LABOR RELATIONS Compiled by Clintmaratas v.4

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo Compiled by: Clint M. Maratas –LLB

LABOR RELATIONS

I. EPLOYER-EPLOYEE RELATIONSIP

3espondent BCC countered that petitioner $as not its employee but that o 9obien ,ood Corp. (9,C)% its ma+or creditor and supplier. 9,C had posted him as its comptroller in BCC to o'ersee BCC
1. Em%!$er Art. 211 ar. E Article 212(e) includes es any person person acting acting in the EPLOYER – includ interest o an employer directly or indirectly. !he term shall not include any labor organi"ation or any o its oi oice cers rs or agen agents ts e#ce e#cept pt $hen hen acti acting ng as an employer.

R'%i"/ !hat o BCC. !he 9upreme Court
2. Em%!$ee A Art. 211 a ar. F Article 212 () EPLOYEE – includes any person in ht employ o an empl employ oyer er.. !he !he term term shal shalll not not be limi limite ted d to the the employees o a particular employee% unless this code so e#pressly e#pressly states. states. &t shall include include any indi'id indi'idual ual $hose $or has ceased as a result o or in connection $ith any current labor dispute or because o any other other substa substanti ntiall allyy eui' eui'ale alent nt and regula regularr employment.  *mployer may be: 1. natural 2. +uridical

&t does seem more natural and more belie'able that petitioneri'en the patent animosity and strained relations bet$een him and respondents in such such circ circum umst stanc ances es%% inde indeed% ed% ho$ ho$ coul could d he stil stilll eici eicient ently ly peror perorm m in behal behal o 9,C 9,C the essent essential ial responsibility to ?o'ersee and super'ise collections@ at BCC= 9urely% respondents $ould ha'e 'igorously ob+ected to any arrangement $ith 9,C in'ol'ing him.

First Semester S.Y. 2013-14 Base !" t#e s$%%a&'s !( Att$. )#e*ie +. ,emei%%! )!mi%e &$/ )%i"t . aratas



*mpl *mploy oyee ee – only only natu natura rall persons may ualiy as an employee. &t could be ,ilipino citi"ens and oreigners

-iring o employees  ,oreigners – Art. /02%  2 applies  ,ilipino ,ilipino00 there is none. !he Constituti Constitution on and the Labor Code encourage the employment o ,ilipinos.

3.

Test t! t! ,e ,etermi"e t# t#e E5 E5iste"6e !( !( Em%!$er-Em%!$ee Em%!$er-Em%!$ee Re%ati!"s#i FOUR-FOL, TEST 1. 3ight to -ire 2. ayment o 4ages 5. o$er o ismissal . Control o'er the conduct o 4or

)ases/ )#ar%i )#ar%ie e 7a! 8s. B))I B))I Pr!' Pr!'6ts 6ts Sa%es Sa%es I"6. I"6. a" Terra"6e T$ 9.R. N!. 1:3;00 Ari% 1< 2012. *!&!&6 !&67*3 7*3 Charl Charlie ie 8ao allege alleged d that that FA)TS/ *!& respon responden dents ts BCC rodu roduct ct 9ales% 9ales% &nc. &nc. (BCC) (BCC) and !errance !y employed him as a comptroller. 6n 6ct. 1% 1;% the security guards o BCC barred him rom entering its premises.

4e note note that that petiti petitione onerr e#ecut e#ecuted ed the aida aida'i 'itt in March 1 to reute a statement !y himsel made in his o$n aida'it dated ec. 11% 1; to the eect that petitioner had illegally appropriated some checs $ithout authority rom BCC. BCC. etitioner thereby sought to sho$ that he had the authority to recei'e the checs pursuant to the arrangements bet$een 9,C and BCC. !his sho$ing $ould aid in ending o the criminal charge respondents iled against him arising rom his mishandling o the checs. 7atu aturally% the circum circumsta stance ncess petiti petitione onerr ad'ert ad'erted ed to in his March March 1 1 aida aida'i 'itt concer concerned ned those those occurr occurring ing beore beore ece ecemb mber er 11% 11% 1; 1;%% the the same same peri period od $hen $hen he actually $ored as comptroller in BCC (Charlie 8ao 's. BCC roducts 9ales &nc. and !errance !y% >.3. 7o. 15//% April 1% 2/12). *mployer0employee relationship. &n determining the pres presen ence ce or abse absenc nce e o an empl employ oyer er0e 0emp mplo loye yee e relationship% the Court has consistently looed or the ollo$ ollo$ing ing incident incidents% s% to $it: $it: (a) the select selection ion and engagement o the employeeD (b) the payment o

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$agesD (c) the po$er o dismissalD and (d) the employer
7OSE 7OSE EL EL BERN BERNA ARTE RTE 8s. 8s. PIL PILIP IPPI PINE NE BAS+ETB BAS+ETBALL ALL ASSO. ASSO. PBA PBA 7OSE EANUEL EANUEL . EALA EALA a" PERRY PERRY ARTINE= ARTINE= 9.R. 9.R. N!. 1>20<4 Setem&er 14 2011 Fa6t Fa6ts/ s/ *!&!&67*3 8ose Mel Bernate $ored as one o the reere reerees es o the hili hilippi ppine ne Baset Basetbal balll Association (BA). -e entered into t$o contracts as a retainer $ith the BA in the year 2//5. !he irst contract $as or 8an. 1% 2//5 to 8uly 1;% 2//5D and the second $as or 9ept. 1 to ecember 2//5. Ater the lapse o the later period% BA decided not to rene rene$ $ his his cont contra ract ct%% citi citing ng his his unsa unsati tis sac acto tory ry perormance on and o the court. Maintaining he is a regular employee% Bernate iled a complaint or illegal dismissal against BA. id his case prosper=

R'%i"/ 7o. 4e agree $ith respondents that once on the playing court% the reerees e#ercise their o$n indepe independe ndent nt +udgme +udgment% nt% based on the rules rules o the game% as to $hen and ho$ a call or decision is to be made. !he reerees decide $hether an inraction $as committed% and the BA cannot o'errule them once the decision is made on the playing court. !he !he ree reere rees es are are the the only only%% abso absolu lute te%% and and ina inall authority on the playing court. 3espondents or any o the BA oicers cannot and do not determine $hich calls to mae or not to mae and cannot control the reeree $hen he blo$s the $histle because such authority e#clusi'ely e#clusi'ely belongs to the reerees. !he 'ery nature o petitioner
$ee spread o'er an a'erage o only 1/; playing days a year% and they oiciate oiciate games at an a'erage o t$o hours per gameD and (2) the only deductions rom rom the the ees ees recei ecei''ed by the reer eeree eess are are $ithholding ta#es. ta#es. &n othe otherr $ord $ords% s% unli unlie e regu regula larr empl employ oyee eess $ho $ho ordinarily report or $or eight hours per day or i'e days a $ee% petitioner is reuired to report or $or only $hen BA games are scheduled or three times a $ee at t$o hours per game. &n addition% there are no deductions or contributions to the 9ocial 9ecurity 9ystem% hilhealth or ag0&big% $hich are the usual dedu deduct ctio ions ns rom rom empl employ oyee ees< s< sala salari ries es.. !hes !hese e undisp undispute uted d circum circumsta stance ncess buttr buttress ess the act act that that petitioner is an independent contractor% and not an employee o respondents. (8ose Mel Bernarte 's. hilippine Basetball Association (BA)% et. al.% >.3. 7o. 12/% 9ept. 1% 2/11)

ARTI)IO SEBLANTE SEBLANTE a" ,UBRI)+ PILAR PILAR 8s. T )OURT OF APPEALS 1> ,IVI ,IVISI SION ON "!? "!? SPE)IAL FORER 1> T ,IVISION 9ALLERA ,E AN, AN,AU AUE E @SPO @SPOUS USES ES VI)E VI)ENT NTE E a" a" ARI ARIA A LUISA LOOT9.R. N!. 1>:42: A''st 1 2011 *!&!&67 &67*39 *39 Martic Marticio io 9embla 9emblante nte and FA)TS/ *!&! ubri ubric c ilar ilar $ere $ere hired hired by pri'at pri'ate e respon responden dents ts Ficente and Maria Luisa Loot as oicial masiador and sentenciad sentenciador% or% respecti' respecti'ely% ely% o their >allera >allera de Mandaue% a cocpit. As the masiador% 9emblante $ould call and tae the bets rom the gamecoc o$ners and other bettors and order the start o the cocight. -e $ould also distribute the $innings ater deducting the arriba% or the commission or the cocpit. As the sentenciador% ilar $ould o'ersee the proper gaing o ighting coc cocss dete deterrmine mine the the igh ighti ting ng coc cocs< s< phys physic ical al condition and capabilities to continue the cocight% and e'entually declare the result o the cocight. ,or their their ser'ic ser'ices es as masiad masiador or and senten sentencia ciador dor%% 9emblante $as paid 2%/// per $ee or %/// per mont month% h% $hil $hile e ila ilarr $as $as paid paid 5%; 5%;// // a $ee $ee or 1%/ 1%/// // a month. month. !hey !hey $ore $ored d e'ery e'ery !uesda !uesday% y% 4ednesd 4ednesday% ay% 9aturd 9aturday ay and 9unday 9unday e'ery e'ery $ee% $ee% e#clud e#cluding ing monthl monthlyy derbie derbiess and coci cocight ghtss held held on special holidays. &n a complaint or illegal dismissal% the Labor Arbiter oun ound d peti petiti tion oner erss to be regu regula larr empl employ oyee eess o respondents. &n their appeal to the 7ational Labor 3ela 3elati tion onss Comm Commis issi sion on (7L3 (7L3C) C)%% resp respon onde dent ntss belatedly put up an appeal bond. !he 7L3C ater a Moti Motion on or or 3econ econsi side dera rati tion on by resp respon onde dent nts% s% entertained the appeal and ound that there $as no employer0employee relationship bet$een petitioners

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and respondents. !he Court o Appeals (CA) upheld the the deci decisi sion on o the the 7L3C 7L3C.. Can Can the the deci decisi sion on be +ustiied=

R'%i"/ Ges. 4hile respondents had ailed to post their bond $ithin the 1/0day period pro'ided abo'e% it is e'ident% on the other hand% that petitioners are not employees o respondents% since their relationship ails to pass muster the our0old test o employment 4e ha'e ha'e repea epeate tedl dlyy ment mentio ione ned d in coun countl tles esss decisions: (1) the selection and engagement o the employeeD (2) the payment o $agesD (5) the po$er o dism dismis issa salD lD and and () () the the po$ po$er to cont contro roll the the employ employee< ee.3. 7o. 12% Aug. 1;% 2/11).

)R) A9RI)U A9RI)ULTURA LTURAL L TRA,IN9 TRA,IN9 a" ROLAN,O ROLAN,O B. )ATIN,I9 8s. NLR)  ROBERTO OBIAS 9.R. N!. 1;;::4 ,e6. 23 200> *!&!& !&67 67*3 *39 9 oppo oppose sed d resp respond ondent ent FA)TS/ *!& 3obert 3oberto o 6bia
payment o $agesD (5) the po$er o dismissalD and () the employer
this case. ,irst ,irst%% the petiti petitione oners rs engage engaged d the ser'ic ser'ices es o the respondent in 1;. 9econd% the petitioners paid the respondent a daily $age o 1;.//% $ith allo$ances ranging rom 1/.// to 2//.// per day. !he act the respondent $as paid under a ?no $or0no pay@ sche scheme me%% assum assumin ing g this this clai claim m to be true true%% is not not signiicant. !he ?no $or0no pay@ scheme is merely a method o computing compensation% not a basis or determining the e#istence or absence o employer0 employee relationship. !hird% the petitioners< po$er to dismiss the respondent $as inherent in the act that they engaged the ser'ices o the respondent as a dri'er. ,inally% a careul re'ie$ o the record sho$s that the respondent perormed his $or as dri'er under the petiti petitione oners< rs< super' super'isi ision on and contro control.l. etiti etitione oners rs determined ho$% $here% and $hen the respondent peror perormed med his tas. tas. !hey% !hey% in act% act% reues reuested ted the resp respond onden entt to li'e li'e insi inside de thei theirr comp compou ound nd so he (resp (respond ondent ent)) could could be readil readilyy a'ail a'ailabl able e $hen $hen the petitione petitioners rs needed needed his ser'ices. ser'ices. Hndoubtedly% Hndoubtedly% the petiti petitione oners rs e#erci e#ercised sed contro controll o'er o'er the means means and methods methods by $hich $hich the respondent respondent accomplis accomplished hed his $or as a dri'er. dri'er. 4e conc conclu lude de rom rom all all thes these e that that an empl employ oyer er00 empl employ oyee ee rel relati ations onship hip e#i e#isted sted bet$ et$een een the petitioners and respondent (C3C Agricultural !rading and 3oland 3olando o B. Catind Catindig ig 's. 7L3C 7L3C and 3obert 3oberto o 6bias% >.3. 7o. 1% ecember 25% 2//).

,EAL)O FARS IN). 8s. NLR) et.a%. 9.R. N!. N!. 131>2 7a". 30 200> etitioner er ealco ealco ,arms is a corporati corporation on FA)TS/ etition engaged in the business o importation% production% attening and distribution o li'e cattle or sale to meat dealer dealers% s% meat meat trader traders% s% meat meat proces processor sors% s% canned canned good manuacturers and other dealers in Mindanao and in Metro Manila. etitioner imports cattle by the boatlo boatload ad rom rom Austra Australilia a into into the ports ports o >enera >enerall 9anto 9antoss City% City% 9ubic% 9ubic% Batang Batangas% as% or Manil Manila. a. &n turn% turn% these imported cattle are transported to% and housed in% petitioner
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USPF LABOR RELATIONS REVIEW NOTES 2013

based on the outline of Atty. Demegillo

Compiled by: Clint M. Maratas –LLB

3espondents Albert Caban and Chiuito Bastida $ere hired by petitioner on 8une 2;% 15 and 6ctober 2% 1% respecti'ely% as escorts or IcomboysI or the transit o li'e cattle rom >eneral 9antos City to Manila. 3espondents< $or entailed tending to the cattle during transportation. &t included eeding and reuently sho$ering the cattle to pre'ent dehydration and to de'elop heat resistance. 6n the $hole% respondents ensured that the cattle $ould be sae rom harm or death caused by a cattle ight or any such similar incident. Hpon arri'al in Manila% the cattle are turned o'er to and recei'ed by the duly acno$ledged buyers or customers o petitioner% at $hich point% respondents< $or ceases. ,or e'ery round trip tra'el $hich lasted an a'erage o 12 days% respondents $ere each paid 1%;//.//. !he 120day period is occasionally e#tended $hen petitioner
ISSUE/ 4hether or not an employer0employee relationship e#isted bet$een petitioner and respondents and thereore the latter
respondent. &t is o +udicial notice that the bul o the maret or li'estoc o big li'estoc raisers such as respondent is in Manila. -ogs do not s$im% they are shipped. !he caretaer is a component o the business% a part o the scheme o the operation. More% it also appears that respondents had rendered ser'ice or more than one year doing the same tas repeatedly% thus% e'en assuming they $ere casual employees they may be considered regular employees $ith respect to the acti'ity in $hich they $ere employed and their employment shall continue $hile such acti'ity e#ists (last par. o Art. 2/). &n the case at bench% both the Labor Arbiter and the 7L3C $ere one in their conclusion that respondents $ere not independent contractors% but employees o petitioner. &n determining the e#istence o an employer0employee relationship bet$een the parties% both the Labor Arbiter and the 7L3C e#amined and $eighed the circumstances against the our0old test $hich has the ollo$ing elements: (1) the po$er to hire% (2) the payment o $ages% (5) the po$er to dismiss% and () the po$er to control the employees< conduct% or the so0called Icontrol test.I 6 the our% the po$er o control is the most important element. More importantly% the control test merely calls or the e#istence o the right to control% and not necessarily the e#ercise thereo. !he presence o the our () elements in the determination o an employer0employee relationship has been clearly established by the acts and e'idence on record% starting $ith the admissions o petitioner $ho acno$ledged the engagement o respondents as escorts o their cattles shipped rom >eneral 9antos to Manila% and the compensation o the latter at a ee o 1%;//.// per trip !he element o control% +urisprudentially considered the most essential element o the our% has not been demolished by any e'idence to the contrary. !he branch has noticed that the preparation o the shipment o cattle% manning and eeding them $hile in transit% and maing a report upon their return to >eneral 9antos that the cattle shipped and $hich reached Manila actually tallied $ere all indicators o instructions% super'ision and control by JpetitionerK on Jrespondents
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they $ere undeniably the o$ners o the cattle escorted by respondents. 9hould losses o a shipment occur due to respondents< neglect these $ould still be petitioners< loss% and nobody else
WPP AR+ETIN9 )OUNI)ATIONS IN). et. A%. 8s. 7O)ELYN . 9ALERA 9.R. N!. 1:>20; ar6# 2 2010 A" 7O)ELYN . 9ALERA 8s. WPP AR+ETIN9 )O. et. a%. 9.R. N!. 1:>23> ar6# 2 2010 Fa6ts/ etitioner 8ocelyn M. >alera is an American citi"en% $ho $as hired by respondent 8ohn 9teedman% Chairman o 4 4orld$ide and Chie *#ecuti'e 6icer o Mindshare% Co.% a corporation based in -ong ong% China% to $or in the hilippines or pri'ate respondent 4 Mareting Communications% &nc. (4)% a corporation registered and operating under the la$s o hilippines. Hnder the employment contract% >alera $ould commence employment on 9eptember 1% 1% $ith the position o Managing irector o Mindshare hilippines. !hus% $ithout obtaining an alien employment permit% >alera commenced her employment $ith 4 hilippines on the said date. &t $as only ater our months rom the time she commenced employment that pri'ate respondent 4 iled beore the Bureau o &mmigration an application or petitioner >alera to recei'e a $oring 'isa. &n the application% she $as designated as Fice0 resident o 4. etitioner alleged that she $as constrained to sign the application in order that she could remain in the hilippines and retain her employment. 6n ecember 1% 2///% pri'ate respondent >alera $as 'erbally inormed by 9teedman that her employment had been terminated. 9he recei'ed her termination letter the ollo$ing day. -er termination prompted >alera to commence a complaint or illegal dismissal beore the labor arbiter. !he labor arbiter ound 4% 9teedman% 4ebster% and Lansang liable or illegal dismissal and damages. ,urthermore the labor arbiter stated that >alera $as not only illegally dismissed but $as also not accorded due process% saying that >alera $as not gi'en an opportunity by

4 to deend hersel and e#plain her side. !hus% 4 did not obser'e both substanti'e and procedural due process in terminating >aleraalera and to pay her bac$ages% transportation and housing beneits% and moral and e#emplary damages% among others. 6n appeal% the 7L3C re'ersed the labor arbiteralera $as 4aleraalera bac$ages and separation pay% as $ell as housing beneits% moral and e#emplary damages% and attorney
Iss'es/ 1. &s >alera an employee or a corporate oicer o 4= 2. id the labor arbiter ha'e +urisdiction o'er the case= 5. 4as >alera illegally dismissed= . &s >alera entitled to collect the a$ard o bac$ages and damages e'en i she did not ha'e an alien employment permit $hen she commenced her employment in the hilippines= R'%i" First Iss'e/ >alera is an employee o 4. 9he is not a corporate oicer o 4. An e#amination o 4aleraalera
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4ebster. >alera cannot be said to be a director o 4 also also becaus because e all i'e i'e direct directors orship hip positi positions ons pro'ided in the by0la$s are already occupied. !he appellate appellate court urther urther +ustiied +ustiied that >alera >alera $as an empl mployee oyee and and not not a cor corpor porate ate oi oiccer by sub+ecting 4 and >alera
Se6!" Se6!" Iss'e Iss'e// !he Labor Arbiter had +urisdiction o'er the illegal dismissal complaint iled by >alera. >alera being an employee% the Labor Arbiter and the 7L3C 7L3C had +urisd +urisdict iction ion o'er o'er her illega illegall dismis dismissal sal complaint. Article 21 o the Labor Code 'ests the Labor Arbiter $ith the +urisdiction to hear and decide% amon among g othe others rs term termin inat atio ion n disp disput utes es%% in'o in'ol' l'in ing g $orers% $hether agricultural or non0agricultural. non0agricultural. Ges% 4aler >alera a T#i T#ir r Iss' Iss'e e// Ges% laced both substanti'e and procedural due process. 4 ailed to pro'e any +ust or authori"ed cause or >aleraalera >alera%% (uest (uestion ioning ing her leader leadershi ship p and competence). >alera% on the other hand% presented documentar documentaryy e'idence e'idence in the orm o congratulat congratulatory ory letters% including one rom 9teedman% $hich contents are diametrically opposed to the ecember 1;% 2/// letter. Also% the la$ reuires that the employer must urnish the $orer sought to be dismissed $ith t$o $ritten notices beore termination o employment can be legall legallyy eect eected: ed: (1) (1) notice notice $hich $hich appris apprises es the employ employee ee o the particul particular ar acts acts or omissi omissions ons or $hich his dismissal dismissal is soughtD and (2) the the subseuent notice $hich inorms the employee o the employeraleraale >alera ra coul could d not not clai claim m the the F!' F!'rt rt# # Iss' Iss'e e// 7o% employees beneits she is entitled under hilippine Labor La$s. !he la$ and the rules are consistent consistent in stating that the employment permit must be acuired prior to employment. Article / o the Labor Code

state tates: s: IAny IAny alie alien n see seeiing admi admiss ssiion to the the hil hilip ippi pine ness or or empl employ oymen mentt purp purpos oses es and and any any domestic or oreign employer $ho desires to engage an alien alien or employ employmen mentt in the hili hilippi ppines nes shall shall obtain an employment permit rom the epartment o Labor. or. 9ection % 3ule N&F% Boo 1 o the &mpl &mplem emen entiting ng 3ule 3uless and and 3egu 3egula latition onss pro' pro'id ides es%% among others% that i an alien enters the country under a non0$oring 'isa and $ishes to be employed thereater% he may only be allo$ed to be employed upon presentation o a duly appro'ed employment permit. >ale >alera ra cann cannot ot come come to this this Cour Courtt $ith $ith uncl unclean ean hands. !o grant >aleraalera rom seeing relie rom other +urisdictions.

9LORIA V. 9OE= 8s. PNO) ,EVELOPENT ,EVELOPENT AN,A AN,ANA9E NA9EENT ENT )ORPORA )ORPORATION TION P,) P,) D (!rmer%$ "!?" as FILOIL ,EVELOPENT AN, ANA9EENT 9.R. N!. N!. 1;4044 N!8. 2; 200> Fa6ts/ etitioner >loria F. >ome" used to $or as Mana Manage gerr o the the Lega Legall epa epart rtme ment nt o etro etron n Corporation% then a go'ernment0o$ned corporation. 4ith 4ith etr etron onome" continued to ser'e as corporate secretary o respondent respondent MC. MC. 6n 9eptember 9eptember 25% 1 its presid president ent re0hir re0hired ed her as admini administr strato atorr and legal legal counsel o the company. 6n March 2% 1 the ne$ board o directors o respon responden dentt MC MC remo'e remo'ed d petiti petitione onerr >ome" >ome" as corporate secretary. secretary. ,urther% at the boardome"
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compan companyome" >ome" or her part part conced conceded ed that that as corporate corporate secretary% secretary% she ser'ed only as a corporate corporate oicer. But% $hen they named her administrator% she became a regular manageri erial emplo ployee. Conseuently% the respondent MC
Iss'e/ 467% >ome" an ordinary employee $hose complaint is $ithin the +urisdiction o the 7L3C Ges. !he !he rela relatitions onshi hip p o a pers person on to a R'%i"/ Ges. corporation% $hether as oicer or agent or employee% is not determined by the nature o the ser'ices he perorms but by the incidents o his relationship $ith the the corp corpor orat atio ion n as they they actu actual ally ly e#is e#ist. t. !hat !hat the the employee ser'ed concurrently as corporate secretary or or a time time is immat mmater eria ial. l. A corp corpor orat atio ion n is not not prohibited rom hiring a corporate oicer to perorm ser'ices under circumstances $hich $ill mae him an employee. &ndeed% it is possible or one to ha'e a dual dual role role o oi oice cerr and and empl employ oyee ee.. 7L3C 7L3C has has +urisdiction o'er a complaint iled by one $ho ser'ed both as corporate oicer and employee% $hen the money claims $ere made as an employee and not as a corporate oicer.

RAUL RAUL 9. LO)SIN a" a" E,,IE E,,IE B. TOAUIN TOAUIN Vs. PIL PILIP IPPI PINE NE LON9 LON9 ,IST ,ISTAN AN)E )E TELE TELEP PON ONE E )OPANY 9.R. N!. 1<21 O6t!&er 2 200> Fa6ts/ 6n 7o'ember 1% 1/% respondent hilippine Long istance !elephone Company (L!) and the 9ecurity and 9aety Corporation o the hilippines (99C) entered into a 9ecurity 9er'ices Agreement (Agreement (Agreement)) $hereby $hereby 99C $ould pro'ide pro'ide armed armed security guards to L! to be assigned to its 'arious oices. oices. ursuant ursuant to such such agreement% agreement% petiti petitioners oners 3aul 3aul Locs Locsin in and and *ddi *ddie e !oma !omau uin in%% amon among g othe otherr security guards% $ere posted at a L! oice. 6n August August 5/% 2//1% 2//1% respon responden dentt issued issued a Letter Letter dated August 5/% 2//1 terminating the Agreement eecti'e 6ctober 6ctober 1% 2//1. espite the termination termination o the Agreement Agreement%% ho$e'er% ho$e'er% petitioner petitionerss continued continued to secure the premises o their assigned oice. !hey $ere allegedly directed to remain at their post by repres represent entati ati'es 'es o respon responden dent. t. &n suppor supportt o their their contention contention%% petitione petitioners rs pro'ided pro'ided the Labor Arbiter $ith copies o petitioner Locsin
reco'e reco'ery ry o money money claims claims such such as o'erti o'ertime me pay% pay% holiday pay% premium pay or holiday and rest day% ser'i ser'ice ce incent incenti'e i'e lea'e lea'e pay% pay% *merge *mergency ncy Cost Cost o Li'i Li'ing ng Allo Allo$ $ance ance%% and and mora morall and and e#em e#empl plar aryy damages against L!. !he Labor Arbiter rendered a ecision inding L! liable or illegal dismissal. &t $as e#plained in the ecision that petitioners $ere ound to be employees o L! and not o 99C. 9uch conclusion $as arri'e arri'ed d at $ith $ith the actua actuall indi inding ng that that petit petition ioners ers continued to ser'e as guards o L!
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BALA BALAIS IS@A @AVE VELI LINO NO REYE REYES S 8s. 8s. A9, A9,A ALENA LENA A,7OS =ENAI,A TIA=ON a" )ARELITA RAPA,AS 9.R. N!. 1<0>4 N!8em&er 2 200> Fa6ts/ 3espondent 3espondentss Magdalena Magdalena Mad+os% Mad+os% Oenaida Oenaida !iam" !iam"on on and Carmel Carmelita ita 3apada 3apadass $ere $ere employ employed ed someti etime in 11 as all0aro around und labo aborers (dri (dri'e 'erP rPs$ s$eep eeper erPP ?tag ?taga0 a0lilibi bing ng@P @Pgr gras ass0 s0cu cutt tter er)) by Maso Masoni nicc Cont Contra ract ctor or%% &nc. &nc. (MC& (MC&). ). *ach *ach o them them recei'ed an initial daily $age o 1;.// and $ere reuired to report or $or rom :// a.m. to :// p.m. p.m. !hree !hree years years there thereat ater% er% MC& increa increased sed their their $ages by 1;.// per day but not $ithout earning the ire o Mel'in Balais% president o MC&. 9ometime in 2//% Balais told Mad+os% !iam"on and 3apadas% along $ith nine () other employees% to tae a t$o0day lea'e. 4hen they reported or $or t$o days thereate thereater% r% they $ere barred rom entering entering the $or premises and $ere inormed that they had alre alread adyy been been repl replac aced ed by othe otherr $or $orer ers. s. !his !his prom prompt pted ed Mad+ Mad+os os and and her her co0$ co0$or ore ers rs to ile ile a comp compla lain intt agai agains nstt here herein in peti petititione oners rs or or ille illega gall dismis dismissal sal and or non0pa non0payme yment nt o o'erti o'ertime me pay% pay% holiday pay% 15th month pay% and damages. etit etition ioners ers%% or their their part% part% denie denied d being being the direct direct employer employer o respondents respondents.. *ssential *ssentially% ly% they argued argued that MC& had maintenance contracts $ith dierent memorial par companies and that% o'er the years% they they had had engag engaged ed the the ser' ser'ic ices es o a cert certai ain n Lu" Lu" Mali Malibi bira ran n to pro' pro'id ide e them them $ith $ith the the nece necess ssar aryy manpo$er depending on MC&
R'%i"/ Ges. etitioners< deense that they merely contra contracte cted d the ser'ic ser'ices es o respon responden dents ts throug through h Malibiran ails to persuade us. !he acts o this case sho$ that respondents ha'e been under the employ o MC& as early as 11. !hey $ere hired not to perorm a speciic +ob or undertaing. &nstead% they $ere employed as all0around laborers doing 'aried and and inte interm rmititte tent nt +obs +obs%% such such as thos those e o dri' dri'er ers% s% s$eep s$eeper ers% s% gard garden ener ers% s% and and e'en e'en unde undert rta aer erss or tagalibing% until they $ere arbitrarily terminated by MC& in 2//. !heir $ages $ages $ere paid directly directly by MC&% MC&% as e'idenced by the latter
bearers thereo as bona ide employees o the irm or inst instit itut utio ion n that that issu issued ed them them.. !he !he pro' pro'is isio ion n o company0issued identiication cards and uniorms to respon responden dents% ts% aside aside rom rom their their inclu inclusio sion n in MC&
LESLIE O+OL 8s. SLIERS WORL, INTERNA INTERNATIONA TIONAL L BEAVIOR BEAVIOR O,IFI)A O,IFI)ATION TIONS S IN). IN). a" a" RO RONA NAL, L, 7OSE 7OSEP P OY OY  9.R. 9.R. N!. N!. 1:014: ,e6em&er 11 200> *!&!&67 &67*3 *3 Leslie Leslie 6ol 6ol rose rose rom rom the FA)TS/ *!&! rans to become head oice manager% then director and 'ice president% o the respondent rom 1 until her dismissal on 9ept. 22% 1. 9he iled a complaint or illegal suspension% illegal dismissal and money claims against the respondent in the the arbi arbitr trat atio ion n bran branch ch o the the 7ati 7ationa onall Labo Laborr 3elations 3elations Commission Commission (7L3C). (7L3C). 9he asserted asserted that e'en as 'ice president% the $or that she perormed con conor orme med d to that that o an empl employ oyee ee rath rather er than than a corporate oicer. -ence% 7L3C has +urisdiction o'er the case. id this contention prosper= submitted R'%i"/ 7o. Clearly% rom the documents submitted by respondents% petitioner $as a director and oicer o 9limm limmer erss 4or 4orld. !he charg harges es o illegal egal suspension suspension%% illegal illegal dismissal% dismissal% unpaid unpaid commission commissions% s% reinstatement and bac $ages imputed by petitioner against respondents all suarely $ithin the ambit o intra0corporate disputes. &n a number o cases% $e ha'e ha'e held held that that a corpor corporate ate oice oicer.3. 1/22% 6ct. % 1% 22 9C3A /D Lo"on '. 7L3C% 51/ hil. 1 (1;)D *spino '. 7L3C% 51/ hil. 1 (1;)D ,ortune Cement Corp. '. 7L3C% >.3. 2% 8an. 2% 11% 15 9C3A 2; citing y '. 7L3C% 22 hil. 25 (1).K 9ubsec 9ubsectition on ;.2% ;.2% 9ecti 9ection on ; o 3epubl 3epublic ic Act % %

Eage




$hich too eect on Aug. % 2///% transerred to regional trial courts the 9*C
6n the same date% respondent $as ad'ised that petitioner is terminating his retainer contract $ith the company since his ser'ices are no longer necessary.

It is a settled rule that jurisdiction over the subject matter is conferred by law. The determination of the rights of a director and 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. !hus% the appellate court

&ssue: *#istence o employer0employee relationship

correctly ruled that it is not the 7L3C but the regular courts $hich ha'e +urisdiction o'er the present case. (Leslie 6ol 's. 9limmers 4orld &nternational Beha'ior Modiications &nc. and 3onald 8oseph Moy% >.3. 1/1% ec. 11% 2//).

ATO+ BI9 WE,9E )OPANY IN). PETITIONER VS. 7ESUS P. 9ISON RESPON,ENT. G9.R. N!. 1:>10 A''st 0< 2011H !opic: Basic rinciples Fa6ts/ 3espondent 8esus . >ison $as engaged as part0time consultant on retainer basis by petitioner Ato Big 4edge Company% &nc. As a consultant on retainer basis% respondent assisted petitionerQs retained legal counsel $ith matters pertaining to the prosecution o cases against illegal surace occupants $ithin the area co'ered by the companyQs mineral claims. 3espondent $as lie$ise tased to perorm liaison $or $ith se'eral go'ernment agencies% $hich he said $as his e#pertise. etitioner did not reuire respondent to report to its oice on a regular basis% e#cept $hen occasionally reuested by the management to discuss matters needing his e#pertise as a consultant. As payment or his ser'ices% respondent recei'ed a retainer ee o 5%///.// a month%J5K $hich $as deli'ered to him either at his residence or in a local restaurant. !he parties e#ecuted a retainer agreement% but such agreement $as misplaced and can no longer be ound. !he said arrangement continued or the ne#t ele'en years. 9ometime thereater% since respondent $as getting old% he reuested that petitioner cause his registration $ith the 9ocial 9ecurity 9ystem (999)% but petitioner did not accede to his reuest. 3espondent iled a ComplaintJK $ith the 999 against petitioner or the latterQs reusal to cause his registration $ith the 999.

3uling: !o ascertain the e#istence o an employer0 employee relationship +urisprudence has in'ariably adhered to the our0old test% to $it: (1) the selection and engagement o the employeeD (2) the payment o $agesD (5) the po$er o dismissalD and () the po$er to control the employeeQs conduct% or the so0called Icontrol test.IJ1K 6 these our% the last one is the most important.J1K !he so0called Icontrol testI is commonly regarded as the most crucial and determinati'e indicator o the presence or absence o an employer0employee relationship. Hnder the control test% an employer0employee relationship e#ists $here the person or $hom the ser'ices are perormed reser'es the right to control not only the end achie'ed% but also the manner and means to be used in reaching that end.J2/K Applying the aorementioned test% an employer0 employee relationship is apparently absent in the case at bar. Among other things% respondent $as not reuired to report e'eryday during regular oice hours o petitioner. 3espondentQs monthly retainer ees $ere paid to him either at his residence or a local restaurant. More importantly% petitioner did not prescribe the manner in $hich respondent $ould accomplish any o the tass in $hich his e#pertise as a liaison oicer $as neededD respondent $as let alone and gi'en the reedom to accomplish the tass using his o$n means and method. 3espondent $as assigned tass to perorm% but petitioner did not control the manner and methods by $hich respondent perormed these tass. Ferily% the absence o the element o control on the part o the petitioner engenders a conclusion that he is not an employee o the petitioner. Contrary to the conclusion o the CA% respondent is not an employee% much more a regular employee o petitioner. !he appellate courtQs premise that regular employees are those $ho perorm acti'ities $hich are desirable and necessary or the business o the employer is not determinati'e in this case. &n act% any agreement may pro'ide that one party shall render ser'ices or and in behal o another% no matter ho$ necessary or the latterQs business% e'en $ithout being hired as an employee.J25K -ence% respondentQs length o ser'ice and petitionerQs repeated act o assigning respondent some tass to be perormed did not result to respondentQs entitlement to the rights and pri'ileges o a regular employee.

Eage




,urthermore% despite the act that petitioner made use o the ser'ices o respondent or ele'en years% he still cannot be considered as a regular employee o petitioner. Article 2/ o the Labor Code% in $hich the lo$er court used to buttress its indings that respondent became a regular employee o the petitioner% is not applicable in the case at bar. &ndeed% the Court has ruled that said pro'ision is not the yardstic or determining the e#istence o an employment relationship because it merely distinguishes bet$een t$o inds o employees% i.e.% regular employees and casual employees% or purposes o determining the right o an employee to certain beneits% to +oin or orm a union% or to security o tenureD it does not apply $here the e#istence o an employment relationship is in dispute.J2K &t is% thereore% erroneous on the part o the Court o Appeals to rely on Article 2/ in determining $hether an employer0employee relationship e#ists bet$een respondent and the petitioner Considering that there is no employer0employee relationship bet$een the parties% the termination o respondentQs ser'ices by the petitioner ater due notice did not constitute illegal dismissal $arranting his reinstatement and the payment o ull bac$ages% allo$ances and other beneits.

II. )LASSIFI)ATION OF EPLOYEES a. Re'%ar 8s. )as'a% Em%!$ees ARTI)LE 2<0.Re'%ar a" 6as'a% em%!$me"t. — !he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreements o the parties% an employment shall be deemed to be regular $here the employee has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer e#cept $here the employment has been fi!ed for a specific project or undertaing% the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or or ser'ice to be perormed is seasonal in nature a >,nd the employment is or the duration o the season. An employment shall be deemed to be 6as'a% i it is not co'ered by the preceding paragraph: ro'ided% !hat any employee $ho has rendered at least one year o ser'ice% $hether such ser'ice is continuous or broen% shall be considered a regular employee $ith respect to the acti'ity in $hich he is employed and his employment shall continue $hile such acti'ity e#ists.

ARTI)LE 2<1. Pr!&ati!"ar$ em%!$me"t. R robationary employment shall not e#ceed si# months rom the date the employee started $oring% unless it is co'ered by an apprenticeship agreement stipulating a longer period. !he ser'ices o an employee $ho has been engaged on a probationary basis may be terminated or a +ust cause or $hen he ails to ualiy as a regular employee in accordance $ith reasonable standards made no$n by the employer to the employee at the time o his engagement. An employee $ho is allo$ed to $or ater a probationary period shall be considered a regular employee. NOTE: Art. 2/ is 76! the yardstic in determining

employer0employee relationship. 4hat is controlling is the our0old test and (no$) the economic reality test. Art. 2/ apply only $hen the e#istence o employer0employee relationship is not in dispute.

1. Re'%ar Em%!$me"t 0 an employment shall be deemed to be regular $here the employee has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer. the $ord ?usually@ is used because it does not mean they al$ays ha'e to perorm tass $hich are necessary or desirable. it also reers to casual employees $ho ha'e rendered at least one year o ser'ice% $hether continuoPus or broen% $ith respect to the acti'ity they are employed. probationary or term employees are also considered regular once they are allo$ed to $or beyond the term or duration o the pro+ect. pro+ect employee $ho has been continuously rehired (Maraguinot Case)0becomes regular or the speciic +ob or continuously rehired or: i. employee is continuously rehired rom pro+ect to pro+ect e'en $ith gaps o time in bet$een ii. tas is H76 in H!6B% or else the pro+ect employee is considered only a casual employee iii. rehired or the same tas or nature o tas a pro+ect employee concerted to regular employee is still not paid or the period he does not $or. But i the employer is reuired to hire him $hen the ne#t pro+ect reuires the particular +ob he does% or else% the employer is guilty o illegal termination.

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Re'%ar Em%!$ee ma$ eit#er &e a. "ermanent – a regular appointed or an indeinite period % either $ith or $ithout passing a probationary period. b. "robationary – one $ho is placed in a trial period $hose perormance is assessed $hether satisactory or not. & perormance is satisactory% it is ollo$ed by a regular employment% i not% the employment is terminated. 0An employer has the prerogati'e $hether to sub+ect the employee $ith probationary employment or not. !hus% an employee may be considered as a permanent employee on his irst day o $or. Em%!$ees ma$ &e 6!"siere re'%ar ee"i" !" 2 (a6t!rs/ 1. 3egular employees by the nature o the $or – H76 in H!6B 2. 3egular employees by the length o ser'ice 2. )as'a% Em%!$me"t 0 An employment shall be deemed to be casual i it is not co'ered by the preceding paragraph (regular employment) An employment is casual i : 1. a $orer is employed to perorm $or not related to the business or trade o the employer and 2. he is employed or a short term or short duration.(e.g. less than a year) does not ha'e security o tenure beore reaching the one0year period% ho$e'er% i he has rendered at least one year o ser'ice% $hether such ser'ice is continuous or broen% he shall be considered a regular employee $ith respect to the acti'ity in $hich he is employed and his employment shall continue $hile such acti'ity e#ists. *#amples% not usually necessary or desirable: in a ban: +anitorial ser'ice in a manuacturing company: the cutter o cogon grass in the company
Beore reaching the one year period% a casual employee can be terminated i his $or is ound to be unsatisactory. !he moment he reaches the one0year period% he becomes a regular employee $ho can neither be remo'ed nor dismissed e#cept or a +ust cause as pro'ided in the LC.

3.Pr!e6t Em%!$me"t – is one $here the employment has been i#ed or a speciic pro+ect or undertaing% the completion or termination o $hich

has been determined at the time o the engagement o the employee Three instances when the project employee is converted into a regular employee#

1. A pro+ect employee may be con'erted to a regular status $hen he $as employed or a speciic pro+ect% the completion o $hich is determined% but despite the termination o the pro+ect% he is still made to $or. &t negates the essence o pro+ect employment. &t sho$s that the employeei'ing the employee additional $ors negates the essence o pro+ect employment. &t sho$s that his ser'ices is not limited to the pro+ect. *'en i the e#tra $or is not H76 in H!6B to the main business% he is con'erted to a regular employee. 5. Maraguinot case. Hnder multiple succeeding pro+ects% can ha'e gaps bet$een each pro+ect% the employees can still be con'erted to regular status but only $hen the pro+ect employee is rehired continuously% and or the same nature o tas. !here is a pattern sho$ing that H76 in H!6B. 7ote: !he one0year rule only applies to casual employment% not to pro+ect nor seasonal employees.

T?! i"s !( Pr!e6t Em%!$ee/ 1. tass $hich are H76 in H!6B 2. tass $hich are not H76 in H!6B a. the +ob must be distinct rom the totality o *3
A $or pool is not necessary in order to con'ert the pro+ect employee into regular% But its e#istence may signiy that the pro+ect employee has become regular i there is a continuous rehiring. ReJ'ireme"ts/ 1. he must be hired or that speciic pro+ect 2. the completion or termination o his pro+ect $as made no$n to him

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4.Seas!"a% Em%!$me"t 0 is one $here the $or or ser'ice to be perormed is seasonal in nature and the employment is or the duration o the season. $easonal %mployee

0-ired or a speciic period o time during the year% and may be H76 in H!6B 3ehired $hene'er their ser'ices are reuired (e.g. arm $orers) At the arri'al o the season must be rehired% or else employer is guilty o illegal termination Allo$ed to see $or else$here $hile o0 season •

•

•

2 reJ'isites t! r!8e seas!"a% em%!$ees/ 1. the $or or ser'ices perormed by the $orers are seasonal in nature 2. they must be employed or the duration o one season only 09easonal $orers $ho are called to $or rom time to time and are temporarily laid o during o0season are not separated rom the ser'ice in said period% but are merely considered on lea'e until re0employed. &n this case% con'ersion occurs similar to pro+ect employees. 4hen they are continuously rehired or the same tasPnature o tas% they become regular employees. uring o season% they are temporarily laid o% $ithout pay% but they are still considered regular employees.

Fi5e term 0the +ob is assigned a speciic date o e#piration e'en i the +ob is considered H76 in H!6B. !he important aspect is that the +ob is time bound. &rent school r'%i"/ ReJ'ireme"ts (!r a 8a%i

Fi5e Term em%!$me"t/ 1. $here a i#ed period or employment $as agreed upon no$ingly and 'oluntarily by the parties 2. $ithout any orce% duress or improper pressure being brought to bear upon the employee and absent any circumstances 'itiating consent% or 5. $here it satisactorily appears that the employer and employee dealt $ith each other on more or less eual terms $ith no moral dominance $hate'er being e#ercised by the ormer o'er the latter .Pr!&ati!"ar$ Em%!$me"t – is one $ho is on tentati'e employment during $hich the employer determines $hether he (employee) is ualiied or permanent employment.

0 robationary period is  months or the employer to determine the eligibility o the employee. But the period may be shortened or e#tended. robationary employee is con'erted to regular ater the period imposed has lapsed% and the employee continues to $or. &t implies that the employee has passed and is eligible or regular employment. Also% i the terms and conditions o employment are not clearly pro'ided by the employer% the standards are not clear then the employee is deemed a regular employee. !his is because the employee has no no$ledge o $hat standards he or she must meet% and so this should not $or to his or her pre+udice. *mployee is hired or  months in order to determine ualiication or capacity as a regular employee although an employee can become regular right a$ay $ithout going through probation. !he employee is gi'en the standards at the time o engagement (employer must e#plain not merely gi'ing document) LC pro'ides that the duration o probation is  months (ma#imum period o probation). !he e#ceptions are the ollo$ing: $$$ unless it is co'ered by an apprenticeship (a) agreement stipulating a longer period such as +obs $hich are highly technical ( not an employee)D and (b) &n cases o academic personnel: the Manual o 3egulations or ri'ate 9chool pro'ides a longer probationary period.

A6aemi6 ers!""e%- &nclude all school personnel $ho are ormally engaged in actual teaching ser'ice or research assignment% either on ull0time or part0 time basis% as $ell as those $ho possess certain prescribed unctions directly supporti'e o teaching% such as registrars% librarian% guidance counselors% researchers% and other similar persons. !hey include school oicials responsible or academic matters% and may include other school oicials.

Se6 >2. D a"'a% !( Re'%ati!" !( Pri8ate S6#!!%s a. or those in the secondary and elementary le'el% a probationary period o not more than 5 consecuti'e years o satisactory ser'ice (calendar year) b. or those in the tertiary le'el% not more than  consecuti'e regular semesters o satisactory ser'ice (school year) c. or those in trimester% or not more than  consecuti'e trimesters o satisactory ser'ice (school year)

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N!"-a6aemi6 ers!""e%- means school personnel usually engaged in administrati'e unctions $ho are not co'ered under the deinition o academic personnel. !hey may include school oicials. W#e" is r!&ati!"ar$ em%!$me"t ermissi&%eK a. $hen the $or reuires special ualiications% sills training or e#perience b. $hen the $or% +ob or position in'ol'ed is permanent% regular% stable or indeinite and not merely casual or intermittent. c. i the $or is not intended to circum'ent the security o tenure d. i it is necessary or customary or the position or the +ob in'ol'ed 9e"era% r'%e/ robationary period should not e#ceed  months rom the date the employee started $oring. E56eti!"/ !he  months period pro'ided in the la$ admits o certain e#ceptions such as: 1. $hen the *3 and ** mutually agree on a shorter or longer periodD 2. $hen the nature o $or to be perormed by the ** reuired a longer periodD 5. $hen a longer period is reuired and established by company policy -

9ecurity o tenure is still a'ailable to probationary employees% but only or a limited period.

Ot#er )%assi(i6ati!" (9pecial La$s) 1. )!"str'6ti!" I"'str$ (epartment 6rder 7o. 1% 9eries o 15) a. ro+ect b. 7on0ro+ect b.1. probationary b.2. regular b.5. casual 2. Br!a6ast I"'str$ (6L* olicy &nstruction 7o. /) 9tation *mployee: a. are those $hose ser'ices are engaged to discharge unctions $hich are usually necessary and desirable to the operation o the station and b. $hose useulness is not aected by changes o programs% ratings% or ormats and $ho obser'e normal $oring hours. 0 !hese shall include employees $hose talents% sills or ser'ices are engaged as such by the station $ithout particular reerence to any speciic program undertaing and are not allo$ed by the station to be engaged or hired by other stations or persons e'en i such employee do not obser'e normal $oring hours.

Pr!ram em%!$ee/ a. are those $hose sills or ser'ices are engaged by the station or a particular or speciic program or undertaing and b. $ho are not reuired to obser'e normal $oring hours such that on some days they $or or less than  hours and on other days beyond the normal $oring hours obser'ed by station employeesD and c. are allo$ed to enter into employment contracts $ith other persons% stations% ad'ertising agencies or sponsoring companies. S9ame classiication as in the Labor Code. olicy &nstruction 7o. / has been declared to be o 76 eect in the case o 9on"a 's. AB90CB7 (>.3. 15/;1% 8une 1/% 2//) olicy &nstruction / is a mere e#ecuti'e issuance $hich does not ha'e the orce and eect o la$. !here is no legal presumption that olicy &nstruction 7o. / determines 967OA
I" Pri8ate E'6ati!"a% I"stit'ti!"s (Manual o 3egulations or ri'ate 9chool) a. Academic ersonnel a.1. Academic teaching a.2. Academic non0teaching (librarian) b. 7on0Academic ersonnel – those sta $ho perorm administrati'e unctions but are not in'ol'ed in academic $or * !heir employment is 76! co'ered by the M39 or by the !F*! Manual but by the Labor Code. 5.

4. I" !sita%s '# Are (esident "hysicians employees of hospitals)

considered

A: &t depends. & undergoing training% he is 76! an employee o the hospital. & not undergoing training% he is an employee% but only on a term basis. BA9&90 6mnibus 3ules% Boo &&&% 3ule N0A% 9ec.1; 3esidents in training. R !here is employer employee relationship bet$een resident physicians and the training hospitals% H7L*99: (1) there is a training agreement bet$een them and the training program is duly accredited or appro'ed by the appropriate go'ernment agency. N##

E56eti!"s t! re'%ar em%!$me"t

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1. 2. 5. .

9easonal *mployment ro+ect *mployment Casual *mployment ,i#ed !ermPeriod *mployment – an employment that $ill last only or a deinite period% as agreed by the parties.

9'ie%i"es (!r t#e 8a%iit$ !( t#is i" !( em%!$me"t 1. the i#ed period o employment (*!) is no$ingly and 'oluntarily agreed upon by the parties $ithout any orce% duress% or improper pressure being brought to bear upon the ** and absent any other circumstances 'itiating his consent. 2. &t satisactorily appears that the *3 and the ** dealt $ith each other on more or less eual terms $ith no moral dominance being e#ercised by the ormer or the latter. 5. &t must not circum'ent the pro'isions in the labor code on security o tenure. )ASES/ LEYTE 9EOTERAL POWER PRO9RESSIVE EPLOYEES UNION D ALU D TU)P 8s. PILIPPINE NATIONAL OIL )OPANY D ENER9Y ,EVELOPENT )ORPORATION 9.R. N!. 1;031 ar6# 30 2011 Fa6ts/ J3espondent hilippine 7ational 6il CorporationK0*nergy e'elopment Corporation J76C0*CK is a go'ernment0o$ned and controlled corporation engaged in e#ploration% de'elopment% utili"ation% generation and distribution o energy resources lie geothermal energy. etitioner is a legitimate labor organi"ation% duly registered $ith the epartment o Labor and *mployment (6L*) 3egional 6ice 7o. F&&&% !acloban City. Among JrespondentQsK geothermal pro+ects is the Leyte >eothermal o$er ro+ect located at the >reater !ongonan >eothermal 3eser'ation in Leyte. !he said ro+ect is composed o the !ongonan 1 >eothermal ro+ect (!1>) and the Leyte >eothermal roduction ,ield ro+ect (L>,) $hich pro'ide the po$er and electricity needed not only in the pro'inces and cities o Central and *astern Fisayas (3egion F&& and F&&&)% but also in the island o Lu"on as $ell. !hus% the JrespondentK hired and employed hundreds o employees on a contractual basis% $hereby% their employment $as only good up to the completion or termination o the pro+ect and $ould automatically e#pire upon the completion o such pro+ect. Ma+ority o the employees hired by JrespondentK in its Leyte >eothermal o$er ro+ects had become members o petitioner. &n 'ie$ o that circumstance% the petitioner demands rom the JrespondentK or recognition o it as the

collecti'e bargaining agent o said employees and or a CBA negotiation $ith it. -o$e'er% the JrespondentK did not heed such demands o the petitioner. 9ometime in 1 $hen the pro+ect $as about to be completed% the JrespondentK proceeded to ser'e 7otices o !ermination o *mployment upon the employees $ho are members o the petitioner. 6n ecember 2% 1% the petitioner iled a 7otice o 9trie $ith 6L* against the JrespondentK on the ground o purported commission by the latter o unair labor practice or Ireusal to bargain collecti'ely% union busting and mass termination.I 6n the same day% the petitioner declared a strie and staged such strie. !o a'ert any $or stoppage% then 9ecretary o Labor Bien'enido *. Laguesma inter'ened and issued the 6rder% dated 8anuary % 1% certiying the labor dispute to the 7L3C or compulsory arbitration. Accordingly% all the striing $orers $ere directed to return to $or $ithin t$el'e (12) hours rom receipt o the 6rder and or the JrespondentK to accept them bac under the same terms and conditions o employment prior to the strie. ,urther% the parties $ere directed to cease and desist rom committing any act that $ould e#acerbate the situation. -o$e'er% despite earnest eorts on the part o the 9ecretary o Labor and *mployment to settle the dispute amicably% the petitioner remained adamant and unreasonable in its position% causing the ailure o the negotiation to$ards a peaceul compromise. &n eect% the petitioner did not abide by JtheK assumption order issued by the 9ecretary o Labor. Conseuently% on 8anuary 1;% 1% the JrespondentK iled a Complaint or 9trie &llegality% eclaration o Loss o *mployment and amages at the 7L3C03AB F&&& in !acloban City and at the same time% iled a etition or Cancellation o etitionerQs Certiicate o 3egistration $ith 6L*% 3egional 6ice 7o. F&&&. !he t$o cases $ere later on consolidated pursuant to the 7e$ 7L3C 3ules o rocedure. !he consolidated case $as doceted as 7L3C Certiied Case 7o. F0 /20 (7CMB03AB F&&&0790120/1/0D 3AB Case 7o. F&&&010//10). !he said certiied case $as indorsed to the 7L3C th i'ision in Cebu City on 8une 21% 1 or the proper disposition thereo.

Iss'e/ 1. 4hether the oicers and members o petitioner Hnion are pro+ect employees o respondentD and 2.4hether the oicers and members o petitioner Hnion engaged in an illegal strie. R'%i"s/ 6n the irst issue% petitioner Hnion contends that its oicers and members perormed acti'ities that

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$ere usually necessary and desirable to respondentQs usual business. &n act% petitioner Hnion reiterates that its oicers and members $ere assigned to the %onstruction &epartment o respondent as carpenters and masons% and to other +obs pursuant to ci'il $ors% $hich are usually necessary and desirable to the department. etitioner Hnion lie$ise points out that there $as no inter'al in the employment contract o its oicers and members% $ho $ere all employees o respondent% $hich lac o inter'al% or petitioner Hnion% Imaniests that the TundertaingQ is usually necessary and desirable to the usual trade or business o the employer.I 4e cannot subscribe to the 'ie$ taen by petitioner Hnion. !he distinction bet$een a regular and a pro+ect employment is pro'ided in Article 2/% paragraph 1% o the Labor Code: ART. 2<0. (egular and *asual %mployment .00 !he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer% e#cept $here the employment has been i#ed or a speciic pro+ect or undertaing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or or ser'ice to be perormed is seasonal in nature and the employment is or the duration o the season. An employment shall be deemed to be casual i it is not co'ered by the preceding paragraph: ro'ided% !hat% any employee $ho has rendered at least one year o ser'ice% $hether such ser'ice is continuous or broen% shall be considered a regular employee $ith respect to the acti'ity in $hich he is employed and his employment shall continue $hile such actually e#ists.

T#e (!re!i" 6!"tem%ates (!'r 4 i"s !( em%!$ees/ a regular em%!$ees or those $ho ha'e been Iengaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employerC & project em%!$ees !r those I$hose employment has been i#ed or a speciic pro+ect or undertaingJ%K the completion or termination o $hich has been determined at the time o the engagement o the employeeC 6 seasonal em%!$ees or those $ho $or or perorm ser'ices $hich are seasonal in nature% and the employment is or the duration o the seasonC a"  casual em%!$ees or those $ho are not regular% pro+ect% or seasonal employees.

8urisprudence has added a ith ind00 a (i5e-term em%!$ee. Arti6%e 2<0 !( t#e La&!r )!e% as $orded% establishes that the nature o the employment is determined by la$% regardless o any contract e#pressing other$ise. T#e s'rema6$ !( t#e %a? !8er t#e "!me"6%at're !( t#e 6!"tra6t a" t#e sti'%ati!"s 6!"tai"e t#erei" is t! &ri" t! %i(e t#e !%i6$ e"s#ri"e i" t#e )!"stit'ti!" t! a((!r ('%% r!te6ti!" t! %a&!r. !hus% labor contracts are placed on a higher plane than ordinary contractsD t#ese are im&'e ?it# '&%i6 i"terest a" t#ere(!re s'&e6t t! t#e !%i6e !?er !( t#e State. -o$e'er% not$ithstanding the oregoing iterations% pro+ect employment contracts $hich i# the employment or a speciic pro+ect or undertaing remain 'alid under the la$: # # # By entering into such a contract% an employee is deemed to understand that his employment is coterminous $ith the pro+ect. -e may not e#pect to be employed continuously beyond the completion o the pro+ect. &t is o +udicial notice that pro+ect employees engaged or manual ser'ices or those or special sills lie those o carpenters or masons% are% as a rule% unschooled. -o$e'er% this act alone is not a 'alid reason or besto$ing special treatment on them or or in'alidating a contract o employment. ro+ect employment contracts are not lopsided agreements in a'or o only one party thereto. T#e em%!$erMs i"terest is eJ'a%%$ im!rta"t as t#at !( t#e em%!$eeGsMH (!r t#eirs is t#e i"terest t#at r!e%s e6!"!mi6 a6ti8it$. 4hile it may be true that it is the employer $ho drats pro+ect employment contracts $ith its business interest as o'erriding consideration% such contracts do not% o necessity% pre+udice the employee. 7either is the employee let helpless by a pre+udicial employment contract. Ater all% under the la$% the interest o the $orer is paramount. &n the case at bar% the records re'eal that the oicers and the members o petitioner Hnion signed employment contracts indicating the speciic pro+ect or phase o $or or $hich they $ere hired% $ith a i#ed period o employment. !he 7L3C correctly disposed o this issue: A deeper e#amination also sho$s that Jthe indi'idual members o petitioner HnionK indeed signed and accepted the Jemployment contractsK reely and 'oluntarily. 7o e'idence $as presented by JpetitionerK Hnion to pro'e improper pressure or undue inluence $hen they entered% perected and consummated Jthe employmentK contracts. &n act% it $as clearly established in the course o the trial o this case% as e#plained by no less than the resident o JpetitionerK Hnion% that the contracts o employment $ere read% comprehended% and 'oluntarily accepted by them. # # #.

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As clearly sho$n by JpetitionerK HnionQs o$n admission% both parties had e#ecuted the contracts reely and 'oluntarily $ithout orce% duress or acts tending to 'itiate the $orerJsQK consent. !hus% $e see no reason not to honor and gi'e eect to the terms and conditions stipulated therein. # # #. !hus% $e are hard pressed to ind cause to disturb the indings o the 7L3C $hich are supported by substantial e'idence. &t is $ell0settled in +urisprudence that actual indings o administrati'e or uasi0+udicial bodies% $hich are deemed to ha'e acuired e#pertise in matters $ithin their respecti'e +urisdictions% are generally accorded not only respect but e'en inality% and bind the Court $hen supported by substantial e'idence. 3ule 155% 9ection ; deines s'&sta"tia% e8ie"6e as t#at am!'"t !( re%e8a"t e8ie"6e ?#i6# a reas!"a&%e mi" mi#t a66et as aeJ'ate t! 'sti($ a 6!"6%'si!".I Consistent there$ith is the doctrine that this Court is not a trier o acts% and this is strictly adhered to in labor cases. 4e may tae cogni"ance o and resol'e actual issues% only $hen the indings o act and conclusions o la$ o the Labor Arbiter or the 7L3C are inconsistent $ith those o the CA. &n the case at bar% both the 7L3C and the CA $ere one in the conclusion that the oicers and the members o petitioner Hnion $ere pro+ect employees. 7onetheless% petitioner Hnion insists that they $ere regular employees since they perormed $or $hich $as usually necessary or desirable to the usual business or trade o the %onstruction &epartment o respondent. olicy &nstruction 7o. 12 o the epartment o Labor and *mployment discloses that the concept o regular and casual employees $as designed to put an end to casual employment in regular +obs% $hich has been abused by many employers to pre'ent so 0 called casuals rom en+oying the beneits o regular employees or to pre'ent casuals rom +oining unions. !he same instructions sho$ that the pro'iso in the second paragraph o Art. 2/ $as not designed to stile small0scale businesses nor to oppress agricultural land o$ners to urther the interests o laborers% $hether agricultural or industrial. 4hat it sees to eliminate are abuses o employers against their employees and not% as petitioners $ould ha'e us belie'e% to pre'ent small0scale businesses rom engaging in legitimate methods to reali"e proit. -ence% the pro'iso is applicable only to the employees $ho are deemed IcasualsI but not to the Ipro+ectI employees nor the regular employees treated in paragraph one o Art. 2/.

Clearly% thereore% etiti!"ers &ei" r!e6t em%!$ees !r t! 'se t#e 6!rre6t term seas!"a% em%!$ees t#eir em%!$me"t %ea%%$ e"s '!" 6!m%eti!" !( t#e r!e6t !r t#e Ge" !( t#eH seas!". The termination of their employment cannot and should not constitute an illegal dismissal.

