in all matters connected with the performance of work
excepting the results thereof.
 He has his own CAPITAL in the form of TOOLS, EQUIPMENT, MACHINERY,

WORK PREMISES, and
 The agreement between the contractor and principal assures the former’s employees of
ALL RIGHTS AND BENEFITS under the law.
3. LABOR-ONLY CONTRACTING ARRANGEMENTS
3.1 Labor-only contracting is evident in such a situation where the contractor merely
recruits, supplies, and assigns workers to perform a job for a principal. (J. Inting,
Servflex, Inc. v. Urera, G.R. No. 246369, [March 29, 2022])
First, it bears stressing that in the context of labor-only contracting, substantial capital or
investment rests not only on the capitalization indicated in the financial documents but
on the pieces of equipment and machinery, and work premises a person or
entity actually and directly used in the performance of the work or service it contracts
out.
In other words, to be considered as a legitimate labor contractor, a person or

entity must possess the necessary tools and premises in relation to the job or
service it renders.
57
Here, petitioner did not at all specify any tool or equipment it owned and supplied
respondents for them to perform their work for PLDT. On the contrary, PLDT provided
the relevant tools and the premises for the performance of respondents' work. More
importantly, respondents have been performing tasks central and necessary to the
business of PLDT. Undeniably, all these matters indicate that PLDT is the employer of
respondents. (Servflex, Inc. v. Urera, G.R. No. 246369, [March 29, 2022])
3.2 TWO (2) WAYS OF PROVING LABOR-ONLY CONTRACTING:

(Memory Aid: No Cap Direct OR No Control)
For labor-only to exist, Sec. 5 of Dept Order No. 174 s 2017 requires any two of the
elements to be present, viz.:
 The contractor or sub-contractor DOES NOT HAVE

SUBSTANTIAL CAPITAL or investment to actually perform the job,
work or service under its own account and responsibility; and the
employees recruited, supplied or placed by such contractors are
performing activities which are DIRECTLY RELATED to the main
business of the principal;
OR
 The CONTRACTOR has NO CONTROL over the conduct of the work to be

done by his employees.
To emphasize, a finding that a contractor is a labor-only contractor is equivalent to

declaring that there is an employer-employee relationship between the company and
the employees of the labor-only contractor.(Industrial Timer Corp., vs. NLRC, 169
SCRA 341).
This is because the labor-only contractor is considered as a mere agent of the

EMPLOYER and the latter is responsible to the employees of the labor-only contractor
as if such employees had been directly employed by the principal employer. (Alviado
et. al. vs. Procter & Gamble, and Promm Gemm, G.R. No. 160506, 09 March 2010).
4. SYNTHESIS AND CLARIFICATION OF

DOCTRINES ON JOB-CONTRACTING
4.1 Job contracting is a trilateral work arrangement arising out of two different
contracts:
a) Contract between Principal and the Agency: CIVIL CONTRACT

b) Contract between Agency and its employees: LABOR CONTRACT
But note that there should be NO CONTROL between Principal and Agency or Principal
and employees of the agency; otherwise, an employer-employee relationship is
established in either case.
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4.2 GENERAL RULE: Contracting out is valid as an exercise of management

prerogative for as long as it complies with the limits and standards provided by
the Labor Code. [COCA-COLA BOTTLERS VS. DELA CRUZ ET AL, G.R. No. 184977, 07 December
2009 (BRION, J)], --
Essentially, there must be proof of capitalization, and of control over his employees on
the part of the independent contractor. The law allows contracting and
subcontracting involving services but closely regulates these activities for the
protection of workers.
Thus, an employer can contract out part of its operations, provided it complies with the
limits and standards provided in the Code and in its implementing rules. xxx In strictly
layman’s terms, a manufacturer can sell its products on its own, or allow
contractors, independently operating on their own, to sell and distribute these
products in a manner that does not violate the regulations.
Consolidated Building Maintenance, Inc. v. Asprec, Jr., G.R. No. 217301, [June 6,
2018] -- It is clear that job contracting is not absolutely prohibited. Indeed, an employer
is allowed to farm out the performance or completion of a specific job, work or service,
within a definite or specified period, and regardless of whether the said task is to be
performed or completed within or outside its premises.
Job contracting is deemed legitimate and permissible when the contractor has
substantial capital or investment, and runs a business that is independent and free from
control by the principal. Further, in Norkis Trading Co., Inc. v. Gnilo, it is required that
"the agreement between the principal and the contractor or subcontractor assures the
contractual employees' entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of tenure, and social
welfare benefits." The absence of any of these elements results in a finding that the
contractor is engaged in labor-only contracting.|||
4.3 The right of management to outsource parts of its operations is within the purview of
management prerogative, but said right may limited by law, CBA provisions or the
general principles of fair play and justice. Goya Inc. vs. Goya Employees Union –
FFW, G.R. No. 170054 21 January 2013.
4.4 The law and its implementing rules recognize that management may rightfully exercise
its prerogatives in determining what activities may be contracted out, REGARDLESS
OF WHETHER SUCH ACTIVITY IS PERIPHERAL OR CORE IN NATURE. (Alviado
et. al. vs. Procter & Gamble, and Promm Gemm, G.R. No. 160506, 09 March 2010, Del
Castillo, J).
57
4.5 GENERAL RULE: There is a preliminary presumption in a trilateral working

arrangement is that there is labor-only contracting. The contractor is presumed to be a
labor-only contracting UNLESS such principal or contractor overcomes the burden of
proving that it has substantial capital, investment, tools and the like. (Petron vs. Armz
Caberte, G.R. No. 182255, 15 June 2015. J. Del Castillo.)
4.6 WHETHER DOLE CERTIFICATION IS CONCLUSIVE EVIDENCE TO PROVE

LEGITIMATE JOB-CONTRACTING.
General Rule: The DOLE certification simply gives rise to a DISPUTABLE

presumption that the contractor is a legitimate one. It does NOT prohibit the
Supreme Court, in the exercise of its plenary judicial powers of review, to determine
sufficiency of evidence other than the certification, in ruling that one is, or is not, an
independent contractor. (Ramy Gallego vs. Bayer Phils. G.R. No. 179807, 31 July 2009,
Carpio-Morales, J.)
Exception: However, apart and separate from the existence of said DOLE certification,
and especially in instances where there are contradictory findings between the
Court of Appeals and the NLRC/Labor Arbiter, the Supreme Court may consider
other factors in the determination of whether or not a contractor complies with the
requisite elements of a legitimate sub-contracting as enumerated in the Labor Code and
the Dept. Order No. 18-02.
In these cases, the Supreme Court reviewed the records and found that the so-called
independent contractors had no substantial capitalization and investment, and
that the workers supplied by it were performing activities which were necessary and
desirable in the usual trade or business of the employer. COCA COLA BOTTLERS VS. RICKY
DELA CRUZ, ET AL. (G.R. No. 184977, 07 December 2009) and COCA COLA BOTTLERS VS. AGITO ET
AL (G.R. 179546, 13 Feb 2009, J. Chico-Nazario)
5. EFFECT OF LABOR-ONLY CONTRACTING AND VALID JOB CONTRACTING

AGREEMENTS -- San Miguel Corp. vs. MAERC Integrated Systems, 405 SCRA 579 [10 July 2003]
 If labor only contracting: ILLEGAL.

The employer is deemed the DIRECT employer and is made liable to the employees of
the contractor for a more comprehensive purpose (wages, monetary claims, and all other
benefits in the Labor Code such as SSS/Medicare/Pag-Ibig). The labor-only contractor is
deemed merely an agent.
 If job-contracting: LEGAL.
The employer is considered an INDIRECT EMPLOYER, and is made solidarily liable with
the contractor to the employees of the latter for a more limited purpose, viz.: payment of
unpaid wages and other monetary claims, including 13th Month pay, service incentive
leave pay (New Golden Builders case).
57
6. CASES ON JOB-CONTRACTING VS LABOR-ONLY CONTRACTING;
CHECK THE PATTERN
57
D. MANAGEMENT PREROGATIVES:
1. J. HERNANDO. Telus International Philippines, Inc. v. De Guzman, G.R. No. 202676,
[December 4, 2019]) --
GENERAL PRINCIPLE: Labor laws and the Constitution recognize the right of the
employers to regulate, according to his/her own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time, place and
manner of work, work supervision, transfer of employees, lay-off of workers, and discipline,
dismissal, and recall of employees. The only limitations to the exercise of this prerogative are
those imposed by labor laws and the principles of equity and substantial justice.
As long as no arbitrary or malicious action on the part of an employer is

shown, the wisdom of a business judgment to implement a cost saving device is beyond this
court's determination. After all, the free will of management to conduct its own business
affairs to achieve its purposes cannot be denied. (citing Maya Farms Employees Org. vs
NLRC, GR No. 106256, 28 Dec 1994)
2. MEMORIZE ELEMENTS: Valid exercise of management prerogatives
The free will of the management to conduct its own affairs to achieve its purpose cannot be
denied, PROVIDED THAT THE SAME IS EXERCISED:
• IN GOOD FAITH (BONA-FIDE IN CHARACTER),

• FOR THE ADVANCEMENT OF THE EMPLOYER’S INTEREST; AND
• NOT TO CIRCUMVENT THE RIGHTS OF THE EMPLOYEES. (Capitol
Medical Center vs. Meriz; San Miguel Brewery and Union Carbide cases).
3. ON TRANSFER: It is the prerogative of management to transfer an employee where he can

be most useful to the company; Insubordination if not followed.
3.1 Jurisprudential guidelines in the transfer of employees: ICT Marketing

Services, Inc., etc. vs. Mariphil L. Sales, G.R. No. 202090, 09 September 2015.
i. Transfer is a movement from one position to another of equivalent rank, level or

salary without break in the service or a lateral movement from one position to
another of equivalent rank or salary;
ii. The employer has the inherent right to transfer or reassign an employee for
legitimate business purposes;
iii. A transfer becomes unlawful where it is motivated by discrimination or bad faith or
is affected as a form of punishment or is a demotion without sufficient cause;
iv. The employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee.
3.2 2019-2022 CASES ON TRANSFER:
a) J. HERNANDO. Teletech Customer Care Management Philippines, Inc. v.

Gerona, Jr., G.R. No. 219166, [November 10, 2021]
Petitioner Teletech is a domestic business process outsourcing (BPO) company,
which answers queries and concerns in behalf of their clients, such as Accenture and
Telstra. Gerona was hired as one of Teletech's technical support representatives and
was assigned to the Accenture account. By January 17, 2009, Gerona became a
regular employee.
57
On October 30, 2009, Teletech's HRD informed Gerona that he would be transferred
to the Telstra account upon successfully passing the training, assessment and
examination. He was further informed that should he refuse to take the examinations
, he will be terminated on the ground of redundancy.
Gerona refused to undergo training and take the examinations under the belief that he
was entitled to security of tenure. As such, he was declared redundant.
Issue: May Company transfer Gerona to another account, with condition to undergo
an examination, and failing which, he will be considered redundant?
Answer: NO. Gerona was a regular employee, hence, he was entitled to security of
tenure.
A company's new table of organization and certification from its human resources
department attesting that the position held by a certain employee is redundant are
insufficient evidence to support a claim of redundancy. Similarly, an alleged email from
a company's client to downsize its manpower will also not suffice if such email was not
presented in evidence.
In the case at hand, Teletech should have presented any document proving the decline
in Accenture's volume of calls for the past months, or affidavits of the Accenture and
Teletech officers who determined that business was slowing down and their basis
thereof. Unfortunately, Teletech only relied heavily on the self-serving affidavit of its
human capital delivery site manager. While Teletech submitted other documents, such
pieces of evidence hardly proved the fact of redundancy.
By requiring him to pass additional trainings and examination as a condition to retain
his employment under the pain of dismissal, Teletech disregarded his right to security
of tenure. Teletech's failure to prove redundancy, coupled with the imposition of a
prejudicial condition to retain employment, rendered the offer of transfer invalid.
In Sumifru Philippines Corporation v. Baya, citing Peckson v. Robinsons Supermarket
Corp., We held that: AIDSTE
[F]or a transfer not to be considered a constructive dismissal, the
employer must be able to show that such transfer is not
unreasonable, inconvenient, or prejudicial to the employee; nor does
it involve a demotion in rank or a diminution of his salaries, privileges and
other benefits. Failure of the employer to overcome this burden of proof,
the employee's demotion shall no doubt be tantamount to unlawful
constructive dismissal.
c) Illegal transfer: Caniogan Credit and Dev't Cooperative, Inc. v. Mendoza, G.R. No.
194353 (Notice), [March 4, 2020]
Facts:
Respondents are employees of Caniogan Credit. They were closely associated with Mr.
Celso F. Pascual, Sr. and Mr. Serafin Terencio (petitioner's former General Manager
and Collection Manager, respectively). They were transferred to petitioner's other
branches where they reported for three (3) months but were not given any
tasks. Respondents wrote a letter noting the perceived acts of discrimination.
Without addressing respondents' letter, petitioner issued notices requiring respondents to

explain why they did not report for work on July 18, 2006. This was followed by a
termination letter stating that respondents' services will be discontinued effective August 3,
2006.
57
Issues:
1. Was the transfer of respondents tainted with bad faith?
2. Abandonment or constructive dismissal?
Labor Arbiter: For complainants; illegal dismissal

NLRC: For company; valid reorganization and abandonment.
Court of Appeals: For complainants; illegal dismissal.
Supreme Court: Respondents' transfer was motivated by bad faith. Constructive

dismissal. Employer bears the burden of proof that the transfer was not motivated by bad
faith, and prompted by business necessity.
Caniogan Cooperative failed to prove its burden that the employees' transfer was for
valid and legitimate grounds such as genuine business necessity. From the effectivity of
their transfer on May 2, 2006 up to July 17, 2006 or for two and a half (2 1/2) months, not
a single task was assigned to respondents at their new respective stations.
This belied petitioner's claim that respondents' services were greatly needed and
instead gave credence to the idea that their transfer was only a ruse to cover up
management's mistrust and motive of retaliation.
Petitioner's acts clearly exhibited discrimination, insensibility, and disdain towards

undesirable employees with close association with the former management. As
respondents could no longer take what they felt was an act of oppression, if not
constructive dismissal, they were forced not to report for work anymore.
Respondents did not voluntarily abandon their job. As they were forced to discontinue
with their employment, respondents could not be deemed to have voluntarily abandoned
their job. Rather respondents were confronted with undeniable hostility from the
management.
To constitute abandonment, there must be: (a) failure to report for work or absence
without valid or justifiable reason; and, (b) a clear intention, as manifested by some overt
act, to sever the employer-employee relationship, requisites that are negated by the
immediate filing of a complaint for constructive dismissal. A charge of abandonment is
totally inconsistent with the immediate filing of a complaint for illegal dismissal; more so,
when it includes a prayer for reinstatement. (Caniogan Credit and Dev't Cooperative,
Inc. v. Mendoza, G.R. No. 194353 (Notice), [March 4, 2020])
4. OTHER CASES ON MANAGEMENT PREROGATIVES .
a) J. HERNANDO, Moreno v. Chateau Royale Sports and Country Club, Inc., G.R.
No. 203942, [August 4, 2021] – Hiring is essentially an exercise of management
prerogative.
Respondent Chateau Royale Sports and Country Club, Inc. (Chateau Royale) is a
corporation operating a resort hotel in Nasugbu, Batangas. On February 8, 2005, it hired
petitioner Rhodora "Dolly" R. Moreno (Moreno) as its Operations Manager on a
probationary capacity with a monthly salary of P50,000.00 and additional benefits.
Moreno allegedly tried to resign but was prevailed upon by the Chateau Royale
President Go, when she was allegedly offered position of GM with increase in salary.
Filed for constructive dismissal when a Frenchman was hired as GM.
Labor Arbiter: Illegal termination

NLRC and Court of Appeals: No constructive dismissal; valid exercise of management
prerogative.
57
Supreme Court: No illegal termination, as there was no proof that she was offered
the position of General Manager, or of actual dismissal. Neither was there
abandonment.
The hiring of Gautier cannot be considered a discriminatory act, in bad faith, against
Moreno to ease her out of employment. This was a legitimate and valid exercise of
management prerogative on the part of Chateau Royale. Moreno failed to prove that
she was the GM or had any right to the position. She relied solely on her bare
allegation that President Go promised and appointed her as GM while she was
still on probation. Such cannot be given credence in the absence of substantial
evidence.
Although Moreno was not illegally dismissed by Chateau Royale, she cannot be
considered to have abandoned her work. Hence, as elucidated in Rodriguez, there can
be no grant of "reinstatement" similar to illegal dismissal cases since "there can be no
reinstatement as one cannot be reinstated to a position he is still holding. Instead, the
Court merely declares that the employee may go back to his work and the employer
must then accept him because the employment relationship between them was never
actually severed."
Necessarily, Moreno is not entitled to her claims for full backwages, salaries, benefits,
and other monetary claims which are granted only to employees who have been unjustly
dismissed pursuant to Article 279 of the Labor Code. Nonetheless, Chateau Royale
should admit Moreno to her former position, or a substantially-equivalent position,
without payment of backwages. If Moreno refuses to return to work, she is considered
to have resigned from employment. In the event that reinstatement to her old position is
no longer possible, and the employee's failure to work was occasioned neither by
abandonment nor termination, the Court has recognized that each party must bear their
own economic loss. (Moreno v. Chateau Royale Sports and Country Club, Inc., G.R. No.
203942, [August 4, 2021])
b) IMPORTANT CASE ON FLOATING STATUS
Ada’s notes: Floating status is allowed in two instances:

(a) for a maximum period of six (6) months as a result of temporary cessation of
operations of the business under Article 301, Labor Code, OR
(b) for a period of three (30 months under Dept Order No. 174 s 2017, where the contract
between the principal and the independent contractor had expired, and the
independent contractor/employer is under obligation to look for alternative
employment for its regular employees.
(b.1) J. HERNANDO. TELUS INTERNATIONAL PHILIPPINES, INC. V. DE GUZMAN,

G.R. NO. 202676, [December 4, 2019]
Facts: On August 2, 2008, Telus received an escalation complaint from Jeanelyn

Flores (Flores), Team Captain of DELL APoS, charging De Guzman of disrespect
and ridicule towards a person.
The complaint alleged that on July 31, 2008, Flores, while in the process of checking
the work progress of all the agents to determine if coaching was required to improve
their performance, sent a chat message to Quality Analysts (QA) directing them to
do coaching. She messaged: "QAs there are tons of avails, do your coaching." De
Guzman who was among the QAs who received the message, replied: "that is good,
you can now do your huddle for your team." Flores was offended when the other
QAs exited the conversation and by De Guzman's reply as she felt that he was
implying that she has no time for her team.
57
After investigation, the company absolved De Guzman but decided to transfer him
to another account in order to avoid any awkwardness with Ms. Flores, who
remained the boss in the DELL account.
However, De Guzman was placed on floating status for more than six months, while
waiting for his transfer, and hence, this case for constructive dismissal.
Issues: Whether or not De Guzman was constructively dismissed? (Yes)

Whether he was validly placed on floating status? (No).
Supreme Court: Based on the foregoing, the series of actions done by Telus
manifests that De Guzman was terminated in disguise and such actions amount to
constructive dismissal.
.
First, after finding petitioner not liable for the offense charged, respondents did not
immediately reinstate petitioner to his former position.
Second, private respondents informed petitioner that he was being transferred to a

new account and directed to report to the Telus' branch office at Market, Market,
Global City, Taguig City. However, after a few hours, respondents asked petitioner
to just go home and wait since they needed time to search for his account. While
waiting for the promised new account, petitioner was compelled to utilize his leave
credits.
Third, after his leave credits were consumed, private respondents placed petitioner
on a floating status. It bears stressing that after more than one (1) month from his
exoneration and the lifting of the suspension, private respondents have not assigned
petitioner a new account.
Finally, respondents required petitioner to undergo a profile interview supposedly to

determine which account would he would best fit in. In this connection, while it was
stressed that such profile interview was not a pre-qualification requirement for
employment, petitioner nonetheless received a text message from his manager,
respondent Michael Sy, informing him that he should pass the interview in order to
be endorsed to a new account.
ON FLOATING STATUS. -- This Court cannot likewise subscribe to the argument of

the company that placing De Guzman on "floating status" was perfectly acceptable
under the labor laws.
Telus compared De Guzman's circumstances to that of security guards on "off detail"

and insists that the call center industry is on all fours with that of a security agency
or bus companies to their drivers wherein placing the employees on floating status
without salaries or financial benefit for an indefinite time is a valid recourse so long
as it does not exceed six months.
Contrary to the stance of Telus, the floating status principle does not find application
in the instant case. While it may be argued that the nature of the call center business
is such that it is subject to seasonal peaks and troughs because of client pullouts,
changes in clients' requirements and demands, and a myriad other factors, still, the
necessity to transfer De Guzman to another practice/account does not depend
on Telus' third party-client/contracts.
When the controversy arose, Telus had several clients in its roster to which it
can easily assign De Guzman as Quality Analyst without any hindrance. As
earlier admitted by Telus, profiling interviews were not a condition precedent to the
transfer. Moreover, as established before the Labor Arbiter, after the lifting of the
preventive suspension of De Guzman by Telus, the company had several job
vacancy postings for the position of Quality Analysts, the very position previously
occupied by De Guzman.(Telus International Philippines, Inc. v. De Guzman, G.R.
No. 202676, [December 4, 2019])
57
(b.2) J. CAGUIOA, Ebus v. The Results Co., Inc., G.R. No. 244388, [March 3, 2021].
Facts: Ebus was sales repesentative of respondent The Results Company, Inc.
(TRCI),a business process outsourcing company, since August 13, 2012.
He was promoted several times until he became a Team Leader in 2014. As a

Team Leader, Ebus had the duty of supervising agents assigned to a program
handling TRCI's US-based telecommunication service provider. During Ebus's
employment, he was recognized for his accomplishments and was given various
awards and travel incentives.
Ebus was tasked to investigate and discipline one of his agents, Ruby de Leon, for
otwo company infractions allegedly committed by her. In sending her the Notice to
Explain, he failed to include and incorporate the particular penalties that may be
incurred should she be found guilty of the infractions.
Later, Ebus was also handed a Notice to Explain with Preventive Suspension,
stating that he committed the following acts inimical to TRCI: (1) failure to act on an
infraction by a supervisor; (2) gross negligence in the performance of an assigned
task; (3) willful disobedience of the orders of a superior; and (4) serious misconduct.
The same notice placed him under preventive suspension for 30 days and
summoned him to an administrative hearing.
After due process, a Notice of Decision, wherein Ebus was admonished with a
warning that another similar violation of TRCI's Code of Discipline might lead to
his dismissal. HOWEVER, the notice likewise informed Ebus that he would be re-
profiled to another account. Hence, along with the Notice of Decision, the HR
Department issued a Redeployment Notice, placing Ebus on temporary lay-off
(TLO) until he was re-assigned to another account after being processed and after
having qualified therefor. During the lay-off, which should not exceed six months,
Ebus would not receive any compensation; thus this case for constructive dismissal.
Issue: Whether or not there was a valid transfer? May Management place
Ebus on temporary lay-off under the circumstances?
SUPREME COURT: Invalid transfer; temporary lay-off akin to constructive

dismissal.
Rationale: Ebus's infraction that led to his re-profiling was his failure to inform his
subordinate of the penalty imposable on her because of her error during a call. But
there is nothing on record to show that Ebus's infraction was detrimental to the
account he was handling such that TRCI had no choice but to re-profile him.
In fact, Ebus was in reality not even transferred to any account. Using TRCI's term,
he was temporarily laid-off, and was treated like a new applicant where he
would be assessed for other accounts to see if he was qualified. In the interim,
Ebus's economic circumstances were murky. His salaries and benefits, save for
accrued vacation leave, were all stopped for a period not to exceed six months as
he awaited being accepted into a new account. Worse, he had no assurance
whether he would be considered for another account.
Although the exercise of management prerogative will ordinarily not be interfered with,
it is not absolute and it is limited by law, collective bargaining agreement, and
general principles offair play and justice. ” Indeed, having the right should not be
confused with the manner in which that right is exercised." HOWEVER, in cases of
transfer of an employee, the employer has the burden to prove that its conduct is
valid and legitimate and that it would not be prejudicial to the employee;
otherwise, it will be deemed as constructive dismissal.
Measured against the standard for a valid transfer, the Court is convinced that
TRCI failed to prove any valid and legitimate ground to re-profile Ebus as its drastic
57
action was not commensurate to Ebus's transgressions.|TRCI cannot hide behind
the argument that its conduct was an exercise of management prerogative
as its actions prejudiced Ebus and it failed to provide a legitimate ground to
put him on TLO. (J. CAGUIOA, Ebus v. The Results Co., Inc., G.R. No. 244388,
[March 3, 2021])
c) Management prerogative to impose productivity standards. (NEVER ASKED IN

THE BAR EXAMS) -- Puncia vs. Toyota Shaw, G.R. No. 214399, 28 June 2016.
Facts: Records reveal that as a Marketing Professional for Toyota, Puncia had a monthly
sales quota of seven (7) vehicles from March 2011 to June 2011. As he was having trouble
complying with said quota, Toyota even extended him a modicum of leniency by lowering
his monthly sales quota to just three (3) vehicles for the months of July and August 2011;
but even then, he still failed to comply.
Issue: Whether or not management may impose productivity standards to determine

efficiency of employee?
Supreme Court: YES!!! Puncia’s repeated failure to perform his duties, i.e., reaching his
monthly sales quota for such a period of time, falls under the concept of gross inefficiency.
In Aliling vs. Feliciano (686 Phil. 910 [2012], citing Lim vs. NLRC, 328 Phil. 843 [1996]),
the SC held that an employer is entitled to impose productivity standards for its employees,
and the latter’s non-compliance therewith can lead to his termination from work. In this
regard, case law instructs that “gross inefficiency” is analogous to “gross neglect of duty”,
a just cause of dismissal under Article 297 of the Labor Code, for both involve specific
acts of omission on the part of the employee resulting in damage to the employer or to his
business.
d) Management prerogative to discipline its employees, must be balanced with justice

and equity. – J. HERNANDO. Lamadrid v. Cathay Pacific Airways Limited, G.R. No.
200658, [June 23, 2021].
While management has the prerogative to discipline its employees and to impose
appropriate penalties on erring workers, pursuant to company rules and regulations,
however, such management prerogatives must be exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws and valid agreements. The
Court is wont to reiterate that while an employer has its own interest to protect, and
pursuant thereto, it may terminate an employee for a just cause, such prerogative to
dismiss or lay off an employee must be exercised without abuse of discretion. Its
implementation should be tempered with compassion and understanding. The employer
should bear in mind that, in the execution of said prerogative, what is at stake is not only
the employee's position, but his very livelihood, his very breadbasket.
Dismissal is the ultimate penalty that can be meted to an employee. Even where a worker
has committed an infraction, a penalty less punitive may suffice, whatever missteps may
be committed by labor ought not to be visited with a consequence so severe. This is not
only the laws concern for the workingman. There is, in addition, his or her family to
consider. Unemployment brings untold hardships and sorrows upon those dependent on
the wage-earner.
57
E. KINDS OF EMPLOYMENT
Article 295, Labor Code: The provisions of a written agreement to the contrary
notwithstanding, and regardless of the oral agreement between the parties, an employment
shall be deemed REGULAR where the employee has been engaged to perform activities
which are usually necessary or desirable to the usual trade or business of the employer
EXCEPT:
• where the employment has been fixed for a SPECIFIC PROJECT OR
UNDERTAKING, the completion of which has been determined at the time of the
engagement of the worker; OR
• where the job, work or services to be performed is SEASONAL in nature, and the
employment is for the duration of the season.
An employment shall be deemed to be CASUAL if it is NOT covered by the preceding

paragraph; PROVIDED, that any employee who has rendered at least one year of service,
whether such service be continuous or broken, shall be considered a REGULAR
employee with respect to the activity for which he is employed, and his employment shall
continue while such activity exists.
FRAMEWORK:
General rule: Employment is deemed regular
Exceptions: Probationary Project Seasonal Fixed-Term Casual
Exceptions to exceptions:
 Probationary employees allowed to work after probn. period
 Casual workers rendering service for at least one year xxx
 Fixed-Term employee allowed to work after term has expired/ended
 Project employee allowed to work after project without any contract; or project
employee allowed to work for several projects but no termination reports
 Seasonal employee allowed to work after season is over
 Generally, employee was not informed that his/her employment is not regular
1. REGULAR EMPLOYEES – those who are hired for activities which are necessary or
desirable in the usual trade or business of the employer.
J. LEONEN: Paragele v. GMA Network, Inc., G.R. No. 235315, [July 13, 2020] –
Facts: Complaint for regularization, which was subsequently converted into one for "illegal
dismissal, non-payment of salary/wages, and regularization” filed by 30 camera men,
against respondent GMA Network, Inc., with work service ranging from two (2) years to
thirteen (13) years.
Case for GMA: No employer-employee relationship. Camera men were engaged as mere
"pinch-hitters or relievers" whose services were engaged only when there was a need for
substitute or additional workforce.
Supreme Court: Classifying employment, that is, whether an employee is engaged as a

regular, project, seasonal, casual, or fixed-term employee, is "determined by law,
regardless of any contract expressing otherwise."
57
An employee is regarded a casual employee if he or she was engaged to perform functions

which are NOT necessary and desirable to the usual business and trade of the employer.
Thus, when one is engaged to perform functions which are necessary and desirable to the
usual business and trade of the employer, engagement for a year-long duration is not a
controlling consideration.
From the plain language of the second paragraph of Article 295 of the Labor Code, it is
clear that the requirement of rendering "at least one (1) year of service[,]" before an
employee is deemed to have attained regular status, only applies to casual employees.
GMA's claim that petitioners were required to render at least one (1) year of service before
they may be considered regular employees finds no basis in law.
Petitioners were never casual employees precisely because they performed

functions that were necessary and desirable to the usual business of GMA. They
did not need to render a year's worth of service to be considered regular employees.
(Paragele v. GMA Network, Inc., G.R. No. 235315, [July 13, 2020])
2. PROBATIONARY EMPLOYEES – those who are hired generally for regular positions
but are placed on a probationary status for a period of 6 months (as a general rule). May
become regular once he has qualified as such in accordance with reasonable standards
made known to him at the time of hiring. They are considered regular if they are allowed
to work beyond the probationary period.
2.1 Burden of proof is upon the employer to show that: (a) employee was informed of
the reasonable standards made known to him at the time of engagement; and (b)
employee failed to qualify in accordance with said reasonable standards for
regularization.
2.2 J. HERNANDO. Palgan v. Holy Name University, G.R. No. 219916, [February 10,
2021]. – The Manual of Regulations for Private Schools, and not the Labor Code,
determines whether or not a faculty member in an educational institution has attained
regular or permanent status. In University of Santo Tomas v. National Labor
Relations Commission, the Court en banc said that under Policy Instructions No. 11
issued by the Department of Labor and Employment,
"the probationary employment of professors, instructors and teachers shall be
subject to the standards established by the Department of Education and Culture."
Said standards are embodied in paragraph 75 (now Section 93) of the Manual of
Regulations for Private Schools.||
A peculiarity in education law is that only full-time teachers can be given permanent
status. |In this case, while petitioner has rendered three consecutive years of
satisfactory service, she was, however, not a full-time teacher at the College of
Nursing of Holy Name University, and hence, she could not have acquired
permanent status no matter the length of her satisfactory service.
Moreover, and in accordance with the Nursing Act, a three-year or one-year clinical
practice experience is a minimum academic requirement to qualify as a faculty
member in a college of nursing, and is therefore, required for one to be considered
as a full-time faculty of such. As applied in this case, and as correctly observed by
the CA, petitioner failed to meet the required minimum clinical practice experience
under the law and the relevant regulations. (Palgan v. Holy Name University, G.R.
No. 219916, [February 10, 2021])
2.3 POSSIBLE BAR QUESTION (not yet asked in the Bar Exam): May a probationary
employee who failed to qualify, justify poor performance on account of management’s
assignment of a job not within his/her field of competence? International School of
Manila vs. International School Alliance of Educations (ISAE), G.R. No. 162786, 05
February 2014.
57
Facts: Spanish teacher resigned. Rehired under 3-year probationary period, but given
Filipino subjects which she accepted. Termination for failure to qualify: all three years
had “poor” evaluation ratings. She now questions validity of termination because the
School knew that having assigned Filipino subjects to her, the same was not within her
field of competency.
Answer: NO. It is the prerogative of the school to set high standards of efficiency for
its teachers since quality education is a mandate of the Constitution.
Santos voluntarily agreed to teach the Filipino classes given to her when she came
back from her leave of absence. Said classes were not forced upon her by the
School. This much she admitted in the hearing of the case before the Labor Arbiter.
When she consented to take on the Filipino classes, it was Santos’s responsibility to
teach them well within the standards of teaching required by the School, as she had
done previously as a teacher of Spanish. Failing in this, she must answer for the
consequences.
2.4 HYBRID CONTRACTS; Probationary employment on fixed-term contract. --