S)  8s. E,UAR,O L. TEO,OSIO 9.R. N!. 1:3033 O6t!&er 2 200> Fa6ts/ 6n 9eptember ;% 11% respondent *duardo !eodosio $as hired by 9an Miguel Corporation (9MC) as a 6as'a% (!r%i(t !erat!r in its Bacolod City Bre$ery. As a orlit operator% respondent $as tased $ith loading and unloading pallet o beer cases $ithin the bre$ery premises. 3espondent continuously $ored rom 9eptember ;% 11 until March 12% ater $hich he $as ?ased to rest@ or a $hile. A month ater% or sometime in April 12% respondent $as rehired or the same position% and ater ser'ing or about i'e to si# months% he $as again ?ased to rest.@ Ater three $ees% he $as again rehired as a orlit operator. -e continued to $or as such until August 15. 9ometime in August 15% res!"e"t ?as mae t! si" a" Em%!$me"t ?it# a Fi5e Peri! contract by 9MC% $herein it $as stipulated% among other things% that respondent
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his dismay or his dismissal. -e inormed 9MC that despite the act that he $ould be compelled to recei'e his separation pay and $ould be orced to sign a $ai'er to that eect% this does not mean that he $ould be $ai'ing his right to uestion his dismissal and to claim employment beneits as pro'ided in the Collecti'e Bargaining Agreement (CBA) and company policies.

transers o beer cases and empties $ould be e#tensi'e $ithin the bre$ery and its premises.

!hereater% respondent signed a 3eceipt and 3elease document in a'or o 9MC and accepted his separation pay% thereby releasing all his claims against 9MC.6n 8uly % 1;% respondent iled a Complaint against 9MC.

Se6!" Iss'e/ Ges. 9ince respondent $as already a regular employee months beore the e#ecution o the *mployment $ith a ,i#ed eriod contract% its e#ecution $as merely a ploy on 9MC
Iss'es/ (1) &s respondent a regular employee= (2) &s there illegal dismissal= Ges. Based on the R'%i" First Iss'e/ circumstances surrounding respondent
Hndoubtedly% respondent is a regular employee o 9MC. Conseuently% the employment contract $ith a i#ed period $hich 9MC had respondent e#ecute $as meant only to circum'ent respondent
-a'ing gained the status o a regular employee% respondent is entitled to security o tenure and could only be dismissed on +ust or authori"ed causes and ater he has been accorded due process. 3egular *mployees are classiied into +- regular employees by nature of work and +- regular employees by years of service0the ormer reers to

those employees $ho perorm a particular acti'ity $hich is necessary or desirable in the usual business or trade o the employer% regardless o the their length o ser'ice.

PL,T I"6. 8s. Ar6e! 4<> S)RA :1; 200: FA)TS/ May 1/ – A3C*6 applied or the position o telephone operator $ith L!. 9he% ho$e'er% ailed the pre0employment ualiying e#amination. -a'ing ailed the test% A3C*6 reuested L! to allo$ her to $or at the latter
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to assimilate traic procedures% the company transerred her to au#iliary ser'ices% a minor acility. 9ubseuently% A3C*6 too the pre0ualiying e#ams or the position o telephone operator t$o more times but again ailed in both attempts. 6ctober 5/% 11 – L! discharged A3C*6 rom employment. 9he then iled a case or illegal dismissal beore the labor arbiter. 6n May 11% 15% the arbiter ruled in her a'or. L! $as ordered to reinstate A3C*6 to her ?ormer position or to an eui'alent position.@ 8une % 15 – A3C*6 $as reinstated as casual employee $ith a minimum $age o 1/ per day. 9he $as assigned to photocopy documents and sort out telephone bills.

)AUSE OF A)TION/ 9eptember 5% 1 (more than three years ater her reinstatement) – A3C*6 iled a complaint or unair labor practice% underpayment o salary% underpayment o o'ertime pay% holiday pay% rest day pay and other monetary claims. 9he alleged in her complaint that% since her reinstatement% she had yet to be regulari"ed and had yet to recei'e the beneits due to a regular employee. ,E)ISION !( t#e %a&!r ar&iter NLR) )A/ August 1% 1 – !he labor arbiter ruled that A3C*6 $as already ualiied to become a regular employee. -e also ound that L! denied her all the beneits and pri'ileges o a regular employee. 7o'ember 2% 1 – !he 7L3C airmed the decision o the labor arbiter inding A3C*6 eligible to become a regular employee. 8une 2% 2//1 – !he CA airmed the decision o the 7L3C. ISSUE/ oes the pro'ision in Art. 2/ o the Labor Code $hich re'%ari*es a casual employee $ho has rendered at least one year o ser'ice sub+ect to the condition that the employment subsists or the position still e#ists= EL,/ 3einstatement to an ?eui'alent position@ – L!
subsists. U"er Art. 2<0 a"$ em%!$ee ?#! #as re"ere at %east !"e $ear !( ser8i6e s#a%% &e 6!"siere a re'%ar em%!$ee ?it# rese6t t! t#e a6ti8it$ i" ?#i6# #e is em%!$e a" #is em%!$me"t s#a%% 6!"ti"'e ?#i%e s'6# a6ti8it$ e5ists. ,or L!
A re'%ar em%!$ee is (1 !"e ?#! is eit#er e"ae t! er(!rm a6ti8ities t#at are "e6essar$ !r esira&%e i" t#e 's'a% trae !r &'si"ess !( t#e em%!$er !r (2) a 6as'a% em%!$ee ?#! #as re"ere at %east !"e $ear !( ser8i6e ?#et#er 6!"ti"'!'s !r &r!e" ?it# rese6t t! t#e a6ti8it$ i" ?#i6# #e is em%!$e. ABS-)BN 8s. Na*are"! 03 S)RA 204 200: Fa6ts/ AB90CB7 employed respondents 7a"areno% >er"on% eiparine% and Lerasan as production assistants (As) on dierent dates. !hey $ere assigned at the ne$s and public aairs% or 'arious radio programs in the Cebu Broadcasting 9tation% $ith a monthly compensation o %///. !hey $ere issued AB90CB7 employees< identiication cards and $ere reuired to $or or a minimum o eight hours a day% including 9undays and holidays. !hey $ere made to: a repare% arrange airing o commercial broadcasting based on the daily operations log and digicart o respondent AB90CB7D & Coordinate% arrange personalities or air inter'ie$sD 6 Coordinate% prepare schedule o reporters or scheduled ne$s reporting and lead0in or incoming reportsD  ,acilitate% prepare and arrange airtime schedule or public ser'ice announcement and complaintsD e Assist% anchor program inter'ie$% etcD and ( 3ecord% log clerical reports% man based control radio. etitioner and the AB90CB7 3an0and0,ile *mployees e#ecuted a Collecti'e Bargaining Agreement (CBA) to be eecti'e during the period rom ec 11% 1 to ec 11% 1. -o$e'er% since petitioner reused to recogni"e As as part o the bargaining unit% respondents $ere not included to the CBA. ue to a memorandum assigning A
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$ould be handled by the studio technician. !here $as a re'ision o the schedule and assignments and that respondent >er"on $as assigned as the ull0time A o the !F 7e$s epartment reporting directly to Leo Lastimosa. 6n 6ct 12% 2///% respondents iled a Complaint or 3ecognition o 3egular *mployment 9tatus% Hnderpayment o 6'ertime ay% -oliday ay% remium ay% 9er'ice &ncenti'e ay% 9ic Lea'e ay% and 15th Month ay $ith amages against the petitioner beore the 7L3C.

Iss'e/ 467 employees=

the

respondents

are

regular

e%/ 3espondents are considered regular employees o AB90CB7 and are entitled to the beneits granted to all regular employees. W#ere a ers!" #as re"ere at %east !"e $ear !( ser8i6e rear%ess !( t#e "at're !( t#e a6ti8it$ er(!rme !r ?#ere t#e ?!r is 6!"ti"'!'s !r i"termitte"t t#e em%!$me"t is 6!"siere re'%ar as %!" as t#e a6ti8it$ e5ists. T#e reas!" &ei" t#at a 6'st!mar$ a!i"tme"t is "!t i"ise"sa&%e &e(!re !"e ma$ &e (!rma%%$ e6%are as #a8i" attai"e re'%ar stat's. Article 2/ o the Labor Code pro'ides: R%/01A( A2D *A$0A1 %3"1453%2T. !he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer e#cept $here the employment has been i#ed or a speciic pro+ect or undertaing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or or ser'ices to be perormed is seasonal in nature and the employment is or the duration o the season. Any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity performed and while such activity actually e!ists. !he act that respondents recei'ed

pre0agreed ?talent ees@ instead o salaries% that they did not obser'e the reuired oice hours% and that they $ere permitted to +oin other productions during their ree time are not conclusi'e o the nature o their employment. !hey are regular employees $ho perorm se'eral dierent duties under the control and direction o AB90CB7 e#ecuti'es and super'isors.

T#ere are t?! i"s !( re'%ar em%!$ees '"er t#e %a?/ 1 those engaged to perorm acti'ities $hich are "e6essar$ !r esira&%e in the usual business or trade o the employerD and 2 those casual employees $ho ha'e re"ere at %east !"e $ear !( ser8i6e% $hether continuous or broen% $ith respect to the acti'ities in $hich they are employed. 4hat determines $hether a certain employment is regular or other$ise is the character of the activities performed in relation to the particular trade or 'usiness ta!ing into account all the circumstances" and in some cases the length of time of its performance and its continued e$istence .

4hile %e"t# !( time ma$ "!t &e a s!%e 6!"tr!%%i" i"terest or pro+ect employment% it can be a strong actor to determine $hether the employees $as hired or a speciic undertaing or in ace tased to peorm unctions $hich are 'ital% necessary and indispensable to the usual trade or business o employer.

T#e em%!$er-em%!$ee re%ati!"s#i &et?ee" etiti!"er a" res!"e"ts #as &ee" r!8e" &$ t#e ((/ (irst. &n the selection and engagement o respondents% no peculiar or uniue sill% talent or celebrity status $as reuired rom them because they $ere merely hired through petitioner
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P!sei!" Fis#i" 8s. NLR) 4<2 S)RA ;1; 200: FA)TS/ ri'ate respondent $as employed by oseidon ,ishing in 8anuary 1 as Chie Mate. Ater i'e years% he $as promoted to Boat Captain. &n 1% petitioners% $ithout reason% demoted respondent rom Boat Captain to 3adio 6perator o petitioner oseidon. As a 3adio 6perator% he monitored the daily acti'ities in their oice and recorded in the duty logboo the names o the callers and time o their calls. 6n 5 8uly 2///% pri'ate respondent ailed to record a :2; a.m. call in one o the logboos. -o$e'er% he $as able to record the same in the other logboo. Conseuently% $hen he re'ie$ed the t$o logboos% he noticed that he $as not able to record the said call in one o the logboos so he immediately recorded the :2; a.m. call ater the :5/ a.m. entry. Around :// o
ISSUE/ 4hether or not respondent *stouia is a regular employee o petitioner. EL,/ !he 9C held that the ruling in the Brent case could not apply in the case at bar. !he acid test in considering i#ed0term contracts as 'alid is: i rom the circumstances it is apparent that periods ha'e been imposed to preclude acuisition o tenurial security by the employee% they should be disregarded or being contrary to public policy. !he 9C $ill not hesitate to nulliy employment contracts stipulating a i#ed term ater inding that the purpose behind these contracts $as to e'ade the application o the labor la$s% since this is contrary to public policy. Moreo'er% unlie in the Brent case $here the period o the contract $as i#ed and clearly stated% note that in the case at bar% the terms o employment o pri'ate respondent as pro'ided in the asunduan $as not only 'ague% it also ailed to pro'ide an actual or speciic date or period or the contract. !here is nothing in the contract that says complainant% $ho happened to be the captain o said 'essel% is a casual% seasonal or a pro+ect $orer. !he date 8uly 1 to 51% 1 under the heading ?agdating@ had been placed there merely to indicate the possible date o arri'al o the 'essel and is not an indication o the status o employment o the cre$ o the 'essel. ,urthermore% as petitioners themsel'es admitted in their petition beore this Court% pri'ate respondent $as repeatedly hired as part o the boat
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(!r t#e same tass !r "at're !( tass D and 2 t#ese tass are 8ita% "e6essar$ a" i"ise"sa&%e t! t#e 's'a% &'si"ess !r trae !( t#e em%!$er t#e" t#e em%!$ee m'st &e eeme a re'%ar em%!$ee. &n ine% inasmuch as pri'ate respondent
Bi AA a"'(a6t'rer 8s. A"t!"i! 4<4 S)RA 33 200: Fa6ts/ etitioner Big AA Manuacturer is a sole proprietorship registered in the name o its proprietor% *nrico *. Ale+o. 3espondents iled a complaint or illegal lay0o and illegal deductions. !hat as regular employees% they $ored rom :// a.m. to;:// p.m. at petitioner
reinstatement $as no longer easible% $ith ull bac $ages in either case. !he 7L3C ruled that respondents $ere regular employees% not independent contractors. &t urther held that petitioner ailed to +ustiy its reason or terminating respondents and its ailure to comply $ith the due process reuirements. CA airmed 7L3C ruling. Iss'e/ 1. 467 respondents $ere regular employees 2. 467 respondents $ere illegally dismissed

R'%i" 1. G*90 3espondents $ere employed or more than 1 year and their $or as carpenters $as necessary or desirable in petitioner
business% b) possesses substantial capital or in'estment in tools% euipment% machinery or $or premises% c) he does not $or $ithin another employerPcompany
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maniested their intention against se'ering their employment relationship $ith petitioner and abandoning their +obs. &t is settled that an employee $ho orth$ith protests his layo cannot be said to ha'e abandoned his $or. Pa'i! 8s. NLR) 9.R. N!. 14;<1: a$ > 2003H Fa6ts/ Metro !imes Corporation% publisher o I!he Manila timesI hired petitioner as account e#ecuti'e tased to solicit ad'ertisements or the said ne$s paper. &n return he $ill recei'e commission eui'alent to 1; on direct ad'ertisements sub+ect to ta# deductions. ,urthermore he recei'es a monthly allo$ance o 2/// i he meets the uota.

Seas!"a% 0 is one $here the $or or ser'ice to be perormed is seasonal in nature and the employment is or the duration o the season.

6n August 1;% 12 barely 2 months ater the ith rene$al o his contract $ith the company he $as inormed about his termination based on accusations not clearly established.

2 reJ'isites t! r!8e seas!"a% em%!$ees/ 1. the $or or ser'ices perormed by the $orers are seasonal in nature 2. they must be employed or the duration o one season only

&n their contract% there is a stipulation $hich states that petitioner in not an employee o the company. Moreo'er% it states that either party may terminate the contract ater 5/ days notice. 3espondent iled a complaint or illegal dismissal. Labor Arbiter ound respondent company liable or illegal dismissal and ordered the reinstatement o the petitioner. 6n appeal 7L3C re'ersed the decision airmed in toto by CA% hence the appeal.

Iss'e/ 4hether or not petitioner in an employee o said company= 4hether or not the dismissal $as proper= e%/ !he prime uestion here is $hether petitioner is a regular employee or not. A re'%ar em%!$ee is !"e ?#! is e"ae t! er(!rm a6ti8ities ?#i6# are "e6essar$ a" esira&%e i" t#e 's'a% &'si"ess !r trae !( t#e em%!$er as aai"st t#!se ?#i6# are '"ertae" (!r a se6i(i6 r!e6t !r are seas!"a%. *'en in these latter cases% $here such person has rendered at least one year o ser'ice% regardless o the nature o the acti'ity perormed or o $hether it is continuous or intermittent% the employment is considered regular as long as the acti'ity e#ists% it not being indispensable that he be irst issued a regular appointment or be ormally declared as such beore acuiring a regular status. Admittedly% companyQs president acceded that petitioners $or is o great importance in the sur'i'al o the company being the ad'ertisements solicited by the petitioner are the lieblood o the company. a. Seas!"a%

9easonal *mployee 0-ired or a speciic period o time during the year% and may be H76 in H!6B 3ehired $hene'er their ser'ices are reuired (e.g. arm $orers) At the arri'al o the season must be rehired% or else employer is guilty o illegal termination Allo$ed to see $or else$here $hile o0 season •

•

•

9easonal $orers $ho are called to $or rom time to time and are tem!rari%$ %ai !(( 'ri" !((-seas!" are not separated rom the ser'ice in said period% &'t are mere%$ 6!"siere !" %ea8e '"ti% reem%!$e. &n this case% con'ersion occurs similar to pro+ect employees. 4hen they are continuously rehired or the same tasPnature o tas% they become regular employees. ,'ri" !(( seas!" t#e$ are tem!rari%$ %ai !(( ?it#!'t a$ &'t t#e$ are sti%% 6!"siere re'%ar em%!$ees. ,i#ed term 0 the +ob is assigned a speciic date o e#piration e'en i the +ob is considered H76 in H!6B. !he important aspect is that the +ob is time bound. &rent school r'%i"/ ReJ'ireme"ts (!r a 8a%i

Fi5e Term em%!$me"t/ 1. $here a i#ed period or employment $as agreed upon no$ingly and 'oluntarily by the parties 2. $ithout any orce% duress or improper pressure being brought to bear upon the employee and absent any circumstances 'itiating consent% or 5. $here it satisactorily appears that the employer and employee dealt $ith each other on more or less eual terms $ith no moral dominance $hate'er being e#ercised by the ormer o'er the latter

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)ases/ a6ie"a Fatima et.a%. 8s. NFSWF et.a%. 3>: S)RA 1< A)IEN,A FATIA a"@!r PATRI)IO VILLE9AS ALFONSO VILLE9AS a" )RISTINE SE9URA etiti!"ers 8s. NATIONAL FE,ERATION OF SU9AR)ANE WOR+ERS-FOO, AN, 9ENERAL TRA,E res!"e"ts. FA)TS/ &n the course o a labor dispute bet$een the petitioner and respondent union% the union members $ere not gi'en $or or more than one month. &n protest% complainants staged a strie $hich $as ho$e'er settled upon the signing o a Memorandum o Agreement. A conciliation meeting $as conducted $herein Luisa 3ombo% 3amona 3ombo% Bobong Abrega% and Boboy 9il'a $ere not considered by the company as employees% and thus may not be members o the union. &t $as also agreed that a number o other employees $ill be reinstated. 4hen respondents again reneged on its commitment% complainants iled the present complaint. &t is alleged by the petitioners that the abo'e employees are mere seasonal employees. ISSUE/ 4hether or not the seasonal employees ha'e become regular employees. EL,/ !he 9C held that or respondents to be e#cluded rom those classiied as regular employees% it is not enough that they perform work or services that are seasonal in nature . !hey must ha'e also been employed only for the duration of one season. !he e'idence pro'es the e#istence o

the irst% but not o the second% condition. !he act that respondents 00 $ith the e#ception o Luisa 3ombo% 3amona 3ombo% Bobong Abriga and Boboy 9il'a 00 repeatedly $ored as sugarcane $orers or petitioners or se'eral years is not denied by the petitioners employed latter. *'idently% respondents for more than one season. !hereore% t#e e"era% r'%e !( re'%ar em%!$me"t is a%i6a&%e.

T#e rimar$ sta"ar !( etermi"i" re'%ar em%!$me"t is the reasona'le connection 'et#een the particular activity performed 'y the employee in relation to the usual trade or 'usiness of the employer . !he test is $hether the ormer is usually

necessary or desirable in the usual trade or business o the employer. !he connection can be determined by considering the nature o the $or perormed and its relation to the scheme o the particular business or trade in its entirety. Also i the employee has been perorming the +ob or at least a year% e'en i the perormance is not continuous and merely intermittent% the la$ deems repeated and continuing

need or its perormance as suicient e'idence o the necessity i not indispensability o that acti'ity to the business. -ence% the employment is considered regular% but only $ith respect to such acti'ity and $hile such acti'ity e#ists. etition is denied. A)IEN,A BINO V )UEN)A 4: S)RA 300 Ari% 1 200 FA)TS: -acienda Bino (-B) is a 250hectare sugar plantation in 7egros 6cc% o$ned and operated by -ortencia 9tare. -B consists o 22/ $orers perorming 'arious $ors% such as culti'ation% planting o cane points% ertili"ation% $atering% $eeding% har'esting% and loading o har'ested sugarcanes to cargo trucs. 6n 8uly 1 1% 9tare issued a notice that those $ho signed in a'or o CA3 are e#pressing their desire to get out o employment.  $orers $ere aected: they regarded the notice as a notice o their termination. !hey iled a complaint or illegal dismissal% $age dierentials% 15th month pay% holiday pay and premium pay or holiday% ser'ice incenti'e lea'e pay% and moral and e#emplary damages. )tar!e*s side: -B
or reclassiication o the hacienda (e#cept the portion earmared or CA3) rom agricultural to industrial% residential and commercial. 9he $as merely gi'ing priority to those $ho supported the reclassiication. 8uly 1 $as o0season% so not so many $orers neededD the $or $as seasonal in nature. 9he relies on the ruling in Mercado )r. v. N+,% $here sugar arm $orers $ere classiied as seasonal employees% and not regular employees. !he $orers $ere ree to oer their ser'ices to neighboring haciendas. ,espondents* side: !hey are regular employees. !he

hacienda $as so big that they $or there year0round and that they do not oer their ser'ices to neighboring haciendas. !he Mercado case dealt $ith a 1.;0heactare hacienda% considerable smaller than -B. 467 the respondents are seasonal ISSUE: employees

EL,: 76% !he respondents are regular employees. 9tare
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added that the petitioners in the Mercado case $ere Inot hired regularly and repeatedly or the same phasePs o agricultural $or% but on and o or any single phase thereo.I 9tare did not present any e'idence that the respondents $ere reuired to perorm certain phases o agricultural $or or a deinite period o time. Although she asserted that the respondents made their ser'ices a'ailable to the neighboring haciendas% the records do not% ho$e'er% support such assertion. !he primary standard or determining regular employment is the reasonable connection bet$een the particular acti'ity perormed by the employee in relation to the usual trade or business o the employer. !here is no doubt that the respondents $ere perorming $or necessary and desirable in the usual trade or business o an employer. -ence% they can properly be classiied as regular employees. ,or respondents t! &e e56%'e (r!m t#!se 6%assi(ie as re'%ar em%!$ees% it is not enough that they perorm $or or ser'ices that are seasonal in nature. They must have been employed only for the duration of one season. 4hile the records suiciently sho$ that the respondentsQ $or in the hacienda $as seasonal in nature% there $as% ho$e'er% no proo that they $ere hired or the duration o one season only. &n act% the payrolls% submitted in e'idence by the petitioners% sho$ that they a'ailed the ser'ices o the respondents since 11. Absent any proo to the contrary% the general rule o regular employment should% thereore% stand. &t bears stressing that the employer has the burden o pro'ing the la$ulness o his employeeQs dismissal. Disposition etition denied.

3einstate $orers $ithout loss o seniority% pay bac$ages and $age dierentials% and pay attys ees.

PILIPPINE TOBA))O FLUE-)URIN9  RE,RYIN9 )ORPORATION 's. NATIONAL LABOR RELATIONS )OISSION et.a%. 9.R. N!. 12;3> ,e6em&er 10 1>>< !hese reer to the consolidated cases or payment o separation pay lodged by JtheK Lubat >roup% and or illegal dismissal and underpayment o separation pay by JtheK Luris group% $ith prayers or damages and attorney
claimed that petitioner
Iss'es/ &n the Court
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business o an other$ise 'iable enterprise. Although Article 25 uses the phrase ?closure or cessation o operation o an establishment or undertaing%@ this Court pre'iously ruled in Coca0Cola Bottlers (hils.)% &nc. '. 7L3C that said statutory pro'ision applies in cases o both complete and partial cessation o the business operation. etitioner did not actually close its entire business. &t merely transerred or relocated its tobacco processing and redrying operations. Moreo'er% it $as also engaged in% among others% corn and rental operations% $hich $ere unaected by the closure o its Balinta$a plant. !ested against the aorecited standards% $e hold that herein petitioner $as not able to pro'e serious inancial losses arising rom its tobacco operations. A close e#amination o its 9tatement o &ncome and *#penses and its recasted 'ersion thereo% $hich $ere presented in support o its contention% suggests its ailure to sho$ business losses. 6n the contrary% the 9tatement o &ncome and *#penses sho$s that the selling and administrati'e e#penses pertain not only to the tobacco business o petitioner% but also to its corn and rental operations% and that the interest e#penses pertain to all o its business operations. &n act% the aorementioned 9tatement sho$s that there $as a net gain rom operations in each year co'ered by the report. &n other $ords% the recasted inancial statement eecti'ely modiied the 9tatement o &ncome and *#penses by deducting rom the tobacco operations alone the operating costs pertaining to all businesses o petitioner. !he contention o petitioner that tobacco $as its main business does not +ustiy the de'ious contents o the recasted inancial statement. &t is diicult to accept that it could not ha'e incurred any e#pense in its other operations. Common sense re'olts against such proposition. 9econd &ssue: Lubat >roup &llegally ismissed etitioner illegally dismissed the members o the Lubat group $hen it reused to allo$ them to $or during the 1 season. &t ollo$s that the employeremployee relationship bet$een herein petitioner and members o the Lubat group $as not terminated at the end o the 15 season. ,rom the end o the 15 season until the beginning o the 1 season% they $ere considered only on lea'e but ne'ertheless still in the employ o petitioner. etitioner is liable or illegal dismissal and should be responsible or the reinstatement o the Lubat group and the payment o their bac $ages. -o$e'er% since reinstatement is no longer possible as petitioner has

already closed its Balinta$a plant% respondent members o the said group should instead be a$arded normal separation pay (in lieu o reinstatement) eui'alent to at least one month pay% or one month pay or e'ery year o ser'ice% $hiche'er is higher. &t must be stressed that the separation pay being a$arded to the Lubat group is due to illegal dismissalD hence% it is dierent rom the amount o separation pay pro'ided or in Article 25 in case o retrenchment to pre'ent losses or in case o closure or cessation o the employer
T#ir Iss'e/ Am!'"t !( Searati!" Pa$. !he amount o separation pay is based on t$o actors: the amount o monthly salary and the number o years o ser'ice. Although the Labor Code pro'ides dierent deinitions as to $hat constitutes ?one year o ser'ice%@ Boo 9i# does not speciically deine ?one year o ser'ice@ or purposes o computing separation pay. !?e8er Arti6%es 2<3 a" 2<4 &!t# state i" 6!""e6ti!" ?it# searati!" a$ t#at a (ra6ti!" !( at %east si5 m!"t#s s#a%% &e 6!"siere !"e ?#!%e $ear. Applying this to the case at bar% $e hold that the amount o separation pay $hich respondent members o the Lubat and Luris groups should recei'e is one0hal (1P2) their respecti'e a'erage monthly pay during the last season they $ored multiplied by the number o years they actually rendered ser'ice% pro'ided that they $ored or at least si# months during a gi'en year. !he ormula that petitioner proposes% $herein a year o $or is eui'alent to actual $or rendered or 5/5 days% is both unair and inapplicable% considering that Articles 25 and 2 pro'ide that in connection $ith separation pay% a raction o at least si# months shall be considered one $hole year. Hnder these pro'isions% an employee $ho $ored or only si# months in a gi'en year 00 $hich is certainly less than 5/5 days 00 is considered to ha'e $ored or one $hole year. 7L3C ecision is airmed $ith modiications. $easonal 7orkers who are called to work from time to time and are temporarily laid off during offseason are not separated from service in said period, but are merely considered on leave until reemployed or when their services may be needed. They are not strickly speaking separated from the service but are merely considered as on leave of absence without pay until they are reemployed.

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PILIPPINE FRUIT  VE9ETABLE IN,USTRIES IN). a" its Presie"t a" 9e"era% a"aer R. PE,RO )ASTILLO 's. NATIONAL LABOR RELATIONS )OISSION a" P#i%ii"e Fr'it a" Veeta&%e W!rers U"i!"-T'as L!6a% )#ater 9.R. N!. 122122 7'%$ 20 1>>> Fa6ts/ hilippine ,ruit and Fegetable &ndustries% &nc. (,F&&) is a go'ernment0o$ned and controlled corporation engaged in the manuacture and processing o ruit and 'egetable purees or e#port. 6n 9eptember ;% 1 herein pri'ate respondent hilippine ,ruit and Fegetable 4orers Hnion0!upas Local Chapter% or and in behal o 12 o its members% iled a complaint or unair labor practice and illegal dismissal $ith damages against petitioner corporation. ri'ate respondent alleged that many o its complaining members started $oring or ,F&& in 8anuary or ,ebruary 15 until their dismissal on dierent dates in 1;% 1% 1 and 1. etitioner edro Castillo is the ormer resident and >eneral Manager o petitioner ,F&&. etitioners urther argue that ,F&& operates on a seasonal basis and the complainants $ho are members o respondent union are seasonal $orers because they $or only during the period that the company is in operation. &ts operation starts only in ,ebruary and ceases by the end o the same month $hen the supply is consumed. &t then resumes operations at the end o April or early May% depending on the a'ailability o supply and ceases operation in 8une. !he se'erance o complainantsQ employment rom petitioner corporation $as a necessary conseuence o the nature o seasonal employmentD and since complainants are seasonal $orers as deined by the Labor Code% they cannot in'oe any beneit.

Iss'e/ 4hether or not respondents are seasonal employees $hose employments ceased during the o0season due to no $or and not due to illegal dismissal. 3egular and Casual *mployment0 !he e%/ pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employers% e#cept $here the employment has been i#ed or a speciic pro+ect. An employment shall be deemed to be casual i it is not co'ered by the preceding paragraphD pro'ided% that% any employee $ho has rendered at least one year o ser'ice $hether such ser'ice is continuous or broen% shall be considered a regular employee $ith respect to the

acti'ity in $hich he is employed and his employment shall continue $hile such actually e#ists. An employment shall be deemed regular $here the employee: a) has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employerD or b) has rendered at least one year o ser'ice% $hether such ser'ice is continuous or broen% $ith respect to the acti'ity in $hich he is employed. T#e ?!r !( 6!m%ai"a"ts as seeers !erat!rs s!rters s%i6ers a"it!rs ri8ers tr'6 #e%ers me6#a"i6s a" !((i6e ers!""e% is ?it#!'t !'&t "e6essar$ i" t#e 's'a% &'si"ess !( a (!! r!6essi" 6!ma"$ %ie etiti!"er PFVII . 4hile it may be true that some phases o petitioner companyQs processing operations is dependent on the supply o ruits or a particular season% the other eually important aspects o its business% such as manuacturing and mareting are not seasonal. !he act is that large0scale ood processing companies such as petitioner company continue to operate and do business throughout the year e'en i the a'ailability o ruits and 'egetables is seasonal. !hereore% the petition is re'ersed $ith respect to the union members% $ho did not adduce e'idence in support o their claims.

&. Pr!e6t Pr!e6t– is one $here the employment has been i#ed or a speciic pro+ect or undertaing% the completion or termination o $hich has been determined at the time o the engagement o the employee Three instances when the project employee is converted into a regular employee#

1. A pro+ect employee may be con'erted to a regular status $hen he $as employed or a speciic pro+ect% the completion o $hich is determined% but despite the termination o the pro+ect% he is still made to $or. &t negates the essence o pro+ect employment. &t sho$s that the employeei'ing the employee additional $ors negates the essence o pro+ect employment. &t sho$s that his ser'ices is not limited to the pro+ect. *'en i the e#tra $or is not H76 in H!6B to the main business% he is con'erted to a regular employee. 5. Maraguinot case. Hnder multiple succeeding pro+ects% can ha'e gaps bet$een each pro+ect% the employees can still be con'erted to regular

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status but only $hen the pro+ect employee is rehired continuously% and or the same nature o tas. !here is a pattern sho$ing that H76 in H!6B.

!he employees% appealed rom the said decision. !he 7L3C airmed the decision o the Labor Arbiter $ith the modiication that pri'ate respondent pay bac$ages computed rom the respecti'e dates o dismissal until inality o the decision.

. 7ote: !he one0year rule only applies to casual employment% not to pro+ect nor seasonal employees.

ri'ate respondent% unsatisied $ith the modiication made by the 7L3C% iled a M3 $ith the contention that% since it has been ound by the Labor Arbiter and airmed in the assailed decision that the employees $ere pro+ect employees% the computation o bac$ages should be limited to the date o the completion o the pro+ect and not to the inality o the decision. !he 7L3C% ho$e'er% denied the motion ruling that pri'ate respondent ailed to establish the date o the completion o the pro+ect.

T?! i"s !( Pr!e6t Em%!$ee/ 1. tass $hich are H76 in H!6B 2. tass $hich are not H76 in H!6B i. the +ob must be distinct rom the totality o *3
A $or pool is not necessary in order to con'ert the pro+ect employee into regular% But its e#istence may signiy that the pro+ect employee has become regular i there is a continuous rehiring.

ReJ'ireme"ts/ 1. he must be hired or that speciic pro+ect 2. the completion or termination o his pro+ect $as made no$n to him )ases/ WILFRE,O ARO RONILO TIROL 7OSE PA)AL,O PRIITIVO )ASUE7O a" AR)IAL AB9O VS. NATIONAL LABOR RELATIONS )OISSION FOURT ,IVISION a" BENTEL ,EVELOPENT )ORPORATION 9.R. N!. 1;4;>2 ar6# ; 2012 The facts# 9e'eral employees o pri'ate respondent Benthel e'elopment Corporation% including the petitioners% iled a Complaint or illegal dismissal $ith 'arious money claims and prayer or damages against the latter% in the 7L3C Arbitration Branch 7o. F&& in Cebu City. !hereater% Labor Arbiter *rnesto ,. Carreon rendered a decision inding pri'ate respondent guilty o illegal dismissal and ordering it to pay its thirty0si# (5) employees %/.// as separation pay.

Issue# 4hether or not petitioners $ere pro+ect

employees or regular employees. 8eld# According to the CA% petitioners are pro+ect

employees as ound by Labor Arbiter *rnesto Carreon in his ecision dated May 2% 1% because they $ere hired or the construction o the Cordo'a 3ee Fillage 3esort in Cordo'a% Cebu% $hich $as later on airmed by the 7L3C in its 8anuary 12% 1 decision. !he only discrepancy is the 6rder o the 7L3C that petitioners are entitled to bac$ages up to the inality o its decision% $hen as pro+ect employees% pri'ate respondents are only entitled to payment o bac$ages until the date o the completion o the pro+ect. &n a later resolution on pri'ate respondentQs motion or reconsideration o its 8anuary 12% 1 decision% the 7L3C changed its indings by ruling that petitioners herein $ere regular employees and% thereore% entitled to ull bac$ages% until inality o the decision% citing that petitioners< repeated rehiring o'er a long span o time made them regular employees. &n 8anjin 8eavy Industries and *onstruction *o. 1td. v. Iba9e:, ; 1/K this Court e#tensi'ely discussed the abo'e distinction% thus:# # # J!Khe principal test or determining $hether particular employees are properly characteri"ed as Ipro+ect employeesI as distinguished rom Iregular employeesI is $hether or not the pro+ect employees $ere assigned to carry out a Ispeciic pro+ect or undertaing%I the duration and scope o $hich $ere speciied at the time the employees $ere engaged or that pro+ect. J11K &n a number o cases% J12K the Court has held that the length o ser'ice or the re0hiring o construction $orers on a pro+ect0to0pro+ect basis does not coner upon them regular employment status% since their re0 hiring is only a natural conseuence o the act that e#perienced construction $orers are preerred.

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*mployees $ho are hired or carrying out a separate +ob% distinct rom the other undertaings o the company% the scope and duration o $hich has been determined and made no$n to the employees at the time o the employment % are properly treated as pro+ect employees and their ser'ices may be la$ully terminated upon the completion o a pro+ect. J15K 9hould the terms o their employment ail to comply $ith this standard% they cannot be considered pro+ect employees. &n

*aramol v. 2ational 1abor (elations *ommission% J1;K and later reiterated in 9alinas% 8r.

'. 7ational Labor 3elations Commission% J1K the Court maredly stressed the importance o the employeesQ no$ing consent to being engaged as pro+ect employees $hen it clariied that Ithere is no uestion that stipulation on employment contract pro'iding or a i#ed period o employment such as ?pro+ect0to0pro+ect@ contract is 'alid pro'ided the period $as agreed upon no$ingly and 'oluntarily by the parties% $ithout any orce% duress or improper pressure being brought to bear upon the employee and absent any other circumstances 'itiating his consent # # #.I &t is not disputed that petitioners $ere hired or the construction o the Cordo'a 3ee Fillage 3esort in Cordo'a% Cebu. By the nature o the contract alone% it is clear that petitionersQ employment $as to carry out a speciic pro+ect. -ence% the CA did not commit gra'e abuse o discretion $hen it airmed the indings o the Labor Arbiter. !hereore% being pro+ect employees% petitioners are only entitled to ull bac$ages% computed rom the date o the termination o their employment until the actual completion o the $or. &llegally dismissed $orers are entitled to the payment o their salaries corresponding to the une#pired portion o their employment $here the employment is or a deinite period. J1K &n this case% as ound by the CA% the Cordo'a 3ee Fillage 3esort pro+ect had been completed in 6ctober 1 and pri'ate respondent herein had signiied its $illingness% by $ay o concession to petitioners% to set the date o completion o the pro+ect as March 1% 1D hence% the latter date should be considered as the date o completion o the pro+ect or purposes o computing the ull bac$ages o petitioners.

,.. )ONSUN7I IN). a"@!r ,AVI, . )ONSUN7I 8s. ESTELITO L. 7AIN 9.R. N!. 1>214 Ari% 1< 2012 Fa6ts/ 6n ecember 1% 1% petitioner .M. Consun+i% &nc. (MC&)% a construction company% hired

respondent *stelito L. 8amin as a laborer. 9ometime in 1;% 8amin became a helper carpenter. 9ince his initial hiring% 8amineneral Manager% a'id M. Consun+i. 8amin alleged that MC& terminated his employment $ithout a +ust and authori"ed cause at a time $hen he $as already ;; years old and had no independent source o li'elihood. -e claimed that he rendered ser'ice to MC& continuously or almost 51 years. &n addition to the schedule o pro+ects ($here he $as assigned) submitted by MC& to the labor arbiter% JK he alleged that he $ored or three other MC& pro+ects: !$in !o$ers% 3it" !o$ers% rom 8uly 2% 1/ to 8une 12% 12D 7e$ &stana ro+ect% B.9.B. Brunei% rom 8une 25% 12 to ,ebruary 1% 1D and 7e$ &stana ro+ect% B.9.B. Brunei% rom 8anuary 2% 1 to May 2;% 1. MC& denied liability. &t argued that it hired 8amin on a pro+ect0to0pro+ect basis% rom the start o his engagement in 1 until the completion o its 9M Manila pro+ect on March 2/% 1 $here 8amin last $ored. 4ith the completion o the pro+ect% it terminated 8amin
Iss'e/ 4hether or not 8amin is a regular employee. T#e )!'rtQs R'%i" As earlier mentioned% 8amin $ored or MC& or almost 51 years% initially as a laborer and% or the most part% as a carpenter. !hrough all those years% MC& treated him as a pro+ect employee% so that he ne'er obtained tenure. 6n the surace and at irst glance% MC& appears to be correct. 8amin entered into a contract o employment (actually an appointment paper to $hich he signiied his conormity) $ith MC& either as a ield $orer% a temporary $orer% a casual employee% or a pro+ect employee e'erytime MC& needed his ser'ices and a termination o employment paper $as ser'ed on him upon completion o e'ery pro+ect or phase o the pro+ect $here he $ored. J5;K MC& $ould then submit termination o employment reports to the 6L*% containing the names o a number o employees including 8amin. J5K !he 7L3C and the

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CA $ould later on say% ho$e'er% that MC& ailed to submit termination reports to the 6L*. !he CA pierced the co'er o 8amin
disclosure might not ha'e constituted suppression o e'idence R it could +ust ha'e been o'erlooed by the company R but the o'ersight is unair to 8amin as the non0inclusion o the three pro+ects gi'es the impression that there $ere substantial gaps not only o se'eral months but years in his employment $ith MC&. !hus% as 8amin e#plains% the 3it" !o$er ro+ect (8uly 2% 1/ to 8une 12% 12) and the 7e$ &stana ro+ect (8une 25% 12 to ,ebruary 1% 1) $ould e#plain the gap bet$een the Midto$n la"a pro+ect (9eptember 5% 1 to 8uly 2% 1/) and the &33& orm &F pro+ect (8une 15% 1 to March 12% 1;) and the other 7e$ &stana ro+ect (8anuary 2% 1 to May 2;% 1) $ould e#plain the gap bet$een . ;1 -anger (9eptember 15% 1; to 8anuary 25% 1) and . ;1 Maint (May 2% 1 to 7o'ember 1% 1). !o reiterate% 8amin
4e re'ie$ed 8amin
,urther% as $e stressed in Ligan"a% JK ?JrKespondent capitali"es on our ruling in .M. Consun+i% &nc. '. 7L3C $hich reiterates t#e r'%e t#at t#e %e"t# !( ser8i6e !( a r!e6t em%!$ee is "!t t#e 6!"tr!%%i" test !( em%!$me"t te"'re &'t ?#et#er !r "!t t#e em%!$me"t #as &ee" (i5e (!r a se6i(i6 r!e6t !r '"ertai" t#e 6!m%eti!" !r termi"ati!" !( ?#i6# #as &ee" etermi"e at t#e time !( t#e e"aeme"t !( t#e em%!$ee.<@

,or not disclosing that there had been other pro+ects $here MC& engaged his ser'ices% 8amin accuses the company o suppressing 'ital e'idence that supports his contention that he rendered ser'ice in the company
?9urely% length o time is not the controlling test or pro+ect employment. 7e'ertheless% it is 'ital in determining i the employee $as hired or a speciic undertaing or tased to perorm unctions 'ital% necessary and indispensable to the usual business or trade o the employer. -ere% Jpri'ateK respondent had

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been a pro+ect employee se'eral times o'er. -is employment ceased to be coterminous $ith speciic pro+ects $hen he $as repeatedly re0hired due to the demands o petitioner
4ith our ruling that 8amin had been a regular employee% the issue o $hether MC& submitted termination o employment reports% pursuant to olicy &nstructions 7o. 2/ (Hndated JK)% as superseded by 6L* epartment 6rder 7o. 1 (series o 15)% has become academic. 6L* olicy &nstructions 7o. 2/ pro'ides in part: ro+ect employees are not entitled to termination pay i they are terminated as a result o the completion o the pro+ect or any phase thereo in $hich they are employed% regardless o the number o pro+ects in $hich they ha'e been employed by a particular construction company. Moreo'er% the company is not reuired to obtain a clearance rom the 9ecretary o Labor in connection $ith such termination. 4hat is reuired o the company is a report to the nearest ublic *mployment 6ice or statistical purposes. JK !o set the records straight% MC& indeed submitted reports to the 6L* but as pointed out by 8amin% the submissions started only in 12. JK MC& e#plained that it submitted the earlier reports (12)% but it lost and ne'er reco'ered the reports. &t reconstituted the lost reports and submitted them to the 6L* in 6ctober 12D thus% the dates appearing in the reports. JK 0s &avid M. %onsunji" &M%0*s 1resident2/eneral Manager" lia'le for 3amin*s dismissal4

4hile there is no uestion that the company is liable or 8amineneral Manager% a co0petitioner $ith the company% is also liable. J;/K 7either had the parties brought the matter up to the CA nor $ith this Court. As there is no e#press inding o Mr. Consun+i
completion o the pro+ect or $hich he $as hired. !he import o this decision is not to impose a positi'e and s$eeping obligation upon the employer to re0hire pro+ect employees. 4hat this decision merely accomplishes is a +udicial recognition o the employment status o a pro+ect or $or pool employee in accordance $ith $hat is ait accompli% i.e.% the continuous re0hiring by the employer o pro+ect or $or pool employees $ho perorm tass necessary or desirable to the employer
LEYTE 9EOTERAL POWER PRO9RESSIVE EPLOYEES UNION D ALU D TU)P 8s. PILIPPINE NATIONAL OIL )OPANY D ENER9Y ,EVELOPENT )ORPORATION 9.R. N!. 1;031 ar6# 30 2011 FA)TS/ 76C is a go'ernment0o$ned and controlled corporation engaged in% among others o energy resources lie geothermal energy. etitioner is a legitimate labor organi"ation% duly registered $ith the 6L*. 76C hired employees or its Leyte >eothermal o$er ro+ect $hereby% their employment $as only good up to the completion or termination o the pro+ect and $ould automatically e#pire upon the completion o such pro+ect. Ma+ority o the employees hired had become members o petitioner. &n 'ie$ o that circumstance% the petitioner demands or recognition o it as the collecti'e bargaining agent o said employees and or a CBA negotiation $ith it. -o$e'er% 76C did not heed such demands. 9ometime in 1 $hen the pro+ect $as about to be completed% 76C proceeded to ser'e 7otices o !ermination o *mployment upon the employees $ho are members o the petitioner. !he petitioner iled a 7otice o 9trie $ith 6L* against 76C on the ground o purported commission by the latter o HL or Ireusal to bargain collecti'ely% union busting and mass termination.I 6n the same day% the petitioner declared a strie and staged such strie. 76C iled a complaint or% among others% 9trie &llegality $ith 7L3C $hich ruled in its a'our and $hose decision $as airmed by the CA.

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ISSUE/ 467 the oicers and members o petitioner Hnion are pro+ect employees o respondent. RULIN9/ !he litmus test to determine $hether an indi'idual is a pro+ect employee lies in setting a i#ed period o employment in'ol'ing a speciic undertaing $hich completion or termination has been determined at the time o the particular employeeeothermal o$er ro+ect located at the >reater !ongonan >eothermal 3eser'ation in Leyte. Conseuently% upon the completion o the pro+ect or substantial phase thereo% the oicers and the members o petitioner Hnion could be 'alidly terminated. Clearly% thereore% petitioners being pro+ect employees% or% to use the correct term% seasonal employees% their employment legally ends upon completion o the pro+ect or the Jend o theK season. !he termination o their employment cannot and should not constitute an illegal dismissal.

ILLENNIU ERE)TORS )ORPORATION VS. VIR9ILIO A9ALLANES 9.R. N!. 1<43:2 N!8em&er 1 2010 Fa6ts/ 3espondent Firgilio Magallanes started $oring in 1 as a utility man or Laurencito !iu (!iu)% Chie *#ecuti'e 6icer o Millennium *rectors Corporation (petitioner)% !iuQs amily% and enneth Construction Corporation. -e $as assigned to dierent construction pro+ects undertaen by petitioner in Metro Manila% the last o $hich $as or a building in Libis% Uue"on City. &n 8uly o 2// he $as told not to report or $or anymore allegedly due to old age% prompting him to ile on August % 2// an illegal dismissal complaint 1 beore the Labor Arbiter. Iss'e/ 4hether or not Magallanes< dismissal 'iolates security o tenure. Ar'me"ts/ M*C 3espondent $as a pro+ect employee $hom it hired or a building pro+ect in Libis on 8anuary 5/ and $hich $as in near completion on August 5% 2//% $hen ser'ices $ere terminated. 9aid all 6L* reuirements $ere complied. etitioner mo'ed or reconsideration o the 7L3C decision% contending that respondentQs motion or reconsideration $hich it treated as an appeal $as not perected% it ha'ing been belatedly iledD that there $as no statement o the date o receipt o the appealed decisionD and that it laced 'eriication and copies thereo $ere not urnished the ad'erse parties

RULIN9/

1. A pro+ect employee is one $hose Iemployment has been i#ed or a speciic pro+ect or undertaing% the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or or ser'ice to be perormed is seasonal in nature and the employment is or the duration o the season.I As the Court has consistently held% the ser'ice o pro+ect employees are coterminus JsicK $ith the pro+ect and may be terminated upon the end or completion o that pro+ect or pro+ect phase or $hich they $ere hired. 3egular employees% in contrast% en+oy security o tenure and are entitled to hold on to their $or or position until their ser'ices are terminated by any o the modes recogni"ed under the Labor Code. 5emphasis and underscoring supplied6 Assuming arguendo that petitioner hired respondent initially on a per pro+ect basis% his continued rehiring% as sho$n by the sample payrolls con'erted his status to that o a regular employee 2. &n labor cases% rules o procedure should not be applied in a 'ery rigid and technical sense. !echnicalities should not be permitted to stand in the $ay o euitably and completely resol'ing the rights and obligations o the parties. 4here the ends o substantial +ustice shall be better ser'ed% the application o technical rules o procedure may be rela#ed. As to the deecti'e 'eriication in the appeal memorandum beore the 7L3C% the same liberality applies. Ater all% the reuirement regarding 'eriication o a pleading is ormal% not +urisdictional. 4-*3*,63*% the petition is *7&*.

RONILO SORRE,A VS. )ABRI,9E ELE)TRONI)S )ORP 9.R. N!. 1;2>2; Fe&r'ar$ 11 2010 Fa6ts/ 6n May % 1% petitioner $as hired by respondent as a technician or a period o ; months at minimum $age. ,i'e $ees into the +ob (on 8une 1;% 1)% petitioner met an accident in $hich his let arm $as crushed by a machine and had to be amputated. &n 9eptember 1% ater he reco'ered rom his in+ury% petitioner reported or $or. &nstead o gi'ing him employment% they made him sign a memorandum o resignation to ormali"e his separation rom the company in the light o the e#piration o his i'e0month contract. etitioner iled a case or illegal dismissal. eendant a'erred that there $as no employer0employee relationship. CA ruled that theK petitioner 3onilo

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9orreda $as not a regular employee o respondent Cambridge *lectronics Corporation.

$ell as to the management prerogati'e o respondent company to choose its employees.

Iss'e/ 4hether or not there is an employer0 employee relationship.

4-*3*,63*% the petition is hereby *7&*.

e%/ NO. &n this instance% petitioner% rom the period May % 1 to 6ctober % 1% $as clearly a per0 pro+ect employee o pri'ate respondent% resulting in an employer0employee relationship. Conseuently% uestions or disputes arising out o this relationship ell under the +urisdiction o the labor arbiter. -o$e'er% based on petitioner
WILLIA UY )ONSTRU)TION )ORP. a"@!r TERESITA UY a" WILLIA UY 8s. 7OR9E R. TRINI,A, 9.R. N!. 1<320 ar6# 10 2010 Fa6ts/ !rinidad claimed that he had been $oring $ith the latter company or 1 years since 1 as dri'er o its ser'ice 'ehicle% dump truc% and transit mi#er. -e had signed se'eral employment contracts $ith the company that identiied him as a pro+ect employee although he had al$ays been assigned to $or on one pro+ect ater another $ith some inter'als. 6n ecember 2//% he $as terminated rom $or due to the shutdo$n o operations due to lac o pro+ects but he later ound out that there $as a pro+ect in Batangas but he $as no longer hired bac. etitioner company countered that it $as in the construction business. By the nature o such business% it had to hire and engage the ser'ices o pro+ect construction $orers% including respondent !rinidad% $hose employments had to be co0 terminous $ith the completion o speciic company pro+ects. ,or this reason% e'ery time the company employed !rinidad% he had to e#ecute an employment contract $ith it% called 7ppointment as 1roject Wor!er . !he Labor Arbiter dismissed !rinidad
Iss'e/ &s respondent !rinidad a regular employee= R'%i"/ 7o. !he test or distinguishing a ?pro+ect employee@ rom a ?regular employee@ is $hether or not he has been assigned to carry out a ?speciic pro+ect or undertaing%@ $ith the duration and scope o his engagement speciied at the time his ser'ice is contracted. -ere% it is not disputed that petitioner company contracted respondent !rinidad
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speciic pro+ects $ith the duration o his $or clearly set out in his employment contracts. -e remained a pro+ect employee regardless o the number o years and the 'arious pro+ects he $ored or the company. >enerally% length o ser'ice pro'ides a air yardstic or determining $hen an employee initially hired on a temporary basis becomes a permanent one% entitled to the security and beneits o regulari"ation. But this standard $ill not be air% i applied to the construction industry% simply because construction irms cannot guarantee $or and unding or its payrolls beyond the lie o each pro+ect. !he repeated and successi'e rehiring o pro+ect employees do not ualiy them as regular employees% as length o ser'ice is not the controlling determinant o the employment tenure o a pro+ect employee% but $hether the employment has been i#ed or a speciic pro+ect or undertaing% its completion has been determined at the time o the engagement o the employee. !rinidad
,.. )ONSUN7I IN). VS. ANTONIO 9OBRES A9ELLAN ,ALISAY 9O,OFRE,O PARA9SA EILIO ALETA a" 9ENEROSO ELO 9.R. N!. 1:>1;0 A''st < 2010 Fa6ts/ 3espondents Antonio >obres% Magellan alisay% >odoredo aragsa% *milio Aleta and >eneroso Melo $ored as carpenters in the construction pro+ects o petitioner .M. Consun+i% &nc.% a construction company% on se'eral occasions andPor at 'arious times. !heir termination rom employment or each pro+ect $as reported to the epartment o Labor and *mployment (6L*)% in accordance $ith olicy &nstruction 7o. 2/% $hich $as later superseded by epartment 6rder 7o. 1% series o 15. 6n 6ctober 1% 1% respondents sa$ their names included in the 7otice o !ermination posted on the bulletin board at the pro+ect premises. 3espondents

iled a Complaint $ith the Arbitration Branch o the 7ational Labor 3elations Commission (7L3C) against petitioner .M. Consun+i% &nc. and a'id M. Consun+i or illegal dismissal% and non0payment o 15th month pay% i'e (;) days ser'ice incenti'e lea'e pay% damages and attorneyQs ees. etitioner contended that since respondents $ere terminated by reason o the completion o their respecti'e phases o $or in the construction pro+ect% their termination $as $arranted and legal. Moreo'er% petitioner claimed that respondents ha'e been duly paid their ser'ice incenti'e lea'e pay and 15th month pay through their respecti'e ban accounts% as e'idenced by ban remittances. Labor Arbiter ruled that the employees $ere pro+ect employees. 7L3C airmed the decision o the Labor Arbiter% and Court o Appeals airmed the decision o 7L3C but a$arded damages or the ailure o the company to obser'e procedural due process.

Iss'e/ 4hether or not notice (procedural due process) is reuired in termination o pro+ect employees R'%i"/ 7o. A pro+ect employee is deined under Article 2/ o the Labor Code as one $hose Iemployment has been i#ed or a speciic pro+ect or undertaing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or or ser'ices to be perormed is seasonal in nature and the employment is or the duration o the season.I As pro+ect employees% respondentsQ termination is go'erned by 9ection 1 (c) and 9ection 2 (&&&)% 3ule NN&&& (!ermination o *mployment)% Boo F o the 6mnibus 3ules &mplementing the Labor Code. 9ection 1 (c)% 3ule NN&&&% Boo F o the 6mnibus 3ules &mplementing the Labor Code states: 9ection 1.)ecurity of tenure. R (a) &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or +ust or authori"ed causes as pro'ided by la$% and sub+ect to the reuirements o due process. ### ### ### (c)&n cases o pro+ect employment or employment co'ered by legitimate contracting or sub0contracting arrangements% no employee shall be dismissed prior to the completion o the pro+ect or phase thereo or $hich the employee $as engaged% or prior to the e#piration o the contract bet$een the principal and contractor% unless the dismissal is or +ust or authori"ed cause sub+ect to the reuirements o due process or prior notice% or is brought about by

55 E  a g e




the completion o the phase o the pro+ect or contract or $hich the employee $as engaged.

is ser'ed the employee $ithin a reasonable time rom the eecti'e date o termination.

3ecords sho$ that respondents $ere dismissed ater the e#piration o their respecti'e pro+ect employment contracts% and due to the completion o the phases o $or respondents $ere engaged or. -ence% the cited pro'isionQs reuirements o due process or prior notice $hen an employee is dismissed or +ust or authori"ed cause (under Articles 22 and 25 o the Labor Code) prior to the completion o the pro+ect or phase thereo or $hich the employee $as engaged do not apply to this case. A*C-9

&n this case% the Labor Arbiter% the 7L3C and the Court o Appeals all ound that respondents $ere 'alidly terminated due to the completion o the phases o $or or $hich respondentsQ ser'ices $ere engaged. !he abo'e rule clearly states% I& the termination is brought about by the completion o the contract or phase thereo% no prior notice is 3r. v. %.E. %onstruction reuired.I %ioco" %orporation e#plained that this is because completion o the $or or pro+ect automatically terminates the employment% in $hich case% the employer is% under the la$% only obliged to render a report to the 6L* on the termination o the employment.

,urther% 9ection 2 (&&&)% 3ule NN&&&% Boo F o the 6mnibus 3ules &mplementing the Labor Code pro'ides: 9ection 2.)tandard of due process: re8uirements of notice. R&n all cases o termination o employment% the ollo$ing standards o due process shall be substantially obser'ed. 1 .,or termination o employment based on +ust causes as deined in Article 22 o the Code: (a)A $ritten notice ser'ed on the employee speciying the ground or grounds or termination% and gi'ing to said employee reasonable opportunity $ithin $hich to e#plain his sideD (b)A hearing or conerence during $hich the employee concerned% $ith the assistance o counsel i the employee so desires% is gi'en opportunity to respond to the charge% present his e'idence or rebut the e'idence presented against himD and (c)A $ritten notice JoK termination ser'ed on the employee indicating that upon due consideration o all the circumstance% grounds ha'e been established to +ustiy his termination. &n case o termination% the oregoing notices shall be ser'ed on the employeeQs last no$n address. &&.,or termination o employment as based on authori"ed causes deined in Article 25 o the Code% the reuirements o due process shall be deemed complied $ith upon ser'ice o a $ritten notice to the employee and the appropriate 3egional 6ice o the epartment at least thirty (5/) days beore the eecti'ity o the termination% speciying the ground or grounds or termination. &&&. & the termination is brought about by the completion o the contract or phase thereo% no prior notice is reuired. & the termination is brought about by the ailure o an employee to meet the standards o the employer in the case o probationary employment% it shall be suicient that a $ritten notice

-ence% prior or ad'ance notice o termination is not part o procedural due process i the termination is brought about by the completion o the contract or phase thereo or $hich the employee $as engaged. etitioner% thereore% did not 'iolate any reuirement o procedural due process by ailing to gi'e respondents ad'ance notice o their terminationD thus% there is no basis or the payment o nominal damages.

7U,Y O. ,A)UITAL et. a%. 8s. L.. )AUS EN9INEERIN9 )ORPORATION a"@!r LUIS . )AUS 9.R. N!. 1;:;4< Setem&er 1 2010 Fa6ts/ etitioners (LMC*C *mployees) iled a complaint for illegal dismissal and non0payment o monetary beneits against respondent LM Camus *ngineering Corp. beore the 7ational Labor 3elations Commission (7L3C). !he employees alleged that they $ere illegally dismissed rom employment and that their employer ailed to pay them their holiday pay% premium pay or holiday% rest day% ser'ice incenti'e lea'e pay% and 15th month pay during the e#istence and duration o their employment. !hey also a'erred that they $ere not pro'ided $ith sic and 'acation lea'es. 3espondents denied that petitioners $ere illegally dismissed rom employment. They claimed that petitioners #ere project employees and% upon the completion o each pro+ect% they $ere ser'ed notices o pro+ect completion. !hey clariied that the termination o petitioners< employment $as due to the completion o the pro+ects or $hich they $ere hired. 1etitioners" ho#ever" countered that they #ere regular employees as they had 'een engaged to perform activities #hich are usually necessary or desira'le in the usual 'usiness or trade of +M%E%.

!hey denied that they $ere pro+ect or contractual

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employees because their employment $as continuous and uninterrupted or more than one (1) year. ,inally% they maintained that they $ere part o a $or pool rom $hich LMC*C dre$ its $orers or its 'arious pro+ects. !he Labor Arbiter rendered a decision declaring the dismissal o the complainant0employees as &LL*>AL and the complainants are entitled to reinstatement $ithout bac $ages. !he 7L3C modiied the decision o the Labor Arbiter and ordered the reinstatement o the complainants $ith limited bac$ages. !he respondents appealed the decision to the Court o Appeals and the appellate court held that the complainants are 368*C! *ML6G**9 and hence% there $as no illegal dismissal.

ISSUE/ 4hether or not the Court o Appeals is correct in concluding that the petitioners are 368*C! *ML6G**9 and that their dismissal rom employment $as legal RULIN9/ !he 9upreme Court speaing through 8ustice 7achura ans$ered in the 7*>A!&F*. Article 2/ o the Labor Code distinguishes a Ipro+ect employeeI rom a Iregular employeeI in this $ise: Arti6%e 2<0. Re'%ar a" 6as'a% em%!$me"t.R !he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer% e#cept $here the employment has been i#ed or a speciic pro+ect or undertaing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or or ser'ices to be perormed is seasonal in nature and the employment is or the duration o the season...### !he principal test used to determine $hether employees are pro+ect employees is $hether or not the employees $ere assigned to carry out a speciic pro+ect or undertaing% the duration or scope o $hich $as speciied at the time the employees $ere engaged or that pro+ect. *'en though the absence o a $ritten contract does not by itsel grant regular status to petitioners% such a contract is evidence that petitioners #ere informed of the duration and scope of their #or! and their status as project employees. &n this case% $here no other

e'idence $as oered% the absence o the employment contracts raises a serious uestion o $hether the employees $ere properly inormed at the

onset o their employment o their status as pro+ect employees. 4hile it is true that respondents presented the employment contract o acuital% the contract does not sho$ that he $as inormed o the nature% as $ell as the duration o his employment. &n act% the duration o the pro+ect or $hich he $as allegedly hired $as not speciied in the contract. -ence% the ismissal o the petitioners are declared &LL*>AL.

ROSITA PAN9ILINAN et a%. Petiti!"ers - 8ers's 9ENERAL ILLIN9 )ORPORATION Res!"e"t. 9R N!. 14>32> 7'%$ 12 2004 FA)TS/ !he respondent >eneral Milling Corporation is a domestic corporation engaged in the production and sale o li'estoc and poultry. &t is% lie$ise% the distributor o dressed chicen to 'arious restaurants and establishments nation$ide. As such% it employs hundreds o employees% some on a regular basis and others on a casual basis% as ?emergency $orers.@ !he petitioners $ere employed by the respondent on dierent dates as emergency $orers at its poultry plant in Cainta% 3i"al% under separate ?temporaryPcasual contracts o employment@ or a period o i'e months. Most o them $ored as chicen dressers% $hile the others ser'ed as pacers or helpers. Hpon the e#piration o their respecti'e contracts% their ser'ices $ere terminated. !hey later iled separate complaints or illegal dismissal and non0payment o holiday pay% 15th month pay% night0 shit dierential and ser'ice incenti'e lea'e pay against the respondent beore the Arbitration Branch o the 7ational Labor 3elations Commission. !he petitioners alleged that their $or as chicen dressers $as necessary and desirable in the usual business o the respondent% and added that although they $ored rom 1/:// p.m. to :// a.m.% they $ere not paid night0shit dierential. !hey stressed that based on the nature o their $or% they $ere regular employees o the respondentD hence% could not be dismissed rom their employment unless or +ust cause and ater due notice. !hey asserted that the respondent >MC terminated their contract o employment $ithout +ust cause and due notice. !hey urther argued that the respondent could not rely on the nomenclature o their employment as ?temporary or casual.@

ISSUE/ 4hether or not the petitioners $ere regular employees o the respondent >MC $hen their employment $as terminated.

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EL,/ !he 9C held the petitioners $ere employees $ith a i#ed period% and% as such% $ere not regular employees. Article 2/ o the Labor Code comprehends three inds o employees: (a) regular employees or those $hose $or is necessary or desirable to the usual business o the employerD (b) pro+ect employees or those $hose employment has been i#ed or a speciic pro+ect or undertaing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or or ser'ices to be perormed is seasonal in nature and the employment is or the duration o the seasonD and% (c) casual employees or those $ho are neither regular nor pro+ect employees. A regular employee is one $ho is engaged to perorm acti'ities $hich are necessary and desirable in the usual business or trade o the employer as against those $hich are undertaen or a speciic pro+ect or are seasonal.J1K !here are t$o separate instances $hereby it can be determined that an employment is regular: (1) i the particular acti'ity perormed by the employee is necessary or desirable in the usual business or trade o the employerD and% (2) i the employee has been perorming the +ob or at least a year. Article 2/ o the Labor Code does not proscribe or prohibit an employment contract $ith a i#ed period. &t does not necessarily ollo$ that $here the duties o the employee consist o acti'ities usually necessary or desirable in the usual business o the employer% the parties are orbidden rom agreeing on a period o time or the perormance o such acti'ities. !here is thus nothing essentially contradictory bet$een a deinite period o employment and the nature o the employee
these contracts $ere used as a subteruge by the respondent >MC to e'ade the pro'isions o Articles 2 and 2/ o the Labor Code. !he petitioners $ere hired as ?emergency $orers@ and assigned as chicen dressers% pacers and helpers at the Cainta rocessing lant. 4hile the petitioners< employment as chicen dressers is necessary and desirable in the usual business o the respondent% they $ere employed on a mere temporary basis% since their employment $as limited to a i#ed period. As such% they cannot be said to be regular employees% but are merely ?contractual employees.@ Conseuently% there $as no illegal dismissal $hen the petitioners< ser'ices $ere terminated by reason o the e#piration o their contracts. Lac o notice o termination is o no conseuence% because $hen the contract speciies the period o its duration% it terminates on the e#piration o such period. A contract or employment or a deinite period terminates by its o$n term at the end o such period. etition is denied.

).E. )!"str'6ti!" )!r. 8s. Isaa6 )i!6! 7r. 9R N!. 1:<>: Set. < 2004 Fa6ts/ &saac Cioco% et al. $ere hired by C.*. Construction Corporation% a domestic corporation engaged in the construction business% hired $orers as carpenters and laborers in 'arious construction pro+ects rom 1/ to 1. !he latest o $hich $as >!& !o$er in Maati. rior to the start o e'ery pro+ect% the $orers signed indi'idual employment contracts. !he contract stipulated that the period o employment shall be co0terminus $ith the completion o the pro+ect% unless sooner terminated by you prior to the completion o the pro+ects. May and 8une 1% $orers $ere terminated by the company on the ground o completion o the phases o the >!& !o$er pro+ect. Alleging that they $ere regular employees% they iled or illegal dismissal. LA arbiter rendered +udgment in a'or o the company on April 1% 2///. -e ruled that the $orers $ere pro+ect employees as e'ident in the employment contractsD that due notice $ere aordedD reuired termination reports $ere submitted to 6L*. !he 7L3C airmed the LA
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Compiled by: Clint M. Maratas –LLB %ommission dated Octo'er ;" <<= affirming the &ecision of the +a'or 7r'iter dated 7pril =>" <<< dismissing the petitioners* complaint for illegal dismissal and claims for under payment 5sic6 and nonpayment of monetary 'enefits for lac! of merit" and its ,esolution of Novem'er ?" <<= denying petitioners* Motion for ,econsideration are here'y 7((0,ME&" 'ut MO&0(0E&" in that although petitioners #ere project employees" their dismissal as such project employees is here'y declared 0++E/7+" and private respondent %.E. %onstruction %orporation is directed to pay 'ac! #ages computed from the date of termination" i.e." May >" =??? for petitioners 0saac %ioco" 3r." %armelo 3uan@o" %ecelio 5sic6 )oler and Aenito /alvadores and from 3une B" =??? for petitioners ,e'ie Mercado" Aaysa Aenjamin 5sic6 and ,odrigo Napoles" up to the date of completion of the construction of the /T0 To#er project.

!he $orers contend that they are regular employees% hence entitled to reinstatement and bac $ages rom the time o their illegal dismissal. !he company% ho$e'er% contends that the $orers are its pro+ect employees% that they are not illegally dismissed. 4P7 the $orers $ere regular ISSUE/ employees o the company. 4P7 the $orers $ere illegally dismissed. !he LA% 7L3C% CA unanimously ound that the $orers $ere pro+ect employees. !hey hold that act the $orers ha'e been employed $ith company or se'eral years% did not automatically mae them regular employees considering that the deinition o regular employment in Article 2/ o the Labor Code% maes speciic e#ception $ith respect to pro+ect employment. !he re0hiring o petitioners on a pro+ect0 to0pro+ect basis did not coner upon them regular employment status. !he practice $as dictated by the practical consideration that e#perienced construction $orers are more preerred. &t did not change their status as pro+ect employees !he ne#t issue is $hether the 463*39 $ere illegally dismissed. !he CA ruled that they $ere illegally dismissed as: !here $as no e'idence presented by the C6MA7G to sho$ that the 463*39 had been duly notiied or inormed beorehand o their dismissal and the reasons thereor. ,urthermore% the C6MA7G allegedly ailed to present e'idence conclusi'ely pro'ing completion o the >!& !o$er pro+ect or phases thereo or •

•

•

•

•

$hich the ser'ices o the 463*39 had been engaged. &ndi'idual notices o termination had been sent to the 463*39 9ection 21; (&&&)% 3ule NN&&&% Boo F o the Om"i&'s R'%es Im%eme"ti" t#e La&!r )!e pro'ides that no prior notice o termination is reuired i the termination is brought about by completion o the contract or phase thereo or $hich the $orer has been engaged. !his is because completion o the $or or pro+ect automatically terminates the employment% in $hich case% the employer is% under the la$% only obliged to render a report to the 6L* on the termination o the employment. C6MA7G ailed to present e'idence conclusi'ely sho$ing actual completion o the >!& !o$er pro+ect or respecti'e phases thereo or $hich the 463*39 had been hired

!he court again re'ie$ the records and it sho$s that hat the C6MA7G submitted the needed e'idence. &n its motion or reconsideration o the CA!& !o$er pro+ect $as already /.2/5 and 1.5 accomplished as o May 51% 1 and 8une 5/% 1% respecti'ely. b. 9peciically% the particular orm% concreting and masonry $ors or $hich the 4 63*39 had been hired and assigned $ere already completed or near completion. !he 463*39 did not uestion the 'eracity o the e'idence presented and +ust insisted that they are regular employees o the C6MA7G% hence% not liable or termination on mere ground o pro+ect completion. Considering the oregoing% $e hold that the C6MA7G complied $ith the procedural as $ell as the substanti'e reuirements o due process $ith respect to the 463*39< termination% as ound by the Labor Arbiter and the 7L3C. 4e re'erse the CA. !he termination rom employment o pro+ect employees &saac Cioco% 8r.% !heir a$ard o bac$ages computed rom the date o their termination is set aside

A&es6! )!"str'6ti!" a" ,e8t. )!r 8s. Ramire* 4<; S)RA > FA)TS/ etitioner company $as engaged in a construction business $here respondents $ere hired on dierent dates rom 1 to 12 either as laborers% road roller operators% painters or dri'ers.

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&n 1% respondents iled 2 separate complaints or illegal dismissal against the company and its >eneral Manager beore the Labor Arbiter (LA). etitioners allegedly dismissed them $ithout a 'alid reason and $ithout due process o la$. !he complaints also included claims or non0payment o the 15th month pay% i'e days< ser'ice incenti'e lea'e pay% premium pay or holidays and rest days% and moral and e#emplary damages. !he LA later ordered the consolidation o the t$o complaints. etitioners denied liability and countered that respondents $ere ?pro+ect employees@ since their ser'ices $ere necessary only $hen the company had pro+ects to be completed. etitioners argued that% being pro+ect employees% respondents< employment $as coterminous $ith the pro+ect to $hich they $ere assigned. !hey $ere
EL,/ 1. G*9. (atio &n determining the nature o one
8urisprudence: !he 9C ruled that respondents $ere regular employees but not or the reasons gi'en by the LA ($hich both the 7L3C and the CA airmed). Citing 1alomar" et al. v. N+,%" the 9C held that contrary to the disuisitions o the LA% employees (lie respondents) $ho $or under dierent pro+ect employment contracts or se'eral years do not automatically become regular employeesD they can remain as pro+ect employees regardless o the number o years they $or. Length o time is not a controlling actor in determining the nature o one
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2. G*9. (atio !he la$ reuires that the employer urnish the employee 2 $ritten notices: (1) a notice inorming them o the particular acts or $hich they are being dismissed and (2) a notice ad'ising them o the decision to terminate the employment% beore termination can be 'alidly eected. (easoning

&n resol'ing the issue o illegal dismissal% the 9C simply stated that petitioners ailed to adhere to the ?t$o0notice rule%@ and said that respondents $ere ne'er gi'en such notices. Disposition etition denied

ISAEL SASON vs. NLR)  ATLANTI) 9ULF 9.R. N!. 1131::. Fe&r'ar$ 1  1>>: FA)TS: etitioner had been $oring or respondent Atlantic >ul and aciic Co. Manila or appro#imately 2 years and his pro+ect0to0pro+ect employment $as rene$ed se'eral times. -is successi'e contracts o employment reuired him to perorm 'irtually the same ind o $or throughout his period o employment. etitioner $ould be re0hired immediately% some or a gap o one day to one $ee rom the last pro+ect to the succeeding one. ISSUE: 467 petitioner is a regular employee EL,: Article 21 o the Labor Code pertinently prescribes that the pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreements o the parties% an employment shall be deemed to be regular $here the employee has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer. 4here rom the circumstances it appeared that periods ha'e been imposed to preclude the acuisition o tenurial security by the employee% they should be struc do$n as contrary to public policy% morals% good customs% or public order. !here can be no escape rom the conclusion that the employee is a regular employee o the respondent.

ABS-)BN 8s. Na*are"! 03 S)RA 204 FA)TS/ etitioner AB90CB7 Broadcasting Corporation (AB90CB7) employed respondents 7a"areno% >er"on% eiparine% and Lerasan as production assistants (As) on dierent dates. !hey $ere assigned at the ne$s and public aairs% or 'arious radio programs in the Cebu Broadcasting 9tation% $ith a monthly compensation o %///. !hey $ere issued AB90CB7 employees< identiication cards and $ere reuired to $or or a minimum o eight hours a day% including 9undays and holidays.

!he As $ere under the control and super'ision o Assistant 9tation Manager ante 8. Lu"on% and 7e$s Manager Leo Lastimosa. 6n 6ctober 12% 2///% respondents iled a Complaint or 3ecognition o 3egular *mployment 9tatus% Hnderpayment o 6'ertime ay% -oliday ay% remium ay% 9er'ice &ncenti'e ay% 9ic Lea'e ay% and 15th Month ay $ith amages against the petitioner beore the 7L3C. Complainants alleged that they $ere engaged by respondent AB90CB7 as regular and ull0time employees or a continuous period o more than i'e (;) years $ith a monthly salary rate o ,our !housand (%///.//) pesos beginning 1; up until the iling o this complaint on 7o'ember 2/% 2///. 3espondents insisted that they belonged to a ?$or pool@ rom $hich petitioner chose persons to be gi'en speciic assignments at its discretion% and $ere thus under its direct super'ision and control regardless o nomenclature. Complainants urther pray o this Arbiter to declare them regular and permanent employees o respondent AB90CB7 as a condition precedent or their admission into the e#isting union and collecti'e bargaining unit o respondent company $here they may as such acuire or other$ise perorm their obligations thereto or en+oy the beneits due thererom. ,or its part% petitioner alleged in its position paper that the respondents $ere As $ho basically assist in the conduct o a particular program ran by an anchor or talent. Among their duties include monitoring and recei'ing incoming calls rom listeners and ield reporters and calls o ne$s sourcesD generally% they perorm leg $or or the anchors during a program or a particular production. !hey are considered in the industry as ?program employees@ in that% as distinguished rom regular or station employees% they are basically engaged by the station or a particular or speciic program broadcasted by the radio station. etitioner asserted that as As% the complainants $ere issued talent inormation sheets $hich are updated rom time to time% and are thus made the basis to determine the programs to $hich they shall later be called on to assist. etitioner maintained that As% reporters% anchors and talents occasionally ?sideline@ or other programs they produce% such as drama talents in other productions. As program employees% a A
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As such program employees% their compensation is computed on a program basis% a i#ed amount or perormance ser'ices irrespecti'e o the time consumed. At any rate% petitioner claimed% as the payroll $ill sho$% respondents $ere paid all salaries and beneits due them under the la$. Hpon appeal% the 7L3C held that respondents are regular employees o the petitioner and that they are co'ered by the CBA. !he CA lie$ise dismissed the petition or certiorari iled by the petitioner. -ence% this petition.

ISSUE/ 4Pn respondents are regular employees o AB9 CB7. EL,/ ,espondents are ,egular employees of the

e'idence o the necessity i not indispensability o that acti'ity to the business. -ence% the employment is considered regular% but only $ith respect to such acti'ity and $hile such acti'ity e#ists. 7ot considered regular employees are ?pro+ect employees%@ the completion or termination o $hich is more or less determinable at the time o employment% such as those employed in connection $ith a particular construction pro+ect% and ?seasonal employees@ $hose employment by its nature is only desirable or a limited period o time. *'en then% any employee $ho has rendered at least one year o ser'ice% $hether continuous or intermittent% is deemed regular $ith respect to the acti'ity perormed and $hile such acti'ity actually e#ists.

petitioner" 7A) %AN.

4here a person has rendered at least one year o ser'ice% regardless o the nature o the acti'ity perormed% or $here the $or is continuous or intermittent% the employment is considered regular as long as the acti'ity e#ists% the reason being that a customary appointment is not indispensable beore one may be ormally declared as ha'ing attained regular status. Article 2/ o the Labor Code pro'ides: A3!. 2/. 3*>HLA3 A7 CA9HAL *ML6GM*7!.R!he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer e#cept $here the employment has been i#ed or a speciic pro+ect or undertaing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or or ser'ices to be perormed is seasonal in nature and the employment is or the duration o the season. !he primary standard% thereore% o determining regular employment is the reasona'le connection bet$een the particular acti'ity perormed by the employee in relation to the usual trade or business o the employer. !he test is $hether the ormer is usually necessary or desirable in the usual business or trade o the employer. !he connection can be determined by considering the nature o $or perormed and its relation to the scheme o the particular business or trade in its entirety. Also% i the employee has been perorming the +ob or at least a year% e'en i the perormance is not continuous and merely intermittent% the la$ deems repeated and continuing need or its perormance as suicient

&t is o no moment that petitioner hired respondents as ?talents.@ !he act that respondents recei'ed pre0 agreed ?talent ees@ instead o salaries% that they did not obser'e the reuired oice hours% and that they $ere permitted to +oin other productions during their ree time are not conclusi'e o the nature o their employment. 3espondents cannot be considered ?talents@ because they are not actors or actresses or radio specialists or mere clers or utility employees. !hey are regular employees $ho perorm se'eral dierent duties under the control and direction o AB90CB7 e#ecuti'es and super'isors. !hus% there are t$o inds o regular employees under the la$: (1) those engaged to perorm acti'ities $hich are necessary or desirable in the usual business or trade o the employerD and (2) those casual employees $ho ha'e rendered at least one year o ser'ice% $hether continuous or broen% $ith respect to the acti'ities in $hich they are employed. Additionally% respondents cannot be considered as pro+ect or program employees because no e'idence $as presented to sho$ that the duration and scope o the pro+ect $ere determined or speciied at the time o their engagement. Hnder e#isting +urisprudence% pro+ect could reer to t$o distinguishable types o acti'ities. ,irst% a pro+ect may reer to a particular +ob or undertaing that is $ithin the regular or usual business o the employer% but $hich is distinct and separate% and identiiable as such% rom the other undertaings o the company. 9uch +ob or undertaing begins and ends at determined or determinable times. 9econd% the term pro+ect may also reer to a particular +ob or undertaing that is not $ithin the regular business o the employer. 9uch a +ob or undertaing must also be identiiably separate and distinct rom the ordinary or regular business operations o the employer. !he +ob or undertaing also begins and ends at determined or determinable

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times. !he principal test is $hether or not the pro+ect employees $ere assigned to carry out a speciic pro+ect or undertaing% the duration and scope o $hich $ere speciied at the time the employees $ere engaged or that pro+ect. As gleaned rom the records o this case% petitioner itsel is not certain ho$ to categori"e respondents. &n its earlier pleadings% petitioner classiied respondents as program employees% and in later pleadings% independent contractors. rogram employees% or pro+ect employees% are dierent rom independent contractors because in the case o the latter% no employer0employee relationship e#ists. etition is denied.

P!sei!" Fis#i" 8s. NLR) 4<2 S)RA ;1; Fa6ts/ etitioner oseidon ,ishing is a ishing company engaged in the deep0sea ishing industry $ith !erry de 8esus as the manager. 8immy 9. *stouia $as employed as Chie Mate in 8anuary 1 and ater i'e years. !he contract $ith *ustoia per the IasunduanI% there $as a pro'ision stating that he $as being employed only on a C*por viaje** basis and that his employment $ould be terminated at the end o the trip or $hich he $as being hired. -e $as promoted to Boat Captain but $as later demoted to 3adio 6perator. As a 3adio 6perator% he monitored the daily acti'ities in their oice and recorded in the duty logboo the names o the callers and time o their calls. 6n 5 8uly 2///% *stouia ailed to record a :2; a.m. call in one o the logboos. 4hen he re'ie$ed the t$o logboos% he noticed that he $as not able to record the said call in one o the logboos so he immediately recorded the :2; a.m. call ater the :5/ a.m. entry. &n the morning o  8uly 2///% petitioner detected the error in the entry in the logboo. *stouia $as ased to prepare an incident report to e#plain the reason or the said o'ersight. 6n the same day% oseidon
terminated at the end o the trip or $hich he $as being hired.

Iss'es/ 467 *ustoia $as a regular employee 467 deep 0sea ishing is a seasonal industry 467 *ustoia $as illegally dismissed R'%i"/ Ges% *ustouia $as a regular employee. Article 2/ dra$s a line bet$een regular and casual employment. !he pro'ision enumerates t$o (2) inds o employees% the regular employees and the casual employees. !he regular employees consist o the ollo$ing: 1) those engaged to perorm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employerD and 2) those $ho ha'e rendered at least one year o ser'ice $hether such ser'ice is continuous or broen. &n a span o 12 years% *ustouia $ored or petitioner irst as a Chie Mate% then Boat Captain% and later as 3adio 6perator. -is +ob $as directly related to the deep0sea ishing business o petitioner oseidon. -is $or $as% thereore% necessary and important to the business o his employer. 9uch being the scenario in'ol'ed% *ustouia is considered a regular employee. !here is nothing in the contract that says complainant is a casual% seasonal or a pro+ect $orer. !he date 8uly 1 to 51% 1 under the heading IagdatingI had been placed there merely to indicate the possible date o arri'al o the 'essel and is not an indication o the status o employment o the cre$ o the 'essel. !he test to determine $hether employment is regular or not is the reasona'le connection 'et#een the particular activity performed 'y the employee in relation to the usual 'usiness or trade of the employer. And% i the employee has been perorming

the +ob or at least one year% e'en i the perormance is not continuous or merely intermittent% the la$ deems the repeated and continuing need or its perormance as suicient e'idence o the necessity% i not indispensability o that acti'ity to the business. &n the case at bar% the act o hiring and re0hiring in 'arious capacities is a mere gambit employed by petitioner to th$art the tenurial protection o pri'ate respondent. 9uch pattern o re0hiring and the recurring need or his ser'ices are testament to the necessity and indispensability o such ser'ices to petitioners< business or trade. 7o% the acti'ity o catching ish is a continuous process and could hardly be considered as seasonal in nature.

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ro+ect employees is deined as those $orers hired: (1) or a speciic pro+ect or undertaing% and (2) the completion or termination o such pro+ect has been determined at the time o the engagement o the employee. !he principal test or determining $hether particular employees are Ipro+ect employeesI as distinguished rom Iregular employees%I is #hether or not the Dproject employeesD #ere assigned to carry out a Dspecific project or underta!ing"D the duration and scope of #hich #ere specified at the time the employees #ere engaged for that project.

&n this case% *ustouia $as ne'er inormed that he $ill be assigned to a Ispeciic pro+ect or undertaing@ at the time o their engagement. 6nce a pro+ect or $or pool employee has been: (1) continuously% as opposed to intermittently% re0hired by the same employer or the same tass or nature o tassD and (2) these tass are 'ital% necessary and indispensable to the usual business or trade o the employer% then the employee must be deemed a regular employee. *ustouia
Ba#ia S#ii" Ser8i6es 8s. Re$"a%! )#'a 9.R. N!. 1:21> Ari% < 200< Fa6ts/ ri'ate respondent 3eynaldo Chua $as hired by the petitioner shipping company% Bahia 9hipping 9er'ices% &nc.% as a restaurant $aiter on board a lu#ury cruise ship liner MP9 Blac 4atch pursuant to a hilippine 6'erseas *mployment Administration (6*A) appro'ed employment contract dated 6ctober % 1 or a period o nine () months rom 6ctober 1% 1 to 8uly 1% 1. 6n 6ctober 1% 1% the pri'ate respondent let Manila or -eathro$% *ngland to board the said sea 'essel $here he $ill be assigned to $or. 6n ,ebruary 1;% 1% the pri'ate respondent reported or his $oring station one and one0hal hours late. 6n ,ebruary 1% 1% the master o the 'essel ser'ed to the pri'ate respondent an oicial $arning0termination orm pertaining to the said incident. 6n March % 1% the 'esselQs master% ship captain !hor ,leten conducted an inuisitorial hearing to in'estigate the said incident. !hereater% on March % 1% pri'ate respondent $as dismissed rom the ser'ice on the strength o an unsigned and undated notice o dismissal. An alleged record or minutes o the said in'estigation $as attached to the said dismissal notice. 6n March 2% 1% the pri'ate respondent iled a complaint or illegal dismissal and other monetary claims% $hich case $as assigned to Labor Arbiter Manuel M. Manansala.

Ges% *ustoia $as illegally dismissed. !here is no suicient e'idence on record to pro'e *ustoia
PL,T 8s. Y%aa" 0< S)RA 31 A ro+ect employee is assigned to carry out a speciic pro+ect or undertaing the duration and scope o $hich are speciied at the time the employee is engaged in the pro+ect. A pro+ect is a +ob or undertaings o the company. A pro+ect employee is assigned to a pro+ect $hich begins and ends at determined or determinable times.

Iss'es/ 1. 4hether or not respondent is entitled to o'ertime pay $hich $as incorporated in his a$ard or the une#pired portion o the contract despite the act that he did not render o'ertime $orD and 2. 4hether or not it is proper or the 7L3C to a$ard money claims despite the act that the 7L3C decision% and airmed by the Court o Appeals% did not state clearly the acts and the e'idence upon $hich such conclusions are based. S) R'%i"/ &t being settled that the dismissal o respondent $as illegal% it ollo$s that the latter is entitled to payment o his salary or the une#pired portion o his contract% as pro'ided under 3epublic Act (3.A.) 7o. /2% considering that his employment $as pre0terminated on March % 1 or our months prior to the e#piration o his employment contract on 8uly 1% 1. -o$e'er% the LA limited the a$ard to an amount eui'alent to respondentQs salary or three months.

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!he 7L3C airmed said a$ard but deducted thererom his salary or one day as penalty or the tardiness incurred. !he CA airmed the one0day salary deduction imposed by the 7L3C but remo'ed the three months 0 salary cap imposed by the LA. &n eect% as this particular monetary a$ard no$ stands% it is to be computed based on the salary o respondent co'ering the period March % 1 to 8uly 1% 1% less his salary or one day. etitioner uestions the CA or liting the three0month salary cap% pointing out that the LA and 7L3C decisions $hich imposed the cap can no longer be altered as said decisions $ere not uestioned by respondent. &ndeed% a party $ho has ailed to appeal rom a +udgment is deemed to ha'e acuiesced to it and can no longer obtain rom the appellate court any airmati'e relie other that $hat $as already granted under said +udgment. -o$e'er% $hen strict adherence to such technical rule $ill impair a substanti'e right% such as that o an illegally dismissed employee to monetary compensation as pro'ided by la$% then euity dictates that the Court set aside the rule to pa'e the $ay or a ull and +ust ad+udication o the case. !he Court has consistently applied the oregoing e#ception to the general rule. &t does so yet again in the present case. 9ection 1/ o 3.A. 7o. /2% entitles an o'erseas $orer $ho has been illegally dismissed to Ihis salaries or the une#pired portion o the employment contract or or three (5) months or e'ery year o the une#pired term% $hiche'er is less.I !he CA correctly applied the interpretation o the Court in Marsaman Manning 7gency" 0nc. v. National +a'or ,elations %ommission that the second option $hich imposes a three months salary cap applies only $hen the term o the o'erseas contract is i#ed at one year or longerD other$ise% the irst option applies in that the o'erseas $orer shall be entitled payment o all his salaries or the entire une#pired period o his contract. &n )!ippers 1acific" 0nc. v. Mira %$herein the o'erseas contract in'ol'ed $as only or si# months% the Court held that it is the irst option pro'ided under 9ection 1/ o 3.A. 7o. /2 $hich is applicable in that the o'erseas $orer $ho $as illegally dismissed is entitled to payment o all his salaries co'ering the entire une#pired period o his contract. !he CA committed no error in adhering to the pre'ailing interpretation o 9ection 1/ o 3.A. 7o. /2. ,inally% the Court comes to the last issue on $hether in the computation o the oregoing a$ard% respondentQs Iguaranteed o'ertimeI pay amounting to H9V1.// per month should be included as part

o his salary. etitioner contends that there is no actual or legal basis or the inclusion o said amount because% ater respondentQs repatriation% he could not ha'e rendered any o'ertime $or. !his time% petitionerQs contention is $ell0taen. !he Court had occasion to rule on a similar issue in )toltNielsen Marine )ervices 51hils.6" 0nc. v. National +a'or ,elations %ommission% $here the

7L3C $as uestioned or a$arding to an illegally dismissed o'erseas $orer i#ed o'ertime pay eui'alent to the une#pired portion o the latterQs contract. &n resol'ing the uestion% the Court% citing %agampan v. National +a'or ,elations %ommission % held that although an o'erseas employment contract may guarantee the right to o'ertime pay% entitlement to such beneit must irst be established% other$ise the same cannot be allo$ed. -ence% it being improbable that respondent rendered o'ertime $or during the une#pired term o his contract% the inclusion o his Iguaranteed o'ertimeI pay into his monthly salary as basis in the computation o his salaries or the entire une#pired period o his contract has no actual or legal basis and the same should ha'e been disallo$ed. Viri%i! Sai! 8s. )astr! 9R N!. 1034 a$ 22 200< Fa6ts/ !he contro'ersy started $ith a complaint iled by petitioner against Hndaloc Construction andPor *ngineer Cirilo Hndaloc or illegal dismissal% underpayment o $ages and nonpayment o statutory beneits. 3espondent Hndaloc Construction% a single proprietorship o$ned by Cirilo Hndaloc% is engaged in road construction business in Cebu City. etitioner had been employed as $atchman rom 1 May 1; to 5/ May 1 $hen he $as terminated on the ground that the pro+ect he $as assigned to $as already inished% he being allegedly a pro+ect employee. But petitioner asserted that he $as a regular employee ha'ing been engaged to perorm $ors $hich are Iusually necessary or desirableI in respondentsQ business.

Iss'e/ 1. 4hether or not the petitioner is a pro+ect employee . 2. 4hether or not he is entitled to salary dierential apart rom attorney
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erasures is clearly non seuitur. !he same is true $ith respect to the type$ritten payroll sheets. &n act% neither the Labor Arbiter nor the 7L3C ound any alteration or erasure or traces thereat% $hether on the pencil0$ritten or type$ritten payroll sheets. &ndeed% the most minute e#amination $ill not re'eal any tampering. ,urthermore% i there is any ad'erse conclusion as regards the ecember 1; payroll sheet% it must be conined only to it and cannot be applied to the type$ritten payroll sheets. Moreo'er% absent any e'idence to the contrary% good aith must be presumed in this case. *ntries in the payroll% being entries in the course o business% en+oy the presumption o regularity under 3ule 15/% 9ection 5 o the 3ules o Court. -ence% $hile as a general rule% the burden o pro'ing payment o monetary claims rests on the employer% $hen raud is alleged in the preparation o the payroll% the burden o e'idence shits to the employee and it is incumbent upon him to adduce clear and con'incing e'idence in support o his claim. Hnortunately% petitionerQs bare assertions o raud do not suice to o'ercome the disputable presumption o regularity. 4hile $e adhere to the position o the appellate court that the ItendencyI to alter the entries in the payrolls $as not substantiated% $e cannot ho$e'er subscribe to the total deletion o the a$ard o salary dierential and attorneyQs ees% as it so ruled. !he a$ard o attorneyQs ees is $arranted under the circumstances o this case. !hus% the petition is partially granted. etitioner is a$arded the salary dierential in the reduced amount o 15%1;.// and respondents are directed to pay the same% as $ell as ten percent (1/) o the a$ard as attorneyQs ees.

6. Pie6e-Rate )ase/ La&!r )!"ress !( t#e P#i%s. Vs. NLR) S)RA 0>

2>0

Fa6ts/ !he  persons named as petitioners in this proceeding $ere ran0and0ile employees o respondent *mpire ,ood roducts% $hich hired them on 'arious dates. etitioners iled against pri'ate respondents a complaint or payment o money claims and or 'iolation o labor standards la$s !hey also iled a petition or direct certiication o petitioner Labor Congress o the hilippines as their bargaining representati'e. &n an 6rder dated 6ctober 2% 1/% Mediator Arbiter appro'ed the memorandum o agreement and certiied LC Ias the sole and e#clusi'e bargaining agent among the ran0and0ile employees o *mpire ,ood roducts or purposes o collecti'e bargaining $ith respect to $ages% hours o $or and other terms and conditions o employmentI.

6n 7o'ember 1/% petitioners through LC resident 7a'arro submitted to pri'ate respondents a proposal or collecti'e bargaining. 6n 8anuary 11% petitioners iled a complaint against pri'ate respondents or Hnair Labor ractice by $ay o &llegal Locout andPor ismissalD Hnion busting thru -arassments JsicK% threats% and interering $ith the rights o employees to sel0organi"ationD Fiolation o the Memorandum o Agreement dated 6ctober 25% 1/D Hnderpayment o 4ages in 'iolation o 3.A. 7o. / and 3.A. 7o. 2% such as 4ages promulgated by the 3egional 4age BoardD Actual% Moral and *#emplary amages.I

Iss'e/ 467 the petitioners are entitled to labor standard beneits considering they are paid by piece rate $orer. e%/ !he petitioners are so entitled to these beneits namely% holiday pay% premium pay% 15th month pay and ser'ice incenti'e lea'e. !hree (5) actors lead us to conclude that petitioners% although piece0rate $orers% $ere regular employees o pri'ate respondents. ,irst% as to the nature o petitionersQ tass $ere necessary or desirable in the usual business o pri'ate respondents% $ho $ere engaged in the manuacture and selling o such ood productsD second% petitioners $ored or pri'ate respondents throughout the year% and third% the length o time that petitioners $ored or pri'ate respondents. !hus% $hile petitionersQ mode o compensation $as on a Iper piece basis%I the status and nature o their employment $as that o regular employees. !he 3ules &mplementing the Labor Code e#clude certain employees rom recei'ing beneits such as nighttime pay% holiday pay% ser'ice incenti'e lea'e and 15th month pay% Iield personnel and other employees $hose time and perormance is unsuper'ised by the employer% including those $ho are engaged on tas or contract basis% purely commission basis% or those $ho are paid a i#ed amount or perorming $or irrespecti'e o the time consumed in the perormance thereo.I lainly% petitioners as piece0rate $orers do not all $ithin this group. As mentioned earlier% not only did petitioners labor under the control o pri'ate respondents as their employer% lie$ise did petitioners toil throughout the year $ith the ulillment o their uota as supposed basis or compensation.

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,urther% in 9ection (b)% 3ule &F% Boo &&& $hich $e uote hereunder% piece $orers are speciically mentioned as being entitled to holiday pay. 9*C. . -oliday pay o certain employees. R (b) 4here a co'ered employee is paid by results or output% such as payment on piece $or% his holiday pay shall not be less than his a'erage daily earnings or the last se'en () actual $oring days preceding the regular holiday: ro'ided% ho$e'er% that in no case shall the holiday pay be less than the applicable statutory minimum $age rate. &n addition% the 3e'ised >uidelines on the &mplementation o the 15th Month ay La$% in 'ie$ o the modiications to .. 7o. ;1 1 by Memorandum 6rder 7o. 2% clearly e#clude the employer o piece rate $orers rom those e#empted rom paying 15th month pay% to $it: 2. *N*M!* *ML6G*39 !he ollo$ing employers are still not co'ered by .. 7o. ;1: b. *mp loyers o those $ho are paid on purely commission% boundary or tas basis% and those $ho are paid a i#ed amount or perorming speciic $or% irrespecti'e o the time consumed in the perormance thereo% e#cept $here the $orers are paid on piece0rate basis in $hich case the employer shall grant the reuired 15th month pay to such $orers. !he 3e'ised >uidelines as $ell as the 3ules and 3egulations identiy those $orers $ho all under the piece0rate category as those $ho are paid a standard amount or e'ery piece or unit o $or produced that is more or less regularly replicated% $ithout regard to the time spent in producing the same. As to o'ertime pay% the rules% ho$e'er% are dierent. According to 9ec 2(e)% 3ule &% Boo &&& o the &mplementing 3ules% $orers $ho are paid by results including those $ho are paid on piece0$or% taay% paiao% or tas basis% i their output rates are in accordance $ith the standards prescribed under 9ec. % 3ule F&&% Boo &&&% o these regulations% or $here such rates ha'e been i#ed by the 9ecretary o Labor in accordance $ith the aoresaid section% are not entitled to recei'e o'ertime pay. As such% petitioners are beyond the ambit o e#empted persons and are thereore entitled to o'ertime pay.

Lam&! 8s. NLR) O6t. 2: 1>>> Fa6ts/ etitioners A'elino Lambo and Ficente Belocura $ere employed as tailors by pri'ate

respondents 8.C. !ailor 9hop andPor 8ohnny Co on 9eptember 1/% 1; and March 5% 1;% respecti'ely. !hey $ored rom :// a.m. to :// p.m. daily% including 9undays and holidays. As in the case o the other 1// employees o pri'ate respondents% petitioners $ere paid on a piece0$or basis% according to the style o suits they made. 3egardless o the number o pieces they inished in a day% they $ere each gi'en a daily pay o at least .//. 6n 8anuary 1% 1% petitioners iled a complaint against pri'ate respondents or illegal dismissal and sought reco'ery o o'ertime pay% holiday pay% premium pay on holiday and rest day% ser'ice incenti'e lea'e pay% separation pay% 15th month pay% and attorney
Iss'e/ 467 the petitioners are entitled to the minimum beneits pro'ided by la$. e%/ !he petitioners are entitled to the minimum beneits pro'ided by la$. !here is no dispute that petitioners $ere employees o pri'ate respondents although they $ere paid not on the basis o time spent on the +ob but according to the uantity and the uality o $or produced by them. !here are t$o categories o employees paid by results: (1) those $hose time and perormance are super'ised by the employer. (-ere% there is an element o control and super'ision o'er the manner as to ho$ the $or is to be perormed. A piece0rate $orer belongs to this category especially i he perorms his $or in the company premises.)D and (2) those $hose time and perormance are unsuper'ised. (-ere% the employer
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:// p.m. daily% including 9undays and holidays. !he mere act that they $ere paid on a piece0rate basis does not negate their status as regular employees o pri'ate respondents. !he term I$ageI is broadly deined in Art.  o the Labor Code as remuneration or earnings% capable o being e#pressed in terms o money $hether i#ed or ascertained on a time% tas% piece or commission basis. ayment by the piece is +ust a method o compensation and does not deine the essence o the relations. 7or does the act that petitioners are not co'ered by the 999 aect the employer0employee relationship. As petitioners $ere illegally dismissed% they are entitled to reinstatement $ith bac $ages. !he Arbiter applied the rule in the Mercury rug case% according to $hich the reco'ery o bac $ages should be limited to three years $ithout ualiications or deductions. Any a$ard in e#cess o three years is null and 'oid as to the e#cess. !he Labor Arbiter correctly ordered pri'ate respondents to gi'e separation pay.

AR+ RO)E INTERNATIONAL AN,@OR E,UAR,O ,AYOT a" SUSAN ,AYOT 8s. NLR) et.a%. 9.R. N!. 123<2 A''st 31 1>>> FA)TS/ 6n dierent dates% pri'ate respondents iled separate complaints or underpayment o $ages and non0payment o o'ertime pay against petitioners Mar 3oche &nternational (M3&)% *duardo ayot and 9usan ayot. ri'ate respondents sought the assistance o a labor organi"ation $hich helped them organi"e the Mar 3oche 4orers Hnion (M34H). Apparently ired by the idea o a union $ithin the company% petitioners ordered pri'ate respondents to $ithdra$ the petition and urther threatened them that should they insist in the organi"ation o a union they $ould be dismissed. Hna"ed% pri'ate respondents reused. As e#pected% pri'ate respondents $ere discharged rom $or. etitioners disclaimed no$ledge o any deiciency o$ing to pri'ate respondents since all the beneits due them as reuired by la$ $ere ully paid% e#cept o'ertime pay $hich they $ere not entitled to on account o their being piece0rate $orers. !he Labor Arbiter rendered his decision declaring as illegal the constructi'e dismissal o pri'ate respondents and ordered their reinstatement% payment o bac$ages% salary dierentials and proportionate 15th month pay and ser'ice incenti'e lea'e pay. 6n appeal% the 7ational Labor 3elations Commission (7L3C) airmed the decision o the Labor Arbiter% but set aside the a$ard o ser'ice incenti'e lea'e on the ground that pri'ate respondents $ere not entitled thereto as they $ere piece0rate $orers. etitioners mo'ed or reconsideration% but it $as denied. -ence% the present petition.

ISSUE/ 467 the dismissal o pri'ate respondents $as a constructi'e dismissal or an illegal dismissal EL,/ Constructi'e dismissal or a constructi'e discharge has been deined as a uitting because continued employment is rendered impossible% unreasonable or unliely% as an oer in'ol'ing a demotion in ran and a diminution in pay. &n the instant case% pri'ate respondents $ere not demoted in ran nor their pay diminished considerably. !hey $ere simply told $ithout prior $arning or notice that there $as no more $or or them. Ater recei'ing the notice o hearing o the petition or certiication election on 2 6ctober 12% petitioners immediately told pri'ate respondents that they $ere no longer employed. *'idently it $as the iling o the petition or certiication election and organi"ation o a union $ithin the company $hich led petitioners to dismiss pri'ate respondents and not petitionersQ allegations o absence or abandonment by pri'ate respondents. !he ormation o a labor union has ne'er been a ground or 'alid termination% and $here there is an absence o clear% 'alid and legal cause% the la$ considers the termination illegal. d. Pr!&ati!"ar$ – is one $ho is on tentati'e employment during $hich the employer determines $hether he (employee) is ualiied or permanent employment. robationary period is  months or the employer to determine the eligibility o the employee. But the period may be shortened or e#tended. robationary employee is con'erted to regular ater the period imposed has lapsed% and the employee continues to $or. &t implies that the employee has passed and is eligible or regular employment. Also% i the terms and conditions o employment are not clearly pro'ided by the employer% the standards are not clear then the employee is deemed a regular employee. !his is because the employee has no no$ledge o $hat standards he or she must meet% and so this should not $or to his or her pre+udice. *mployee is hired or  months in order to determine ualiication or capacity as a regular employee although an employee can become regular right a$ay $ithout going through probation. !he employee is gi'en the standards at the time o engagement (employer must e#plain not merely gi'ing document) LC pro'ides that the duration o probation is  months (ma#imum period o probation). !he e#ceptions are the ollo$ing: $$$ unless it is co'ered by an apprenticeship (c)

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agreement stipulating a longer period such as +obs $hich are highly technical ( not an employee)D and (d) &n cases o academic personnel: the Manual o 3egulations or ri'ate 9chool pro'ides a longer probationary period.

A6aemi6 ers!""e%- &nclude all school personnel $ho are ormally engaged in actual teaching ser'ice or research assignment% either on ull0time or part0 time basis% as $ell as those $ho possess certain prescribed unctions directly supporti'e o teaching% such as registrars% librarian% guidance counselors% researchers% and other similar persons. !hey include school oicials responsible or academic matters% and may include other school oicials.

Se6 >2. D a"'a% !( Re'%ati!" !( Pri8ate S6#!!%s d. or those in the secondary and elementary le'el% a probationary period o not more than 5 consecuti'e years o satisactory ser'ice (calendar year) e. or those in the tertiary le'el% not more than  consecuti'e regular semesters o satisactory ser'ice (school year) . or those in trimester% or not more than  consecuti'e trimesters o satisactory ser'ice (school year) N!"-a6aemi6 ers!""e%- means school personnel usually engaged in administrati'e unctions $ho are not co'ered under the deinition o academic personnel. !hey may include school oicials. W#e" is r!&ati!"ar$ em%!$me"t ermissi&%eK a. $hen the $or reuires special ualiications% sills training or e#perience b. $hen the $or% +ob or position in'ol'ed is permanent% regular% stable or indeinite and not merely casual or intermittent c. i the $or is not intended to circum'ent the security o tenure d. i it is necessary or customary or the position or the +ob in'ol'ed 9e"era% r'%e/ robationary period should not e#ceed  months rom the date the employee started $oring. E56eti!"/ !he  months period pro'ided in the la$ admits o certain e#ceptions such as: 1. $hen the *3 and ** mutually agree on a shorter or longer periodD 2. $hen the nature o $or to be perormed by the ** reuired a longer periodD

5. $hen a longer period is reuired and established by company policy -

9ecurity o tenure is still a'ailable to probationary employees% but only or a limited period.

)ases/ )EBU ARINE BEA) RESORTet.a%. vs. NLR) et.a%. 9.R. N!. 14322. O6t. 23 2003 FA)TS/ 6n 8anuary 1/% Cebu Marine Beach 3esort started operations $ith the recruitment o its employees including petitioners 3odrigue"% Fillegas and &got and became ully operational on March 1/. !he respondents had to undergo a special training in 8apanese customs% traditions% and discipline% as $ell as hotel and resort ser'ices. !his special training $as super'ised by petitioner 9asai. 6n May 2% 1/% 9asai suddenly scolded respondents and hurled brooms% loor maps% iron trays% ire hoses and other things at them. 3espondents staged a $al0out as a sign o protest and gathered in ront o the resort. !he ormer reacted by shouting at them to go home and ne'er to report bac to $or. !hus the employees iled $ith the 3egional Arbitration Branch at Cebu City a complaint or illegal dismissal and other monetary claims against petitioners. 6n May 2% 1/% the company through its acting general manager elae" sent letters to respondents reuiring them to e#plain $hy they should not be terminated rom employment on the grounds o abandonment o $or and ailure to ualiy $ith the standards or probationary employees. !he Labor Arbiter rendered a ecision date March 25% 15 dismissing respondents< complaint but directing them to immediately report bac to $or. 6n 8une 2% 1% 7L3C re'ersed the Labor Arbiters ecision% declaring that the respondents $ere dismissed illegally and ordering their reinstatement $ith payment o ull bac $ages rom May 2% 1/ up to their actual reinstatement or in lieu thereo% the payment o their respecti'e separation pay rom May 2% 1/ up to the date they $ere supposed to be reinstated% as $ell as attorney
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dismissal) until March 25% 15 ($hen they $ere ordered reinstated by the Labor Arbiter)% sub+ect to the deduction o their earnings rom other sources during the pendency o the appeal. 6n March 22% 1;% petitioners iled $ith this Court a petition or certiorari % prohibition and in+unction $ith prayer or the issuance o a temporary restraining order. 6n 7o'ember ;% 1% the Court o Appeals rendered its ecision airming $ith modiication the ecision and 3esolution o the 7L3C that the bac $ages should be computed rom the date o the dismissal o pri'ate respondents until the inality o this ecision $ithout deduction rom earnings during the pendency o the appeal and the a$ard o separation pay must be eui'alent to one0hal months< salary or e'ery year o ser'ice commencing lie$ise on the date o the dismissal o pri'ate respondents until the inality o this ecision. etitioner iled a motion or reconsideration% but $as denied. -ence% a petition or re'ie$ on certiorari $as done.

R!i" A%6ira 8s. NLR) 9.R.14><> 7'"e > 2004 Fa6ts/ Middleby hilippines Corp. hired petitioner as engineering support ser'ices super'isor on a probationary basis or si# months. 6n 2/ 7o'ember 1% a senior oicer o Middleby $ithheld his time card and did not allo$ him to $or. Alcira iled $ith the 7L3C a complaint or illegal dismissal on the contention that he had become a regular employee $hen he $as illegally dismissed. &n their deense% respondents claim that% during petitioner
etitioner insists that he already attained the status o a regular employee $hen he $as dismissed on 7o'ember 2/% 1 because% ha'ing started $or on May 2/% 1% the si#0month probationary period ended on 7o'ember 1% 1. According to petitioner
Code pro'ides that one month is composed o thirty days% si# months total one hundred eighty days. As the appointment pro'ided that petitioner
9ection  (d) o 3ule 1 o the &mplementing 3ules o Boo F& o the Labor Code (epartment 6rder 7o. 1/% 9eries o 1) pro'ides that: &n all cases o probationary employment% the employer shall mae no$n to the employee the standards under $hich he $ill ualiy as a regular employee at the time o his engagement. 4here no standards are made no$n to the employee at that time% he shall be deemed a regular employee. 4e hold that respondent Middleby substantially notiied petitioner o the standards to ualiy as a regular employee $hen it apprised him% at the start o his employment% that it $ould e'aluate his super'isory sills ater i'e months. an employer is deemed to substantially comply $ith the rule on notiication o standards i he apprises the employee that he $ill be sub+ected to a perormance e'aluation on a particular date ater his hiring. 4e agree $ith the labor arbiter $hen he ruled that: &n the instant case% petitioner cannot successully say that he $as ne'er inormed by pri'ate respondent o the standards that he must satisy in order to be con'erted into regular status. !his runs counter to the agreement bet$een the parties that ater i'e months o ser'ice the petitioner- 7hether petitioner was illegally dismissed when respondent 3iddleby opted not to renew his contract on the last day of his probationary employment.

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&t is settled that e'en i probationary employees do not en+oy permanent status% they are accorded the constitutional protection o security o tenure. !his means they may only be terminated or +ust cause or $hen they other$ise ail to ualiy as regular employees in accordance $ith reasonable standards made no$n to them by the employer at the time o their engagement. But this constitutional protection ends on the e#piration o the probationary period. 6n that date% the parties are ree to either rene$ or terminate their contract o employment. !his de'elopment has rendered moot the uestion o $hether there $as a +ust cause or the dismissal o the petitioners. Middleby e#ercised its option not to rene$ the contract $hen it inormed petitioner on the last day o his probationary employment that it did not intend to grant him a regular status. Although $e can regard petitioner
its'&is#i !t!rs 8s. )#r$s%er P#i%s La&!r U"i!" 55 9C3A 2/ 9.R. 14<;3< 7'"e 2> 2004 FA)TS: Mitsubishi Motors hilippines Corporation (MMC) is a domestic corporation engaged in the assembly and distribution o Mitsubishi motor 'ehicles. Chrysler hilippines Labor Hnion (CLH) is a legitimate labor organi"ation and the duly certiied bargaining agent o the hourly0paid regular ran and

ile employees o MMC. 7elson aras $as a member o CLH $hile $ie% Cecille aras% $as the resident o the Chrysler hilippines 9alaried *mployees Hnion (C9H). 7elson aras $as irst employed by MMC as a shuttle bus dri'er. -e resigned and $ent to 9audi Arabia $or. 4hen he returned to the hilippines% he $as re0hired as a $elder0abricator at the MMC. 9ometime in May o 1% aras $as re0hired on a probationary basis as a manuacturing trainee at the lant *ngineering Maintenance epartment. As part o the MMC
aras% the latter
- "%TITI42%(?$ *1AI3# X aras and CLH asserted that pursuant to Article 15 o the 7e$ Ci'il Code% the period o May 2% 1 to 7o'ember 2% 1 consisted o one hundred eighty0three (15) days. !hey asserted that the ma#imum o the probationary period is si# () months% $hich is eui'alent to 1/ daysD as such% aras% $ho continued to be employed e'en ater the 1/th day% had become a regular employee as pro'ided or in Article 22 o the Labor Code. !hey a'erred that as a regular employee% aras<

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employment could be terminated only or +ust or authori"ed causes as pro'ided or under the Labor Code% and ater due notice. !hey posited that in the Letter o !ermination dated 7o'ember 2;% 1% the ground or aras< termination $as not among those sanctioned by the Labor CodeD hence% his dismissal $as illegal. aras and CLH also stressed that he had already been in the employ o MMC rom 6ctober 5% 1 to March 5% 1; as a $elder0 abricator. 9uch period% in addition to the si#0month probationary period% amounted to ele'en (11) months o ser'ice% $hich is suicient or him to be considered as a regular employee.

- (%$"42D%2T?$ *1AI3 : X !he MMC% or its part% a'erred that under Article 15 o the 7e$ Ci'il Code% aras< probationary employment $hich commenced on May 2% 1 $ould e#pire on 7o'ember 2% 1. 9ince he recei'ed the notice o termination o his employment on 7o'ember 2;% 1% the same should be considered to ha'e been ser'ed $ithin the si#0month probationary period. 0 CA agreed $ith the petitionerQs claim and held the dismissal o aras illegal. ISSUE 467 aras $as illegally dismissed% he being dismissed ater the ma#imum  month probation (MAG 2% 1 0 76F*MB*3 25% 1) EL,/ G*9. (atio &ndeed% an employer% in the e#ercise o its management prerogati'e% may hire an employee on a probationary basis in order to determine his itness to perorm $or. Hnder Article 21 o the Labor Code% the employer must inorm the employee o the standards or $hich his employment may be considered or regulari"ation. 9uch probationary period% unless co'ered by an apprenticeship agreement% shall not e#ceed si# () months rom the date the employee started $oring. !he employee
7o'ember 2;% 1 $as ser'ed on respondent aras only at 5:// a.m. o 7o'ember 2% 1. -e $as% by then% already a regular employee o the petitioner under A21 LC (easoning : !he basis or $hich respondent aras<

ser'ices $ere terminated $as his alleged unsatisactory rating arising rom poor perormance. &t is a settled doctrine that the employer has the burden o pro'ing the la$ulness o his employee3 9 7o. /5/ is hereby AFFIRE, WIT O,IFI)ATIONS. !he petitioner is OR,ERE, to pay respondent 7elson aras separation pay eui'alent to one (1) month% or to at least one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher% a raction o at least si# () months to be considered as one yearD and to pay ull bac$ages% computed rom the time o his dismissal up to March 2;% 1. !hat portion o the decision o the Court o Appeals directing the reinstatement o the respondent aras is ,ELETE,. Disposition

,'sit !te% Ni! 8s. Re"at! . 9at&!"t!" 9.R. N!. 1:1:4 a$  200: FA)TS/ 6n 7o'ember 21% 1% respondent 3enato M. >atbonton $as hired as Chie 9te$ard in petitioner usit -otel 7ioatbonton

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ailed to meet the ualiication standards or Chie 9te$ard% and 3auber recommended a t$o0month e#tension o >atbontonatbonton that the latter had poor ratings on sta super'ision% producti'ity% uantity o $or% and o'erall eiciency and did not ualiy as Chie 9te$ard. >atbonton reuested another month or until April 22% 1 to impro'e his perormance% to $hich 3auber agreed but allegedly reused to sign the erormance *'aluation ,orm. 7either did he sign the Memorandum on the e#tension. 6n March 51% 1% a notice o termination o probationary employment eecti'e April % 1% on the abo'e alleged grounds $as ser'ed on >atbonton. 6n April 12% 1% he iled a complaint or illegal dismissal and non0payment o $ages% $ith prayers or reinstatement% ull bac$ages% and damages% including attorney
ISSUE/ 4hether or not respondent $as a regular employee at the time o his dismissal. EL,/ !he 9C held that as Article 21 clearly states% a probationary employee can be legally terminated either: (1) or a +ust causeD or (2) $hen the employee ails to ualiy as a regular employee in accordance $ith the reasonable standards made no$n to him by the employer at the start o the employment. 7onetheless% the po$er o the employer to terminate an employee on probation is not $ithout limitations. ,irst% this po$er must be e#ercised in accordance $ith the speciic reuirements o the contract. 9econd% the dissatisaction on the part o the employer must be real and in good aith% not eigned so as to circum'ent the contract or the la$D and third% there must be no unla$ul discrimination in the dismissal. &n termination cases% the burden o pro'ing +ust or 'alid cause or dismissing an employee rests on the employer. -ere% the petitioner did not present proo that the respondent $as e'aluated rom 7o'ember 21% 1 to ,ebruary 21% 1% nor that his probationary employment $as 'alidly e#tended. !he petitioner alleged that at the end o the respondentatbonton $as not yet ready or regular employment. !he petitioner presented a ersonnel Action ,orm containing the recommendation. 4e obser'ed% ho$e'er% that this document $as prepared on March 51% 1% the end o the th month o the respondent
probationary employment eecti'e April % 1% and not e#tension o probation period. Hpon appeal to the 7L3C% the petitioner presented another ersonnel Action ,orm prepared on March 2% 1% sho$ing that the respondentatbonton had become a regular employee. &t is an elementary rule in the la$ on labor relations that a probationary employee engaged to $or beyond the probationary period o si# months% as pro'ided under Article 21 o the Labor Code% or or any length o time set orth by the employer (in this case% three months)% shall be considered a regular employee. !his is clear in the last sentence o Article 21. Any circum'ention o this pro'ision $ould put to naught the 9tate
YOLAN,A . ER)A,O et. a%.  8s. AA )OPUTER  9.R. N!. 1<3;2 Ari% 13 2010 Fa6ts/ ,i'e ormer aculty members o AMA Computer College in araYaue City e#ecuted indi'idual !eacher
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ailed to obtain a passing rating based on the perormance standards. !hus% AMACC did not gi'e them any salary increase. ue to this% they iled a complaint or underpayment o $ages. Conseuently% they $ere dismissed as their contracts ha'e e#pired Z $ere not rene$ed. !he Labor Arbiter ruled that they had been illegally dismissed. !he 7L3C airmed the LA
Iss'e/ 4hether or not the dismissal is 'alid. R'%i"/ AMACC ailed to pro'e by substantial e'idence that there $as +ust cause or the non0 rene$al o the petitioners< contracts. !he Labor Code is supplemented $ith respect to the period o probation by special rules ound in the Manual o 3egulations or ri'ate 9chools. 6n the matter o probationary period% 9ection 2 o these regulations pro'ides: 9ection 2. robationary eriod. – 9ub+ect in all instances to compliance $ith the epartment and school reuirements% the probationary period or academic personnel shall not be more than three (5) consecuti'e years o satisactory ser'ice or those in the elementary and secondary le'els% si# () consecuti'e regular semesters o satisactory ser'ice or those in the tertiary le'el% and nine 5?6

consecutive trimesters of satisfactory service for those in the tertiary level #here collegiate courses are offered on a trimester 'asis.

6ther than on the period% the ollo$ing uoted portion o Article 21 o the Labor Code still ully applies: !he ser'ices o an employee $ho has been engaged on a probationary basis may be terminated or a +ust cause $hen he ails to ualiy as a regular employee in accordance $ith reasonable standards made no$n by the employer to the employee at the time o his engagement. An employee $ho is allo$ed to $or ater a probationary period shall be considered a regular employee. !he common practice is or the employer and the teacher to enter into a contract% eecti'e or one school year. At the end o the school year% the employer has the option not to rene$ the contract% particularly considering the teacheri'en the clear constitutional and statutory intents% $e cannot but conclude that in a situation $here the probationary status o'erlaps $ith a i#ed0term contract not speciically used or the i#ed term it oers% Article 21 should assume primacy and the i#ed0period character o the contract must gi'e $ay. 4hile $e can grant that the standards $ere duly communicated to the petitioners and could be applied beginning the 1st trimester o the school year 2///0 2//1% glaring and 'ery basic gaps in the school
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e'idence sho$ ho$ these standards $ere applied to the petitioners. -ence% the dismissal $as illegal.

ON9 a" 7ONSON N9 8s. )OURT OF APPEALS a" ROSEARIE L. SY 9.R. N!. 1>2<<1 N!8em&er 1: 2011 TAPSONS ENTERPRISE I"6. 8s. )A Fa6ts/ !his case stemmed rom a complaint or illegal dismissal $ith money claims iled by respondent 3osemarie L. 9y 5)y6 beore the Arbitration Branch% 7ational Capital 3egion% 7L3C% against petitioners !amson
company and to be entitled to the beneits and pri'ileges o a regular employee. 4orse% she $as depri'ed o her only means o li'elihood. 9he urther claimed $as illegally terminated rom ser'ice and insists that the petitioners cannot in'oe her ailure to ualiy as she $as not inormed o the standards or criteria $hich she should ha'e met or regular employment. Moreo'er% no proo $as sho$n as to her alleged poor $or perormance. 9he $as unceremoniously terminated to pre'ent her rom becoming a regular employee and be entitled to the beneits as such.

ISSUE/ 467 the termination o 9y% a probationary employee% $as 'alid or not. EL,/ !he Court inds the petition de'oid o merit. !he pertinent la$ go'erning the present case is Article 21 o the Labor Code $hich pro'ides as ollo$s:

6n ,ebruary 2% 2//% our days beore she completed her si#th month o $oring in !amson
Art. 21. 1ro'ationary employment. R robationary employment shall not e#ceed si# months rom the date the employee started $oring% unless it is co'ered by an apprenticeship agreement stipulating a longer period. !he ser'ices o an employee $ho has been engaged in a probationary basis may be terminated or a +ust cause or $hen he ails to ualiy as a regular employee in accordance $ith reasonable standards made no$n by the employer to the employee at the time o his engagement. An employee $ho is allo$ed to $or ater a probationary period shall be considered a regular employee. (Hnderscoring supplied)

uring her pre0employment inter'ie$% Lee had nice comments about her good $or e#perience and educational bacground. 9he $as assured o a long0 term employment $ith beneits. !hroughout her employment% she earnestly perormed her duties% had a perect attendance record% $ored e'en during bro$nouts and typhoons% and $ould oten $or o'ertime +ust to inish her $or.

&t is settled that e'en i probationary employees do not en+oy permanent status% they are accorded the constitutional protection o security o tenure. !his means they may only be terminated or a +ust cause or $hen they other$ise ail to ualiy as regular employees in accordance $ith reasonable standards made no$n to them by the employer at the time o their engagement.

9y claimed that the remars o her superiors about her alleged ineiciency $ere ill0moti'ated and made $ithout any basis. 9he had been rendering ser'ices or almost si# () months beore she $as arbitrarily and summarily dismissed. -er dismissal $as highly suspicious as it too place barely our () days prior to the completion o her si#0month probationary period. !he petitioners did not sho$ her any e'aluation or appraisal report regarding her alleged ineicient perormance. As she $as terminated $ithout an e'aluation on her perormance% she $as depri'ed o the opportunity to be regularly part o the

Hnder the terms o the Labor Code% these standards should be made no$n to the JemployeesK on probationary status at the start o their probationary period% or ### during $hich the probationary standards are to be applied. 6 critical importance in in'oing a ailure to meet the probationary standards% is that the JemployerK should sho$ – as a matter o due process – ho$ these standards ha'e been applied. ,or ailure o the petitioners to support their claim o unsatisactory perormance by 9y% this Court shares

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the 'ie$ o the CA that 9y
III. SE)URITY OF TENURE i. S6!e S6!e !( Se6'rit$ !( te"'re IRR B!! VI R'%e 1 . Se6ti!" 1. )!8erae- !his rule shall apply to all establishments and undertaings% $hether operated or proit or not% including educational% medical% charitable and religious institutions and organi"ations% in cases o regular employment $ith the e#ception o the >o'ernment and its political subdi'isions including go'ernment0 o$ned or controlled corporations. RI9T TO SE)URITY OF TENURE Se6'rit$ !( te"'re Art 2;>C 6!"6etC 6!"stit'ti!"a%  stat't!r$ &asis

ARTI)LE 2;>. Se6'rit$ !( Te"'re. R &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or i. a +ust cause or ii. $hen authori"ed by this !itle. 7n employee #ho is unjustly dismissed from #or! shall 'e entitled to:

a. reinstatement $ithout loss o seniority rights and b. other pri'ileges and c. to his ull bac$ages% inclusi'e o allo$ances% and to his other beneits or their monetary eui'alent computed rom the time his compensation $as $ithheld rom him up to the time o his actual reinstatement.