Expiration of contract NO LONGER valid ground. (Colegio del Santissimo Rosario
vs. Rojo, G.R. No. 170388, 03 September 2013, reiterating Yolanda Mercado vs. AMA
Computer College-Paranaque 618 SCRA 218 [2010].)
Situation: High School teacher on probationary status with fixed term contracts who
was able to complete three consecutive years of service. Teacher no longer rehired
on the ground that with the expiration of the contract to teach, the employment
contract would no longer be renewed.
Issue: May the probationary teacher be validly dismissed for expiration of the
contract to teach?
Answer: NO! Termination of a probationary employee must be for his/her failure to

comply with the reasonable standards for regular employment made known at the
time of the engagement, and NOT simply because the probationary period has
expired.
Yolanda Mercado, et al. vs. AMA Computer College Parañaque City, Inc. 618
SCRA 218 [2010].- The Supreme Court stated that nothing is illegitimate in defining
the school-teacher on fixed term basis.
HOWEVER, the school should not forget that its system of fixed-term contract
is a system that operates during the probationary period and for this reason
is subject to the terms of Article 281 of the Labor Code. Unless this reconciliation
is made, the requirements of this Article on probationary status would be fully
negated as the school may freely choose not to renew contracts simply because
their terms have expired.
Given the clear constitutional and statutory intents, the Supreme Court concluded
that in a situation where the probationary status overlaps with a fixed-term contract
not specifically used for the fixed term it offers, Article 281 should assume primacy
and the fixed-period character of the contract must give way.
Ada’s Note1: In this instance therefore, the School illegally dismissed the teachers
because it simply refused to renew the employment contract.
Because the teachers were under a probationary period, it was incumbent upon the
School to have evaluated said teachers, and to have informed them of their failure
to qualify as regular employees in accordance with standards made known to them
at the time of hiring.
Ada’s Note2: To highlight what the Supreme Court meant by a fixed-term contract
specifically used for the fixed term it offers, a replacement teacher, for example, may
57
be contracted for a period of one year to temporarily take the place of a permanent
teacher on a one-year study leave.
The expiration of the replacement teacher’s contracted term, under the

circumstances, leads to no probationary status implications as she was never
employed on probationary basis; her employment is for a specific purpose with
particular focus on the term and with every intent to end her teaching relationship
with the school upon expiration of this term. (Mercado, et al. vs. AMA Computer
College Parañaque City, Inc. 618 SCRA 218 [2010]. Emphasis supplied.)
3. FIXED-TERM EMPLOYEES – those who are hired for a specific period, the arrival of the
date specified in the contract of which automatically terminates the employer-employee
relationship. (Brent School vs. NLRC, 181 SCRA 702 [1989], reiterated in AMA Computer
– Paranaque vs. Austria, 538 SCRA 438 [November 2007]).
3.1 A contract of employment for a definite period terminates by its own terms at the
end of such period
3.2 The decisive determinant in term employment should not be the activities that the
employee is called upon to perform, but the day certain agreed upon by the
parties for the commencement and the termination of their employment
relation.
3.3 BRENT SCHOOL CASE: Criteria for fixed term employment contracts so
that the same will not circumvent security of tenure:
A. The fixed period of employment was KNOWINGLY AND VOLUNTARILY

AGREED UPON by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; AND
B. It satisfactorily appears that the employer and employee DEALT WITH EACH
OTHER ON MORE OR LESS EQUAL TERMS with no moral dominance
whatever being exercised by the former on the latter.(PNOC vs. NLRC [G.R.
No. 97747, 31 March 1993] and Brent School vs. Zamora and NRLC, 181
SCRA 702]
3.4 J. HERNANDO, Regala v. Manila Hotel Corp., G.R. No. 204684, [October 5,
2020]). -- The employment status of a person is defined and prescribed by
law and not by what the parties say it should be.
Facts: Regala was hired as a waiter on several fixed-term contracts, from 2004
to 2009. Regala alleged that he was not recognized as a regular rank-and-file
employee despite having rendered services to MHC for several years. Regala
also claimed that MHC constructively dismissed him from employment when it
allegedly reduced his regular work days to two (2) days from the normal five (5)-
day work week starting December 2, 2009, which resulted in the diminution of
his take home salary.
In this regard, Article 295 of the Labor Code "provides for two types of regular
employees, namely: (a) those who are engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer
(first category); and (b) those who have rendered at least one year of service,
whether continuous or broken, with respect to the activity in which they are
employed (second category)." While MHC insists that Regala was engaged
under a fixed-term employment agreement, the circumstances and evidence on
record, and provision of law, however, dictate that Regala is its regular employee.
57
First, Regala is performing activities which are usually necessary or

desirable in the business or trade of MHC as a part of the hotel and food
industry. Xxxx Second, the fact alone that Regala was allowed to work for MHC
on several occasions for several years under various Service Agreements is
indicative of the regularity and necessity of his functions to its business.
As proof of Regala's fixed-term employment status, MHC depended heavily on

Regala's Service Agreements covering the periods of his supposed temporary
engagement with MHC, or from March 1, 2010 to March 3, 2010. It then asserted
that the Service Agreements entered into by and between MHC and Regala are
valid for the following reasons: (1) the terms thereof are clear and bereft of
ambiguity; (2) the duration or terms of Regala's employment as indicated in the
Service Agreements were determined and made known to him before each
engagement; and (3) the Service Agreements were freely entered into by both
parties.|||
While this Court has recognized the validity of fixed-term employment

contracts, it has consistently held that they are the exception rather than
the general rule. A fixed-term employment is valid only under certain
circumstances. We thus laid down in Brent School, Inc. v.
Zamora parameters or criteria under which a "term employment" cannot be
said to be in circumvention of the law on security of tenure, namely:
1) The fixed period of employment was knowingly and
voluntarily agreed upon by the parties without any force, duress,
or improper pressure being brought to bear upon the employee
and absent any other circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee
dealt with each other on more or less equal terms with no moral
dominance exercised by the former or the latter.
This Court does not believe that Regala can be on equal terms with MHC insofar
as negotiating the terms and conditions of his employment is concerned. To be
clear, a fixed-term employment agreement should result from bona
fide negotiations between the employer and the employee. As such, they
must have dealt with each other on an arm's length basis where neither of
the parties have undue ascendancy and influence over the other. As a
waiter, a rank-and-file employee, Regala can hardly stand on equal terms with
MHC. Moreover, no particulars in the Service Agreements or the fixed-term
service contract regarding the terms and conditions of employment indicate that
Regala and MHC were on equal footing in negotiating them||| (Regala v. Manila
Hotel Corp., G.R. No. 204684, [October 5, 2020]).
4. PROJECT EMPLOYEES– The principal test for determining whether particular

employees are properly characterized as "project employees" as distinguished from
"regular employees" is whether or not the project employees were assigned to carry
out a "specific project or undertaking," the duration and scope of which were specified
at the time the employees were engaged for that project.
4.1 The length of service or the re-hiring of construction workers on a project-

to-project basis does not confer upon them regular employment status,
since their re-hiring is only a natural consequence of the fact that
experienced construction workers are preferred. Employees who are hired
for carrying out a separate job, distinct from the other undertakings of the
company, the scope and duration of which has been determined and made
known to the employees at the time of the employment, are properly treated as
57
project employees and their services may be lawfully terminated upon the
completion of a project. Should the terms of their employment fail to comply with
this standard, they cannot be considered project employees. (Hanjin Heavy
Industries vs. Ibanez et., al., G.R. 170181, 26 June 2008.)
4.2 Indicators of Project Employment is found in Section 2.2(e) and (f) of DOLE
Department Order No. 19, Series of 1993, entitled Guidelines Governing the
Employment of Workers in the Construction Industry, to wit:
“2.2 Indicators of project employment. - Either one or more of the following
circumstances, among others, may be considered as indicators that an employee is a
project employee.
(a) The duration of the specific/identified undertaking for which the worker
is engaged is reasonably determinable.
(b) Such duration, as well as the specific work/service to be performed, is
defined in an employment agreement and is made clear to the
employee at the time of hiring.
(c) The work/service performed by the employee is in connection with the
particular project/undertaking for which he is engaged.
(d) The employee, while not employed and awaiting engagement, is free
to offer his services to any other employer.
(e) The termination of his employment in the particular project/undertaking
is reported to the Department of Labor and Employment (DOLE)
Regional Office having jurisdiction over the workplace within 30 days
following the date of his separation from work, using the prescribed
form on employees' terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the employer to pay
completion bonus to the project employee as practiced by most
construction companies.
4.3 Purely Project employees – are those employed in connection with a particular
construction project.
Effect:
(a) not entitled to separation pay if terminated as a result of the completion of the
project or any phase thereof in which they are hired;
(b) no prior clearance for termination is necessary, but termination must be
reported to DOLE;
(c) however, if the project or phase lasts for more than one (1) year, he may not
be terminated prior to completion of project or phase without previous written
clearance from DOLE.
4.4 Employees from Labor Pool -- those employed by a construction company

without reference to any particular project. May be further classified into
probationary and regular.
Effect:
(a) organize and to collectively bargain, or join rank-and-file union of the
construction company may not be curtailed;
(b) completion of project or phase will not sever employer-employee
relationship, as they are to be considered employees for an indefinite term.
4.5 Report of termination of project employers compulsory. – Failure to file

termination reports, particularly on the cessation of petitioner’s employment, was
an indication that the petitioner was not a project employee but a regular
employee. Goma vs. Pamplona Plantation, Inc., 557 SCRA 124 (2007)
4.6 J. HERNANDO, Engineering & Construction Corporation of Asia v. Palle,

G.R. No. 201247, [July 13, 2020]. -- In order to ascertain whether
respondents were project employees, it is essential to determine whether
notice was given to them that they were being engaged just for a specific
project, which notice must be made at the time of hiring. Burden of proof
that employee was duly notified is placed upon employer.
57
Generally, length of service is a measure to determine whether or not an

employee who was initially hired on a temporary basis has attained the status of
a regular employee who is entitled to security of tenure. However, such
measure may not necessarily be applicable in a construction industry
since construction firms cannot guarantee continuous employment of their
workers after the completion stage of a project. In addition, a project
employee's work may or may not be usually necessary or desirable in the usual
business or trade of the employer. Thus, the fact that a project employee's work
is usually necessary and desirable in the business operation of his/her employer
does not necessarily impair the validity of the project employment contract which
specifically stipulates a fixed duration of employment.
ECCA failed to present substantial evidence to show that it informed

respondents of the duration and scope of their work at the time of their
hiring. Upon careful review of the company's respective contracts of
employment with respondents, this Court holds that the employment contracts
were lacking in details to prove that respondents had been duly informed of the
duration and scope of their work, and of their status as project employees at the
time of their hiring. The respective contracts of respondents may have been
dated at the time of their issuance, but nowhere did said contracts show as to
when respondents supposedly signed or received the same or were informed of
the contents thereof. This gives rise to the distinct possibility that respondents
were not informed of their status as project employees, as well as the scope and
duration of the projects that were assigned to them at the time of their
engagement||.
In view of ECCA's indisputable failure to discharge its burden to prove that

respondents were project employees, We find that the CA properly found
them to be regular employees. Therefore, respondents, as regular
employees, may only be dismissed for just or authorized causes and upon
compliance with procedural due process, i.e., notice and hearing. This
Court notes that completion of a project is not a valid cause to terminate regular
employees, such as respondents herein. ||| (Engineering & Construction
Corporation of Asia v. Palle, G.R. No. 201247, [July 13, 2020])| (Engineering &
Construction Corporation of Asia v. Palle, G.R. No. 201247, [July 13, 2020])|||
J. HERNANDO. Jovero v. Cerio, G.R. No. 202466, [June 23, 2021] -- Burden
|||
of proof upon employer that employees knew of the nature of their

engagement as project employees. Failure to submit termination reports
indicative of regular employment.
Clearly, the presentation of service contracts between the employer and their
client (even if it shows the duration of the project), in lieu of the employees'
individual employment contracts, does not establish that the latter are project
employees. There was no other substantial evidence offered to prove that
respondents were informed at the time of their hiring, that they were
project employees. Moreover, petitioner's failure to file termination reports at
the end of each project was an indication that respondents were regular
employees.
5. SEASONAL EMPLOYEES -- those hired for work or services which is seasonal in

nature, and the employment is for the duration of the season.
IMPORTANT NOTE ON EMERGING TREND OF SUPREME COURT CASES: REGULAR

SEASONAL WORKERS. -- Where the seasonal employees had been hired
repeatedly and continuously to perform the same tasks or activities for several
seasons or even after the cessation of the season, this length of time may likewise
serve as badge of regular employment. In fact, even though denominated as
“seasonal workers,” if these workers are called to work from time to time and are
57
only temporarily laid off during the offseason, the law does not consider them
separated from the service during the off-season period. The law simply
considers these seasonal workers on leave until re-employed.
Gapayao vs. Fulo and SSS, G.R. No. 193493, 13 June 2013 (Sereno, C.J.) --
Farm workers are considered seasonal employees so long as there is a reasonable
causal connection between nature of employer’s business and that work should
have been rendered for more than one continuous or accumulated year.
Farm workers generally fall under the definition of seasonal employees. We have
consistently held that seasonal employees may be considered as regular
employees. Regular seasonal employees are those called to work from time to
time. The nature of their relationship with the employer is such that during the
off season, they are temporarily laid off; but reemployed during the summer
season or when their services may be needed. They are in regular employment
because of the nature of their job, and not because of the length of time they have
worked.
Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439.
15 January 2014. J Brion.
Issue: Whether or not complainants are regular workers or seasonal workers? Are
they entitled to CBA benefits accorded the regular employees?
Answer: Complainants are REGULAR SEASONAL WORKER

Complainants are NOT entitled to CBA benefits which are for regular workers only.
The respondents are neither project, seasonal nor fixed-term employees, but
regular seasonal workers of URSUMCO.xxx THEIR SEASONAL WORK,
HOWEVER, DOES NOT DETRACT FROM CONSIDERING THEM IN REGULAR
EMPLOYMENT since in a litany of cases, this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily laid
off during the off-season are not separated from the service in said period, but are
merely considered on leave until re-employment
Be this as it may, REGULAR SEASONAL EMPLOYEES, LIKE THE

RESPONDENTS IN THIS CASE, SHOULD NOT BE CONFUSED WITH THE
REGULAR EMPLOYEES OF THE SUGAR MILL such as the administrative or office
personnel who perform their tasks for the entire year regardless of the season. The
NLRC, therefore, gravely erred when it declared the respondents regular employees
of URSUMCO without qualification and that they were entitled to the benefits
granted, under the CBA, to URSUMCO’S regular employees.
6. CASUAL EMPLOYEES – those who are hired to perform work or service which is
merely incidental to the business of the employer. Any casual employee who has
rendered at least one (1) year of service, whether it be continuous or broken, shall
be considered a regular employee with respect to the activity for which he is
employed, and his employment shall continue while such activity exists.
EMPLOYEE CLASSIFICATION AS TO RANK

7. MANAGERIAL EMPLOYEES – those vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall employees. (Art. 219, par. m, Labor Code)
7.1 CONFIDENTIAL EMPLOYEES: Doctrine of necessary implication and/or

confidential employee rule reiterated.
57
Confidential employees are those who: (1) assist or act in a confidential

capacity, (2) to persons who formulate, determine, and effectuate management
policies in the field of labor relations. The two criteria are cumulative, and both
must be met if an employee is to be considered a confidential employee —
e.g., the confidential relationship must exist between the employee and his
supervisor, and the supervisor must handle the prescribed responsibilities
relating to labor relations. The exclusion from bargaining units of the
employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective sought
to be accomplished by the “confidential employee rule”. Tunay na Pagkakaisa
ng Manggagawa sa Asia Brewery vs. Asia Brewery, G.R. No. 162025, 03
August 2010.; See also: San Miguel Corporation Supervisors and Exempt
Employees Union vs. Laguesma, 277 SCRA 370 [1997].
8. SUPERVISORY EMPLOYEES – those who, in the interest of management,

effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature, but requires use of independent judgment.
(Art. 212, par. N, Labor Code). Note: Supervisory employees form part of the
managerial staff, which are not covered by the rules on hours of work, viz., night shift
differentials, overtime pay, etc. (See Art. 82, Labor Code cf. Art. 219 [m]).
9. RANK-AND-FILE EMPLOYEES - All other employees not falling within the

definition of “managerial” or “supervisory” employees, are considered rank-and-file
employees for purposes of Book V of the Labor Code.
F. SPECIFIC ISSUES ON LABOR STANDARDS
1. WAGES.
1.1 Article 97 (f) Labor Code, definition: Remuneration or earnings, however

designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under the
written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value, as
determined by the Secretary of Labor, of board, lodging, or other facilities
customarily furnished by the employer to the employee. Fair and reasonable value
shall not include any profit to the employer or to any person affiliated with the
employer.
1.2. EMPLOYEES NOT COVERED BY PROVISIONS ON WAGES:
 farm tenancy / leasehold;

 domestic service (household or domestic helpers);
 persons working in their respective homes in needle work or in any
cottage industry duly registered in accordance with law
 Barangay micro business enterprise (BMBE) under RA 9178, the BMBE
Law. BMBE – any business entity or enterprise engaged in the
production, processing, or manufacturing of products or commodities,
including agro- processing, trading and services, whose total assets
including those arising from loans but exclusive of the land on which the
particular business entity’s office, plant and equipment are situated, shall
not be more than P3M.
1.3 Wages; facilities and supplements.
Facilities are items of expense necessary for the laborer’s and his family’s existence
and subsistence so that by express provision of law, they form part of the wage and
when furnished by the employer are deductible therefrom, since if they are not so
furnished, the laborer would spend and pay for them just the same.
57
Supplements constitute extra remuneration or special privileges or benefits given

to or received by the laborers over and above their ordinary earnings or wages.
NOTES:
 “Facilities” includes articles or services for the benefit of the employee or his
family. (Book III, Rule III-A, Sec. 5, Implementing Rules and Regulations of the
Labor Code.) They are not “facilities” within the meaning of the Rules if they
were provided for the employer’s benefit and convenience.
 Hence, in the case of Millares vs. NLRC (see below), the receipt of an allowance
on a monthly basis did not ipso facto characterize it as regular and forming part
of salary because the grant was subject to peculiar circumstances which were
present: lack of space in the housing facility, the heavy volume of vehicle
request, the hostile environment in the workplace. The continuous enjoyment of
the allowance was based on contingencies, the occurrence of which wrote “finis”
to such enjoyment.
• Although it is quite easy to comprehend "board" and "lodging," it is not so with

"facilities." Thus, Sec. 5, Rule VII, Book III, of the Rules Implementing
the Labor Code gives meaning to the term as including articles or services for
the benefit of the employee or his family but excluding tools of the trade or
articles or service primarily for the benefit of the employer or necessary to the
conduct of the employer's business. The Staff/Manager's allowance may fall
under "lodging". The transportation and Bislig allowances are not
embraced in "facilities" because assailed allowances were for the benefit
and convenience of respondent company to insure petitioners render
quality performance. The intention that it was intended as facilities was
supported by the circumstance that they were not subjected to withholding tax.
(Millares v. National Labor Relations Commission, G.R. No. 122827, [March 29,
1999], 365 PHIL 42-55)
Facilities Supplements
Deductible YES, because it forms part of NO. It is an act of gratuity from

from wage? wage. employer, and hence, NOT part
of wage.
Nature Items of expense necessary for Granted to employer for his

worker’s and/or his family’s convenience, rather than the
subsistence. employee. (Example: free coffee)
1.4 PAYMENT OF WAGES
 Wages shall be paid in cash, legal tender at or near the place of work
 Payment may be made through a bank upon written petition of majority of the
workers in establishments with 25 or more employees and within one kilometer
radius to a bank
 Payment shall be made directly to the employees
 Wages shall be given not less than once every two (2) weeks or twice within a
month at intervals not exceeding 16 days
J. HERNANDO, Ginta-Ason v. J.T.A. Packaging Corp., G.R. No. 244206, [March

16, 2022]. – There must be substantial evidence proving payment of wages.
To prove the element of payment of wages, petitioner submitted pay slips allegedly
issued by JTA. Significantly, the pay slips presented by petitioner bore no indication
whatsoever as to their source. Absent any clear indication that the amount
petitioner was allegedly receiving came from JTA, We cannot concretely
establish payment of wages.
57
In Valencia v. Classique Vinyl Products Corporation, the Court rejected the pay slips
submitted by the petitioner employee because they did not bear the name of the
respondent company. Thus, We cannot sustain petitioner's argument that the failure
to indicate who issued the pay slips should not be taken against him. Moreover, a
perusal of the pay slips submitted by petitioner would show that he had been
receiving compensation as early as February 2014. This clearly belies petitioner's
allegation in his complaint that he was hired by JTA only on December 26, 2014. To
Our minds, the wide gap between February 2014 and December 2014 cannot be
dismissed as a trivial inconsistency.
1.5 SOME GOVERNING RULES:
 FAIR AND REASONABLE VALUE shall not include any profit to the employer,
or to any person affiliated with the employer.
 “NO WORK NO PAY” PRINCIPLE. -- If there is no work performed by the

employee, there can be no wage or pay unless the laborer was able, willing, and
ready to work but was prevented by management or was illegally locked out,
suspended or dismissed. But where the failure of employees to work was not due
to the employer’s fault, the burden of economic loss suffered by the employers
should not be shifted to the employer. Each party must bear his own loss.
 EQUAL PAY FOR EQUAL WORK. -- Employees who work with substantially
equal qualifications, skill, effort and responsibility, under similar conditions should
be paid similar salaries (International School Alliance of Educators vs.
Quisumbing, GR No.128845, June 1, 2000).
 CIVIL CODE PROVISIONS:
Art. 1705. The laborer’s wages shall be paid in legal currency.
Art. 1706. Withholding of the wages, except for a debt due, shall not be made by
the employer.
Art. 1707. The laborer’s wages shall be a lien on the goods manufactured or the
work done.
Art. 1708. The laborer’s wages shall not be subject to execution or attachment
except for debts incurred for food, shelter, clothing, and medical attendance.
Art. 1709. The employer shall neither seize nor retain any tool or other articles
belonging to the laborer.
 ART. 110, LABOR CODE. WORKER’S PREFERENCE IN CASE OF

BANKRUPTCY. (FOR POSSIBLE BAR QUESTION THIS YEAR. HAD NOT BEEN
ASKED SINCE THE LAST DECADE). — In the event of bankruptcy or liquidation of
an employer’s business, his workers shall enjoy first preference as regards their
wages and other monetary claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary claims shall be paid in full
before claims of the government and other creditors may be paid.
Associated Labor Union – Divine Word University Employees’ Union vs.

Court of Appeals and Divine Word University, G.R. No. 156882, 31 October
2008. -- Bankruptcy proceedings must first be instituted for Article 110 to
apply.
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The instant petition will nevertheless fail even if we concede that the Union has
legal personality to institute it. The judgment lien over the subject properties is
really non-existent as it has not been shown that a levy on execution has been
imposed over the subject properties. While the Decision in G.R. No. 91915 is
indeed final and executory, such reality does not ipso facto burden all the lands
and properties owned by the SVD over which the DWUT is erected, absent proof
that the SVD cannot pay its adjudicated obligations and that a levy on execution
was indeed made over the subject properties. aATHIE
We agree with the RCAP that a judgment lien over the subject properties has not
legally attached and that Art. 110 of the Labor Code, in relation to Arts. 2242,
2243, and 2244 of the Civil Code on concurrence and preference of credits, does
not cover the subject properties.
Art. 110 of the Labor Code applies only to cases of bankruptcy and
liquidation. Likewise, the abovementioned articles of the Civil Code on
concurrence and preference of credits properly come into play only in
cases of insolvency. Since there is no bankruptcy or insolvency
proceeding to speak of, much less a liquidation of the assets of DWUT, the
Union cannot look to said statutory provisions for support. (Associated Labor
Unions v. Court of Appeals, G.R. No. 156882, [October 31, 2008], 591 PHIL 316-331)
NOTES:
a) The application of Article 110 of the Labor Code is contingent upon the
institution of bankruptcy or insolvency proceedings against the
employer. Hence, preferential right given to workers under Art. 110 may be
invoked only during bankruptcy or insolvency proceedings against the
employer. (Development Bank of the Philippines vs. Secretary of Labor, 179 SCRA
630 [1989]).
b) What Article 110 of the Labor Code establishes is not a lien, but a preference
of credit in favor of employees. Unlike a lien, a preference of credit does
not create a charge upon any particular property of the debtor. This
simply means that during bankruptcy or insolvency proceedings against the
properties of the employer, the employees have the advantage of having their
unpaid wages satisfied ahead of certain claims which may be proved therein.
(DBP vs. Secretary, ibid.; See also DBP vs. NLRC, 222 SCRA 264 [1993]; DBP vs.
NLRC, 229 SCRA 350 [1994]; Hautea vs. NLRC, 230 SCRA 119 [1994]).
1.6 GENERAL RULE: WAGE DEDUCTIONS ARE NOT ALLOWED
EXCEPTIONS:
ALLOWABLE DEDUCTIONS WITHOUT EMPLOYEE’S CONSENT:
a. SSS, Philhealth and PAG-IBIG contributions;

b. Withholding taxes on income
c. Where the employer is authorized by law or regulations issued by the
Secretary of Labor;
d. Agency fees, where the employee who is not a member of the exclusive
bargaining agent but a member of the appropriate bargaining unit, may be
assessed a reasonable fee for benefits received under a CBA.
NOTE: JUXTAPOSE WITH ALLOWABLE DEDUCTIONS THAT CAN BE DONE

ONLY WITH THE EMPLOYEE’S CONSENT:
57
ALLOWABLE DEDUCTIONS WITH EMPLOYEE’S CONSENT:

a. Reasonable value of meals and other facilities;
b. Payment of union dues, which may or may not be under an automatic
charging-off arrangement
c. Debt payments to the employer or third persons with employee’s explicit
written consent
d. Worker’s insurance acquired by the employer with employee’s consent;
 J.Reyes, Marby Food Ventures Corp. v. Dela Cruz, G.R. No. 244629, [July
28, 2020]. -- Respondents are entitled to reimbursements in case of illegal
deductions.
It is clearly stated in Article 113 26 of the Labor Code that no employer, in his
own behalf or in behalf of any person, shall make any deduction from the wages
of his employees, except in cases where the employer is authorized by law or
regulations issued by the Secretary of Labor and Employment, among others.
The Omnibus Rules Implementing the Labor Code similarly provides that
deductions from the wages of the employees may be made by the employer
when such deductions are authorized by law, or when the deductions are with
the written authorization of the employees for payment to a third person.
Therefore, any withholding of an employee's wages by an employer may only

be allowed in the form of wage deductions under the circumstances provided in
Article 113 of the Labor Code, as well as the Omnibus Rules implementing it.
Further, Article 116 of the Labor Code clearly provides that it is unlawful
for any person, directly or indirectly, to withhold any amount from the
wages of a worker without the worker's consent.
In the instant case, petitioners confirmed the alleged deductions but reasoned
that the same were due to the penalties they imposed for deliveries outside the
delivery hours, cell phone plans, bad orders and liquidation shortage. This act
is a clear violation of the Labor Code since there was no written conformity
coming from the respondents regarding the deduction. Hence, reimbursement
of these illegal deductions should be returned to the respondents. (J.Reyes,
Marby Food Ventures Corp. v. Dela Cruz, G.R. No. 244629, [July 28, 2020])
1.7 NON-DIMINUTION OF BENEFITS, EXPLAINED:
Art. 100, Labor Code. Prohibition against elimination or diminution of

benefits. — Nothing in this Book shall be construed to eliminate or in any way
diminish supplements, or other employee benefits being enjoyed at the time of
promulgation of this Code.
 GENERAL RULE: Benefits being given to employees shall not be taken back
or reduced unilaterally by the employer because the benefit has become part
of the employment contract, written or unwritten
EXCEPTIONS:
1. If the employee also consents to the deduction.
2. If the deduction is made to correct an error.
EXCEPTION TO THE EXCEPTION:

If the error is left uncorrected for a reasonable period of time, it ripens into a
company policy and employees can demand for it as a matter of right.
57
 Requisites for voluntary employer practice such that the same cannot be
unilaterally withdrawn anymore: (a) It should have been practiced over a
long period of time; and (b) It must be shown to have been given regularly,
voluntarily, and deliberately for a period of time. (Sevilla Trading Company vs.
Semana, 428 SCRA 239 [2004], citing Globe Mackay Cable and Radio Corp. vs.
NLRC, 163 SCRA 71 [1988].
 As to length of time required to ripen into a corporate policy: The

Supreme Court has not laid down any specific rule requiring a specific
minimum number of years. Rather, the test of long practice has been
enunciated thus: where the company agreed to continue giving a benefit
knowing fully well that said employees are not covered by the law requiring
payment of said. (Oceanic Pharmacal Employees Union (FFW) vs. Inciong, 94
SCRA 270 [1979]). Hence, the Supreme Court has ruled in specific cases as
follows:
a. Davao Fruits Corporation vs. Associated Labor Unions (225 SCRA 562
[1993]): six (6) years.
b. Davao Integrated Port Stevedoring Services vs. Abarquez (220 SCRA 197
[1983]): three (3) years and nine (9) months
c. Sevilla Trading Company vs. Semana, (428 SCRA 239 [2004]: two (2)
years. – USE THIS.
 Disc Contractors, Builders and General Services, Inc. v. Buen, G.R. No.
237267 (Notice), [January 22, 2020]). -- As correctly ruled by the CA, no grave
abuse of discretion can be attributed to the National Labor Relations
Commission in affirming the Labor Arbiter's finding that: (a) petitioner is a private
corporation beyond the authority of the governance commission of the
Government Owned and Controlled Corporation, following the status of its
parent company, Philippine National Construction Corporation; and (b)
petitioner's grant of mid-year bonus ripened into a company policy, thereby
making its unilateral withdrawal a violation of the principle of non-diminution of
benefits under Article 100 of the Labor Code.
Settled is the rule that the application of the prohibition against the diminution
of benefits presupposes that a company practice, policy or tradition favorable to
the employees has been clearly established, and that the payments made by
the employer pursuant to the practice, policy, or tradition have ripened into
benefits enjoyed by them, which respondents were able to show in this case.
2. BONUS
Nature of a bonus: a prerogative, not an obligation. -- The matter of giving a bonus
over and above the worker’s lawful salaries and allowances is entirely dependent on the
financial capability of the employer to give it. (Traders Royal Bank vs. NLRC, 189 SCRA
274 [1990]).
EXCEPTIONS: When bonus is demandable as a matter of right

a) Bonus given without condition, and hence, part of wage or salary;
b) Grant is the result of an agreement or undertaking, such as in a cba
c) Given on account of company policy or practice
d) Given AS A MANDATE OF LAW.
3. HOURS OF WORK.
3.1 Hours of worked shall include: (a) all time during which an employee is required to
be on duty or to be at the prescribed workplace, and (b) all time during which an
employee is suffered or permitted to work. (Art. 84, Labor Code; See also Rada vs.
NLRC, 205 SCRA 69 [1992].)
57
3.2 Rest period of short duration during working hours shall be counted as hours
worked. (Art. 84, Labor Code.) Example: coffee break of 15 minutes; meal period of
less than one hour, e.g., 30 minutes.
3.3 Exemptions. (See Art. 82, Labor Code.) . -- The following employees are not
covered by the Labor Code provisions on hours of work:
a) Government employees;
b) Managerial employees (International Pharmaceuticals, Inc. vs. NLRC, 287 SCRA
213 [1998].);
c) Field Personnel;
d) Members of the employer who are dependent upon him for support;
e) Domestic helpers and persons in the personal service of another;
f) Workers who are paid by results, e.g., piece workers. (Red V Coconut Products,
Ltd. vs. CIR, 17 SCRA 553 [1966], citing Lara vs. del Rosario, 94 Phil. 780) (Note:
Reason is that workers who are paid by the result are compensated on the basis of the
work completed, and NOT in respect of the time spent working on it).
3.4 CHANGE IN WORKING HOURS AND WORKING CONDITIONS

• COMPRESSED WORK-WEEK
• FLEXIBLE WORK ARRANGEMENT
• ALTERNATIVE WORK ARRANGEMENT
• TELE-COMMUTING PROGRAM
The Department of Labor and Employment (DOLE) allows companies to

implement FLEXIBLE WORK ARRANGEMENTS as remedial measures due to the
ongoing pandemic. (Labor Advisory No. 09-20,Guidelines on the Implementation of Flexible
Work Arrangements as Remedial Measure due to the Ongoing Outbreak of Coronavirus Disease)
These are coping mechanisms and remedial measures in times of economic

difficulties and national emergencies. These are encouraged as cost-cutting
measures short of termination of employment or closure of business. (See: Dept
Order No. 02 s 2009 Guidelines on Adoption of Flexible Work Arrangements; cf. Labor Advisory No.
17-20, Guidelines on Employment Preservation upon Resumption to work; Labor Advisory No. 09-
20,Guidelines on the Implementation of Flexible Work Arrangements as Remedial Measure due to
the Ongoing Outbreak of Coronavirus Disease)
Some examples of these flexible work arrangements include, but NOT limited to:
a) work-from-home;
b) compressed work-week;
c) reduction of workhours and/or workdays;
d) reduction of workers, or skeletal workforce; and
e) forced leave, among others.
3.4.1 COMPRESSED WORK WEEK (CWW); WHEN ALLOWED-