)!"6et 9ecurity o !enure – is the right o the employee to continue $ith his employment unless terminated or a +ust authori"ed cause. •

)!"stit'ti!"a% Basis (Art. 15% 9ec. 5% 1 Constitution) •

•

•

•

T#e State shall aord ull protection to labor% local and o'erseas% organi"ed and unorgani"ed% and promote ull employment and euality o employment opportunities or all. &t s#a%% 'ara"tee t#e ri#ts !( a%% ?!rers to sel 0organi"ations% and peaceul concerted acti'ities% including the right to strie in accordance $ith la$. T#e$ s#a%% &e e"tit%e t! se6'rit$ !( te"'re% humane conditions o $or% and a li'ing $age. !hey shall also participate in policy and decision0maing processes aecting their rights and beneits as may be pro'ided by la$. !he 9tate shall promote the principle o shared responsibility bet$een $orers and employers and the preerential use o 'oluntary modes in settling disputes% including conciliation% and shall enorce their mutual compliance there$ith to oster industrial peace. !he 9tate shall regulate the relations bet$een $orers and employers% recogni"ing the right o labor to its +ust share in the ruits o production and the right o enterprises to reasonable returns on in'estments% and to e#pansion and gro$th.

Stat't!r$ Basis ( Art 2 o LC)

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Se6ti!" 2. Se6'rit$ !( te"'rea. &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or +ust or authori"ed causes as pro'ided by la$% and sub+ect to the reuirements o due process. b. !he oregoing shall also apply in cases o probationary employmentD pro'ided% ho$e'er% that in such cases% termination o employment due to ailure o the employee to ualiy in accordance $ith the standards o the employer made no$n to the ormer at the time o engagement may also be a ground or termination o employment. c. &n cases o employment co'ered by contracting or subcontracting arrangements% no employee shall be dismissed prior to the e#piration o the contract bet$een the principal and contractor or subcontractor as deined in 3ule &&&0A% Boo &&& o these 3ules% unless the dismissal is or +ust or authori"ed cause% or is brought about by the completion o the phase o the contract or $hich the employee $as engaged% but in any case% sub+ect to the reuirements o due process or prior notice. d. &n all cases o termination o employment% the ollo$ing standards o due process shall be substantially obser'ed: F!r termi"ati!" !( em%!$me"t &ase !" 'st 6a'ses as e(i"e i" Art 2<2 !( t#e La&!r )!e/ i. A $ritten notice ser'ed on the employee speciying the ground or grounds or termination% and gi'ing said employee reasonable opportunity $ithin $hich to e#plain his side. ii. A hearing or conerence during $hich the employee concerned% $ith the assistance o counsel i he so desires is gi'en opportunity to respond to the charge% present his e'idence% or rebut the e'idence presented against him. iii. A $ritten notice o termination ser'ed on the employee% indicating that upon due consideration o all the circumstances% grounds ha'e been established to +ustiy his termination. ,or termination o employment as deined in Art 25 o the Labor Code% the reuirement o due process shall be deemed complied $ith upon ser'ice o $ritten notice to the employee and the appropriate 3egional 6ice o the 6L* at least 5/ days beore eecti'ity o the termination% speciying the ground or grounds or termination. & the termination $as brought about by the completion o a contract or phase thereo% or by ailure o an employee to meet the standards o the employer in the case o probationary employment% it shall be suicient that a $ritten notice is ser'ed the employee% $ithin a reasonable time rom the eecti'e date o termination.

)ases/ PL,T 8s. T!%e"ti"! 9. R. N!. 1431;1 Set. 21 2004 FA)TS/ Arturo 3. !olentino !olentino $as employed in petitioner L! or 25 years. -e started in 12 as an installerPhelper and% at the time o his termination in 1;% $as the di'ision manager o the ro+ect 9upport i'ision% ro'incial *#pansion Center% Meet emand >roup. -is di'ision $as in charge o the e'aluation% recommendation and re'ie$ o documents relating to pro'incial lot acuisitions. 9ometime in 1;% 8onathan de 3i'era% a super'isor directly under respondent !olentino% $as ound to ha'e entered into an ?internal arrangement@ $ith the sellers o a parcel o land $hich he recommended or acuisition under L!roup% gi'ing respondent !olentino the option to resign. etitioner did not grant respondent
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3espondent
ISSUE/ 467 the Court o Appeals erred in ruling that the dismissal $as not ounded on clearly established acts suicient to $arrant separation rom employment EL,/ 76 !he petition is $ithout merit. L!
#arrant separation from employment . !he actual indings o the court a 8uo on the issue o $hether

there $as suicient basis or petitioner L! to dismiss respondent !olentino are binding on this Court. &n the e#ercise o the po$er o re'ie$% the actual determinations o the Court o Appeals are generally conclusi'e and binding on the 9upreme Court. 0 !he e'idence relied upon by petitioner L! R de 3i'era
roo beyond reasonable doubt is not reuired pro'ided there is a 'alid reason or the loss o trust and conidence% such as $hen the employer has a reasonable ground to belie'e that the managerial employee concerned is responsible or the purported misconduct and the nature o his participation renders him un$orthy o the trust and conidence demanded by his position.

JKismissal is the most se'ere penalty an employer can impose on an employee. &t goes $ithout saying that care must be taen% and due regard gi'en to an employee
-o$e'er% the right o the management to dismiss must be balanced against the managerial employee
An employee illegally dismissed is entitled to ull bac$ages and reinstatement pursuant to Article 2 o the Labor Code% as amended by 3A 1;.

Certainly% a great in+ustice $ill result i this Court upholds !olentino
Although a managerial employee% respondent should be reinstated to his ormer position or its eui'alent $ithout loss o seniority rights inasmuch as the alleged strained relations bet$een the parties $ere not adeuately pro'en by petitioner L! $hich had the burden o doing so. &n Uui+ano 's. Mercury rug Corporation% the Court ruled that strained relations are a actual issue $hich must be raised beore the labor arbiter or the proper reception o e'idence. &n this case% petitioner L! only raised the issue o strained relations in its appeal rom the labor arbiter
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no longer possible. &n act% the records o the case sho$ that L!% through F 9acdalan% ga'e respondent !olentino the option to resign.J1K 9uch a deerential act by management maes us doubt L!
F'its' )!m'ter Pr!'6ts )!r!rati!" !( t#e P#i%ii"es 8s. )A 9. R. N!. 1<232 Ari% < 200 FA)TS/ etitioner ,u+itsu Computer roducts Corporation o the hilippines (,C) is a corporation organi"ed and e#isting under hilippine la$s engaged in the manuacture o hard disc dri'es% M3 heads and other computer storage de'ices or e#port. 0 3espondent Fictor de >u"man began $oring or ,C on 9eptember 21% 1 as ,acilities 9ection Manager. As o 1% he $as also holding in a concurrent capacity the position o Coordinator &96 1/// 9ecretariat. Allan Al'are"% on the other hand% $as employed as a 9enior *ngineer on April 21% 1. -e $as assigned at the ,acilities epartment under the super'ision o respondent e >u"man. 0 !he garbage and scrap materials o ,C $ere collected and bought by the 9arou"man as ,acilities 9ection Manager% or and in behal o ,C% signed a >arbage Collection Agreement $ith 9arou"man ser'ed as middleman bet$een 9ta. 3osa Bible Baptist Church and 9aro. !he Church $as looing or scrap metal% and $as $illing to buy the purlins at 5. !he scrap metal $as then deli'ered rom ,C to 9ta. 3osa Bible Baptist Church. 0 *rnesto *spinosa% -3 and >eneral Aairs irector o ,C% recei'ed a disturbing report rom Manaig. Manaig reported that respondent e >u"man had caused the ?anomalous disposal o steel JpurlinsK o$ned by ,C.@ !$o o Manaigu"man had ordered the steel purlins to be brought out. !hereater% petitioner *spinosa sent a t$o0page &nter06ice Memorandum dated 8uly

2% 1 to respondent e >u"man% eecti'ely placing him under pre'enti'e suspension. 0 6n 8uly 2% 1% respondent Al'are" sent an e0 mail message to his co0employees% e#pressing sympathy or the plight o respondent e >u"man. 3espondent Al'are" used a dierent computer% but the e'ent 'ie$er system installed in the premises o petitioner ,C $as able to trace the e0mail message to him. 3espondent Al'are" submitted a $ritten *#planation dated 9eptember 2% 1 $here he apologi"ed% readily admitted that he $as the sender o the e0mail message in uestion% and claimed that he ?acted alone $ith his o$n con'iction.@ -e alleged% ho$e'er% that he $as only e#pressing his sentiments% and that he $as led by his desire to help a riend in distress. 0 3espondent Al'are" $as inormed that his ser'ices $ere terminated on the ground o serious misconduct eecti'e August 15% 1. 3espondent e >u"manu"man% a managerial employee% $as 'alidly dismissed or loss o trust and conidence. Citing a number o cases%J2K the Labor Arbiter stressed that $here an employee holds position o trust and conidence% the employer is gi'en $ider latitude o discretion in terminating his ser'ices or +ust cause. !he 7L3C sustained the ruling o the Labor Arbiter and dismissed the respondents< appeal or lac o merit. !he 7L3C also airmed the Labor Arbiteru"man% a managerial employee $ho $as routinely charged $ith the custody and care o the petitioneru"man.

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Contrary to the indings o the Labor Arbiter% respondent e >u"man did not betray the trust reposed on him by his employer% as the transaction in'ol'ing the sale o scrap steel purlins $as bet$een 9ta. 3osa and 9arou"man and e#pressing his 'ie$s@ $as not o such gra'e character as to be considered serious misconduct $hich $arranted the penalty o dismissal.

ISSUES/ 1. 467 e >u"man is guilty o breach o conidence% thus $arranting dismissal 2. 467 Al'are" committed serious misconduct in sending the e0mail EL,/ 1. NO ,e 9'*ma" is "!t 'i%t$ !( &rea6# !( 6!"(ie"6e. (atio# !o be a 'alid ground or dismissal% loss o trust and conidence must be based on a $illul breach o trust and ounded on clearly established acts. A breach is $illul i it is done intentionally% no$ingly and purposely% $ithout +ustiiable e#cuse% as distinguished rom an act done carelessly% thoughtlessly% heedlessly or inad'ertently. &t must rest on substantial grounds and not on the employeru"man% as the ,acilities 9ection Manager% occupied a position o responsibility% a position imbued $ith trust and conidence. (easoning#

!he Court had the occasion to reiterate in 7oom '. 7ational Labor 3elations Commission the guidelines or the application o the doctrine o loss o conidence: Loss o conidence should not be simulatedD X &t should not be used as a subteruge or causes $hich are improper% illegal or un+ustiiedD X &t may not be arbitrarily asserted in the ace o o'er$helming e'idence to the contraryD and X &t must be genuine% not a mere aterthought to +ustiy earlier action taen in bad aith.

disposal. 7o less than the $ritten statements o the $itnesses or the petitioners conirm this. 7o raud or bad aith could be attributed to respondent e >u"man% as e'inced by his readiness to disclose his participation in the transaction bet$een 9aro
L!ss !( tr'st a" 6!"(ie"6e as a 'st 6a'se (!r termi"ati!" !( em%!$me"t is remise !" t#e (a6t t#at t#e em%!$ee 6!"6er"e is i"8este ?it# e%i6ate matters s'6# as t#e #a"%i" !r 6are a" r!te6ti!" !( t#e r!ert$ a" assets !( t#e em%!$er. Ater such scrap materials are $eighed% loaded onto a truc and carried out o the company premises% the petitioner ,C can no longer be considered the o$ner thereo% and ceases to e#ercise control o'er such property. &n this case ho$e'er% 9aro
t! &e a 'st 6a'se (!r ismissa% a it m'st &e seri!'sC & m'st re%ate t! t#e er(!rma"6e !( t#e em%!$eeQs 'tiesC a" 6 m'st s#!? t#at t#e em%!$ee #as &e6!me '"(it t! 6!"ti"'e ?!ri" (!r t#e em%!$er. !he Court inds that respondent Al'are"
!he scrap metals% including the steel purlins% $ere already classiied as scrap materials and ready or

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!here is no sho$ing that the sending o such e0mail message had any bearing or relation on respondent Al'are"
airmed% $ith costs against the petitioners.

)!"! S'ite )%'& Tra8e% I"6. 8s. NLR) 7a" 2< 2002 %mployer Qs offer to reinstate does not forestall payment of full backwages.

&n )!"! S'ite )%'& Tra8e% I"6. 8s. NLR) " J>. 3. 7o. 12;1% 8anuary 2% 2///K" bac$ages $ere limited by the 7L3C rom the date o the employee
2. )!"str'6ti8e ,ismissa% 8s. I%%ea% ,ismissa% )!"str'6ti8e ,ismissa% concept Constructi'e dismissal is an employer
Constructi'e dismissal does not al$ays in'ol'e orthright dismissal or diminution in ran% compensation% beneit and pri'ileges. !here may be constructi'e dismissal i an act o clear discrimination% insensibility or disdain by an employer becomes so unbearable on the part or the employee that it could oreclose any choice by him e#cept to orego his continued employment. (9ee -yatt !a#i 9er'ices case% >.3. 7o. 152/% 8une 2% 2//1.) a 6!"str'6ti8e is6#are is ? a 8uitting because continued employment is rendered impossible% unreasonable or unliely% as% an oer in'ol'ing a demotion in ran and a diminution in pay.(hilippine 8apan Acti'e Carbon Corporation and !uuichi 9atoua 's 7L3C)

)!"str'6ti8e ,ismissa% Resi"ati!"

a"

I"8!%'"tar$

*onstructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely@

$hen there is a demotion in ran or a diminution in payD or $hen a clear discrimination% insensibility or disdain by an employer becomes unbearable to an employee. &n >lobe !elecom% &nc. '. ,lorendo0,lores% it $as held that $here an employee ceases to $or due to a demotion o ran or a diminution o pay% an unreasonable situation arises $hich creates an ad'erse $oring en'ironment rendering it impossible or such employee to continue $oring or her employer. -ence% her se'erance rom the company $as not o her o$n maing and thereore amounted to an illegal termination o employment. ( %ited in ,rancisco 's. 7L3C% >.3. 7o. 1//% August 21% 2//.) )ases 1. iminution o pay. A diminution o pay is pre+udicial to the employee and amounts to constructi'e dismissal. (,rancisco 's. 7L3C) 2. !ranser o employee not amounting to constructi'e dismissal. !ranser o an employee rom one area o operation to another is a management prerogati'e and is not constituti'e o constructi'e dismissal% $hen the transer is based on sound business +udgment% unattended by a demotion in ran or a diminution o pay or bad aith. (!an 's. 7L3C% >.3. 7o. 122/% 7o'ember 2% 1.) 5. !ranser o employee amounting to constructi'e dismissal. A transer amounts to constructi'e dismissal $hen the transer is unreasonable% unliely%

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incon'enient% impossible% or pre+udicial to the employee. (hil. &ndustrial 9ecurity Agency Corp. 's. Aguinaldo% >.3. 7o. 1% 8une 1;% 2//;.)

)ases/ Fer"a"! 9!. Vs. )A 9R N!. 1<>22 a$ 2< 2004 FA)TS: ,ernando >o $as hired by Molde# roducts &nc. in 1 as a salesman% then% o'er the years% $as promoted to a 9enior 9ales Manager. As such oicer% he $as responsible or o'erseeing and managing the sales orce o the company such as dealing $ith clients% getting orders% entering into an agreement $ith clients (sub+ect to appro'al o higher management). 0 9ometime in 1% the *F o Molde# called the attention o >o regarding the disco'ery o alleged anomalies purportedly committed by the sales people under >ooo himsel $as terminated% allegedly ?on account o command responsibility@. Molde# claimed that >o% ?ob'iously eeling guilty or not e#ercising eecti'e super'ision o'er his subordinates% submitted a letter o resignation dated 6ctober 12% 1 but eecti'e on 7o'ember 1% 1.@ Molde# added that >o $ent on lea'e rom 6ct 12% 1 to 7o' 1% 1. 4hile on lea'e% he $ored or the release o his clearance and the payment o 15 th month pay and lea'e pay beneits. 6n the other hand% >o contends that he $as not in'estigated. !he in'estigation only in'ol'ed other sales people. -e iled a complaint or constructi'e dismissal. LA ruled or >o (there $as illegal dismissal)% 7L3C airmed% but CA set aside the decisions% relying on e'idence that >o $as acti'ely perorming his normal duties and unctions during the months immediately prior to his resignation% contrary to the inding o constructi'e dismissal. ISSUE: 467 there $as constructi'e dismissal EL,: 76. (atio# Constructi'e dismissal e#ists $here there is a

cessation o $or because continued employment is rendered impossible% unreasonable or unliely. &t is present $hen an employee
0 Apparently% >o still ully e#ercised the prerogati'es and the responsibilities o his oice as the 9enior 9ales Manager during the time that the said unctions

$ere supposedly remo'ed rom him. !hereore% there can be no constructi'e dismissal to spea o. 0 >o claims that his separation rom employment $ith Molde# $as a case o constructi'e dismissal% an allegation $hich the company reutes $ith its o$n set o e'idence pointing to the >oo has submitted a letter o resignation. &t is thus incumbent upon him to substantiate his claim that his resignation $as not 'oluntary but in truth $as actually a constructi'e dismissal. !his the petitioner ailed to do. -is bare allegations% $hen uncorroborated by e'idence% cannot be gi'en credence. 0 on the other hand% Molde# presented conidential sales e'aluation orms that pro'e that >o $as still perorming his duties and responsibilities one month prior to his resignation. 0 4hile on lea'e% he $ored or the release o his clearance and the payment o his 15th month pay and lea'e pay beneits. &n doing so% he in act perormed all that an employee normally does ater he resigns. 3esignation is the ormal pronouncement or relinuishment o an oice. !he 'oluntary nature o >oo resigned rom employment $ithout any coercion or compulsion rom respondent. -is resignation $as 'oluntary. Disposition: etition denied% and decision o CA A,,&3M*.

U"i6!r" Sa(et$ 9%ass I"6. 8s. R!ri! Basarte 9R N!. 14:<> N!8. 2 2004 )!"str'6ti8e ,ismissa% !r a 6!"str'6ti8e is6#are has been deined as uitting because continued employment is rendered impossible% unreasonable or unliely% as an oer in'ol'ing a demotion in ran and a diminution in pay. Constructi'e dismissal% ho$e'er% does not al$ays tae the orm o a diminution. &n se'eral cases% $e ha'e ruled that an act o clear discrimination% insensibility% or disdain by an employer may become so unbearable on the part o the employee so as to oreclose an choice on his part e#cept to resign rom such employment. !his constitutes constructi'e dismissal. Immediate filing abandonment.

of

complaint

negates

&n a 2// case% it $as ruled that the immediate iling o complaint or illegal dismissal by the employees praying or their reinstatement% negates the inding o abandonment. !hey cannot% by any reasoning% be said to ha'e abandoned their $or% or as the

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9upreme Court had consistently ruled% the iling by an employee o a complaint or illegal dismissal is proo enough o his desire to return to $or% thus negating the employer
9LORIA ARTIA9A 8s. SILIAN UNIVERSITY 9.R. N!. 1;<43 Ari% 1: 200> etitioner 'oluntarily resigned. -er employer cannot be held liable or constructi'e dismissal. /loria 7rtiaga vs. )iliman 9niversity and )iliman 9niversity Medical %enter" >.3. 7o. 1;5% April 1% 2//.

ER)+ SARP AN, ,OE PILIPPINES a" PETER S. )ARBONELL 8s. 7ONAR P. ROBLES et. A%. 9.R. N!. 1;:0: N!8. 2 200> Fa6ts/ 3espondents are ormer health care representati'es assigned at the istrict F0M9 Cardio'ascular Hnit% 3egion & o Merc 9harp. !hey $ere placed under pre'enti'e suspension on the ground o loss o trust and conidence by allegedly submitting alse% misleading% or inaccurate data about the $or o other employees. 9ubseuently% 3obles and >onito $ere inormed that their ser'ices had been terminated. Cristobal% on the other hand% $as inormed that his suspension $as lited. -o$e'er% he $as reassigned to istrict & o Baguio City and La Hnion as his ne$ area o responsibility. Christian reuested or a transer. -is reuest $as not a'orably acted upon% instead% he recei'ed his second *mployees< 7otice to *#plain dated 8anuary 1% 2//% or dishonesty and oenses against company interest. !hereater% Christian got sic due to the stress brought about by his recei'ing se'eral *7!*s. As such% he $as compelled to apply or a sic lea'e. Christian stated that his sic lea'e application $as not acted upon and instead he recei'ed his third *7!* dated ,ebruary % 2//% or insubordination% serious misconduct or $illul disobedience. Christian% thereater% resigned citing oppression and utter unbearability o the $or atmosphere. Christian then amended his complaint or constructi'e dismissal.

Iss'e/ 4as there constructi'e dismissal= R'%i"/ Ges. M9 is adamant that the CA erred in not characteri"ing the $or reassignment o respondent Cristobal as alling $ithin the ambit o management prerogati'e and% thus% beyond challenge. &n addition% M9 postulates that the $or reassignment o medical representati'es% such as respondent Cristobal% is not only dictated by the

nature o the $or% but is% more importantly% $ritten in the employment contract. 6nce more% the Court agreed $ith M9
ANOLO A. PEAFLOR 8s. OUT,OOR )LOTIN9 ANUFA)TURIN9)ORPORATION et. A%. 9.R. N!. 1;;114 Ari% 13 2010 Fa6ts/ eYalor $as hired as probationary -3 Manager o 6utdoor Clothing on 9eptember 2% 1. 6n March 15% 2///% more than si# months rom the time he $as hired% 6utdoor Clothing
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permanently se'er his ties $ith 6utdoor Clothing. !his alls suarely $ithin the concept o constructi'e dismissal that +urisprudence deines% among others% as in'oluntarily resignation due to the harsh% hostile% and una'orable conditions set by the employer. &t arises $hen a clear discrimination% insensibility% or disdain by an employer e#ists and has become unbearable to the employee. !he gauge or constructi'e dismissal is $hether a reasonable person in the employee
)O)A-)OLA BOTTLERS PILIPPINES IN). 8s. AN9EL U. ,EL VILLAR 9.R. N!. 1:30>1 O6t!&er : 2010 Fa6ts/ Coca0Cola hired respondent Angel H. del Fillar (el Fillar) on May 1% 1/ as hysical istribution ,leet Manager $ith a +ob grade o 90 and monthly salary o ;/%///.//% aside rom the use o a company car% gasoline allo$ance% and annual oreign tra'el% among other beneits. &n 12% as part o the reorgani"ation o the Company% el Fillar became the !ransportation 9er'ices Manager% under the Business Logistic irectorate% headed by irector *dgardo &. 9an 8uan (9an 8uan). As !ransportation 9er'ices Manager% el Fillar prepares the budget or the 'ehicles o the Company

nation$ide. el Fillar submitted a 3eport to the Company resident% detailing an alleged raudulent scheme undertaen by certain Company oicials in conspiracy $ith local truc manuacturers% o'erpricing the trucs purchased by the Company by as much as /%///.// each. el Fillar implicated 9an 8uan and 8ose L. ineda% 8r.% among other Company oicials% as part o the conspiracy. ineda then ser'ed as the *#ecuti'e Assistant in the Business Logistic irectorate in charge o the 3erigeration 9er'ices o the Company. 9e'en months ater the submission o his 3eport on the raudulent scheme o se'eral company oicials% el Fillar recei'ed a Memorandum rom 9an 8uan% inorming him that (1) he $as designated as 9ta Assistant to the Corporate urchasing and Materials Control Manager% $ith a +ob grade o 790F&&D (2) $ith el Fillars ne$ assignment% he ceased to be entitled to the beneits accruing to an 90 position under e#isting company rules and policiesD and (5) el Fillar $as to turn o'er the 'ehicle assigned to him as !ransportation 9er'ices Manager to ineda by 8uly 1/% 1. Although as the 9ta Assistant o the Corporate urchasing and Materials Control Manager% el Fillar continued to recei'e the same salary as !ransportation 9er'ices Manager% but his car and other pri'ileges $ere $ithdra$n and he spent his time at his ne$ post sitting Iat a des $ith no meaningul $or $hatsoe'er.I el Fillar belie'ed that he $as demoted by the Company to orce him to resign. Hnable to endure any urther the harassment% el Fillar iled $ith the Arbitration Branch o the 7L3C on 7o'ember 11% 1 a complaint against the Company or illegal demotion and oreiture o company pri'ileges. According to Coca0Cola Jel FillarK $as not outrightly dismissedD instead% he $as remo'ed rom his ormer position as !ransportation 9er'ices Manager% and demoted to 9ta Assistant to the Corporate urchasing and Materials Control Manager. !he Company embared on a reorgani"ation o the Business Logistic irectorate. As a result% the unctions related to 3erigeration $ere assigned to the !ransportation 9er'ices Manager% $hich $as renamed the !ransportation and 3erigeration 9er'ices Manager. !he Company ailed to appear% despite due notice% at the scheduled preliminary conerence beore the 7L3C Arbitration Branch. !he Company reasoned that in appointing el Fillar as the 9ta Assistant o the Corporate urchasing and Materials Control Manager% rom his ormer position as !ransportation

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9er'ices Manager% the Company $as merely e#ercising its inherent management prerogati'e to transer an employee rom one position to another. !hey contended that el Fillar had no 'ested right to the pri'ileges he pre'iously en+oyed as !ransportation 9er'ices Manager. 9ince the 'arious programs $ill aect some o its employees% in good aith the Company has initiated a special program called Iro+ect 7e$ 9tartI. !his program is intended to assist employees $hose positions $ill be declared redundant $ith the implementation o ne$ distribution systems% utili"ation o impro'ed operational processes and unctional re0organi"ations. Labor Arbiter rendered a ecision in el Fillars a'or. !he Labor Arbiter held that the allegations in el Fillars complaint suiciently presented a cause o action against the Company. el Fillar appears to ha'e been singled out or discriminated upon due to his ha'ing reported the 1 truc scam% and his present isolation can be seen as a punishment or acting in a righteous and orthright manner. 6ther$ise% as a I9ta AssistantI Jel FillarK should ha'e been gi'en some meaningul or responsible $or appurtenant to the +ob designation. 7L3C re'ersed the Labor Arbiter% reasoning that: Contrary to the Labor Arbiters pronouncement that Jthe CompanyK should ha'e rebutted allegations o bad aith and malice% $e are more inclined to apply the presumption o good aith. Mere conclusions o act and la$ should not be used as bases or an automatic inding o bad aith. As it is% $e do not e'en see any disclosure o the scam and his alleged demotion. & indeed the so0called Igreat grandmother o Coca cola scams o 1I $ere true% the logical conseuence o such disclosure is or the president o the company to dismiss the erring employees and oicers or their highly irregular acts and not to penali"e Jel FillarK or maing such disclosure. !his is amply supported by the act that the Jthe CompanyK conducted a thorough in'estigation o the reported scam and e'en obtained the ser'ices o an independent auditor to determine $hether the alleged anomalous transactions $ere actually irregular andPor uestionable. !his maniests that Jel FillarsK disclosure $as taen seriously contrary to his claims o discrimination. Accordingly% it cannot be said that the act o the JCompanyK $as retaliatory or penal in nature nor tainted $ith bad aith andPor malice. 6ther$ise% Jthe CompanyK $ould not ha'e gi'en gra'e attention to the disclosure o Jel FillarK.

A company cannot% ho$e'er% be reasonably e#pected to pro'ide the same beneits to an employee $hose position or e#ample% reuires that he stays in the oice during $oring hours. Beneits% pri'ileges and peruisites that attach to a certain position do not pro'ide suicient bases or determining the superiority or ineriority o the position so held.

Iss'e/ 4hether or not Company% in transerring el Fillar rom the position o !ransportation 9er'ices Manager to 9ta Assistant to the Corporate urchasing and Materials Control Manager% 'alidly e#ercised its management prerogati'e or committed constructi'e dismissal% or demotion= 4hether or not there has been redundancy in the position held by el Fillar that +ustiied the company rom the act o taing the position rom him= R'%i"/ &n the pursuit o its legitimate business interest% management has the prerogati'e to transer or assign employees rom one oice or area o operation to another pro'ided there is no demotion in ran or diminution o salary% beneits% and other pri'ilegesD and the action is not moti'ated by discrimination% made in bad aith% or eected as a orm o punishment or demotion $ithout suicient cause. !he right o employees to security o tenure does not gi'e them 'ested rights to their positions to the e#tent o depri'ing management o its prerogati'e to change their assignments or to transer them. a"aeria% rer!ati8es #!?e8er are s'&e6t t! %imitati!"s r!8ie &$ %a? 6!%%e6ti8e &arai"i" areeme"ts a" e"era% ri"6i%es !( (air %a$ a" 'sti6e. But% lie other rights% there are limits thereto. !he managerial prerogati'e to transer personnel must be e#ercised $ithout gra'e abuse o discretion% bearing in mind the basic elements o +ustice and air play. -a'ing the right should not be conused $ith the manner in $hich that right is e#ercised. !hus% it cannot be used as a subteruge by the employer to rid himsel o an undesirable $orer. &n particular% the employer must be able to sho$ that the transer is not unreasonable% incon'enient or pre+udicial to the employeeD nor does it in'ol'e a demotion in ran or a diminution o his salaries% pri'ileges and other beneits. 9hould the employer ail to o'ercome this burden o proo% the employees transer shall be tantamount to constructi'e dismissal% $hich has been deined as a uitting because continued employment is rendered impossible% unreasonable or unlielyD as an oer in'ol'ing a demotion in ran and diminution in pay.

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Lie$ise% constructive dismissal e!ists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment .

Ater a careul scrutiny o the records% $e agree $ith the Labor Arbiter and the Court o Appeals that the Company ailed to discharge this burden o proo. !he Company and its oicials attempt to +ustiy the transer o el Fillar by alleging his unsatisactory perormance as !ransportation 9er'ices Manager. !he Company disclosed that: Jel FillarK displayed an utterly $oeul perormance. -e $as unable to submit basic data as to type and brand o 'ehicles $ith highestPlo$est maintenance cost as reuested. Jel FillarK could not e'en update the records o his oice. -e could not $or $ith minimum or no super'ision. -is acti'ities needed to be closely and constantly monitored by his superiors. Jel FillarK laced initiati'e and had to be constantly reminded o $hat to do. -e merited a mediocre grade o 2 in a scale o one (1) to i'e (;)% the latter number being the highest grade 4e are uncon'inced. !he dismal perormance e'aluations o el Fillar $ere prepared by 9an 8uan and ineda ater el Fillar already implicated his t$o superiors in his 3eport dated 8anuary % 1 in an alleged raudulent scheme against the Company. More importantly% $e gi'e $eight to the ollo$ing instances establishing that el Fillar $as not merely transerred rom the position o !ransportation 9er'ices Manager to the position o 9ta Assistant to the Corporate urchasing and Materials Control ManagerD he $as e'idently demoted. A transer is a mo'ement rom one position to another $hich is o eui'alent ran% le'el or salary% $ithout brea in ser'ice. romotion% on the other hand% is the ad'ancement rom one position to another $ith an increase in duties and responsibilities as authori"ed by la$% and usually accompanied by an increase in salary. Con'ersely% demotion in'ol'es a situation $here an employee is relegated to a subordinate or less important position constituting a reduction to a lo$er grade or ran% $ith a corresponding decrease in duties and responsibilities% and usually accompanied by a decrease in salary. el Fillars demotion is readily apparent in his ne$ designation. ,ormerly% he $as the !ransportation 9er'ices ManagerD then he $as made a 9ta Assistant a subordinate to another manager%

particularly% the Corporate urchasing and Materials Control Manager. 9econd% the t$o posts are not o the same $eight in terms o duties and responsibilities. el Fillars position as !ransportation 9er'ices Manager in'ol'ed a high degree o responsibility% he being in charge o preparing the budget or all o the 'ehicles o the Company nation$ide. As 9ta Assistant o the Corporate urchasing and Materials Control Manager% el Fillar contended that he $as not assigned any meaningul $or at all. !hird% $hile el Fillars transer did not result in the reduction o his salary% there $as a diminution in his beneits. !he Company admits that as 9ta Assistant o the Corporate urchasing and Materials Control Manager% el Fillar could no longer en+oy the use o a company car% gasoline allo$ance% and annual oreign tra'el% $hich el Fillar pre'iously en+oyed as !ransportation 9er'ices Manager. ,ourth% it $as not bad enough that el Fillar $as demoted% but he $as e'en placed by the Company under the control and super'ision o ineda as the latters 9ta Assistant. !o recall% ineda $as one o the Company oicials $ho el Fillar accused o derauding the Company in his 3eport dated 8anuary % 1. &t is not too diicult to imagine that the $oring relations bet$een el Fillar% the accuser% and ineda% the accused% had been strained and hostile. !he situation $ould be more oppressi'e or el Fillar because o his subordinate position visvis ineda. ,ith% all the oregoing caused el Fillar incon'enience and pre+udice% so unbearable or him that he $as constrained to see remedy rom the 7L3C. !he Labor Arbiter $as correct in his obser'ation that had el Fillar resigned immediately ater his Itranser%I he could be said to ha'e been constructi'ely dismissed. !here is constructi'e dismissal $hen there is a demotion in ran andPor diminution in payD or $hen a clear discrimination% insensibility or disdain by an employer becomes unbearable to the employee. *'entually% ho$e'er% the Company actually terminated el Fillars ser'ices eecti'e May 51% 1% as his position $as no longer necessary or $as considered redundant due to the reorgani"ation o the Business Logistic irectorate. 3edundancy is one o the authori"ed causes or the dismissal o an employee. &t is go'erned by Article 25 o the Labor Code% $hich reads: A3!. 25. )%!s're !( esta&%is#me"t a" re'6ti!" !( ers!""e%. !he employer may also terminate the

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employment o any employee due to the installation o labor0sa'ing de'ices% redundancy% retrenchment to pre' pre'en entt loss losses es or the the clos closin ing g or cess cessat atio ion n o operation o the establishment or undertaing unless the closing is or the purpose o circum'enting the pro'isions o this !itle% by ser'ing a $ritten notice on the the $ore orers rs and and the the epa epart rtme ment nt o Labo Laborr and and *mpl *mploy oyme ment nt at leas leastt one one (1) (1) mont month h beor beore e the the intended date thereo. &n case o termination due to the inst nstall allati ation o labor abor0s 0sa' a'iing de'i e'ices ces or redund redundanc ancyy% the $orer $orer aec aected ted thereb therebyy shall shall be entitled to a separation pay eui'alent to at least his one (1) month pay or to at least one (1) month pay or e'ery year o ser'ice% $hiche'er is higher. &n case o retr retren ench chme ment nt to pre' pre'en entt loss losses es and and in case casess o closures or cessation o operations o establishment or undertaing not due to serious business losses or ina inanc ncia iall re'e re'ers rses es%% the the sepa separa ratition on pay pay shal shalll be eui'alent to one (1) month pay or to at least one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least si# () months shall be considered one (1) $hole year. 3edundancy% or purposes o the Labor Code% e#ists $here the ser'ices o an employee are in e#cess o $hat is reasonably demanded by the actual reuir reuireme ements nts o the enterp enterpri rise. se. 9ucci 9uccinct nctly ly put% put% a position is redundant $here it is superluous% and super superlui luity ty o a positi position on or positi positions ons may be the outcome o a number o actors% such as o'erhiring o $orers% decreased 'olume o business% or dropping o a part partic icul ular ar prod produc uctt line line or ser' ser'ic ice e acti acti'i 'ity ty pre' pre'io ious usly ly manu manua act ctur ured ed or unde undert rta aen en by the the enterprise. !he determination that the employeeQs ser'ices are no longer necessary or sustainable and% thereore% prop proper erly ly term termin inab able le or or bein being g redu redund ndant ant is an e#ercise e#ercise o business business +udgment o the employer. employer. !he $isdom or soundness o this +udgment is not sub+ect to discretionary re'ie$ o the Labor Arbiter and the 7L3C% pro'ided there is no 'iolation o la$ and no sho$ sho$in ing g that that it $as $as prom prompt pted ed by an arbi arbitr trar aryy or malicious act. &n other $ords% it is not enough or a company to merely declare that it has become o'ermanned. &t must produce adeuate proo o such redundancy to +ustiy the dismissal dismissal o the aected aected employees. employees. Coca Cola presented no other e'idence% 7either did the Company present proo that it had complied $ith the proced procedura urall reuir reuireme ement nt in Artic Article le 25 o prior prior notice to the epartment o Labor and *mployment (6L*) o the termination o el Fillars employment due to redundancy one month prior to May 51% 1.

el Fillars poor employee perormance is irrele'ant as regards regards the issue on redundancy redundancy.. 3edundancy 3edundancy aris arises es beca becaus use e ther there e is no more more need need or or the the employees position in relation to the $hole business orga organi ni"a "ati tion on%% and and not not beca becaus use e the the empl employ oyee ee unsati atisactorily perormed the duties and responsibilities reuired by his position. po sition. An employee $ho is illegally dismissed is entitled to the t$in relies o ull bac$ages and reinstatement. & rein reinst stat atem emen entt is not not 'iabl 'iable% e% separ separat atio ion n pay pay is a$arded to the employee. &n a$arding separation pay to an illegally dismissed employee% in lieu o reinstatement% the amount to be a$arded shall be eui'a eui'alen lentt to one month salary salary or e'ery year o ser'ice. ser'ice. Hnder 3epublic 3epublic Act 7o. 1;% employees employees $ho are illegally dismissed are entitled to ull bac bac$a $age ges% s% incl inclus usi' i'e e o allo allo$a $anc nces es and and othe otherr beneits or their monetary eui'alent% computed rom the time their actual compensation $as $ithheld rom them up to the time o their actual reinstatement but i reinstatement is no longer possible% the bac$ages shal shalll be comp comput uted ed rom rom the the time time o thei theirr ille illega gall termination up to the inality o the decision. 4e note that el Fillars reinstatement is no longer possible becaus because e the positi position on he pre'i pre'iousl ouslyy occupi occupied ed no longer e#ists% per 9an 8uans Aida'it dated 6ctober 1;% 1. Also% el Fillar had already recei'ed his separation pay sometime in 6ctober 1.

BEBINA BEBINA 9. SALVALO SALVALO=A =A rerese"ti rerese"ti" " #er %ate #'s&a" #'s&a"  9R 9RE9O E9ORI RIO O SALVA SALVALO=A LO=A 8s. NLR) NLR) et.a%. 9.R. N!. 1<20<: N!8em&er 24 2010 4hen a loating status lasts or more than si# () months% the employee may be considered to ha'e been constructi'ely dismissed. *onstr *onstruct uctive ive dismis dismissal sal e!ists e!ists when when an act of clear discrimination, insensibility insensibility or disdain by an empl employ oyer er has has beco become me so unbe unbear arab able le to the the empl employ oyee ee leav leavin ing g him him with with no opti option on but but to e#ist forego with his continued employment . &t is e#ist

$hen there is a cessation o $or because continued employment is rendered impossible% unreasonable% or unliely% as an oer in'ol'ing a demotion in ran and a diminution in pay. &neiciency o employeeD condonation by employer. 4hile it is acno$ledged that petitioner >regorioul aciic ne'er issued any memo citing him or the alleged repeated errors% ineiciency% and poor perormance $hile on duty% and instead continued to assign him to 'arious 'arious posts. !his amounts amounts to condonation condonation by >ul aciic aciic o $hate'er $hate'er inractio inractions ns >regorio >regorio may ha'e committed. *'en assuming the the reasons or relie'ing relie'ing

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>regorio o his position $ere true% it $as incumbent upon >ul aciic to be 'igilant in its compliance $ith labor la$s. &ebina /. $alvalo:a vs. 2ational 1abor (elati (elations ons *ommis *ommissio sion, n, /ulf /ulf "acif "acific ic $ecuri $ecurity ty Agency, Inc., and Angel 'ui:on, 9.R. N!. 1<20<: N!8em&er 24 2010.

ARI ARIO O B. ,IA ,IA9A 9AN N 8s. 8s. ,a6? ,a6?!r !rs s U"it U"ite e I"6!r!rate a"@!r ,ea" A. )1a"6i"! 9.R. N!. 1>103 N!8em&er 2< 2011 9omettime in 2//2 2//2%% peti petiti tio oner ner $as FA)TS/ 9ome do$ngr do$ngraded aded rom his post post as 6&C to super' super'iso isor. r. !hen% in March o the ollo$ing year% he $as made to $or as a mere technician. 4hen he 'ocally e#pressed his concerns regarding his assignments% one Loida Auino% $ho $as in charge o ser'icing ser'icingPpers Ppersonnel onnel under the direct direct super'isi super'ision on o respondent ean A. Cancino% told him not to report or $or anymore. !hereater% a certain Carlito ia"% 6per 6perat atio ions ns Mana Manage gerr o resp respon onde dent nt comp compan any% y% cast castig igat ated ed peti petititione onerr or or not not oll ollo$ o$in ing g Aui Auino noQs Qs instruction to $or as a technician. !his prompted petitioner to ile a complaint or illegal dismissal% non0 paym payment ent o o'er o'ertitime me pay% pay% holi holida dayy pay% pay% ser' ser'ic ice e ince ncenti nti'e lea' ea'e and and separ epara ation tion pay pay agai agains nstt respondents. 3espon 3esponden dents ts denie denied d that that petit petition ioner er $as $as illega illegallllyy dismissed arguing that% since April % 2//5 up to the time o the iling o the complaint% petitioner ne'er repo report rted ed or or $or $or and and cont contin inuo uous usly ly 'iol 'iolat ated ed the the compan companyy policy policy on absenc absence e $itho $ithout ut oic oicial ial lea'e lea'e (A46 (A46L) L).. !hey !hey alle allege gedl dlyy sent sent a tota totall o our our () () memoranda or the period August 2//2 to March 2//5 inorming petitioner o his oenses% including bein being g A46L% A46L% but but he none noneth thel eles esss un+u un+ust stiiia iabl blyy reused to return to $or. &n reply% petitioner denied e'er recei'ing any one o the our memoranda allegedly sent by respondents.

Iss'e/ 4hether or not there had been constructi'e dismissal Constructi'e 'e dismissal dismissal is deined deined as a R'%i"/ Ges. Constructi uitting uitting because because continued continued employmen employmentt is rendered rendered impossible% unreasonable or unlielyD $hen there is a demotion in ran or a diminution o pay. 2 !he test o cons constr truc uctiti'e 'e dism dismis issa sall is $het $hethe herr a reas reason onabl able e person in the employeeQs position $ould ha'e elt comp ompell elled to gi' gi'e up his his posi posittion under nder the circumstances. &t is an act amounting to dismissal but is made to appear as i it $ere not. Constructi'e dismissal is thereore a dismissal in disguise. !he la$ recogn recogni" i"es es and resol' resol'es es this this situat situation ion in a'or a'or o empl employ oyee eess in orde orderr to prot protec ectt thei theirr righ rights ts and and interests rom the coerci'e acts o the employer.2;

As held in the case o %oca%ola Aottlers 1hilippines" 0nc. 0nc. vs. vs. &el &el ill illar ar %2 the the burd burden en all allss upon upon the the company to pro'e that the employeeQs assignment rom one position to another $as not tantamount to cons constr truc ucti ti''e dism dismiissal ssal.. &n the the cas case at bar bar% respondents ailed to discharge said burden. &n act% respondents never even disputed that that petitioner $as relegated rom the position o 6&C to super'isor and% subseuently% to an ordinary technician. Clearly% the reduction reduction in petitioner petitionerQs Qs responsibi responsibiliti lities es and duties% duties% particular particularly ly rom super'iso super'isorr to ordinary ordinary technician technician%% demoti tion on in ran! ran! tantam constituted a demo tantamoun ountt to constructi'e dismissal. !hus% contrary to the position o the CA% it is o no conseuence that petitioner ailed to substantiate his alle allega gati tion on that that Loid Loida a Aui Auino no%% an empl employ oyee ee o respondent company% inormed him that he $ill be $oring as an ordinary technician% and that $hen he openly 'oiced out his concern regarding the transer% he $as told not to report or $or anymore. As $ith all all the the othe otherr alle allega gati tion onss made made by peti petiti tion oner er%% respondents never disputed or re'utted this this act. 9imilarl 9imilarly% y% 4 e cannot concur $ith the inding o the CA that that it $as peti petiti tion oner er $ho aban abando done ned d his his employment by ailing to report or $or or ha'ing gone A46L. ? Abandonment Abandonment is the deliberate and unjustified refusal of an employee to resume his employment .@ .@2 !o constitute abandonment o $or%

t$o elements must concur: ?(1) the employee must ha'e ailed to report or $or or must ha'e been abse absent nt $ith $ithou outt 'ali 'alid d or +ust +ustiiia iabl ble e reas reason onDD and and (2) there must ha'e been a clear intention on the part o the emplo employee yee to se'er se'er the employ employer0 er0emp employ loyee ee 2 relationsh relationship ip manieste maniested d by some o'ert act.@ !he employ employer er bears bears the burden burden o proo proo to sho$ sho$ the deliberate deliberate and un+ustii un+ustiied ed reusal reusal o the employee employee to resume resume his emplo employme yment nt $itho $ithout ut any intent intention ion o 2 returning. &n the the case case o -odieng %oncrete 1roducts" 0nc. v. 5/ Emilia % citing )amarca v. 7rcMen 0ndustries" 0nc. 51% the Court has ruled thus: ?# # #. Absence must be accompanied by o'ert acts unerr unerring ingly ly pointi pointing ng to the act act that that the employ employee ee simply simply does not $ant to $or $or anymore. anymore. And the burden o proo to sho$ that there $as un+ustiied reusal to go bac to $or rests on the employer. ###

A&a"!"me"t is a matter !( i"te"ti!" a" 6a""!t %i#t%$ &e res'me (r!m 6ertai" eJ'i8!6a% a6ts. T! 6!"stit'te a&a"!"me"t t#ere m'st &e 6%ear

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r!!( !( e%i&erate a" '"'sti(ie i"te"t t! se8er t#e em%!$er-em%!$ee re%ati!"s#i. )%ear%$ t#e !erati8e a6t is sti%% t#e em%!$eeQs '%timate a6t !( 'tti" a" e" t! #is em%!$me"t. 9ettled is the rule that mere a&se"6e !r (ai%'re t! re!rt (!r ?!r is "!t ta"tam!'"t t! a&a"!"me"t !( ?!r. # # #.@ (*mphasis supplied) &n this case% petitionerQs ailure to report or $or $as caused by the un$arranted demotion in ran that $as impo impose sed d upon upon him him by resp respon onde dent nts% s% not not by any any intention to se'er employment ties $ith them. And his iling iling o the instan instantt compla complaint int or illega illegall dismis dismissal sal indubitably negates the allegation o abandonment. -ad petitioner intended to orsae his +ob% then he $ould not ha'e ound it necessary to institute this case against respondents.

NIPPON NIPPON OUSIN9 OUSIN9 PIL. PIL. IN). IN). a"@!r a"@!r TA,ASI TA,ASI OTA OTA OROSI OROSI TA+A,A TA+A,A YUSUIR YUSUIRO O +AWATA +AWATA R. NOBOYUSI a" 7OEL REYES 8s. AIA AN9EL AN9ELA A LEYNE LEYNES S 9.R. 9.R. N!. 1;;<1: 1;;<1: A''st A''st 3 2011 Fa6ts/ etitioner% originally engaged in the business o pro'iding building maintenance ,rom its original 'entured into building management and gained Bay >ardens Condominium ro+ect (the ro+ect) o the Bay >ardens Condominium Corporation (B>CC) as its irst and only building maintenance client. &n this regard regard%% petiti petitione onerr hired hired respon responden dentt Maiah Maiah Angela Angela Leynes on 2 March 2//1 or the position o roperty Manager% $ith a salary o /%///.// per month. -er responsibilities include sur'eying the reuirements o the go'ernment and the client or said pro+ect% the orm ormul ulat atio ion n o hous house e rule ruless and and regu regula latition ons% s% the the prep prepar arat atio ion n o the the annu annual al oper operat atin ing g and and capi capita tall e#pe e#pend ndititur ure e budg budget et%% hiri hiring ng and and depl deploy oyme ment nt o manpo$er% salary and position determination as $ell as the assignment o the schedules and responsibilities o employees. Leynes Leynes had a misund misunders erstan tandin ding g $ith $ith the buildi building ng engin engineer eer o the pro+ec pro+ectt (Cant (Cantuba uba)) and barred barred the latter
resign. resign. -o$e'er -o$e'er%% she sent another letter letter e#pressing e#pressing her intention to return to $or and to call o her planned resignation. -o$e'er% she recei'ed a letter rom the management to report instead to the main oice as one in a ?loating status@ because someone already occupies her post. Aggrie'ed% Leynes iled a complaint against petitioner or or ille illega gall dism dismis issa sal%l% unpa unpaid id sala salari ries es%% bene beneiits ts%% damage damagess and attorn attorneyQ eyQss ees. ees. !he Labor Labor arbite arbiterr ound that the petitioner
Iss'e/ 467 petitionersQ decision to place respondent on loa loatiting ng stat status us is tant tantam amou ount nt to cons constr truc uctiti'e 'e dismissal. (Alternati'e: (Alternati'e: $hat is the eect o $ithdra$n resignation= R'%i" R'%i"// 7o% the placement o Leynes on a loating stat status us due due to redu redund ndan ancy cy is 'ali 'alid. d. !her !here e is no constr construct ucti' i'e e dismis dismissal sal.. !he actua actuall antece anteceden dents ts suggest that 7-&Qs immediate hiring o *ngr. 8ose as the ne$ roperty Manager or the ro+ect $as brought about by LeynesQ o$n rash announcement o her intention to resign rom her position. Although she subseuently changed her mind and sent 3eyes a letter by telea# announcing the reconsideration o her planned resignation and her intention to return to $or% Leynes e'idently had only hersel to blame or precipitately setting in motion the e'ents $hich led to 7-&Qs hiring o her o$n replacement. !he !he reco record rd%% more moreo' o'er er%% sho$ sho$ss that that 77-& & simp simply ly placed her on loating status Iuntil such time that another pro+ect could be securedI or her. !raditionally !raditionally in'oed by security agencies $hen guards guards are are tempor temporari arily ly sideli sidelined ned rom rom duty duty $hile $hile $aiting to be transerred or assigned to a ne$ post or the +a'o +a'orr %ode %ode has client client%% Arti Article cle 2 o the has been been applied to other industries $hen% as a conseuence 'ona fide fide suspen o the the 'ona suspensio sion n o the opera operatio tion n o a business or undertaing% an employer is constrained to put employees on loating status or a period not e#ceeding si# months. &n brushing aside respondentsQ reliance on said pro'ision to +ustiy the act o putting Leyn Leynes es on loa loatiting ng stat status us%% the the CA ruled ruled that that no e'id e'iden ence ce $as $as addu adduce ced d to sho$ sho$ that that ther there e $as $as 'ona fide fide suspen a 'ona suspensio sion n o 77-&Q &Qss busine business. ss. 4hat 4hat said court clearly o'erlooed% ho$e'er% is the act that 7-& had had bel belated atedly ly 'entu enturred into nto bui building ding management and% $ith B>CC as its only client in said said undert undertai aing% ng% had no other other rope roperty rty Manag Manager er position a'ailable to Leynes.

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!he rule is settled% ho$e'er% that Io0detailingI is not eui'alent to dismissal% so long as such status does not continue beyond a reasonable time and that it is only $hen such a Iloating statusI lasts or more than si# months that the employee may be considered to ha'e been constructi'ely dismissed. A complaint or illegal dismissal iled prior to the lapse o said si#0 month andPor the actual dismissal o the employee is generally considered as prematurely iled. 9ince the petitioner has no other client or the building management side o its business% it acted $ithin its prerogati'es $hen it e'entually terminated LeynesQ ser'ices on the ground o redundancy. 6ne o the recogni"ed authori"ed causes or the termination o employment% redundancy e#ists $hen the ser'ice capability o the $ororce is in e#cess o $hat is reasonably needed to meet the demands o the business enterprise. A redundant position is one rendered superluous by any number o actors% such as o'erhiring o $orers% decreased 'olume o business% dropping o a particular product line pre'iously manuactured by the company or phasing out o ser'ice acti'ity priorly undertaen by the business An employer has no legal obligation to eep more employees than are necessary or the operation o its business. Considering that Leynes $as terminated rom ser'ice upon an authori"ed cause% $e ind that the CA lie$ise erred in aulting 7-& or supposedly ailing to notiy said employee o the particular act or omission le'eled against her and the groundPs or $hich she $as dismissed rom employment. 4here dismissal% ho$e'er% is or an authori"ed cause lie redundancy% the employer is% instead% reuired to ser'e a $ritten notice o termination on the $orer concerned and the 6L*% at least one month rom the intended date thereo. ,or its ailure to comply strictly $ith the 5/0day minimum reuirement or said notice and eecti'ely 'iolating LeynesQ right to due process% 7-& should be held liable to pay nominal damages in the sum o ;/%///.//.

3. PREVENTIVE SUSPENSION B!! V R'%e 14 Se6ti!" 3  4 SE)TION 3. Pre8e"ti8e s'se"si!". R !he employer may place the $orer concerned under pre'enti'e suspension i( #is 6!"ti"'e em%!$me"t !ses a seri!'s a" immi"e"t t#reat t! t#e %i(e !r r!ert$ !( t#e em%!$er !r !( #is 6!-?!rers. SE)TION 4. Peri! !( s'se"si!". R 7o pre'enti'e suspension shall last longer than 5/ days. !he employer shall thereater reinstate the $orer in

his ormer or in a substantially eui'alent position or the employer may e#tend the period o suspension pro'ided that during the period o e#tension% he pays the $ages and other beneits due to the $orer. &n such case% the $orer shall not be bound to reimburse the amount paid to him during the e#tension i the employer decides% ater completion o the hearing% to dismiss the $orer.

Pre8e"ti8e S'se"si!" !he right to impose pre'enti'e suspension is a management prerogati'e although it is not ound in the LC. &t is ound in its implementing and regulations. Va%i s'se"si!" & the employees continued employment poses a serious and imminent threat to the lie and or property o the employer or o his co0$orers. (section 5% rule N&F% boo F) &t is not a orm o penalty% it is more o a protecti'e measure undertaen by the employer. 6ne cannot impose a penalty because the employee cannot be punished $ithout due process. &n practice% pre'enti'e suspension notice should be in $riting.

Nat're !( Pre8e"ti8e S'e"si!" &t is a protecti'e measure undertaen by the employer to protect the interest o his business 1. to pre'ent urther commission o another oense 2. to pre'ent tampering o e'idences to conceal a crime to pre'ent inluence on the $itnesses 1. 9r!'"s if his continued employment poses a serious and imminent threat to the life or property of the employer or of his coworkers Pre8e"ti8e S'se"si!" 3eaning

re'enti'e suspension may be deined as the temporary remo'al o an employee charged or 'iolation o company rules rom his present status or position. re'enti'e suspension is usually imposed against sub+ect employee $hile the company is conducting an in'estigation or his alleged 'iolation in order to pre'ent him rom causing urther harm or damage to the company or his co0employees. re'enti'e suspension is not a disciplinary measure% and should not be conused $ith suspension imposed as a penalty.

Lea% Basis !he right o employer to impose pre'enti'e suspension is not ound in the Labor Code itsel.

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!he ot0cited legal basis or imposition o pre'enti'e suspension is 9ection  and 9ection  o 3ule NN&&&% Boo F% o the 6mnibus 3ules &mplementing the Labor Code% as amended by epartment 6rder 7o. % 9eries o 1% $hich read as ollo$s: $ection B. "reventive suspension. !he employer may place the $orer concerned under pre'enti'e suspension only i his continued employment poses a serious and imminent threat to the lie or property o the employer or o his co0$orers. $ection C. "eriod of suspension. 7o pre'enti'e suspension shall last longer than thirty (5/) days. !he employer shall thereater reinstate the $orer in his ormer or in a substantially eui'alent position or the employer may e#tend the period o suspension pro'ided that during the period o e#tension% he pays the $ages and other beneits due to the $orer. &n such case% the $orer shall not be bound to reimburse the amount paid to him during the e#tension i the employer decides% ater completion o the hearing% to dismiss the $orer. &nterestingly% the abo'e0uoted pro'isions are no longer reproduced in the present 6mnibus 3ules% as amended by epartment 6rder 7o. /% 9eries o 2//5% $hich supersedes epartment 6rder 0. &t is opined% ho$e'er% that the remo'al o said pro'isions rom the omnibus rules did not diminish the right o the employer to impose pre'enti'e suspension% considering that the +ustiication or upholding the right is necessity itsel% i.e.% $hen continued employment poses threats to the lie o the employer or his co0$orer.

a5im'm Peri! !( Pre8e"ti8e S'se"si!" !he ma#imum period o pre'enti'e suspension under the rule is 5/ days. Ater that period% the $orer must be reinstated to his ormer position% or in a substantially eui'alent position. & the employer does not $ant to reinstate his employee or $hate'er reason% he has the option to e#tend the period o suspension $ith the condition that he must pay the $orer his $ages and other beneits during the entire period o e#tension. !he latter option is called payroll reinstatement (as opposed to the ormer $hich is called actual reinstatement). &n case the employer opts or payroll reinstatement% the employee is not bound to reimburse $ages and beneits paid e'en i he is ultimately dismissed rom ser'ice% and regardless o $hether the ground or pre'enti'e suspension is pro'ed to be 'alid.

Pa$me"t !( Waes 'ri" Pre8e"ti8e S'se"si!" !he employee placed under pre'enti'e suspension is not entitled to payment o $ages. !his rule% ho$e'er% presupposes that the suspension is 'alid. & the suspension is in'alid or illegal% the employee shall be entitled to payment o $ages during the entire period o illegal suspension. ()ee >atbonton 's. 7L3C% >.3. 76. 1% 8anuary 25% 2//.) Lie$ise% i the suspension is e#tended beyond the 5/0day limit% the employee shall be entitled to $ages and other beneits or the period o the e#tension. W#e"

W#e" Em%!$ee ma$ &e P%a6e '"er Pre8e"ti8e S'se"si!" !he employer may place the $orer concerned under pre'enti'e suspension only i his continued employment poses a serious and imminent threat to the lie or property o the employer or o his co0 $orers. &t is not the nature or gra'ity o the charge against the employee that should be made the basis or placing him under pre'enti'e suspension. !hus% in a case% the Court held that it is improper or the employer to place under pre'enti'e suspension employees charged o 'iolation o school rules and regulations on the $earing o uniorm% tardiness or absence% and maliciously spreading alse accusations against the school. (9ee 4oodridge 9chool 's. e Benito% >.3. 7o. 1/2/% 6ctober 2% 2//.)

Pre8e"ti8e S'se"si!" am!'"ts t! )!"str'6ti8e ,ismissa% 4hen pre'enti'e suspension e#ceeds the ma#imum period allo$ed $ithout reinstating the employee either by actual or payroll reinstatement ( see -yatt !a#i 9er'ices &nc. 's. 3ustom M. Catinoy% >.3. 7o. 152/% 8une 2% 2//1)% or $hen pre'enti'e suspension is or indeinite period (see ido 's. 7ational Labor 3elations Commission% >.3. 7o. 112% ,eb. 2% 2//)% constructi'e dismissal $ill set in. re'enti'e suspension is imposed on an employee under in'estigation i he poses a serious threat to the lie and property o the employer and o his co0$orers. J/atbonton vs. 21(*, 9.R. N!. 14:;;> 7a"'ar$ 23 200: 4;> S)RA 41:K !he rule on pre'enti'e suspension is ound in 9ecs.  and % 3ule NN&&&% 6 1% 8une 21% 1.

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As a general rule% the employee is not entitled to $ages during the period o a 8a%i pre'enti'e suspension. -o$e'er% i pre'enti'e suspension is ound to be $ithout basis% the employer is reuired to pay the illegally suspended employee his bac$ages or the period o his suspension. J3aricalum 3ining vs. Decorion, i"(ra K

R'%e !" Pr!!rti!"a%it$ Accordingly% in determining the 'alidity o dismissal as to a orm o penalty% the charges or $hich an employee is being administrati'ely cited must be o such nature that $ould merit the imposition o the said supreme penalty. ismissal should not be imposed i it is unduly harsh and grossly disproportionate to the charges. !he rule on proportionality0 that the penalty imposed should be commensurate to the gra'ity o his oense. REEBER t#at re'enti'e suspension pending in'estigation is not a penalty. &t is a measure intended to enable the disciplining authority to in'estigate charges against respondent by pre'enting the latter rom intimidating or in any $ay inluencing $itnesses against him. ;3andapat vs. Add orce "ersonnel $ervices, Inc., /.(. 2o. BEBF, Guly H, EE, "ere:, G.

& the in'estigation is not inished and a decision is not rendered $ithin that period% the suspension $ill be lited and the respondent $ill automatically be reinstated. ;The &oard of Trustees of the /overnment $ervice Insurance $ystem, et al. vs. Albert 3. Jelasco, et al., /.(. 2o. KELH>, ebruary , E, *arpio, G.

re'enti'e suspension lasts only or a period o 5/ days% and beyond this period% such suspension may amount to constructi'e dismissal. G3aricalum 3ining *orp. vs. Decorion, 4<; S)RA 1<2 200:H -64*F*3% !here are cases $here a 'iolation o the 5/0day suspension period may entail payment o indemnity o 1%///.// GG($ &usiness *orp. vs. 21(*, 9.R. N!. 10<<>1 7'%$ 1; 1>>H !r P3000.00 G "epsi *ola Distributors vs. 21(*, 9.R. N!. 10:<31 a$ : 1>>;H 4hile another 'ie$ is that the period e#ceeding 5/ days shall be compensable% J%arlos . alen@uela vs. %alte$ 1hilippines" 0nc." >.3. 7os. 1;0% ecember 1;% 2/1/% illarama" 3r." 3.K thus% the e#tension $ill not gi'e rise to constructi'e dismissal.