Resorted to by the employer to prevent serious losses due to causes
beyond his control, such as:
a) when there is substantial slump in demand for his goods and
services
b) when there is lack of raw materials; and
c) Pandemic and other calamities
Note:
• Instead of working 6 days a week, the employees will be regularly
working for less than 6 days but each workday exceeds 8 hrs.
EFFECT: Employees waive their OT for the hours of work exceeding
8 in a workday;
• Must be freely agreed upon between the employer and majority of the
employees.
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• Further, the arrangement should not diminish the employees’ monthly

or daily pay or their established employment benefits;
• Extended workday in CWW should not exceed 12 hrs. In short, the
48-hour workweek can been compressed to only 5-days (9 hours and
36 minutes/day or 4-days workweek (12 hours/day), but NOT 3-days
workweek.
• Work exceeding 12 (hrs) in a day or 48 (hrs) in a week should be
considered OT;
• Should the work shift revert to 8 hrs., the reversion shall not constitute
a diminution of benefits.
3.4.2 “Reduction of workdays or work hours” – refers to one where normal

work hours or work days are reduced.
3.4.3 “Rotation of workers” – where employees are rotated or alternately

provided work within the week (example: during MECQ or GCQ, from six-
days a week to three days a week, MWF or TTHS)
3.4.4 “Forced leave” pertains to a situation where the employees are required
to go on leave for several days or weeks utilizing their leave credits, if there
are any. This may be applied simultaneously to reduction of workweek, or
rotation of employees, or in cases where the management decides to go
on temporary closure not exceeding six (6) months. During days where the
employee is forced to go on leave, they are on “no-work, no-pay” UNLESS
they can charge these days to their remaining leave credits.
3.4.5 Question: Is the employer allowed to implement a temporary suspension

of business operations?
Answer: Yes. But this must pertain to a bona fide suspension of operations
of a business or undertaking for a period not exceeding six (6) months xxx
shall not terminate employment. Note that there is an expectation that the
business will resume in this case.
The DOLE Guidelines allowed for partial suspension of operations of

certain departments. By law, this is for a period not exceeding six (6)
months, especially in this instance where face-to-face activities have been
prohibited or limited during the height of the COVID-19 pandemic.
Note however that at the end of the said six (6) month period, the employer
is obliged to recall employees back to work. Failing such, the employees
are deemed to been constructively dismissed, for which reason they are
thus entitled to payment of separation pay in accordance with law.
3.4.6 TELECOMMUTING ACT, Rep. Act No.11165 [20 December 2018], in

conjunction with the Implementing Rules and Regulations of Republic Act
|||
No. 11165, DOLE Department Order No. 202, s. 2019, [March 26, 2019]).
SECTION 3. Telecommuting Defined. — As used in this Act, the term

"telecommuting" refers to a work arrangement that allows an employee in
the private sector to work from an alternative workplace with the use of
telecommunication and/or computer technologies.
SECTION 4. Telecommuting Program. — An employer in the private sector

may offer a telecommuting program to its employees on a voluntary basis,
and upon such terms and conditions as they may mutually agree upon;
Provided:
57
• That such terms and conditions shall not be less than the minimum labor
standards set by law, and shall include compensable work hours,
minimum number of work hours, overtime, rest days, and entitlement to
leave benefits.
• In all cases, the employer shall provide the telecommuting employee with
relevant written information in order to adequately apprise the individual
of the terms and conditions of the telecommuting program, and the
responsibilities of the employee.
SECTION 5. Fair Treatment. — The employer shall ensure that the

telecommuting employees are given the same treatment as that of
comparable employees working at the employer's premises. All
telecommuting employees shall:
(a) Receive a rate of pay, including overtime and night shift differential,
and other similar monetary benefits not lower than those provided in
applicable laws, and/or CBA;
(b) Have the right to rest days, regular holidays, and special nonworking
days;
(c) Have the same or equivalent workload and performance standards as
those of comparable workers at the employer's premises; provided
that the parties may mutually agree to different performance standards
that may be more appropriate given the location of the employee is not
at the premises of the employer;
(d) Without additional cost, have the same access to training and career
development opportunities as those of comparable workers at the
employer's premises, and be subject to the same appraisal policies
covering these workers, including the qualification provided on the
preceding item;
(e) Without additional cost, receive appropriate training on the technical
equipment at their disposal, and the characteristics and conditions
of telecommuting; and
(f) Have the same collective rights as the workers at the employer's
premises, including access to safety and health services when
necessary as required by Republic Act No. 11058 and Department
Order No. 198, Series of 2018, and shall not be barred from
communicating with worker's representatives.
The employer shall also ensure that measures are taken to prevent
the telecommuting employee from being isolated from the rest of the
working community in the company by giving
the telecommuting employee the opportunity to meet with colleagues on
a regular basis and allowing access to the regular workplace and company
information.
4. WAGE RELATED BENEFITS
4.1 HOLIDAY PAY
(a) Coverage: This benefit applies to all employees except:

 Government employees
 Those of retail and service establishments regularly employing less than
ten (10) workers;
 Kasambahay and persons in the personal service of another;
 Managers and managerial staff (supervisors);
57
 Field personnel and other employees whose time and performance are
unsupervised by the employer, including those who are engaged on task
or contract basis, purely commission basis or those who are paid a fixed
amount for performing work irrespective of the time consumed in the
performance thereof.
(b) Unless otherwise modified by law, order, or proclamation, the following are the
twelve (12) regular holidays in a year under E.O. 292, as amended by R.A. 9849:
 New Year’s Day January 1
 Maundy Thursday Movable date
 Good Friday Movable date
 Araw ng Kagitingan April 09
 Labor Day May 01
 Independence Day June 12
 National Heroes’ Day Last Monday of August
 Eid’l Fitr Movable date
 Eid’l Adha Movable date
 Bonifacio Day November 30
 Christmas Day December 25
 Rizal Day December 30
[c) The employee is entitled to the payment of his regular daily basic wage (100%)
during said holidays, even if the worker did not report for work on said days;
provided that he was present or was on leave of absence with pay on the work
day immediately preceding the holiday.
c.1 If the employee was suffered to work during the said holidays, they will be
entitled to payment of holiday premium of 200% of his basic wage (100% of
basic wage plus 100%).
Note 1: If the day immediately preceding the holiday was the employee’s rest
day, then he must be present on the day PRIOR to the rest day to avail of his
holiday pay.
Note 2: If employee was on authorized leave with pay on the day prior to the
holiday, then he should be allowed to avail of his holiday pay.
c.2 Rules on two successive holidays (example: Holy Thursday and Good
Friday):
 Employee present on Holy Thursday, does not go to work on both Holy
Thursday and Good Friday. Is he entitled to holiday pay for both days?
Yes.
 Employee was absent on Holy Wednesday, went to work on Holy
Thursday and Good Friday. Is he entitled to holiday pay on Holy
Thursday? No. He was absent on Holy Wednesday, but he should be
paid compensation for work on Holy Thursday (hence, only 100%, and
NOT 200%). It is only on Good Friday that he will be entitled to holiday
pay, and paid 200% for being present on Holy Thursday, and having
worked on that day (Good Friday).
c.3 Rules on two holidays falling on the same day: April 9, 2020 being both
Araw ng Kagitingan and Holy Thursday.
 Employee reports for work on April 8, but does not report for work on April
9. Is he entitled to holiday pay and how much? Yes, for 200% for both
holidays.
 Employee reports for work on April 8, and reports for work on the double
holiday. Is he entitled to payment for the two holidays, and how much pay
57
for that day? Yes, for 300% - 100% Araw ng Kagitingan; 100% Holy
Thursday plus 100% for work on that day.
(d) General Rule: Employees on task or “pakyaw” basis are entitled to holiday pay
and SIL pay.
Exception: When they qualify as field personnel.
4.2 SPECIAL DAYS: (Three plus one special working day)

 November 1: All Saints’ Day
 December 31: Last day of the year
 August 21: Ninoy Aquino Day
 Feast of Immaculate Concepcion: December 8.
(a) General Rule: “No work, no pay” principle applies during special days and on
such other special days as may be proclaimed by the President or by
Congress.
Exception: When company gives better policy or as provided in CBA.
(b) Premium pay for work within 8 hours on a:

• Special or rest day: Plus 30% of basic daily rate (BDR)
• Rest day falling on a special day: Plus 50% of BDR
• Rest day falling on a regular holiday: Plus 30% of 200% of BDR
4.3 OVERTIME PAY FOR WORK IN EXCESS OF 8 HOURS ON:
• Ordinary days: plus 25% of the basic hourly rate

• Special days, rest days and holidays: plus 30% of the regular hourly rate on said
days
4.4 NIGHTSHIFT DIFFERENTIAL PAY: Plus 10% of the basic/regular rate for work
between 10PM to 6AM
NIGHT WORKERS: REPUBLIC ACT NO. 10151 ENTITLED “AN ACT ALLOWING THE
EMPLOYMENT OF NIGHT WORKERS, THEREBY REPEALING ARTICLES 130 AND 131 OF
PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTY-TWO, AS AMENDED, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES”
The old law prohibited women from working the nightshift between the hours of 10:00
p.m. and 6:00 a.m. of the following day, whether with or without compensation. This
prohibition has now been repealed by Republic Act No. 10151.
All workers regardless of gender may now be employed or permitted or suffered to

work at night, with the exception of the following: (see below)
Exceptions:
(a) pregnant women or nursing mothers, subject to certain conditions; and
(b) those workers employed in agriculture, stock raising, fishing, maritime transport
and inland navigation.
4.1.1 As regards women night workers, the law provides that women who are
pregnant or nursing their children for a period of at least sixteen (16) weeks
before or after childbirth, are to be allowed alternative to night work, such as:
(a) transfer to day work where this is possible; (b) the provision of social
security benefits; or (c) an extension of maternity leave.
4.1.2 Pregnant women and nursing mothers may be allowed to work at night only if
a competent physician, other than the company physician, shall certify their
57
fitness to render night work, and specify, in the case of pregnant employees,
the period of the pregnancy that they can safely work.
4.1.3 Rights of the Night Workers:

 Right to health assessement. --
 Right to safe and healthful working conditions
 Right to compel employer to provide the following mandatory facilities:
(a) Suitable first aid facilities
(b) Adequate or reasonable facilities such as sleeping or resting quarters
in the establishment
(c) Adequate transportation from the work premises to the nearest point
of their residence subject to the exceptions and guidelines to be
provided by the DOLE
4.1.4 AS AMENDED BY DOLE Department Order No. 119-12 [24 January 2012]
Implementing Rules of RA 10151 –
GENERAL RULE: There should always be facilities for transportation and/or

sleeping/resting quarters for the night workers.
EXCEPTIONS:
• When there is already an existing company policy or CBA providing for an
equivalent or superior benefit i.e. there is already transportation allowance;
• Start or end of work rendered does not fall between 12mn to 5am;
• Where the workplace is located in an area that is accessible twenty four
(24) hours to public transportation; and
• Insufficient number or night workers to warrant the necessity for
sleeping/resting facilities.
4.5 SERVICE CHARGES: 100% of service charges are now to be distributed to the rank-
and-file employees of the employer establishment under R.A. 11360, Requiring
Hotels, Restaurants and Other Similar Establishments to Distribute in Full, Service
Charges to All Covered Employees, Amending for the Purpose P.D. 442, (August 7,
2019).
5. THIRTEENTH MONTH PAY
5.1 How much: 1/12th of the basic salary of an employee within a calendar year.
5.2 Coverage: All employers are required to pay all their rank-and-file employees a 13th
month pay not later than December 24 of every year.
5.3 Exclusions or exemptions from the coverage
(a) Government and any of its political subdivisions, including GOCCs.

Exception: Corporations operating essentially as private subsidiaries of the
Government;
(b) Employers already paying their employees 13th month pay or more in a calendar
year or its equivalent at the time of issuance of P.D. 851;
• “Its equivalent” includes Christmas bonus, mid-year bonus, cash
bonuses and other payments amounting to not less than 1/12 of the
basic salary but shall not include cash and stock dividends, COLA
and all other allowances regularly enjoyed by the employees as well
as non-monetary benefits.
(c) Employers of household helpers and persons in the personal service of another
in relation to such workers;
57
(d) Distressed employers:

• currently incurring substantial losses; or
• in the case of non-profit institutions and organizations, where their income,
whether from donations, contributions, grants and other earnings from any
source, has consistently declined by more than forty (40%) percent of their
normal income for the last two (2) years, subject to the provision of Section 7
of this issuance;
(e) Employers of those who are paid on commission, boundary, or task basis, and
those who are paid a fixed amount for performance of a specific work, irrespective
of the time consumed in the performance thereof.
Exception: Where the workers are paid on a piece-rate basis, in which case the
employer shall grant the required 13th month pay to such workers.
6. EMPLOYMENT OF MINORS: (cf Sec. 12, R.A. 7610, as amended by R.A. 9231).
Article 139. Minimum employable age. --

(a) No child below fifteen (15) years of age shall be employed, except when he
works directly under the sole responsibility of his parents or guardian, and his
employment does not in any way interfere with his schooling.
(b) Any person between fifteen (15) and eighteen (18) years of age may be
employed for such number of hours and such periods of the day as
determined by the Secretary of Labor in appropriate regulations.
(c) The foregoing provisions shall in no case allow the employment of a person
below eighteen (18) years of age in an undertaking which is hazardous or
deleterious in nature as determined by the Secretary of Labor.
Article 140. Prohibition against child discrimination..-- No employer shall

discriminate against any person in respect to terms and conditions of employment on
account of his age.
ON HAZARDOUS WORK. -- Any person between fifteen (15) and eighteen (18) years
of age may be employed for NON-HAZARDOUS WORK for such number of hours and
such periods of the day as determined by the Secretary of Labor in appropriate
regulations. No such prohibition if eighteen (18) years old and above.
PROHIBITION AGAINST CHILD DISCRIMINATION. -- No employer shall discriminate

against any person in respect to terms and conditions of employment on account of his
age.
Comparisons: (Rep. Act No. 9231)
A child below 15  Allowed to work for not more than 20 hours a week.
Provided, the work shall not be more than 4 hours in a day.
 Shall not be allowed to work between 8pm and 6am of the
following day.
A child above 15  Shall not be allowed to work for more than 8 hours a day,
years of age but below and in no case beyond 40 hours a week.
18  Shall not be allowed to work between 10 pm and 6am the
following day
57
7. DISABLED WORKERS
7.1 Equal opportunity for employment.

 No disabled person shall be denied access to opportunities for suitable
employment. [R.A. 7277, Sec. 5: Magna Carta for Disabled Persons]
 Qualified disabled employees shall be subject to the same terms and conditions
of employment and the same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able-bodied person.
 A worker is not necessarily considered as a handicapped worker if he is

capable, as an able-bodied worker, to function suitably in relation to the work to
which he was hired. (i.e. one-legged transcriptionist)
 J. Panganiban, Bernardo v. National Labor Relations Commission, G.R.

No. 122917, [July 12, 1999], 369 PHIL 443-464. -- Respondent bank entered
into employment contracts with handicapped workers and renewed the
contracts of 37 of them. This showed that these workers were qualified to
perform the responsibilities of their positions.
The Magna Carta for Disabled Persons mandates that a qualified disabled
employee should be given the same terms of employment as a qualified able-
bodied person. This being so, petitioners are thus covered by Art. 280 of
the Labor Code which defines regular employment to be that the employee has
been engaged to perform activities usually necessary or desirable in the usual
business or trade of the employer.
The task of counting and sorting bills is necessary to the business of respondent
bank. With the exception of sixteen of them, petitioners performed these tasks
for more than six months. Therefore, the 27 petitioners should be deemed
regular employees entitled to security of tenure. Their services may only be
terminated for a just and authorized cause. Because respondents failed to show
such cause, these 27 petitioners are deemed illegally dismissed and hence
entitled to backwages and separation pay. (ASKED IN THE 2012 BAR EXAMS)
7.2 Incentives for employment of disabled workers (Sec. 2, RA 7277, as amended

by Republic Act No. 9442 ).
1. Private entities that employ disabled persons who meet the required skills or
qualifications either as regular employee, apprentice or learner, shall be entitled
to an additional deduction from their gross income, equivalent to 25% of the total
amount paid as salaries and wages to disabled persons; Provided, that the
following are complied with:
a. Presentation of proof certified by DOLE that disabled persons are under
their employ; and
b. Disabled employee is accredited with DOLE and DOH as to his disability,
skills and qualifications.
2. Private entities that improve or modify their physical facilities to provide

reasonable accommodation for disabled persons shall also be entitled to an
additional deduction from their taxable income, equivalent to 50% of the direct
costs of the improvements or modifications. This does not apply to improvements
required under B.P. Blg. 344.
3. Those caring for and living with a person with disability shall be granted the
following incentives (Sec 33, RA 9442):
(a) Persons with disability shall be treated as dependents under Section 35(A) of
the National Internal Revenue Code, as amended, and as such, individual
taxpayers caring for them shall be accorded the privileges granted by the
code insofar as having dependents under the same section are concerned;
and
57
(b) Individuals or nongovernmental institutions establishing homes, residential

communities or retirement villages solely to suit the needs and requirements
of persons with disability shall be accorded the following:
(i) Realty tax holiday for the first five years of operation; and
(ii) Priority in the building and/or maintenance of provincial or municipal
roads leading to the aforesaid home, residential community or
retirement village."
7.3 How to avail: (RA 9442)

The abovementioned privileges are available only to persons with disability who are
Filipino citizens upon submission of any of the following as proof of his/her entitlement
thereto:
a. An identification card issued by the city or municipal mayor or the barangay
captain of the place where the persons with disability resides;
b. The passport of the persons with disability concerned; or
c. Transportation discount fare Identification Card (ID) issued by the National
Council for the Welfare of Disabled Persons (NCWDP).
The privileges may not be claimed if the persons with disability claims a higher
discount as may be granted by the commercial establishment and/or under other
existing laws or in combination with other discount program/s.
The establishments may claim the discounts granted in sub-sections (a), (b), (c), (e),
(f) and (g) as tax deductions based on the net cost of the goods sold or services
rendered: Provided, however, That the cost of the discount shall be allowed as
deduction from gross income for the same taxable year that the discount is
granted: Provided, further, That the total amount of the claimed tax deduction net of
value-added tax if applicable, shall be included in their gross sales receipts for tax
purposes and shall be subject to proper documentation and to the provisions of the
National Internal Revenue Code (NIRC), as amended." (Amendment to R.A. No. 7277
(Magna Carta for Disabled Persons), Republic Act No. 9442, [April 30, 2007])
8. REPUBLIC ACT 9710 ENTITLED “THE MAGNA CARTA OF WOMEN”.-- Equal

access and elimination of discrimination against women in education,
scholarships and training. This includes revising educational materials and curricula
to remove gender stereotypes and images, and outlawing the expulsion, non-
readmission, prohibiting enrollment and other related discrimination against women
students and faculty due to pregnancy outside of marriage; (Section 16)
8.1 ADA: POSSIBLE QUESTION FOR LABOR OR POLITICAL LAW (NOT ASKED
SINCE 2012 BAR): -- Termination of pregnant employee in catholic schools.
Position of school re: academic freedom and religious nature of catholic schools
to impose higher standards of morality vs. strict implementation of Magna Carta of
Women.
DOCTRINAL CASE: Cheryll Leus vs St. Scholastica – Westgrove, G.R. No.

187226, 28 Jan 2015
Facts: Cheryll Santos Leus (petitioner) was hired by St. Scholastica's College
Westgrove (SSCW), a Catholic educational institution, as a non-teaching
personnel. Cheryll engaged in pre-marital sexual relations, got pregnant out of
wedlock, married the father of her child, and was dismissed by SSCW, in that
order.
Issue: Whether or not Leus may be validly dismissed for pregnancy out of
wedlock, on account of immorality.
Supreme Court decision: Illegal dismissal.

57
In resolving the foregoing question, the Court will assess the matter from a strictly
neutral and secular point of view – the relationship between SSCW as employer
and the petitioner as an employee, the causes provided for by law in the
termination of such relationship, and the evidence on record.
The ground cited for the petitioner’s dismissal, i.e., pre-marital sexual relations
and, consequently, pregnancy out of wedlock, will be assessed as to whether the
same constitutes a valid ground for dismissal pursuant to Section 94(e) of the 1992
MRPS [and the Labor Code].
As stated above, when the law refers to morality, it necessarily

pertains to PUBLIC AND SECULAR MORALITY, and not religious
morality. Thus, the proscription against “disgraceful or immoral conduct” under
Section 94(e) of the 1992 MRPS, which is made as a cause for dismissal, must
necessarily refer to public and secular morality.
Accordingly, in order for a conduct to be considered as disgraceful or immoral, it

must be “‘detrimental (or dangerous) to those conditions upon which depend the
existence and progress of human society’ and not because the conduct is
proscribed by the beliefs of one religion or the other.”
Admittedly, the petitioner is employed in an educational institution where the

teachings and doctrines of the Catholic Church, including that on pre-marital
sexual relations, is strictly upheld and taught to the students. That her indiscretion,
which resulted in her pregnancy out of wedlock, is anathema to the doctrines of
the Catholic Church.
However, viewed against the prevailing norms of conduct, the petitioner’s

conduct cannot be considered as disgraceful or immoral; such conduct is
not denounced by public and secular morality. It may be an unusual
arrangement, but it certainly is not disgraceful or immoral within the
contemplation of the law.
To stress, pre-marital sexual relations between two consenting adults who have
no impediment to marry each other, and, consequently, conceiving a child out of
wedlock, gauged from a purely public and secular view of morality, does not
amount to a disgraceful or immoral conduct under Section 94(e) of the 1992
MRPS."
J. Reyes, Capin-Cadiz v. Brent Hospital and Colleges, Inc., G.R. No. 187417,
[February 24, 2016], 781 PHIL 610-643:
Capin-Cadiz's was employed as a human resources officer in an educational and

medical institution of the Episcopal Church of the Philippines; she and her
boyfriend at that time were both single; they engaged in premarital sexual relations,
which resulted into pregnancy. Brent placed her on indefinite suspension until she
gets married.
The labor tribunals characterized these as constituting disgraceful or immoral

conduct. They also sweepingly concluded that as Human Resource Officer, Cadiz
should have been the epitome of proper conduct and her indiscretion "surely
scandalized the Brent community.”
Question: Instead of dismissal in instances of pregnancy outside of marriage, may

the School instead place the woman in indefinite suspension until she gets
married?
57
Answer: NO. The foregoing circumstances, however, do not readily equate to

disgraceful and immoral conduct, reiterating the Cheryll Leus case. The fact that
Brent is a sectarian institution does not automatically subject Cadiz to its religious
standard of morality absent an express statement in its manual of personnel policy
and regulations, prescribing such religious standard as gauge as these regulations
create the obligation on both the employee and the employer to abide by the same.
The labor tribunals' respective conclusion that Cadiz's "indiscretion" "scandalized

the Brent community" is speculative, at most, and there is no proof adduced by
Brent to support such sweeping conclusion. Even Brent admitted that it came to
know of Cadiz's "situation" only when her pregnancy became manifest. xxx This
only goes to show that Cadiz did not flaunt her premarital relations with her
boyfriend and it was not carried on under scandalous or disgraceful circumstances.
With particular regard to women, Republic Act No. 9710 or the Magna Carta of
Women protects women against discrimination in all matters relating to marriage
and family relations, including the right to choose freely a spouse and to enter into
marriage only with their free and full consent.
Weighed against these safeguards, it becomes apparent that Brent's condition is

coercive, oppressive and discriminatory. There is no rhyme or reason for it. It
forces Cadiz to marry for economic reasons and deprives her of the freedom
to choose her status, which is a privilege that inheres in her as an intangible
and inalienable right.
While a marriage or no-marriage qualification may be justified as a "bona fide

occupational qualification," Brent must prove two factors necessitating its
imposition, viz.:
(1) that the employment qualification is reasonably related to the
essential operation of the job involved; and
(2) that there is a factual basis for believing that all or substantially all
persons meeting the qualification would be unable to properly
perform the duties of the job.
Brent has not shown the presence of neither of these factors. Perforce, the Court
cannot uphold the validity of said condition. (J. Reyes, Capin-Cadiz v. Brent
Hospital and Colleges, Inc., G.R. No. 187417, [February 24, 2016], 781 PHIL 610-
643)
J. Tijam, Union School International v. Dagdag, G.R. No. 234186, [November

21, 2018] – Leus and Cadiz doctrines reiterated.
Dagdag was employed as an Elementary School Teacher on a probationary
status by Union School. During her employment, she found out that she was
eight weeks and five days pregnant. Soon thereafter, Dagdag informed School
of her pregnancy and that the father of the child was marrying another woman.
As Dagdag was single, the matter of being charged with gross immorality and
Dagdag's resignation was discussed. She also underwent an investigation by a
Teachers’ Disciplinary Committee regarding the disciplinary action against her
for gross immorality. During the hearing, Dagdag acknowledged the contents of
the school's Faculty and Staff Handbook, which includes the offense on gross
immorality and the Professional Code of Ethics for Teachers. She was apprised
of the possible consequences if she will be dismissed from service as it might
affect her next job application as compared to resigning which, petitioners
thought, was a better option. Dagdag then agreed to resign. The Minutes of
the hearing also stated that she consulted her mother and relatives and
57
that she was accepting dismissal as a disciplinary action but she will wait
for the decision of the school.
On the same date, Dagdag filed a complaint against petitioners for illegal
dismissal (constructive dismissal), non-payment of salaries and benefits, moral
and exemplary damages, and attorney's fees. AIHTE
Supreme Court: School’s act of suggesting that Dagdag should simply tender
her resignation, as the school may impose harsher penalties, left Dagdag with no
choice but to discontinue working for Union School. Also, the CA noted that
although there was a conduct of grievance meeting, its outcome was already
predetermined as petitioners were already resolute in their decision to terminate
Dagdag's employment.
This is evident by the fact that Dagdag was left with two choices — resignation or
dismissal and threatening her with possible revocation of her teaching license.
Indeed, Dagdag agreed to resign because her actuation was perceived by
petitioners as a ground for the revocation of her license as a teacher. Such license
serves as a permit for Dagdag to secure an employment and find a means of
livelihood. (Union School International v. Dagdag, G.R. No. 234186, [November
21, 2018])
8.2 Non-discrimination in employment in the field of military, police and other

similar services.
8.3 GYNECOLOGICAL Leave benefits of two (2) months with full pay based on
gross monthly compensation, for women employees who undergo surgery
caused by gynecological disorders, provided that they have rendered continuous
aggregate employment service of at least six (6) months for the last twelve (12)
months; (Section 21)
AS AMENDED BY DOLE Department Order No. 112-A [22 May 2012]

providing for the guidelines on the Implementation of the leave benefit for
Women Employees in the private sector. -- Ada
DOLE inserted a new provision under Section 4, which provides: “The special
leave benefit. – The two (2) months special leave benefit is the maximum period
of leave with pay that a woman may avail of under RA 9710. For purposes of
determining the period of leave with pay that will be allowed to a woman
employee, the certification of a competent physician as required period for
recuperation shall be controlling.”
Additionally, Section 6 of the DO 112-A also provides as follows: “Frequency of

availment. – A woman employee can avail of the special leave benefit for every
instance of surgery due to gynecological disorder for a maximum total period of
two (2) months per year.”
EFFECT: The total recovery period for a woman employee is limited to two
months per year regardless of the frequency of surgical operations that a
female employee might undergo.
9. BATTERED WOMAN LEAVE UNDER REPUBLIC ACT NO. 9262, ANTI-VIOLENCE

AGAINST WOMEN AND CHILDREN:
Allows the victim of violence, which may be physical, sexual, or psychological, to apply for
the issuance of a protection order that will shield her from further violence and provide her
related reliefs.
57
9.1 Entitlement to Leave . – Victims under this Act shall be entitled to take a paid leave
of absence up to ten (10) days in addition to other paid leaves under the Labor Code
and Civil Service Rules and Regulations, extendible when the necessity arises as
specified in the protection order.
9.2 Any employer who shall prejudice the right of the person under this section shall be
penalized in accordance with the provisions of the Labor Code and Civil Service Rules
and Regulations. Likewise, an employer who shall prejudice any person for assisting
a co-employee who is a victim under this Act shall likewise be liable for discrimination.
9.3 Conditions for entitlement

• The victim must be an employee. If she is such, she is entitled to a paid leave
of up to 10 days in addition to other paid leaves under the Labor Code, other
laws and company policies
• The employee has to submit a certification from the Punong Barangay or
Kagawad or prosecutor or Clerk of Court that an action under RA 9262 has been
filed and is pending.
10. SOLO PARENT LEAVE UNDER REPUBLIC ACT NO. 8972, SOLO PARENTS’
WELFARE ACT OF 2000 cf Expanded Solo Parents Welfare Act, Republic Act No.
11861, [June 4, 2022].
10.1 Parental Leave. — In addition to leave privileges under existing laws, parental
leave of not more than seven (7) working days every year shall be granted to any
solo parent employee who has rendered service of at least one (1) year. (Sec. 8,
RA 8972)
10.2 Categories of Solo Parent. — A solo parent refers to any individual who falls
under any of the following categories:
(a) A parent who provides sole parental care and support of the child or children
due to —
(1) Birth as a consequence of rape, even without final conviction: Provided,
That the mother has the sole parental care and support of the child or
children: Provided, further, That the solo parent under this category may
still be considered a solo parent under any of the categories in this section;
(2) Death of the spouse;
(3) Detention of the spouse for at least three (3) months or service of sentence
for a criminal conviction;
(4) Physical or mental incapacity of the spouse as certified by a public or
private medical practitioner;
(5) Legal separation or de facto separation for at least six (6) months, and
the solo parent is entrusted with the sole parental care and support of the
child or children;
(6) Declaration of nullity or annulment of marriage, as decreed by a court
recognized by law, or due to divorce, subject to existing laws, and
the solo parent is entrusted with the sole parental care and support of the
child or children; or
(7) Abandonment by the spouse for at least six (6) months;
(b) Spouse or any family member of an Overseas Filipino Worker (OFW), or the
guardian of the child or children of an OFW: Provided, That the said OFW
belongs to the low/semi-skilled worker category and is away from the
Philippines for an uninterrupted period of twelve (12) months: Provided, further,
That the OFW, his or her spouse, family member, or guardian of the child or
children of an OFW falls under the requirements of this section;
(c) Unmarried mother or father who keeps and rears the child or children;
57
(d) Any legal guardian, adoptive or foster parent who solely provides parental care
and support to a child or children;
(e) Any relative within the fourth (4th) civil degree of consanguinity or affinity of the
parent or legal guardian who assumes parental care and support of the child
or children as a result of the death, abandonment, disappearance or absence
of the parents or solo parent for at least six (6) months:
Provided, That in cases of solo grandparents who are senior citizens but who
have the sole parental care and support over their grandchildren who are
unmarried, or unemployed and twenty-two (22) years old or below, or those
twenty-two (22) years old or over but who are unable to fully take care or
protect themselves from abuse, neglect, cruelty, exploitation, or discrimination
because of a physical or mental disability or condition, they shall be entitled to
the benefits of this Act in addition to the benefits granted to them by Republic
Act No. 9257, otherwise known as the 'Expanded Senior Citizens Act of 2003';
or
(f) A pregnant woman who provides sole parental care and support to her unborn
child or children."
10.3 Work Discrimination. — No employer shall discriminate against any solo parent
employee with respect to terms and conditions of employment on account of his or
her status. Employers may enter into agreements with their solo parent employees
for a telecommuting program, as provided in Republic Act No. 11165, otherwise
known as the 'Telecommuting Act': Provided, That said solo parent employees shall
be given priority by their employer."||| (Sec. 7, Expanded Solo Parents Welfare Act,
Republic Act No. 11861, [June 4, 2022])
10.4 Additional Benefits. — A solo parent shall be entitled to the following additional
benefits:
(a) Means-, pension-, and subsidy-tested monthly cash subsidy of One thousand
pesos (P1,000.00) per month per solo parent who is earning a minimum wage
and below, to be allocated by the concerned city or municipal government in
accordance with Section 17(b)(2)(iv) of the Local Government Code
xxx; Provided, further, That the solo parent under this section is not a recipient
of any other cash assistance or subsidy from any other government
programs: Provided, finally, That a beneficiary who is also a senior citizen or a
person with disability (PWD) may continue receiving senior citizen or PWD
benefits without forfeiting the benefits under this Act;
(b) A ten percent (10%) discount and exemption from the value-added tax (VAT) on
baby's milk, food and micronutrient supplements, and sanitary diapers
purchased, duly prescribed medicines, vaccines, and other medical supplements
purchased from the birth of the child or children until six (6) years of age of
a solo parent who is earning less than Two hundred fifty thousand pesos
(P250,000.00) annually xxx;
(c) Automatic coverage under the National Health Insurance Program (NHIP) being
administered by the PhilHealth with premium contributions to be paid by the
National Government: Provided, That the premium contribution
of solo parents in the formal economy shall be shared equally by their employers
and the National Government;
(d) Prioritization of solo parents, particularly solo mothers in re-entering the work
force, and their children as applicable, in apprenticeships, scholarships,
livelihood training, reintegration programs for OFWs, employment information
and matching services, and other poverty alleviation programs of the TESDA,
DTI, CHED, DepEd, DOLE, DMW and other related government agencies,
subject to the standard eligibility and qualifications; and
(e) Prioritization and allocation in housing projects with liberal terms of payment on
government low-cost housing projects in accordance with housing law provisions
prioritizing applicants below poverty line as declared by the Philippine Statistics
Authority (PSA).
57
HOW TO AVAIL: To avail of the additional benefits under this section,

the solo parent shall present a Solo Parent Identification Card (SPIC): Provided,
That in availing the additional benefits under paragraph (2) of this section,
the solo parent booklet shall also be presented." (Sec. 12, Expanded Solo
Parents Welfare Act, Republic Act No. 11861, [June 4, 2022]).
10.4 Limitation and Termination of the Benefits of a Solo Parent. — Only a solo parent
exercising sole parental care and support of the child or children is entitled to claim
the benefits of a solo parent under this Act: Provided, That a solo parent shall not lose
his or her status as solo parent if the other parent provides occasional assistance
and/or seasonal gifts that do not meet the legal requirement of support under The
Family Code of the Philippines: Provided, further, That the absence of a valid and legal
marriage between the mother and father of a child or dependent does not automatically
entitle either individual to the benefits under this Act if the factual circumstances
demonstrate that parental care and support are shared.
When a solo parent, as defined under this Act, ceases to be such by reason of change
of status and circumstances, the said solo parent shall be ineligible to avail of the
benefits under this Act. (Sec. 13, Expanded Solo Parents Welfare Act, Republic Act
No. 11861, [June 4, 2022])
11. BONA-FIDE OCCUPATIONAL QUALIFICATION (BFOQ)

AND THE ANTI-AGE DISCRIMINATION LAW
11.1 BFOQ: When the employer can prove that the reasonable demands of the business
require a distinction based on a qualification, and there is no better available or
acceptable policy which would better accomplish the business purpose, then this is
a bona fide occupational qualification. (Star Paper Corp. v. Simbol, G.R. No. 164774,
[April 12, 2006], 521 PHIL 364-379)
Ada’s definition: You can put a qualification (BFOQ) for hiring when the same is
reasonably necessary for the performance of the job for which he/she is hired
Contra: when not BFOQ because it is considered discriminatory employment policy
• Disparate treatment analysis: an employment policy is discriminatory on its

face. No-spouse employment policies requiring an employee of a particular sex
to either quit, transfer, or be fired are facially discriminatory. (Star Paper Corp. v.
Simbol, supra.)
• Disparate impact analysis: a facially neutral employment policy has a

disproportionate effect on a particular class. For example, although most
employment policies do not expressly indicate which spouse will be required to
transfer or leave the company, the policy often disproportionately affects one
sex. (Star Paper Corp. v. Simbol, supra.)
11.2 ANTI-AGE DISCRIMINATION LAW: REPUBLIC ACT NO. 10911 [10 June 2016]
• Rationale behind the law:

(a) Promote employment of individuals on the basis of their abilities, knowledge,
skills and qualifications rather than their age.
(b) Prohibit arbitrary age limitations in employment.
(c) Promote the right of all employees and workers, regardless of age, to be treated
equally in terms of compensation, benefits, promotion, training and other
employment opportunities
57
• Salient features of Rep Act No. 10911
a) You cannot print or publish, in any form of media, including the internet, any
notice of advertisement relating to employment suggesting preferences,
limitations, specifications, and discrimination based on age;
b) You cannot require the declaration of age or birth date during the application
process;
c) You cannot decline any employment application because of the individual’s
age;
d) You cannot discriminate against an individual in terms of compensation, terms
and conditions or privileges of employment on account of such individual’s age;
e) You cannot deny promotion or opportunity for training because of age;
f) You cannot lay off an employee or worker because of old age; or
g) You cannot impose early retirement on the basis of such employee’s or
worker’s age.
• Exceptions to the above prohibitions. -- The employer can set an age

requirement ONLY if it is BFOQ, where the age requirement is reasonably
necessary for the performance of the job for which he/she was hired.
Example: Younger applicants needed for a teenage modeling job.