!he pre'enti'e suspension beyond 5/ days shall be upheld pro'ided the employeeQs $ages and beneits are paid in the interim. J /enesis Transport )ervice" 0nc. vs. 9nyon ng Malayang Manggaga#a ng /enesis Transport" >.3. 7o. 1211% April ;% 2/1/% %arpio Morales" 8.K

An employee $ho $as pre'enti'ely suspended pending an in'estigation is treated lie an employee on appro'ed 'acation lea'e $ithout pay. !he period o pre'enti'e suspension shall eecti'ely interrupt the continuity o his go'ernment ser'ice. GThe &oard of Trustees of the /overnment $ervice Insurance $ystem, et al. vs. Albert 3. Jelasco, et al., 9.R. N!. 1;04:3 Fe&r'ar$ 2 2011 *arpio, G.H

&mposition o pre'enti'e suspension does not amount to termination o employment. re'enti'e suspension is +ustiied $here the employeeQs continued employment poses a serious and imminent threat to lie or property or o the employeeQs co0 $orers% and does not amount to illegal dismissal. ;Gose ". Artificio vs. 21(*, et al., /.(. 2o. KCBB, Guly H, EE, "ere:, G.

2. ,'rati!" a5im'm eri! re'enti'e suspension shall not last longer than 5/ days. !he employer shall thereater (1) reinstate the $orer in his ormer or in a substantially eui'alent positionD or (2) the employer may e#tend the period o suspension% pro'ided that during the period o e#tension% he pays the $ages and other beneits due to the $orer concerned. &n such a case% the $orer shall not be bound to reimburse the amount paid to him during the e#tension i the employer decides% ater completion o the hearing% to dismiss the $orer. 3. E5te"si!" )ases/ 7RS B'si"ess )!r. 8s. NLR) 24: S)RA 44 !here are cases $here a 'iolation o the 5/0day suspension period may entail payment o indemnity o 1%///.//. 9a"ara S'%$ 8s. NLR) 300 S)RA 1:2 !he supposed suspension $as e#pected to last or more than the period allo$ed by la$% thus maing the suspension constitute o an illegal dismissal. At%as Ferti%i*er )!r 8s. NLR) 2;3 S)RA 4> re'enti'e 9uspension is a disciplinary measure or the protection o the company
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in'estigation o any alleged maleasance or miseasance committed by the employee. 9ection 5% 3ule N&F% Boo F o the 6mnibus 3ules &mplementing the Labor Code pro'ides that the employer may place the $orer concerned under pre'enti'e suspension i his continued employment poses a serious threat to the lie or property o the employer or o his co0$orers.

)ONA TORRES V NLR) ER SE)URITY A9EN)Y 330 S)RA 31 Ari% 12 2000 FA)TS/ 8an ;% 1% * Z 3 security agency hired Chona !orres as a security guard. 6n 6ct 2% 1% during a routinary meeting o the security guards o the agency assigned to the hilippine Aerospace e'elopment Corporation% the issue o granting a 2;.// pay increase pursuant to 3A 2 $as taen up and uestions $ere raised as to the date o implementation o the increase. etitioner !orres stood up and uttered aloud at the presiding oicer: IBA&! A7> 9A9AB&-&7 7&7G6 9A 6&9&7A A! &!6 AG MA>A&BA[I to $hich remar the presiding oicer replied: I4ALA 7AMA7 A>AA&BA% & BA=I. !he presiding oicer also ased: IBA&! AGA4 M6 667 9A 6&9&7A=I !hen petitioner shouted: I4ALA 7A A67> !&4ALA 9A &7G6 A! 9A A>*7CG A9& 9&7H7>AL&7> AG6. *-% H7> LALA& LA7> A6% BAA H7> A76 A A7> 7A>A4A 6 9A &7G6 7>AG67[I 6n the same day% the agency sent !orres a letter saying eecti'e immediately% she is suspended rom duty as 9ecurity >uard or iteen days or discourtesy" disloyalty and insu'ordination #hile in the performance of duty .

!orres iled $ith the Labor Arbiter a complaint or illegal suspension and 'iolation o 3.A. 2% and or ha'ing been reuired to sign on a blan payroll. 6n 7o' 1/% 1% !orres recei'ed a letter rom the agency inorming her that she $as re0assigned and reuired to report at the respondentQs Manila oice or urther instructions. 6n 7o' 2% the agency terminated her ser'ices or abandonment $hen she ailed to report or $or in her ne$ assignment. !orres iled $ith the Labor Arbiter an amended complaint charging respondent $ith underpayment o $ages under 3.A. 7o. / and harassment. 0 Labor Arbiter ordered agency to reinstate !orres to her ormer position% pay her salary or 6ct 1% and salary dierentials under 3A / and 3A 2 Agency appealed to 7L3C. !he 7L3C denied the appeal on the ground o non0perection due to lac o

appeal bond and that there $as no reason to disturb the decision. 0 !he decision ha'ing become inal% the Labor Arbiter issued a $rit o e#ecution on the reinstatement aspect% but it $as not implemented because the monetary aspect o the decision remained to be determined. 0 6n 7o' % 11% !orres ased the Labor Arbiter to issue an alias $rit o e#ecution based on the completed computation o bac $ages o 1/%5.// $ored out by 7L3CQs 3esearch and &normation Hnit. 7L3C 9heri issued a 7otice o >arnishment $hich $as ser'ed the agency
ISSUE/ 467 7L3C committed gra'e abuse o discretion in ordering the Labor Arbiter to resol'e the motion to uash alias $rit o e#ecution

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EL,/ G*9 *#ecution is the inal stage o litigation% the end o the suit. &t cannot be rustrated e#cept or serious reasons demanded by +ustice and euity. 4hen a +udgment becomes inal and e#ecutory% it is the ministerial duty o the court to issue a $rit o e#ecution to enorce the +udgment. 0 A $rit o e#ecution may ho$e'er be reused on euitable grounds as $hen there $as a change in the situation o the parties that $ould mae e#ecution ineuitable or $hen certain circumstances% $hich transpired ater +udgment became inal% rendered e#ecution o +udgment un+ust. !he act that the decision has become inal does not preclude a modiication or an alteration thereo because e'en $ith the inality o +udgment% $hen its e#ecution becomes impossible or un+ust% it may be modiied or altered to harmoni"e the same $ith +ustice and the acts. 0 !he respondent agencyQs contention that there has been a change in the situation o the parties maing e#ecution ineuitable because petitioner accepted employment rom another agency $ithout resigning rom it is patently $ithout merit. !he rule no$ is that bac $ages a$arded to an illegally dismissed employee shall not be diminished or reduced by the earnings deri'ed by him else$here during the period o his illegal dismissal. 0 &n this particular case% the decision is inal and% in act% the amount o the salary dierentials and bac $ages a$arded to !orres has been garnished rom the account o respondent agency $ith 7B $ith no opposition or resistance and it is the ministerial duty o the Labor Arbiter to release the money to petitioner. Disposition etition granted. Labor Arbiter directed to release the money a$ard to petitioner 7OSE P. ARTIFI)IO 8s. NATIONAL LABOR RELATIONS )OISSION RP 9UAR,IANS SE)URITY A9EN)Y IN). 7UAN VI)TOR +. LAURILLA ALBERTO A9UIRRE a" ANTONIO A. AN,RES 9.R. N!. 1;2><< 7'%$ 2: 2010 Fa6ts/ etitioner 8ose . Artiicio $as employed as security guard by respondent 3 >uardians 9ecurity Agency% &nc.% a corporation duly organi"ed and e#isting under hilippine La$s and lie$ise duly licensed to engage in the security agency business. 9ometime in 8une 2//2% Artiicio had a heated argument $ith a ello$ security guard% Merlino B. *du (*du). 6n 2; 8uly 2//2% *du submitted a conidential report ; to Antonio A. Andres (Andres)% Administration Z 6perations Manager% reuesting that Artiicio be in'estigated or maliciously machinating *duQs hasty relie rom his post and or lea'ing his post during

night shit duty to see his girlriend at a nearby beerhouse. 6n 2 8uly 2//2% another security guard% >utierre" *rr (*rr)% sent a report  to Andres stating that Artiicio arri'ed at the oice o 3 >uardians 9ecurity Agency% &nc. on 2; 8une 2//2% under the inluence o liuor. 4hen Artiicio learned that no salaries $ould be gi'en that day% he bad0mouthed the employees o 3 >uardians 9ecurity Agency% &nc. and threatened to IarsonI their oice. 6n e'en date% Andres issued a Memorandum temporarily relie'ing Artiicio rom his post and placing him under pre'enti'e suspension pending in'estigation or conduct unbecoming a security guard% such as% abandonment o post during night shit duty% light threats and irregularities in the obser'ance o proper relie'ing time. -e also directed Artiicio to report to the oice o 3 >uardians 9ecurity Agency% &nc. and submit his $ritten ans$er immediately upon receipt o the memorandum. &n another memorandum% Andres inormed Artiicio that a hearing $ill be held on 12 August 2//2. 4ithout $aiting or the hearing to be held% Artiicio iled on ; August 2//2% a complaint or illegal dismissal% illegal suspension% non0payment o o'ertime pay% holiday pay% premium pay or holiday and rest days% 15th month pay% and damages. -e also prayed or payment o separation pay in lieu o reinstatement. 1/ Labor Arbiter rendered a decision dated  6ctober 2//5% inding respondents guilty o illegal suspension and dismissal. &t $as also held that Artiicio should ha'e been allo$ed to conront *du and *rr beore he $as pre'enti'ely suspended. 9ince the complainant does not see reinstatement% he is entitled to limited bac$ages and separation pay. 6n appeal% the 7L3C% set aside the decision o the Labor Arbiter ruling that the Labor Arbiter erred in considering pre'enti'e suspension as a penalty. !he motion or reconsideration iled by Artiicio $as denied or lac o merit Artiicio ne#t iled a petition or certiorari beore the Court o Appeals $hich rendered a decision airming the 7L3C decision. Artiicio iled a motion or reconsideration $hich the Court o Appeals again denied.

Iss'es/ 1. 4ether or not etitioner ArtiicioQs pre'enti'e suspension $as +ustiied 2. 4hether or not% he is entitled to bac$ages and separation pay R'%i"/

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1. Ges. 9ections  and  o 3ule NN&&&% &mplementing Boo F o the 6mnibus 3ules &mplementing the Labor Code pro'ides that pre'enti'e suspension is +ustiied $here the employeeQs continued employment poses a serious and imminent threat to the lie or property o the employer or o the employeeQs co0 $orers. 4ithout this ind o threat% pre'enti'e suspension is not proper. &n this case% ArtiicioQs pre'enti'e suspension $as +ustiied since he $as employed as a security guard tased precisely to saeguard respondentsQ client. -is continued presence in respondentsQ or its clientQs premises poses a serious threat to respondents% its employees and client in light o the serious allegation o conduct unbecoming a security guard such as abandonment o post during night shit duty% light threats and irregularities in the obser'ance o proper relie'ing time. Besides% Management has the prerogati'e to discipline its employees and to impose appropriate penalties on erring $orers pursuant to company rules and regulations. !his Court has upheld a companyQs management prerogati'es so long as they are e#ercised in good aith or the ad'ancement o the employerQs interest and not or the purpose o deeating or circum'enting the rights o the employees under special la$s or under 'alid agreements. 2/ 9igniicantly% Artiicio regrettably chose not to present his side at the administrati'e hearing scheduled to loo into the actual issues that accompanied the accusation against him. &n act% he a'oided the in'estigation into the charges by iling his illegal dismissal complaint ahead o the scheduled in'estigation. -e% on his o$n decided that his pre'enti'e suspension $as in act illegal dismissal and that he is entitled to bac$ages and separation pay. &ndeed% Artiicio $ould e'en re+ect reinstatement re'ealing his bent to ha'e his o$n $ay through his o$n means. As aptly noted by the 7L3C% Artiicio preempted the in'estigation that could ha'e aorded him the due process o $hich he $ould then say he $as denied. 2. Ges or Bac$ages. 7o or separation pay. !hat resol'ed% $e ne#t proceed to the beneits due Artiicio. -a'ing determined that the imposition on Artiicio o pre'enti'e suspension $as proper and that such suspension did not amount to illegal dismissal% $e see no basis or the grant o bac$ages.

7onetheless% gi'en the attendant circumstances in this case% namely% that Artiicio had been $oring $ith the company or a period o si#teen (1) years and $ithout any pre'ious derogatory record% the ends o social and compassionate +ustice $ould be ser'ed i Artiicio be gi'en some euitable relie in the orm o separation pay. Artiicio is entitled to separation pay considering that $hile reinstatement is an option% Artiicio himsel has ne'er% at anytime ater the notice o pre'enti'e suspension intended to remain in the employ o pri'ate respondents.

+oss of %onfindence

BLUE S+Y TRA,IN9 )OPANY IN). a"@!r 7OSE TANTIANSU a" LIN,A TANTIANSU 8s. ARLENE P. BLAS a" 7OSEP ,. SILVANO 9.R. N!. 1>0> ar6# ; 2012 acts# etitioner Blue 9y !rading Company% &nc. (Blue 9y) is a duly registered domestic corporation engaged in the importation and sale o medical supplies and euipment. etitioner 8ose >. !antiansu% 8r. (8ose) is Blue 9yQs 'ice president or operations $hile petitioner Linda >. !antiansu (Linda) is its assistant corporate secretary. !he respondents Arlene . Blas (Arlene) and 8oseph . 9il'ano (8oseph) $ere regular employees o Blue 9y and they respecti'ely held the positions o stoc cler and $arehouse helper beore they $ere dismissed rom ser'ice on ,ebruary ;% 2//;. 6n 8anuary 2% 2//;% Lorna 7. Manalastas (Lorna)% Blue 9yQs $arehouse super'isor% $rote 8ose a memorandum JK inorming the latter that si# pairs o intensiying screens $ere missing. Lorna lie$ise stated that $hen a certain ?Boy@ conducted an in'entory on 6ctober 2//% the screens $ere still completely accounted or. 6n 8anuary 51% 2//;% -elario Adonis% 8r. (-elario)% $arehouse personnel% $as summoned by Linda% 8oseQs $ie Alice !antiansu% and human resources department head 8ean B. e La a" (8ean). -elario $as ased to admit his participation in the thet o the missing screens. 4hile he $as oered to be paid a separation pay i he $ould coness complicity $ith the alleged thet% he pleaded utter innocence. 6n ,ebruary 1% 2//;% 8ean notiied -elario o his termination rom ser'ice on the ground o his ailure to properly account or and maintain a balance o the companyQs stoc in'entories% hence% resulting in Blue 9yQs loss o trust and conidence in him. JK !he day

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ater% Blue 9y promptly iled $ith the epartment o Labor and *mployment (6L*) an establishment termination report JK indicating therein -elarioQs dismissal rom ser'ice or cause. 6n ,ebruary 5% 2//;% 8ean issued notices to e#plainPpre'enti'e suspension JK to Arlene% 8oseph% deli'ery personnel 8ayde !ano0an (8ayde) and maintenance personnelPdri'er 4ilredo ,asonilao (4ilredo). !he notices inormed them that they $ere being accused o gross dishonesty in connection $ith their alleged participation in and conspiracy $ith other employees in committing thet against company property% speciically relati'e to the loss o the si# intensiying screens. !hey $ere placed under pre'enti'e suspension pending in'estigation and $ere thus reuired to ile their $ritten e#planations $ithin  hours rom receipt o the notices. 6n ,ebruary % 2//;% Arlene submitted to 8ean a hand$ritten memorandum denying no$ledge or complicity $ith the thet o the intensiying screens. 8oseph% 8ayde and 4ilredo also iled their $ritten e#planations denying any in'ol'ement in the thet $hich too place and proessing their dedication and loyalty to Blue 9y. J12K 6n ,ebruary ;% 2//;% 8ean issued to Arlene% 8oseph% 8ayde and 4ilredo notices o dismissal or cause J15K stating therein that e'idence that they had conspired $ith each other to commit thet against company property $as too glaring to ignore. Blue 9y had lost its trust and conidence on them and as an act o sel0preser'ation% their termination rom ser'ice $as in order. 6n ,ebruary % 2//;% Blue 9y iled $ith the 6L* an establishment termination report stating therein the dismissal o Arlene% 8oseph% 8ayde and 4ilredo. 6n ,ebruary % 2//;% Arlene% 8oseph% -elario% 8ayde and 4ilredo iled $ith the 7ational Labor 3elations Commission (7L3C) a complaint or illegal dismissal and suspension% underpayment o o'ertime pay% and non0payment o emergency cost o li'ing allo$ance (*C6LA)% $ith prayers or reinstatement and payment o ull bac$ages. !he complaint $as doceted as 7L3C 7C3 Case 7o. //0/20/15;10/;. Mean$hile% an entrapment operation $as conducted by the police during $hich 8ayde and -elario $ere caught allegedly attempting to sell to an operati'e an ultrasound probe $orth around //%///.// belonging to Blue 9y. 6n April 22% 2//;% Uue"on City &nuest rosecutor Arleen !agaban issued a resolution J1;K recommending the iling in court o criminal charges against 8ayde and -elario.

6n May 2//;% beore the complaint $hich $as iled $ith the 7L3C can be resol'ed% -elario% 8ayde and 4ilredo e#ecuted aida'its o desistance J1K stating therein that their termination by Blue 9y $as or cause and ater obser'ance o due process. Issues

4hether or not respondents< dismissal $as +ustiied on the ground o loss o trust and conidence. This *ourt?s (uling

!he rule is long and $ell settled that% in illegal dismissal cases lie the one at bench% the burden o proo is upon the employer to sho$ that the employee
IV. TERINATION OF EPLOYENT A. ReJ'isites (!r a Va%i ,ismissa%  Se6t 1 Art. III !( t#e 1><; )!"stit'ti!" Se6ti!" 1. 7o person shall be depri'ed o lie% liberty% or property $ithout due process o la$% nor shall any person be denied the eual protection o the la$s.  Arti6%e 2;; & L)P Arti6%e 2;;. Miscellaneous provisions. (a) NNN (b) 9ub+ect to the constitutional right o $orers to security o tenure and their right to be protected against dismissal e#cept or a +ust or authori"ed

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cause and $ithout pre+udice to the reuirement o notice under Article 25 o this Code% the employer shall urnish the $orers $hose employment is so sought to be terminated a $ritten notice containing a statement o the cause or termination and shall aord the latter ample opportunity to be heard and to deend himsel $ith the assistance o his representati'e i he so desires in accordance $ith company rules and regulations promulgated pursuant to guidelines set by the epartment o Labor and *mployment. Any decision taen by employer shall be $ithout pre+udice to the right o the $orer to contest the 'alidity or legality o his dismissal by iling a complaint $ith the regional branch o the 7ational Labor 3elations Commission. !he burden o pro'ing that the termination $as or a 'alid or authori"ed cause shall rest on the employer. !he 9ecretary o Labor and *mployment may suspend the eects o the termination pending resolution o the dispute in the e'ent o a prima acie inding by the appropriate oicial o the epartment o Labor and *mployment beore $hom such dispute is pending that the termination may cause a serious labor dispute or is in implementation o a mass lay0o. (As amended by 3A 1;)

a. S'&sta"tia% E8ie"6e La&!r )!e Art. 2;>. Se6'rit$ !( te"'re. &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or a +ust cause or $hen authori"ed by this !itle. An employee $ho is un+ustly dismissed rom $or shall be entitled to reinstatement $ithout loss o seniority rights and other pri'ileges and to his ull bac$ages% inclusi'e o allo$ances% and to his other beneits or their monetary eui'alent computed rom the time his compensation $as $ithheld rom him up to the time o his actual reinstatement. (As amended by 9ection 5% 3epublic Act 7o. 1;% March 21% 1) )ase/ Sa%8a!r 8s. P#i%. i"i" Ser8i6es )!r 3> S)RA ;2> FA)TS/ 869* F. 9ALFA63 $as irst employed by respondent in 11. -e rose rom the rans and assumed the position o lant &nspection ,oreman in 11. -e $as tased to: (1) super'ise plant euipment and acility inspectionD (2) conirm actual deectsD (5) establish inspection standards and reuencyD () analy"e troubles and recommend counter measuresD and (;) prepare $eelyPmonthly inspection schedule.J5K As early as March 1% 1;% respondent instituted the ?shit boss@ scheme $hereby the oreman rom the

lant 9ection and the oreman rom the Mining 9ection rotate as shit boss throughout their night shit to o'ersee and super'ise both the mining and plant operations. !he shit boss $as entrusted $ith the care% super'ision and protection o the entire plant. Aside rom his employment $ith respondent% petitioner co0o$ned and managed L-60!AB *nterprises% $ith his partner 6ndo Alcantara. !hey $ere engaged in the manuacture and sale o hollo$ blocs. 6n 9eptember 2% 1% petitionerresones% sa$ petitioner operating respondentuangco $as in the $har% o'erseeing the loading o respondent
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2. 467 the employer $as $ell $ithin its rights in imposing a harsh penalty considering the length o the employee
EL, 1. G*9% (atio# !he settled rule in administrati'e and uasi0+udicial proceedings is that proo beyond reasonable doubt is not reuired in determining the legality o an employer
- !he Labor Code pro'ides that an employer may terminate the ser'ices o an employee or +ust cause and this must be supported by substantial e'idence. &n the case at bar% our e'aluation o the e'idence o both parties indubitably sho$s that petitioner
into consideration in imposing the penalty to be meted an erring employee. -o$e'er% the case at bar in'ol'es dishonesty and pilerage by petitioner $hich resulted in respondent
against him% as his act o pilerage relects a regrettable lac o loyalty $hich he should ha'e strengthened% instead o betrayed. Disposition !he petition is *7&*.

Se8i%%a"a 8s. I.T. I"tQ%. )!r. a" NLR) Ari% 1: 2001 OAR O. SEVILLANA etiti!"er 8s. I.T. INTERNATIONAL )ORP.@SAIR A,,A  TRAVELLERS INSURAN)E AN, SURETY )ORPORATION ,EPARTENT OF LABOR AN, EPLOYENT a" NATIONAL LABOR RELATIONS )OISSION Se6!" ,i8isi!" res!"e"ts. FA)TS/ etitioner 6mar 9e'illana $as contracted to $or as a dri'er by pri'ate respondent &.!. Corporation or its oreign accredited principal% 9amir Maddah% in 8eddah% 9audi Arabia. !he agreed monthly salary $as H9 V5/.// or a period o t$o (2) years. etitioner alleged% ho$e'er% that $hen he recei'ed his salaries rom his employer% he $as only paid H9 V1//.// a month or t$el'e (12) months% instead o the agreed H9 V5/.// per month. 6n 7o'ember 2% 1% ater $oring t$el'e (12) months $ith his employer% petitioner said that he $as repatriated $ithout any 'alid and +ustiiable reason. etitioner shouldered the cost o his return airare in the amount o H9 V5/.//. etitioner iled a complaint $ith the 6*A% or underpayment o salaries% illegal dismissal% reimbursement o return airare% moral damages and attorneyQs ees against & .! . Corporation% 9amir Maddah and !ra'ellers &nsurance and 9urety Corporation. ri'ate respondent & .! . denied the material allegations o the petitioner but admitted that the petitioner $as one o se'eral $orers it deployed and employed abroad. & .! . argued that the petitioner continuously $ored $ith 9amir or more than one (1) year until his blood pressure $as considered critical. !hus% 9amir $as orced to closely monitor the health condition o the petitioner. 4hen petitionerQs blood pressure did not stabili"e and begun aecting his $or as dri'er due to reuent headaches and di""iness% & .! . alleged that 9amir decided to repatriate the petitioner to a'oid urther in+ury and complication to his health. & .! . claimed that ater the petitioner had recei'ed all the beneits accorded to an employee consisting o ull salaries and separation pay% the petitioner reused to be repatriated and instead decided to run a$ay. 9ince then% the $hereabouts o the petitioner $ere unno$n and & .! . only heard about the petitioner $hen the latter reported to their oice in the hilippines and later on

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iled the sub+ect complaint beore the 6*A Ad+udication 6ice. 6*A Ad+udication 6ice rendered a decision holding the pri'ate respondents herein +ointly and se'erally liable to the petitioner. 6nly pri'ate respondent &.!. appealed the aoresaid decision o the 6*A Ad+udication 6ice to the 7L3C 9econd i'ision $hich in turn re'ersed and set aside the indings and ruling o the ormer .

ISSUE/ 4-*!-*3 63 76! !-* HBL&C 3*967*7! *33* &7 -6L&7> !-A! !-* C6MLA&7A7!0*!&!&67*3 4A9 76! &LL*>ALLG &9M&99*. EL,/ 4e rule or the petitioner. 4hen the 7L3C declared that the burden o proo in dismissal cases shits to the employer only $hen the latter admits such dismissal% the 7L3C ruled erroneously in disregard o the la$ and pre'ailing +urisprudence on the matter. I 7rticle >>5'6 of the +a'or %ode puts the 'urden of proving that the dismissal of an employee #as for a valid or authori@ed cause on the employer. 0t should 'e noted that the said provision of la# does not distinguish #hether the employer admits or does not admit the dismissal.

&t is clear that petitioner $as illegally dismissed by pri'ate respondent 9amir Maddah.I !ime and again $e ha'e ruled that $here there is no sho$ing o a clear% 'alid and legal cause or termination o employment% the la$ considers the case a matter o illegal dismissal. T#e &'re" is !" t#e em%!$er t! r!8e t#at t#e termi"ati!" !( em%!$me"t ?as (!r a 8a%i a" %ea% 6a'se. ,or an employeeQs dismissal to be 'alid% (a) the dismissal must be or a 'alid cause and (b) the employee must be aorded due process. A re'ie$ o the record sho$s that neither o the t$o (2) conditions precedent $ere sho$n to ha'e been complied $ith by the pri'ate respondents. All that pri'ate respondent & .! . did $as to rely on its claim that petitioner $as repatriated by its oreign principal% respondent 9amir Maddah% due to hypertension $ith nary an e'idence to support it. &n all termination cases% strict compliance by the employer $ith the demands o both procedural and substanti'e due process is a condition sine ua non or the same to be declared 'alid. Hnder 9ection % 3ule &% Boo F& o the 3ules and 3egulations &mplementing the Labor Code% or a disease to be a 'alid ground or the dismissal o the employee% the continued employment o such employee is prohibited by la$ or

pre+udicial to his health or the health o his co0 employees% there must be a certiication by a competent public health authority that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# () months% e'en $ith proper medical treatment. !he deense o complainantQs medical problems (alleged hypertension o complainant) interposed by respondents to +ustiy the dismissal o the ormer is totally beret o merit. !he said deense o respondents is not only uncorroborated by documentary e'idence but is also not a +ust or 'alid cause or termination o oneQs employment. 4hile an employer (respondents in this case) may 'alidly terminate the ser'ices o an employee $ho has been ound to be suering rom any disease% it is authori"ed only i his continued employment is prohibited by la$ or is pre+udicial to his health as $ell as to the health o his co0employees (Art. 2% Labor Code). !his is not present in the instant case% or there is no inding rom a medical practitioner certiying that complainant is really hypertensi'e.I 9ince the burden o pro'ing the 'alidity o the dismissal o the employee rests on the employer% the latter should lie$ise bear the burden o sho$ing that the reuisites or a 'alid dismissal due to a disease ha'e been complied $ith. &n the absence o the reuired certiication by a competent public health authority% this Court has ruled against the 'alidity o the employeeQs dismissal. &t is thereore incumbent upon the pri'ate respondents to pro'e by the uantum o e'idence reuired by la$ that petitioner $as not dismissed% or i dismissed% that the dismissal $as not illegalD other$ise% the dismissal $ould be un+ustiied. !his Court $ill not sanction a dismissal premised on mere con+ectures and suspicions% the e'idence must be substantial and not arbitrary and must be ounded on clearly established acts suicient to $arrant his separation rom $or. 4e ind no cogent reason to depart rom the conclusion reached by the 6*A Ad+udication 6ice in the case at bar. &n all termination cases% stri6t 6!m%ia"6e &$ t#e em%!$er ?it# t#e ema"s !( &!t# r!6e'ra% a" s'&sta"ti8e 'e r!6ess is a condition sine ua non or the same to be declared 'alid. 4here there is no sho$ing o a clear% 'alid and legal cause or termination o employment% the la$ considers the case a matter o illegal dismissal. !he burden is on the employer to pro'e that the termination o employment $as or a 'alid and legal cause. ,or an employee
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be aorded due process. (9e'illana 's. &.!. Corp. and 7L3C)

i%%ares 8s. PL,T a$ : 200 !he standard o substantial e'idence is satisied $here the employer has reasonable ground to belie'e that the employee is responsible or the misconduct and his participation therein renders him un$orthy o trust and conidence demanded by his position. -ere% the 9C inds that there is substantial e'idence to support the indings o the CA that petitioner
P#i%trea Tire  R'&&er )!r. 8s. A%&ert! Vi6e"te 9R N!. 142;> N!8. 10 2004 S'&sta"tia% e8ie"6e is that amount o rele'ant e'idence $hich a reasonable mind might accept as adeuate to +ustiy a conclusion. &. ,'e Pr!6ess  N!ti6e ReJ'ireme"t ,'e r!6ess Art 2;; &  Bi%% !( Ri#ts 9ub+ect to the constitutional right o $orers to security o tenure and their right to be protected against dismissal e#cept or a +ust and authori"ed cause and $ithout pre+udice to the reuirement o notice under Article 25 o this Code% the employer shall urnish the $orer $hose employment is sought to be terminated a $ritten notice containing a statement o the causes or termination and shall aord the latter ample opportunity to be heard and to deend himsel $ith the assistance o his representati'e i he so desires in accordance $ith company rules and regulations promulgated pursuant to guidelines set by the epartment o Labor and *mployment. Any decision taen by the employer shall be $ithout pre+udice to the right o the $orers to contest the 'alidity or legality o his dismissal by iling a complaint $ith the regional branch o the 7ational Labor 3elations Commission. !he burden o pro'ing that the termination $as or a 'alid or authori"ed cause shall rest on the employer. !he 9ecretary o the epartment o Labor and

*mployment may suspend the eects o the termination pending resolution o the dispute in the e'ent o a prima acie inding by the appropriate oicial o the epartment o Labor and *mployment beore $hom such dispute is pending that the termination may cause a serious labor dispute or is in implementation o a mass layo.

Bi%% !( Ri#ts 9ection 1% Article &&&% 1 Constitution <2o person shall be deprived of life, liberty and property without due process of law.=

ri!r "!ti6e a" #eari"  30 a$ ri!r "!ti6e r'%e !he employer must urnish the $orer $ith 2 ?ritte" "!ti6es &e(!re termi"ati!" !( em%!$me"t can be legally eected. 1. !he notice to apprise the employee o the particular acts or omissions or $hich his dismissal is sought. 2. !he notice inorming the employee o the employer
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inspection and submitted a report to the eect that she ound amiseta property in !orno
0 4hen LA !umanong agreed to conduct a ormal hearing o the case and% indeed% set the case or hearing% the petitioner thenceorth acuired a 'ested right.

ISSUE/ 467 9hoppes Manila had a 'ested right to a ormal hearing because the irst labor arbiter granted its motion (!his case is under 1osition 1aper as ,e8uirement in the outline) EL,/ 76% 9hoppes Manila is not entitled to said right.

(atio !he holding o a ormal hearing or trial is

discretionary $ith the labor arbiter and is something that the parties cannot demand as a matter o right. - T#e reJ'ireme"ts !( 'e r!6ess are satis(ie ?#e" t#e arties are i8e" t#e !!rt'"it$ t! s'&mit !siti!" aers ?#erei" t#e$ are s'!se t! atta6# a%% t#e !6'me"ts t#at ?!'% r!8e t#eir 6%aim i" 6ase it &e e6ie t#at "! #eari" s#!'% &e 6!"'6te !r ?as "e6essar$. (easoning# ursuant to 9ection ;% 3ule F o the 7e$ 3ules o rocedure o the 7L3C% the labor arbiter has the authority to determine $hether or not there is a necessity to conduct ormal hearings in cases brought beore him or ad+udication. &t is entirely $ithin the authority o the labor arbiter to decide a labor case beore him% based on the position papers and supporting documents o the parties% $ithout a trial or ormal hearing. !he order o LA !umanong granting the petitioner
Va%ia! 8s. )A 9R N!. 14::21 7'%$ 30 2004 FA)TS/ etitioner Faliao $as appointed by pri'ate respondent 4est 7egros College (47C) as 9tudent Aairs 6ice (9A6) irector% $ith a starting salary o 2%// per month. 9ubseuently% he $as assigned as Acting irector% Alumni Aairs 6ice. -e $as transerred to sta position and designated as 3ecords Chie at the 3egistrar
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summary o tardiness and absences report% $hich sho$ed him to ha'e been absent or late or $or rom a minimum o se'en to ma#imum o ; minutes or the period March to 6ctober 51% 11 and to ha'e reported late almost e'ery day or the period 7o'ember to ecember 11. Copies o his tardinessPabsences reports $ere urnished petitioner% along $ith memoranda reuiring him to e#plain but his e#planations $ere either unacceptable or unsatisactory. 9ubseuently% reports also sho$ed that he did not change his habits resulting in tardiness and absences. -e $as e'en caught one time manipulating the bundy cloc% thus necessitating another memorandum to him asing him to e#plain his dishonest actuations in accomplishing the daily attendance logboo and in using the bundy cloc. -e recei'ed a suspension order $ithout pay or iteen days because o dishonesty in reporting his actual attendance. -e reported bac to oice ater ser'ing the suspension but $as another ad'erse report on tardiness and absences $as made against the petitioner% prompting 47C to send him another memorandum $ith an attached tardiness and absences report. etitioner sent a letter o appeal and e#plained his side to the ne$ college president $ho ga'e petitioner another chance. !he petitioner $as appointed as &normation Assistant eecti'e immediately. -o$e'er% petitioner did not promptly assume his post% prompting the president to call his attention. 9ubseuently% 47C $on a case against the oicial o the union beore the 7L3C. etitioner $as ordered to prepare a media blit" o this 'ictory but the petitioner did not comply $ith the order on the ground that such a press release $ould only $orsen the aggra'ated situation and strained relations bet$een 47C management and the union oicials. 4hen petitioner reported or $or on the irst day o 8anuary 15% he $as relie'ed rom his post and transerred to the College o Liberal Arts as 3ecords *'aluator. 7ot or long% the ean o the Liberal Arts sent a letter to the -uman 3esources Manager complaining about the petitioner
etitioner $as ased to e#plain $ithin 2 hours $hy he should not be terminated as a result o the raid and charged against him or 'iolation o 3A 7o. 2; as amended. etitioner $as dismissed or ailure to ans$er said memorandum. 9ubseuently% he $rote to the president o 47C e#plaining his side and asing or due process. !he petitioner $as notiied through a memorandum about the grant o his reuest and that a hearing $ould be conducted. -e $as then placed under pre'enti'e suspension and an in'estigation committee $as organi"ed to conduct the probe. A notice o hearingPin'estigation $as sent to the petitioner. Ater the in'estigation attended by the petitioner and his counsel% $ith proceedings duly recorded% the in'estigation committee recommended the dismissal o petitioner. A notice o termination $as then sent to petitioner inorming him o his termination rom the ser'ice or serious misconduct and gross and habitual neglect o duty. !he petitioner recei'ed the notice but did not ile a grie'ance concerning the notice o termination. etitioner iled a complaint against 47C or illegal suspension% illegal dismissal bac$ages% salary dierential or salary increases and other beneits granted ater his dismissal as $ell as or moral and e#emplary damages and attorney
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Certiorari under 3ule ; beore the CA but this $as dismissed or lac o merit. etitioner duly iled a Motion or 3econsideration% $hich $as denied by the CA.

ISSUE/ 467 petitioner $as 'alidly dismissed rom employment on the ground o serious misconduct and gross habitual neglect o duties% including habitual tardiness and absenteeism EL,/ G*9 9o irresponsible an employee lie petitioner does not deser'e a place in the $orplace% and it is $ithin the management
and

a penalty or committing an inraction. !hat decision shall be stated on said &rregularity 3eport and $ill be urnished to the employee. Hpon audit o the 6ctober 2% 2//1 ConductorQs 3eport o respondent% !& noted an irregularity. &t disco'ered that respondent declared se'eral sold ticets as returned ticets causing !& to lose an income o eight hundred and ninety pesos. 4hile no irregularity report $as prepared on the 6ctober 2% 2//1 incident% !& ne'ertheless ased respondent to e#plain the discrepancy. &n his letter% respondent said that the erroneous declaration in his 6ctober 2% 2//1 !rip 3eport $as unintentional. -e e#plained that during that dayQs trip% the $indshield o the bus assigned to them $as smashedD and they had to cut short the trip in order to immediately report the matter to the police. As a result o the incident% he got conused in maing the trip report. 6n 7o'ember 2% 2//1% respondent recei'ed a letter terminating his employment eecti'e 7o'ember 2% 2//1. !he dismissal letter alleged that the 6ctober 2% 2//1 irregularity $as an act o raud against the company. !& also cited as basis or respondentQs dismissal the other oenses he allegedly committed since 1. 3espondent iled a Complaint or illegal dismissal% illegal deductions% nonpayment o 15th0month pay% ser'ice incenti'e lea'e% and separation pay. -e denied committing any inraction and alleged that his dismissal $as intended to bust union acti'ities. Moreo'er% he claimed that his dismissal $as eected $ithout due process.

resolution

+i" !( +i"s Tra"s!rt 8s. Sa"tia! ama6 9R N!. 1::20<7'"e 2> 200; Fa6ts/ 3espondent Mamac $as hired as bus conductor o on Mariano !ransit Corporation (M!C) on April 2% 1. 3espondent $as reuired to accomplish a IConductorQs !rip 3eportI and submit it to the company ater each trip. As a bacground% this report indicates the ticet opening and closing or the particular day o duty. Ater submission% the company audits the reports. 6nce an irregularity is disco'ered% the company issues an I&rregularity 3eportI against the employee% indicating the nature and details o the irregularity. !hereater% the concerned employee is ased to e#plain the incident by maing a $ritten statement or counter0aida'it at the bac o the same &rregularity 3eport. Ater considering the e#planation o the employee% the company then maes a determination o $hether to accept the e#planation or impose upon the employee

!& contended that respondent $as legally dismissed ater his commission o a series o misconducts and misdeeds. &t claimed that respondent had 'iolated the trust and conidence reposed upon him by !&. Also% it a'erred that it had obser'ed due process in dismissing respondent and maintained that respondent $as not entitled to his money claims such as ser'ice incenti'e lea'e and 15th0month pay because he $as paid on commission or percentage basis.

Iss'e/ 4hether or not procedural reuirements $ere complied $ith. R'%i"/ ,'e r!6ess '"er t#e La&!r )!e i"8!%8es t?! ase6ts/ (irst s'&sta"ti8e  t#e 8a%i a" a't#!ri*e 6a'ses !( termi"ati!" !( em%!$me"t '"er t#e La&!r )!eC a" se6!" r!6e'ra%  t#e ma""er !( ismissa%.

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N!"-6!m%ia"6e ?it# t#e ,'e Pr!6ess ReJ'ireme"ts 9*C. 2. 9tandards o due processD reuirements o notice. &n all cases o termination o employment% the ollo$ing standards o due process shall be substantially obser'ed: &. F!r termi"ati!" !( em%!$me"t &ase !" 'st 6a'ses as e(i"e i" Arti6%e 2<2 o the Code: (a) A $ritten notice ser'ed on the employee speciying the ground or grounds or termination% and gi'ing said employee reasonable opportunity $ithin $hich to e#plain his side. (b) A hearing or conerence during $hich the employee concerned% $ith the assistance o counsel i he so desires is gi'en opportunity to respond to the charge% present his e'idence% or rebut the e'idence presented against him. (c) A $ritten notice o termination ser'ed on the employee% indicating that upon due consideration o all the circumstances% grounds ha'e been established to +ustiy his termination. &n case o termination% the oregoing notices shall be ser'ed on the employeeQs last no$n address. !o clariy% the ollo$ing should be considered in terminating the ser'ices o employees: (1)!he irst $ritten notice to be ser'ed on the employees should contain the speciic causes or grounds or termination against them% and a directi'e that the employees are gi'en the opportunity to submit their $ritten e#planation $ithin a reasonable period. D,easona'le opportunityD under the 6mnibus 3ules means e'ery ind o assistance that management must accord to the employees to enable them to prepare adeuately or their deense. !his should be construed as a period of at least five 5B6 calendar days from receipt of the notice to gi'e the employees an opportunity to study the accusation against them% consult a union oicial or la$yer% gather data and e'idence% and decide on the deenses they $ill raise against the complaint. Moreo'er% in order to enable the employees to intelligently prepare their e#planation and deenses% the notice should contain a detailed narration o the acts and circumstances that $ill ser'e as basis or the charge against the employees. A general description o the charge $ill not suice. Lastly% the notice should speciically mention $hich company rules% i any% are 'iolated andPor $hich among the grounds under Art. 22 is being charged against the employees.

(2)Ater ser'ing the irst notice% the employers should schedule and conduct a hearing or conerence $herein the employees $ill be gi'en the opportunity to: (1) e#plain and clariy their deenses to the charge against themD (2) present e'idence in support o their deensesD and (5) rebut the e'idence presented against them by the management. uring the hearing or conerence% the employees are gi'en the chance to deend themsel'es personally% $ith the assistance o a representati'e or counsel o their choice. Moreo'er% this conerence or hearing could be used by the parties as an opportunity to come to an amicable settlement. (5)Ater determining that termination o employment is +ustiied% the employers shall ser'e the employees a $ritten notice o termination indicating that: (1) all circumstances in'ol'ing the charge against the employees ha'e been consideredD and (2) grounds ha'e been established to +ustiy the se'erance o their employment. &n the instant case% !& admits that it had ailed to pro'ide respondent $ith a Icharge sheet.I -o$e'er% it maintains that it had substantially complied $ith the rules% claiming that Irespondent $ould not ha'e issued a $ritten e#planation had he not been inormed o the charges against him.I 4e are not con'inced. ,irst% respondent $as not issued a $ritten notice charging him o committing an inraction. !he la$ is clear on the matter. A 'erbal appraisal o the charges against an employee does not comply $ith the irst notice reuirement. &n epsi Cola Bottling Co. '. 7L3C% the Court held that consultations or conerences are not a substitute or the actual obser'ance o notice and hearing. 9econd% the Court obser'ed the irregularity reports against respondent or his other oenses that such contained merely a general description o the charges against him. !he reports did not e'en state a company rule or policy that the employee had allegedly 'iolated. Lie$ise% there is no mention o any o the grounds or termination o employment under Art. 22 o the Labor Code. !hus% !&Qs IstandardI charge sheet is not suicient notice to the employee. !hird% no hearing $as conducted. 3egardless o respondentQs $ritten e#planation% a hearing $as still necessary in order or him to clariy and present e'idence in support o his deense. Moreo'er% respondent made the letter merely to e#plain the circumstances relating to the irregularity. -e $as

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una$are that a dismissal proceeding $as already being eected. 9anction or 7on0compliance $ith ue rocess 3euirements. As stated earlier% ater a inding that petitioners ailed to comply $ith the due process reuirements% the CA a$arded ull bac$ages in a'or o respondent in accordance $ith the doctrine in 9errano '. 7L3C. -o$e'er% the doctrine in 9errano had already been abandoned in Agabon '. 7L3C by ruling that i the dismissal is done $ithout due process% the employer should indemniy the employee $ith nominal damages. !hus% or non0compliance $ith the due process reuirements in the termination o respondentQs employment% petitioner !& is sanctioned to pay respondent the amount o thirty thousand pesos (h5/%///) as damages.

U"i?ie Sa%es Ware#!'se )%'& 8s. NLR) 9R NO. 1403 Fe&. 2> 200< 0t is not the denial of the right to 'e heard 'ut denial of the opportunity to 'e heard that constitutes violation of due process of la# . !he essence o due

process is simply to be heard% or as applied to administrati'e proceedings% a air and reasonable opportunity to e#plain one
Fa6ts/ Amalia . a$ada is an employee o Hni$ide. 9ometime in 1% Hni$ide recei'ed reports rom the other employees regarding some problems in the departments managed by the pri'ate respondent. !hus% on March 1;% 1% Hni$ide% through 9tore Manager Apduhan% issued a Memorandum addressed to the pri'ate respondent summari"ing the 'arious reported incidents signiying unsatisactory perormance on the latter
$as being shouted at because o her unsatisactory perormance. 6n August 2% 1% Apduhan issued a Memorandum recei'ed on the same day by *dgardo a$ada% the husband o pri'ate respondent% ad'ising the latter o a hearing scheduled on August 12% 1 to be held at the Hni$ide 6ice in Uuirino -igh$ay% and $arning her that ailure to appear shall constitute as $ai'er and the case shall be submitted or decision based on a'ailable papers and e'idence. 3espondent did not attend the hearing and $as terminated. 9he then iled or an illegal dismissal because she constructi'ely dismissed $hich is the reason or her ailure to attend the hearing.

Iss'e/ 4as there constructi'e dismissal= 3espondent argues that since the in'estigation $as conducted ater she $as constructi'ely dismissed. !hereore% according to her% there $as no point to still attend the in'estigation set on August 12% 1. -ence there $as denial o due process. e%/ Case la$ deines constructi'e dismissal as a cessation o $or because continued employment is rendered impossible% unreasonable or unlielyD $hen there is a demotion in ran or diminution in pay or bothD or $hen a clear discrimination% insensibility% or disdain by an employer becomes unbearable to the employee. !he test o constructi'e dismissal is $hether a reasonable person in the employee
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result o Apduhan
ROLAN,O PLA)I,O a" E,9AR,O )ARA9AY Vs. NLR) a" PL,T IN) 9.R. N!. 1<0<<< Set. 1< 200> Fa6ts/ etitioners lacido and Caragay had been employed as cable splicers by L!. L! had been recei'ing reports o thet and destruction o its cables. L! inspector and security guard% responding to a report that cables $ere being stripped and burned in one o the residences% proceeded to the said area $here they sa$ petitioners< ser'ice 'ehicle pared inront o the house. etitioners $ere seen stripping and burning cables inside the compound o the house $hich turned out to belong to Caragay
etitioners< counsel later reiterated the reuest or a setting o a hearing and an audiotape o the 8une 2;% 2//1 hearing% but the same $as denied. A third time reuest or another hearing $as lie$ise denied. L! sent notices o termination to petitioners% prompting them to ile a complaint or illegal dismissal beore the Labor Arbiter. Labor Arbiter held that petitioners $ere illegally dismissed $hich $as re'ersed by the 7L3C. ettitioners appealed to CA $hich airmed the 7L3C ecision holding that since the cables bore the IL!I maring% they $ere presumed to be o$ned by L!% hence% the burden o e'idence shited on petitioners to pro'e that they $ere no longer o$ned by L!% but they ailed.

Iss'e/ 467 petitioners $ere denied due process and $ere illegally dismissed 7o% petitioners $ere not denied due R'%i"/ process. !hey $ere legally dismissed. Article 2 o the Labor Code pro'ides: (b) 9ub+ect to the constitutional right o $orers to security o tenure and their right to be protected against dismissal e#cept or a +ust or authori"ed cause and $ithout pre+udice to the reuirement o notice under Article 25 o this Code% the employer shall urnish the $orers $hose employment is sought to be terminated a $ritten notice containing a statement o the causes or termination and shall aord the latter ample opportunity to be heard and deend himsel $ith the assistance o his representati'e i he so desires in accordance $ith company rules and regulations promulgated pursuant to the guidelines set by the epartment o Labor and *mployment. Any decision taen by the employer shall be $ithout pre+udice to the right o the $orer to contest the 'alidity or legality o his dismissal by iling a complaint $ith the regional branch o the 7ational Labor 3elations Commission. !he burden o pro'ing that the termination $as or a 'alid or authori"ed cause shall rest on the employer. And the 6mnibus 3ules &mplementing the Labor Code re8uire a hearing and conference during $hich the employee concerned is gi'en the opportunity to respond to the charge% and present his e'idence or rebut the e'idence presented against him. !hus 3ule &% 9ection 2(d)% pro'ides:

Se6ti!" 2. $ecurity of Tenure.  (d) &n all cases o termination o employment% the ollo$ing standards o due process shall be substantially obser'ed:

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,or termination o employment based on +ust causes as deined in Article 22 o the Labor Code: (i) A $ritten notice ser'ed on the employee speciying the ground or grounds or termination% and gi'ing said employee reasonable opportunity $ithin $hich to e#plain his side. (ii) A hearing or conerence during $hich the employee concerned% $ith the assistance o counsel i he so desires% is gi'en opportunity to respond to the charge% present his e'idence or rebut the e'idence presented against him. (iii) A $ritten notice o termination ser'ed on the employee% indicating that upon due consideration o all the circumstances% grounds ha'e been established to +ustiy his termination. !he abo'euoted pro'ision o 9ection 2(d) should not 'e ta!en to mean% ho$e'er% that holding an actual hearing or conference is a condition sine 8ua non for compliance #ith the due process re8uirement in case of termination of employment .

,or the test or the air procedure guaranteed under the abo'e0uoted Article 2(b) o the Labor Code is not $hether there has been a ormal pretermination conrontation bet$een the employer and the employee. !he Dample opportunity to 'e heardD standard is neither synonymous nor similar to a formal hearing. !o conine the employee
heard to a solitary orm narro$s do$n that right.

T#e essence of due process is sim%$ a" !!rt'"it$ t! &e #ear !r as a%ie t! ami"istrati8e r!6eei"s a" !!rt'"it$ t! e5%ai" !"eMs sie !r a" !!rt'"it$ t! see a re6!"sierati!" !( t#e a6ti!" !r r'%i" 6!m%ai"e !(. 4hat the la$ prohibits is absolute absence o the opportunity to be heard% hence% a party cannot eign denial o due process $here he had been aorded the opportunity to present his side. A ormal or trial type hearing is not at all times and in all instances essential to due process% the reuirements o $hich are satisied $here the parties are aorded air and reasonable opportunity to e#plain their side o the contro'ersy. &n the present case% petitioners $ere% among other things% gi'en se'eral $ritten in'itations to submit themsel'es to L!
9C ound that as the cables bore the IL!I maring% the presumption is that L! o$ned them. !he burden o e'idence thus lay on petitioners to pro'e that they acuired the cables la$ully but this they ailed to discharge.

TE)NOL EI9T PILIPPINES )ORPORATION 8s. NLR)  ,ENNIS AULAR 9.R. N!. 1<;:0 Ari% 13 2010 ,'e Pr!6essC termi"ati!". !he records belie Amular;
OS)AR P. 9AR)IA a" ALE V. ORALES 8s. ALAYAN INSURAN)E )O. IN). a" NLR). 9.R. NO. 1:033> ar6# 14 200< BA)OLO,-TALISAY REALTY AN, ,EVELOPENT )ORPORATION 8s. ROEO ,ELA )RU= <; S)RA 304 200> 9.R. N!. 1;>:3 Ari% 30 200> FA)TS/ 3omeo dela Cru" (respondent) is an employee o Bacolod0!alisay 3ealty e'elopment Corporation (Bacolod0!alisay) as an o'erseer. -e $as suspended or 5/ days or payroll paddling% selling canepoints $ithout the no$ledge and consent o management and misappropriating the proceeds thereo% and renting out tractor or use in another arm. Ater 5/ days% he recei'ed a letter inorming him that he $as dismissed rom his $or. 3espondent dela Cru" and Bacolod0!alisay had a conrontation beore the barangay council but they did not reach any settlement. A case or illegal dismissal $as iled by dela Cru"% and it $as dismissed by the Labor Arbiter as $ell as the 7L3C. 6n the other hand% the Court o Appeals re'ersed the decision o the 7L3C inding that the Bacolor0alisay did not comply $ith the guidelines or the dismissal o an employee.

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ISSUE/ 4hether or not petitioner% Bacolod0!alisay obser'ed due process in dismissing 3omeo dela Cru" EL,/ !he Court o Appeals correctly held though that Bacolod0!alisay did not comply $ith the proper procedure in dismissing respondent. &n other $ords% Bacolod0!alisay ailed to aord dela Cru" due process by ailing to comply $ith the t$in notice reuirement in dismissing him% 'i": 1) a irst notice to apprise him o his ault% and 2) a second notice to him that his employment is being terminated. !he letter dated 8une 5% 1 sent to dela Cru" $as a letter o suspension. &t did not comply $ith the reuired irst notice% the purpose o $hich is to apprise the employee o the cause or termination and to gi'e him reasonable opportunity to e#plain his side. &n ine% $hile the dismissal o dela Cru" $as or a +ust cause% the procedure in eecting the same $as not obser'ed. ,UE PRO)ESS. !he Court o Appeals correctly held that petitioners did not comply $ith the proper procedure in dismissing respondent. &n other $ords% petitioners ailed to aord respondent due process by ailing to comply $ith the t$in notice reuirement in dismissing him% vi@: 5 1) a irst notice to apprise him o his ault% and (2) a second notice to him that his employment is being terminated. !he letter dated 8une 5% 1 sent to respondent $as a letter o suspension. &t did not comply $ith the reuired irst notice% the purpose o $hich is to apprise the employee o the cause or termination and to gi'e him rasonable opportunity to e#plain his side. !he conrontation beore the 'arangay council did not constitute the irst notice – to gi'e the employee ample opportunity to be heard $ith the assistance o counsel% i he so desires. -earings beore the'arangay council do not aord the employee ample opportunity to be represented by counsel i he so desires because 9ection 1; o the Local >o'ernment Code mandates that ?JiKn all !atarungang pam'arangay proceedings% the parties must appear in person $ithout the assistance o counsel or his representati'es% e#cept or minors and incompetents $ho may be assisted by their ne#t0 o0in $ho are not la$yers.@ !he reuirement o gi'ing respondent the irst notice not ha'ing been complied $ith% discussions o $hether the second notice $as complied $ith is rendered unnecessary. &acolodTalisay (ealty and Development *orp., et al. vs. (omeo Dela *ru: 9.R. N!. 1;>:3 Ari% 30 200>.

LYNVIL FISIN9 ENTERPRISES IN). a"@!r ROSEN,O S. ,E BOR7A 8s. AN,RES 9. ARIOLA 7ESSIE ,. AL)OVEN,AS 7IY B. )ALINAO AN, LEOPOL,O 9. SEBULLEN 9.R. N!. 1<1>;4 Fe&r'ar$ 1 2012 Fa6ts/ etitioner Lyn'il ,ishing *nterprises% &nc. (Lyn'il) is engaged in deep0sea ishing. 3espondents< ser'ices $ere engaged in 'arious capacities: Andres >. Ariola% captainD 8essie . Alco'endas% chie mateD 8immy B. Calinao% chie engineerD &smael >. 7ubla% cooD *lorde BaYe"% oilerD and Leopoldo >. 9ebullen% bodegero. 6n Aug. 1% 1% Lyn'il recei'ed a report rom 3amonito Clarido% one o its employees% that on 8uly 51% 1% he $itnessed that $hile on board the company 'essel Analyn F&&&% respondents conspired $ith one another and stole eight tubs o ?pampano@ and ?tangigue@ ish and deli'ered them to another 'essel. etitioner iled a criminal complaint against respondents beore the oice o the City rosecutor o Malabon City $hich ound probable cause or indictment o respondents or the crime o ualiied thet. 3elying on the inding and 7asipit Lumber Company '. 7L3C% 2; hil. 5 (1)% Lyn'il asserted there $as suicient basis or 'alid termination o employment o respondents based on serious misconduct andPor loss o trust and conidence.

Iss'es/ 1. 4hether a inding o the city prosecutor o probable cause to indict employees o ualiied thet is suicient basis or 'alid termination or serious misconduct andPor loss o trust or conidence= 2. 4hether the employees $ere 'alidly terminated=

R'%i"/ 6n the irst issue% the 9upreme Court ruled in the negati'e. 4e ruled that proo beyond reasonable doubt o an employee
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6n the second uestion% the Court stated that nonetheless% e'en $ithout reliance on the prosecutor
&n the conte#t o the acts that: (1) the respondents $ere doing tass necessarily to Lyn'il
6. B're" !( Pr!!( )ases/ ANTLE TRA,IN9 SERVI)ES IN).@OR BOBBY ,EL ROSARIO 8s. NLR) a" PABLO S. A,RIA9A 9.R. N!. 1::;0 7'%$ 2< 200> Fa6ts: etitioner company% Mantle !rading 9er'ices% &nc.% is engaged in the ishing business. Madriaga $as hired by petitioner company as a IbatilyoI or ish hauler. 9ubseuently% he became a ItagapunoI &t $as reported that Madriaga recei'ed money to put more ish in Alaro
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hand% alleged that Madriaga abandoned his $or $hen he $as about to be in'estigated or the reports. etitioner company alleged% among others% that Madriaga $as a seasonal employee and he $as not dismissed. !he Labor Arbiter ruled that Madriaga $as a regular. !he Labor Arbiter also aulted the petitioner company in ailing to comply $ith the reuirement o notice beore dismissing an employee. !he 7L3C airmed the Labor Arbiter
Iss'e/ 4as pri'ate respondent illegally dismissed= R'%i"/ Ges. &t is settled that to eect a 'alid dismissal% the la$ reuires that a) there be +ust and 'alid cause as pro'ided under Article 22 o the Labor CodeD and b) the employee be aorded an opportunity to be heard and to deend himsel. !he t$o0notice reuirement must be complied $ith% to $it: a) a $ritten notice containing a statement o the cause or the termination to aord the employee ample opportunity to be heard and deend himsel $ith the assistance o his representati'e% i he so desiresD and b) i the employer decides to terminate the ser'ices o the employee% the employer must notiy him in $riting o the decision to dismiss him% stating clearly the reason thereore.

!he case o 7ga'on v. N+,% % et al. applies to the case at bar. &n Agabon% the dismissal $as ound by the Court to be based on a +ust cause because the employee abandoned his $or. But it also ound that the employer did not ollo$ the notice reuirement demanded by due process. &t ruled that this 'iolation o due process on the part o the employer did not nulliy the dismissal% or render it illegal% or ineectual. 7onetheless% the employer $as ordered to indemniy the employee or the 'iolation o his right to due process. A dismissal or +ust cause under Article 22 implies that the employee concerned has committed% or is guilty o% some 'iolation against the employer% i.e. the employee has committed some serious misconduct% is guilty o some raud against the employer% or% as in Agabon% he has neglected his duties. !hus% it can be said that the employee himsel initiated the dismissal process. 9ince in the case o 8AA% the employee $as terminated or authori"ed causes as the employer $as suering rom serious business losses% the Court i#ed the indemnity at a higher amount o ;/%///.//. &n the case at bar% the cause or termination $as abandonment% thus it is due to the employee
PIL. VETERANS BAN+ 8s. NLR) a" BENI9NO ARTINE= 9.R. N!. 1<<<<2 ar6# 30 2010 Fa6ts/ 3espondent Benigno Martine" $as the umaguete City branch manager o the hilippine Feterans Ban rom 9eptember 1% 2//1 upto 8anuary % 2//5% the date respondent tendered his resignation because ?it J$asK so e#pensi'e or JhimK to be staying a$ay rom JhisK amily%@ $hich circumstance $as brought about by his transer to the Maati head oice the ban since 6ctober 2//2. 3espondent claimed that he $as transerred to the

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Maati branch oice ater he earned the ire o the ban
the

respondent

constructi'ely

R'%i"/ Ges% the transer o the umaguete Branch Manager o Feterans Ban to Maati constituted constructi'e dismissal. !he test o constructi'e dismissal is $hether a reasonable person in the employeeQs position $ould ha'e elt compelled to gi'e up his position under the circumstances. Based on the actual considerations in the present case% $e hold that the hostile and unreasonable $oring

conditions o the petitioner +ustiied the inding o the 7L3C and the CA that respondent $as constructi'ely dismissed. &n constructi'e dismissal cases% the employer has the burden o pro'ing that its conduct and action or the transer o an employee are or 'alid and legitimate grounds such as genuine business necessity. articularly% or a transer not to be considered a constructi'e dismissal% the employer must be able to sho$ that such transer is not unreasonable% incon'enient% or pre+udicial to the employee. ,ailure o the employer to o'ercome this burden o proo taints the employeeQs transer as a constructi'e dismissal. &n the present case% the petitioner ailed to discharge this burden. !he combination o the harsh actions o the petitioner rendered the employment condition o respondent hostile and unbearable. ,irst% the petitioner ailed to sho$ any urgency or genuine business necessity to transer the respondent to the Maati -ead 6ice. 9econd% the respondentQs transer rom umaguete to Maati City is clearly unreasonable% incon'enient and oppressi'e% since the respondent and his amily are residents o umaguete City. !hird% the petitioner ailed to present any 'alid reason $hy it had to reuire the respondent to go to Maati -ead 6ice to undergo branch head training $hen it could ha'e +ust easily reuired the latter to undertae the same training in the F&9M&7 area. ,inally% there $as nothing in the order o transer as to $hat position the respondent $ould occupy ater his trainingD the respondent $as eecti'ely placed in a IloatingI status.

ANILA ELE)TRI) )OPANY 8s. a. L'isa Be%tra" 9.R. N!. 1;4;;4 7a"'ar$ 30 2012 Fa6ts/ Beltran $as employed by M*3ALC6 and at the time material to this case% she $as holding the position o 9enior Branch Cler at M*3ALC6
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Beltran% ho$e'er% $as only able to remit Changarcia% the Administrati'e 9uper'isor o M*3ALC6
e#cusable or Beltran to commit lapses in her $or due to serious amily diiculties. Hpon appeal% the 7L3C re'ersed the Labor Arbiter
Iss'e/ 4hether or not Beltran dismissal is 'alid inding that she is guilty o $ithholding company unds. 3uling: 9upreme Court support the CA
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ailure to immediately turn o'er Changross negligence # # # is the $ant o e'en slight care% acting or omitting to act in a situation $here there is duty to act% not inad'ertently but $illully and intentionally% $ith a conscious indierence to conseuences insoar as other persons may be aected.@ -abitual neglect% on the other hand% connotes repeated ailure to perorm one
. Pri"6i%e !( ,is6reti!"ar$ 7'sti6e ?4hene'er a penalty less puniti'e $ould suice% $hate'er missteps may be committed by labor ought not to be 'isited $ith a penalty so se'ere.@ Fa6t!rs t#at s#!'% &e tae" i"t! 6!"sierati!" i" etermi"i" a e"a%t$ s#!rt !( termi"ati!" !( em%!$me"t/ 1. seriousness o the oense 2. pre'ious record o the employee 5. length o ser'ice . pre'ious oenses )ase/ A%mira 8s. BF 9!!ri6# < S)RA 1;0 A 1 case% that the strie should ha'e been 'ie$ed $ith a little less disappro'al and e'en i declared illegal% need not ha'e been attended $ith such a drastic conseuence as termination o employment relationship. !his is so because% according to the Court% o the security o tenure pro'ision under the Constitution. !he Court stated% thus: &t $ould imply at the 'ery least that $here a penalty less puniti'e $ould suice% $hate'er missteps may be committed by labor ought not to be 'isited $ith a conseuence so se'ere. &t is not only because o the la$Qs concern or the $oringman% !here is% in addition% his amily to consider. Hnemployment brings untold hardships and sorro$s on those dependent on the $age0earner. !he misery and pain attendant on the loss o +obs then could be a'oided i there be acceptance o the 'ie$ that under all the circumstances o this case% petitioners should not be depri'ed o their means o li'elihood. 7or is this to condone $hat had been done by them. ,or all this $hile% since pri'ate respondent

considered them separated rom the ser'ice% they had not been paid. ,rom the strictly +uridical standpoint% it cannot be too strongly stressed% to ollo$ a'is in his masterly $or iscretionary 8ustice% that $here a decision may be made to rest on inormed +udgment rather than rigid rules% all the euities o the case must be accorded their due $eight. ,inally% labor la$ determinations% to uote rom Bultmann% should be not only secundum rationem but also secundum caritatem.

V a"'(a6t'ri" I"6. 8s. NLR) 7a". 1> 2000 FA)TS/ 9ince 7o'ember ;% 1; >amido $as employed in F- Manuacturing) cylinders. -e ser'ed as a uality control inspector $ith the principal duty o inspecting L> cylinders or any possible deects. -is ser'ice $ith the company $as abruptly interrupted on ,ebruary 1% 1;% $hen he $as ser'ed a notice o termination o his employment. -is dismissal stemmed rom an incident on ,ebruary 1/% 1; $herein F-amido sleeping on the +ob. 6n that same day% pri'ate respondent $as ased through a $ritten notice rom the petitioner
he $as terminated. ,eeling aggrie'ed% he iled a complaint or illegal dismissal% praying or reinstatement to his position as uality control inspector. Labor Arbiter declared that >amido
ISSUE/ 467 >amidoamido% he $as not sleeping on the +ob but $as merely idle% $aiting or the ne#t cylinder to be checed. &n 'ie$ o the gra'ity o the penalty o separation% as pro'ided by the Company 3ules and 3egulation.% in

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termination disputes% the burden o proo is al$ays on the employer to pro'e that the dismissal $as or a +ust and 'alid cause. 4hat is at stae here is not only the +ob itsel o the employee but also his regular income thererom $hich is the means o li'elihood o his amily. A thorough re'ie$ o the record discloses that% contrary to the indings o the Labor Arbiter% petitioner
7either $as it sho$n that pri'ate respondent
,is!siti!" petition is hereby &9M&99*  and the challenged ecision and 6rder o public respondent 7L3C are A,,&3M*.

TE)NOLO9I)AL INSTITUTE OF TE PILIPPINES TEA)ERS a" EPLOYEES OR9ANI=ATION TIPTEO a" its mem&er A9,ALENA T. SALON 8s. TE ON. )OURT OF APPEALS a" TE)NOLO9I)AL INSTITUTE OF TE PILIPPINES 9.R. N!. 1<;03 7'"e 2: 200> Fa6ts/ etitioner Magdalena !. 9alon ()alon) $as a College &nstructor 5 o the -umanities and 9ocial 9cience epartment (-))&) o respondent !echnological &nstitute o the hilippines ( T01) and a member o the !echnological &nstitute o the hilippines !eachers and *mployees 6rgani"ation (T01TEO). 9ometime in year 2///% the !& recei'ed complaints rom students claiming that 9alon $as collecting 1.;/ per page or the test paper used in the sub+ect she $as teaching at the time. 9he reportedly ased her students not to $rite on the test papersD these test papers $ere not returned to the students ater the test. &n addition% a complaint $as iled against her or anomalously changing the grade o a particular student $ho $as at the same time a son o a co0aculty member rom ;./ (ailed) to ./ (dropped). 9alon ans$ered that she only collected /.;/ per page to reimburse hersel rom personal e#penses. ,urther% she admitted o ha'ing changed the grade in order to 'indicate the student rom the $rath o his ather. 9alon belie'ed that a ?dropped@ grade is better than a ?ailed@ mar. !here $ere enumerated !& Memoranda in the case% geared to$ards a'oidance o unduly burdening the students rom unreasonable inances. But $hat is really determinati'e is !& Memorandum 7o. 0% $hich reuires a prior permission rom the proper school authority should the teacher directly sell hisPher e#amination papers to students% usually or reimbursement% pro'ided% the cost shall be $ithin the rate prescribed by the school. !he Foluntary Arbitrator ruled in a'or o 9alon. 6n appeal under 3ule 5% said decision $as airmed by CA. -o$e'er% on motion or reconsideration% CA re'ersed itsel% ruling in a'or o !& and against 9alon% but granted separation pay. Iss'e/ 1. 4hether or not 9alon is guilty o 'iolating !&
papers by 9alon to her students $as $ithin the

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prescribed parameters o the school. -o$e'er% it cannot be denied that 9alon did not irst obtain the prior permission o the proper school authority% a condition precedent reuired by !& Memorandum no. 0. Clearly% she transgressed the school regulation. On grade tampering: &t is a 'iolation against the

Manual o 3egulation or ri'ate 9chools $hose 9ection  pro'ides: 9ec. . Basis or >rading. !he inal grade or rating gi'en to a pupil or student in a sub+ect should be based on his scholastic record. Any addition or diminution to the grade # # # shall not be allo$ed. !he present 'iolation in'ol'es elements o alsiication and dishonesty. no$ing ully $hat Manalo deser'ed% 9alon ga'e him a grade o ./ instead o a ailing grade. &n the process% she changed – in short% alsiied – her o$n records by changing the submitted record and the supporting documents. Fie$ed in any light% this is 9erious Misconduct under Article 22(a) o the Labor Code% and a +ust cause or termination o employment. On separation pay: CA erred on this matter. !he 'iolation constituted serious misconduct or a cause relating to the employee
PILIPPINE LON9 ,ISTAN)E TELEPONE )OPANY 8s. 7OEY B. TEVES 9.R. N!. 14311 N!8em&er 1 2010 Fa6ts/ 3espondent $as employed by petitioner hilippine Long istance !elephone Company in 11 as Cler && until his termination rom ser'ice on 8une 1% 12. etitioner terminated respondent through an &nter06ice Memorandum dated May 2% 12 on account o his three (5) unauthori"ed lea'es o absence committed $ithin three (5) years in 'iolation o petitioner
go on an e#tended lea'e. Hpon his reporting or $or% he $rote petitioner a letter conirming his lea'e o absence $ithout pay or that period and stating the reasons thereo% $ith his $ieQs medical certiicate attached. issatisied% petitioner reuired respondent to submit urther e#planation $hich the latter did reiterating his pre'ious e#planation. -o$e'er% it ound respondent
Iss'e/ 4hether or not there is suicient ground or the termination o respondent. e%/ 4e ind that respondentQs termination or committing three unauthori"ed absences $ithin a three0year period had no basisD thus% there $as no 'alid cause or respondentQs dismissal.

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*'en assuming that respondentQs absenteeism constitutes $illul disobedience% such oense does not $arrant respondentQs dismissal. 7ot e'ery case o insubordination or $illul disobedience by an employee reasonably deser'es the penalty o dismissal. !here must be a reasonable proportionality bet$een the oense and the penalty. etitionerQs claim that the alleged pre'ious inractions may be used as supporting +ustiication to a subseuent similar oense% $hich $ould merit dismissal% inds no application in this case. 3espondentQs absence rom August 25 to 9eptember 5% 1/ $as +ustiied and not unauthori"ed as there $as prior notice. -is absence rom May 2 to 8une 12% 11% although ound to be unauthori"ed% $as not at all un+ustiied. !hus% his absence during the period rom ,ebruary 11 to 1% 11% being the only unauthori"ed and un+ustiied absence and his second unauthori"ed absence% should not merit the penalty o dismissal. 4hile management has the prerogati'e to discipline its employees and to impose appropriate penalties on erring $orers% pursuant to company rules and regulations% ho$e'er% such management prerogati'es must be e#ercised in good aith or the ad'ancement o the employer
ANILA ELE)TRI) )OPANY 8s. a. L'isa Be%tra" 9.R. N!. 1;4;;4 7a"'ar$ 30 2012 B. 7'st )a'ses (!r Termi"ati!" !( Em%!$me"t Art. 2<2 L)P \8H9! CAH9* 0 9eparation pay% in lieu o reinstatement% shall include the amount eui'alent at least to one (1) month salary or to one (1) month salary or e'ery year o ser'ice% $hiche'er is higher% a raction o at least si# () months being considered as one (1) $hole year including regular allo$ances. & not regular% not included. \AH!-63&O* CAH9* – 9eparation pay is as ollo$s: \&n case o termination due to the installation o labor0 sa'ing de'ices or redundancy% the $orer aected thereby shall be entitled to a separation pay eui'alent to at least one (1) month pay or to at least one (1) month pay or e'ery year o ser'ice% $hiche'er is higher. \&n case o retrenchment to pre'ent losses and in cases o closures or cessation o operations o establishment or undertaing not due to serious business losses or inancial re'erses% the separation pay shall be eui'alent to one (1) month pay or at least one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least si# () months shall be considered one (1) $hole year. \&n cases o closures or cessation o operations o establishment or undertaing due to serious business losses or inancial re'erses% there shall be no separation pay.

F!'r 6!"te5ts !( searati!" a$/ 1. As employer
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A3!&CL* 22. !ermination by employer. R An employer may terminate an employment or any o the ollo$ing +ust causes: (a) 9erious misconduct or $illul disobedience by the employee o the la$ul orders o his employer or representati'e in connection $ith his $orD (b) >ross and habitual neglect by the employee o his dutiesD (c) ,raud or $illul breach by the employee o the trust reposed in him by his employer or duly authori"ed representati'eD (d) Commission o a crime or oense by the employee against the person o his employer or any immediate member o his amily or his duly authori"ed representati'eD and (e) 6ther causes analogous to the oregoing.

a. seri!'s mis6!"'6t &n order to constitute a ?+ust cause@ or dismissal% ho$e'er% the act complained o must be related to the perormance o the duties o the employee such as $ould sho$ him to be thereby unit to continue $oring or the employer. ReJ'isites/ 1. it must be serious and not minor 2. it must be $or0related or relate to the perormance o the employeeross negligence a $ant or absence o or ailure to e#ercise e'en the slightest care or diligence% or the entire absence o care as to amount to a recless disregard o the saety o the person or property. &t e'inces a thoughtless disregard o conseuences $ithout e#erting any eort to a'oid them. &t means an absence o diligence $hich an ordinary man $ould use in his o$n aairs. -abitual reers to a repetition o similar acts. -abitual neglect% on the other hand% implies repeated ailure to

perorm one
. (ra' &t is generic term embracing all multiarious means $hich human ingenuity can de'ice% and $hich are resorted to by one indi'idual to secure ad'antage o'er another by alse suggestions or by suppression o truth and includes all surprise% tric% cunning% dissembling ad any unair $ay by $hich another is cheated. Any act or omission or concealment $hich in'ol'es a breach o legal duty% trust and conidence +ustly reposed and is in+urious to another. 3euisites: 1. committed against the employer or his representati'e 2. in connection $ith the employee
e. ?i%%('% &rea6# &$ t#e em%!$ee !( t#e tr'st re!se i" #im &$ #is em%!$er !r '%$ a't#!ri*e rerese"tati8e/ &t is $illul $hen it is done intentionally% no$ingly% deliberately $ithout +ustiiable e#cuse as distinguished rom an act done carelessly% thoughtlessly% heedlessly and inad'ertently. (e6uisites#

1. breach must be $or0related 2. position must be impressed $ith trust and conidence such as positions ha'ing the custody o unds% money or other company property

9'ie%i"es (!r t#e a%i6ati!" !( t#e ,!6tri"e !( L!ss !( )!"(ie"6e/ 1. loss o conidence $hich should not be simulatedD 2. it should not be used as subteruge or causes $hich are improper% illegal or un+ustiiedD 5. it should not be arbitrarily asserted in the ace o o'er$helming e'idence to the contraryD . it must be genuine% not a mere aterthought to +ustiy earlier action taen in bad aithD ;. the employee in'ol'ed holds a position o trust and conidence Moreo'er% loss o conidence should ideally apply to positions o trust and conidence% such as: 1. those in'ol'ing employees occupying positions o trust and conidence lie managerial or super'isory employees% or 2. to those situation $here the employee is routinely charged $ith the care and custody o the

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employer
(. 6!mmissi!" !( 6rime !r !((e"se &$ t#e em%!$ee aai"st - t#e ers!" !( #is em%!$er !r 0 his duly authori"ed representati'e or 0 any immediate member o his amily Con'iction is not necessary here% mere substantial e'idence is reuired. 7o need or a case. A mere commission o an oense against the employer $ill +ustiy termination. . !t#er a"a%!!'s 6a'ses 0 6ther analogous causes e.g. abandonment% se#ual harassment% gross ineiciency or poor perormanceD drug use or abuse (3A 1;)D attitude problemD conlict o interest% lac o common sense A&a"!"me"t 0 analogous to gross and habitual neglect o duty. &t reuires deliberate% un+ustiied reusal o the employee to resume his employment



T?! e%eme"ts m'st &e satis(ie/ 1. ailure to report or $or or absence $ithout any 'alid or +ustiiable reason 2. a clear intention to se'er the *30** relationship0 must be e'inced by o'er acts Se5'a% arassme"t 0 analogous to serious misconduct 0 the gra'amen o the oense in se#ual harassment is not the 'iolation o the employee


9r!ss i"e((i6ie"6$ 0 analogous to serious misconduct 0 ailure to obser'e pescribed standards o $or to ulill reasonable $or assignments



)!"(%i6t !( i"terest !r !!r er(!rma"6e 0 analogous to gross neglect or both in'ol'e speciic act or omissions on the part o the employees resulting in damage to the employer or his business. &t reers to ailure to obser'e prescribed standards o $or% or to ulill reasonable standard o $or due to ineiciency. 0 poor perormance is eui'alent to ineiciency and incompetence in the perormance o oicial duties. An unsatisactory rating can be a +ust cause

or dismissal only i it amounts to gross and habitual neglect o duties.

,r' 'se !r a&'se 0analogous to serious misconduct Re'&%i6 A6t >1: ARTI)LE V romotion o a 7ational rug0,ree 4orplace rogram $ith the participation o ri'ate and Labor 9ectors and the epartment o Labor and *mployment.



9ection  – rug0,ree 4orplace – it is deemed a policy o the 9tate to promote drug0ree $orplaces using a tripartite approach. 4ith the assistance o the Board% the epartment o Labor and *mployment (6L*) shall de'elop% promote and implement a national drug abuse pre'ention program in the $orplace to be adopted by pri'ate companies $ith ten (1/) or more employees. 9uch program shall include the mandatory drating and adoption o company policies against drug use in the $orplace in close consultation and coordination $ith the 6L*% Labor and *mployer organi"ations% human resources de'elopment managers and other such pri'ate sector organi"ations.

Se6ti!" 4< D 9'ie%i"es (!r t#e Nati!"a% ,r' -Free W!r%a6e Pr!ram D !he board and the 6L* shall ormulate the necessary guidelines or the implementation o the national drug0ree $orplace program. !he amount necessary or the implementation o $hich shall be included in the Annual >eneral Appropriations Act. Attit'e r!&%em 0 analogous to breach o trust and conidence 0 An employee $ho cannot get along $ith his co0 employees is detrimental to the company or he can upset and strain the $oring en'ironment.



La6 !( 6!mm!" se"se ,isra6e('% !r imm!ra% 6!"'6t 0 analogous to serious misconduct 09ee also Manual o 3egulations or ri'ate 9chool or !ermination o Academic ersonnel

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

Se6ti!" >4. )a'ses !( Termi"ati" Em%!$me"t0 &n addition to the +ust cause enumerated in the LC% the employment o school personnel% including aculty% may be terminated or any o the ollo$ing causes: a. >ross ineiciency and incompetence in the perormance o his duties such as% but not necessarily limited to% habitual and ine#cusable absences and tardiness rom his classes% $illul abandonment o employment or assignmentD

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b. 7egligence in eeping school or student records% or tampering $ith or alsiication o the sameD c. Con'iction o a crime or an attempt on% or a criminal act against the lie o a school oicial% personnel or student or upon the property or interest o the schoolD d. notoriously undesirableD e. disgraceul or immoral conductD . the sale o ticets or the collection o any contribution in any orm or or any purpose or pro+ect $hatsoe'er% $hether 'oluntary or other$ise% rom pupils% students and school personnel% e#cept membership ees o pupils and students in the 3ed Cross% !he >irl 9couts o the hilippines and the Boy 9couts o the hilippinesD g. &n the e'ent o phasing out% closure or the cessation o the educational program or course o the school itselD andD h. 6ther causes analogous to the oregoing as may be pro'ided or in the regulations prescribed by the 9ecretary or in the school rules or in a collecti'e bargaining agreement. 9ection ; 9uspension. 9uspension o any school may be pre'enti'e or puniti'e. Pre8e"ti8e s'se"si!" not to e#ceed 5/ days maybe imposed on any school personnel pending in'estigation o the charge against him i his continued presence poses a serious and imminent danger to the school% property and to his lie% the lie o his pupils% students o school personnel.

P'"iti8e s'se"si!" is the imposition o the penalty on an erring school personnel ater con'iction or an oense or a misconduct committed. Seri!'s is6!"'6t !r ?i%%('% is!&eie"6e Os6ar 9ar6ia 8s. a%a$a" I"s'ra"6e 9.R.N!. 1:033> ar. 14 200< E'ar! B'#a? 8s. Treas're Is%a" 9.R. N!. 1;311 ar. 2< 200< FA)TS: *duardo Bugha$ (Bugha$) $as employed as production $orer by !reasure &sland &ndustrial (!&&)% respondent. 0*rlito Loberanes (Loberanes)% an employee o !&& $as caught in flagrante delicto by the police oicers $hile in possession o sha'u. 0&n the course o police in'estigation% Loberanes admitted the commission o the crime and implicated petitioner% Bugha$% by stating that part o the money used or buying the illegal drugs $as gi'en by Bugha$% and the illegal drugs purchased $ere or their consumption or the rest o the month.

0!&& sent a memo to Bugha$. !he memo contains the : (1) notice o the 5/0day pre'enti'e suspension (2) An instruction reuiring him to e#plain $ithin 12/ hours $hy no disciplinary action should be imposed against him or his alleged in'ol'ement in illegal drug acti'ities. (5) An instruction reuiring him to appear at the oice o respondentQs legal counsel or the hearing on the matter. 0Bugha$ ailed to appear beore the !&&Qs legal counsel on the scheduled hearing date. 0!&& sent a second letter to petitioner directing him to attend another administrati'e hearing but petitioner once again ailed to sho$ up. 0&n a third letter addressed to Bugha$% !&& terminated the latterQs employment or using illegal drugs $ithin company premises during $oring hours% and or reusal to attend the administrati'e hearing and submit $ritten e#planation on the charges hurled against him. 0!hereater% Bugha$ iled a complaint or illegal dismissal against !&& and its resident% *mmanuel 6ng% beore the Labor Arbiter. -e argues that: 1. -e had been $oring or the respondent or 1; years and he $as 'ery conscientious $ith his +ob. 2. -e $as suspended or 5/ days on the unounded allegation o his co0$orer that he used illegal drugs $ithin company premises. 5. 4hen he reported bac to $or ater the e#piration o his suspension% he $as no longer allo$ed by respondent to enter the $or premises and $as told not to report bac to $or. 0LA/ 3endered a ecision in a'or o Bugha$ based on the : (1) !&& ailed to present substantial e'idence to establish the charge le'eled against the Bugha$. Apart rom LoberanesQs statements on petitionerQs alleged illegal drug use% no other corroborating proo $as oered by respondent to +ustiy petitionerQs dismissal. (2)!&& ailed to comply $ith due process $hen it immediately suspended petitioner and e'entually dismissed him rom employment. Bugha$
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-NLR): Airmed the Labor ArbiterQs ecision. -)A/ 3e'ersed the ecisions o the Labor Arbiter and 7L3C on the grounds o patent misappreciation o e'idence and misapplication o la$. CA ound that Bugha$ $as aorded the opportunity to e#plain and deend himsel rom the accusations against him $hen !!& ga'e him notices o hearing. !he essence o due process in administrati'e proceedings is simply an opportunity to e#plain oneQs side or to see reconsideration o the action or ruling complained o. ue process is not 'iolated $here one is gi'en the opportunity to be heard but he chooses not to e#plain his side ISSUE: 467 Bugha$ $as illegally dimissed. EL,: 7o% but Bugha$ is entitled to nominal damages. A3! 22 pro'ides: An employer may terminate an employment or any o the ollo$ing causes: (a) Seri!'s mis6!"'6t !r ?i%%('% is!&eie"6e &$ t#e em%!$ee !( t#e %a?('% !rers !( #is em%!$er !r rerese"tati8e i" 6!""e6ti!" ?it# #is ?!rC (b) >ross and habitual neglect by the employee o his dutiesD (c) ,raud or $illul breach by the employee o the trust reposed in him by his employer or his duly authori"ed representati'eD (d) Commission o a crime or oense by the employee against the person o his employer or any immediate member o his amily or his duly authori"ed representati'eD and (e) 6ther causes analogous to the oregoing.

)iti&a" 8s. NLR) a" ROSITA TAN PARA9AS 9R N!. 1>302 Fe&. : 200< ;5 9C3A  (2//) !he general prayer o ?other relies@ is applicable only to such other relies $arranted by la$ and acts. Fa6ts/ 3osita !an aragas (aragas) $ored as a iling cler o Citiban% 7.A. (Citiban) or eighteen (1) years. 9he $as terminated by Citiban or serious misconduct% $illul disobedience% gross and habitual neglect o duties and gross ineiciency. aragas iled a complaint or illegal dismissal $hich $as dismissed or lac o merit% inding that the dismissal on the ground o $or ineiciency $as 'alid. !he 7ational Labor 3elations Commission (7L3C) airmed the decision o the Labor Arbiter $ith the modiication that aragas should be paid

separation pay as a orm o euitable relie in 'ie$ o her length o ser'ice $ith Citiban. aragas iled a Motion or artial 3econsideration o the 7L3C 3esolution. 9he no longer challenged her dismissal on the ground o $or ineiciency% but prayed that Citiban be ordered to pay her the ro'ident ,und beneits under its retirement plan or $hich she claimed to be ualiied pursuant to Citiban
ISSUE/ 4hether or not the CA erred in airming the 7L3C
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C@ $as% nor oer any substantiation or including it to be among her actual damages. 9he did not e'en hint ho$ ?ro'ident A Z C@ had a bearing on retirement beneits. !hus% $hile aragas did reer to the ro'ident ,und in her position paper% such reerence $as too 'ague to be a basis or any court or administrati'e body to grant her retirement beneits. aragas +ustiies her ailure to claim or retirement beneits beore the labor arbiter by alleging that it $ould be inconsistent $ith her prayer or reinstatement. aragas% ho$e'er% could ha'e easily claimed such beneits as an alternati'e relie. &n any e'ent% aragas is not entitled to retirement beneits as this Court inds that she $as 'alidly dismissed or serious misconduct and not merely or $or ineiciency.

E,UAR,O . TOA,A SR. 8s. RF )ORPORATION-BA+ERY FLOUR ,IVISION a" 7OSE ARIA )ON)EP)ION III 9.R. N!. 1:32;0 Set. 11 200> Le"t# !( Ser8i6e Although his nearly t$o decades o ser'ice might generally be considered or some orm o inancial assistance to shield him rom the eects o his termination% !omada.3. 7o. 152/% 9eptember 11% 2//) RENO FOO,S IN). a"@!r VI)ENTE +U 8s. Naaaisa" Laas " a"aa?a NL +ATIPUNAN !" &e#a%( !( its mem&er NENITA )APOR 9.R. N!. 1:401: ar6# 1 2010 ,AC!9: etitioner 3*76 ,669 (3*76) is a manuacturer o canned meat products o $hich Ficente hu is the president and is being sued in that capacity. 3espondent 7enita Capor (Capor) $as an employee o 3eno ,oods until her dismissal on 6ctober 2% 1. &t is a standard operating procedure o petitioner0company to sub+ect all its employees to reasonable search o their belongings upon lea'ing the company premises. 6n 6ctober 1% 1% the guard on duty ound si# 3eno canned goods $rapped in nylon leggings inside Capor
atipunan. Hnortunately% 3eno terminated Capor. (7LM) – atipunan iled on behal o Capor a complaint or illegal dismissal and money claims against petitioners. !he complaint prayed that Capor be paid her ull bac$ages as $ell as moral and e#emplary damages. LA ound Capor guilty o serious misconduct $hich is a +ust cause or termination (Art 252 o the Labor Code). he Labor Arbiter ound that thet o company property is tantamount to serious misconductD as such% Capor is not entitled to reinstatement and bac$ages% as $ell as moral and e#emplary damages. Moreo'er% the Labor Arbiter ruled that consistent $ith pre'ailing +urisprudence% an employee $ho commits thet o company property may be 'alidly terminated and conseuently% the said employee is not entitled to separation pay. 6n appeal% 7L3C airmed the Labor Arbiter
ISSUE/ 4hether the grant o inancial assistance to an employee% $ho $as 'alidly dismissed or thet o company property% is correct. EL,/ 76. 9C upheld Labor Arbiter
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time employee to return such airness $ith at least some respect and honesty. !hus% it may be said that betrayal by a long0time employee is more insulting and odious or a air employer. 6n the date that the appellate court issued its ecision% Capor iled a Maniestation inorming the CA o her acuittal in the charge o ualiied thet. 4e held that a criminal con'iction is not necessary to ind +ust cause or employment termination. 6ther$ise stated% an employee
PL,T 8s. INO)EN)IO B. BERBANO 7R. 9.R. N!. 1:1>> N!8. 2; 200> Fa6ts: Berbano $as hired by L! as a Computer Assistant. -o$e'er% he alleged that he also perormed the unctions o a 9pecialist or *49 $ho $as responsible or handling% operations and maintenance o the $hole *49 7et$or handling net$or database% ault clearance% database modiication alarm monitoring% traic routing% trun administration% pass$ord and tari administration and others. Being trained as *49 6MC 9pecialist% complainant claimed that respondent e#pected him to ha'e ?depth o understanding@ in continuous painstaing research and study. !hus% he initiated a study o ?hi0tech *49 9$itching *uipment%@ a part o $hich is the sot$are installation o 'arious subscriber ser'ice eatures and control operation. &t is at this time that complainant tapped his brother0in0 la$
Iss'e/ 4as the dismissal o Berbano $arranted= R'%i"/ 7o. 4ell0settled is the rule that no employee shall be 'alidly dismissed rom employment $ithout the obser'ance o substanti'e and procedural due process. !he minimum standards o due process are

prescribed under Article 2(b) o the Labor Code o the hilippines. !hus% dismissal rom ser'ice o an employee is 'alid i the ollo$ing reuirements are complied $ith: (a) substanti'e due process $hich reuires that the ground or dismissal is one o the +ust or authori"ed causes enumerated in the Labor Code% and (b) procedural due process $hich reuires that the employee be gi'en an opportunity to be heard and deend himsel. &n this case% procedural due process $as ollo$ed by L! $hen it notiied respondent o the complaint against him through an inter0oice memorandum and in another inter0oice memorandum inorming respondent that his act o installing special eatures in his brother0in0la$
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!he 9upreme Court ound that the misconduct o respondent is not o serious nature as to $arrant respondent
PLANTATION BAY RESORT  SPA  EFREN BELARINO 8s. ROEL S. ,UBRI)O et.a% 9.R. N!. 1<221: ,e6. 4 200> Fa6ts/ &n compliance $ith 3A 1; (Comprehensi'e angerous rugs Act)% lantation Bay conducted surprise random drug tests on 122 unsuspecting 'ictims. .errr. . .employees. !he tests $ere done $ith the assistance o 7 96C6 (scene o the crime operations) $ith 2 labs conducting the tests: (1) MA3!*LL drug lab administered the initial tests and (2) -&L. 3H> 9C3**7&7> LAB conducted the conirmatory tests. 3espondents 3omel ubrico% >odrey 7gu+o and 8ulius Fillalor $ere among 21 employees ound positi'e or use o methamphetamine hydrochloride (shabu). &n compliance $ith se'eral memoranda% they submitted their e#planations on the results o the tests% $hich lantation Bay ound unsatisactory hence% they $ere dismissed. Labor Arbiter ound them guilty o serious misconduct and ruled that there $as no illegal dismissal. 7L3C re'ersed saying there $as illegal dismissal and that respondents $ere not really using drugs[ CA airmed 7L3C decision based on e'idence $hich sho$ed a discrepancy bet$een the tests conducted by hil. rug and Martell. lantation

Bay ob+ected to the employees< uestioning the 'eracity o the tests only in the 7L3C Motion or 3econ% an issue not raised during the proceedings. Additionally% they maintain that in terminating the ser'ices o respondents% they relied on the results o the random drug tests undertaen by an accredited and licensed drug testing acility% and i the results turned out to be uestionable or erroneous% they should not be made liable thereor.

Iss'e/ 1. 4hether or not the 7L3C erred in considering the ne$ issue on the 'eracity o the tests conducted. 2. 4hether or not there $as illegal dismissal on the part o lantation Bay. R'%i"/ etition is beret o merit. (a) 7L3C did not err. !echnical rules o procedure are not strictly adhered to in labor cases consistent $ith the Constitutional mandate to aord protection to labor. ?!he 7L3C did not err in considering the issue o the 'eracity o the conirmatory tests e'en i the same $as raised only in respondents< Motion or 3econsideration o its ecision% it being crucial in determining the 'alidity o respondents< dismissal rom their employment. !echnical rules o procedure are not strictly adhered to in labor cases. &n the interest o substantial +ustice% ne$ or additional e'idence may be introduced on appeal beore the 7L3C. 9uch mo'e is proper% pro'ided due process is obser'ed% as $as the case here% by gi'ing the opposing party suicient opportunity to meet and rebut the ne$ or additional e'idence introduced.@ (b)Ges. &llegal dismissal. etition lie$ise ails on the merits. lantation Bay ailed to pro'e that employees used drugs based on the doubtul test results. *#hibit A (7ote that the conirmatory test sho$ed earlier results that the initial test L6L) 7ame

rug !est

Conirmatory !est

3omel ubrico

Hrine sample &ssued on recei'ed on /P2P/ at 5:; /P2P/ at ;:1 p.m. p.m.

>odrey 7gu+o

Hrine sample &ssued on recei'ed on /P2P/ at 5:; /P2P/ at ;:2 p.m. p.m.

8ulius Fillalor

Hrine sample &ssued on recei'ed on /P2P/ at :1; /P2P/ at ;:52 p.m. p.m.

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4here there is no sho$ing o a clear% 'alid and legal cause or termination% the la$ considers the case a matter o illegal dismissal. !he burden is on the employer to pro'e that the termination $as or a 'alid and legal cause. 4-*3*,63*% the etition is *7&*.

WILFRE,O . BARON et.a%. 8s. NLR) a" A9I) SALES IN). rerese"te &$ 7OSE Y. SY 9.R. N!. 1<22>> Fe&. 22 2010 Fa6ts/ !he president and general manager o the M9& ordered an in'entory to be conducted and e'en ordered Baron to be temporarily relie'ed or the audit and the employees $ere instructed (1) to gi'e all the support needed by the audit teamD (2) to surrender all eys and documentsD (5) not to bring out anything belonging to managementD and () to undergo a search beore lea'ing the oice. etitioners% ho$e'er% reused to cooperate in the audit process% and thereater% rerained rom reporting or $or. 7onetheless% the audit $as completed% and an &nternal Audit 3eport $as submitted. According to the audit team% there $ere se'eral irregularities in the operations o M9&. !he accounting system designed by Baron $as generally $ea and compliance to procedures $as not strictly implemented. !he team $as also con'inced that Baron abused his authority and too ad'antage o the la#ity o the system he designed. -ence% M9& decided to terminate their ser'ices. !he petitioners iled a complaint in the 7L3C that they $ere dismissed $himsically and capriciously in a 'ery oppressi'e manner% $ithout 'alid cause and $ithout due process o la$.

Iss'es/ (1) 4ere petitioners 'alidly dismissed on the grounds o gra'e misconduct and loss o conidence= (2) 4ere petitioners accorded their right to due process $hen they $ere terminated rom their employment= R'%i" First Iss'e/ Ges. !he Constitution% statutes and +urisprudence uniormly mandate that no $orer shall be dismissed e#cept or a +ust or 'alid cause pro'ided by la$% and only ater due process is properly obser'ed. !he +ust causes or termination o employment are enumerated in Article 22 o the Labor Code% as amended. ,or there to be a 'alid dismissal based on loss o trust and conidence% the breach o trust must be $illul% meaning it must be done intentionally% no$ingly% and purposely% $ithout +ustiiable e#cuse. !he basic premise or dismissal on the ground o loss o conidence is that the employees concerned hold a position o trust and conidence. &t is the breach o this trust that results in

the employer
Se6!" Iss'e/ Ges. 3ecords sho$ that respondents complied $ith the t$o0notice rule. 6n 'arious dates% t$o J2K separate notices $ere gi'en the employees. &n the irst notice% the acts imputed against them $ere enumerated $ith a call or an in'estigation% $hile the second notice contained M9&
7err$ ai%i 8s. P#i%. B's ra&&it %i"es i"6. @ Nati8ia Nis6e 9.R. N!. 1;20: 7'%$ 2; 2011 An past inractions already penali"ed be still considered in penali"ing an employee $ho again commits another similar inraction= !his is the issue raised by 7ardo in his case. FA)TS/ 7ardo $as a bus conductor in a bus transportation company (3BL&) $ith a salary o ;1/ per trip. &n one o the trips% he $as caught by the bus inspector e#tending a ree ride to a police oicer. 4hen in'estigated and told to e#plain% he said that the police oicer $as on duty and reused to pay the are. ,or this inraction% 7ardo $as suspended or 5/ days and $arned no to repeat the same. But barely a year later he $as again caught e#tending a ree ride to a ormer employee. !his time he said that the employee misrepresented himsel to be a current employee by 'irtue o a company & he presented to him% so he ga'e him a ree ride. 7e'ertheless or such inraction he $as again suspended $ith the same $arning. ,or the third time% ho$e'er% $hile on duty en route rom Manila to angasinan% 7ardo $as again caught

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by the ield inspector e#tending a ree ride to the $ie o a co0dri'er o the bus company $ho did not ha'e a ree pass. 9o% upon order o the inspector% the $ie $as immediately issued a passenger ticet or $hich she paid ;/. 9o 7ardo $as again pre'enti'ely suspended and directed to appear in an administrati'e in'estigation. At the hearing% 7ardo e#plained that he ga'e a ree ride to the $ie because o gratitude to her $ho assisted him in his inancial troubles. -e admitted that $hat he had done $as a gra'e oense and he $as ready to accept $hate'er suspension the company may impose. But this time instead o merely suspending him% the bus company terminated his employment or committing a serious irregularity or the third time. 7ardo uestioned his dismissal as illegal in a complaint iled $ith the 7L3C. -e argued that the penalty o dismissal is grossly disproportionate to the inraction he committed because his act o e#tending a ree ride $as not deliberate and $as done on a $rong assumption that immediate amily members o company employees are entitled to ree rides. -e insisted that his pre'ious t$o oenses o not issuing are ticets to a police oicer and a ormer company employee cannot be used as bases or his termination considering that his actuations or those oenses $ere +ustiied under the circumstances and that he $as already penali"ed or all these past 'iolations. -e said that his last inraction should merit only a 5/0day suspension. And the Labor Arbiter (LA) agreed $ith him. !he LA declared that 7ardo $as illegally dismissed. !he LA opined that his actuations merited a less puniti'e penalty such as suspension or 5/ days $hich he already ser'ed during his pre'enti'e suspension. 9o the LA ordered 7ardo
N!. Nar! ?as a?are t#at t#e i"(ra6ti!" #e 6!mmitte 6!"stit'te a ra8e !((e"se &'t #e sti%% i"siste i" 6!mmitti" t#e same !'t !( ratit'e t! t#e asse"er. !here $as deliberate intent on his part to commit the 'iolation in order to repay a personal debt at the e#pense o the company. -e chose to 'iolate company rules or his beneit $ithout regard to his responsibilities to the company. & not or the inspector $ho disco'ered the incident% the company $ould ha'e been derauded o the transportation are.

7ardo ought to ha'e no$n better than to repeat the same 'iolation as he is presumed to be thoroughly acuainted $ith the prohibitions and restrictions against e#tending ree rides. As a &'s 6!"'6t!r ?#!se 'ties rimari%$ i"6%'e t#e 6!%%e6ti!" !( tra"s!rtati!" (ares ?#i6# is t#e %i(e&%!! !( t#e 6!ma"$ #e s#!'% #a8e e5er6ise t#e reJ'ire i%ie"6e in the perormance thereo. 9o his habitual ailure to e#ercise such diligence is not tri'ial and cannot be taen or granted. Although 7ardo already suered the corresponding penalties or his past misconduct% those inractions are still rele'ant in assessing his liability or the last 'iolation in order to determine the appropriate penalty. !o sustain 7ardo.3. 12;/% 8uly 2% 2/11).

9r!ss a" a&it'a% Ne%e6t )ases/ Tres Re$es 8s. a5imQs Tea !'se 3>< S)RA 2<< FA)TS/ 3espondent Ma#imQs !ea -ouse (hereinater Ma#imQs or bre'ity) had employed 3eyes as a dri'er since 6ctober 1;. -e $as assigned to its M.-. del ilar 9treet% *rmita% Manila branch. -is $oring hours $ere rom ;:// .M. to 5:// A.M.% and among his duties $as to etch and bring to their respecti'e homes the employees o Ma#imQs ater the restaurant closed or the day. 0 &n the $ee hours o the morning o 9eptember 2% 1% petitioner $as dri'ing a Mitsubishi L5// 'an and $as sent to etch some employees o 9a'annah Moon% a ballroom dancing establishment in Libis% Uue"on City. etitioner complied and too his usual route along 8ulia Fargas 9treet in asig City. -e $as headed to$ards Meralco A'enue at a cruising speed o ;/ to / ilometers per hour% $hen he noticed a ten0$heeler truc coming his $ay at ull speed despite the act that the latterQs lane had a red signal light on. etitioner maneu'ered to a'oid a collision% but nonetheless the 'an he $as dri'ing struc the truc. As a result% petitioner and se'en o his passengers sustained physical in+uries and both 'ehicles $ere damaged. 0 !he management o Ma#imQs reuired petitioner to submit% $ithin orty0eight hours% a $ritten e#planation as to $hat happened that early morning o 9eptember 2% 1. -e complied but his employer

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ound his e#planation unsatisactory and as a result he $as pre'enti'ely suspended or thirty (5/) days. 9ubseuently% Ma#imQs terminated petitioner or cause. 0 ,eeling that the 'ehicular accident $as neither a +ust nor a 'alid cause or the se'erance o his employment% petitioner iled a complaint or illegal dismissal doceted as 7L3C 7C3 Case 7o. //0120 /50. &n his decision% the Labor Arbiter ound that petitioner $as grossly negligent in ailing to a'oid the collision. &nstead o iling the reuisite pleading or appeal% petitioner iled a IMotion or artial 3econsiderationI $ith the 7L3C. !he 7L3C opted to treat petitionerQs motion as an appeal. !he 7L3C re'ersed the decision o the Labor Arbiter on the ground that there $as no negligence on petitionerQs part. 3espondents mo'ed or reconsideration o the oregoing decision% but said motion $as denied by the Commission in its resolution 0 3espondents then iled a special ci'il action or certiorari $ith the Court o Appeals% !he appellate court decided in a'or o the employer and its manager. -ence% the instant case.

ISSUE: 467 petitionerross negligence is negligence characteri"ed by $ant o e'en slight care% acting or omitting to act in a situation $here there is a duty to act% not inad'ertently but $illully and intentionally $ith a conscious indierence to conseuences insoar as other persons may be aected. &n this case% ho$e'er% there is no substantial basis to support a inding that petitioner committed gross negligence. 0 &n sustaining the Labor ArbiterQs inding that petitioner $as grossly negligent% the appellate court stressed that the cited episode $as the second 'ehicular accident in'ol'ing petitioner% and as such it Imay clearly relect against JhisK attitudinal character as a dri'er.I !he Court notes% ho$e'er% that the Commission ound that in the irst 'ehicular accident in'ol'ing petitioner Ihe $as the 'ictim o the recless and negligent act o a ello$ dri'er.I An imputation o habitual negligence cannot be dra$n against

petitioner% since the earlier accident $as not o his o$n maing. !he test to determine the e#istence o negligence is as ollo$s: id petitioner in doing the alleged negligent act use that reasonable care and caution $hich an ordinarily prudent person $ould use in the same situation= &t is not disputed that petitioner tried to turn let to a'oid a collision. !o put it other$ise% petitioner did not insist on his right o $ay% not$ithstanding the green light in his lane. 9till% the collision too place as the ten0$heeler careened on the $rong lane. Clearly% petitioner e#erted reasonable eort under the circumstances to a'oid in+ury not only to himsel but also to his passengers and the 'an he $as dri'ing. !o hold that petitioner $as grossly negligent under the circumstances goes against the actual circumstances sho$n. &t appears to us he $as more a 'ictim o a 'ehicular accident rather than its cause. 0 !here being no clear sho$ing that petitioner $as culpable or gross negligence% petitionerQs dismissal is illegal. Disposition etition granted.

9!%e" T#rea +"itti" 8s. NLR) ar6# 11 1>>> 304 S)RA ;20 FA)TS/ 9e'eral employees o >olden !hread nitting &ndustries (>!) $ere dismissed or dierent reasons. 2 employees $ere allegedly or slashing the company!% on the other hand% contend that there $ere 'alid causes or the terminations. !he dismissals $ere allegedly a result o the slashing o their products% rotation o $or% $hich in turn $as caused by the lo$ demand or their products% and abandonment o $or. 43! to the cases in'ol'ing the slashing o their products and threats to the personnel manager% the dismissals $ere in eect a orm o punishment. !he labor arbiter ruled partially in a'or o >!. -e said that there $as no sho$ing that the dismissals $ere in retaliation or establishing a union. -e% ho$e'er% a$arded separation pay to some employees.

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0 7L3C% ho$e'er% appreciated the e'idence dierently. &t held that there $as illegal dismissal and ordered reinstatement. ISSUE/ 467 there $as illegal dismissal EL,/ G*9 3atio ismissal is the ultimate penalty that can be meted to an employee. &t must thereore be based on a clear and not on an ambiguous or ambi'alent ground.

Reas!"i"/ 43! to the case in'ol'ing slashing o to$els% the employees $ere not gi'en procedural due process. !here $as no notice and hearing% only outright denial o their entry to the $or premises by the security guards. !he charges o serious misconduct $ere not suiciently pro'ed. 43! to the employees dismissed or redundancy% there $as also denial o procedural due process. -earing and notice $ere not obser'ed. !hus% although the characteri"ation o an employee! e#ercised their authority to dismiss $ithout due regard to the pro'isions o the Labor Code. !he right to terminate should be utili"ed $ith e#treme caution because its immediate eect is to put an end to an employeeQs present means o li'elihood $hile its distant eect% upon a subseuent inding o illegal dismissal% is +ust as pernicious to the employer $ho $ill most liely be reuired to reinstate the sub+ect employee and grant him ull bac $ages and other beneits. isposition ecision A,,&3M* 7! 8s. NLR) Fe&. 2 2000 I6a?at 8s. NLR) 7'"e 20 2000 R. Tra"s!rt )!r. 8s. Ea"ra 9R. N!. 14<0< a$ 20 2004

U"i!" !t!r )!r. 8s. NLR) 9.R. 1>;3< ,e6. > 2004 RP ,i"%asa" )!"str'6ti!" I"6. 8s. Atie"*a et.a%. 9R NO. 1:104 7'"e 2> 2004 FA)TS/ !his is an appeal rom the decision and resolution o the Court o Appeals% dated 8anuary 1% 2//1 and 6ctober 5/% 2//2% respecti'ely% upholding the inding o constructi'e dismissal against petitioner. etitioner 3.. inglasan Construction% &nc. pro'ided +anitorial ser'ices to ilipinas 9hell 3einery Corporation (9hell Corporation) in Batangas City. ri'ate respondents Mariano Atien"a and 9antiago Asi ser'ed as petitioner
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reuirements. Accompanied by the barangay oicials% pri'ate respondents attempted to meet $ith the oicers o petitioner but the latter reused to dialogue $ith them. As proo o their compliance $ith the 9hell reuirements% pri'ate respondents submitted to the 6L* their #0ray results% dated May 1 and 1% 1; and their barangay certiication% dated May 15% 1;. !he case $as e'entually reerred to the 7ational Labor 3elations Commission (7L3C) or compulsory arbitration. ri'ate respondents amended their complaint charging petitioner $ith illegal dismissal and non0payment o 15th month pay% $ith a claim or payment o attorney
pri'ate respondents could not be considered to ha'e abandoned their $or. 0 As petitioner
ISSUES 1. 467 the respondents< dismissal is +ustiied 2. 467 the Court o Appeals% contrary to e#isting la$% erred in dismissing the petition or certiorari and airming the decision o the 7L3C insoar as the monetary a$ard is concerned EL, 1. (atio

&n an illegal dismissal case% the onus pro'andi rests on the employer to pro'e that its dismissal o an employee is or a 'alid cause. &n the case at bar% petitioner ailed to discharge its burden. &t ailed to establish that pri'ate respondents deliberately and un+ustiiably reused to resume their employment $ithout any intention o returning to $or. 0 !o constitute abandonment o $or% t$o (2) reuisites must concur: irst% the employee must ha'e ailed to report or $or or must ha'e been absent $ithout +ustiiable reasonD and second% there must ha'e been a clear intention on the part o the employee to se'er the employer0employee relationship as maniested by o'ert acts. Abandonment as a +ust ground or dismissal reuires deliberate% un+ustiied reusal o the employee to resume his employment. Mere absence or ailure to report or $or% ater notice to return% is not enough to amount to abandonment. (easoning

0 &n the case at bar% the e'idence o pri'ate respondents negates petitioner
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employee relations and abandon their $or. All these o'ert acts on the part o pri'ate respondents negate petitioner
e'idence o the parties upon $hich the monetary a$ard is based belongs to the labor arbiter. !his Court is not a trier o acts and actual issues are improper in a petition or re'ie$ on certiorari . Lie$ise% the Court notes that i" seei" rei"stateme"t a" a$me"t !( t#eir m!"etar$ 6%aims ri8ate res!"e"ts #a8e tra8erse a %!" a" i((i6'%t at#. !his case has passed the 6L*% the labor arbiter% the 7L3C% the Court o Appeals and no$ this Court% $ith the inding o illegal dismissal ha'ing been consistently airmed in each stage. ri'ate respondents had been rendering +anitorial ser'ices as early as 12 and% at the time o their dismissal% $ere recei'ing a measly %///.// monthly salary. &t is time to put a period to pri'ate respondents< tra'ail. & there is anything that rustrates the search or +ustice by the poor% it is the endless search or it.

)!sm!s B!tt%i" )!r. 8s. Pa&%! Narama 9.R. 1:4403 ar6# 4 200< Fa6ts/ 3espondent ablo 7agrama% 8r. $as initially employed by petitioner as a maintenance mechanic on 8une 2% 15 at the Cosmos lant in Cauayan% &sabela. 6n 9eptember 1% 1% he $as elected by the local union as chie shop ste$ard. 3espondent $as designated by petitioner as $aste $ater treatment operator eecti'e 9eptember 2% 1. etitioner hired Clean ,lo$ hilippines% &nc. to conduct training seminars to acuaint petitioner
Iss'e/ &s the dismissal based on the grounds o abandonment and gross insubordination 'alid= R'%i"/ There is no abandonment and gross insubordination.

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!$o (2) elements must be satisied or an employee to be guilty o abandonment. !he irst is the ailure to report or $or or absence $ithout 'alid or +ustiiable reason. !he second is a clear intention to se'er the employer0employee relationship. !he second element is the more determinati'e actor and must be e'inced by o'ert acts. Lie$ise% the burden o proo is on the employer to sho$ the employee
NATIONWI,E SE)URITY AN, ALLIE, SERVI)ES IN). 8s. RONAL, P. VAL,ERAA 9.R. N!. 1<::14 Fe&r'ar$ 23 2011 Fa6ts/ 3espondent 3onald Falderama (Falderama) $as hired by 7ation$ide 9ecurity and Allied 9er'ices (79A9) as security guard on April 1% 2//2. -e $as assigned at the hilippine -eart Center (-C)% Uue"on City% until his relie on 8anuary 5/% 2//. Falderama $as not gi'en any assignment thereater. !hus% on August 2% 2//% he iled a complaint or constructi'e dismissal and nonpayment o 15th month pay% $ith prayer or damages against petitioner and 3omeo 7olasco. -o$e'er% 79A9 alleged that Falderama $as not constructi'ely or illegally dismissed% but had 'oluntarily resigned. 79A9 a'erred that Falderama has committed serious 'iolations o the security rules in the $orplace. And by the order o the 6perations Manager% he $as relie'ed rom his post at the hilippine -eart Center and $as directed to report to the oice. espite his 'oluntary resignation% 79A9 sent him a letter through registered mail to report or the oice and gi'e inormation on $hether or not he $as still interested or report or duty or not. -o$e'er% Falderama did not bother to reply nor did he report to the oice.

Iss'e/ 4as Falderama illegally dismissed= R'%i"/ Ges% he $as. &n cases in'ol'ing security guards% a relie and transer order in itsel does not se'er employment relationship bet$een a security guard and his agency. An employee has the right to security o tenure% but this does not gi'e him a 'ested right to his position as $ould depri'e the company o its prerogati'e to change his assignment or transer him $here his ser'ice% as security guard% $ill be most beneicial to the client. !emporary Io0detailI or the period o time security guards are made to $ait until they are transerred or assigned to a ne$ post or client does not constitute constructi'e dismissal% so long as such status does not continue beyond si# months. !he onus o pro'ing that there is no post a'ailable to $hich the security guard can be assigned rests on the employer% 'i".: 4hen a security guard is placed on a Iloating status%I he does not recei'e any salary or inancial beneit pro'ided by la$. ue to the grim economic conseuences to the employee% the employer should bear the burden o pro'ing that there are no posts

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a'ailable to $hich the employee temporarily out o $or can be assigned. Falderama claims that he $as relie'ed rom -C on 8anuary 5/% 2//D thereater% he $as not gi'en a ne$ assignment. etitioner% on the other hand% asserts that respondent reused to report to petitioner or his reassignment. 6ther$ise stated% petitioner claims that respondent abandoned his +ob. &n this case% 79A9 ailed to establish clear e'idence o FalderamaQs intention to abandon his employment. *#cept or 7A9AQs bare assertion that respondent did not report to the oice or reassignment% no proo $as oered to pro'e that respondent intended to se'er the employer0employee relationship. &ndubitably% Falderama remained on Iloating statusI or more than si# months. -e $as relie'ed on 8anuary 5/% 2//% and $as not gi'en a ne$ assignment at the time he iled the complaint on August 2% 2//. 8urisprudence is trite $ith pronouncements that the temporary inacti'ity or Iloating statusI o security guards should continue only or si# months. 6ther$ise% the security agency concerned could be liable or constructi'e dismissal. !he ailure o petitioner to gi'e respondent a $or assignment beyond the reasonable si#0month period maes it liable or constructi'e dismissal. & there is a surplus o security guards caused by lac o clients or pro+ects% the security agency may resort to retrenchment upon compliance $ith the reuirements set orth in the Labor Code. &n this $ay% the security agency $ill not to be held liable or constructi'e dismissal and be burdened $ith the payment o bac$ages.

OSPITAL ANA9EENT SERVI)ES IN). E,I)AL )ENTER ANILAPITAL ANA9EENT SERVI)ES IN). D E,I)AL )ENTER ANILA EPLOYEES ASSO)IATIONAFW a" E,NA R. ,E )ASTRO 9.R. N!. 1;:2<; 7a"'ar$ 31 2011 Fa6ts/ 3espondent e Castro started $oring as a sta nurse at petitioner hospital since 9eptember 2% 1/% until she $as dismissed on 8uly 2/% 1. Bet$een 2:// a.m. to 5:// a.m. o March 2% 1% $hile respondent e Castro and $ard0cler orientee >ina >uillergan $ere at the nurse station on night duty (rom 1/:// p.m. o March 25% 1 to :// a.m. o March 2% 1)% one 3uina Causaren% an 10 year0old patient conined at 3oom 201 o petitioner hospital or ?gangrenous $ound on her right anterior leg and right oreoot@ and scheduled or operation on March 2% 1% ell rom the right side o the bed as

she $as trying to reach or the bedpan. Because o $hat happened% the niece o patient Causaren staying in the room $as a$aened and she sought assistance rom the nurse station. &nstead o personally seeing the patient% respondent e Castro directed $ard0cler orientee >uillergan to chec the patient. !he 'ital signs o the patient $ere normal. Later% the physician on duty and the nursing sta on duty or the ne#t shit again attended to patient Causaren. Chie 7urse 8oseina M. Fillanue'a inormed r. Asuncion Abaya0Morido% president and hospital director% about the incident and reuested or a ormal in'estigation. 6n May 11% 1% the legal counsel o petitioner hospital directed respondent e Castro and three other nurses on duty% 9ta 7urse 8anith F. aderes and 7ursing Assistants Marilou 3espicio and Bertilla !. !atad% to appear beore the &n'estigation Committee. e Castro e#plained that at around 2:5/ a.m. to 5:// a.m.% she $as attending to a ne$ly0admitted patient at 3oom 1/ and% because o this% she instructed 7ursing Assistant !atad to chec the 'ital signs o patient Causaren% $ith $ard0cler orientee >uillergan accompanying the latter. 4hen the t$o arri'ed at the room% the patient $as in a suatting position% $ith the right arm on the bed and the let hand holding on to a chair. &n the &n'estigation 3eport% the &n'estigation Committee ound that the sub+ect incident happened bet$een 11:// a.m. to 11:5/ a.m. o March 25% 1. !he three other nurses or the shit $ere not at the nurse station. 9ta 7urse aderes $as then in another nurse station encoding the medicines or the current admissions o patients% $hile 7ursing Assistant 3espicio $as maing the door name tags o admitted patients and 7ursing Assistant !atad deli'ered some specimens to the laboratory. !he committee recommended that despite her more than se'en years o ser'ice% respondent e Castro should be terminated rom employment or her lapse in responding to the incident and or trying to manipulate and inluence her sta to co'er0up the incident. As or 9ta 7urse aderes and 7ursing Assistants 3espicio and !atad% the committee recommended that they be issued $arning notices or ailure to note the incident and endorse it to the ne#t duty shit and% although they did not ha'e any no$ledge o the incident% they should be reminded not to succumb to pressure rom their superiors in distorting the acts. 6n 8uly ;% 1% 8anette A. Cali#i+an% -3 6icer o petitioner hospital% issued a notice o termination% duly noted by r. Abaya0Morido% upon respondent e Castro% eecti'e at the close o oice hours o 8uly 2/% 1% or alleged 'iolation o company rules and

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regulations% particularly paragraph 1 (a)% &tem 5% Chapter N& o the *mployeeQs -andboo and olicy Manual o 1 (*mployeeQs -andboo) (1) negligence to ollo$ company policy on $hat to do $ith patient 3uina Causaren $ho ell rom a hospital bedD (2) ailure to record and reer the incident to the physician0Jon0 duty andK allo$JingK a signiicant lapse o time beore reporting the incidentD (5) deliberately instructing the sta to ollo$ her 'ersion o the incident in order to co'er up the lapseD and () negligence and carelessness in carrying out her duty as sta nurse0on0duty $hen the incident happened. 6n 8uly 21% 1% respondent e Castro% $ith the assistance o respondent -ospital Management 9er'ices &nc.0Medical Center Manila *mployees Association0A,4% iled a ComplaintJK or illegal dismissal against petitioners $ith prayer or reinstatement and payment o ull bac$ages $ithout loss o seniority rights% 2/%///.// moral damages% 1/%///.// e#emplary damages% and 1/ o the total monetary a$ard as attorneyQs ees. !he Labor Arbiter rendered a ecision%JK ordering the hospital to reinstate respondent e Castro to her ormer position or by payroll reinstatement% at the option o the ormer% $ithout loss o seniority rights% but $ithout bac$ages and% also% directing petitioners to notiy her to report to $or. !he Labor Arbiter concluded that although respondent e Castro committed the act complained o% being her irst oense% the penalty to be meted should not be dismissal rom the ser'ice% but merely  to 1 days suspension as the same $as classiied as a less serious oense under the *mployeeuillergan to do the same in her behal and or inluencing her sta to conceal the incident. !he 7L3C denied respondent e CastroQs Motion or 3econsideration. !he CA re'ersed and set aside the ecision o the 7L3C and reinstated the ecision o the Labor Arbiter% $ith modiication that respondent e Castro should be entitled to payment o ull bac$ages and other beneits% or their monetary eui'alent% computed rom the e#piration o the 10day0 suspension period up to actual reinstatement. !he CA ruled that $hile respondent e CastroQs ailure to

personally attend to patient Causeran amounted to misconduct% ho$e'er% being her irst oense% such misconduct could not be categori"ed as serious or gra'e that $ould $arrant the e#treme penalty o termination rom the ser'ice ater ha'ing been employed or almost  years. &t added that the sub+ect inraction $as a less serious oense classiied under ?commission o negligent or careless acts during $oring time or on company property that resulted in the personal in+ury or property damage causing e#penses to be incurred by the company@ stated in subparagraph 11% paragraph 5 (B)% Chapter N& Jon the 3ules on isciplineK o the *mployeeQs -andbooJK o petitioner hospital. !he CA denied the hospital
Iss'e/ 4as e Castro guilty o serious misconduct= 4as the penalty o termination reasonable= R'%i"/ !he hospital is guilty o illegal dismissal. Article 22 (b) o the Labor Code pro'ides that an employer may terminate an employment or gross and habitual neglect by the employee o his duties. !he CA ruled that per the *mployee
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responsibility% respondent e Castro should ha'e immediately proceeded to chec the health condition o patient Causaren and% i necessary% reuest the physician0on0duty to diagnose her urther. More importantly% respondent e Castro should mae e'erything o record in the patient
Ne%e6t !( 't$ t! &e a r!'" (!r ismissa% m'st &e &!t# r!ss a" #a&it'a%. 9r!ss "e%ie"6e 6!""!tes ?a"t !( 6are i" t#e er(!rma"6e !( !"eMs 'ties. a&it'a% "e%e6t im%ies reeate (ai%'re t! er(!rm !"eMs 'ties (!r a eri! !( time ee"i" '!" t#e 6ir6'msta"6es. A single or isolated act o negligence does not constitute a +ust cause or the dismissal o the employee. espite our inding o culpability against respondent e CastroD ho$e'er% $e do not see any $rongul intent% deliberate reusal% or bad aith on her part $hen% instead o personally attending to patient Causaren% she reuested 7ursing Assistant !atad and $ard0cler orientee >uillergan to see the patient% as she $as then attending to a ne$ly0admitted patient at 3oom 1/. &t $as her +udgment call% albeit an error o +udgment% being the sta nurse $ith presumably more $or e#perience and better learning cur'e% to send 7ursing Assistant !atad and $ard0cler orientee >uillergan to chec on the health condition o the patient% as she deemed it best% under the gi'en situation% to attend to a ne$ly0admitted patient $ho had more concerns that needed to be addressed accordingly. Being her irst oense% respondent e Castro cannot be said to be grossly negligent so as to +ustiy her termination o employment. Moreo'er% petitioners< allegation% that respondent e Castro e#erted undue pressure upon her co0nurses to alter the actual time o the incident so as to e#culpate her rom any liability% $as not clearly substantiated. 2egligence is defined as the failure to e!ercise the standard of care that a reasonably prudent person would have e!ercised in a similar

situation. !he Court emphasi"es that the nature o

the business o a hospital reuires a higher degree o caution and e#acting standard o diligence in patient management and health care as $hat is in'ol'ed are li'es o patients $ho see urgent medical assistance. An act or omission that alls short o the reuired degree o care and diligence amounts to serious misconduct $hich constitutes a suicient ground or dismissal. -o$e'er% in some cases% the Court had ruled that sanctioning an erring employee $ith suspension $ould suice as the e#treme penalty o dismissal $ould be too harsh. Considering that this $as the irst oense o respondent e Castro in her nine () years o employment $ith petitioner hospital as a sta nurse $ithout any pre'ious derogatory record and% urther% as her lapse $as not characteri"ed by any $rongul moti'e or deceitul conduct% the Court deems it appropriate that% instead o the harsh penalty o dismissal% she $ould be suspended or a period o si# () months $ithout pay% inclusi'e o the suspension or a period o 1 days $hich she had earlier ser'ed. !hereater% petitioner hospital should reinstate respondent *dna 3. e Castro to her ormer position $ithout loss o seniority rights% ull bac$ages% inclusi'e o allo$ances and other beneits% or their monetary eui'alent% computed rom the e#piration o her suspension o si# () months up to the time o actual reinstatement.