Younger applicants needed for a job requiring perfect eyesight (pilots,
flight attendants, miners per Senate delibrations); or physical strength.
• How will the law affect existing company retirement plans and/or practices
on early retirement benefits? Will the early age requirement be voided?:
Section 9, IRR DO170-17. Effects on existing CBAs, Employment Contracts and

Company Policies. – All existing individual and/or collective agreements,
employment contracts and company policies prior to the effectivity of this law and
this IRR shall be respected as agreed upon by the parties.
12. EMPLOYEE BENEFITS; RETIREMENT LAW.
12.1 RETIREMENT AGE
GENERAL RULE: R.A. 7641

a. OPTIONAL at 60 years with minimum 5 years of service
b. MANDATORY at 65 years, no service requirement
EXCEPTION:
Where the company provides for a Retirement Plan with earlier retirement age,
then the company’s Retirement Plan will apply
12.2 RETIREMENT BENEFITS
GENERAL RULE: R.A. 7641

½ month for every year of service (expanded concept per Sec 1, RA 7641)
Expanded concept: 22.5 days (basis: Capitol Wireless vs. Confesor)

15 days + 5 days service incentive leave + 2.5 days prorated 13th month pay
EXCEPTION:
Where the company provides for a Retirement Plan with better benefits, then the
company’s Retirement Plan will apply
12.3 Retirement benefits under Rep. Act 7641 are tax-exempt.

What if company has a retirement plan, will this be tax-exempt?
Generally NO, unless: (a) the company retirement plan is registered with BIR
(b) the retiree is at least 50 years old + 10 years service
57
G . THE RIGHT TO UNIONIZE AND THE

APPROPRIATE BARGAINING UNIT
1. Existence of ER-EE relationship is essential for the determination of whether or not one
may exercise right of self-organization for purposes of collective bargaining
2. Who may unionize for purposes of collective bargaining negotiations?
2.1 General Rule: Any employee may be eligible to join and be a member of a labor
union, beginning on his first day of service, whether employed for a definite period
or not. (Article 277 [c], Labor Code; See also: UST Faculty Union vs. Bitonio)
2.2 Exceptions: Who may NOT unionize
2.2.1 Government Employees, including GOCCs WITH original charter
2.2.2 Managerial employees (Art. 245, Labor Code.)

N.B.: Supervisory employees may unionize and form labor organizations of
their own, but may not join rank-and-file union.
2.2.3 Confidential employees -- Confidential employees are those who: (1)
assist or act in a confidential capacity, (2) to persons who formulate,
determine, and effectuate management policies in the field of labor relations.
The two criteria are cumulative, and both must be met if an employee is to
be considered a confidential employee.
NOTE: Must have access to confidential information relating to labor

matters.
 Article 245 of the Labor Code does not directly prohibit confidential
employees from engaging in union activities. However, under the doctrine
of necessary implication, the disqualification of managerial employees
equally applies to confidential employees
 It must be stressed, however, that IF the employee does NOT have
access to confidential labor relations information, there is no legal
prohibition against confidential employees from forming, assisting, or
joining a union. (Sugbuanon Rural Bank, v. Laguesma, [G.R. No. 116194.
February 2, 2000)
2.2.4 Employees who are members of a cooperative; Employees of

International Organizations or Specialized Agencies which are
registered with the United Nations and which enjoys diplomatic
immunity. (International Catholic Migration Commission vs. Calleja; and
Kapisanan ng Manggagawa at TAC sa IRRI, etc. vs. Secretary of Labor.)
2.2.5 Aliens (Department Order No. 9 [1997], Rule II, Sec. 2).
Exception: Alien may be allowed to join union if: (a) with valid working permit;
and (b) there is reciprocity, e.g., home country allows Filipinos to unionize
there.
2.3 CANCELLATION OF UNION REGISTRATION: ONLY THREE GROUNDS

under Article 247, Labor Code
(a) Misrepresentation, false statement or fraud in connection with the

adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, and the list of members
who took part in the ratification;
57
(b) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of
voters;
(c) Voluntary dissolution by the members
2.3.1 Where the union has included employees outside the bargaining unit in its
membership (example: confidential, supervisory or managerial employees),
this is no longer a ground for cancellation of union registration. Thus:
“ART. 256. Effect of Inclusion as Members of Employees Outside

the Bargaining Unit. - The inclusion as union members of employees
outside the bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of
said union.”
2.3.2 REQUIREMENTS FOR VOLUNTARY CANCELLATION OF UNION

REGISTRATION - 2/3 VOTE OF GENERAL MEMBERSHIP
“ART. 248. Voluntary Cancellation of Registration. - The registration

of a legitimate labor organization may be cancelled by the organization
itself. Provided, That at LEAST TWO-THIRDS of its general
membership votes, in a meeting duly called for that purpose
to dissolve the organization: Provided, further, That an application
to cancel registration is thereafter submitted by the board of the
organization, attested to by the president thereof.”
2.4 EXPLICIT PROVISION THAT EMPLOYER IS SIMPLY A BY-STANDER AND

CAN NO LONGER OPPOSE OR PARTICIPATE IN THE
CERTIFICATION PROCEEDINGS.
“ ART. 258- A. Employer as Bystander. - In all cases, whether the

petition for certification election is filed by an employer or a
legitimate labor organization, the employer shall not be considered a
party thereto with a concomitant right to oppose a petition for
certification election. The employer’s participation in such
proceedings shall be limited to: (1) being notified or informed
of petitions of such nature; and (2) submitting the list of
employees during the pre-election conference should the Med-
Arbiter act favorably on the petition
57
3. APPROPRIATE BARGAINING UNIT
3.1. Bargaining unit, defined. - A "bargaining unit" has been defined as a group
of employees of a given employer, comprised of all or less than all of the entire body
of employees, which the collective interest of all the employees, consistent with
equity to the employer, indicate to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law. (Golden
Farms vs. Calleja, supra.)
3.2 What is a proper bargaining unit? -- A proper bargaining unit may be said to be a
group of employees of a given employer, comprised of all or less than all of the entire
body of employees, which the collective interest of all of the employees indicate to
be best suited to serve the reciprocal rights and duties of the parties under the
Collective bargaining provisions of the law. (Golden Farms vs. Calleja, supra.) It
is that group ofjobs that serves as the election constituency in the
enterprise.
3.3. How to determine inclusion in the bargaining unit: COMMUNITY OR

MUTUALITY OF INTEREST.
The most efficacious bargaining unit is one which is comprised of workers enjoying
community of interests. This is so because the basic test of a bargaining unit’s
acceptability is whether it will best assure to all employees concerned of the exercise of
their collective bargaining rights.
Factors to be considered: (a) similarity in scale and manner of determining earnings;

(b) similarity in employment benefits, hours of work, other terms and conditions of
employment; (c) similarity in kind of work performed; (d) similarity in qualifications, skills,
training of employees; (e) frequency of contact or interchange between employees; (f)
geographic proximity; (g) continuity or integration of production processes; (h) common
supervision and determination of collective bargaining; etc.
H. CERTIFICATION ELECTION (FRAMEWORK)
1. General Rule: The employer is not a party in a certification election, which activity is
the sole concern of the workers. IT IS MERELY A BYSTANDER.
“Art. 2 7 1 , LC. Employer as Bystander - - In all cases, whether the petition for
certification election is filed by an employer or a legitimate labor organization, the
employershall not be considered a party thereto with a concomitant right to oppose
a petition for certification election. The employer’s participation in such
proceedings shall be limited to: (1) being notified or informed of
petitions of such nature; and (2) submitting the list of employees
during the pre-election conference should the Med-Arbiter act
favorably on the petition”
Exception: Where the employer has to file a petition for certification election pursuant to
Art. 258 of the Labor Code because it was requested to bargain collectively. Even then,
it becomes a neutral bystander.
Coca-Cola Beverages Philippines, Inc. v. Philippine Trade and General Workers

Organization, G.R. No. 244110 (Notice), [February 27, 2019]) –I t is a well-established
ruling that an employer is not a party to a certification election, which is the sole or
exclusive concern of the workers. In certification elections, the employer is a mere
bystander as it has no right or material interest to assail
the certification election. The only instance when the employer may be involved in
that process is when it is obliged to file a petition
57
for certification election on its workers' request to bargain collectively pursuant to

the Labor Code. After the order for a certification election is issued, the employer's
involvement ceases and it again becomes a neutral bystander.
Moreover, there was no fraud or any irregularity in the conduct of election to warrant the
intervention of petitioner. In fact, the certification election had yet to be conducted when
petitioner filed its opposition to respondents' petition for certification election. The petition
for certification election was filed precisely to determine the will of the employees for the
purpose of collective bargaining. Petitioner, however, interfered with the valid exercise of
the labor organization's right to a certification election from the outset and consistently
took the adversary position in the petition. Petitioner's act cannot be countenanced.
2. Other kinds of recognition of employee representation

excluding certification elections
2.1 Direct certification - not allowed
2.2 Consent election (Aligre vs. De Mesa, 237 SCRA 647) - Consent election is an
agreed one, the purpose merely being to determine the issue of majority
representation of all of the workers in the appropriate bargaining unit.
Dept. Order No. 4 0 , Rule 8 , Section 1 0 . Consent Election; Agreement. - In case the
contending unions agree to a consent election, the Med-Arbitershall not issue a formal
order calling for the conduct of certification election, but shall enter the fact of the
agreement in the minutes of the hearing. The minutes of the hearing shall be signed by
the parties and attested to by the Med-Arbiter. The Med-Arbiter shall, immediately thereafter,
forward the records of the petition to the Regional Director or his/her authorized representative
for the determination of the Election Officer by the contending unions through raffle. The first
pre-election conference shall be scheduled within ten (10) days from the date of entry of
agreement to conduct consent election.
Section 23. Effects of consent election. - Where a petition for certification election had
been filed, and upon the intercession of the Med-Arbiter, the parties agree to hold a consent
election, the results thereof shall constitute a bar to the holding of a certification election for
one (1) year from the holding of such consent election. Where an appeal has been filed from
the results of the consent election, the running of the one-year period shall be suspended until
the decision on appeal has become final and executory.
Where no petition for certification election was filed but the parties themselves agreed to hold
a consent election with the intercession of the Regional Office, the results thereof shall
constitute a bar to another petition for certification election.
2.3. SOLE AND EXCLUSIVE BARGAINING AGENT (SEBA)
WHO HAS POWER TO RECOGNIZE?

REGIONAL DIRECTOR may recognize representation status of union
Note: Distinguish from the previous “voluntary recognition”, where it is the company
that may voluntarily recognize the legitimate labor organization as the sole and
exclusive bargaining agent.
ELEMENTS FOR SEBA

 Unorganized establishment and there is ONLY ONE legitimate labor
organization operating within the bargaining unit
 Request for recognition filed by the LLO containing the following:
1. Names and addresses of the LLO and the company
2. Bargaining unit sought to be represented
3. Approximate number of employees in bargaining unit
4. MAJORITY of #3 support the certification as SEBA of the
petitioning union
5. No other legitimate labor organization operating within the
bargaining unit
6. Documents duly certified by union president
57
3. CERTIFICATION ELECTION AND PROCEDURE

Art. 256-257, LC; BR R5 S1-9, IRR; Dept. Order No. 9 s1-9, Dept. Order No. 40-03
Rule VIII s1-25.
3.1 Who may and where to file petition for CE

B5 R5 S1-2, IRR; Dept Order No. 40-03, R8, secs 1-25
• Who may file: General rule - any legitimate labor organization

Exception - Employer, if requested to bargain collectively
and the majority status of the labor organization
is questionable
• Where to file: Mediation-Arbitration Branch, through the Regional
Office which has jurisdiction over the principal office of the employer. Officer
who will hear the petition is called the Med-Arbiter.
3.2 When to file petition for CE
3.2.1 If unorganized establishment (B5 R5 S3-6, IRR)

 Petition for certification election may be filed at any time by
a legitimate labor organization.
Note that the 25% signature requirement is not applicable. Why? Literal
interpration of law in favor of labor. The Labor Code merely provides
that it may be filed by any legitimate labor organization.
3.2.2 If organized establishment (with existing majority union)
a) No duly registered CBA – Petition for certification election may

be filed at anytime. Contract bar rule will not apply.
b) With duly registered CBA - DO 9, Rule XI, S3
1) Contract bar rule - only during freedom period

(Art. 232, LC; B5 R5 S4, IRR; see previous notes)
Note1: If a CBA has been duly registered in accordance with Article

231, a petition for CE or motion for intervention can only be
entertained within 60 days prior to the expiry date of the CBA
(freedom period).
Note2: The operative phrase here is “DULY REGISTERED

CBA” . Hence, if CBA has been executed, but parties did not
register the CBA with the Department of Labor (Bureau of Labor
Relations), then contract bar rule will not apply. A petition for
certification election may still prosper in this instance.
2) One year bar rule; also known as certification year bar rule (B5
R5 S3, IRR; see previous notes)
No certification election may be held within one (1) year from the
date of the issuance of a final certification election result.
Note1: This presupposes that the employees of the appropriate

bargaining unit did not want to be represented by any union, or that
having elected a majority union as exclusive bargaining
representative, the latter is given one (1) year within which to
negotiate with the employer.
57
Note2: Where the one year period – known as the certification year
during which the certified union is required to negotiate with the
employer and the filing of a petition forCE is prohibited – has expired
and the majority union fails to bring the employer to the bargaining
table, the minority union may file petition for CE. (Kaisahan ng
Manggagawa vs. Trajano, 201 SCRA 453)
3) Deadlock bar rule (B5 R5 S3, IRR; see previous notes)
Neither may a representation question be entertained if, before the

filing of a petition for certification election, a CBA deadlock to which
an incumbent or certified bargaining agent is a party, had been
submitted for conciliation or arbitration, or had become the subject
of a valid notice of strike/lock-out.
3.3 IN ANY EVENT, REGISTRATION OF UNION CANNOT BE ATTACKED

COLLATERALLY DURING THE CERTIFICATION ELECTION PROCEEDINGS
HOW TO CHALLENGE A PETITION FOR CERTIF ELECTION; Grounds. – The

Med-Arbiter may dismiss the petition on any of the following grounds:
o the PETITIONER UNION IS NOT LISTED in the Department’s registry of

legitimate labor unions or that ITS LEGAL PERSONALITY HAS BEEN
REVOKED OR CANCELLED WITH FINALITY in accordance with Rule XIV of
these Rules;
o in case of an organized establishment, FAILURE TO SUBMIT THE

TWENTY-FIVE PERCENT (25%) support requirement for the filing of the petition
for certification election.
o CONTRACT BAR RULE: the petition was filed before or after the freedom period
of a duly registered collective bargaining agreement; provided that the sixty-day
period based on the original collective bargaining agreement shall not be
affected by any amendment, extension or renewal of the collective bargaining
agreement; (for more detailed discussion, see notes below, page 91)
o ONE YEAR BAR RULE: the petition was filed within one (1) year from entry
of voluntary recognition or a valid certification, consent or run-off election and
no appeal on the results of the certification, consent or run-off election is pending;
(see notes below)
o DEADLOCK BAR RULE: a duly certified union has commenced and

sustained negotiations with the employer in accordance with Article 250 of the
Labor Code within the one-year period referred to in Section 14.cof this Rule, or
there exists a bargaining deadlock which had been submitted to conciliation or
arbitration or had become the subject of a valid notice of strike or lockout to
which an incumbent or certified bargaining agent is a party.
||3.4 J. Gaerlan, Coca-Cola FEMSA Philippines, Inc. v. Coca-Cola FEMSA Phils.,

G.R. No. 238633, [November 17, 2021]). -- The filing of a petition
for certification election does not violate any right of the employer, for it is well
settled that an employer has no right to participate in a certification election unless
it is requested to bargain collectively under Article 270 of the Labor Code.
Reorganization which merely changes nomenclatures or does not affect the job
levels, will not render a certification election moot and academic.
57
Facts: CCPI is a corporation engaged in the manufacture and sale of non-

alcoholic beverages; while the Union is a legitimate labor organization which
represents the regular coordination and supervisory employees of CCPI's Misamis
Oriental plant.
The Union filed a petition for certification election seeking to represent the
appropriate bargaining unit of regular coordinator and supervisor employees of
CCPI's Misamis Oriental plant. The regional Med-Arbiter (MA) summoned the
parties to a preliminary conference.
CCPI argued that the employees in the bargaining unit sought to be represented
by the Union — who have the following job titles: Line Production Supervisor,
Production Process Coordinator, Maintenance Planning Coordinator, Line
Production Coordinator, Line Maintenance Coordinator, Maintenance Supervisor,
Auxiliary Maintenance Supervisor, Line Quality Supervisor, Process Integrity
Coordinator, Quality Process Coordinator, Quality Assurance Coordinator,
Warehouse Coordinator, Warehouse Supervisor, and Preventive Maintenance
Supervisor — are not eligible to organize themselves for the purpose of collective
bargaining, because they are managerial employees who have the power not
only to lay down and execute management policies but also to hire, transfer,
suspend, layoff, recall, discharge, assign or discipline employees. T
Meanwhile, the certification election took under CCPI's protest. The DOLE
Regional Election Officer denied CCPI's protest, and the votes were canvassed.
The Union won the certification election and was certified by the Med-Arbiter as
the sole and exclusive bargaining agent of the regular supervisory and coordinator
employees of CCPI's Misamis Oriental plant.
CCPI appealed the Certification Order to the SOLE, on the ground that
the certification election should not have taken place in view of the pendency of
CCPI's petition in CA-G.R. SP No. 07723-MIN, and because two employees who
were not part of the bargaining unit were allowed to vote.
While its petition for certiorari in CA-G.R. SP No. 07723-MIN was pending, CCPI
reorganized the operations of the Misamis Oriental plant and abolished the
positions held by the Union employees. CCPI submitted in evidence notices of
"internal movement" to 24 employees who were either supervisors or coordinators,
whose job titles were changed to "heads" of various company operation areas.
Issues: Whether the positions are supervisory or managerial positions.
Whether the reorganization and reclassification of positions rendered the
case moot and academic.
Supreme Court: Supervisory positions. Not moot and academic; reorganization
and reclassification did not change nature of positions as supervisory).
1. On supervisory nature. -- A reading of the job descriptions of the Production
Supervisors, Line Quality Supervisors, Line Maintenance Supervisors, Inbound-
Outbound Supervisors, and coordinators, as well as the organizational chart
submitted in evidence by CCPI, readily reveals that they are supervisory
employees and not managerial employees. In fact, the four (4) categories of
supervisors directly report to their respective Coordinators who in turn report to the
Plant Manager, Quality Manager, Maintenance Head and Operations Head. They
are not vested with powers or prerogatives to lay down and execute management
policies but merely have the authority to effectively recommend managerial
actions.||| (Coca-Cola FEMSA Philippines, Inc. v. Coca-Cola FEMSA Phils., G.R.
No. 238633, [November 17, 2021])
2. On whether alleged reorganization and abolition of positions held by Union
members has rendered the election moot and academic. -- The reorganization of
business operations is a well-recognized management prerogative. However, as
57
correctly found by the CA, the alleged reorganization did not result in any through
consolidation of existing positions without changes in level, or mere change in
nomenclature significant changes to the bargaining unit represented by the Union.
The change in positions was made either,||| The transfer records submitted by
CCPI clearly show that the reorganization involved the bargaining unit members
being transferred from the old positions, either directly to the correspondingly
renamed new positions, or to a different position on the same level.
Given the totality of the evidence presented, the CA did not err in denying CCPI's
motion for reconsideration on the ground of the March 2017 reorganization, for
said reorganization did not alter the composition and integrity of the bargaining unit
composed of the supervisory employees of CCPI's Misamis Oriental plant, who
have already given the Union a mandate to represent them by virtue of a validly
held certification election.||| (J. Gaerlan, Coca-Cola FEMSA Philippines, Inc. v.
Coca-Cola FEMSA Phils., G.R. No. 238633, [November 17, 2021])|
J. J. Lopez, ABS-CBN IJM Workers Union v. ABS-CBN Corp., G.R. No. 202131,
[September 21, 2022]. – The Med-Arbiter and DOLE Secretary have authority to
determine existence of Er-Ee relationship in certification election proceedings,
without having to refer the issue to a Labor Arbiter. IJM workers are regular
employees.
Facts: ABS-CBN IJM Workers Union (AIWU) filed a petition for certification election
seeking to represent the 1,101 workers who were placed on the Internal Job Market
database (see Del Rosario vs. ABS-CBN, Caguioa), composed mostly of accredited
technical or creative manpower, and/or talents who offer their services for a fee. ABS-CBN
objected to it on the following grounds: (a) the issue of the existence of employer-
employee relationship properly devolves with the jurisdiction of the Labor Arbiter, and not
the DOLE; and (b) those listed with the IJM database are not employees but independent
contractors.
Supreme Court:
1. Med-Arbiter and DOLE Secretary have authority and power to determine existence of
employer-employee relationship. -- It bears stressing that the present controversy
involves the propriety of the conduct of a certification election among IJM workers,
which is cognizable by the Bureau. Under Article 232 of the Labor Code, as amended,
the Bureau, where the Mediator-Arbiter serves as an officer, has the original and
exclusive authority to act on all inter-union and intra-union conflicts, and all disputes,
grievances or problems arising from or affecting labor-management relations in all work
places:
ARTICLE 232. [226] Bureau of Labor Relations. — The Bureau of Labor Relations
and the Labor Relations Divisions in the regional offices of the Department of Labor
shall have original and exclusive authority to act, at their own initiative or upon
request of either or both parties, on all inter-union and intra-union conflicts, and all
disputes, grievances or problems arising from or affecting labor-management
relations in all work places whether agricultural or non-agricultural, except those
arising from the implementation or interpretation of CBA xxx.
On the other hand, the order of the Mediator-Arbiter granting or denying a petition for
certification election may be appealed before the DOLE Secretary:
ARTICLE 272. [259] Appeal from certification election orders. — Any party to an
election may appeal the order or results of the election as determined by the Med-
Arbiter directly to the Secretary of Labor and Employment on the ground that the
rules and regulations or parts thereof established by the Secretary of Labor and
57
Employment for the conduct of the election have been violated. Such appeal shall
be decided within fifteen (15) calendar days.
As the purpose of a petition for certification election is to determine which organization

will represent the employees in their collective bargaining with the employer, it follows
that the nature of the relationship between the members of the union or organization
and the company must first be determined. In order then for the Bureau to perform
its mandate of resolving issues arising from or affecting labor-management
relations, which includes the issue of whether a certification election should be
conducted by a union, the Mediator-Arbiter must necessarily make a finding as
to the existence of employer-employee relations, which shall be subject to review
by the DOLE Secretary on appeal.
This Court, in M.Y. San Biscuits, Inc. v. Acting Sec. Laguesma, is emphatic that the
Mediator-Arbiter and the DOLE Secretary are sufficiently empowered to make their own
independent finding as to the existence of such relationship, without having to rely and
wait for such a determination by the labor arbiter or the Commission in a separate
proceeding.
2. IJM workers are regular employees, and not independent contractors. -- Aside from
being anchored on substantial evidence, the findings of the DOLE Secretary are also
consistent with this Court's rulings in Del Rosario, et al. v. ABS-CBN Broadcasting
Corp., 72 ABS-CBN Corp. v. Concepcion, 73 Gava, et al. v. ABS-CBN Broadcasting
Corp., 74 and ABS-CBN Broadcasting Corp. v. Tajanlangit, et al. 75 In all these cases,
the Court uniformly declared that IJM workers are regular employees of respondent.
As the first case that reviewed the status of IJM workers, the En Banc ruling in Del
Rosario, penned by Associate Justice Alfredo Benjamin S. Caguioa, resolved the
consolidated cases for regularization and illegal dismissal filed by IJM workers.
Similar to the sound decision of the DOLE Secretary in the instant case, Del Rosario
evaluated the circumstances of the IJM workers and found these to have satisfied all
the elements of the four-fold test to prove the IJM workers' employer-employee
relationship with respondent. (J. J. Lopez, ABS-CBN IJM Workers Union v. ABS-CBN Corp.,
G.R. No. 202131, [September 21, 2022]).
4. REQUIREMENTS FOR VALID CERTIFICATION ELECTION

(Dept. Order No.9, Section 12, Rule XIII; Dept Order No. 40-03 Rule 9)
4.1 REMEMBER: DOUBLE MAJORITY RULE
TO FIND OUT IF THERE IS A VALID ELECTION: To have a valid election,

a majority of all eligible voters in the appropriate bargaining unit must have
CAST their votes (FIRST MAJORITY RULE -- JUST COUNT HOW MANY VOTED).
TO FIND OUT WHO WON THE ELECTIONS: The Union obtaining a majority of
ALL VALID VOTES cast shall be certified as sole and exclusive bargaining
representative of the workers in the appropriate bargaining unit. (SECOND
MAJORITY RULE – JUST COUNT IF THERE IS A UNION THAT GARNERED A
MAJORITY OF THE VALID VOTES CAST)
4.2 RUN-OFF ELECTION, REQUISITES (Dept. Order No. 9, Rule XIII):

a) Between three or more choices
b) There is a valid election ( FIRST MAJORITY RULE COMPLIED).
c) No choice receiving a majority of the valid votes cast (SECOND MAJORITY
RULE NOT COMPLIED);
d) The total number of votes for all contending unions is at least 50% of the
number of votes cast
e) Between the two labor unions receiving the two highest number of votes.
57
I. INTER-UNION AND INTRA-UNION DISPUTES

(DOLE Dept. Order No. 40-03, series of 2003)
1. WHAT ARE INTER OR INTRA-UNION DISPUTES: (sec 1&2)
(a) cancellation of registration of a labor organization filed by its members or

by another labor organization;
(b) conduct of election of union and workers’ association officers/nullification
of election of union and workers’ association officers;
(c) audit/accounts examination of union or workers’ association funds;
(d) deregistration of collective bargaining agreements;
(e) validity/invalidity of union affiliation or disaffiliation;
(f) validity/invalidity of acceptance/non-acceptance for union membership;
(g) validity/invalidity of impeachment/expulsion of union and workers
association officers and members;
(h) validity/invalidity of voluntary recognition;
(i) opposition to application for union and CBA registration;
(j) violations of or disagreements over any provision in a union or workers’
association constitution and by-laws;
(k) disagreements over chartering or registration of labor organizations and
collective bargaining agreements;
(l) violations of the rights and conditions of union or workers’ association
membership;
(m) violations of the rights of legitimate labor organizations, except
interpretation of collective bargaining agreements;
(n) such other disputes or conflicts involving the rights to self-organization,
union membership and collective bargaining –
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers’ association.
Other related labor relations disputes shall include any conflict between a labor union
and the employer or any individual, entity or group that is not a labor organization or
workers’ association. This includes: (1) cancellation of registration of unions and
workers associations; and (2) a petition for interpleader.
2. WHAT ARE THE EFFECTS OF PENDENCY OF INTER/INTRA-UNION DISPUTE?

(Sec 3)
2.1 PARTIES TO REMAIN STATUS QUO ANTE. -- “The rights, relationships and
obligations of the parties litigants against each other and other parties-in-interest
prior to the institution of the petition shall continue to remain during the
pendency of the petition and until the date of finality of the decision rendered
therein. Thereafter, the rights, relationships and obligations of the parties litigants
against each other and other parties-in-interest shall be governed by the decision so
ordered.
2.2 INTER/INTRA-UNION DISPUTE SHALL NOT BE CONSIDERED PREJUDICIAL

QUESTION. -- The filing or pendency of any inter/intra-union dispute and other related
labor relations dispute is not a prejudicial question to any petition for certification
election and shall not be a ground for the dismissal of a petition for certification election
or suspension of proceedings for certification election.
3. WHO MAY FILE INTER OR INTRA-UNION DISPUTE (Sec 4):

• Any legitimate labor organization or member(s) thereof specially concerned may file a
complaint or petition involving disputes or issues enumerated in (a) to (n) ofSection 1.
• Any party-in-interest may file a complaint or petition involving disputes or issues
regarding cancellation of registration of unions and workers associations; and/or a
petition for interpleader
• Where the issue involves the entire membership of the labor organization, the complaint
or petition shall be supported by at least thirty percent (30%) of its members.
57
4. WHERE TO FILE INTER/INTRA-UNION DISPUTES.
4.1 With Regional Office that issued the certificate of registration or certificate of
creation of chartered local, for the following complaints --
 Complaints or petitions involving labor unions with independent registrations,

chartered locals, workers’ associations, its officers or member
 Petitions for cancellation of registration of labor unions with independent
registration, chartered locals and workers association shall be resolved by the
Regional Director. He/She may appoint a Hearing Officer from the Labor
Division.
 Petitions for deregistration of collective bargaining agreements
 Other inter/intra-union disputes and related labor relations disputes shall be heard
and resolved by the Med-Arbiter in the Regional Office.
4.2 With Bureau of Labor Relations, for the following complaints --
• Complaints or petitioners involving federations, national or industry unions,

trade union centers and their chartered locals, affiliates or member
organizations, its officers or member organizations.
• Note, if filed with the Regional Office, the complaint/petition shall still be heard
and resolved by the Bureau.
5. IMPT.; NOT ASKED IN THE BAR SINCE 2012

DISAFFILIATION FROM MOTHER FEDERATION
5.1 What is the nature of the relationship between the legitimate labor
organization and the federation to which it is affiliated?
• Local chapter or legitimate labor org: Principal
• Mother federation: Agent
The Supreme Court explained the nature of the relationship between a mother
union/federation and a local union, thus:
“At this juncture, it is important to clarify the relationship between the

mother union and the local union. In the case of Liberty Cotton Mills
Workers Union v. Liberty Cotton Mills, Inc. (66 SCRa 512 [1975]),
the Court held that the mother union, acting for and in behalf of its
affiliate, had the status of an agent while the local union remained the
basic unit of the association, free to serve the common interest of
all its members subject only to the restraints imposed by the
constitution and by-laws of the association …
The same is true even if the local union is not a legitimate labor
organization. Conformably, in the above-cited case the court ruled that
the mother federation was a mere agent and the local chapter/union
was the principal, notwithstanding the failure of the local union to
comply with the procedural requirements that would make it a
legitimate labor organization.” (Filipino Pipe and Foundry Corp. Vs.
NLRC, G.R. No. 115180, November 16, 1999, citing
Progressive Development Corporation Vs. Secretary, Department of
Labor and Employment, G.R. No. 96425, 04 February 1992).
5.2 When can the local union disaffiliate from the mother federation?
General rule: A labor union may disaffiliate from the mother union to form a local or
independent union only during the 60-day freedom period immediately preceding the
expiration of the CBA.
57
Exception: Even before the onset of the freedom period (and despite the closed-
shop provision in the cba between the mother union and management) disaffiliation
may still be carried out, but such disaffiliation must be effected by a majority of
the members in the bargaining unit. This happens when there is a substantial shift in
allegiance on the part of the majority of the members of the union. In such a case,
however, the cba continues to bind the members of the new or disaffiliated and
independent union up to the CBA’s expiration date.”
5.3 What happens to existing CBAs in case of disaffilation?