ELPI,IO )ALIPAY VS. NATIONAL LABOR RELATIONS )OISSION TRIAN9LE A)E )ORPORATION a" 7OSE LEE 9.R. N!. 1::411 A''st 3 2010 Fa6ts/ 6n 8uly 1% 1% a Complaint 5 or illegal dismissal% unair labor practice% underpayment o $ages and 15th month pay% non0payment o ser'ice incenti'e lea'e pay% o'ertime pay% premium pay or holiday% rest day% night shit allo$ances and separation pay $as iled by herein petitioner *lpidio Calipay% together $ith Alredo Mission and *rnesto imalanta against herein pri'ate respondents !riangle Ace Corporation (!riangle) and 8ose Lee. Calipay and the other complainants alleged in their osition aper that in the course o their employment% they $ere not gi'en any speciic $or assignmentD they perormed 'arious inds o $or imposed upon them by LeeD in discharging their unctions% they $ere reuired by Lee to $or or nine () hours a day% beginning rom :// a.m. and ending at :// p.m. $ith a brea o one hour at 12:// noonD they $ere also reuired to report rom Monday to 9undayD or $or rendered rom Mondays to 9aturdays beyond the normal eight () $oring hours in a day% they $ere paid a uniorm daily $age in the

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amount o 1/.// e'en during holidaysD or $or perormed on 9undays% they $ere not paid any $age due to the policy o Lee that his $orers must pro'ide $or $ithout pay at least a day in the $ee under his so0called Ibayanihan systemID in recei'ing their $ages% they $ere not gi'en any duly accomplished payslipsD instead% they $ere orced to sign a blan orm o their daily time records and salary 'ouchers. &t $as urther alleged that in May 1% Lee conronted Calipay and Mission regarding their alleged participation and assistance in imalantaQs claim or disability beneits $ith the 9ocial 9ecurity 9ystemD despite their denials% Lee scolded Calipay and MissionD this incident later led to their dismissal in the same month. Labor Arbiter handling the case rendered a ecision dismissing the Complaint or lac o merit. Calipay and the other complainants iled an appeal $ith the 7ational Labor 3elations Commission (7L3C) modiying the Labor ArbiterQs decision and ordering respondents !riangle Ace Corporation &nc.P8ose Lee to reinstatement. Aggrie'ed% pri'ate respondents iled a Motion or 3econsideration $as >i'en due course and the decision o the Labor Arbiter $as reinstated and airmed. As a conseuence% Calipay and the other complainants mo'ed or the reconsideration% but the same $as denied by the 7L3C.

also ailed to present e'idence to pro'e their allegation that they $ere orced to sign blan orms o their !3s and 9alary Fouchers. 6n the basis o the oregoing% the Court arri'es at the conclusion that the iling o the complaint or illegal dismissal appears only as a con'enient aterthought on the part o petitioner and the other complainants ater they $ere dismissed in accordance $ith la$. 8urisprudence has held time and again that abandonment is totally inconsistent $ith the immediate iling o a complaint or illegal dismissal% more so i the same is accompanied by a prayer or reinstatement. 2 &n the present case% ho$e'er% petitioner iled his complaint more than one year ater his alleged termination rom employment. Moreo'er% petitioner and the other complainantsQ inconsistency in their stand is also sho$n by the act that in the complaint orm $hich they personally illed up and iled $ith the 7L3C% they only ased or payment o separation pay and other monetary claims. !hey did not as or reinstatement. &t is only in their osition aper later prepared by their counsel that they ased or reinstatement. !his is an indication that petitioner and the other complainants ne'er had the intention or desire to return to their +obs. &n act% there is no e'idence to pro'e that petitioner and his ormer co0 employees e'er attempted to return to $or ater they $ere dismissed rom employment.

Iss'e/ 4hether or not there $as abandonment o $or a +ust ground or dismissal

6n the other hand% pri'ate respondents $ere able to present memoranda or sho$0cause letters ser'ed on petitioner and the other complainants at their last no$n address reuiring them to e#plain their absence% $ith a $arning that their ailure $ould be construed as abandonment o $or. Also% pri'ate respondents ser'ed on petitioner and the other complainants a notice o termination as reuired by la$. ri'ate respondentsQ compliance $ith said reuirements% taen together $ith the other circumstances abo'e0discussed% only pro'es petitioner and the other complainantsQ abandonment o their $or.

e%/ Calipay and the other complainants ailed to suiciently reute these indings o the Labor Arbiter in their appeal iled $ith the 7L3C. !hey simply insisted that they did not report or $or% because they $ere already terminated. -o$e'er% they did not present any e'idence to pro'e their allegation. 6n the other hand% as held by the Labor Arbiter% pri'ate respondents $ere able to present the !3s and 9alary Fouchers o Calipay and the other complainants sho$ing that they indeed reported or $or e'en ater their alleged termination rom employment. 2 Calipay and the other complainants

FUN)TIONAL IN). 8s. SAUEL ). 9RANFIL 9.R. N!. 1;:3;; N!8em&er 1: 2011 Fa6ts/ 9ometime in 12% respondent 9amuel C. >ranil $as hired as ey operator by petitioner ,unctional% &nc. (,&)% a domestic corporation engaged in the business o sale and rental o 'arious business euipments% including photocopying machines. As ey 6perator% >ranil $as tased to operate the photocopying machine rented by the 7ational Boostore (7B9) at its 9M Megamall Branch. !here is no dispute regarding the act that% in the e'ening o 5/ 8uly 2//2% >ranil attended to a customer by the

Appealed to CA $hich rendered its ecision dismissing the petition. Calipay iled a Motion or 3econsideration% but the CA denied -ence% the instant petition o Calipay raising the ollo$ing

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name o Cosme Ca'alde+a (Ca'alde+a) $ho% together $ith his $ie% ased to ha'e their lyers photocopied. &t appears that Bonnel echa'e"% the security guard assigned at said establishment% sa$ Ca'alde+a handing money to >ranil ater the transaction $as inished. Ater in'estigating the matter% echa'e" submitted the ollo$ing incident report to 7B9 Branch Manager Lucy >enegaban (>enegaban)% to $it: At around 1/ on 8uly 5/% 2//2 at 7B9 9M Megamall ona 8ulia Fargas A'e.% Mandaluyong City% & checed one customer and ased i he already paid or his #ero#JedK itemranil iled a complaint against ,&% its resident% 3omeo Bautista (Bautista)% its Mareting Manager% ,reddie !enorio (!enorio)% its 6ice 9uper'isor% 8ulius Ballesteros (Ballesteros)% and its Area 9uper'isor% 8oel i"on (i"on)% or illegal dismissal% unpaid 15th month pay% moral and e#emplary damages and attorneyranil alleged% among other matters% that the money $hich echa'e" sa$ him recei'e rom Ca'alde+a $as a 2// tip said customer ga'e him in appreciation o his assistance in #ero#ing and organi"ing the batches o 'oluminous materials he ased to be photocopiedD that payment or the materials $as% ho$e'er% already paid per batch by Ca'alde+a
>ranil urther asse'erated that% $ith said incident report ha'ing been telea#ed to ,&
incident also ell on dea earsD that ha'ing been terminated $ithout +ust cause and obser'ance o due process% he $as constrained to ile the 5 9eptember 2//2 complaint rom $hich the instant suit originatedD that aside rom the reinstatement to $hich he is clearly entitled as an illegally dismissed employee% he should be paid ull bac$ages and 15 th month pay or the year 2//2D and% that in 'ie$ o the malice and bad aith $hich characteri"ed his dismissal rom employment% Bautista% !enorio% Ballesteros and i"on should be held +ointly and se'erally liable $ith ,& or the payment o said indemnities as $ell as his claims or moral and e#emplary damages and attorneyenegaban reuested or >ranilranil that he $as going to be transerred to a dierent assignment% $ithout demotion in ran or diminution o his salaries% beneits and other pri'ilegesD that reuired to report to ,&ranil misconstrued his transer as a punishment or his guilt and reused to heed said directi'e $hich $as $ithin the managementranil clearly abandoned his employment rather than illegally dismissed thererom. 6n 2 April 2//5% Labor Arbiter *duardo Carpio rendered a decision discounting >ranilranil perected the appeal $hich $as doceted beore the ,irst i'ision o the 7L3C as 7L3C 7C3 CA 7o. /5;0/5. 4ith the airmance o the Labor Arbiterranil ele'ated the case through the 3ule ; petition or certiorari doceted beore the CA as CA0>.3. 9 7o. ;1. 6n 22 7o'ember 2//% the CA rendered the herein assailed 22 7o'ember 2// ecision% re'ersing the 7L3C
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satisactorily pro'e >ranilranil and to pay his ull bac$ages% allo$ances and other beneits rom 51 8uly 2//2 until his actual reinstatement% the CA denied said employee
Iss'e/ 4hether or not employee $as illegally dismissed Yes. !he rule is long and $ell settled that% in illegal dismissal cases lie the one at bench% the burden of proof is upon the employer to show that the employee’s termination from service is for a just and valid cause. !he employer
ails on the strength o its e'idence and not the $eaness o that adduced by the employee% in eeping $ith the principle that the scales o +ustice should be tilted in a'or o the latter in case o doubt in the e'idence presented by them. 6ten described as more than a mere scintilla% the uantum o proo is substantial e'idence $hich is understood as such rele'ant e'idence as a reasonable mind might accept as adeuate to support a conclusion% e'en i other eually reasonable minds might concei'ably opine other$ise. ,ailure o the employer to discharge the oregoing onus $ould mean that the dismissal is not +ustiied and thereore illegal. enying the charge o illegal dismissal% ,& insists that >ranil abandoned his employment ater he $as transerred rom his assignment at the 7B9 Megamall Branch as a conseuence o the latterranilranil $as indeed recalled rom his assignment% ho$e'er% $e ind that the CA correctly discounted their probati'e 'alue insoar as ,&
Being a matter o intention% moreo'er% abandonment cannot be inerred or presumed rom eui'ocal acts. As a +ust and 'alid ground or dismissal% it reuires the deliberate% un+ustiied reusal o the employee to resume his employment% $ithout any intention o returning. !$o elements must concur: (1) ailure to report or $or or absence $ithout 'alid or +ustiiable reason% and (2) a clear intention to se'er the employer0employee relationship% $ith the second element as the more determinati'e actor and being maniested by some o'ert acts. !he burden o pro'ing abandonment is once again upon the employer $ho% $hether pleading the same as a ground or dismissing an employee or as a mere deense% additionally has the legal duty to obser'e due process. 9ettled is the rule that mere absence or ailure to report to $or is not tantamount to abandonment o $or. Fie$ed in the light o the oregoing principles% $e ind that the CA correctly ruled out ,&ranil had abandoned his employment. Aside rom the act that Bautista% !enorio% Ballesteros and i"on did not e'en e#ecute s$orn statements to reute the o'ert acts o dismissal imputed against them% the record is $holly beret o any sho$ing that ,& reuired >ranil to report to its main oice or% or that matter% to e#plain his supposed unauthori"ed absences. Absence must be accompanied by o'ert acts unerringly pointing to the act that the employee simply does not $ant to $or anymore. *'en then% ,&ranilranil clearly maniested that he has no intention o relinuishing his employment. &n any case% the act that >ranil prayed or his reinstatement speas against any intent to se'er the employer0employee relationship $ith ,&.

9AR,EN OF EORIES PAR+ a" LIFE PLAN IN). a" PAULINA T. REUIO 8s. NATIONAL LABOR RELATIONS )OISSION SE)ON, ,IVISION LABOR ARBITER FELIPE T. 9AR,UUE II a" ILARIA )RU= 9.R. N!. 1:02;< Fe&r'ar$ < 2012 A. ELISSA A. 9ALAN9 8s. 7ULIA ALASU9UI 9.R. N!. 1;41;3 ar6# ; 2012 FA)TS/ 3*967*7! 8ulia Malasugui $as a gardener o petitioner Ma. Melissa A. >alang. 9he iled a complaint or illegal dismissal% claiming she $as barred on 8an. 2% 1 rom entering the angi property $here she $as $oring. !he petitioner alleged that respondent became sic o e#cessi'e

11 E  a g e




coughing early in 1. 9he made an arrangement $ith a radiologist or respondentalang about this% respondent paced up her belongings and let the angi property. oes this deense prosper=

R'%i"/ 7o.% 3espondent has been in the employ o petitioner or si# years $hen the alleged abandonment happened. Being scolded% i it $ere true% is hardly a reason or a gardener o si# years to +ust pac up and lea'e the $or premises $here she $as e'en allo$ed to reside% at a time $hen she needed medical attention. &ndeed% the alleged scolding is itsel incredible. !he gi'en reason $as that respondent ailed to sho$ up at her arranged appointment $ith the radiologist. &t is hard to belie'e that a sic gardener $ould reuse the oer o medical ser'ices. &n act% the basic allegation in respondentarcia 's. 7ational Labor 3elations Commission correctly relied upon by the Court o Appeals% the 9upreme Court emphasi"ed that there must be a concurrence o the intention to abandon and some o'ert acts rom $hich an employee may be deduced as ha'ing no more intention to $or. 9uch intent to discontinue the employment must be sho$n by clear proo that it $as deliberate and un+ustiied. &n the instant case% the o'ert act relied upon by petitioner is not only a doubtul occurrence but is% i it did transpire% e'en consistent $ith the dismissal rom employment posited by the respondent. !he Court o Appeals is correct. etitioner $as displeased ater incurring e#penses or respondentalang 's. 8ulia Malasugui% >.3. 7o. 115% March % 2/12).

Fra' !r Wi%%('% Brea6# !( Tr'st@L!ss !( )!"(ie"6e )ases/ N!!m 8s. NLR) 7'%$ 1< 2000 ,e%!s Sa"t!s 8s. NLR) ,e6. 20 2001 PL,T 8s. T!%e"ti"! 9R N!. 1431;1 Set. 21 2004 FA)TS/ Arturo 3. !olentino !olentino $as employed in petitioner L! or 25 years. -e started in 12 as an installerPhelper and% at the time o his termination in 1;% $as the di'ision manager o the ro+ect

9upport i'ision% ro'incial *#pansion Center% Meet emand >roup. -is di'ision $as in charge o the e'aluation% recommendation and re'ie$ o documents relating to pro'incial lot acuisitions. 9ometime in 1;% 8onathan de 3i'era% a super'isor directly under respondent !olentino% $as ound to ha'e entered into an ?internal arrangement@ $ith the sellers o a parcel o land $hich he recommended or acuisition under L!roup% gi'ing respondent !olentino the option to resign. etitioner did not grant respondent
ISSUE/ 467 the Court o Appeals erred in ruling that the dismissal $as not ounded on clearly established

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acts suicient employment

to

$arrant

separation

rom

generally conclusi'e and binding on the 9upreme Court.

EL,/ 76 !he petition is $ithout merit. L!
0 !he e'idence relied upon by petitioner L! R de 3i'era
!here is no dispute o'er the act that respondent $as a managerial employee and thereore loss o trust and conidence $as a ground or his 'alid dismissal. !he mere e#istence o a basis or the loss o trust and conidence +ustiies the dismissal o the employee because: J#Khen an employee accepts a promotion to a managerial position or to an office re8uiring full trust and confidence" she gives up some of the rigid guaranties availa'le to ordinary #or!ers. 0nfractions #hich if committed 'y others #ould 'e overloo!ed or condoned or penalties mitigated may 'e visited #ith more severe disciplinary action. 7 company*s resort to acts of selfdefense #ould 'e more easily justified.

roo beyond reasonable doubt is not reuired pro'ided there is a 'alid reason or the loss o trust and conidence% such as $hen the employer has a reasonable ground to belie'e that the managerial employee concerned is responsible or the purported misconduct and the nature o his participation renders him un$orthy o the trust and conidence demanded by his position. -o$e'er% the right o the management to dismiss must be balanced against the managerial employee
;Dismissal is the most severe penalty an employer can impose on an employee. It goes without saying that care must be taken, and due regard given to an employee’s circumstances, in the application of such punishment.

0 Certainly% a great in+ustice $ill result i this Court upholds !olentino
A" em%!$ee i%%ea%%$ ismisse is e"tit%e t! ('%% &a6?aes a" rei"stateme"t 'rs'a"t t! Arti6%e 2;> !( t#e La&!r )!e as ame"e &$ RA :;1. 0 Although a managerial employee% respondent should be reinstated to his ormer position or its eui'alent $ithout loss o seniority rights inasmuch as the alleged strained relations bet$een the parties $ere not adeuately pro'en by petitioner L! $hich had the burden o doing so. &n Uui+ano 's. Mercury rug Corporation% the Court ruled that strained relations are a actual issue $hich must be raised beore the labor arbiter or the proper reception o e'idence. &n this case% petitioner L! only raised the issue o strained relations in its appeal rom the labor arbiter
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,urthermore% respondent $as dismissed in ecember% 1; $hen petitioner L! $as still under the Co+uangco group. L! has since then passed to the o$nership and control o its ne$ o$ners% the ,irst aciic group $hich has absolutely nothing to do so $ith this contro'ersy. 9ince there are no strained relations bet$een the ne$ management and respondent% reinstatement is easible. Disposition !he petition $as denied.

)#ar%es Ram!s 8s. )A 7'"e 2> 2004

9R N!. 1440

in the case at bar $here both the Labor Arbiter and the 7L3C share the same indings. !he rule is not ho$e'er% $ithout e#ceptions one o $hich is $hen the indings o act o the labor oicials on $hich the conclusion $as based are not supported by substantial e'idence. !he same is true $hen it is percei'ed that ar too much is concluded% inerred or deducted rom bare acts adduced in e'idence. !he employer
A,ELINO FELI 8. NATIONAL LABOR RELATIONS )OISSION a" REPUBLI) ASAI 9LASS )ORPORATION 442 S)RA 4: 2004 9R N!. 14<2: N!8. 1; 2004 FA)TS/ etitioner Adelino ,eli# $as hired by the 3epublic Asahi >lass Corporation as a Cadet *ngineer. 9ometime in 12% ,eli# $as oered a chance to train and ualiy or the position o Assistant Manager but he declined and $ai'ed the opportunity to the one $ho $as ne#t0in0line. By ,eli#Qs claim% he $as ased by certain oicers o the company to resign and accept a separation pacage% ailing $hich he $ould be terminated or loss o conidence.

,eli# $as hastily dismissed by A9A-& as the ormer $as not gi'en adeuate time to prepare or his deense but $as preemptorily dismissed e'en $ithout any ormal in'estigation or hearing. &t is settled that $here the employee denies the charges against him% a hearing is necessary to thresh out any doubt. !he ailure o the company to gi'e petitioner% $ho denied the charges against him% the beneit o a hearing and an in'estigation beore his termination constitutes an inringement o his constitutional right to due process.

,eli#% ho$e'er% reused to resign and accept separation beneits% dra$ing the oicers o the company to% by his claim% start harassing him. !hus% he $as not gi'en $or and another employee% Mr. *lmer !acata% $as assigned to tae o'er his post and unction. Hnable to $ithstand the manner by $hich he $as being treated by the company% ,eli#% through his la$yer% $arned the 3epublic Asahi >lass Corporation about the illegality o its actions. ,eli# attributed the companyQs harassment against him to his being a member o the super'isory union then being ormed. !he 3epublic Asahi >lass Corporation subseuently terminated ,eli#<# ser'ices or loss o trust and conidence.

&t bears emphasis that the matter o determining $hether the cause or dismissal is +ustiied on the ground o loss o conidence cannot be let entirely to the employer. &mpartial tribunals do not only rely on the statement made by the employer that there is ^loss o conidence‖ unless duly pro'ed or suiciently substantiated. At all e'ents% e'en i all the allegations are true% they are not o such nature to merit the penalty o dismissal gi'en the 1 years in ser'ice o ,eli#. ismissal is unduly harsh and grossly disproportionate to the charges. !his rule on proportionality – that the penalty imposed should commensurate to the gra'ity o the oense – has been obser'ed in a number o cases.

,eli# thus lodged a complaint or illegal dismissal. !he Labor Arbiter dismissed ,eli#Qs complaint. 6n appeal% the 7ational Labor 3elations Commission (7L3C) dismissed ,eli#Qs complaint or lac o merit. !he Court o Appeals lie$ise dismissed the complaint.

!here being no basis in la$ or in act +ustiying ,eli#
ISSUE/ 4hether or not the company
R!%a"! Ar!mi" 8s. NLR) 9R NO. 1:4<24 Ari% 30 200< Fa6ts/ Aromin $ored or B& or 2 years% rising rom the rans to become an assistant 'ice0president. &n a case in'ol'ing a purchase o a B& trust asset% Aromin testiied to the surprise o B&
11 E  a g e




Later% he $as dismissed or loss o trust and conidence.

Iss'e/ 4as the dismissal 'alid= e%/ Ges. Loss o conidence% as a ground or dismissal% is premised on the act that the employee concerned holds a position o responsibility or o trust and conidence. As such% the employee must be in'ested $ith conidence on delicate matters% such as the custody% handling% or care o the employer
beore us is a real case o betrayal o trust and conidence% duly substantiated% to +ustiy the dismissal o an employee. As borne out by the records% B& complied $ith the mandatory t$o0notice rule% the irst eected through the May % 11 sho$0cause memorandum $hich Aromin e'en ans$ered% and the second 'ia the 8une 1% 11 notice o termination% both issued by Barcelon. Considering that Aromin is guilty o $illul betrayal o trust% a serious oense ain to dishonesty% he is not entitled to inancial assistance or separation pay. &t may be that his 2 years o ser'ice might generally be considered or a se'erance pay a$ard or some orm o inancial assistance to cushion the eects o his termination.

7AES BEN L. 7ERUSALE 8s. +EPPEL ONTE BAN+ et.a%. 9R. N!. 1:>:4 Ari% : 2011 FA)TS/ *!&!&67*3 8ames Ben L. 8erusalem $as employed by respondent eppel Monte Ban (eppel) on May 2% 1 as assistant 'ice0 president. 6n 8une 1% 1% he $as assigned as head o the ne$ly created F&9A Credit Card epartment. 6n April ;% 1% carrying the same ran% he $as reassigned as head o mareting and operations o the +e$elry department. 6n 9ept. 2% 2///% petitioner $as dismissed rom the ser'ice or breach o trust and conidence or no$ingly and maliciously reerring% endorsing and 'ouching or F&9A card applicants in or about May 1. !hey later turned out to be impostors resulting in inancial loss to eppel. ISSUE/ 4as the dismissal legal=

R'%i"/ 7o. Loss o conidence as a +ust cause or termination o employment is premised on the act that the employee concerned holds a position o responsibility or trust and conidence. -e must be in'ested $ith conidence on delicate matters% such as custody handling or care and protection o the property and assets o the employer. And% in order to constitute a +ust cause or dismissal% the act complained o must be $or0related and sho$s that the employee concerned is unit to continue to $or or the employer (9ulpicio Lines% &nc. '. >ulde% 2 hil. /;% 1/ (2//2). ,rom the indings o both the labor arbiter and the 7L3C% it is clear that 8ames did nothing $rong $hen he handed o'er to Marciana the en'elope containing the applications o persons under the reerred accounts o 8orge $ho $ere later ound to be ictitious.

11 E  a g e




As the records no$ stand% 8ames $as no longer connected $ith the F&9A Credit Card Hnit $hen the  applications or F&9A card $ere appro'ed. At such time% he $as already the head o mareting and operations o the +e$elry department. -is act thereore o or$arding the already accomplished applications to the F&9A Credit Card Hnit is proper as he is not in any position to act on them. !he processing and 'eriication o the identities o the applicants $ould ha'e bdone by the proper department% $hich is the F&9A Credit Card Hnit. !hereore% it is incumbent upon Marciana as unit head to ha'e perormed her duties. As correctly obser'ed by the labor arbiter% eppel had gone too ar in blaming 8ames or the shortcomings and imprudence o Marciana. !he in'ocation o eppel o the loss o trust and conidence as ground or 8ames.3. 7o. 1;% April % 2/11).

TE )O)A-)OLA EPORT )ORPORATION 8s. )LARITA P. 9A)AYAN 9.R. N!. 14>433 7'"e 22 2011 3espondent >acayan $as the 9enior FA)TS/ ,inancial Accountant o the petitioner rom 6ctober % 1; to April % 1; and $as dismissed on the ground o alleged loss o trust and conidence. 6ne o the beneits en+oyed by the respondent $as the reimbursement o meal allo$ances incurred during o'ertime $or $ith hp 1;/ as the ma#imum amount per meal. Hpon in'estigation o the petitioner% it $as ound out that the meal receipts incurred by respondent during the period rom 8uly to 7o'ember 1 $ere altered in the date or items purchased $hich $as deemed a 'iolation o company policy. uring the ormal in'estigation% Cola0 Cola inormed the respondent o the alleged raudulent alterations $hile >acayan denied any personal no$ledge in the commission o the alterations. 9ubseuently% in a letter dated April % 1;% Coca Cola dismissed the ser'ices o the >acayan because o the alleged gross 'iolation o the petitioneracayan iled a complaint or illegal dismissal against Coca0Cola. !he Labor Arbiter decided in a'or o the latter on the ground that the alterations made by the petitioner relect her uestionable integrity and honesty $hich $as airmed by the 7L3C. -o$e'er% CA o'erturned the

decision and ordered the reinstatement o the >acayan $ithout loss o seniority and $ith ull bac$ages.

ISSUE/ 4hether or not the acts o respondent constitute as serious misconduct% thus% gi'ing cause or her termination= EL,/ 7o. Misconduct has been deined as improper or $rong conduct. &t is the transgression o some established and deinite rule o action% a orbidden act% a dereliction o duty% $ilul character% and implies $rongul intent and not mere error o +udgment. !hus% or misconduct or improper beha'iour to be a +ust cause or dismissal% (a) it must be seriousD (b) must relate to the perormance o the employee
11 E  a g e




is unduly oppressi'e and disproportionate to the inraction $hich she committed.

,ismissa%C %!ss !( 6!"(ie"6eC 'ie%i"es (!r a%i6ati!". !he Court has set the guidelines or the application o the doctrine o loss o conidence as ollo$s: (a) Loss o conidence should not be simulatedD (b) &t should not be used as a subteruge or causes $hich are improper% illegal or un+ustiiedD (c) &t may not be arbitrarily asserted in the ace o o'er$helming e'idence to the contraryD and (d) &t must be genuine% not a mere aterthought to +ustiy earlier action taen in bad aith. &n the case at bar% no mention $as made regarding petitioner
)!mmissi!" !( a 6rime aai"st em%!$er Ot#er A"a%!!'s )ases 0 the person o his employer or 0his duly authori"ed representati'e or 0 any immediate member o his amily Con'iction is not necessary here% mere substantial e'idence is reuired. 7o need or a case. A mere commission o an oense against the employer $ill +ustiy termination.

!t#er a"a%!!'s 6a'ses Ot#er a"a%!!'s 6a'ses e.. a&a"!"me"t se5'a% #arassme"t r!ss i"e((i6ie"6$ !r !!r er(!rma"6eC r' 'se !r a&'se RA >1:C attit'e r!&%emC 6!"(%i6t !( i"terest %a6 !( 6!mm!" se"se )ases/ )at#era% S6#!!% !( Te6#"!%!$ 8s. NLR) 214 S)RA > FA)TS/ 9tarting as an aspirant to the Congregation o the 3eligious o Firgin Mary (3FM)% FALL*8*3A $ored on a 'olunteer basis as a library aide o C9!% an educational institution run by the 3FM sisters. *'entually she became a regular employee o C9!% again as library aide.

&t $as around such regular employment% ho$e'er% that trouble de'eloped. !he sisters began recei'ing complaints rom students and employees about FALL*8*3AQs diicult personality and sour disposition at $or. 6n one occasion% FALL*8*3A $as summoned to the 6ice o the irectress by 9&9!*3 A6L&7A3&A% shortly ater the resignation o the schoolQs Chie Librarian on account o irreconcilable dierences $ith FALL*8*3A% or the purpose o clariying the matter. 93 A6L&7A3&A also inormed FALL*8*3A o the negati'e reports recei'ed by her oice regarding the latterQs rictional $oring relationship $ith co0$orers and students and reminded FALL*8*3A about the proper beha'ior in the interest o peace and harmony in the school library. FALL*8*3A resented the obser'ations about her actuations and $as completely unrecepti'e to the ad'ice gi'en by her superior. 9he reacted 'iolently to 93 A6L&7A3&A and angrily oered to resign% repeatedly saying% I6% & $ill resign. & $ill resign.I !hereater% $ithout $aiting to be dismissed rom the meeting% she stormed out o the oice. 0 6n separate occasions thereater% C9! and 93 A6L&7A3&A (*!&!&67*39% or bre'ity) sent people to con'ince FALL*8*3A to settle her dierences $ith the ormer. FALL*8*3A remained adamant in her reusal to submit to authority. *'entually% 93 A6L&7A3&A% by letter% inormed FALL*8*3A to loo or another +ob as the school had decided to accept her resignation. FALL*8*3A iled a complaint or illegal dismissal. An issue arose as to $hether there $as la$ul cause or her dismissal.

ISSUE/ 467 there $as there la$ul cause or FALL*8*3A
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thereor. !o mae matters $orse% she ignored the persons sent by *!&!&67*39 to inter'ene in an eort to bring the matter to a peaceul resolution. !he conduct she e#hibited on that occasion smacs o sheer disrespect and deiance o authority and assumes the proportion o serious misconduct or insubordination% any o $hich constitutes +ust cause or dismissal rom employment. 0 As C9! is run by a religious order% it is but e#pected that good beha'ior and proper department% especially among the rans o its o$n employees% are ma+or considerations in the ulillment o its mission. Hnder the circumstances% the sisters cannot be aulted or deciding to terminate FALL*8*3A $hose presence Ihas become more a burden rather than a +oyI and had pro'ed to be disrupti'e o the harmonious atmosphere o the school. Disposition N+,% decision that 7++E3E,7 #as illegally dismissed" )ET 7)0&E.

PT  T 8s. NLR) 2> S)RA 4< FA)TS/ !his is a case or illegal dismissal iled by >race de >u"man against !Z!. >race de >u"man is a probationary employee o !Z!. &n her +ob application% she represented that she $as single although she $as married. 4hen management ound out% she $as made to e#plain. -o$e'er% her e#planation $as ound unsatisactory so she $as subseuently dismissed rom $or. >race thus iled a case or illegal dismissal against !Z! $ith 3AB. According to the Labor Arbiter% >race% $ho had already gained the status o regular employee% $as illegally dismissed by !Z!. Moreo'er% he ruled that >race $as apparently discriminated against on account o her ha'ing contracted marriage in 'iolation o company rules. 6n appeal to the 7L3C% the decision o the Labor Arbiter $as upheld. !he Motion or 3econsideration $as lie$ise rebued% hence% this special ci'il action. etitioner argued that the dismissal $as not because >race $as married but because o her concealment o the act that she $as married. 9uch concealment amounted to dishonesty% $hich $as $hy she $as dismissed rom $or.

ISSUES/ 4hether or not the company policy o not accepting married $omen or employment $as discriminatory 4hether or not >racerace $as illegally dismissed

EL,/ !here $as discrimination Article 15 o the Labor Code e#plicitly prohibits discrimination merely by reason o the marriage o a emale employee. etitionerrace did commit an act o dishonesty% $hich should be sanctioned and thereore agreed $ith the 7L3Crace rom $or. >race attained regular status as an employee ri'ate respondent% it must be obser'ed% had gained regular status at the time o her dismissal. 4hen she $as ser'ed her $aling papers on 8an. 2% 12% she $as about to complete the probationary period o 1;/ days as she $as contracted as a probationary employee on 9eptember 2% 11. !hat her dismissal $ould be eected +ust $hen her probationary period $as $inding do$n clearly raises the plausible conclusion that it $as done in order to pre'ent her rom earning security o tenure.

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!here $as illegal dismissal As an employee $ho had thereore gained regular status% and as she had been dismissed $ithout +ust cause% she is entitled to reinstatement $ithout loss o seniority rights and other pri'ileges and to ull bac $ages% inclusi'e o allo$ances and other beneits or their monetary eui'alent. 6n 9tipulation against Marriage &n the inal reconing% the danger o !Z!
). A't#!ri*e )a'ses Arti6%e 2<3 reuires one month prior $ritten notice to 6L* and to **D and generally reuires the payment o separation pay. S'&sta"tia% ReJ'ireme"ts/ S'&sta"tia% ReJ'ireme"ts/ ARTI)LE 2<3. )%!s're !( esta&%is#me"t a" re'6ti!" !( ers!""e%. R !he employer may also terminate the employment o any employee due to the installation o labor sa'ing de'ices% redundancy% retrenchment to pre'ent losses or the closing or cessation o operation o the establishment or undertaing unless the closing is or the purpose o circum'enting the pro'isions o this !itle% by ser'ing a $ritten notice on the $orers and the epartment o Labor and *mployment at least one (1) month beore the intended date thereo. &n case o termination due to the installation o labor sa'ing de'ices or redundancy% the $orer aected thereby shall be entitled to a separation pay eui'alent to at least his one (1) month pay or to at least one (1) month pay or e'ery year o ser'ice% $hiche'er is higher. &n case o retrenchment to pre'ent losses and in cases o closures or cessation o operations o establishment or undertaing not due to serious business losses or inancial re'erses% the separation pay shall be eui'alent to one (1) month pay or to at least one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least si# () months shall be considered one (1) $hole year.



a. i"sta%%ati!" !( %a&!r-sa8i" e8i6es 0 !he installation o labor0sa'ing de'ices contemplates the installation o machinery to eect economy and eiciency in this method o production.

&. re'"a"6$ 0 *#ists $here the ser'ices o an employee are in e#cess o $hat $ould reasonably be demanded but the actual reuirements o the enterprise. Fa6t!rs/ \ 6'er0hiring o $orers \ ecreased 'olume o business \ ropping o a particular product line or ser'ice \ uplication o $or ReJ'isites (!r t#e im%eme"tati!" !( a re'"a"6$ r!ram/ 1. 4ritten notice ser'ed on both the ** and the 6L* at least one month to the intended date o retrenchmentD 2. ayment o separation pay eui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higherD 5. >ood aith in abolishing the redundant positionsD and . ,air and reasonable criteria in ascertaining $hat positions are to be declared redundant and accordingly abolished. 6. retre"6#me"t t! re8e"t %!sses meas're !( %ast res!rt 0 3etrenchment is an economic ground to reduce the number o employees. &n order to be +ustiied% the termination o employment by reason o retrenchment must be due to business losses or re'erses $hich are serious% actual and real. Criteria in laying0o $orers: \ Less preerred status (i.e. temporary $orers) \ *iciency rating \ 9eniority

7'sti($i" sta"ars (!r retre"6#me"t/ 1. Losses e#pected should be substantial and not merely de minimis in e#tent. 0 & the loss purportedly sought to be orestalled by retrenchment is clearly sho$n to be unsubstantial and inconseuential in character% the bona ide nature o the retrenchment $ould appear to be seriously in uestion. 2. 9ubstantial loss apprehended must be reasonably imminent% as such imminence can be percei'ed ob+ecti'ely and in good aith by the employer. 0 !here should in other $ords be a certain degree o urgency% or the retrenchment% $hich is ater all a drastic recourse $ith serious conseuences or the li'elihood o the employees retires or other$ise laid0 o. 5. &t must be reasonably necessary and liely to eecti'ely pre'ent the e#pected losses.

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. Alleged losses i already reali"ed% and the e#pected imminent losses sought to be orestalled% must be pro'ed by suicient and con'incing e'idence.

pay shall be eui'alent to one month pay or at least _ month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least  months shall be considered one $hole year.

. t#e 6%!si" !( !erati!" !( t#e esta&%is#me"t !r '"ertai" '"%ess t#e 6%!si" is (!r t#e 'r!se !( 6ir6'm8e"ti" t#e r!8isi!"s !( t#is tit%e

\ &n cases o closure or cessation o operations o establishment due to serious business losses or inancial re'erses% there shall be no separation pay.

0 may be either: 1. or serious business losses or 2. not due to serious business losses 0 includes bona ide suspension o operations o business e#ceeding  months 0 the signiicance o losses here is that% i the cessation o business $as due to serious business losses then the employer $ould not be liable to pay separation pay to the employee. -o$e'er% it $ould be the other $ay around i the cessation $as not due to serious business losses.

Pr!6e'ra% ReJ'ireme"ts 6mnibus 3ules ,or termination o employment as based on authori"ed causes deined in Art 25 o the LC% the reuirements o due process shall be deemed complied: 1. $ith upon ser'ice o a $ritten notice to the (sho$ cause letter) a. employee and (so that he can loo or another +ob) b. the appropriate 3egional 6ice o the epartment (so that it can chec the 'alidity o the dismissal and or statistical purposes) 2. at least 5/ days beore the eecti'ity o the termination 5. speciying the ground or grounds o termination lus[



9eparation pay0 $ill be gi'en 5/ days ater the ser'ice o notice o the termination. !his is so because it is only then that they are considered separated rom ser'ice. \ &n case o termination due to installation o labor0 sa'ing de'ices or redundancy% the $orer aected thereby shall be entitled to a separation pay eui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higher. \ &n case o retrenchment to pre'ent losses and in cases o closure or cessation o operations o establishment or undertaing not due to serious business losses or inancial re'erses% the separation

& the termination is brought about by the completion o the contract or phase thereo% no prior notice is reuires. & the termination is brought about by the ailure o an employee to meet the standards o the employer in the case o probationary employment% it shall be suicient that a $ritten notice is ser'ed the employee $ithin reasonable time rom eecti'e date o termination.

1. I"sta%%ati!" !( La&!r Sa8i" ,e8i6es 0 !he installation o labor0sa'ing de'ices contemplates the installation o machinery to eect economy and eiciency in this method o production. )ase/ Asia" A%6!#!% )!r. 8s. NLR) ar. 2 1>>> etition or 3e'ie$ on certiorari o 7L3C decision FA)TS/ &n 9ept ]1% the arsons amily% $ho originally o$ned the controlling stocs in Asian Alcohol Corp (AAC)% $ere dri'en by mounting business losses to sell their ma+ority rights to rior -oldings% &nc. $hich too o'er AAC
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0 !he  pri'ate respondents iled $ith the 7L3C complaints or illegal dismissal $ith a prayer or reinstatement $ith bac$ages% moral damages and attyQs ees. !hey alleged that AAC used the retrenchment program as a subteruge or union busting. !hey claimed that they $ere singled out or separation by reason o their acti'e participation in the union. !hey also asse'erated that Asian Alcohol $as not banrupt as it has engaged in an aggressi'e scheme o contractual hiring. 0 LA ruled in a'or o AAC saying that retrenchment $as 'alid. 7L3C re'ersed LA ruling that there $as illegal dismissal. &t re+ected the e'idence by AAC to pro'e its business re'ersals. &t ruled that the positions o pri'ate respondents $ere not redundant or the simple reason that they $ere replaced by casuals. -ence% this petition.

reasonable criteria in ascertaining $ho $ould be dismissed and $ho $ould be retained among the **s% such as status (i .e.% $hether they are temporary% casual% regular or managerial employees)% eiciency% seniority% physical itness% age% and inancial hardship or certain $orers.  On ,edundancy : 3edundancy e#ists $hen the ser'ice capability o the $or orce is in e#cess o $hat is reasonably needed to meet the demands on the enterprise. A redundant position is one rendered superluous by any o these actors: o'erhiring o $orers% decreased 'olume o business% dropping o a particular product line pre'iously manuactured by the company or phasing out o a ser'ice acti'ity priorly undertaen by the business. Hnder these conditions% *3 has no legal obligation to eep in its payroll more **s than are necessary or the operation o its business.

ISSUE/ 467 the positions o the herein pri'ate respondent $orers are unnecessary redundant and superluous% thereby +ustiying the termination o their employment

 1rocedure L ,e8uisites for valid implementation of valid redundancy program: (1) $ritten notice ser'ed

EL,/ G*9 (atio 3etrenchment and redundancy under A25 o Labor Code1 are +ust causes or the employer to terminate the ser'ices o $orers to preser'e the 'iability o the business. &n e#ercising its right% ho$e'er% management must aithully comply $ith the substanti'e and procedural reuirements laid do$n by la$ and +urisprudence (easoning  On ,etrenchment: AAC $as able to pro'e the .

reuirements or retrenchment to be 'alid: (1) the retrenchment $as reasonably necessary and liely to pre'ent business losses% $hich% i already incurred% are not merely de minimis% but substantial% serious% actual and real% or i only e#pected% are reasonably imminent as percei'ed ob+ecti'ely and in good aith by the employerD (2) *3 ser'ed $ritten notice both to the **s and to 6L* at least 1 mo. prior to the intend date o retrenchmentD(5) *3 paid the retrenched employees separation pay eui'alent to 1 mo. pay or at least 1P2 month pay or e'ery year o ser'ice% $hiche'er is higherD () *3 e#ercised its prerogati'e to retrench employees in good aith or the ad'ancement o its interest o its interest and not to deeat or circum'ent the employeesQ right to security o tenureD and (;) *3 used air and 1 Art. 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment, to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a ritten notice on t he orkers and the !inistry of "abor and #mployment at least one $%& month before the intended date thereof. 'n case of termination due to the installation of labor saving devices or redundancy, the orker affected thereby shall be entitled to a separation pay e(uivalent to at least one $%& month pay or to at least one $%& month pay for every year of service, hichever is higher. 'n case of retrenchment to prevent losses and in case of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be e(uivalent to one $%& month pay at least one)half $%*2&, month pay for every year of service, hichever is higher. A fraction of at least si+ $& month shall be considered one $%& hole year.

on both the employees and the epartment o Labor and *mployment at least one month prior to the intended date o retrenchmentD (2) payment o separation pay eui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higherD (5) good aith in abolishing the redundant positionsD and () air and reasonable criteria in ascertaining $hat positions are to be declared redundant and accordingly abolished.  On Effect of Employment of 0ndependent %ontractor : An employerQs good aith in implementing

a redundancy program is not necessarily destroyed by a'ailment o the ser'ices o an independent contractor to replace the ser'ices o the terminated employees. 4e ha'e pre'iously ruled that the reduction o the number o $orers in a company made necessary by the introduction o an independent contractor is +ustiied $hen the latter is undertaen in order to eectuate more economic and eicient methods o production. &n the case at bar% pri'ate respondents ailed to proer any proo that the management acted in a malicious or arbitrary manner in engaging the ser'ices o an independent contractor to operate the Laura $ells. Absent such proo% the Court has no basis to interere $ith the 'ona fide decision o management to eect more economic and eicient methods o production. Disposition etition >3A7!*. 7L3C decision set aside. LA ruling reinstated.

,!%e P#i%s. Vs. NLR) Set. 13 2001 FA)TS: ole hilippines% &nc.% is a corporation organi"ed and e#isting under hilippine la$s. &t is engaged in the business o gro$ing% canning% processing and manuacturing pineapples and other allied products. !he other petitioners $ere ole

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corporate oicers at the time the cases $ere instituted 0 ri'ate respondents $ere oleul 4ar% oil price increases% mandated $age increases% the  import le'y% po$er rate hies% JandK increased land rentals%@ e#isting at that time. 0 ,urthermore% the ?bloody ecember 1 coup d
0 6'erall% 2%2 employees $ere separated under the 9F3 rogram. 0 &n 6ct. 11% complaints or illegal dismissal $ere iled against ole by e Lara et al. 0 LA 9olano dismissed the complaints or lac o meritD their dismissal $as 'alid. 0 7L3C re'ersed the LA and ordered reinstatement. enied 6L*
ISSUE: 467 6L*<9 redundancy program is 'alid and i so% $on the dismissal o the respondent employees are 'alid as $ell EL,/ G*9 0 3edundancy is one o the authori"ed causes or the dismissal o an employee. 0 !he lac o notice to the 6L* does not render the redundancy program 'oid. (easoning 0 7iltshire ile *o. Inc., vs. 21(*# ?# # #

redundancy in an employer
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and the 9pecial Foluntary 3esignation program in 1/011. 0 Among the a'o$ed goals o such restructuring is the reductio reduction n o absenteeis absenteeism m in the company. company. !he harsh harsh economic economic and political political climate then pre'aili pre'ailing ng in the country also emphasi"ed the need or cost0 sa'ing measures. 0 3eorg eorgan anii"ati ation as a cost cost00sa'in a'ing g de'ic e'ice e is acno$ledged by +urisprudence. +urisprudence. An employer employer is not precluded rom adopting a ne$ policy conduci'e to a more economical and eecti'e management% and the la$ does not reuire that the employer should be suering inancial losses beore he can terminate the ser' er'ices ces o the empl employ oyee ee on the ground ound o redundancy. 0 !he la$% ho$e'er% does not pre'ent employers rom sa'ing on labor costs. 0 &nte &ntern rnat atio ional nal Macl Macleo eod% d% &nc. &nc. 's. 's. &nte &nterm rmed edia iate te Appellate Court: held that the determination o the need or the phasing out o a department as a labor and cost sa'ing de'ice because it $as no longer economical to retain ain said aid department is a management prerogati'e% $ith $hich the courts $ill not interere. 0 e 6cam 6campo po 's. 's. 7L3C 7L3C:: ?JtK ?JtKhe he redu reduct ctio ion n o the the number o $orers in a company made necessary by the introduction o the ser'ices o >emac Machin Machineri eries es in the maintena maintenance nce and repair repair o its industria industriall machinery machinery is +ustii +ustiied. ed. !here can can be no uestion as to the right o the company to contract the ser'ices o >emac Machineries to replace the ser'ices rendered by the terminated mechanics $ith a 'ie$ 'ie$ to ee eect ctin ing g more more econ econom omic ic and and ei eici cien entt methods o production.@ 9o long as the undertaing to sa'e on labor costs is not attended by malice% arbitrariness% or intent on the part o the employer to circum'ent the la$% as in this case% the Court $ill not interere $ith such endea'or. (atio & an employee consented to his retrenchment or 'olu 'olunt ntar arililyy appl applie ied d or or retr retrenc enchm hmen entt $ith $ith the the employ employer er due to the insta installllati ation on o labor0 labor0sa' sa'ing ing de'i de'ice ces% s% redu redund ndan ancy cy%% clos closur ure e or cess cessat atio ion n o oper operat atio ion n or to pre' pre'ent ent ina inanc ncia iall loss losses es to the the busine business ss o the employ employer% er% the reuir reuired ed pre'i pre'ious ous notice to the 6L* is not necessary as the employee thereby acno$ledged the e#istence o a 'alid cause or termin terminati ation on o his employ employmen mentt (International 8arvester, 8arveste r, Inc. vs. 21(*21 (*-. -ere% most o the pri'ate respondents e'en illed up appl appliicati catio on or orms to be consi onsid dered ered or or the the redund redundanc ancyy progra program m and thus thus acno$ acno$led ledged ged the e#istence that their ser'ices $ere redundant. 0 ri'ate respondents e#ecuted t$o releases in a'or o petitioner company. 0 7ot all uitclaims are per se in'alid or against public policy. But those

(1) $here there is clear proo that the $ai'er $as $angled rom an unsuspecting unsuspecting or gullible gullible person or (2) $here the terms o settlement are unconscionable on their ace ace are in'alid. in'alid. &n these cases% the la$ $ill step in to annul the uestionable transaction. !here is no sho$ing here that pri'ate respondent respondentss are unsuspecti unsuspecting ng or gullible gullible persons. persons. 7either are the terms o the settlement uncons unconsci ciona onable ble.. &ndeed &ndeed%% pri'ate pri'ate respon responden dents ts recei'ed a generous separation pacage% as set out in the narration o acts abo'e. Disposition etition is >3A7!* >3A7!* and the decision decision o the 7L3C 7L3C A77HLL* A77HLL* and 9*! 9*! A9&*. A9&*. !36 – L&,!*

Serra"! 8s. NLR) 7a". 2; 2; 2000 9errano $as hired by &setann ept. FA)TS : 3uben 9errano 9tore as a security checer 1 – ContractualD 1; – 3egularD 1 – -ead o 9ecurity Checers &n 11% as a cost0cutting measure% measure% &setann decided to phase out the entire security section and engage the ser'ices o an independent security agency. agency. &setan &setann n sent sent a memo memo to 9errano 9errano on 11 6ct 11% 11% reiterating their 'erbal notice o termination eecti'e on the same day. 9errano 9errano iled iled a complaint complaint on 5 ec 11 or illegal dism dismis issa sal%l% ille illega gall layo layo %% una unair ir labo laborr prac practitice ce%% underpayment o $ages% nonpayment o salary and o'ertime pay.

La&!r La&!r Ar&it Ar&iter er #e% #e% t#at t#at Serra" Serra"! ! ?as ?as i%%ea i%%ea%%$ %%$ ismisse ,ailed to establish that the cause o retrenchment is to minimi"e losses id not accord due process to 9errano id id not use reason reasonabl able e stand standard ardss in select selecting ing employees to be terminated id id not sho$ sho$ employ employees ees<< inei ineicie ciency ncy so as to +ustiy their replacement replacement !he day ater 9errano
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USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo Compiled by: Clint M. Maratas –LLB •

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7o bad aith in appointing a super'isor because it $as separate rom 9errano
,ines ,ines impo impose sed d rang range e rom rom 1%/ 1%/// // to 1/%/// Ree5ami"i" Wenphil doctrine 8. anganiban – Monetary sanctions are too insigniicant% niggardly% late 8. uno uno – ?ism ?ismiss iss no$% pay later@ later@ policy policy con'enient or moneyed employers •

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ISSUE AN, OL,IN9/ 467 the abolition o the 9ecurity Checers section and the employ employmen mentt o an indep independ endent ent securi security ty agency alls under any o the authori"ed causes or dismissal under Article 25 o the Labor Code 0 YES% authori" authori"ed ed cause is redundancy redundancyDD 9errano should be gi'en separation pay at the rate o one0month pay or e'ery year o ser'ice (Art. 25) ,IS)USSION pro'ides des that that one month month beore beore inten intended ded Art. rt. 2<3 2<3 pro'i date% $ritten $ritten notice must be ser'ed ser'ed on the $orers and 6L* Authori:ed causes under Art. B> +*losure of establishment and reduction of personnel-

&n their opinion% such dismissal is 'oid and employee should be reinstated and paid bac$ages

Reme$ – pay ull bac$ages rom dismissal until determ determina inatition on that that dismis dismissal sal $as or a +ust +ust cause cause BH! 9!&LL% dismissal must be upheld 7hy violation of the notice re6uirement cannot be considered considered a denial of due process resulting resulting in the nullity of dismissal

ue process clause is a limitati limitation on on go'ernment go'ernmental al po$ers and 6*9 76! ALG to the e#ercise o pri'ate po$er

&nstallat &nstallation ion o labor0 labor0 Searati!" a$ at the rate o at sa'ing de'ices leas leastt one0 one0mo mont nth h pay pay or !"eRe'"a"6$ m!"t# a$ (!r e8er$ $ear !( ser8i6e ($hiche'er is higher) 3etre etrenc nchm hmen entt to 9eparation pay at the rate o at pre'ent losses leas leastt one0 one0mo mont nth h pay pay or hal hal00 Closing or cessation mont month h pay pay or or e'er e'eryy year year o o operations ser'ice ($hiche'er is higher)

a. 6nly the state has authority to tae lie% liberty% property b. urpose o clause is to ensure that the e#ercise o this po$er is consistent $ith ci'ili"ed methods

Absent proo that management acted in a malicious or arbitrary arbitrary manner% manner% the Court $ill not interere interere $ith the employer
a. T#is T#is is NOT t#e t#e 6ase 6ase !( term ermi"at i"ati! i!" " !( em%!$ee – no ad'ersary system here (there is no charge against the employee) &. P'r!se !( 30-a$ ?ritte" "!ti6e is t! i8e em%!$ee time t! reare (!r t#e e8e"t'a% !& %!ss% and or 6L* to determine 467 economic causes e#ist to +ustiy his termination 6. E8e" i" 6ases !( ismissa% '"er Arti6%e 2<2 J1K% purpose o notice and hearing is 76! to comply $ith the due process clause in the Constitut ConstitutionD ionD Compliance Compliance $ith $ith notice notice reuiremen reuirementt does not oreclose right o employee to uestion the legality o his dismissal

8istory of policies When When ther there e is just just caus cause e 'ut 'ut no due due proc proces ess s 5re8uirements of notice and opportunity to 'e heard6

Be(!re/ ismissal is illegal !he s#i(t too place in Wenphil %orp. v. N+,% -ighly pre+udicial to the employer
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employer er N!?/ !?/ ismissal shall be upheld but the employ must be be sanctioned sanctioned or or non0compl non0compliance iance $ith $ith the the reu reuir irem emen ents ts o% o% or or or ail ailur ure e to obse obser' r'e% e% due due process ()e'uguero v. N+,% )

7oti 7otice ce and and hear hearin ing g are are reu reuir ired ed unde underr the the due due process clause beore the po$er o the organi"ed society is brought to bear upon the indi'idual

. ist!r$ !( re%ate %a?s 1. Art. 5/ 5/2 o o 9p 9panish Co Code o o Co Commerce – employeePemployer can terminate relationship by gi'ing one month noticeD in lieu o notice% mesada (one month pay) could be gi'en to employee 2. 7CC 22 22/ – repealed Art Art. 5/ 5/2 o 9p 9panish Code o Commerce 5. 3A 1/ 1/;2 (! (!ermination a ay La$ La$) – re' re'i'ed mesada

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3A 1 1 – am amended 3A 3A 1/ 1/;2 by by pr pro'iding or or gi'i gi'ing ng o ad'an ad'ance ce noti notice ce or paym paymen entt o compensation (1P2 month per year o ser'ice) ;. 3ules implementing B 15/% 3A 1; (amending 7CC 2(b) – notice reuired e'en $hen the dismissal $as or cause *mployer *mployer CA776! CA776! be e#pected e#pected to be an impartial impartial +udge o his o$n cause. Also the case case or termination termination or a +ust cause under Article 22% 8. uno disputes this as he says that many cases ha'e been $on by employees beore grie'ance committees manned by impartial +udges o the company. >rie'ance >rie'ance machinery machinery is &,,*3* &,,*3*7! 7! – established established by agre agreem emen entt o empl employ oyer er%% empl employ oyee eess and and is composed o representati'es rom both sides

I( t#e 8i!%ati!" !( t#e "!ti6e reJ'ireme"t is "!t a e"ia% !( 'e r!6ess ?#at is itK Mere ere ai ailur lure to obse obserr'e a proc proced edur ure e or or the the term termin inat atio ion n o empl employ oyme ment nt%% $hic $hich h mae maess the the termination merely ineectual W#at maes a ismissa% !( a" em%!$ee i%%ea%K 6nly the absence o a +ust cause or termination as pro'ided in Article 2 Basi A't#!ri*e N!ti N!ti6e 6e Rei" Rei"st stat ate e +i" +i" !( a$ a$ s 6a'se 9eparation Art.  ` ` pay% 25 bac$ages Art. ` `  Bac$ages 25 Bac$ages rom termination Art.  ` ` until it is 22 determined that there is +ust cause ,ISPOSITIVE PORTION etition granted. 7L3C resolution modiied. &setann is ordered to: ay separation pay eui'alent to one month pay per year o ser'ice Hnpaid salary roportionate 15th month pay ,ull ,ull bac bac$a $age gess rom rom term termin inat atio ion n unti untill this this decision becomes inal Case remanded to Labor Arbiter to determine computation o monetary a$ards to 9errano. •

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OPINIONS G2H

Searate Oi"i!" D Be%%!si%%! re reer erss to call call inde indemn mnit ityy or pena penalt ltyy as disturbance compensation rop ropos oses es that that amou amount nt o the the a$ar a$ard d be uniorm and rational and not arbitrary ,isse"ti" Oi"i!" D P'"! Wenphil Wenphil did not change ruling that 'iolation o the the pre0 pre0di dism smis issa sall noti notice ce reu reuir irem emen entt is an inringement o due process Wenphi hill rule 9ubm 9ubmititss a retu return rn to the the pre0 pre0Wenp $here a reasonless 'iolation o the notice reuirement maes the dismissal illegal and results in the employee
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ISSUE: 467 there $as illegal dismissal 2. Re'"a"6$/ ReJ'isites 0 *#ists $here the ser'ices o an employee are in e#cess o $hat $ould reasonably be demanded but the actual reuirements o the enterprise. Fa6t!rs/ \ 6'er0hiring o $orers \ ecreased 'olume o business \ ropping o a particular product line or ser'ice \ uplication o $or (e6uisites for the redundancy program#

implementation

of

EL,/ G*9 (atio ismissal is the ultimate penalty that can be meted to an employee. &t must thereore be based on a clear and not on an ambiguous or ambi'alent ground. (easoning

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1. 4ritten notice ser'ed on both the ** and the 6L* at least one month to the intended date o retrenchmentD 2. ayment o separation pay eui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higherD 5. >ood aith in abolishing the redundant positionsD and . ,air and reasonable criteria in ascertaining $hat positions are to be declared redundant and accordingly abolished.

)ases/ 9!%e" T#rea +"itti" 8s. NLR) ar. 11 1>>> FA)TS: 9e'eral employees o >olden !hread nitting &ndustries (>!) $ere dismissed or dierent reasons. 2 employees $ere allegedly or slashing the company!% on the other hand% contend that there $ere 'alid causes or the terminations. !he dismissals $ere allegedly a result o the slashing o their products% rotation o $or% $hich in turn $as caused by the lo$ demand or their products% and abandonment o $or. 43! to the cases in'ol'ing the slashing o their products and threats to the personnel manager% the dismissals $ere in eect a orm o punishment. 0 !he labor arbiter ruled partially in a'or o >!. -e said that there $as no sho$ing that the dismissals $ere in retaliation or establishing a union. -e% ho$e'er% a$arded separation pay to some employees. 0 7L3C% ho$e'er% appreciated the e'idence dierently. &t held that there $as illegal dismissal and ordered reinstatement.

0 43! to the case in'ol'ing slashing o to$els% the employees $ere not gi'en procedural due process. !here $as no notice and hearing% only outright denial o their entry to the $or premises by the security guards. !he charges o serious misconduct $ere not suiciently pro'ed. 0 43! to the employees dismissed or redundancy% there $as also denial o procedural due process. -earing and notice $ere not obser'ed. !hus% although the characteri"ation o an employee! e#ercised their authority to dismiss $ithout due regard to the pro'isions o the Labor Code. !he right to terminate should be utili"ed $ith e#treme caution because its immediate eect is to put an end to an employeeQs present means o li'elihood $hile its distant eect% upon a subseuent inding o illegal dismissal% is +ust as pernicious to the employer $ho $ill most liely be reuired to reinstate the sub+ect employee and grant him ull bac $ages and other beneits. Disposition ecision A,,&3M*

Wits#ire Fi%e )!. i"6. 8s. NLR) 1>3 S)RA :: FA)TS/ ri'ate respondent Ficente !. 6ng $as the 9ales Manager o petitioner 4iltshire ,ile Co.% &nc. (I4iltshireI) rom 1 March 11 up to 1 8une 1;. 6n 15 8une 1;% upon pri'ate respondentQs return

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rom a business and pleasure trip abroad% he $as inormed by the resident o petitioner 4iltshire that his ser'ices $ere being terminated. ri'ate respondent maintains that he tried to get an e#planation rom management o his dismissal but to no a'ail. 6n 1 8une 1;% $hen pri'ate respondent again tried to spea $ith the resident o 4iltshire% the companyQs security guard handed him a letter $hich ormally inormed him that his ser'ices $ere being terminated upon the ground o redundancy.

business losses beginning 1 and that it $as compelled to reduce the si"e o its personnel orce. etitioner also contends that redundancy as a cause or termination does not necessarily mean duplication o $or but a Isituation $here the ser'ices o an employee are in e#cess o $hat is demanded by the needs o an undertaing

ISSUEC 467 pri'ate respondent
ri'ate respondent iled% on 21 6ctober 1;% a complaint beore the Labor Arbiter or illegal dismissal alleging that his position could not possibly be redundant because nobody (sa'e himsel) in the company $as then perorming the same duties. ri'ate respondent urther contended that retrenching him could not pre'ent urther losses because it $as in act through his remarable perormance as 9ales Manager that the Company had an unprecedented increase in domestic maret share the preceding year. ,or that accomplishment% he continued% he $as promoted to Mareting Manager and $as authori"ed by the resident to hire our () 9ales *#ecuti'es i'e (;) months prior to his termination. 0 &n its ans$er% petitioner company alleged that the termination o respondentQs ser'ices $as a cost0 cutting measure: that in ecember 1% the company had e#perienced an unusually lo$ 'olume o orders: and that it $as in act orced to rotate its employees in order to sa'e the company. espite the rotation o employees% petitioner allegedD it continued to e#perience inancial losses and pri'ate respondentQs position% 9ales Manager o the company% became redundant. 0 6n 2 ecember 1% during the proceedings beore the Labor Arbiter% petitioner% in a letter 1 addressed to the 3egional irector o the then Ministry o Labor and *mployment% notiied that oicial that eecti'e 2 8anuary 1% petitioner $ould close its doors permanently due to substantial business losses. 0 &n a decision dated 11 March 1% the Labor Arbiter declared the termination o pri'ate respondentQs ser'ices illegal and ordered petitioner to pay pri'ate respondent bac$ages% unpaid salaries in the amount o% accumulated sic and 'acation lea'es in the amount o% hospitali"ation beneit pacage in the amount% unpaid commission in the amount o% moral damages in the amount o and attorneyQs ees in the amount o. 6n appeal by petitioner 4iltshire% the 7ational Labor 3elations Commission (I7L3CI) airmed in toto on  ,ebruary 1 the decision o the Labor Arbiter. 0 &n this etition or %ertiorari % it is submitted that pri'ate respondentQs dismissal $as +ustiied and not illegal. etitioner maintains that it had been incurring

EL,/ G*9 !he Court resol'ed to grant due course to the etition or %ertiorari . !he 3esolutions o the 7ational Labor 3elations Commission dated  ,ebruary 1 and  March 1 are hereby 9*! A9&* and 7HLL&,&*. !he !emporary 3estraining 6rder issued by this Court on 21 March 1 is hereby made *3MA7*7!. (atio. -a'ing re'ie$ed the record o this case% the Court has satisied itsel that indeed petitioner had serious inancial diiculties beore% during and ater the termination o the ser'ices o pri'ate respondent. ,or one thing% the audited inancial statements o the petitioner or its iscal year ending on 51 8uly 1; prepared by a irm o independent auditors% sho$ed a net loss in the amount o %51%521.// and a total deicit or capital impairment at the end o year o %%5.//. 2 &n the preceding iscal year (150 1)% $hile the company sho$ed a net ater ta# income o 5%;/.//% it actually suered a deicit or capital impairment o 2%5;%12.//. Most importantly% petitioner 4iltshire inally closed its doors and terminated all operations in the hilippines on 8anuary 1% barely t$o (2) years ater the termination o pri'ate respondentQs employment. 4e consider that inally shutting do$n business operations constitutes strong conirmatory e'idence o petitionerQs pre'ious inancial distress. !he Court inds it 'ery diicult to suppose that petitioner 4iltshire $ould tae the inal and irre'ocable step o closing do$n its operations in the hilippines simply or the sole purpose o easing out a particular oicer or employee% such as the pri'ate respondent. 0 !urning to the legality o the termination o pri'ate respondentQs employment% $e ind merit in petitionerQs basic argument. !he Court $as unable to sustain public respondent 7L3CQs holding that pri'ate respondentQs dismissal $as not +ustiied by redundancy and hence illegal. &n the irst place% $hile the letter inorming pri'ate respondent o the termination o his ser'ices used the $ord IredundantI% that letter also reerred to the company ha'ing IincurJredK inancial losses $hich JinK act has compelled JitK to resort to retrenchment to pre'ent urther lossesI. 3 !hus% $hat the letter $as in eect saying $as that because o inancial losses% retrenchment $as necessary% $hich retrenchment in

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turn resulted in the redundancy o pri'ate respondentQs position. 0 &n the second place% the Court does not belie'e that redundancy in an employerQs personnel orce necessarily or e'en ordinarily reers to duplication o $or. !hat no other person $as holding the same position that pri'ate respondent held prior to the termination o his ser'ices% does not sho$ that his position had not become redundant. &ndeed% in any $ell0organi"ed business enterprise% it $ould be surprising to ind duplication o $or and t$o (2) or more people doing the $or o one person. 3edundancy% or purposes o our Labor Code% e#ists $here the ser'ices o an employee are in e#cess o $hat is reasonably demanded by the actual reuirements o the enterprise. 9uccinctly put% a position is redundant $here it is superluous% and superluity o a position or positions may be the outcome o a number o actors% such as o'erhiring o $orers% decreased 'olume o business% or dropping o a particular product line or ser'ice acti'ity pre'iously manuactured or undertaen by the enterprise. 4 !he employer has no legal obligation to eep in its payroll more employees than are necessarily or the operation o its business. &n the third place% in the case at bar% petitioner 4iltshire% in 'ie$ o the contraction o its 'olume o sales and in order to cut do$n its operating e#penses% eected some changes in its organi"ation by abolishing some positions and thereby eecting a reduction o its personnel. !hus% the position o 9ales Manager $as abolished and the duties pre'iously discharged by the 9ales Manager simply added to the duties o the >eneral Manager% to $hom the 9ales Manager used to report. &t is o no legal moment that the inancial troubles o the company $ere not o pri'ate respondentQs maing. ri'ate respondent cannot insist on the retention o his position upon the ground that he had not contributed to the inancial problems o 4iltshire. !he characteri"ation o pri'ate respondentQs ser'ices as no longer necessary or sustainable% and thereore properly terminable% $as an e#ercise o business +udgment on the part o petitioner company. !he $isdom or soundness o such characteri"ation or decision $as not sub+ect to discretionary re'ie$ on the part o the Labor Arbiter nor o the 7L3C so long% o course% as 'iolation o la$ or merely arbitrary and malicious action is not sho$n. &t should also be noted that the position held by pri'ate respondent% 9ales Manager% $as clearly managerial in character.