Answer: Substitutionary doctrine will apply.
Substitutionary doctrine is a principle in labor law which states that even during the
effectivity of a collective bargaining agreement executed between the employer and
employees thru their agent, the employees can change said agent but the contract
continues to bind them up to its expiration date. They may bargain however for the
shortening of said expiration date. The principle applies to a situation when there
occurs a shift in employees’ union allegiance after the execution of a collective
bargaining contract. (Benguet Consolidated, Inc. vs. BCI Employees & Workers Union,
23 SCRA 471 [1968]; Cited In Philippine Law Dictionary By Moreno, 2nd Edition.)
5.4 J. Martires. Ergonomic Systems Philippines, Inc. v. Enaje, G.R. No. 195163,
[December 13, 2017]) -
Facts: Respondents were union officers and members of Ergonomic System

Employees Union-Workers Alliance Trade Unions (local union), affiliated with TUCP
Federation. The local union entered into a CBA with Company, with a 5-year
representation term. Before the CBA expired, the union officers secured the
independent registration of the local union from the DOLE. As such, the Federation
charged the union officers initiating and conspiring in the disaffiliation before the freedom
period, and expelled them from Federation.
Federation furnished Company with the expulsion decision and demanded their
termination on account of the union-security clause. Company notified union officers of
the Federation's demand and gave them 48 hours to explain. Except three union officers,
the rest of the officers refused to receive the notices. Thereafter, Company terminated
them, which notice of termination they refused to receive.
Company submitted to the DOLE a list of the dismissed employees. On the same day,
the local union filed a notice of strike with the NCMB. For three days, the local union
staged a series of noise barrage and "slow down" activities. Several groups of union
members either refused to submit Daily Production Reprots; or abandoned their work
and held a picket line outside the company premises; or went AWOL. All who
participated in these activities were thus terminated after due process.Hence, this
complaint for illegal dismissal and unfair labor practice against Company and its officers.
Issues: Whether Federation may invoke union security clause in demanding for
dismissal of the union officers.
Whether the strike was valid; and whether termination was valid.
Supreme Court: Federation cannot use the union security clause to terminate the union
officers. Disaffilation does not divest local union of its personality. Strike is illegal for
non-compliance with strike vote. Union officers validly dismissed but union members
may not be dismissed.
Rationale:
1. Only the local union may invoke the union security clause in the CBA.|
Before an employer terminates an employee pursuant to the union security clause, it
needs to determine and prove that: (1) the union security clause is applicable; (2) the
union is requesting the enforcement of the union security provision in the CBA; and
(3) there is sufficient evidence to support the decision of the union to expel the
employee from the union.
57
In this case, the primordial requisite, i.e., the union is requesting the enforcement of
the union security provision in the CBA, is clearly lacking.
Under the Labor Code, a chartered local union acquires legal personality through the
charter certificate issued by a duly registered federation or national union and
reported to the Regional Office.
BUT the local union does not owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary association owing its creation to the
will of its members. Mere affiliation does not divest the local union of its own
personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where
the former acts in representation of the latter. Hence, local unions are considered
principals while the federation is deemed to be merely their agent.
2. The strike is deemed illegal for failure to take a strike vote and to submit a report
thereon to the NCMB.
In the determination of the consequences of illegal strikes, the law makes a
distinction between union members and union officers. The services of an
ordinary union member cannot be terminated for mere participation in an
illegal strike; proof must be adduced showing that he or she committed illegal acts
during the strike. A union officer, on the other hand, may be dismissed, not
only when he actually commits an illegal act during a strike, but also if he
knowingly participates in an illegal strike.
In the present case, respondents-union officers stand to be dismissed as they
conducted a strike despite knowledge that a strike vote had not yet been approved
by majority of the union and the corresponding strike vote report had not been
submitted to the NCMB.
With respect to respondents-union members, the petitioners merely alleged that
they committed illegal acts during the strike such as obstruction of ingress to and
egress from the premises of ESPI and execution of acts of violence and intimidation.
There is, however, a dearth of evidence to prove such claims. Hence, there is no
basis to dismiss respondents-union members from employment on the ground that
they committed illegal acts during the strike. |(J. Martires, Ergonomic Systems
Philippines, Inc. v. Enaje, G.R. No. 195163, [December 13, 2017])
J. COLLECTIVE BARGAINING: NEGOTATIONS

AND AGREEMENT
1. DUTY TO BARGAIN COLLECTIVELY:
Labor Code, Article 263. Meaning of duty to bargain collectively. -- The duty to bargain
collectively means the performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement
with respect to wages, hours of work and all other terms and conditions of employment
including proposals for adjusting any grievance or question arising under such agreement
and executing a contract incorporating such agreements if requested by either party, but
such duty does not compel any party to agree to a proposal or to make any concession.
” (Underscoring supplied.)
Labor Code. Art. 264. Duty to bargain collectively when there exists a collective
bargaining agreement. — When there is a collective bargaining agreement, the duty to
bargain collectively shall also mean that neither party shall terminate or modify the
agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both
parties to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a new
agreement is reached by the parties. ”
57
2. DUTY TO BARGAIN collectively does NOT compel any party to agree to any
proposal nor to make any concession by virtue thereof (Article 253, Labor Code), nor
are the parties obliged to reach an agreement. (Union of Filipro Employees vs. Nestle
Philippines, G.R. Nos. 158930-31, 03 March 2008).
2.1 Employer is not under obligation to bargain unless the Union shall have been
certified as the exclusive bargaining agent in a certification election duly
called for such purpose, and that the latter shall have forwarded to the
employer its bargaining demands.
2.2 When there is a collective bargaining agreement, the duty to bargain collectively
shall also mean that neither party shall terminate or modify such agreement
during its lifetime, EXCEPT during the freedom period of at least sixty (60)
days prior to the expiration day (“freedom period”).
2.3 Note AUTOMATIC RENEWAL CLAUSE as regards expired CBA. Under this
clause, the terms and conditions of the existing CBA shall continue to be in full force
and effect during the sixty-day freedom period (Union of Filipro Ees. vs. NLRC, 192 SCRA
414) , or until a new CBA is reached. Thus, despite the lapse of the effectivity of the
old CBA, the law considers the same as continuing in full force and effect until a
new CBA is negotiated and entered into. (Lopez Sugar Corporation vs. FFW, G.R. Nos.
75700-01, 30 Aug. 1990).
2.4 Mandatory provisions which must be included in the negotiations; otherwise, the
CBA will not be registered: (a) no strike-no lockout clause; (b) grievance
machinery. Note further that minimum standards must likewise be complied with;
otherwise, the DOLE will not allow its registration.
3. TWO KINDS OF BARGAINING:
3.1 SINGLE ENTERPRISE BARGAINING. – One where any voluntarily recognized or

certified labor union may demand negotiations with its employer for terms and
conditions of work covering employees in the bargaining unit concerned.
3.2 MULTIPLE EMPLOYER BARGAINING. – One where a legitimate labor union(s)

and employers may agree in writing to come together for the purpose of collective
bargaining, provided:
(a) only legitimate labor unions who are incumbent exclusive bargaining
agents may participate and negotiate in multi-employer bargaining;
(b) only employers with counterpart legitimate labor unions who are
incumbent bargaining agents may participate and negotiate in multi-
employer bargaining; and
(c) only those legitimate labor unions who pertain to employer units who
consent to multi-employer bargaining may participate in multi-
employer bargaining.
3.3 VERY IMPORTANT 2016 CASE: WORK-POOLING SCHEME;

MULTI-EMPLOYER BARGAINING. - NEVER BEEN ASKED IN THE BAR!!!
Erson Ang Lee doing business as “Super Lamination Services”, vs.

Samahang Manggagawa ng Super Lamination (SMSLS-NAFLU-KMU), G.R.
No. 193816, 21 November 2016. - Under the doctrine of piercing the
corporate veil, the three companies can be treated as one and the rank-
and-file employees of the three companies will constitute the appropriate
bargaining unit for purposes of holding a certification election.
Facts:
Super Lamination is principally engaged in the business of providing lamination
services to the general public. It appears that Super Lamination is a sole
proprietorship, while Express Lamination and Express Coat are duly incorporated
entities separately registered with the Securities and Exchange Commission (SEC).
57
Respondent Samahan ng mga Manggagawa ng Super Lamination Services (Union

A) is a legitimate labor organization, which is also a local chapter affiliate of the
National Federation of Labor Unions – Kilusang Mayo Uno.
On 7 March 2008, Union A filed a Petition for Certification Election to represent all the
rank-and-file employees of Super Lamination.
Notably, on the same date, Express Lamination Workers’ Union (Union B) also filed
a Petition for Certification Election to represent all the rank-and-file employees of
Express Lamination.
Also on the same date, the Samahan ng Manggagawa ng Express Coat Enterprises,
Inc. (Union C) filed a Petition for Certification Election to represent the rank-and- file
employees of Express Coat.
All three petitions were dismissed by DOLE NCR Med-Arbiters on the ground of lack
of employer-employee relationship between these establishments and the bargaining
units that Unions A, B and C seek to represent.
The three unions filed their respective appeals before the Office of the DOLE
Secretary which rendered a Decision reversing and setting aside the ruling of the
Med-Arbiters, and directing the immediate conduct of certification election among the
rank-and-file employees of Express Lamination Services, Inc., Super Lamination
Services and Express Coat Enterprises, Inc., with A,B, C Unions and No Union as
choices.
DOLE found that Super Lamination, Express Lamination and Express Coat were
sister companies that had a common human resource department responsible for
hiring and disciplining the employees of the three companies.
The same department was found to have also given them daily instruction on how to
go about their work and where to report for work. It also found that the three
companies involved constantly rotated their workers, and that the latter’s identification
cards had only one signatory.
To DOLE, these circumstance showed that the companies were engaged in a work-
pooling scheme, in light of which they might be considered as one and the same entity
for the purpose of determining the appropriate bargaining unit in a certification
election.
DOLE applied the concept of multi-employer bargaining under Sections 5 and 6 of

DOLE Department Order 40-03, Series of 2003. Under that concept, the creation of
a single bargaining unit for the rank-and-file employees of all three companies was
not implausible and was justified under the given circumstance. Thus, it considered
these rank-and-file employees as one bargaining unit and ordered the conduct of a
certification election as uniformly prayed for by the three unions.
Issue:
May all three companies be considered as a single bargaining unit for all its
employees, under multiple-employer bargaining?
Supreme Court: YES. The application of the doctrine of piercing the corporate
veil is warranted.
Rationale:
This Court has time and again disregarded separate juridical personalities under the
doctrine of piercing the corporate veil. It has done so in cases where a separate legal
entity is used to defeat public convenience, justify wrong, protect fraud, or defend
57
crime, among other grounds. In any of these situations, the law will regard it as an
association of persons or, in case of two corporations, merge them into one (Villanueva
vs. Lorenzon, G.R. No. 179640, 18 March 2015; Times Transportation Co. Inc. vs. Sotelo,
491 Phil. 756 [2005]).
A settled formulation of the doctrine of piercing the corporate veil is that when two
business enterprises are owned, conducted, and controlled by the same parties, both
law and equity will, when necessary to protect the rights of third parties, disregard the
legal fiction that these two entities are distinct and treat them as identical or as one
and the same (Prince Transport, Inc. vs. Garcia, 654 Phil. 296 [2011]).
The established facts show that Super Lamination, Express Lamination, and Express
Coat are under the control and management of the same party - petitioner Ang Lee.
In effect, the employees of these three companies have petitioner as their common
employer. Therefore, in order to safeguard the right of the workers and Unions A, B,
and C to engage in collective bargaining, the corporate veil of Express Lamination
and Express Coat must be pierced. The separate existence of Super Lamination,
Express Lamination, and Express Coat must be disregarded. In effect, we affirm the
lower tribunals in ruling that these companies must be treated as one and the same
unit for purposes of holding a certification election.
4. UNION SECURITY CLAUSES. -- applied to and comprehends "closed shop," "union

shop," "maintenance of membership," or any other form of agreement which imposes
upon employees the obligation to acquire or retain union membership as a condition
affecting employment. (PICOP Resources, Inc. (PRI) vs. Anacleto L. Taneca et. al., G.R. No.
160828, 09 August 2010).
4.1 General rule on coverage of union security clause:
All employees in the bargaining unit covered by a Union Shop Clause in their CBA
with management are subject to its terms.
Exception: However, under law and jurisprudence, the following kinds of

employees are exempted from its coverage, namely:
a) employees who at the time the union shop agreement takes effect are bona
fide members of a religious organization which prohibits its members from
joining labor unions on religious grounds (Elizalde Rope Workers case);
b) employees already in the service and already members of a union other than
the majority at the time the union shop agreement took effect (Art. 248 [e]);
c) confidential employees who are excluded from the rank and file bargaining
unit; and
d) employees excluded from the union shop by express terms of the agreement.
(Bank of the Philippine Islands vs. BPI Employees Union - Davao Chapter - Federation
of Unions in BPI Unibank, G.R. No. 164301, 10 August 2010; En Banc.).
4.2 Kinds of union security clauses:
o Closed Shop. - A form of union security whereby only union members can be
hired and the workers must remain union members as a condition of continued
employment. (Juat vs. Court of Industrial Relations, 122 Phil. 794, cited in
Philippine Law Dictionary by Moreno, 2nd Edition.) It is one where no person
maybe employed in any or certain agreed departments of the enterprise unless
57
2023 HERNANDO BAR LABOR LAW BAR PRE-WEEK HAND-OUTS
FOR ADAMSON LYCEUM FEU BAR OPERATIONS
he or she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of which the
employees in interest are a part. (PICOP Resources, Inc. (PRI) vs. Anacleto
L. Taneca et. al., G.R. No. 160828, 09 August 2010).
o Union Shop. — There is union shop where an employer may hire new
employees, but once they become regular employees, they are required
to join the union within a certain period as a condition for their
continued employment. (PICOP Resources, Inc. (PRI) vs. Anacleto L. Taneca
et. al., G.R. No. 160828, 09 August 2010).
o Modified Union Shop Agreement. -- A union shop agreement with a provision

exempting certain employee groups from its operation, such asold
employees already with the company at a designated date, key personnel,
persons with religious scruples in joining labor unions. (Ibid.)
o Maintenance of membership shop. -- There is maintenance of membership

shop when employees, who are union members as of the effective date of
the agreement, or who thereafter become members, must maintain
union membership as a condition for continued employment until they are
promoted or transferred out of the bargaining unit, or the agreement is
terminated.
(PICOP Resources, Inc. (PRI) vs. Anacleto L. Taneca et. al., G.R. No. 160828,
09 August 2010; see also: Bank of Philippine Islands vs. BPI Employees Union
– Davao Chapter – Federation of Unions in BPI Unibank, G.R, No. 164301, 10
August 2010, En Banc.)
o Open shop -- An arrangement on recruitment whereby an employer may hire

any employee, union member or not, but the new employee must join the union
within a specified time and remain a member in good standing.
(LABSTAT Updates of the Department of Labor and Employment, Vol. 1 No.
12, August 1997).
o Agency shop -- An arrangement whereby non-members of the contracting

union must pay the union a sum equal to union dues known as agency fees
for the benefits they received as a consequence of the bargaining
negotiations effected through the efforts of the union. (LABSTAT Updates of
the Department of Labor and Employment, Vol. 1 No. 12, August 1997).
4.3 J. Martires. Ergonomic Systems Philippines, Inc. v. Enaje, G.R. No. 195163,
[December 13, 2017]) - Even assuming that the union officers were disloyal to the
Federation and committed acts inimical to its interest, such circumstance did not give
the Federation the prerogative to demand the union officers' dismissal pursuant
to the union security clause which, in the first place, only the union may rightfully
invoke. Certainly, it does not give the Federation the privilege to act independently
of the local union.
At most, what the Federation could do is to refuse to recognize the local union as its
affiliate and revoke the charter certificate it issued to the latter. In fact, even if the local
union itself disaffiliated from the Federation, the latter still has no right to demand the
dismissal from employment of the union officers and members because concomitant to
the union's prerogative to affiliate with a federation is its right to disaffiliate therefrom
which the Court explained in Philippine Skylanders, Inc. v. NLRC, viz.:
The right of a local union to disaffiliate from its mother federation is not a novel
thesis unillumined by case law. In the landmark case of Liberty Cotton Mills
Workers Union vs. Liberty Cotton Mills, Inc., we upheld the right of local unions to
separate from their mother federation on the ground that as separate and voluntary
associations, local unions do not owe their creation and existence to the national
federation to which they are affiliated but, instead, to the will of their members. The
sole essence of affiliation is to increase, by collective action, the common
60
bargaining power of local unions for the effective enhancement and protection of
their interests. Admittedly, there are times when without succor and support local
unions may find it hard, unaided by other support groups, to secure justice for
themselves.
Yet the local unions remain the basic units of association, free to serve their own
interests subject to the restraints imposed by the constitution and bylaws of the
national federation, and free also to renounce the affiliation upon the terms laid
down in the agreement which brought such affiliation into existence.
In sum, the Federation could not demand the dismissal from employment of the union
officers on the basis of the union security clause found in the CBA between ESPI and
the local union. (Ergonomic Systems Philippines, Inc. v. Enaje, G.R. No. 195163,
[December 13, 2017])
5. CHECK-OFF OF UNION DUES, SPECIAL

ASSESSMENTS AND AGENCY FEES:
5.1. Union dues defined: Union dues are regular monthly contributions imposed by
the Union upon their members, and form part of the union funds used to finance
union activities and as seed money for services and/or benefits extended by said
Union to them.
Article. 2 7 7, Labor Code. Miscellaneous provisions. - (a ) All unions are

authorized to collect reasonable membership fees, union dues, assessments
and fines and other contributions for labor education and research, mutual
death and hospitalization benefits, welfare fund, strike fund and credit and
cooperative undertakings. (As amended by Section 3 3 , Republic Act No. 6 7 1 5 ,
March 21, 1989).
5.1.1 Requisites for validity of union dues and/or special assessment.

(ABS- CBN Supervisors Employees Union Members vs. ABS-CBN
Broadcasting Corp., 304 SCRA 489 [1999]).
a) authorization by a written resolution of the majority of all the members
at the general membership meeting duly called for the purpose;
b) secretary’s record of the minutes of the meeting; and
c) individual written authorization for check-off duly signed by the
employee concerned.
5.1.2 Question: What if the Union’s Board of Directors passed a resolution

for deduction of union dues, and ratified by the members? Can
Management already check-off the union dues?
Answer: NO. A mere board resolution of the directors, and not by the majority
of all the members of the labor organization, is not sufficient to allow deductions
from the employees’ salary. (Stellar Industrial Services, Inc. vs. NLRC, 252
SCRA 323 [1996].) A written individual authorization duly signed by the
employee is also a condition sine qua non for such deduction. (ibid.)
5.2. Agency fees defined: The collection of agency fees in an amount equivalent
to union dues and fees, from employees who are not union members, is
recognized by Article 248 (e) of the Labor Code, thus:
Employees of an appropriate collective bargaining unit who are not
members of the recognized collective bargaining agent may be
assessed reasonable fees equivalent to the dues and other fees paid
by the recognized collective bargaining agent, if such non- union
members accept the benefits under the collective bargaining agreement.
Provided, That the individual authorization required under Article 241,
paragraph (o) of this Code shall not apply to the non-members of
recognized collective bargaining agent.
60
5.2.1 Requisites for assessment of Agency fee: (Art. 259[e], Labor Code).
a) The employee is part of the bargaining unit;
b) He is not a member of the union; and
c) He partook of the benefits of the CBA.
5.2.2 Individual written authorization is not necessary for the collection of agency
fees. This is to avoid free-riders who will unjustly enrich themselves by the
acceptance of benefits negotiated by the bargaining agent.
5.3. Lakas ng Manggagawa sa Everbright-Solidarity of Unions in the Philippines for

Empowerment and Reforms Federation v. Everbright Net and Twine
Manufacturing Corp., G.R. No. 244751 (Notice), [July 10, 2019]) -- The Court of
Appeals (CA) correctly held that foremen are not rank-and-file employees because
they perform supervisory functions. As such, they are ineligible to join a labor
organization of rank-and-file employees. Petitioner cannot, therefore, demand from
the respondent to check off agency fees from the foremen.
J. Perlas-Bernabe, Peninsula Employees Union v. Esquivel, G.R. No. 218454,

[December 1, 2016], 801 PHIL 667-679) -- PEU's Board of Directors passed a
resolution authorizing (a) the affiliation of PEU with NUWHRAIN, and the direct
membership of its individual members thereto; (b) the compliance with all the
requirements therefor; and (c) the Local President to sign the affiliation agreement
with NUWHRAIN upon acceptance of such affiliation. On the same day, the said
act was submitted to the general membership, and was duly ratified by 223 PEU
members.
Thereafter, PEU-NUWHRAIN sought to increase the union dues/agency fees from

one percent (1%) to two percent (2%) of the rank and file employees' monthly
salaries, brought about by PEU's affiliation with NUWHRAIN, which supposedly
requires its affiliates to remit to it two percent (2%) of their monthly salaries.
The non-PEU members objected to the assessment of

increased agency fees arguing that: (a) the new CBA is unenforceable since no
written CBA has been formally signed and executed by PEU-NUWHRAIN and the
Hotel; (b) the 2% agency fee is exorbitant and unreasonable; and (c) PEU-
NUWHRAIN failed to comply with the mandatory requirements for such increase.
Issue: Whether or not Union PEU-NUWHRAIN is entitled to collect

increased agency fees from the non-PEU members.
Supreme Court: Yes, but cannot increase to 2% for failure to comply with
documentary requirements showing that the increase in union dues (as
counterpart for agency fees) was duly approved by its general
membership.
Rationale: The recognized collective bargaining union which successfully

negotiated the CBA with the employer is given the right to collect a reasonable fee
called "agency fee" from non-union members who are employees of the appropriate
bargaining unit, in an amount equivalent to the dues and other fees paid by union
members, in case they accept the benefits under the CBA.
While the collection of agency fees is recognized by Article 259 43 (formerly Article
248) of the Labor Code, as amended, the legal basis of the union's right to
agency fees is neither contractual nor statutory, but quasi-contractual,
deriving from the established principle that non-union employees may not
unjustly enrich themselves by benefiting from employment conditions
negotiated by the bargaining union.
60
In the present case, PEU-NUWHRAIN's right to collect agency fees is not disputed.
However, the rate of agency fees it seeks to collect from the non-PEU
members is contested, considering its failure to comply with the
requirements for a valid increase of union dues, rendering the collection of
increased agency fees unjustified.
Case law interpreting Article 250 (n) and (o) 45 (formerly Article 241) of the Labor
Code, as amended, mandates the submission of three (3) documentary requisites
in order to justify a valid levy of increased union dues. These are:
(a) an authorization by a written resolution of the majority of all the
members at the general membership meeting duly called for the
purpose;
(b) the secretary's record of the minutes of the meeting, which shall
include the list of all members present, the votes cast, the purpose of
the special assessment or fees and the recipient of such assessment
or fees; and
(c) individual written authorizations for check-off duly signed by the
employees concerned.
In the present case, however, PEU-NUWHRAIN failed to show compliance with the
foregoing requirements. It attempted to remedy the "inadvertent omission" of the
matter of the approval of the deduction of two percent (2%) union dues from the
monthly basic salary of each union member through the July 1, 2010 General
Membership Resolution.
While the matter of implementing the two percent (2%) union dues was taken up
during the PEU-NUWHRAIN's 8th General Membership Meeting on October 28,
2008, there was no sufficient showing that the same had been duly deliberated and
approved. Having failed to establish due deliberation and approval of the
increase in union dues from one percent (1%) to two percent (2%), as well as
the deduction of the two percent (2%) union dues during PEU-NUWHRAIN's
8th General Membership Meeting on October 28, 2008, there was nothing to
confirm, affirm, or ratify through the July 1, 2010 GMR. Contrary to the ruling of
the OSEC in its March 6, 2012 Order, the July 1, 2010 GMR, by itself, cannot
justify the collection of two percent (2%) agency fees from the non-PEU
members beginning July 2010. The Assembly was not called for the purpose of
approving the proposed increase in union dues and the corresponding check-off,
but merely to "confirm and affirm" a purported prior action which PEU-NUWHRAIN,
however, failed to establish.
Corollarily, no individual check-off authorizations can proceed therefrom, and the

submission of the November 2008 check-off authorization becomes
inconsequential. Jurisprudence states that the express consent of the employee to
any deduction in his compensation is required to be obtained in accordance with
the steps outlined by the law, which must be followed to the letter; 57 however,
PEU-NUWHRAIN failed to comply. Thus, the CA correctly ruled that there is no
legal basis to impose union dues and agency fees more than that allowed in
the expired CBA, i.e., at one percent (1%) of the employee's monthly basic
salary. (J. Perlas-Bernabe, Peninsula Employees Union v. Esquivel, G.R. No.
218454, [December 1, 2016], 801 PHIL 667-679).|
K. UNFAIR LABOR PRACTICES||
1. Concept of ULP:
Unfair labor practices violate the constitutional right of workers and employees to self-
organization, are inimical to the legitimate interests of both labor and management, including
their right to bargain collectively and otherwise deal with each other in an atmosphere of
freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy
and stable labor-management relations.
60
2. ULP IN COLLECTIVE BARGAINING:
2.1 Bargaining in bad faith.

• Individual bargaining – employer bypasses the majority union, and deals with the
individual members of the appropriate bargaining unit directly.
• Surface bargaining. – bargaining with empty gestures and without earnest efforts to
enter into a CBA.
2.2 Refusal to bargain. -- The employer, by its refusal to bargain, is guilty of violating the
duty to bargain collectively in good faith. Hence, the Union’s draft CBA proposal may
unilaterally be imposed upon the employer as the collective bargaining
agreement to govern their relationship. (Divine World vs. Secretary of Labor, 213 SCRA 759
[1992].)
2.3 ARE ALL VIOLATIONS OF THE CBA TANTAMOUNT TO UNFAIR LABOR

PRACTICE?
Answer: NO! Violations of a CBA, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as grievances under
the CBA. Gross violations of the CBA shall mean “flagrant and/or malicious refusal to
comply with the economic provisions of the agreement (Art. 260, LC).” (MEMORIZE
THIS!)
3. UNFAIR LABOR PRACTICES OF EMPLOYERS (Article 259, Labor Code)
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-
organization;
(b) To require as a condition of employment that a person or an employee shall not join a
labor organization or shall withdraw from one to which he belongs (yellow dog
stipulations);
(c) To contract out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their right to self-
organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of
any labor organization, including the giving of financial or other support to it or its
organizers or supporters;
(e) To discriminate in regard to wages, hours of work and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization.
Except: Union security clauses
Exception to exception: Will not apply to those employees who are already members of
another union at the time of the signing of the collective bargaining agreement.
(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for
having given or being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney's fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
3.1 Refusal to bargain collectively as ULP. –
After the freedom period, there being no petition for certification filed to challenge the
majority status of the incumbent union, the latter remains to be the exclusive bargaining
agent of the R & F employees of the company. Refusal of company to bargain under
these circumstances is tantamount to ULP. -- Ren Transport Corp., et al. vs. NLRC,
Samahang Manggagawa sa Ren Transport (SMART) – ADLO, etc., GR. Nos. 188020 and
188252, 27 June 2016.
60
3.2 Redundancy program versus ULP on account of union busting. – J. Delos Santos,
Aboitiz Power Renewables, Inc. v. Aboitiz Power Renewables, Inc., G.R. No.
237036, [July 8, 2020].
Company announced redundancy program on account of dwindling demand for steam

power generated by Tiwi Geothermal Plant. Affected employees were given separation
pay as well as all monetary claims, plus P400,000.00 each as one-time special assistant
package. Despite acceptance of the money, complainants filed these cases alleging that
the Company has not shown that it was overmanned and failed to show proof on the
decline on steam production that justified its redundancy program; and that it failed to
show the criteria used to determine which employees will be removed due to redundancy
in their positions. Lastly, they alleged that their removal was equivalent to union busting
and unfair labor practice since it came amidst the negotiations between their respective
unions and APRI.
Issue: Whether or not this was a valid redundancy, or ULP in the form of union busting.
Decision: Valid redundancy; NOT union busting.
As regards the claim of unfair labor practice in the form of union busting, this Court finds
that the record of this case is bereft of any substantial evidence to support the charge
against APRI.
Unfair labor practice refers to acts that violate the workers' right to organize. There
should be no dispute that all the prohibited acts constituting unfair labor practice in
essence relate to the workers' right to self-organization. Thus, an employer may only
be held liable for unfair labor practice if it can be shown that his acts affect in
whatever manner the right of his employees to self-organize. To prove the
existence of unfair labor practice, substantial evidence has to be presented.
Petitioners' assertion that APRI's redundancy program was meant to interfere with or
frustrate petitioners' union activities and negotiation of CBA was a bare conclusion and
unsupported by sufficient proof.
In sum, this Court finds that the rulings of the LA, the NLRC, and the CA were predicated
on the evidence on record and prevailing jurisprudence. We also found no compelling
reason to depart from the general rule that the unanimous findings of these three
tribunals are binding upon this Court. ||| (Aboitiz Power Renewables, Inc. v. Aboitiz
Power Renewables, Inc., G.R. No. 237036, [July 8, 2020])
4. UNFAIR LABOR PRACTICES OF UNIONS. (Article 260, Labor Code)
(a) To restrain or coerce employees in the exercise of their right to self-organization.

However, a labor organization shall have the right to prescribe its own rules with respect
to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee, including
discrimination against an employee with respect to whom membership in such
organization has been denied or to terminate an employee on any ground other than the
usual terms and conditions under which membership or continuation of membership is
made available to other members;
(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the
representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver
any money or other things of value, in the nature of an exaction, for services which are
not performed or not to be performed, including the demand for fee for union
negotiations;
(e) To ask for or accept negotiation or attorney's fees from employers as part of the
settlement of any issue in collective bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
60
4.1 Unfair labor practices for a labor organization; Case is under jurisdiction of labor
arbiter, and not bureau of labor relations as this is not an intra-union or inter-
union controversy – J. Del Castillo, Allan M. Mendoza vs. Officers of Manila Water
Employees Union (MWEU), etc., G.R. No. 201595, 25 January 2016
Facts: Mendoza, a rank-and-file union member of MWEU, did not pay his union dues
because of his stand that there was no observance of the proper procedure in the
increase membership fees from Php 100.00 to Php 200.00 per month. As such,
Mendoza was suspended 30 days by the Executive Board of the Union. He indicated
his intention to appeal to the General Membership Assembly but was told that the
prescribed period for appeal had expired.
Subsequently, for his continuing failure to pay union dues, he was again suspended for
another 30 days. He filed his appeal within the reglementary period but the same was
ignored by the Union.
Meanwhile, MWEU scheduled an election of officers. Mendoza filed his certificate of

candidacy for Vice President but he was disqualified for not being a member in good
standing on account of his suspension. Thereafter, Mendoza was charged with non-
payment of union dues for the third time. He did not attend the hearing. This time, he
was meted the penalty of expulsion from the union, per “unanimous approval” of the
Executive Board. His appeal to the General Membership Assembly was again
unheeded.
During the freedom period and negotiation for a new CBA with Manila Water, Mendoza
joined another union, the WATER-AFWC. He was elected President. He then filed a
Complaint against MWEU and its officers for ULP, damages, attorney’s fees, accusing
them of illegal termination from MWEU in connection with his non-payment of union
dues, coercion and interference in right to self-org.
Issue: Is this a case of intra-union controversy, which would fall within the jurisdiction
of the Bureau of Labor Relations, or is this a case for ULP of a labor organization?
Decision: This is ULP of an organization.
In essence, ULP relates to the commission of acts that transgress the workers’ right to
organize. All the prohibited acts constituting ULP in essence relate to the workers’ right
to self-organization. The term unfair labor practice refers to the gamut of offenses
defined in the Labor Code which, at their core, violates the fundamental right of workers
and employees to self-organization.
Article 260(a) makes it an unfair labor practice for a labor organization to “restrain or
coerce employees in the exercise of their rights to self-organization. As members of
the governing board of the MWEU, they are presumed to know, observe, and apply the
union’s constitution and by-laws.
Thus, their repeated violations thereof and their disregard of Mendoza’s rights as a union
member – their inaction on his two appeals which resulted in his suspension,
disqualification from running as MWEU Officer, and subsequent expulsion without being
accorded the full benefits of due process – connote willfulness and bad faith, a gross
disregard of his rights thus causing untold suffering, oppression and, ultimately,
ostracism from MWEU; thus entitling Mendoza to an award for moral and exemplary
damages plus attorney’s fees.
60
4.2 Labor-only contracting as form of ULP: core element required (ALREADY ASKED IN
2019 BAR) – J. Perlas-Bernabe, Cagayan Electric Power & Light Company, Inc.
(CEPALCO), et al. vs. Cepalco Employee’s Labor Union-ALU-TUCP, G.R. Nos.
211015 & 213835, 20 June 2016.
Under Article 259 of the Labor Code, labor-only contracting is considered as a form of
ULP when the same is devised by the employer to “interfere with, restrain or coerce
employees in the exercise of their rights to self-organization.” All the prohibited acts
constituting ULP in essence relate to the workers right to self-organization. Without
that element, the acts, even if unfair, are not ULP.
The SC found that Cepalco’s labor-only contracting agreements with Cesco did not
amount to ULP. This is because the Union was not able to present any evidence to
show that such arrangements violated the workers right to self-organization which
constitutes the core of ULP.
4.3 Burden of proof is upon the party who alleges any of the acts of ULP. -- Philippine
Hoteliers, Inc. v. Joven, G.R. No. 195479 (Notice), [February 4, 2019])
ULP relate to the workers' right to self-organization and to the observance of a CBA. It
refers to "acts that violate the workers' right to organize." Without that element, the acts,
even if unfair, are not ULP. Thus, an employer may only be held liable for unfair labor
practice if it can be shown that his acts affect in whatever manner the right of his
employees to self-organize.
In order to show that the employer committed ULP under the Labor Code, substantial
evidence is required to support the claim. Such principle finds justification in the fact
that ULP is punishable with both civil and/or criminal sanctions. In this, the NLRC
erroneously pronounced that the quantum of evidence required to prove ULP is proof
beyond reasonable doubt. Invariably, substantial evidence is still the quantum of
evidence required to establish a fact in unfair labor cases brought before the NLRC.
Indeed, both the CA and the Labor Arbiter correctly applied substantial evidence or that
amount of evidence as a reasonable mind might accept as adequate to support a
conclusion, as the proper quantum of evidence to establish ULP. (Philippine Hoteliers,
Inc. v. Joven, G.R. No. 195479 (Notice), [February 4, 2019])
4.4 May a case for ULP on account of refusal to bargain, be rendered moot by the
voluntary dissolution of the union itself during the pendency of the appeal? -- J.
Lazaro-Javier, New World International Development (Phil.), Inc. v. New World
Renaissance Hotel Labor Union, G.R. No. 197889, [July 28, 2021])
YES. A case becomes moot when it ceases to present a justiciable controversy such that
its adjudication would not yield any practical value or use. It can no longer grant any relief
or enforce any right, and anything it says on the matter will have no practical use or value.
Indeed, the power of the Court to adjudicate is limited to actual ongoing controversies.
Here, the dissolution of respondent union by its own members is a supervening event
which rendered the case moot. This is a matter which appellate courts can take judicial
notice of even though the same is raised for the first time on appeal. For such dissolution
deprives these courts of judicial authority to resolve the case, there being no longer any
actual case or controversy since one of the parties, a real party in interest, has ceased to
be. (New World International Development (Phil.), Inc. v. New World Renaissance Hotel
Labor Union, G.R. No. 197889, [July 28, 2021])
60
L. STRIKES, PICKETING AND LOCK-OUTS
1. Who may declare a strike or lock-out? (B5,R13, S2, IRR)
General Rule: Any certified or duly recognized bargaining representative may declare a
strike in cases of bargaining deadlocks or ULP.
Exception: In the absence of a certfiedor duly recognized bargaining representative, any

legitimate labor organization may declare a strike, BUT ONLY ON THE GROUND OF
ULP.
2. Requisites of a valid strike: (a) Must have a lawful purpose; (b) conducted
through lawful means; and (c) must be in compliance with the procedural
requirements under the Labor Code
2.1 Lawful purpose
(a) Economic strike - is intended to force wage and other concessions from the
employer which is not required by law to grant. Usually, the consequence of a
deadlock in collective bargaining negotiations; and
(b) ULP strike - is called against the unfair labor practices of the employer, usually
for the purpose of making him desist from further committing such practices.
Note 1 - Examples of ULP under Articles 248-249, LC: (1) interference,

restraint or coercion of the employees in their exercise of right to self-
organization; (2) yellow-dog contracts, e.g., stipulation requiring employee
not to join unions, or for employee to withdraw from union as condition for
continued employment; (3) refusal to collectively bargain; (4) economic
inducement and/or discrimination in regard to wages, hours of work, in
order to encourage/discourage union membership; (5) contracting out of
services/functions being performed by union members, where such will
interfere in the exercise of right to self-org., among others.
Note 2 - All other forms of strikes, viz.: lightning strike, sit-down strike;
sympathetic strike, slowdown strike; wildcat strike; intermittent strike, are
all prohibited for lack of valid purpose or failure to comply with procedural
requirements (discussion below).
Note 3 - An economic strike may be converted into a ULP strike, when the
employer unjustifiably dismisses the officers of the union during a strike
due to deadlock in collective bargaining negotiations.
Note 4 - What are non-strikeable issues? Article 263 (b); Dept. Order
No. 9, Rule 12, Sec. 2
(a) Violations of CBA which are not gross in character shall be resolved
via the Grievance Machinery;
(b) Inter-union or intra-union disputes;
(c) Labor standards cases such as wage orders (Guidelines governing
Labor Relations [19 Oct. 1987] issued by Sec. Drilon; See: Appendix
“Y” of Foz’s Labor Code; See also: Article 261, LC)
(d) Those issues which had already been brought to voluntary or
compulsory arbitration
60
2.2 Lawful means
2.2.1 Article 279 (b) and (e), Labor Code; as amended Dept. Order No. 9, Rule
22, Sec. 12, pars. 1 and 2
“(b) No person shall obstruct, impede or interfere with by force, violence, coercion,
threats or intimidation any peaceful picketing by employees during any labor
controversy, or in the exercise of the right of self-orgn., or collective bargaining,
or shall aid or abet such destruction or interference. No employer shall
use or employ any person to commit such acts, nor shall any person be
employed for such purpose (prohibition against strike-breakers was added
under Dept. Order No. 9).
(e) No person engaged in picketing shall commit any act of violence, coercion
or intimidation, or obstruct the free ingress to and egress from the employer’s
premises for lawful purposes, or to obstruct public thoroughfares.”
2.2.2 Guidelines on Removal of Illegal Blockades at Factory Gates, DOLE

Memo dated 22 October 1987
“16. Picketing as part of the freedom of expression during strikes shall be

respected, provided that it is peaceful. Shanties and structures setup to
effectively block lawful ingress to, and egress from, company premises for
legal purposes and the free passage to public thoroughfares may be summarily
demolished in accordance with law.
2.2.3 Guidelines for Conduct of PNP/AFP Personnel during Strikes, Lock-outs

and other Labor disputes, DOLE Memo dated 22 October 1987
“1. Obstructions on places and thoroughfares devoted to public use, such

as the streets, sidewalks, alleys and the like are NUISANCES PER SE. As
such, they may be removed summarily by the local government authorities,
through their respective law enforcement authorities, and they may act
independently of the DOLE even if said obstructions are placed as a result of or
in connection with a pending labor strike.
2. However, obstructions on points of ingress/egress within private properties

during a labor dispute, although likewise prohibited by law, cannot be
summarily demolished by law enforcement authorites. Instead, these obstructions
or barricades may be removed only in accordance with the proper orders issued
by the DOLE Office of the Secretary, or the NLRC, with proper coordination
between the said labor officials and the police authorites to ensure that noundue
harm is inflicted upon any person or property.”
2.2.4 What are the consequences if any of the prohibited activities as

mentioned above are committed during the conduct of the strike? The
otherwise valid strike may be converted into an illegal one
 Union officers – may lose employment status if:
(a) he knowingly participates in an illegal strike, viz.: non-
compliance with purpose and process; OR
(b) he knowingly participates in the commission of illegal activities,
whether the strike is legal or illegal.
 Union members - may lose employment status only if he knowingly

commits an illegal act.
61
Note1: If the existence of force is pervasive and widespread, consistently and

deliberately resorted to as a matter of union policy, responsibility is collective
(meaning that all the union officers will be held liable even if did not personally
commit the same). Otherwise, responsibility is only individual. (Almira vs.
BF Goodrich, 58 SCRA 1290)
Note2: In order to hold the labor organization liable for the unlawful acts of
the individual officers, agents or members, there must be proof of actual
authorization or ratification of such acts after actual knowledge thereof. Thus,
where a union, through its officers, not only had knowledge of the acts of
violence committed by some of its strikers, but either participated or ratified
the same, the strike was held to be illegal and the dismissal of ALL active
participants therein was justified. (Phil. Marine Officers Guild vs. Compania
Maritima, 22 SCRA 1113).
2.3 Compliance with procedural requirements of the Labor Code
2.3.1 Notice of strike or lockout - must be filed prior to the intended date of
strike, taking into consideration the cooling off period
2.3.2 Cooling off period (Art. 263, LC; B5 R8 S3, IRR)

If bargaining deadlocks - 30 days
If ULP - 15 days
If ULP on the ground of union busting: Union may take action immediately,
but note that a strike vote must have been conducted and results
submitted to DOLE (Art. 263 [b]; Dept Order No. 9, Rule 22, Secs. 3
and 7)
2.3.3 Conciliation proceedings - NCMB to immediately call parties involved to

a conference within period of 48 hours from receipt of notice, using the
fastest means possible (telephone, telegraph or messenger)
2.3.4 Strike vote - approved by a majority of the TOTAL UNION

MEMBERSHIP in the bargaining unit (hence: only members of the
majority union may vote), via secret ballot, in a meeting or referenda
specially called for the purpose
Lock-out vote - approved by a majority of the Board of Directors of the

employer company, by secret ballot in a meeting called for such purpose.
2.3.5 Seven Day Strike ban (Dept. Order No. 9. R22, S7[e]) - after the strike
vote is taken, it is required that the union must file the result of the strike
vote with the NCMB at least 7 days prior to the intended date of strike.
Note: Both cooling off period and 7-day strike ban must be complied with and is
mandatory. Otherwise, illegal strike. (National Federation of Sugar Workers
vs. Ovejera, 114 SCRA 354)
2.4 2019-2022 cases on strikes:
a) Ilagan v. Manila Electric Co., G.R. Nos. 211746 & 212077 (Notice), [January
22, 2020]. -- A strike is the most powerful weapon of workers in coming to an
agreement with management as to the terms and conditions of employment.
Premised on the concept of economic war between labor and management,
staging a strike either gives life to or destroys the labor union and its members,
as well as affect management and its members.
56
To be legitimate, a strike should not be antithetical to public welfare, and must

be pursued within legal bounds. The right to strike as a means of attaining social
justice is never meant to oppress or destroy anyone, least of all, the employer.
Since strikes affect not only the relationship between labor and management,
but also the general peace and progress of the community, the law has provided
limitations on the right to strike.
b) J. Caguioa, Bigg's, Inc. v. Boncacas, G.R. Nos. 200487 & 200636, [March 6,
2019]. -- Several employees of Bigg's executed affidavits deposing that the union
members conducted a sit-down strike.. The consistent and corroborative sworn
declarations of Bigg's witnesses constitute substantial evidence to prove that the
union members committed a sit-down strike on February 16, 1996.
Moreover, the union did not file the requisite Notice of Strike and failed to
observe the cooling-off period. In an effort to legitimize the strike on February
16, 1996, the union filed a Notice of Strike on the same day. This cannot be
considered as compliance with the requirement, as the cooling-off period is
mandatory. The cooling-off period is not merely a period during which the union
and the employer must simply wait. The purpose of the cooling-off period is
to allow the parties to negotiate and seek a peaceful settlement of their
dispute to prevent the actual conduct of the strike. In other words, there
must be genuine efforts to amicably resolve the dispute.
The strike on March 5, 1996 was illegal; dismissal of union president
Boncacas was valid. He not only knowingly participated but was the one who
principally organized two illegal strikes on February 16, 1996 and March 5,
1996. Thus, the dismissal of Boncacas and the other union officers after the
illegal strike on February 16, 1996 as well as the March 5, 1996 strike was valid.
However, as to the union members who did not participate in any prohibited act
during the strikes, their dismissal was invalid. (Bigg's, Inc. v. Boncacas, G.R.
Nos. 200487 & 200636, [March 6, 2019]).
3. Assumption of Jurisdiction by the Secretary of Labor or Certification of the

Labor Dispute to the National Labor Relations Commission for Compulsory
Arbitration.
3.1 The Secretary of Labor is not precluded from assuming jurisdiction over a labor
dispute in a vital industry even if there is no notice of strike or a formal complaint.
He need not wait for a notice of strike or a formal complaint about a strike already
in progress before he could exercise the powers given to him by law to avoid the
strikes, picketing or lockouts contemplated in the grant of power. (Saulog Transit
vs. Lazaro, 128 SCRA 591.)
3.2 Secretary of Labor has discretion to assume jurisdiction or to certify to the NLRC
on the ground that the labor dispute is one "adversely affecting the national
interest", and said exercise of discretion cannot be questioned. (FEATI University
vs. Bautista, 18 SCRA 1191)
3.3 Requisites for Assumption and/or Certification

a) There is a labor dispute
b) The labor dispute is causing or likely to cause a strike or lock-out
c) The labor dispute involves an industry indispensable to the national interest
d) Once an assumption or certification order is issued:
d.1) If a strike or lock-out is yet to be conducted, the same shall automatically
be enjoined;
d.2) If a strike or lock-out is already taking place, then:
• The striking or locked-out workers shall immediately return to work;
56
• The employer shall immediately resume operations, and readmit all

workers back to work under the same terms and conditions status
quo ante.
d.3) In the exercise of his powers under the Assumption Order, the Secretary
of Labor has the authority to award backwages where the employer failed
to reinstate the employees to their former positions (status quo ante). The
status quo to be maintained under Article 278 [263] of the Labor Code
refers to that which was prevailing the day before the strike.
The effects of an assumption order issued by the Secretary of Labor are

two-fold: (a) it enjoins an impending strike on the part of the employees,
and (b) it orders the employer to maintain the status quo. 21 In cases
where a strike has already taken place, as in this case, the assumption
order shall have the effect of: (a) directing all striking workers to
immediately return to work (return-to-work order), and (b) mandating the
employer to immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike.
The purpose of maintaining the status quo is to avoid any disruption to

the economy while the labor dispute is being resolved in the proper
forum. The objective is to minimize, if not totally avert, any damage that
such labor dispute might cause upon the national interest by occasion of
any work stoppage or slow-down. It follows then, as also demonstrated
by the Court in the above case, that the directive to maintain the status
quo extends only until the labor dispute has been resolved.
Thus, as applied in this case, the status quo mandated by the Assumption
Order extends from the date of its issuance until the Secretary of Labor's
resolution of the dispute between the parties on April 29, 2016. This
obligation on the part of the employer generally requires actual
reinstatement. Where the employer fails to reinstate the employees, then
it shall be obliged to pay them backwages in this regard. (Albay Electric
Cooperative, Inc. v. ALECO Labor Employees Organization, G.R. No.
241437, [September 14, 2020])
3.4 Nature and Effect of Assumption and Certification
a) Assumption and certification orders are executory in character and are strictly
to be complied with by the parties even during the pendency of any petition
questioning their validity.
b) It automatically results in a return-to-work of all striking workers (if one has

already taken place), or enjoins the taking place of a strike (Union of Filipro
Employees vs. Nestle Philippines, Inc., 192 SCRA 396.)
c) While termination by reason of an illegal strike requires hearing, replacement

by reason of violation of a return-to-work order does not. (Free Telephone
Workers Union vs. PLDT, 113 SCRA 663, 678.)
3.5 Effect of Defiance of Assumption or Certification Orders.
"A Strike that is undertaken despite the issuance by the Secretary of Labor of an
assumption or certification order becomes a prohibited activity and thus illegal,
pursuant to the second paragraph of Art. 264 of the Labor Code as amended
(Zamboanga Wood Products, Inc. vs. NLRC, G.R. 82088, October 13, 1989; 178
SCRA 482). The Union, officers and members, as a result, are deemed
to have lost their employment status for having knowingly participated
in an illegal act. " (Union of Filipino Employees vs. Nestle Philippines, Inc. [192 SCRA
396])
56
J. Jardeleza, Almagro v. Philippine Airlines, Inc., G.R. No. 204803,

[September 12, 2018])
ALPAP filed a notice of strike before the National Conciliation and Mediation
Board on grounds of unfair labor practice and union-busting by PAL (strike case).
The DOLE Secretary assumed jurisdiction over the labor dispute but
despite the assumption of jurisdiction by the Secretary, ALPAP declared
and commenced a strike on June 5, 1998. After failed conciliation efforts, the
Secretary issued a return-to-work order (return-to-work order) on June 7, 1998
addressed to all striking officers and members of ALPAP. The strike, however,
continued until June 26, 1998 when ALPAP's officers and members attempted
to report for work. PAL, however, refused to accept these returning employees
on the ground that the deadline imposed by the return-to-work order on June 9,
1998 had already lapsed.
This refusal of PAL to accept ALPAP's officers and members back to work
prompted ALPAP to file an illegal lockout case against PAL with the NLRC on
June 29, 1998. With the Secretary still exercising jurisdiction over the dispute,
the illegal lockout case was consolidated with the strike case in the DOLE.
In a Resolution dated June 1, 1999, the Secretary: (1) declared the loss of
employment status of all officers and members who participated in the strike
in defiance of the return-to-work order; and (2) dismissed the illegal lockout case
against PAL. This Resolution was questioned by ALPAP but eventually upheld
by this Court in G.R. No. 152306, in a Resolution 15 dated April 10, 2002. Both
Decisions in G.R. No. 152306 and Airline Pilots attained finality.||| (Almagro v.
Philippine Airlines, Inc., G.R. No. 204803, [September 12, 2018])
Issue: Whether or not the Court of Appeals erred when it ruled that the NLRC
did not commit grave abuse of discretion and hence, affirming the illegality of the
strike, and loss of employment status of the ALPAP strikers who defied the
assumption and Return-to-Work order.
Supreme Court: No error on the part of the Court of Appeals. Doctrine of
conclusiveness of judgment and stare decisis applied.
Conclusiveness of judgment applies where there is identity of parties in the first

and second cases, but there is no identity of causes of action. Simply put,
conclusiveness of judgment bars the relitigation of particular facts or issues in
another litigation between the same parties on a different claim or cause of action.
Here, the rule on conclusiveness of judgment applies because the determination

of who participated in the illegal strike subject of the return-to-work order, and who
defied the return-to-work order has long been declared settled in Airline Pilots. In
this case, it is undisputed that all petitioners signed PAL's logbook for return to
work returnees/return to work compliance. They are thus covered by the Court's
finding that those who participated in the strike had lost their employment. Hence,
this question cannot be raised again here.
In addition to the doctrine of conclusiveness of judgment, we find that the principle

of stare decisis equally applies to this case. The time-honored principle of stare
decisis et non quieta movere literally means "to adhere to precedents, and not
to unsettle things which are established." The rule of stare decisis is a bar to any
attempt to relitigate the same issue where the same questions relating to the same
event have been put forward by parties similarly situated as in a previous case
litigated and decided by a competent court.
In this case, not only are the factual circumstances of the two cases similar, the
petitioners in Rodriguez and in this case also raise the same arguments and
defenses against their dismissals from PAL||| (Almagro v. Philippine Airlines, Inc.,
G.R. No. 204803, [September 12, 2018])
56
J. Perez, Digital Telecommunications Philippines, Inc. v. Digitel Employees

Union, G.R. Nos. 184903-04, [October 10, 2012], 697 PHIL 132-157 -- Whether
the Secretary of Labor erred in issuing the assumption order despite the
pendency of the petition for cancellation of union registration.
It is well-settled that the pendency of a petition for cancellation of union registration
does not preclude collective bargaining.
The 2005 case of Capitol Medical Center, Inc. v. Hon. Trajano 13 is apropos. The
respondent union therein sent a letter to petitioner requesting a negotiation of their
CBA. Petitioner refused to bargain and instead filed a petition for cancellation of the
union's certificate of registration. Petitioner's refusal to bargain forced the union to file
a notice of strike. They eventually staged a strike. The Secretary of Labor assumed
jurisdiction over the labor dispute and ordered all striking workers to return to work.
Petitioner challenged said order by contending that its petition for cancellation of
union's certificate of registration involves a prejudicial question that should first be
settled before the Secretary of Labor could order the parties to bargain collectively.
When the case eventually reached this Court, we agreed with the Secretary of Labor
that the pendency of a petition for cancellation of union registration does not preclude
collective bargaining, thus:
That there is a pending cancellation proceeding against the respondent
Union is not a bar to set in motion the mechanics of collective bargaining. If
a certification election may still be ordered despite the pendency of a petition
to cancel the union's registration certificate (National Union of Bank
Employees vs. Minister of Labor, 110 SCRA 274), more so should the
collective bargaining process continue despite its pendency. We must
emphasize that the majority status of the respondent Union is not affected
by the pendency of the Petition for Cancellation pending against it. Unless
its certificate of registration and its status as the certified bargaining agent
are revoked, the Hospital is, by express provision of the law, duty bound to
collectively bargain with the Union. (
4. POSSIBLE BAR QUESTION: STRIKES IN HOSPITALS
4.1 CAN THERE BE STRIKES IN HOSPITALS?

Answer: YES, but it is highly discouraged.
Article 278(g), Labor Code. -- In line with the national concern for and the highest
respect accorded to the right of patients to life and health, strikes and lockouts in
hospitals, clinics and similar medical institutions shall, to every extent possible, be
avoided, and all serious efforts, not only by labor and management but government
as well, be exhausted to substantially minimize, if not prevent, their adverse effects
on such life and health, through the exercise, however legitimate, by labor of its right
to strike and by management to lockout. (Labor Code of the Philippines, Presidential
Decree No. 442 (Amended & Renumbered), [July 21, 2015].
4.2 What is the duty and obligation of the striking union, or the lock-outing
employer, if the strike occurs in a hospital?
In labor disputes adversely affecting the continued operation of such hospitals,

clinics or medical institutions, it shall be the duty of the striking union or 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 insure 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. In such cases, therefore, the Secretary of
Labor and Employment may immediately assume, within twenty four (24) hours
from knowledge of the occurrence of such a strike or lockout, jurisdiction
over the same or certify it to the Commission for compulsory arbitration.
(Labor Code of the Philippines, Presidential Decree No. 442 (Amended & Renumbered),
[July 21, 2015])
56
M. LAW ON TERMINATION
BASIC PRINCIPLES IN DISCIPLINARY CASES
1. Ada’s Notes: In the context of the balancing of interests relative to the conduct of
human relationships and work performance within the business, certain parameters will
have to be observed:
a) Burden of proof is upon the employer to show just cause for the imposition of a
penalty upon the employee.
HOWEVER, employee must first prove the fact of dismissal.
b) There must exist substantial evidence to prove just or authorized cause of

termination. Proof beyond reasonable doubt not required in administrative cases.
c) In the imposition of penalty, whether suspension or termination, the same must be

commensurate to the offense committed.
d) Thus: for valid termination, there must both be JUST or AUTHORIZED CAUSE
AND DUE PROCESS.
Note: Also “failure to qualify in accordance with reasonable standards made known
to the employee at the time of hiring” is a valid cause for termination, peculiar only
to probationary employees.
2. CASES ON TERMINATION
2.1 SERIOUS MISCONDUCT
 Defined as improper or wrong conduct, a transgression of a definite rule of

action, a forbidden actor dereliction of duty which is willful in character and
implies wrongful intent, and not mere error in judgment.
 Elements of serious misconduct:
1. Must be serious, of grave and aggravated character, and not merely
trivial or unimportant
2. Must be related to the performance of the employee’s duties; and
3. must show that he has become unfit to continue working for
the employer.
 J. HERNANDO, University of the Cordilleras v. Lacanaria, G.R. No.

223665, [September 27, 2021]. --
College professor Lacanaria required a creative presentation for his class.

During the scheduled presentation, one of his students (Flores) was feeling
ill but still attended for fear of getting zero. While he did not join in the
dance portion of their group number, although he participated in the singing
and acting parts. Because Flores did not join in the dance segment,
Lacanaria instructed him to still dance to be fair to the whole group.
However, while Flores was dancing, his knees suddenly gave out which
caused him to fall to the floor close to the wall. His groupmates assisted
him by giving him a drink and helping him cool down. Lacanaria did not pay
much attention to what happened and instead instructed the next group to
perform.
Since he did not feel well, Flores requested from Lacanaria to permit him
to proceed to the clinic. However, the professor told him, "umupo ka muna
dyan, hindi ka pa naman mamamatay." Regardless, Flores repeated his
56
request. Lacanaria eventually allowed him to go to the clinic with a

classmate but instructed him to return after his consultation.
Flores was eventually brought to the Notre Dame Hospital where he was
diagnosed to have "costochondritis and upper respiratory tract infection."
Flores returned to school and sought Lacanaria to report what had
happened to him. However, when Lacanaria saw Flores at the stairs, the
former said "tae mo!" and then left. University instituted administrative
investigation and dismissed Lacanaria thereafter for serious misconduct.
Issue: Whether there was just cause and compliance with due process.
Supreme Court: There was just cause but no due process compliance.
Agabon doctrine applied.
The following instances demonstrated how Lacanaria's misconduct

amounted to something grave and not merely trivial, considering his
position as a professor: (a) he acknowledged that Flores had a persistent
cough during the class but shrugged it off; (b) he did not act when Flores'
legs gave out and prevented the other students from helping him; (c) he
dismissed Flores' condition as an act of pretension, showing that he had
no intent to ascertain the well-being of his student; (d) he uttered "maupo
ka muna dyan, hindi ka pa naman mamamatay" which reeked of
insensitivity and lack of empathy; (e) he did not immediately allow Flores to
go to the clinic despite prior knowledge of Flores' cough; (f) he replied "tae
mo!'' when Flores tried to explain what happened, which showed
tastelessness and unprofessionalism; (g) he blamed Flores for attending
his class despite knowing that students would normally opt to attend and
perform in order not to get a failing grade in spite of sickness; (h) he
downplayed Flores' condition in his Answer, stating that the clinic's nurse
only gave Flores a tablet and asked him to go back later since the doctor
was unavailable, also notwithstanding the issuance of a medical certificate
by the hospital which properly diagnosed Flores with an illness connected
to his cough; and (i) his comments regarding the video clip exhibited his
uncaring attitude and thoughtlessness even though Flores likely needed
medical attention at the time.
Indisputably, the incident was associated with Lacanaria's work as a

professor. His actuations clearly showed him unfit to continue working for
the University, considering his daily interaction with the students. He acted
with wrongful intent and not mere error of judgment since his statements
were tainted with mockery and insult. He consciously uttered those words
with full knowledge that he was conversing with a student whom he
exercises authority over. Hence, he failed to display professionalism and
decency in dealing with his students. (University of the Cordilleras v.
Lacanaria, G.R. No. 223665, [September 27, 2021])
 J. HERNANDO, G & S Transport Vs. Reynaldo A. Medina, [ G.R. No.

243768. September 05, 2022]
Facts: Reynaldo Medina had been hired as a driver for transporting

tourists to their destination. For seven years, he had no derogatory record.
However, on the night of February 12, 2015, Reynaldo was involved in
misconduct for the first time in his career when he engaged in a heated
argument with a co-employee, resulting in a physical fight..
After the submission of various written explanations, the employer

company placed Reynaldo Medina under preventive suspension and
conducted an administrative hearing. The employer company later
concluded that Reynaldo Medina violated its Code of Discipline for fighting
56
with a co-employee inside the work premises. Thus, Reynaldo was

terminated from employment on March 20, 2015.
Issue: Was Reynaldo Medina illegally dismissed from employment?
Decision: Yes.. The Court found that Reynaldo did not commit serious
misconduct to warrant his dismissal from employment. Dismissal is too
harsh under the circumstances.
Jurisprudence dictates that misconduct is generally defined as a

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 in judgment.
In the present case, the Court found that none of the requisites for
serious misconduct was present. It agreed with the finding of the
Court of Appeals that only a petty quarrel involving shoving or slight
pushing transpired between Reynaldo Medina and Felix Pogoy.
According to the Supreme Court, the same was nipped in the bud by the
intervention of Jose and the security guards on duty. The incident neither
caused work stoppage nor posed a threat to the safety of the other
employees. Furthermore, the employer company never established how
Reynaldo Medina’s misconduct had adversely affected its business, or how
Reynaldo Medina had become unfit to continue working for the company.
 J. CAGUIOA, St. Benedict Childhood Education Centre, Inc. v. San

Jose, G.R. No. 225991, [January 13, 2021])
Petitioners here had substantially established that San Jose's acts do not
only equate to serious misconduct but also constitute child abuse punishable
under RA 7610. She created a traumatic and stressful environment to
AAA to the point that he thought of dropping out from school. San Jose, thus,
inflicted upon AAA not only psychological and emotional abuse but also
violated his inherent dignity as a child who was only in his developmental
years of realizing self- worth.
San Jose nonetheless seeks redemption from her long years of service.
The Court of Appeals, thus, applied the so called compassionate justice
and ruled that the penalty of dismissal was too harsh without due
consideration of the
length of her dedicated service to St. Benedict.
We disagree.
Cathedral School of Technology v. National Labor Relations
Commission clarified that compassionate justice is not applicable in
cases where an employee was validly dismissed due to serious
misconduct or those reflecting on his or her moral character.
Hence, San Jose cannot rely on her 27 years of employment with
St. Benedict to escape liability. On the contrary, the longer an employee
stays in the service of the school, the greater is his or her
responsibility for compliance with the norms of conduct and the code
of discipline as a teacher.
Surely, San Jose's purported years of service, no matter how long,
cannot be used to wipe clean her infractions. If years had to be sensibly
considered here, it should be the tender years of an innocent five-year-old
child and the probable trauma he would have to live with for the rest of his
life.
56
All told, petitioner St. Benedict validly dismissed respondent Joy San
Jose from employment as a preschool teacher. (J. CAGUIOA, St.
Benedict Childhood Education Centre, Inc. v. San Jose, G.R. No. 225991,
[January 13, 2021])
2.2 GROSS INSUBORDINATION
Elements:
1. employee’s assailed conduct must be willful or intentional;
2. willfulness characterized by wrongful or perverse attitude;
3. the order violated must be reasonable, lawful and made known to the
employee; and
4. the order must pertain to the duties which the employee has been engaged
to discharge. (The Coffee Bean and Tea Leaf Philippines, Inc. vs. Rolly P.
Arenas G.R. No. 208908, 11 March 2015)
J. REYES. American Express Transnational v. Borre, G.R. Nos. 228320 &

228344, [July 15, 2020]) – Borre is a company driver cum messenger. Company
officer requested for the services of a company driver for an official business
somewhere in Libis, Quezon City. Borre was the driver scheduled to be on duty
on said date and he, in fact, confirmed his availability thereon to his immediate
supervisor Efren Mendoza (Mendoza). However, when Mendoza called Borre
on the phone to inform him of the Leisure Team's activity, Borre merely
confirmed that he would be reporting for work but refused to drive. Borre
allegedly uttered the words, "teka, 'di ako magdrive, papasok ako pero 'di ako
magdrive." Borre was warned by his superior that the company will be
constrained to issue a memo for insubordination if Borre will not comply. Borre
responded, "[s]ige kasuhan nila ako basta 'di ako magdrive."
Borre's act of unjustifiably refusing to drive was an open and arrogant defiance
to the management's lawful directive, constitutive of willful disobedience under
Article 282 (a) of the Labor Code. The CA also affirmed the Labor Arbiter and
the NLRC's conclusion that procedural due process was observed in Borre's
dismissal. Despite finding of a just and valid cause to dismiss Borre, however,
the CA opted to grant separation pay as a form of financial assistance to Borre.
Issues: Whether or not this was gross insubordination. YES.

Whether grant of separation pay proper. NO.
Supreme Court: Generally, an employee dismissed for any of the just causes
under Article 282 of the Labor Code, 26 is not entitled to separation pay. The law
is clear. Separation pay is only warranted: (1) when the cause of termination is
not attributable to the employee's fault, such as those provided under Articles
283 and 284 of the Labor Code; and (2) in cases of illegal dismissal in which
reinstatement is no longer feasible.
By way of exception, however, the Court has allowed the grant of separation pay
based on equity and as a measure of social justice. This exception is justified by
the positive commands for the promotion of social justice and the protection of
the rights of the workers replete in our Constitution. Indeed, the enhancement of
their welfare is one of the primary concerns of our fundamental law
The attendant circumstances in the instant case considered, we find that

the grant of separation pay by the CA to Borre was unjustified. Foremost,
the cause of the termination of his employment amounts to willful disobedience
under Article 282 (a) of the Labor Code. More importantly, his repeated refusal
to perform the very job he was hired for manifests nothing but his utter disregard
for his employment and his employer's interest. Lastly, unlike in the cases above-
cited, we find no exceptional or peculiar circumstance in this case that would
warrant such generosity to award separation pay or financial assistance to a
simply malfeasant employee. To rule otherwise, would simply be to distort the
56
meaning of social justice. (American Express Transnational v. Borre, G.R. Nos.

228320 & 228344, [July 15, 2020])
J. CAGUIOA, Villanueva v. Ganco Resort and Recreation, Inc., G.R. No.

227175, [January 8, 2020].
Insubordination or willful disobedience requires the concurrence of the
following requisites: (1) the employee's assailed conduct must have been
willful or intentional, the willfulness being characterized by a "wrongful and
perverse attitude"; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties which he
had been engaged to discharge. Both requirements are not present in this
case.
As stated by petitioner in her handwritten explanation, she withheld her
signature on the Notice to Transfer because she was awaiting answers to the
questions she raised to the management via e-mail. She cannot be forced to
affix her signature thereon if she does not really fully understand the reasons
behind and the consequences of her transfer. While her action is willful and
intentional, it is nonetheless far from being "wrongful and perverse." In
addition, respondents failed to prove that there is indeed an order or
company procedure requiring a transferee's written conformity prior to the
implementation of the transfer, and that such order or procedure was made
known to petitioner.
Given the foregoing, there is no basis to dismiss petitioner on the ground of
insubordination for her mere failure to sign the Notice to Transfer.
Relevantly, there is also no basis to impose a penalty of three-month
suspension without pay on petitioner for her delay in assuming her new role at
the Storage Department considering that she was not even cited by GRRI for
said act. GRRI is already deemed to have waived its right to terminate or
discipline petitioner on such ground. ( J. CAGUIOA, Villanueva v. Ganco Resort
and Recreation, Inc., G.R. No. 227175, [January 8, 2020]).
2.3 GROSS AND HABITUAL NEGLECT OF DUTIES
a) gross negligence: connotes want of care in the performance of one’s

duties, or absence of even slight care or diligence as to amount to a
reckless disregards of the safety of the person or property
b) habitual neglect: implies repeated failure to perform one’s duties over a

period of time
c) willful neglect of duties: imply bad faith on the part of the employee in
failing to perform his job, to the detriment of the employer and the latter’s
business
d) Totality of infractions ruling: where the employee has been found to

have repeatedly incurred several suspensions or warnings on account of
violations of company rules and regulations, the law warrants their
dismissal as it is akin to “habitual delinquency” . It is the totality, not the
compartmentalization of company infractions that the employee had
consistently committed, which justified the penalty of dismissal. (Meralco
vs. NLRC, 263 SCRA 531 [24 Oct 1996]).
56
e) Absences: Habitual absenteeism and excessive tardiness are forms of

neglect of duty on the part of the employee and constitute just and sufficient
cause for termination.
f) Abandonment of work: the deliberate and unjustified refusal of an

employee to resume his employment. It is a form of neglect of duty, and
hence, a just cause for termination by the employer.
For a valid finding of abandonment, two factors must be present:: (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, with the
second as the more determinative factor which is manifested by overt acts
from which it maybe deduced that employee has no more intention to work.
The intent to discontinue the employment must be shown by clear proof
that it was deliberate and unjustified.
J. HERNANDO. Lufthansa Technik Philippines, Inc. v. Cuizon, G.R. No.

184452, [February 12, 2020]) -- Gross negligence implies a want or absence
of or a failure to exercise slight care or diligence, or the entire absence of care.
It evinces a thoughtless disregard of consequences without exerting any effort
to avoid them. Habitual neglect implies repeated failure to perform one's
duties for a period of time, depending upon the circumstances.
In termination cases, the employer bears the burden of proving that the
employee's dismissal was for a valid and authorized cause. Consequently, the
failure of the employer to prove that the dismissal was valid, would mean that
the dismissal was unjustified, and thus illegal.
We find that petitioners failed to discharge the burden. They miserably failed
to show that Cuizon did not exercise even a slight care or diligence which
caused the grounding of and damage to the aircraft during the towing
operation. Moreover, petitioners failed to prove that it was Cuizon's act that
directly or solely caused the grounding of and damage to the aircraft during
the towing incident.
J. CAGUIOA, Villanueva v. Ganco Resort and Recreation, Inc., G.R. No.

227175, [January 8, 2020]. -- The totality of infractions or the number of
violations committed during the period of employment shall be considered in
determining the penalty to be imposed upon an erring employee. The
offenses committed by petitioner should not be taken singly and separately.
Fitness for continued employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct and ability separate and
independent of each other.
While it may be true that petitioner was penalized for his previous
infractions, this does not and should not mean that his employment record
would be wiped clean of his infractions. After all, the record of an employee
is a relevant consideration in determining the penalty that should be
meted out since an employee's past misconduct and present behavior must
be taken together in determining the proper imposable penalty. Despite
the sanctions imposed upon petitioner, he continued to commit misconduct
and exhibit undesirable behavior on board. Indeed, the employer cannot be
compelled to retain a misbehaving employee, or one who is guilty of acts
inimical to its interests. It has the right to dismiss such an employee if only as
a measure of self-protection. (Emphasis supplied; citations omitted.)
To be sure, the totality of an employee's infractions is considered and weighed

in determining the imposable sanction for the current infraction. It
presupposes that the employee is already found guilty of the new violation, as
67
in this case. Apropos, it is also worth mentioning that GRRI had already
previously warned petitioner that the penalty for her next infraction would be
elevated to dismissal. Thus, the dismissal of petitioner, on the basis of the

principle of totality of infractions, is justified. J. CAGUIOA, Villanueva v. Ganco
Resort and Recreation, Inc., G.R. No. 227175, [January 8, 2020].
2.4 FRAUD OR WILLFUL BREACH OF TRUST
a) Fraud: the deliberate and false representation of fact, despite knowledge

of its falsehood, in order to induce another who relied upon it and benefit
therefrom.
b) Elements of willful breach of trust leading to loss of trust and

confidence: (1) the breach must be willful and not ordinary breach [hence,
done knowingly and intentionally]; (2) employee holds a position of trust
and confidence; (3) must be in relation to the work performed; and (4) there
must exist substantial evidence, and should not be based on mere
surmises, speculations and conjectures.
J. HERNANDO. Spouses Maynes v. Oreiro, G.R. No. 206109, [November

25, 2020])-- Article 297 (c), which refers to "fraud or willful breach by the
employee of the trust reposed in [him/her] by [his/her] employer" or simply
termed as "loss of trust and confidence," is a just cause for dismissal. "The
requisites for dismissal on the ground of loss of trust and confidence are: (1)
the employee concerned must be holding a position of trust and confidence;
and (2) there must be an act that would justify the loss of trust and confidence.
In addition to these, such loss of trust relates to the employee's performance
of duties."
Monte's position is clearly imbued with trust and confidence. She was tasked
"to perform overall supervision and control of the x x x outlet [including]
receiving of different items from the main office in Bacnotan; safekeeping and
remittance of daily sales; preparation of [inventory]; recording of items released
on credit and issuance of receipts for payments made; and giving items on
account or credit to recognized local dealers. [She] also exercises discretion
on the quantity and manner of payment of items released on credit to local
dealers or retailers."
Company was able to prove anomalies in stocks with substantial evidence,

e.g., Stocks Lost List which indicated that certain stocks were lost while Monte
was the Sales Clerk managing the Bangar branch; a list of old accounts in
which lost payments or products cannot be located or explained by Monte
(totalling P88,423.00); inventory/ledgers, as well as the order slips with
fictitious or non-existent persons would show that there were anomalies in the
sales.
We note that Monte did not even offer any justification for the uncovered
anomalies. She also did not deny the authenticity of her signature in the
Promissory Note wherein she acknowledged her misappropriation of cash
sales and that "due to unavoidable circumstances, [she] took & obtain[ed] the
amount of Six Thousand & Twenty Five Pesos (P6,025) daily sales on
February 3, 2001." 52 She likewise wrote that it was discovered during the spot
audit that stocks were lost. Thus, these infractions caused Oreiro to lose trust
and confidence in Monte. (Spouses Maynes v. Oreiro, G.R. No. 206109,
[November 25, 2020])
J. HERNANDO, San Miguel Corp. v. Gomez, G.R. No. 200815, [August 24,
2020]) -- SMC employed Gomez on September 16, 1986 as a researcher in
the Security Department and concurrently as Executive Secretary to the Head
67
of the Security Department. Sometime in October 1994, Gomez was assigned

as coordinator in the Mailing Department of SMC. On December 20, 2002,
SMC terminated her services after due process, on the ground of fraud or willful
breach of trust||when it was discovered that Gomez was allegedly involved in
anomalies which caused tremendous losses to SMC. Gomez was found guilty
of committing fraud against SMC and of receiving bribes through commissions
in connection with the performance of her function.
NLRC and Court of Appeals: Gomez's dismissal on the ground of fraud and
loss of trust and confidence was illegal because it was not founded on clearly
established facts.
Supreme Court:|||Loss of confidence should ideally apply only to cases

involving employees occupying positions of trust and confidence or to those
situations where the employee is routinely charged with the care and custody
of the employer's money or property. To the first class belong managerial
employees, i.e., those vested with the powers or prerogatives to lay down
management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees or effectively recommend such
managerial actions; and to the second class belong cashiers, auditors,
property custodians, etc., or those who, in the normal and routine exercise of
their functions, regularly handle significant amounts of money or property. x x
x (Emphasis supplied)
The Court finds that Gomez indeed occupied a position of trust and confidence,
as defined by law and jurisprudence, since she was entrusted with SMC's
property, in particular its mail matter which included weighing and determining
volumes of documents to be shipped. Thus, she was routinely charged with
custody of SMC's mail matter.
In addition, We find that SMC likewise substantially proved the second

requisite (i.e., there must be an act that would justify the loss of trust and
confidence). In Cadavas v. Court of Appeals, We have emphasized that "[l]oss
of trust and confidence to be a valid cause for dismissal must be based on a
willful breach of trust and founded on clearly established facts. Such breach is
willful if it is done intentionally, knowingly, and purposely, without justifiable
excuse as distinguished from an act done carelessly, thoughtlessly, heedlessly
or inadvertently."
In this case, We find that Gomez willfully, intentionally, knowingly, purposely,

and without justifiable excuse disregarded SMC's rules and regulations in the
workplace. (San Miguel Corp. v. Gomez, G.R. No. 200815, [August 24, 2020].
CONTRA: WHERE TERMINATION WAS DEEMED TOO HARSH UNDER

THE CIRCUMSTANCES. –
J. HERNANDO, Lamadrid v. Cathay Pacific Airways Limited, G.R. No.

200658, [June 23, 2021]) – Lamadrid was a flight attendant of 17 years with
Cathay Pacific. She was caught in possession of goods after alighting from
the aircraft, viz., a plastic bag containing a 1.5 liter Evian water bottle and a
pile of magazines confiscated from Lamadrid. The confiscated items were
turned over to Cindy Lowe (Lowe), the Airport Services Supervisor, who then
finally surrendered the items to Brian Davis (Davis), Cathay's Airport Services
Manager in Sydney Airport, after Lowe recorded the confiscated items on
Lamadrid's passport. After due process, Lamadrid was terminated for loss of
trust and confidence.
Supreme Court: Lamadrid's infraction was clearly a case of misconduct

considering that it is "a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies
67
wrongful intent and not mere error in judgment." It evidently eroded Cathay's
trust and confidence in her.
However, while the weight of evidence points to Lamadrid's infraction of

company policy, We should also consider that this is Lamadrid's first infraction
in her 17 years of service in the airline which involved a mere bottle of water.
Concededly, the company laid down the penalties for violation of its policies;
however, the evaluation of an employee's infraction should be dealt with
fairness and reason. Simply put, all surrounding circumstances must be
considered and the penalty must be commensurate to the violation committed
by an employee.
During Lamadrid's span of employment, she did not commit any infraction or
was ever sanctioned except in the incident subject of the present controversy.
To impose a penalty as grave as dismissal for a first offense and considering
the value of the property allegedly taken would be too harsh under the
circumstances. Therefore, Lamadrid was illegally dismissed from service.
(Lamadrid v. Cathay Pacific Airways Limited, G.R. No. 200658, [June 23,
2021])
2.5 OTHER ANALOGOUS CAUSES
a) PREVENTIVE SUSPENSION:
Preventive suspension is a disciplinary measure for the protection of the

company’s property pending investigation of any alleged malfeasances or
misfeasance committed by the employee. While the Omnibus Rules limits
the period of preventive suspension to thirty (30) days, such time frame
pertains only to one offense by the employee. For an offense, it cannot
go beyond 30 days.
J. HERNANDO, Philamlife Homeowners Association, Inc. v. De Luna,

G.R. No. 209437, [March 17, 2021]. -- When the employer extended the
period of preventive suspension beyond 30 days, he is obliged to pay
the wages and other benefits due to the employee.
With respect to the appellate court's order for PHAI to pay De Luna her salary
for 10 days in excess of the mandatory 30-day preventive suspension, the
controlling provision is Section 4, Rule XIV, Book V of the Omnibus Rules
Implementing the Labor Code, which reads:
SEC. 9. Period of suspension. — No preventive suspension shall longer than

thirty (30) days. The employer shall thereafter reinstate worker in his former
or in a substantially equivalent position or employer may extend the period of
suspension provided that during period of extension, he pays the wages and
other benefits due to worker. In such case, the worker shall not be bound to
reimburse the amount paid to him during the extension if the employer
decides, after completion of the hearing, to dismiss the worker. (Emphasis
Supplied)
An employee may be preventively suspended while undergoing investigation

for an alleged violation, in order for the investigation to run its course and to
avert any possibility where the employee may cause harm or injury to the
employer, its company or to his fellow employees. 58 When the 30 days
expire, the employer should reinstate the employee by actual or payroll
reinstatement. 59
67
Also, as explicitly provided under Section 4, Rule XIV, the employer must pay
the corresponding wage of his employee if the preventive suspension had
been extended beyond the 30-day period. In this case, the appellate court
found that De Luna's preventive suspension lasted for 40 days.
Even while the dismissal was valid, PHAI should have paid De Luna her
salary for 10 days corresponding to the number of days in excess of the 30-
day period of preventive suspension.
In fine, we hold that the appellate court acted within its jurisdiction in affirming
the NLRC's judgment with modification as to the award of nominal damages
in Bundoc's favor, and payment of De Luna's 10-day salary in excess of the
mandated 30 days of preventive suspension.
To balance the interest of labor and capital, employees who occupy positions
imbued with trust and confidence are reminded that they are expected to
observe utmost integrity, honesty and loyalty in the performance of their
duties and responsibilities. On the other hand, employers, in the exercise of
their management prerogative, must strictly comply with the requirements of
due process in imposing disciplinary sanctions and terminating the services
of their employees.(Philam Homeowners Association, Inc. v. De Luna, G.R.
No. 209437, [March 17, 2021])
b) RESIGNATION
Voluntary resignation is defined as the act of an employee, who finds

himself in a situation in which he belies that personal reasons cannot be
sacrificed in favor of the exigency of the service; thus, he has no other
choice but to disassociate himself from his employment. (Alfaro vs. Court of
Appeals, 363 SCRA 799 [2001]).
General rule: An employee who voluntarily resigns is not entitled to

separation pay.
Exception: Unless stipulated in an employment contract or CBA or

sanctioned by established employer practice or policy.
(CJC Trading, Inc. vs. NLRC, 246 SCRA 724 [1995]; Alfaro
vs. Court of Appeals, 363 SCRA 799 [2001]).
J. HERNANDO, Bance v. University of St. Anthony, G.R. No. 202724,

[February 3, 2021]. -- For resignation from employment to be valid, there
must be an intent to relinquish the position together with the overt act of
relinquishment. Resignation must be voluntary. In illegal dismissal cases, if
defense of resignation is presented, employer must show that the employee
indeed voluntarily resigned. "It is settled that there is nothing reprehensible
or illegal when the employer grants the employee a chance to resign and
save face rather than smear the latter's employment record."
J. HERNANDO, Villola v. United Philippine Lines, Inc., G.R. No. 230047,

[October 9, 2019] -- Resignation is defined as a formal pronouncement or
relinquishment of an office, with the intention of relinquishing the office
accompanied by the act of relinquishment. As the intent to relinquish must
concur with the overt act of relinquishment, the acts of the employee before
and after the alleged resignation must be considered in determining whether
in fact, he or she intended to sever from his or her employment.
The fact of resignation is therefore supported by the concurrence of the

following: (1) the intent to relinquish one's office; and (2) the overt act of
relinquishment. In illegal dismissal cases, fundamental is the rule that when
67
an employer interposes the defense of resignation, on him necessarily rests

the burden to prove that the employee indeed voluntarily resigned.
Thus, in as much as Villola has the burden of proving that he was, in the first
place, dismissed from employment by UPL, it is the concomitant burden of
respondents to prove that Villola voluntarily resigned from service. The pith
of the issue therefore lies in whether Villola is considered voluntarily
resigned or dismissed from employment.
There is substantial evidence to prove that Villola resigned from UPL. The
acts of Villola, particularly when he: (1) failed to question Consunji's
request to submit a written resignation letter; (2) stopped reporting for
work, at his own initiative, after May 31, 2013; and (3) submitted on June
27, 2013 the agreed proposal to UPL under "DRD Solutions," which
appears to be co-written by a third party in the name of Mr. Dulay, impels
this Court to arrive at the logical conclusion that there existed a prior
agreement between UPL and Villola — that instead of terminating Villola's
employment with UPL on the ground of redundancy, he agreed that he will
simply voluntarily cease his employment with UPL effective June 1, 2013,
and thereafter render his services to UPL for its scanning project as an
independent consultant. Moreover, the fact that Villola submitted his
proposal under a name of another corporate entity is a clear indication that
he was no longer connected as an employee of UPL after May 31, 2013.
Simply put, the concurrence of Villola's resignation, coupled with his
actions thereafter, ultimately support the finding that he resigned from
UPL. (Villola v. United Philippine Lines, Inc., G.R. No. 230047, [October
9, 2019]).
J. HERNANDO, Italkarat 18, Inc. v. Gerasmio, G.R. No. 221411,

[September 28, 2020]. -- It is therefore not enough for Juraldine to allege
that he was threatened and thereafter misled to resign in order for the
tribunals and courts to rule that he was constructively dismissed.
Juraldine must prove with particularity the alleged acts of coercion
and intimidation which led him to resign. This, Juraldine failed to do.
Furthermore, we observe that the evidence on record show that Juraldine

had already intended to resign in 2008, even earlier than October. The
evidence presented by the Company would show that Juraldine in fact
requested for multiple leaves on various occasions, usually for processing
of his papers for work abroad.
To summarize, if the fact of dismissal is disputed, it is the

complainant who should substantiate his claim for dismissal and the
one burdened with the responsibility of proving that he was
dismissed from employment, whether actually or constructively.
9Italkarat 18, Inc. v. Gerasmio, G.R. No. 221411, [September 28, 2020])
J. CAGUIOA, Jarabelo v. Household Goods Patrons, Inc., G.R. No.

223163, [December 2, 2020]. -- The failure of petitioner to pursue the
termination proceedings against respondent and to make her pay for the
shortage incurred did not cast doubt on the voluntary nature of her
resignation. A decision to give a graceful exit to an employee rather
than to file an action for redress is perfectly within the discretion of an
employer. It is not uncommon that an employee is permitted to resign to
save face after the exposure of her malfeasance. The CA was correct in
ruling that giving the option to gracefully exit considering his prior good
sales performance and out of compassion did not constitute dismissal, legal
or illegal. Jarabelo, however, did not resign and take the separation
pay offered to him, but neither did Household Goods initiate disciplinary
proceedings to terminate his employment. (J. CAGUIOA, Jarabelo v.
Household Goods Patrons, Inc., G.R. No. 223163, [December 2, 2020])
67
c) TERMINATION DUE TO UNION SECURITY CLAUSE:

For valid termination on this ground, the following must be
proven by the employer --
a) the union security clause is applicable;

b) the union is requesting for the enforcement of the union
security provision in the CBA; and
c) there is sufficient evidence to support the Union’s decision to
expel the employee from the union or company. (Inguillo
vs. First Philippines Scales, Inc., 588 SCRA 471 [2009]; See also:
PICOP Resources, Inc. (PRI) vs. Anacleto Taneca et. al, G.R. No.
160828, 09 August 2010).
J. Martires. Ergonomic Systems Philippines, Inc. v. Enaje, G.R. No.

195163, [December 13, 2017]) - Federation cannot use the union security
clause to terminate the union officers. Disaffilation does not divest local union
of its personality. Strike is illegal for non-compliance with strike vote. Union
officers validly dismissed but union members may not be dismissed.
Only the local union may invoke the union security clause in the CBA. Before
an employer terminates an employee pursuant to the union security clause, it
needs to determine and prove that: (1) the union security clause is applicable;
(2) the union is requesting the enforcement of the union security provision in
the CBA; and (3) there is sufficient evidence to support the decision of the union
to expel the employee from the union.
In this case, the primordial requisite, i.e., the union is requesting the
enforcement of the union security provision in the CBA, is clearly lacking.
Disaffiliation does not divest the local union of its own personality, neither does
affiliation give the mother federation the license to act independently of the local
union. It only gives rise to a contract of agency, where the former acts in
representation of the latter. Hence, local unions are considered principals while
the federation is deemed to be merely their agent.
3. AUTHORIZED CAUSES FOR TERMINATION (Art.

283-284, LC) Memory aid: DIRe2C
DISEASE 1 MO PAY OR ½ MONTH FOR

EVERY YEAR OF SERVICE
INSTALLATION OF LABOR 1 MO PAY OR 1 MONTH FOR

SAVING DEVICES EVERY YEAR OF SERVICE
RETRENCHMENT 1 MO PAY OR ½ MONTH FOR

REDUNDANCY 1 MO PAY OR 1 MONTH FOR

CLOSURE NOT DUE TO 1 MO PAY OR ½ MONTH FOR

SERIOUS BUSINESS LOSSES EVERY YEAR OF SERVICE
J. HERNANDO San Miguel Corporation, Vs. Rosario A. Gomez, G.R. No. 200815.
[August 24, 2020]). -- In termination cases, the employer bears the burden of proving that
the employee's dismissal was for a valid and authorized cause. Consequently, the failure
of the employer to prove that the dismissal was valid, would mean that dismissal was
unjustified, and thus illegal.
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3.1 DISEASE (separation pay of 1/2 month pay for every year of service)
 Employee must be suffering from a disease, and continued

employment is prohibited by law and/or is prejudicial to his health and/or
that of his co-employees;
 Disease cannot cannot be cured within a period of six (6) months, and said fact
is certified by a competent public health authority
 If curable, then employer cannot terminate but may ask employee to take a
leave; immediately upon restoration of normal health, employer must reinstate
employee to former position.
IMPORTANT NOTE: EMPLOYER MUST FURNISH EMPLOYEE TWO (2) WRITTEN

NOTICES ON TERMINATIONS DUE TO DISEASE. (NOT YET ASKED IN THE BAR).
Marlo A. Deoferio v. Intel Technology Philippines, Inc.. And/Or Mike

Wentling, G.R. No. 202996, 18 June 2014. -- The Labor Code and its IRR are silent
on the procedural due process required in terminations due to disease. Despite the
seeming gap in the law, Section 2, Rule 1, Book VI of the IRR expressly states
that the employee should be afforded procedural due process in ALL CASES
OF DISMISSALS.
In Sy v. Court of Appeals (446 Phil. 404 [2003]) and Manly Express, Inc. v. Payong,
Jr., (510 Phil. 818 [2005]), 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.
3.2 INSTALLATION OF LABOR SAVING DEVICES (sepn pay: 1 mo/yr of service)

 Example: computerization of accounting and payroll system;
mechanization of assembly line, etc.
 Presumption is that the employer does not have any serious business losses,
as to afford the purchase of labor-saving devices.
3.3 RETRENCHMENT (Sepn. Pay: 1/2 month pay for every year of service)
Elements for valid retrenchment :
a) The losses expected should be substantial and not merely de minimis in extent.
--
b) The substantial losses apprehended must be reasonably imminent;
c) The retrenchment must be reasonable necessary and likely to effectively
prevent the expected losses; and
d) The alleged losses, if already incurred and the expected imminent losses
sought to be forestalled, must be proved by sufficient and convincing
evidence
This means that retrenchment must be reasonably necessary and is likely to prevent
business losses which, if already incurred, must be substantial, serious, actual and
real, OR if only expected , are reasonably imminent as perceived objectively and in
good faith by the employer.
In addition, the employer should have taken other measures prior or parallel to
retrenchment to forestall losses, e.g., cut other costs. Thus, the Supreme Court has
ruled that the retrenchment undertaken by a company to be invalid where it was shown
that the company likewise continued to dispense fat executive bonuses to its officers.
68
3.4 REDUNDANCY (Sepn pay: 1 mo/yr of service)
 Redundancy exists where the services of an employee are in excess of what

is reasonably demanded by the actual requirements of the business operations.
 Succinctly stated otherwise, a position may be declared redundant and the
employee terminated where his position has become superfluous or is a
duplication of work, viz., caused by overhiring of workers, decreased volume
of business, dropping of a particular product line or service activity.
J. HERNANDO, Teletech Customer Vs. Mario Gerona, Jr[ G.R. No. 219166.
November 10, 2021. –
FACTS: The employer (BPO) company, hired Gerona as one of its technical support
representatives and assigned him to handle a client account. The employer informed
Gerona that he would be transferred to a different client account upon successfully
passing the training, assessment and examination and that his refusal to take the
examinations would result in the termination of his services on the ground
of redundancy.
However, Gerona refused to undergo training and take the examinations under the
belief that he was entitled to security of tenure. Thereafter, Gerona received a
memorandum informing him that those who declined to comply with
the transfer directive were no longer required to log in their system since their
respective team leaders will take care of their attendance instead until the redundancy
offer is finalized. On November 17, 2009, Mario received a notice dated November 16,
2009 informing him of his dismissal due to redundancy effective December 16, 2009.
Issue: Whether or not this was a valid redundancy program?
Supreme Court: Mario was illegally dismissed from employment since the employer’s
evidence was found to be insufficient to support a claim of valid redundancy.
The Court reiterated established principles by stating that redundancy exists when an
employee’s services are in excess of what is reasonably demanded by the actual
requirements of the business. To successfully invoke a valid dismissal due to
redundancy, there must be: a written notice served on both the employees and the
DOLE at least one month prior to the intended date of termination of employment;
payment of separation pay equivalent to at least one month pay for every year of
service;good faith in abolishing the redundant positions; and fair and reasonable
criteria in ascertaining what positions are to be declared redundant and accordingly
abolished. Moreover, the company must provide substantial proof that the services of
the employees are in excess of what is required of the company.
However, the Court was not convinced of the alleged decline in the employer’s
business and the expected decrease in volume of calls. This was because other than
the bare assertions of the human capital delivery site manager, the Court found no
other evidence proving the business slow down or the alleged low volume of calls. The
Court explained that the employer should have presented any document proving the
decline in volume of calls for the past months, or affidavits of client officers who
determined that business was slowing down and the basis thereof. Although other
documents were submitted, the Court found that these hardly proved the fact of
redundancy.
68
3.5 CESSATION OR CLOSURE OF EMPLOYER’S BUSINESS (1/2 month pay for

every year of service)
An employer is not prevented from exercising its prerogatives to close shop so long as
it is done in good faith to advance its interests, and not for the purpose of defeating or
circumventing the rights of the employees. (Angeles vs. Polytex Design, 536 SCRA 159
[Oct 2007]).
Where the closure of business was done in bad faith, viz., no actual sale transpired,
then there is no closure or cessation of business that can serve as an authorized cause
for the dismissal of respondents. In this case, there was no change of ownership and
continuously operated under the same name, franchises and routes and under the
same circumstances as before the alleged sale. ( Peñafrancia Tours and Travel Transport,
Inc. vs. Joselito P. Sarmiento and Ricardo S. Catimbang,G.R. No. 178397, 20 October 2010).
IMPORTANT CASE ON GUIDELINES IN CLOSURE OF BUSINESS:
The Supreme Court made the following summary of principles and guidelines
in the case of Manila Polo Club Employees Union (MPCEU- FUR-TUCP) vs. Manila
Polo Club, G.R. No. 172846, 24 July 2013, as follows:
1. Closure or cessation of operations of establishment or undertaking

may either be partial or total.
2. Closure or cessation of operations of establishment or undertaking

may or may not be due to serious business losses or financial reverses.
However, in both instances, proof must be shown that: (1) it was done
in good faith to advance the employer's interest and not for the
purpose of defeating or circumventing the rights of employees under the
law or a valid agreement; and (2) a written notice on the affected employees
and the DOLE is served at least one month before the intended date of
termination of employment.
3. The employer can lawfully close shop even if not due to serious business
losses or financial reverses but separation pay, which is equivalent to at
least one month pay as provided for by Article 283 of the Labor Code, as
amended, must be given to all the affected employees.
4. If the closure or cessation of operations of establishment or undertaking

is due to serious business losses or financial reverses, the employer
must prove such allegation in order to avoid the payment of separation
pay. Otherwise, the affected employees are entitled to separation pay.
5. The burden of proving compliance with all the above-stated falls upon the
employer.
Guided by the foregoing, the Court shall refuse to dwell on the issue of whether
respondent was in sound financial condition when it resolved to stop the
operations of its F & B Department. As stated, an employer can lawfully close
shop anytime even if not due to serious business losses or financial reverses.
4. PROCEDURE FOR TERMINATION:

4.1 GENERAL RULE:
The twin requirements of NOTICE and HEARING are the essential elements
of due process in termination cases, which cannot be dispensed with without
violating the constitutional right to due process.
68
King of Kings Transport vs. Mamac, 526 SCRA116 (29 Jun 2008. --
(a) Employee must be given FIVE (5) CALENDAR DAYS within which to explain,
as reasonable opportunity within which the employee may adequately
study and prepare for his defense, seek legal counsel or union representation,
gather evidence and look for witnesses to testify in his behalf.
(b) In order to intelligently prepare the employees for their explanation and defenses,
the notice should contain a detailed narration of the facts & circumstances
that will serve as the basis for the charge against the employee – a general
description of the change will not suffice.
EXCEPTION: If no due process but with just cause, then Agabon ruling
to apply.
4.2 ILLEGALITY OF THE ACT OF DISMISSAL - DISMISSAL WITHOUT JUST CAUSE:

Remedies under the Labor Code:
1. Reinstatement to his former position without loss of seniority rights. If no

longer available nor any equivalent position, then separation pay to be given in
lieu or reinstatement computed 1 month pay for every year of service.
2. Payment of FULL backwages corresponding to the period from his illegal

dismissal up to actual reinstatement.
3. Damages plus attorney’s fees.
4.3 ILLEGALITY IN THE MANNER OF DISMISSAL - DISMISSAL WITHOUT

DUE PROCESS: (WENPHIL, SERRANO AND AGABON RULING)
In any event, NO REINSTATEMENT.
However, as regards penalty for non- compliance with due process requirements,
the newest Supreme Court ruling circa November 2004 is that the employer shall
be sanctioned with penalty of P30,000.00 -50,000 in accordance with the Agabon vs.
NLRC case and the Jaka vs. NLRC ruling.
4.4 MATRIX OF FIVE POSSIBLE SITUATIONS IN TERMINATION
68
69
NEW TREND WHERE EMPLOYEE FAILS TO PROVE DISMISSAL BUT COMPANY

FAILS TO PROVE ABANDONMENT. – J. HERNANDO, Gososo vs. Leyte Lumber,
G.R. No. 205257, [January 13, 2021] citing J. CAGUIOA, Rodriguez v. Sintron
Systems, Inc., G.R. No. 240254, [July 24, 2019])
Indeed, in cases where the parties failed to prove the presence of either dismissal of the
employee or abandonment of his work, the remedy is to reinstate such employee without
payment of backwages. Simply stated, parties to revert to status quo and continue the
employment under same terms and conditions as before.
There is, however, a need to clarify the import of the term "reinstate" or "reinstatement"
in the context of cases where neither dismissal nor abandonment exists.
The Court has clarified that "reinstatement," as used in such cases, is merely an
affirmation that the employee may return to work as he was not dismissed in the first
place. It should not be confused with reinstatement as a relief proceeding from illegal
dismissal as provided under Article 279 of the Labor Code
Reinstatement under Art 279 Labor Code restores the employee who was unjustly
dismissed to the position from which he was removed, that is, to his status quo
ante dismissal.
In the present case, considering that there has been no dismissal at all, there can be no
reinstatement as one cannot be reinstated to a position he is still holding. Instead, the
Court merely declares that the employee may go back to his work and the employer must
then accept him BECAUSE THE EMPLOYMENT RELATIONSHIP BETWEEN THEM
WAS NEVER ACTUALLY SEVERED
71
5. ON NOTICE AND HEARING

Dept. Order No. 10, Article V; IRR B5 R14 S1-11
5.1 TWO NOTICES REQUIRED:
1ST NOTICE: NOTICE OF APPRAISAL, which is a written notice served

on the employee specifying the ground or grounds of termination, and
giving the employee reasonable opportunity within which to explain his side
 The first notice should contain a detailed narration of facts and

circumstances that will serve as basis for the charge against the employee.
A general description of the charge will not suffice. The notice should
specifically mention which company rules, if any, are violated. (King of Kings
Transport vs. Mamac, 526 SCRA 116 [29 June 2007]), and that the employer
seeks dismissal for the act or omission charged against the employee;
otherwise; the notice does not comply with the rules. (Magro Placement vs.
Hernandez, 526 SCRA 408 [04 July 2007])
 QUESTION: HOW SPECIFIC SHOULD THE SHOW CAUSE/CHARGE SHEET

(PLEASE EXPLAIN MEMO) BE?
Answer: It should be specific enough to allow the employee to be informed of the
charges against him/her.
2nd NOTICE: NOTICE OF TERMINATION
5.2 General Rule: Administrative investigation is not essential for due process. What is
required for compliance with due process is that the employee is given
an opportunity to be heard.
Exception: When the employee requests for an administrative investigation, then the
company must conduct one.
General Rule: Presence of lawyer is not required in administrative investigation.

Exception: When employee requests for one.
6. BURDEN OF PROOF RESTS UPON THE EMPLOYER
The employer must show that the dismissal of the employee is for just cause. Failure to
do so means that the dismissal is not justified and the employee is entitled to reinstatement.
In fact, as early as the case of Century Textile Mills vs. NLRC [G.R. No. 77859, 25 May 1988],
a finding of the employee’s participation in the criminal conspiracy cannot be made to rest solely
on the unilateral declaration of one who is himself a confirmed “co-conspirator.” The
co-conspirator’s confession must be corroborated by other competent and convincing
evidence.
7. ON REINSTATEMENT:
Reinstatement means the admission of an employee back to work prevailing prior to his
dismissal; restoration to a state or position from which one had been removed or separated,
which presupposes that there shall be no demotion in rank and/or diminution of salary,
benefits and other privileges; if the position previously occupied no longer exists, the
restoration shall be to a substantially equivalent position in terms of salary, benefits and other
privileges (Banares vs. Tabaco Transport citing Pfizer, Inc. vs. Velasco, G.R. No. 177467,
March 9, 2011).
74
 Where the former position is no longer available, the employee must be

reinstated to an equivalent position.
 Where the reinstatement is no longer viable in view of the strained relations

between the employer and employee, or if the employee decides not to be
reinstated, the employer shall pay him separation pay in lieu of reinstatement
7.1 NATURE OF THE ORDER OF THE LABOR ARBITER ON

REINSTATEMENT. –
 The reinstatement order of the Labor Arbiter is immediately executory even pending
appeal. (Article 223 (3), Labor Code; cf Pioneer Texturizing vs. NLRC (280 SCRA 806
[1997]).
 Hence, it is the obligation of the employer to immediately admit the employee back to
work or reinstate him in the payroll at his option. Otherwise, the employer will be
held liable for backwages from the date of notice of the order (International Container
Terminal Services, Inc. vs. NLRC, 360 Phil. 527 [1998]), up to the date of
employees actual or payroll reinstatement. Thus, it was held in Garcia vs. Philippine
Airlines, Inc. (531 SCRA 574 [2007]), that failure on the part of the employer to
exercise the options in the alternative, the employer must pay the employee’s salaries.
 ADA’S NOTE: Situation: Labor Arbiter dismisses complaint and rules that dismissal
is valid, but NLRC reverses on appeal and rules that there is illegal termination, with
reinstatement and backwages. Note that in this instance, THE NLRC ORDER OF
REINSTATEMENT IS NOT IMMEDIATELY EXECUTORY. The employer need not
immediately reinstate the employee, who must first file a Motion for Execution.
7.2 WHERE THE ORDER OF REINSTATEMENT BY THE LABOR ARBITER IS

REVERSED ON APPEAL. –
 Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is

obligatory on the part of the employer to reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal by the higher court.
On the other hand, if the employee has been reinstated during the appeal period
and such reinstatement order is reversed with finality, the employee is not required
to reimburse whatever salary he received for he is entitled to such, more so if he
actually rendered services during the period. (Roquero vs. Philippine Airlines, Inc.,
401 SCRA 424 [2003], cited in Garcia vs. PAL, G.R. No. 164856, 20 January 2009;
En Banc).
 Exception:
After the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be
barred from collecting the accrued wages, if it is shown that the delay in enforcing the
reinstatement pending appeal was without fault on the part of the employer. (Garcia
vs. Phlippine Airlines, G.R. No. 164856, 20 January 2009; En Banc).
The test is two-fold: (1) there must be actual delay or the fact that the order of
reinstatement pending appeal was not executed prior to its reversal; and (2) the delay
(or non-execution) must not be due to the employer’s unjustified act or omission. (ibid
74
8. ON BACKWAGES
8.1 FULL BACKWAGES For termination effected after effectivity of RA 6715
‘FULL” backwages to be computed from the time of termination to the time of actual
reinstatement.
“With the passage of RA 6715 which took effect on 21 March 1989, Article 2709 of the
Labor Code was thus amended to include payment of “full” backwages. The Mercury
drug rule which limited the award of backwages of illegally dismissed workers to
three (3) years without deduction or qualification, is no longer applicable.” (Ferrer
vs. NLRC)
8.2 BASIS FOR COMPUTING BACKWAGES: The workers are to be paid their
backwages fixed as of the time of the dismissal, i.e., unqualified by any wage
increases or other benefits that may have been received by their co-workers. Awards
including salary differentials are not allowed. (Central Azucarrera de Tarlac vs.
Sampang)
8.3 QUESTION: CAN YOU DEDUCT SALARIES EARNED BY EMPLOYEE FROM

ANOTHER EMPLOYER DURING THE PENDENCY OF THE CASE?
ANSWER: NO. Backwages to be awarded to an illegally dismissed employee

should not, as a general rule, be diminished or reduced by the earnings derived by
him elsewhere during the period of illegal dismissal. (Bustamante vs. NLRC)
J. HERNANDO, Angono Medics Hospital, Inc. v. Antonina Q. Agabin , G.R. No.

202542, (December 09, 2020). -- The Supreme Court reiterated the settled rule that
“[t]he twin reliefs that should be given to an illegally dismissed employee are full
backwages and reinstatement. Backwages restore the lost income of an employee and
is computed from the time compensation was withheld up to actual reinstatement. Anent
reinstatement, only when it is not viable is separation pay given.”
First, when reinstatement is ordered, the general concept under Article [294] of the Labor
Code, as amended, computes the backwages from the time of dismissal until the
employee’s reinstatement. The computation of backwages (and similar benefits
considered part of the backwages) can even continue beyond the decision of the [Office
of the Labor Arbiter] or [National Labor Relations Commission] and ends only when the
employee is actually reinstated.
Second, when separation pay is ordered in lieu of reinstatement (in the event that this
aspect of the case is disputed) or reinstatement is waived by the employee (in the event
that the payment of separation pay, in lieu, is not disputed), backwages is computed
from the time of dismissal until the finality of the decision ordering separation pay.
Third, when separation pay is ordered after the finality of the decision ordering the
reinstatement by reason of a supervening event that makes the award of reinstatement
no longer possible, backwages is computed from the time of dismissal until the finality of
the decision ordering separation pay. The finality of the decision becomes the reckoning
point because in allowing separation pay, the final decision effectively declares that the
employment relationship ended so that backwages and separation pay may be properly
computed.
75
N. RECRUITMENT AND PLACEMENT
J. HERNANDO. SRL International Manpower Agency v. Yarza, Jr., G.R. No. 207828,
[February 14, 2022]) - Nature of employment as contractual employee; Contract must
pass through POEA, otherwise NOT valid.
At the root of the controversy is the validity of the "Offer of Employment" which served as
Yarza's "contract" during his initial deployment under the visit visa. There is no dispute that
his deployment did not pass through the official channel, specifically the POEA. "Under
our Labor Code, employers hiring [Overseas Filipino Workers or] OFWs may only do so
through entities authorized by the Secretary of the Department of Labor and Employment.
Unless the employment contract of an OFW is processed through the POEA, the
same does not bind the concerned OFW because if the contract is not reviewed by
the POEA, certainly the State has no means of determining the suitability of foreign
laws to our overseas workers." Moreover, the "Offer of Employment" states that the rules
and regulations found in UAE's labor laws should apply, which is contrary to our country's
policies concerning labor contracts and security of tenure. To stress,
Security of tenure remains even if employees, particularly the Overseas
Filipino Workers (OFWs), work in a different jurisdiction. Since the employment
contracts of OFWs are perfected in the Philippines, and following the principle
of lex loci contractus (the law of the place where the contract is made), these
contracts are governed by our laws, primarily the Labor Code of the
Philippines and its implementing rules and regulations. 87 At the same time, our
laws generally apply even to employment contracts of OFWs as
our Constitution explicitly provides that the State shall afford full protection to
labor, whether local or overseas. 88 Thus, even if a Filipino is employed abroad,
he or she is entitled to security of tenure, among other constitutional rights. 89
The "Offer of Employment" was perfected when Yarza agreed to the same while he was still
in the Philippines, and then consented to be deployed abroad. In fact, he already commenced
with his duties under the said contract until his sudden repatriation. However, the "Offer of
Employment" is invalid since it was not approved by the POEA and because it runs contrary
to the Constitution's principles as well as existing labor laws.
Notwithstanding the invalidity of the "Offer of Employment," an employer-employee
relationship exists. As such, the petitioners should accord Yarza due process, both
substantial and procedural, before terminating his employment.
Termination due to disease is illegal. Akkila did not present any certification from a
competent public health authority citing that Yarza's disease cannot be cured within six
months, or that his employment is prejudicial to his health or that of his co-employees.
Absent this certification, Akkila failed to comply with Article 299 [284] of the Labor Code as
well as Section 8, Title 1, Book Six of the Omnibus Rules Implementing the Labor Code. In
other words, Yarza's dismissal was not based on a just cause. Apart from this, Akkila did
not accord Yarza procedural due process.
Even if the "Offer of Employment" is invalid, the existence of an employer-employee
relationship entitles Yarza to claim for the payment of his salaries for the unexpired portion
of his contract.||| (SRL International Manpower Agency v. Yarza, Jr., G.R. No. 207828,
[February 14, 2022])
75
1. DISTINCTION BETWEEN LICENSE AND AUTHORITY:
 LICENSE means a document issued by the Department of Labor, authorizing a

person or entity to operate a private employment agency.
 AUTHORITY means a document issued by the Department of Labor, authorizing a

person or association to engage in recruitment and placement activities as a private
recruitment entity.
2. DISTINCTION BETWEEN “ PRIVATE EMPLOYMENT AGENCY” VS. “PRIVATE

RECRUITMENT AGENCY” VS. “SHIPPING OR MANNING AGENCY”
 PRIVATE EMPLOYMENT AGENCY: Refers to any person or entity engaged in the

recruitment and placement of workers FOR A FEE, which is charged directly or
indirectly, from the workers, or employers, or both.
A licensed employment agency may charge and collect fees for employment
assistance if the worker has obtained employment through the agency's efforts.
 PRIVATE RECRUITMENT AGENCY: Refers to any person or entity engaged in the

recruitment and placement of workers, locally or overseas, WITHOUT CHARGING
ANY FEE directly or indirectly, from the workers, or employers.
Submission by Private Recruitment agency of a VERIFIED UNDERTAKING

to the POEA that it will assume JOINT AND SOLIDARY LIABILITY with the
employer for all claims and liabilities which might arise in connection with the
implementation of employment
 MANNING OR SHIPPING AGENCY: Refers to any person, partnership or

corporation duly licensed by DOLE to recruit seafarers for vessels plying international
waters and for related maritime activities.
3. TYPES OF ILLEGAL RECRUITMENT
 SIMPLE (BY LICENSEE): illegal recruitment committed by a licensee or holder of

authority against one or two persons only if they commit any of the acts enumerated
under Section 6 of Republic Act No. 8042.
 NON-LICENSEE: committed by a person who has neither a license nor authority.
 SYNDICATED: that carried out by a group of three (3) or more persons in conspiracy
or confederation with one another.
 LARGE SCALE or qualified: that committed against 3 or more persons, individually

or as a group.
4. ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE, if any of the qualifying

circumstances exist or when committed:
 BY A SYNDICATE - If it is carried out by a group of 3 or more persons conspiring and/or

confederating with one another;
 IN LARGE SCALE - If it is committed against 3 or more persons individually or as a

group.
75
5. ILLEGAL RECRUITMENT; elements:
Recruitment and placement refers to the act of canvassing, enlisting, contracting,

transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, LOCALLY OR ABROAD, whether for profit
or not. When a person or entity, in any manner, offers or promises for a fee employment to
two or more persons, that person or entity shall be deemed engaged in recruitment and
placement.
Article 38(a) of the Labor Code, as amended, specifies that recruitment activities
undertaken by non-licensees or non-holders of authority are deemed illegal and
punishable by law.
But to prove illegal recruitment, it must be shown that the accused, without being duly
authorized by law, gave complainants the distinct impression that he had the power or ability
to send them abroad for work, such that the latter were convinced to part with their money in
order to be employed. It is important that there must at least be a promise or offer of an
employment from the person posing as a recruiter, whether locally or abroad.
Illegal recruitment is committed when two (2) elements concur: First, the offender does not
have the required license or authority to engage in the recruitment and placement of
workers. Second, the offender undertook (1) recruitment and placement activity defined under
Article 13(b) of the Labor Code or (2) any prohibited practice under Art. 34 of the same code.
Illegal recruitment is qualified into large scale, when three or more persons, individually or as
group, are victimized.
J. HERNANDO, People vs. Oliver Imperio Y Antonio, G.R. No. 232623. October 5, 2020.
-- Under RA 8042, a non-licensee or non-holder of authority is liable for Illegal Recruitment
when the following elements concur: (1) the offender has no valid license or authority required
by law to enable him to lawfully engage in recruitment and placement of workers; and (2) the
offender undertakes any ofthe activities within the meaning of "recruitment and placement"
under Article13(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).
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. Moreover, "[t]o prove [I]llegal [R]ecruitment, it must be shown that
the accused gave the complainants the distinct impression that [he or she] had the power or
ability to deploy the complainants abroad in [such] a manner that they were convinced to part
with their money for that end."
In this case, the prosecution sufficiently proved that appellant had indeed engaged in Large
Scale Illegal Recruitment. First, appellant is a non-licensee or non-holder of authority.
Among the documentary evidence submitted by the prosecution is a POEA Certification 25
dated May 31, 2013, which states that appellant is "not licensed nor authorized to recruit
workers for overseas employment." 26 Significantly, appellant has not negated nor denied
the contents of the Certification issued by the POEA.
Second, three (3) private complainants, namely, Llave, Concrenio, and Sta. Maria, all
positively identified appellant as the person who promised them overseas employment in
Canada or the USA in various capacities, which gave them the distinct impression that
appellant had the ability to facilitate their applications and, eventually, deploy them for
employment abroad. (People v. Imperio y Antonio, G.R. No. 232623, [October 5, 2020])
75
6. Illegal recruitment as distinguished from estafa

 A person convicted for illegal recruitment under Labor Code can be convicted for violation
of the Revised Penal Code provisions on estafa provided the elements of the crime are
present.
 Estafa under Article 315, par.2 of the RPC is committed by any person who defrauds
another by using fictitious name, or falsely pretends to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions, or by means
of similar deceits executed prior to or simultaneously with the commission of the fraud.
 The offended party must have relied on the false pretense, fraudulent act or fraudulent
means of the accused-appellant and as a result thereof, the offended party suffered
damages.
J. HERNANDO, People v. Manalang, G.R. No. 198015, [January 20, 2021]). -

Jurisprudence is settled that a person, for the same acts, may be convicted separately
for Illegal Recruitment under RA 8042 (or the Labor Code), and Estafa under Article
315(2)(a) of the RPC. In estafa, damage is essential, but not in the crime of illegal
recruitment. As to the latter, it is the lack of the necessary license or authority, but not the
fact of payment that renders the recruitment activity as unlawful.
7. Persons criminally liable for the above offenses: [R.A. 10022, Sec.4]
 Individuals: principals, accomplices and accessories.
 Juridical Persons: the officers having ownership, control, management or direction of
their business that are responsible for the commission of the offense and the responsible
employees/agents thereof shall be liable.
 Where illegal recruitment is proved but the elements of “large scale” or “syndicate” are
absent, the accused can be convicted only of “simple illegal recruitment”. (People v.
Sagun, G.R. No. 110554, 19 February 1999)
8. Nature of liability of local recruitment agency vs. foreign principal:
 Local Agency is solidarily liable with foreign principal.

 Severance of relations between local agent and foreign principal does not affect liability
of local recruiter.
9. Three (3) requirements that must concur for the complete termination of the
employment contract of seafarers. APQ Ship Management Co., Ltd., et al vs.
Angelito L. Caseñas, et al. G.R. No. 197303, 04 June 2014
a) Termination due to expiration or other reasons/ causes;

b) Signing off from the vessels; and
c) Arrival at the point of hire.
 The obligations and liabilities of the local agency and its foreign principal do not end upon
the expiration of the contracted period as they were duty bound to repatriate the seaman
to the point of hire to effectively terminate the contract of employment.
 The original POEA-approved employment contract subsisted and, thus, the solidary
liability of the agent with the principal continued. Any side agreement of an overseas
contract worker with her foreign employer is void as against public policy. The said side
agreement cannot supersede the POEA-SEC, and the solidary liability subsists in
accordance with section 10 of RA8042.
75
 Note: CONTRA to theory of imputed knowledge, when it can bind the agency vis-à-vis
liability of principal employer; on liability of recruitment agency – (Sunace International
Mgmt Services vs. NLRC, GR No. 161757, 25 January 2006).
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the
principal, employer Xiong, AND NOT THE OTHER WAY AROUND. The knowledge of the
principal-foreign employer cannot, therefore, be imputed to its agent Sunace. There being
no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension of the domestic helper Divina, it cannot be said to be privy
thereto. As such, it and its “owner” cannot be held solidarily liable for any of Divina’s claims
arising from the 2-year employment extension.
N. COMPENSABILITY OF DISABILITY
1. General rule: If sickness resulting in death or disability is among those listed in POEA-SEC
Sec 32-A, then this is compensable.
Exception: If not listed in POEA SEC Sec 32-A, then sickness is disputably presumed to be
work-related. Burden is upon OFW (or heirs) to prove reasonable causal connection
between work and sickness.
 POEA SEC, as well as the laws of the Republic of the Philippines, international
conventions, treaties and covenants where the Philippines is a signatory, are
deemed automatically incorporated into any employment contract entered into by a
Filipino OFW.
2. No compensation and benefits are payable for injury, incapacity, disability or death from
OFW’s own willful act.
3. GUIDELINES IN DISABILITY CLAIMS:
“The liabilities of the employer when the seafarer suffers work-related injury or illness during
the term of his contract are as follows:
3.1. The employer shall continue to pay the seafarer his wages during the time he is on
board the vessel;
3.2. If the injury or illness requires medical and/or dental treatment in a foreign port, the
employer shall be liable for the full cost of such medical, serious dental, surgical and
hospital treatment as well as board and lodging until the seafarer is declared fit to work
or to repatriated.
3.3. Upon sign-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 one hundred twenty (120) days.
 For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three 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.
75
 Failure of the seafarer to comply with the mandatory reporting requirement shall
result in his forfeiture of the right to claim the above benefits.
 If a doctor appointed by the seafarer disagrees with the assessment, a third doctor
may be agreed jointly between the Employer and the seafarer. The third doctor’s
decision shall be final and binding on both parties.
3.4. Those illnesses not listed in Section 32 of this Contract are disputably presumed as
work related.
3.5. Upon sign-off of the seafarer from the vessel for medical treatment, the employer shall
bear the full cost of repatriation in the event the seafarer is declared (1) fit for
repatriation; or (2) fit to work but the employer is unable to find employment for the
seafarer on board his former vessel or another vessel of the employer despite earnest
efforts.
J. HERNANDO. Omanfil International Manpower vs. Rolando B. Mesina, G.R. No.

217169, [November 4, 2020]. -- If the repatriation was indeed voluntary on his part,
he would not have pursued a case of illegal termination against petitioners which would
cost him time and money. As it is, Mesina's immediate filing of a case of illegal
dismissal negates petitioners' claim that he voluntarily agreed to his repatriation to
seek medical treatment in his home country. Likewise, petitioners failed to establish the
fact that they provided Mesina a re-entiy visa to support their argument that they did
not dismiss him. In any case, even the existence of a re-entry visa does not necessarily
defeat an illegal dismissal complaint.
3.6. In case of permanent total or partial disability of the seafarer caused by either injury or
illness the seafarershall be compensated in accordance with the schedule of benefits
arising from an illness or disease shall be governed by the rates and the rules of
compensation applicable at the time the illness or disease was contracted.
4. WHEN NO DECLARATION BY COMPANY DOCTOR IS MADE AS TO ILLNESS;

PROCEDURE AND EFFECT:
 OFW contracts sickness or sustains injury resulting in his disability
 Upon sign-off, OFW seafarer is required report within 3 days to designated company
physician for treatment of injury (considered temporary total disability) up to a period of
120 days.
 OFW is to be paid compensation as he is totally unable to work
 How much compensation: Basic wage
 oFor how long: From sign-off until he is declared fit to work, or until declaration by
physician of his disability (e.., permanent partial or permanent total disability)
 If no declaration is made because OFW requires further medical attention, the
temporary total disability compensation MAY be extended to a period of 240 days, the
compensation extended up to 240 days; subject to the right of the employer to declare
within this period that a “permanent partial or total disability already exists” .
 After 240 days and no declaration is made as to the seafarer’s medical condition, then
his disability shall be deemed total and permanent.
J. HERNANDO, Philippine Transmarine Carriers vs. Almario C. San Juan, G.R. No.
207511, [October 5, 2020]) -- We have held that the 120-day period should be reckoned
from the time the seafarer reported to the company-designated physician. If the company-
designated physician fails to give his assessment within the period of 120 days with sufficient
justification, then the period of diagnosis and treatment shall be extended to 240 days.Settled
75
is the rule that when a seafarer sustains a work-related illness or injury while on board the
vessel, his fitness or unfitness for work shall be determined by the company-designated
physician, and that "in case of conflicting medical assessments [between the company-
designated physician and the seafarer's own physician], referral to a third doctor is
mandatory; and that in the absence of a third doctor's opinion, it is the medical assessment
of the company-designated physician that should prevail."
Relevant to this rule is Section 20(B)(3)of the 2000 POEA-SEC, which similarly states that
"[i]f a doctor appointed by the seafarer disagrees with the assessment [of the company-
designated physician],a third doctor may be agreed jointly between the Employer and the
seafarer. Thethird doctor's decision shall be final and binding on both parties.
J. HERNANDO, Ronnie L. Singson vs. Arktis Maritime Corp. G.R. No. 214542, [January
13, 2021]) -- The mere lapse of the 120-day period under Article 198(c)(l) of the Labor Code
does not automatically give rise to a cause of action for a claim of permanent total disability
benefits.
To be clear, when a certain sickness or injury causes a temporary and total disability which
lasts continuously for more than 120 days, then such total disability is considered to be
permanent. However, as an exception to this rule, if the said sickness or injury that caused
the temporary total disability requires medical treatment beyond the 120-day period but not to
exceed 240 days, then the employee is only entitled to temporary total disability benefits until
he is declared as either: 1) "fit to work," which stops his entitlement to disability benefits; or
2)"permanently and totally disabled," which then entitles him to permanent total disability
benefits.
In any event, if the 240 days had lapsed without any certification issued by the company
designated doctor, then the employee may pursue an action for permanent total disability
benefits. Mere presence of a disease is not a disability.
O. PROCEDURES AND REMEDIES
1. IMPORTANT CASE: PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS.,

INC.), vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT
(G.R. No. 179652, March 6, 2012); Jurisdiction of DOLE on its visitorial power
The determination of the existence of an employer-employee relationship by the DOLE must

be respected. The expanded visitorial and enforcement power of the DOLE granted by RA
7730 would be rendered nugatory if the alleged employer could, by the simple expedient of
disputing the employer-employee relationship, force the referral of the matter to the NLRC.
The Court issued the declaration that at least a prima facie showing of the absence of an
employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely
the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if
the same does successfully refute the existence of an employer-employee relationship.
If the DOLE makes a finding that there is an existing employer-employee relationship, it

takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no
jurisdiction only if the employer-employee relationship has already been terminated, or it
appears, upon review, that no employer-employee relationship existed in the first place.
75
TO RECAPITULATE:
a. If a complaint is brought before the DOLE to give effect to the labor standards provisions
of the Labor Code or other labor legislation, and there is a finding by the DOLE that there
is an existing employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC.
b. If the DOLE finds that there is no employer-employee relationship, the jurisdiction is
properly with the NLRC.
c. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement,
the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code,
which provides that the Labor Arbiter has original and exclusive jurisdiction over those
cases involving wages, rates of pay, hours of work, and other terms and conditions of
employment, if accompanied by a claim for reinstatement.
d. If a complaint is filed with the NLRC, and there is still an existing employer-employee
relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE,
however, may still be questioned through a petition forcertiorari under Rule 65 of the
Rules of Court.
2. REQUISITES TO PERFECT AN APPEAL FROM LABOR ARBITER TO NLRC.
Sarah Lee Philippines, Inc. vs. Macatlang, et al. etc., G.R. Nos. 180147, 180148,
180149, 180150, 180319 and 180685; 04 June 2014. -- The requisites for perfection of
appeal as embodied in Article 223, as amended, are:
(1) payment of appeal fees;
(2) filing of the memorandum of appeal; and
(3) payment of the required cash or surety bond (equivalent to the monetary award less
damages and attorney’s fees)
(4) Requisites 1-3 must be satisfied within ten (10) days from receipt of the decision or
order appealed from.
As a rule, an appeal is perfected only upon the posting of a cash or surety bond. The said
posting within the period provided by law is not merely mandatory but jurisdictional.
3. VERIFICATION AND CERTIFICATION;
3.1 Who can sign for the company without need of board resolution. -- South
Cotabato Communications Corporation and Gauvain J. Benzonan vs. Hon. Patricia
A. Sto. Tomas, et al, G.R. No. 173326, 15 Dec 2010. -
The following can sign the verification and certification against forum shopping without
need of a board resolution: (1) the Chairperson of the Board of Directors, (2) the
President of a corporation, (3) the General Manager or Acting General Manager, (4)
Personnel Officer, and (5) an Employment Specialist in a labor case.
While the above cases do not provide a complete listing of authorized signatories, the
determination of the sufficiency of the authority was done on a case to case basis. In the
foregoing cases the authority of said corporate representatives to sign the verification or
certificate is justified in their being in a position to verify the truthfulness and correctness
of the allegations in the petition.
75
However, the better procedure is still to append a board resolution to the complaint or
petition to obviate questions regarding the authority of the signatory of the verification
and certification.
6. IMPORTANT CASES ON QUITCLAIMS:
GENERAL RULE: Courts look with disfavor on quitclaims and releases made by employees
who have been pressured into signing them by unscrupulous employers
seeking to evade legal responsibilities and frustrate just claims fo
employees.
EXCEPTION: However, quitclaims will be considered as valid and binding if the employer is
able to prove the following:
• Employee executes the quitclaim voluntarily
• There is no fraud or deceit on the part of the employer
• Consideration for the quitclaim is credible and reasonable
• Contract is not contrary to law, public order, public policy, morals or good
customs or prejudicial to a third person with a right recognized by law.
J. HERNANDO, Jose dela Torre vs. Twinstar, G.R. No. 22992, (23 June 2021). -- In this
case, employer was able to prove all of the above. The consideration is not grossly inadequate
vis-à-vis what they should receive in full. The difference in the amounts expected from those
that were received may be considered as a fair and reasonable bargain on the part of the both
parties.
The Court reiterated the standards that must be observed in determining whether a waiver and
quitclaim has been validly executed. Not all waivers and quitclaims are invalid as against public
policy. If the agreement was voluntarily entered into and represents a reasonable settlement,
it is binding on the parties and may not later be disowned simply because of a change of mind.
It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible
person, or the terms of settlement are unconscionable on its face, that the law will step in to
annul the questionable transaction.
In the present case, while the Court considered the quitclaim valid for complying with all the
requisites stated above, it stressed that the stipulations in such quitclaim must still be
interpreted within the bounds of law and reason. A waiver/quitclaim is a contract by nature,
and thus, following the rule that the law is deemed written into every contract, the stipulations
therein must be interpreted with this in mind.
7. IMPORTANT CASE: What is the effect of corporate rehabilitation upon monetary

claims. Philippine Airlines, Inc. vs. Reynaldo V. Paz, G.R. No. 192924, 26 Nov 2014. --
In the light of the fact that PAL’s failure to comply with the reinstatement order was justified
by the exigencies of corporate rehabilitation, the respondent may no longer claim salaries
which he should have received during the period that the LA decision ordering his
reinstatement is still pending appeal until it was overturned by the NLRC. Thus, the CA
committed a reversible error in recognizing the respondent’s right to collect reinstatement
salaries albeit suspending its execution while PAL is still under corporate rehabilitation.
75
J. HERNANDO, Digitel Employees Union v. Digital Telecoms Philippines, Inc., G.R. No.
217529, [July 3, 2019]) -- The jurisprudential rules governing the submission and contents
of the verification and certification of non-forum shopping were summarized in Altres, et al. v.
Empleo, et al., 34 viz.:
1) A distinction must be made between non-compliance with the requirement on or

submission of defective verification, and non-compliance with the requirement on or
submission of defective certification against forum shopping. SDAaTC
2) As to verification, non-compliance therewith or a defect therein does not necessarily

render the pleading fatally defective. The court may order its submission or correction
or act on the pleading if the attending circumstances are such that strict compliance
with the Rule may be dispensed with in order that the ends of justice may be served
thereby.
3) Verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition signs
the verification, and when matters alleged in the petition have been made in good
faith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect

therein, unlike in verification, is generally not curable by its subsequent submission or
correction thereof, unless there is a need to relax the Rule on the ground of
"substantial compliance" or presence of "special circumstances or compelling
reasons."
5) The certification against forum shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not sign will be dropped as parties to
the case. Under reasonable or justifiable circumstances, however, as when all the
plaintiffs or petitioners share a common interest and invoke a common cause of
action or defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule.
6) Finally, the certification against forum shopping must be executed by the party-
pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the
party-pleader is unable to sign, he must execute a Special Power of Attorney
designating his counsel of record to sign on his behalf. 35 (Emphases Ours)
FOR THE BAR EXAMINEES:

GOOD LUCK AND GOD BLESS YOU ALL!!
ADAMSON FALCONS: SOARING HIGH, DEFYING GRAVITY!

LYCEUM: VERITAS ET FORTITUDO. PRO DEO ET PATRIA!
FEU: FORTITUDE, EXCELLENCE, AND UPRIGHTNESS. BE BRAVE!
ADA D. ABAD, 04 September 2023
75
2023 HERNANDO LABOR LAW BAR PRE-WEEK HAND-OUTS
FOR 2023 ADAMSON FEU LYCEUM BAR OPERATIONS
THE ABAD NOTES (COMPLETED 28AUG2023)
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2023 HERNANDO BAR LABOR LAW PRE-WEEK HAND-OUTS

FOR 2022 ADAMSON LYCEUM FEU BAR OPERATIONS

PRE-WEEK HAND-OUTS FOR

For 2023 Bar Examinations:

REMINDERS FROM THE SUPREME COURT BAR BULLETINS

• Advancing the Bar month to September 2023

• FOUR BAR EXAMINERS PER SUBJECT

IMPT: TIME YOURSELF DURING THE BAR EXAM PROPER

A. GENERAL PRINCIPLES AND CONCEPTS

1. WHEN FACED WITH A PROBLEM SOLVING ESSAY-TYPE QUESTION IN THE

MEMORIZE ARTICLE 3, LABOR CODE: DECLARATION OF POLICY

2. Principle of Social and Distributive Justice: Balancing of interests in case

3. HOW TO BALANCE CONFLICTING INTERESTS IN PROBLEM SOLVING:

MANAGEMENT VS. LABOR

 Profit  Equitable share in the profits

 Management prerogatives  Worker’s rights

4. SIX (6) GENERAL RULES TO REMEMBER

#1: The EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP IS A CONDITION

#2: PRINCIPLE OF INCORPORATION.

#5: NO RETROACTIVE EFFECT OF LABOR LAWs, except when otherwise provided.

#6: IN CASES OF DOUBT OR AMBIGUITY, INTERPRET OR RULE IN FAVOR OF LABOR.

4.1. GENERAL RULE #1: The existence of Employer-Employee relationship is a

4.1.1 Four tests to determine the existence of an employer-employee relationship

(MEMORY AID: SOUTH WEST DISASTER CONTROL)

a. Selection and hiring;

Control test: An employer-employee relationship exists "where the person for

An employer-employee relationship may cover peripheral or core activities of the

As regards Shogun Ship's power of control over petitioners, respondent contended

Issue: Is there an employer-employee relationship between the spouses and the

Labor Arbiter: No employer-employee relationship

Based on record, there is no proof that a partnership existed between Pedro or

Considering that no partnership exists, we proceed to determine whether Pedro

SELECTION AND HIRING: Ralco Beach engaged the services of Pedro as

DISMISSAL: Emmarck terminated their employment when he notified them that

4.1.5 DISTINGUISH BETWEEN “RULES THAT FIX METHODOLOGY” VS. “RULES

Not every form of control is indicative of employer-employee relationship. A

4.2 GENERAL RULE #2: PRINCIPLE OF INCORPORATION.

Once an employer-employee relationship is deemed to exist, the Labor Code is

4.3 GENERAL RULE #3: BURDEN OF PROOF IS ALWAYS UPON EMPLOYER to

TWO EXCEPTIONS when burden of proof is initially placed upon EMPLOYEE:

No particular form of evidence is required to prove the existence of an employer-

As an allegation is not evidence, it is elementary that a party alleging a critical fact

ADA’S NOTES ON RECENT TRENDING OF THE SUPREME COURT CASES:

 HOW TO PROVE FACT OF HIRING; TWO CONCEPTS:

 It is thus incumbent upon complainant-employee to proffer evidence to prove the

 CONTRA: INSTANCES WHERE THERE IS NO EMPLOYER-EMPLOYEE

a) HERNANDO, J. Gesolgon v. CyberOne PH., Inc., G.R. No. 210741,

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

Based on record, petitioners were requested by respondent Mikrut to become

However, petitioners contend that they were hired as employees of CyberOne PH

b) OUTSIDE THE COVERAGE, BUT GOOD TO KNOW): J. HERNANDO,

c) Carmela Tiangco v. ABS-CBN Broadcasting Corp., G.R. No. 200434,

Facts: Petitioner Carmela C. Tiangco (petitioner) was initially engaged by

In Feb 1995, ABS-CBN issued a Memorandum prohibiting commercial

Unfortunately, Mel Tiangco appeared in a Tide commercial that aired sometime in

a) Proof beyond reasonable doubt is not required in administrative cases.

b) Substantial evidence defined:

J. HERNANDO. JR Hauling Services v. Solamo, G.R. No. 214294, [September

To be clear, in the hierarchy of evidentiary values, "proof beyond reasonable doubt

4.5 GENERAL RULE #5: No retroactive effect of labor laws.

4.6 GENERAL RULE #6: IN CASES OF DOUBT OR AMBIGUITY, INTERPRET OR

CASES ON INTERPRETATION OF LABOR PROCEDURES:

Acting on this anomaly, RBSR conducted an investigation and confirmed the

However, Reyes refused to certify the report, reasoning that no independent