,!%e P#i%s. Vs. NLR) 3: S)RA 124 FA)TS: ole hilippines% &nc.% is a corporation organi"ed and e#isting under hilippine la$s. &t is engaged in the business o gro$ing% canning% processing and manuacturing pineapples and other

allied products. !he other petitioners $ere ole corporate oicers at the time the cases $ere instituted. ri'ate respondents $ere oleul 4ar% oil price increases% mandated $age increases% the  import le'y% po$er rate hies% JandK increased land rentals%@ e#isting at that time. 0 ,urthermore% the ?bloody ecember 1 coup d
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A total o 2%5; hourly and monthly salaried employees $ere separated rom ole during this period. Ater assessing the outcome o the 9F3% ole ound that it could still do $ith lesser employees% and proceeded to dismiss more o them in March 11. 6'erall% 2%2 employees $ere separated under the 9F3 rogram. &n 6ct. 11% complaints or illegal dismissal $ere iled against ole by e Lara et al. LA 9olano dismissed the complaints or lac o meritD their dismissal $as 'alid. 7L3C re'ersed the LA and ordered reinstatement. enied 6L*
EL,/ G*9 3edundancy is one o the authori"ed causes or the dismissal o an employee. !he lac o notice to the 6L* does not render the redundancy program 'oid. (easoning 7iltshire ile *o. Inc., vs. 21(*# ?# # # redundancy

in an employer
0 !he petition alleges that the redundancy program is part o a $ide0scale restructuring o the company. 0 !his purported restructuring is supported by the companyemac Machineries in the maintenance and repair o its industrial machinery is +ustiied. !here can be no uestion as to the right o the company to contract the ser'ices o >emac Machineries to replace the ser'ices rendered by the terminated mechanics $ith a 'ie$ to eecting more economic and eicient methods o production.@ 9o long as the undertaing to sa'e on labor costs is not attended by malice% arbitrariness% or intent on the part o the employer to circum'ent the la$% as in this case% the Court $ill not interere $ith such endea'or. (atio & an employee consented to his retrenchment or 'oluntarily applied or retrenchment $ith the employer due to the installation o labor0sa'ing de'ices% redundancy% closure or cessation o operation or to pre'ent inancial losses to the business o the employer% the reuired pre'ious notice to the 6L* is not necessary as the employee thereby acno$ledged the e#istence o a 'alid cause or termination o his employment (International 8arvester, Inc. vs. 21(*- . 0 -ere% most o the pri'ate respondents e'en illed up application orms to be considered or the redundancy program and thus acno$ledged the e#istence that their ser'ices $ere redundant.

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0 ri'ate respondents e#ecuted t$o releases in a'or o petitioner company. 7ot all uitclaims are per se in'alid or against public policy. But those (1) $here there is clear proo that the $ai'er $as $angled rom an unsuspecting or gullible person or (2) $here the terms o settlement are unconscionable on their ace are in'alid. &n these cases% the la$ $ill step in to annul the uestionable transaction. !here is no sho$ing here that pri'ate respondents are unsuspecting or gullible persons. 7either are the terms o the settlement unconscionable. &ndeed% pri'ate respondents recei'ed a generous separation pacage% as set out in the narration o acts abo'e. Disposition etition is >3A7!* and the decision o the 7L3C A77HLL* and 9*! A9&*. !36 – L&,!*

B!"i(a6i! As'(ri" 7r. 8s. )A.9.R. 1::< ar. 10 2004 FA)TS/ Coca Cola lant% then a department o respondent 9an Miguel Beer Corporation (9MC)% hired petitioner as a utilityPmiscellaneous $orer. -e became a regular employee paid on daily basis as a ,orlit 6perator. !hen became a monthly paid employee promoted as 9toc Cler. !he sales oice and operations at the 9um0ag% Bacolod City 9ales 6ice $ere reorgani"ed. 9e'eral positions $ere abolished including petitioner
retrenchment program% $hile those $ho $ill not a'ail o early retirement $ould be redeployed or absorbed at the Bre$ery or other sales oices. etitioner opted to remain and maniested to Acting ersonnel Manager 9al'ador Abadesco his $illingness to be assigned to any +ob% considering that he had three children in college. etitioner $as surprised $hen he $as inormed by the Acting ersonnel Manager that his name $as included in the list o employees $ho a'ailed o the early retirement pacage. etitioner
ISSUE/ 467 the dismissal o petitioner is based on a +ust and authori"ed cause EL,/ 76 0 ole hilippines% &nc. '. 7L3C% citing the leading case o 4iltshire ,ile Co.% &nc. '. 7L3C:  redundancy in an employer’s personnel force necessarily or even ordinarily refers to duplication of work . !hat no other person $as

holding the same position that pri'ate respondent held prior to the termination o his ser'ices% does not sho$ that his position had not become redundant. &ndeed% in any $ell0organi"ed business enterprise% it $ould be surprising to ind duplication o $or and t$o (2) or more people doing the $or o one person. 4e belie'e that redundancy% or purposes o the Labor Code% e#ists $here the ser'ices o an employee are in e#cess o $hat is reasonably demanded by the actual reuirements o the enterprise. 9uccinctly put% a position is redundant $here it is superluous% and superluity o a position or positions may be the outcome o a number o actors% such as o'erhiring o $orers% decreased 'olume o business% or dropping o a particular product line or ser'ice acti'ity pre'iously manuactured or undertaen by the enterprise.

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!he determination that employee
It is "!t e"!'# (!r a 6!ma"$ t! mere%$ e6%are t#at it #as &e6!me !8erma""e. It m'st r!'6e aeJ'ate r!!( t#at s'6# is t#e a6t'a% sit'ati!" t! 'sti($ t#e ismissa% !( t#e a((e6te em%!$ees (!r re'"a"6$. ersuasi'e as the e#planation proered by respondent may be to +ustiy the dismissal o petitioner% a number o disturbing circumstances% ho$e'er% lea'e the Court uncon'inced.

NELSON A. )ULILI 8s. EASTERN TELE)OUNI)ATIONS PILIPPINES IN). SALVA,OR I=ON Presie"t a" )#ie( E5e6'ti8e O((i6er EILIANO 7URA,O )#airma" !( t#e B!ar VIR9ILIO 9AR)IA Vi6e Presie"t a" STELLA 9AR)IA Assista"t Vi6e Presie"t 9.R. N!. 1:3<1 Fe&r'ar$ > 2011 Fa6ts/ 7elson Culili $as employed by *astern !elecommunications a 9enior !echnician. &n 1% due to business losses% *!& $as compelled to implement a 3ight09i"ing rogram $hich consisted o t$o phases: the first phase in'ol'ed the reduction o *!&
R'%i"/ !here $as a 'alid dismissal on the ground o redundancy. !here is redundancy $hen the ser'ice capability o the $ororce is greater than $hat is reasonably reuired to meet the demands o the business enterprise. A position becomes redundant $hen it is rendered superluous by any number o actors such as o'er0hiring o $orers% decrease in 'olume o business% or dropping a particular product line. Among the reuisites o a 'alid redundancy program are: (1) the good aith o the employer in abolishing the redundant positionD and (2) air and reasonable criteria in ascertaining $hat positions are to be declared redundant such as but not limited to: preerred status% eiciency% and seniority. !he records sho$ that *!& had suiciently established not only its need to reduce its $ororce and streamline its organi"ation% but also the e#istence o redundancy in the position o a 9enior !echnician. &t $as decided that% in the +udgment o *!& management% the speciali"ed unctions o a 9enior !echnician $hose sole unction $as essentially the repair and ser'icing o *!&
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'eil% it must be sho$n that the corporate personality $as used to perpetuate raud or an illegal act% or to e'ade an e#isting obligation% or to conuse a legitimate issue. &n illegal dismissal cases% corporate officers may 'e held solidarily lia'le #ith the corporation if the termination #as done #ith malice or 'ad faith.

Culili has ailed to pro'e that his dismissal $as orchestrated by the indi'idual respondents herein or the mere purpose o getting rid o him. -ence% the dismissal is declared 'alid but *astern !elecommunications hilippines% &nc. is ordered to pay petitioner 7elson A. Culili the amount o ;/%///.// as nominal damages or non0compliance $ith statutory due process% in addition to the mandatory separation pay reuired under Article 25 o the Labor Code.

3. Retre"6#me"t t! Pre8e"t L!sses 3etrenchment is an economic ground to reduce the number o employees. &n order to be +ustiied% the termination o employment by reason o retrenchment must be due to business losses or re'erses $hich are serious% actual and real. )riteria i" %a$i"-!(( ?!rers/ \ Less preerred status (i.e. temporary $orers) \ *iciency rating \ 9eniority 7'sti($i" sta"ars (!r retre"6#me"t/ 1. Losses e#pected should be substantial and not merely de minimis in e#tent. 0 & the loss purportedly sought to be orestalled by retrenchment is clearly sho$n to be unsubstantial and inconseuential in character% the bona ide nature o the retrenchment $ould appear to be seriously in uestion. 2. 9ubstantial loss apprehended must be reasonably imminent% as such imminence can be percei'ed ob+ecti'ely and in good aith by the employer. 0 !here should in other $ords be a certain degree o urgency% or the retrenchment% $hich is ater all a drastic recourse $ith serious conseuences or the li'elihood o the employees retires or other$ise laid0 o. 5. &t must be reasonably necessary and liely to eecti'ely pre'ent the e#pected losses. . Alleged losses i already reali"ed% and the e#pected imminent losses sought to be orestalled% must be pro'ed by suicient and con'incing e'idence.

E)O P%$?!! )!r. 8s. A&e%as 9R N!. 14<32 Ari% 14 2004 FA)TS/ *MC6 is a domestic corporation engaged in the business o ?!! r!6essi"% operating through its sa$mill and plymill sections $here respondents used to be assigned as regular $orers. 0 6n 8an 2/% 15 and Mar 2% 15% *MC6% represented by its >en Manager Lim% informed the &O+E o i ts i"te"ti!" t! retre"6# some o its $orers on the ground o purported inancial diiculties. 0 *MC6 then iss'e a mem!ra"'m% addressed to all its foremen" section heads" supervisors and department heads % $ith the instruction o retrenching

some $orers based on the  guidelines: a) 6ld Age (; years and abo'e e#cept positions that are really silled)D b) erormance (Attitude% Attendance% UualityP Uuantity o 4or) 0 er *MC6
0 *MC6 did not comply $ith one0month prior notice reuirement under LC: a) Memorandum merely pro'ided the guidelines on the conduct of the intended layoff D this did not constitute notice.

)ases/

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b) &t $as not addressed to the #or!ers % but to the oremen% the department super'isors and the section heads. c) !here $as no proper notice to &O+E . *MC6 terminated the ser'ices o 2;/ employees but included only 1/ o them in the list it iled $ith 6L*. 0 Beore *MC6 resorted to retrenchment% it ailed to adduce e'idence o its losses and pro'e that it had undertaen measures to pre'ent the occurrence o such losses. 0 *MC6 had not paid the legally prescribed separation pay. *MC6 'iolated the LC in deducting the amount o attorney
ISSUES 1. 467 petitioner *MC6 had substantially complied $ith the reuisites or a 'alid retrenchment 2. 467 respondents had 'oluntarily e#ecuted their respecti'e Uuitclaims 5. 467 the CA may% in a petition or certiorari% correct the e'aluation o e'idence made by both the Labor Arbiter and the 7L3C EL, 1. 76 (atio 3etrenchment5 is one o the authori"ed causes or dismissal o employees% resorted to by employers to a'oid or minimi"e business losses. &t is only Ia measure o last resort $hen other less drastic means ha'e been tried and ound to be inadeuate.I 5/uerrero v N+,%6

S 9tandards to +ustiy retrenchment and to a'oid abuse: a) Losses e#pected should be substantial b) Losses must be reasonably imminent % as such imminence can be percei'ed ob+ecti'ely and in good aith by the employer 2 "Article 222. APPEARANCES AND FEES. –

$b& -o attorneys fees, negotiation fees or similar charges of any kind arising f rom any collective bargaining negotiations or conclusion of the collective bargaining agreement shall be imposed on any individual member of the contracting union/ 0rovided, hoever, That attorneys fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and v oid.1

3 ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL.  The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a ritten notice on the orker and the !inistry of "abor and #mployment at least one $%& month before the intended date thereof. 'n case of termination due to the installation of labor saving devices or redundancy, the orker affected thereby shall be entitled to a separation pay e(uivalent to at least his one $%& month pay or at least one $%& month pay for every year of service, hichever is higher. 'n case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be e(uivalent to one $%& month pay or at least one)half $%*2& month pay for every year of service, hichever is higher. A fraction of at least si+ $& months shall be considered as one $%& hole year.

c) 3etrenchment is reasonably necessary and liely to eecti'ely pre'ent the e#pected losses. *mployer should ha'e taen other measures prior or parallel to retrenchment to orestall losses d) Alleged losses i already reali"ed% and e#pected losses sought to be orestalled% must be proved by suicient and con'incing e'idence (easoning  employer bears the burden o pro'ing the e#istence

or imminence o substantial losses $ith clear and satisactory e'idence. !he e'idence submitted by *MC6 does not persuade the 9C: a 7udited financial statements or the years 11 and 12. *MC6
0 !he corporation% and not its employees% has the burden o pro'ing that the Uuitclaims $ere 'oluntarily entered into. 5)alonga v N+,%6 0 Because the retrenchment $as illegal and o no eect% the Uuitclaims $ere thereore not 'oluntarily entered into by respondents. Consent $as similarly 'itiated by mistae or raud. 5Trendline Employees 7ssoc)outhern 1hil (ederation of +a'or 5TE7 )1(+6 v N+,%6 (easoning

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Compiled by: Clint M. Maratas –LLB  *MC6 claimed that aside rom *ddie de la Cru"%

the other respondents did not submit their respecti'e supporting aida'its detailing ho$ their indi'idual consents had been obtained. Allegedly% such documents do not constitute the clear and con'incing e'idence reuired under the la$ to o'erturn the 'alidity o Uuitclaims. But the 9C held that the burden o proo is actually on the part o *MC6. 0 As a rule% deeds of release or 8uitclaim cannot bar employees rom demanding beneits to $hich they are legally entitled. Acceptance o those beneits $ould not amount to estoppelD ho$e'er% amounts already recei'ed are to be deducted rom their respecti'e monetary a$ards. 5. G*9 (atio !he lo$er tribunals< actual indings $ill not be upheld $here there is a sho$ing that such indings $ere totally de'oid o support% or that the +udgment $as based on a misapprehension o acts. Disposition etition is *7&* (*MC6 is ordered to 3*&79!A!* employees $ith ull bac$ages% inclusi'e o allo$ances and other beneits)

PL,T a" ,ELIA OFI)IAL vs. NLR) et. A%. N!. 14;002. Ari% 1 200

9.R.

BENE,I)TO A. )A7U)O VII vs. TPI PIL. )EENT )ORP. et.a%. 9.R. N!. 14>0>0 Fe&r'ar$ 11 200 7'8$ a"ata 8s. PTT 9.R. N!. 1;23:3 ar6# ; 200< Fa6ts: &n 9eptember 1% petitioner $as employed by respondent hilippine !elegraph and !elephone Corporation (!Z!) as +unior cler $ith a monthly salary o 5% 5.. 9he $as later promoted as Account *#ecuti'e% the position she held until she $as temporarily laid o rom employment on 1 9eptember 1. etitioner temporary separation rom employment $as pursuant to the !emporary 9ta 3eduction rogram adopted by respondent due to serious business re'erses. 6n 1 7o'ember 1% petitioner recei'ed a letter rom respondent in'iting her to a'ail hersel o its 9ta 3eduction rogram acage eui'alent to one0month salary or e'ery year o ser'ice% one and one0hal month salary% pro0rated 15th month pay% con'ersion to cash o unused 'acation and sic lea'e credits% and -ealth Maintenance 6rgani"ation and group lie insurance co'erage until ull payment o the separation pacage. etitioner% ho$e'er% did not opt to a'ail hersel o the said pacage. 6n 2 ,ebruary 1% petitioner recei'ed a 7otice o 3etrenchment rom respondent permanently dismissing her rom employment eecti'e 1 ,ebruary 1.

etitioner iled illegal dismissal beore the Labor Arbiter. etitioner submitted e'idence that the respondents ha'e no grounds or retrenchment and that the company is not suering rom serious losses. -o$e'er% the respondent also submitted inancial reports to sustain its ground o a 'alid retrenchment. !he Labor Arbiter held in a'or o the petitioner $hich $as airmed by the 7L3C. &t urther noted that the epartment o Labor and *mployment (6L*) $as not notiied by the respondent o its retrenchment program as reuired by la$. 6n appeal to CA% the decision o the 7L3C $as re'ersed. &t held that the company is suering serious inancial losses as relected on its inancial statements submitted and prepared by independent auditors o the company. -ence% this petition.

Iss'e/ 4hether there is a 'alid retrenchment by the respondent company e%/ ertinent pro'ision is Article 25 o the Labor Code. ,or a 'alid retrenchment% the ollo$ing reuisites must be complied $ith: (a) the retrenchment is necessary to pre'ent losses and such losses are pro'enD (b) $ritten notice to the employees and to the 6L* at least one month prior to the intended date o retrenchmentD and (c) payment o separation pay eui'alent to one0month pay or at least one0 hal month pay or e'ery year o ser'ice% $hiche'er is higher. !he inancial statements relect that respondent suered substantial loss in the amount o ;; Million by 5/ 8une 1. !he 3eport o 9>F Z Co. substantiates the alleged precarious inancial condition o the respondent. !he inancial statements audited by independent e#ternal auditors constitute the normal method o pro'ing the proit and loss perormance o a company. !he respondent complied $ith the reuisite notices to the employee and the 6L* to eect a 'alid retrenchment. etitioner ailed to reute that she recei'ed the $ritten notice o retrenchment rom respondent on 1 7o'ember 1. Although respondent ailed to urnish 6L* $ith a ormal letter notiying it o the retrenchment% it still substantially complied $ith the reuirement. 9ince the 7ational Conciliation and Mediation Board% the reconciliatory arm o 6L*% super'ised the negotiation or separation pacage% $e agree $ith the Court o Appeals that it $ould be superluous to still reuire respondent to ser'e notice o the retrenchment to 6L*.

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&n act% e'en granting arguendo that respondent $as not e#periencing losses% it is still authori"ed by Article 25J2K o the Labor Code to cease its business operations. *#plicit in the said pro'ision is that closure or cessation o business operations is allo$ed e'en i the business is not undergoing economic losses. !he o$ner% or any bona ide reason% can la$ully close shop anyone. 8ust as no la$ orces anyone to go into business% no la$ can compel anybody to continue in it. &t $ould indeed be stretching the intent and spirit o the la$ i $e $ere to un+ustly interere $ith the management prerogati'e to close or cease its business operations% +ust because said business operations are not suering any loss or simply to pro'ide the $orers continued employment.

BENITO 7. BRI=UELA 8s. ABRAA ,IN9LE a" NI)AN,RO LE9ASPI 9.R. N!. 1;3;1 Ari% 30 200< VIR9ILIO ANABE 8s. ASIAN )ONST. et. a%. 9.R. N!. 1<3233 ,e6em&er 23 200> ,O)TRINE/ !o eect a 'alid dismissal on the ground o retrenchment% the losses must be supported 'y sufficient and convincing evidence% the normal method o discharging $hich is the submission o inancial statements duly audited by independent e#ternal auditors. FA)TS/ etitioner Firgilio Anabe $as hired by respondent company (Asiaonstrut) as radio technicianPoperator sometime in 15. 6n 9eptember % 1% he $as notiied by the latter that his ser'ices $ould be% as he $as in act% terminated eecti'e a month thereater% on the ground o retrenchment. etitioner iled a complaint or illegal dismissal and illegal deduction and payment o ringe beneits. !he Labor Arbiter ound that Asiaonstrut ailed to submit inancial statements to pro'e losses% and thus ruled that Anabe $as illegally dismissed. Hpon appeal% Asiaonstrut submitted certiied true copies o its audited inancial statements in 102///. Considering the same% 7L3C ruled that Anabe $as not illegally dismissed. !he CA airmed the inding o 7L3C% noting that the latter is not precluded rom recei'ing e'idence on appeal as technical rules o procedure are not binding in labor cases. -ence% this petition. ISSUE/ 4hether Anabe $as 'alidly dismissed based on the ground o retrenchment. EL,/ NO. 3etrenchment is the termination o employment initiated by the employer through no ault o and $ithout pre+udice to the employees. &t is resorted to during periods o business recession%

industrial depression% or seasonal luctuations or during lulls occasioned by lac o orders% shortage o materials% con'ersion o the plant or a ne$ production program or the introduction o ne$ methods or more eicient machinery or o automation. &t is a management prerogati'e resorted to% to a'oid or minimi"e business losses. !o eect a 8a%i retre"6#me"t% the ollo$ing e%eme"ts must be present: (1) the retrenchment is reasona'ly necessary and liely to pre'ent business losses $hich% i already incurred% are not merely de minimis% but su'stantial" serious" and real" or only i e#pected% are reasona'ly imminent as percei'ed ob+ecti'ely and in good aith by the employerD (2) the employer ser'es #ritten notice both to the employeePs concerned and the epartment o Labor and *mployment at least a month beore the intended date oretrenchmentD (5) the employer pays the retrenched employee separation pay in an amount prescribed by the CodeD () the employer e#ercises its prerogati'e to retrench in good faithD and (;) the employer uses fair and reasona'le criteria in ascertaining $ho $ould be retrenched or retained. rescinding rom the oregoing% the Court noted that the losses must be supported 'y sufficient and convincing evidence% the normal method o discharging $hich is the submission o inancial statements duly audited by independent e#ternal auditors. &n the present case% Asiaonstrut ailed to submit its audited inancial statements $ithin the t$o years that the case $as pending beore the Labor Arbiter. &t submitted them only ater it recei'ed the ad'erse +udgment o the Labor Arbiter. 4hile the 7L3C is not indeed precluded rom recei'ing e'idence% the delay in the submission o e'idence should be clearly e#plained and should adeuately pro'e the employer
,O)TRINE/ !o eect a 'alid dismissal on the ground o retrenchment% the losses must be supported 'y

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Compiled by: Clint M. Maratas –LLB evidence% the normal method o discharging $hich is the submission o inancial statements duly audited by independent e#ternal auditors. sufficient and convincing

OTEL ENTERPRISES OF TE PILs IN). EPI 8s. SAASA-NUWRAIN 9.R. N!. 1:;: 7'"e  200> ,O)TRINE/ 3etrenchment and redundancy are valid management prerogatives % pro'ided they are done in good faith and the employer aithully complies $ith the su'stantive and procedural re8uirements laid do$n by la$ and +urisprudence. An employerF indicated that the hotel suered an operating loss amounting to o'er 1M. -*& alleged that it initially decided to cost0cut by implementing energy0 sa'ing schemes. &n 2//2% -*& decided to implement a do$nsi"ing scheme to determine the areas $here it could obtain signiicant sa'ings. Ater e'aluation% it ound some positions to be redundant. !he Hnion opposed the do$nsi"ing scheme o petitioner arguing that the latter ailed to pro'e that it is incurring hea'y inancial losses. espite the HnionF Z Co. that the hotel had incurred huge inancial losses necessitating the adoption o a do$nsi"ing scheme. !he CA re'ersed the 7L3C decision. -ence% this petition. ISSUE/ 4hether the do$nsi"ing scheme% i.e. retrenchment and redundancy% adopted by petitioner $as 'alid. EL,/ YES. ,etrenchment is the reduction o $or personnel usually due to poor inancial returns% aimed to cut do$n costs or operation particularly on salaries and $ages. ,edundancy % on the other hand% e#ists $here the number o employees is in e#cess o $hat is reasonably demanded by the actual reuirements o the enterprise. 3etrenchment and redundancy are valid management prerogatives% pro'ided they are done in good faith and the

employer aithully complies $ith the su'stantive and procedural re8uirements laid do$n by la$ and +urisprudence. ,or a valid retrenchment % the ollo$ing reuisites must be complied $ith: (1) the retrenchment is necessary to pre'ent losses and such losses are pro'enD (2) $ritten notice to the employees and to the 6L* at least one month prior to the intended date o retrenchmentD and (5) payment o separation pay eui'alent to one0month pay or at least one0hal month pay or e'ery year o ser'ice% $hiche'er is higher. &n case o redundancy % the employer must pro'e that: (1) a #ritten notice $as ser'ed on both the employees and the 6L* at least one month prior to the intended date o retrenchmentD (2) separation pay eui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higher% has been paidD (5) good faith in abolishing the redundant positionsD and () adoption o fair and reasona'le criteria in ascertaining $hich positions are to be declared redundant and accordingly abolished. &n the present case% the Court appreciated the inancial statements submitted by 9>F in a'or o petitioner
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Accordingly% the termination o the  employees $as legal.

ALFRE,O A. EN,ROS 7R. 8s. ITSUBISI OTORS PILS. )ORP. 9.R. N!. 1:>;<0 Fe&r'ar$ 1: 200> FLI9T ATTEN,ANTS AN, STEWAR,S ASSO)IATION OF TE PILIPPINES FASAPVs. PAL et.a%. 9.R. N!. 1;<0<3 O6t!&er 2 200> Fa6ts/ 6n 8une 1;% 1% AL retrenched ;%/// o its employees% including morethan 1%// o its cabin cre$ personnel% to tae eect on 8uly 1;% 1. AL adopted the retrenchment scheme allegedly to cut costs and mitigate huge inancial losses as a result o a do$nturn in the airline industry brought about by the Asian inancial crisis. uring said period% AL claims to ha'e incurred / billion in liabilities% $hile its assets stood at ; billion. &n implementing the retrenchment scheme% AL adopted its so0called Ilan 1I $hereby ALQs leet o aircrat $ould be reduced rom ; to 1% thus reuiring the ser'ices o only ; cabin cre$ personnel. rior to the ull implementation o the assailed retrenchment program% ,A9A and AL conducted a series o consultations and meetings and e#plored all possibilities o cushioning the impact o the impending reduction in cabin cre$ personnel. -o$e'er% the parties ailed to agree on ho$ the scheme $ould be implemented. !hus AL unilaterally resol'ed to utili"e the criteria set orth in 9ection 112 o the AL,A9A Collecti'e Bargaining Agreement (CBA) in retrenching cabin cre$ personnel: that is% that retrenchment shall be based on the indi'idual employeeQs eiciency rating and seniority. AL determined the cabin cre$ personnel eiciency ratings through an e'aluation o the indi'idual cabin cre$ memberQs o'erall perormance or the year 1 alone. !he actors taen into account on $hether the cabin cre$ member $ould be retrenched% demoted or retained $ere: 1) the e#istence o e#cess sic lea'esD 2) the cre$ memberQs being physically o'er$eightD 5) seniorityD and ) pre'ious suspensions or $arnings imposed. 4hile consultations bet$een ,A9A and AL $ere ongoing% the latter began implementing its retrenchment program by initially terminating the ser'ices o 1/ probationary cabin attendants only to rehire them in April 1. Moreo'er% their employment $as made permanent and regular. 6n 8uly 1;% 1% ho$e'er% AL carried out the retrenchment o its more than 1%// cabin cre$ personnel.

Mean$hile% in 8une 1% AL $as placed under corporate rehabilitation and a rehabilitation plan $as appro'ed per 9ecurities and *#change Commission (9*C) 6rder dated 8une 25% 1 in 9*C Case 7o. /00//. 6n 9eptember % 1% AL% through its Chairman and Chie *#ecuti'e 6icer (C*6) Lucio !an% made an oer to transer shares o stoc to its employees and three seats in its Board o irectors% on the condition that all the e#isting Collecti'e Bargaining Agreements (CBAs) $ith its employees $ould be suspended or 1/ years% but it $as re+ected by the employees. 6n 9eptember 1% 1% AL inormed its employees that it $as shutting do$n its operations eecti'e 9eptember 25% 1 despite the pre'ious appro'al on 8une 25% 1 o its rehabilitation plan. 6n 9eptember 25% 1% AL ceased its operations and sent notices o termination to its employees. !$o days later% AL employees% through the hilippine Airlines *mployees Association (AL*A) board% sought the inter'ention o then resident 8oseph *. *strada. AL*A oered a 1/0year moratorium on stries and similar actions and a $ai'er o some o the economic beneits in the e#isting CBA. Lucio !an% ho$e'er% re+ected this counter0oer. &n a reerendum conducted on 6ctober 2% 1% AL employees ratiied the proposal. 6n 6ctober % 1% AL resumed domestic operations and% soon ater% international lights as $ell. Mean$hile% in 7o'ember 1% or i'e months ater the 8une 1;% 1 mass dismissal o its cabin cre$ personnel% AL began recalling to ser'ice those it had pre'iously retrenched. 9e'eral o those retrenched $ere called bac to ser'ice. &n ecember 1% AL submitted a Istand0aloneI rehabilitation plan to the 9*C by $hich it undertoo a reco'ery on its o$n $hile eeping its options open or the entry o a strategic partner in the uture. Accordingly% it submitted an amended rehabilitation plan to the 9*C $ith a proposed re'ised business and inancial restructuring plan% $hich reuired the inusion o H9V2// million in ne$ euity into the airline. 6n May 1% 1% the 9*C appro'ed the proposed IAmended and 3estated 3ehabilitation lanI o AL and appointed a permanent rehabilitation recei'er or the latter. 6n 8une % 1% the 9*C issued an 6rder conirming its appro'al o the IAmended and 3estated 3ehabilitation lanI o AL. &n said order% the cash inusion o H9V2// million made by Lucio !an on 8une % 1 $as

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acno$ledged. 3espondent AL is ordered to pay the separation beneits to those complainants $ho ha'e not recei'ed their separation pay and to pay the balance to those $ho ha'e recei'ed partial separation pay. Iss'e/ 467 CA decided the case a uo in a $ay contrary to la$ andPor +urisprudence 467 AL
e%/ &t is a settled rule that in the e#ercise o the 9upreme CourtQs po$er o re'ie$% the Court is not a trier o acts and does not normally undertae the ree#amination o the e'idence presented by the contending parties during trial. -o$e'er% there are se'eral e#ceptions to this rule such as $hen the actual indings o the Labor Arbiter dier rom those o the 7L3C% as in the instant case% $hich opens the door to a re'ie$ by this Court. !he la$ recogni"es the right o e'ery business entity to reduce its $or orce ithe same is made necessary by compelling economic actors $hich $ould endanger its e#istence or stability. 4here appropriate and $here conditions are in accord $ith la$ and +urisprudence% the Court has authori"ed 'alid reductions in the $or orce to orestall business losses% the hemorrhaging o capital% or e'en to recogni"e an ob'ious reduction in the 'olume o business $hich has rendered certain employees redundant. !he burden clearly alls upon the employer to pro'e economic or business losses $ith suicient supporting e'idence. &ts ailure to pro'e these re'erses or losses necessarily means that the employeeQs dismissal $as not +ustiied. Any claim o actual or potential business losses must satisy certain established standards% all o $hich must concur% beore any reduction o personnel becomes legal.

e#pected losses that $ould ha'e been incurred had operations been continued% may not amount to serious business losses mentioned in the la$. !he employer must sho$ that its losses increased through a period o time and that the condition o the company $ill not liely impro'e in the near uture or that it e#pected no abatement o its losses in the coming years. !he employer must also e#haust all other means to a'oid urther losses $ithout retrenching its employees. 3etrenchment is a means o last resortD it is +ustiied only $hen all other less drastic means ha'e been tried and ound insuicient. &n the instant case% AL ailed to substantiate its claim o actual and imminent substantial losses $hich $ould +ustiy the retrenchment o more than 1%// o its cabin cre$ personnel. Although the hilippine economy $as gra'ely aected by the Asian inancial crisis% ho$e'er% it cannot be assumed that it has lie$ise brought AL to the brin o banruptcy. Lie$ise% the act that AL under$ent corporate rehabilitation does not automatically +ustiy the retrenchment o its cabin cre$ personnel. 3ecords sho$ that AL $as not e'en a$are o its actual inancial position $hen it implemented its retrenchment program. &t embared on the mass dismissal $ithout irst undertaing a $ell0considered study on the proposed retrenchment scheme. !his 'ie$ is underscored by the act that pre'iously% AL terminated the ser'ices o 1/ probationary cabin attendants% but rehired them almost immediately and e'en con'erted their employment into permanent and regular% e'en as a massi'e retrenchment $as already looming in the hori"on.

FIRST ELEENT/ T#at retre"6#me"t is reas!"a&%$ "e6essar$ a" %ie%$ t! re8e"t &'si"ess %!sses ?#i6# i( a%rea$ i"6'rre are "!t mere%$ e mi"imis &'t s'&sta"tia% seri!'s a6t'a% a" rea% !r i( !"%$ e5e6te are reas!"a&%$ immi"e"t as er6ei8e !&e6ti8e%$ a" i" !! (ait# &$ t#e em%!$er.

Also% the claim that AL sa'ed 2 million monthly due to the implementation o the retrenchment program does not pro'e anythingD it has not been sho$n to $hat e#tent or degree such sa'ings beneited AL% 'is0a0'is its total e#penditures or its o'erall inancial position. Lie$ise% its claim that its liabilities reached / billion% $hile its assets amounted to ; billion only 0 or a debt to asset ratio o more than 1:1 0 may not readily be belie'ed% considering that it did not submit its audited inancial statements. All these allegations are selser'ing e'idence.

!he la$ speas o serious business losses or inancial re'erses. 9liding incomes or decreasing gross re'enues are not necessarily losses% much less serious business losses $ithin the meaning o the la$. !he act that an employer may ha'e sustained a net loss% such loss% per se% absent any other e'idence on its impact on the business% nor on

,6H3!- *L*M*7!: !hat the employer e#ercises its prerogati'e to retrench employees in good aith or the ad'ancement o its interest and not to deeat or circum'ent the employeesQ right to security o tenure. Concededly% retrenchment to pre'ent losses is an authori"ed cause or terminating employment and the decision $hether to resort to such mo'e or not is a

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management prerogati'e. -o$e'er% the right o an employer to dismiss an employee diers rom and should not be conused $ith the manner in $hich such right is e#ercised. &t must not be oppressi'e and abusi'e since it aects oneQs person and property. 6n the reuirement that the prerogati'e to retrench must be e#ercised in good aith% $e ha'e ruled that the hiring o ne$ employees and subseuent rehiring o IretrenchedI employees constitute bad aithD that the ailure o the employer to resort to other less drastic measures than retrenchment seriously belies it claim that retrenchment $as done in good aith to a'oid lossesD and that the demonstrated arbitrariness in the selection o $hich o its employees to retrench is urther proo o the illegality o the employerQs retrenchment program% not to mention its bad aith. 4hen AL implemented lan 22% instead o lan 1% $hich $as $hat it had originally made no$n to its employees% it could not be said that it acted in a manner compatible $ith good aith. &t oered no satisactory e#planation $hy it abandoned lan 1D instead% it +ustiied its actions o subseuently recalling to duty retrenched employees by maing it appear that it $as a sho$ o good aithD that it $as due to its good corporate nature that the decision to consider recalling employees $as made. ,&,!- *L*M*7!: !hat the employer used air and reasonable criteria in ascertaining $ho $ould be dismissed and $ho $ould be retained among the employees% such as status% eiciency% seniority% physical itness% age% and inancial hardship or certain $orers. &n selecting employees to be dismissed%air and reasonable criteria must be used% such as but not limited to: (a) less preerred status (e.g.% temporary employee)% (b) eiciency and (c) seniority. !he appellate court held that there $as no need or AL to consult $ith ,A9A regarding standards or criteria that the airline $ould utili"e in the implementation o the retrenchment programD and that the criteria actually used $hich $as unilaterally ormulated by AL using its erormance *'aluation ,orm in its >rooming and Appearance -andboo $as reasonable and air. &ndeed% AL $as not obligated to consult ,A9A regarding the standards it $ould use in e'aluating the perormance o the each cabin cre$. -o$e'er% $e do not agree $ith the indings o the appellate court that the criteria utili"ed by AL in the actual retrenchment $ere reasonable and air. 9C has repeatedly en+oined employers to adopt and obser'e air and reasonable standards to eect retrenchment. !his is o paramount importance

because an employerQs retrenchment program could be easily +ustiied considering the sub+ecti'e nature o this reuirement. !he adoption and implementation o unair and unreasonable criteria could not easily be detected especially in the retrenchment o large numbers o employees% and in this aspect% abuse is a 'ery distinct and real possibility. !his is $here labor tribunals should e#ercise more diligenceD this aspect is $here they should concentrate $hen placed in a position o ha'ing to +udge an employerQs retrenchment program. Moreo'er% in assessing the o'erall perormance o each cabin cre$ personnel% AL only considered the year 1. !his maes the e'aluation o each cabin attendantQs eiciency rating capricious and pre+udicial to AL employees co'ered by it. &n sum% ALQs retrenchment program is illegal because it $as based on $rongul premise (lan 1% $hich in reality turned out to be lan 22% resulting in retrenchment o more cabin attendants than $as necessary) and in a set o criteria or rating 'ariables that is unair and unreasonable $hen implemented. &t ailed to tae into account each cabin attendantQs respecti'e ser'ice record% thereby disregarding seniority and loyalty in the e'aluation o o'erall employee perormance. Uuitclaims e#ecuted as a result o ALQs illegal retrenchment program are lie$ise annulled and set aside because they $ere not 'oluntarily entered into by the retrenched employeesD their consent $as obtained by raud or mistae% as 'olition $as clouded by a retrenchment program that $as% at its inception% made $ithout basis. !he la$ loos $ith disa'or upon uitclaims and releases by employees pressured into signing by unscrupulous employers minded to e'ade legal responsibilities. As a rule% deeds o release or uitclaim cannot bar employees rom demanding beneits to $hich they are legally entitled or rom contesting the legality o their dismissal. !he acceptance o those beneits $ould not amount to estoppel. !he amounts already recei'ed by the retrenched employees as consideration or signing the uitclaims should% ho$e'er% be deducted rom their respecti'e monetary a$ards. As to ALQs recall and rehire process (o retrenched cabin cre$ employees)% the same is lie$ise deecti'e. Considering the illegality o the retrenchment% it ollo$s that the subseuent recall and rehire process is lie$ise in'alid and $ithout eect. A corporate oicer is not personally liable or the money claims o discharged corporate employees unless he acted $ith e'ident malice and bad aith in terminating their employment. 4e do not see ho$ respondent atria Chiong may be held personally liable together $ith AL% it appearing that she $as merely acting in accordance $ith $hat her duties

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reuired under the circumstances. Being an Assistant Fice resident or Cabin 9er'ices o AL% she taes direct orders rom superiors% or those $ho are charged $ith the ormulation o the policies to be implemented. etition granted.

OBILIA PRO,U)TS IN). 8s. ALAN 9. ,EE)ILLO et. a%. 9.R. N!. 1;0::> Fe&. 4 200> M (e6uirement for (etrenchment

,or a 'alid termination due to retrenchment% the la$ also reuires that $ritten notices o the intended retrenchment be ser'ed by the employer on the $orer and on the 6L* at least one month beore the actual date o the retrenchment. !he purpose o this reuirement is to gi'e employees time to prepare or the e'entual loss o their +obs% as $ell as to gi'e 6L* the opportunity to ascertain the 'eracity o the alleged cause o termination. &n this case% petitioner insists that the payment o 5/ days salary to respondents in place o notice $as suicient compliance $ith the 5/0day notice rule. 4e cannot agree. 7othing in the la$ gi'es petitioner the option to substitute the reuired prior $ritten notice $ith payment o 5/ days salary. &ndeed% a +ob is more than the salary it carries. ayment o 5/ days salary cannot compensate or the psychological eect or the stigma o immediately inding one
FRAN)IS RAY TALA VS. NLR) et. A%. 9.R. N!. 1;040 Ari% : 2010 FA)TS/ &n the latter part o 2//1 and in 2//2% the respondent% !he 9ot$are ,actory% &nc. (!9,&)% suered inancial re'erses. &ts e#ternal inancial auditor ad'ised that it cut on its payroll e#penses% $hich accounted or 1 o its total operating costs. !hus% !9,& decided to retrench some o its employees% using as basis its employeesQ ser'ice income and contribution margins to the company. !alam $as $as one o t$o employees $ith the least

or $ith no income contribution or the year 2//2. Conseuently% >rapilon (6ice Manager) and 4olgang -ermle (C*6) 'erbally inormed !alam that his ser'ices $ith the company $ould be terminated 5/ days ater 9eptember 2% 2//2. !hereater% !9,& notiied !alam in $riting o the termination o his employment. 6n 7o'ember % 2//2% or ater a month% !alam signed a 3elease and Uuitclaim in consideration and receipt o %;.// in compensation and other beneits. 6n 7o'ember 2% 2//2% !alam iled a complaint or illegal dismissal and illegal deduction% $ith claims or ser'ice incenti'e lea'e pay% damages and attorneyQs ees against !9,&% >rapilon and -ermle% beore the 7ational Labor 3elations Commission (7L3C) in Cebu City. !he Labor Arbiter declared that !alamQs dismissal illegal and directed !9,& to pay !alam separation beneits% bac$ages and 15th month pay. !he arbiter held that !9,& had not adopted a retrenchment program and there $as also no e'idence sho$ing clearly that !alam should be retrenched. -e disregarded the release and uitclaim e#ecuted by !alam declaring that he $as compelled to accept ithe monetary consideration behind it out o necessity. !9,& appealed to the 7L3C. Lie the Labor Arbiter% it nulliied the release and uitclaim signed by !alam. !he 7L3C ound !alamQs dismissal 'alid by reason o retrenchment% but deleted the a$ard o separation pay Iin 'ie$ o payment.I 6n motion or reconsideration% the 7L3C deleted the a$ard o bac$ages and 15th month pay% but ordered the company to pay !alam 5/%///.// as nominal damages or 'iolating his right to procedural due process. !he Court o Appeals ound the retrenchment to be 'alid. -o$e'er% it ruled that the company ailed to gi'e !alam the notice reuired by la$. !he CA also noted that !alamQs employment contract pro'ided or t$o monthQs notice. !hus% it increased to ;/%///.// the nominal damages. !he matter $as ele'ated to the 9upreme Court. !alam contends that the inancial statements relied upon by the company do not sho$ that !9,& $as in dire inancial straits nor $as it suering drastic business losses. !he alleged losses $ere not imminent as there $ere only 2 employees $ho $ere retrenched. ,urthermore% there $ere ; probationary employees $ho became regular employees on 6ctober 1% 2//2. -e also argues that the basis o ha'ing the least contribution margin to the company is not a 'alid cause or dismissal under Articles 22 and 25 o the Labor CodeD be that as it may% he did not ha'e the highest negati'e contribution margin.

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!9,& maintains that it did not only e#pect but had already suered substantial losses% as reported by its e#ternal auditor and as established by its inancial records. !he act that it retrenched only 2 employees did not mean its losses $ere not imminent. !9,& also e#plains that the ; probationary employees $ere $oring on a pro+ect that $as then in mid0stream and% considering their no$0ho$ in the pro+ect% could not +ust be assigned to !alam. &t also argues that !alam had the highest negati'e contribution margin. &t submits that !alam $as not chosen by any o its clients as sho$n by the act that since 8anuary 2//2 until his separation% he had no ser'ice income. &t posits that it cannot be e#pected to maintain an employment consultant $hose ser'ices the clients do not need. &t insists that the contribution margin or ser'ice income is a air and reasonable criterion in deciding $ho to retrench. ISSUE/ 4hether there $as a 'alid cause or !alam
absent any sho$ing o bad aith% $e cannot ault the company or choosing the option o looing at the margins o contribution o the consultants to the income o the company as primary retrenchment standard. !alam himsel admitted that he had no contribution income or 2//2. Management e#plained that !9,&
>rapilon and -ermleD it reduced the salaries o its employees by as much as 5/. 6n the $hole% $e ind that !9,& satisied the reuisites or a 'alid retrenchment. !he release and uitclaim $as a 'alid and binding undertaing that should ha'e been recogni"ed by the labor authorities and the CA. A legitimate $ai'er representing a 'oluntary settlement o a laborerQs claims should be respected by the courts as the la$ bet$een the parties. &n e#ecuting the release and uitclaim% !alam had unui'ocably signiied his acceptance o his separation rom the ser'ice. !hus% $e ind the iling o the illegal dismissal case tainted $ith bad aith on his part. >i'en the release and uitclaim% $e do not see ho$ !9,& can be made to ans$er or ailure to aord !alam procedural due process. !he release and uitclaim% to our mind% erased $hate'er inirmities there might ha'e been in the notice o termination as !alam had already 'oluntarily accepted his dismissal through the release and uitclaim.

4. )%!s're !r )essati!" !( Oerati!" 'e t! Seri!'s B'si"ess L!sses T#e 6%!si" !( !erati!" !( t#e esta&%is#me"t !r '"ertai" '"%ess t#e 6%!si" is (!r t#e 'r!se !( 6ir6'm8e"ti" t#e r!8isi!"s !( t#is tit%e 0 may be either: 1. or serious business losses or 2. not due to serious business losses 0 includes bona ide suspension o operations o business e#ceeding  months 0 the signiicance o losses here is that% i the cessation o business $as due to serious business losses then the employer $ould not be liable to pay separation pay to the employee. -o$e'er% it $ould be the other $ay around i the cessation $as not due to serious business losses. )ases/ N!rt# ,a8a! i"i" )!r.  Asset Pri8ati*ati!" Tr'st 8s. NLR) 24 S)RA ;21 1>>: FACTS

&n May 12% petitioner 7orth a'ao completely ceased operations due to serious business re'erses. ,rom 1 until its closure in 12% 7orth a'ao suered net losses a'eraging 5B per year% or each o the i'e years prior to its closure. &t $as ound that ; months prior to its closure% its total liabilities had e#ceeded its assets by 2/.B% as sho$n by its inancial statements audited by the C6A. 4hen it ceased operations% its remaining employees $ere separated and gi'en the eui'alent o 12.; daysQ pay or e'ery year o ser'ice% computed on their basic monthly pay% in addition to the commutation to cash

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o their unused 'acation and sic lea'es. -o$e'er% it appears that% during the lie o the petitioner corporation% rom the beginning o its operations in 11 until its closure in 12% it had been gi'ing separation pay eui'alent to 5/ daysQ pay or e'ery year o ser'ice. Moreo'er% inasmuch as the region $here 7orth a'ao operated $as plagued by insurgency and other peace and order problems% the employees had to collect their salaries at a ban in !agum% a'ao del 7orte% some ; m rom their $orplace and about 2.; hoursQ tra'el time by public transportationD this arrangement lasted rom 11 to 1/. A complaint $as iled $ith respondent Labor Arbiter by respondent 4ilredo >uillema and 21 other separated employees or: (1) additional separation pay o 1.; days or e'ery year o ser'iceD (2) bac $ages eui'alent to t$o days a monthD (5) transportation allo$anceD () ha"ard payD (;) housing allo$anceD () ood allo$anceD () post0employment medical clearanceD and () uture medical allo$ance% all o $hich amounted to ;M as computed by pri'ate respondent. LA ruled in a'or o pri'ate respondents. 6n appeal% respondent 7L3C airmed the decision in toto. etitioner 7orth a'aoQs motion or reconsideration $as lie$ise denied. -ence% this petition. (espondent’s 3ain *ontentions# !hat the a$ard o separation pay should be gi'en% based solely on petitioner 7orth a'aoQs long0standing policy o gi'ing separation pay beneits eui'alent to 5/0daysQ pay% $hich policy had been in orce in the years prior to its closure. !hat by denying the same separation beneits to pri'ate respondent and the others similarly situated% petitioners discriminated against them.

ISSUES/ 1. 467 an employer $hose business operations ceased due to serious business losses or inancial re'erses is obliged to pay separation pay to its employees separated by reason o such closure 2. 467 the a$ard o bac $ages and transportation allo$ance $as proper EL,/ 1. 76 (atio !he underscored portion o Art. 25  go'erns the grant o separation beneits Iin case o closures or cessation o operationI o business establishments I76! due to serious business losses or inancial 4 Art. 283. Closure of establishment and reduction of personnel . The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a ritten notice on t he orkers and the !inistry of "abor and #mployment at least % month before the intended date thereof. 'n case of termination due to the installation of labor saving devices or redundancy, the orker affected thereby shall be entitled to a separation pay e(uivalent to at least his % month pay or to at least % month pay for every year of service, hichever is higher. 'n case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be e(uivalent to % month pay or at least %*2 month pay for every year of service, hichever is higher. A fraction of at least  months shall be considered % hole year.

re'erses.I 9aid pro'ision does not obligate an employer to pay separation beneits $hen the closure is due to losses. (easoning ;a 4here the closure $as due to business losses as

in the instant case% in $hich the aggregate losses amounted to o'er 2/ billion the Labor Code does not impose any obligation upon the employer to pay separation beneits% or ob'ious reasons. !he companyQs practice o gi'ing one monthQs pay or e'ery year o ser'ice could no longer be continued precisely because the company could not aord it anymore. &t $as orced to close do$n on account o accumulated losses o o'er 2/ billion ;b &n this case% the basis or the claim o the additional separation beneit o 1.; days is alleged discrimination% i.e.% uneual treatment o employees% $hich is proscribed as an unair labor practice by Art. 2 (e) o said Code. Hnder the acts and circumstances o the present case% the grant o a lesser amount o separation pay to pri'ate respondent $as done% not by reason o discrimination% but rather% out o sheer inancial banruptcy% a act that is not controlled by management prerogati'es. 9tated dierently% the total cessation o operation due to mind0boggling losses $as a super'ening act that pre'ented the company rom continuing to grant the more generous amount o separation pay. !he act that 7orth a'ao at the point o its orced closure 'oluntarily paid any separation beneits at all although not reuired by la$ and 12.;0days $orth at that% should ha'e elicited admiration instead o condemnation. 2. G*9 0 !he a$ard o bac $ages and transportation allo$ance and the issued connected there$ith are actual% the determination o $hich is best let to the respondent 7L3C. &t is $ell settled that this Court is bound by the indings o act o the 7L3C% so long as said indings are supported by substantial e'idence 0 ,rom the e'idence on record% Court inds that the hours spent by complainants in collecting salaries at a ban in !agum% a'ao del 7orte shall be considered compensable hours $ored. Considering urther the distance bet$een Amacan% Maco to !agum $hich is 2.; hours by tra'el and the riss in commuting all the time in collecting complainantsQ salaries% $ould +ustiy the granting o bac$ages eui'alent to 2 days in a month as prayed or. Corollary to the abo'e indings% and or euitable reasons% $e lie$ise hold respondents liable or the transportation e#penses incurred by complainants at / round trip are during pay days. 0 &t is petitionersQ burden or duty to present e'idence o compliance o the la$ on labor standards% rather than or pri'ate respondents to pro'e that they $ere

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not paidPpro'ided by petitioners o their bac$ages and transportation e#penses. Disposition 8udgment M6&,G&7> assailed 3esolution by 9*!!&7> A9&* and deleting the a$ard or Iadditional separation pay o 1.; days or e'ery year o ser'iceI% and A,,&3M&7> it in all other aspects.

)ama et.a%. 8s. 7!"iQs F!! Ser8i6es I"6. 9.R. 13021 ar6# 10 2004 Closure o *stablishment &t is only in instances o ?retrenchment to pre'ent losses and in cases o closures orcessation o operations o establishment or undertaing not due to serious business losses orinancial re'erses@ that employees $hose employment has been terminated as a result are entitledto separation pay. G7OSEFINA A. )AA 8s. 7ONIQS FOO, SERVI)ES IN). H Closure o *stablishment or a La$ul CauseD 4hen Made !he o$ner% or any bona ide reason% can la$ully close shop at anytime. 8ust as no la$orces anyone to go into business% no la$ can compel anybody to continue in it. &t $ould indeed bestretching the intent and spirit o the la$ i 9C $ere to un+ustly interere $ith the managementQsprerogati'e to close or cease its business operations% +ust because said business operation orundertaing is not suering rom any loss or simply to pro'ide the $orers continued employment.And since pri'ate respondentsQ cessation and closure o business $as la$ul% there $as no illegaldismissal to spea o. !his act negated the obligation to pay bac$ages. &nstead pri'aterespondents $ere reuired to gi'e separation pay% $hich they already did% to all their regularemployees. JMAC AAM9 M*!AL *7>&7**3&7> 463*39 H7&670&7**7*7! 's. MAC AAM9 M*!AL *7>&7**3&7>K

)BL Tra"sit I"6. 8s. NLR) 9.R.12<42 ar6# 11 2004 Nasiit L'm&er )!. et.a%. 8s. NLR) 9R N!. 14:22 N!8. 2 2004

AR) II AR+ETIN9 IN). a" LU)ILA V. 7OSON 8s. ALFRE,O . 7OSON 9.R. N!. 1;1>>3 ,e6em&er 12 2011 . )riteria i" Termi"ati!" !( Em%!$ees '"er A't#!ri*e )a'se e56et 6%!s're ,or termination o employment as based on authori"ed causes deined in Art 25 o the LC% the reuirements o due process shall be deemed complied: 1. $ith upon ser'ice o a $ritten notice to the (sho$ cause letter) a. employee and (so that he can loo or another +ob) b. the appropriate 3egional 6ice o the epartment (so that it can chec the 'alidity o the dismissal and or statistical purposes) 2. at least 5/ days beore the eecti'ity o the termination 5. speciying the ground or grounds o termination lus[ )ases/ a$a Farms Em%!$ees Ora"i*ati!" 8. NLR) 23> S)RA 0< Fa6ts/ ri'ate respondents Maya ,arms% &nc. and Maya 3ealty and Li'estoc Corporation belong to the Liberty Mills group o companies $hose undertaings include the operation o a meat processing plant $hich produces ham% bacon% cold cuts% sausages and other meat and poultry products. etitioners% on the other hand% are the e#clusi'e bargaining agents o the employees o Maya ,arms% &nc. and the Maya 3ealty and Li'estoc Corporation. 6n April 12% 11% pri'ate respondents announced the adoption o an early retirement program as a cost0cutting measure considering that their business operations suered ma+or setbacs o'er the years. !he program $as 'oluntaryand could be a'ailed o only by employees $ith at least eight () years o ser'ice. ialogues $ere thereater conducted to gi'e the parties an opportunity to discuss the details o the program.

SOLI,BAN+ )ORPORATION 8s. NLR) et.a%. 9.R. N!. 1:>1 mar6# 30 2010

Accordingly% the program $as amended to reduce the minimum reuirement o eight () years o ser'ice to only i'e (;) years. -o$e'er% the response to the program $as nil. !here $ere only a e$ taers. !o a'ert urther losses% pri'ate respondents $ere constrained to loo into the companiesQ organi"ational set0up in order to streamline operations.

PEAFRAN)IA TOURS AN, TRAVEL TRANSPORT IN). 8s. 7OSELITO P. SARIENTO a" RI)AR,O S. )ATIBAN9 9.R. N!. 1;<3>; O6t!&er 20 2010

Conseuently% the early retirement program $as con'erted into a special redundancy program intended to reduce the $or orce to an optimum number so as to mae operations more 'iable.

a"a'e ,i"#!? ,ims'm !'se 8s. NLR) 9R N!. 1:1134 ar6# 3 200<

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&n ecember 11% a total o si#ty0nine () employees rom the t$o companies a'ailed o the special redundancy program. 6n 8anuary 1% 12% the t$o companies sent letters to si#ty0si# () employees inorming them that their respecti'e positions had been declared redundant. !he notices lie$ise stated that their ser'ices $ould be terminated eecti'e thirty (5/) days rom receipt thereo. 9eparation beneits% including the con'ersion o all earned lea'e credits and other beneits due under e#isting CBAs $ere thereater paid to those aected. 6n 8anuary 2% 12% a notice o strie $as iled by the petitioners $hich accused pri'ate respondents% among others% o unair labor practice% 'iolation o CBA and discrimination. Conciliation proceedings $ere held by the 7ational Conciliation and Mediation Board (7CMB) but the parties ailed to arri'e at a settlement. 6n ,ebruary % 12% the t$o companies iled a petition $ith the 9ecretary o Labor and *mployment asing the latter to assume +urisdiction o'er the case andPor certiy the same or compulsory arbitration. !hus% on ,ebruary 12% 12% the then Acting Labor 9ecretary (no$ 9ecretary) 7ie'es Conesor certiied the case to herein public respondent or compulsory arbitration. 6n March % 12% the parties $ere called to a hearing to identiy the issues in'ol'ed in the case. !hereater% they $ere ordered to submit their respecti'e position papers. &n their position paper% petitioners a'erred that in the dismissal o si#ty0si# () union oicers and members on the ground o redundancy% pri'ate respondents circum'ented the pro'isions in their CBA. etitioners also alleged that the companiesQ claim that they $ere in economic crisis $as abricated because in 1/% a net income o o'er 5 million pesos $as reali"ed by Liberty ,lour Mills >roup o Companies. &n'oing the $orersQ constitutional right to security o tenure% petitioners prayed or the reinstatement o the si#ty0si# () employees and the payment o attorneyQs ees as they $ere constrained to hire the ser'ices o counsel in order to protect the $orersQ rights. 6n their part% pri'ate respondents contend that their decision to implement a special redundancy program $as an e#ercise o management prerogati'e $hich could not be interered $ith unless it is sho$n to be tainted $ith bad aith and ill moti'e. ri'ate respondents e#plained that they had no choice but to reduce their $or orce% other$ise% they $ould suer more losses. ,urthermore% they

denied that the program 'iolated CBA pro'isions. 7L3C a'ored the company. Iss'e/ 467 there $as gra'e abuse o discretion amounting to lac or in e#cess o+urisdiction $ith the actual indings o public respondent

e%/ !he termination o the si#ty0si# employees $as done in accordance $ith Article 25 o the Labor Code. !he basis or this $as the companiesQ study to streamline operations so as to mae them more 'iable. ositions $hich o'erlapped each other% or $hich are in e#cess o the reuirements o the ser'ice% $ere declared redundant. 4e ully agree $ith the indings and conclusions o the public respondent on the issue o termination. A close e#amination o the positions retained by management sho$ that said positions such as egg sorter% debonner $ere but the minimal positions reuired to sustain the limited unctionsPoperations o the meat processing department. &n the absence o any e'idence to pro'e bad aith on the part o management in arri'ing at such decision% $hich records on hand ailed to sho$ in instant case% the rationality o the act o management in this regard must be sustained. !he rule is $ell0settled that labor la$s discourage intererence $ith an employerQs +udgment in the conduct o his business. *'en as the la$ is solicitous o the $elare o employees% it must also protect the right o an employer to e#ercise $hat are clearly management prerogati'es. As long as the companyQs e#ercise o the same is in good aith to ad'ance its interest and not or the purpose o deeating or circum'enting the rights o employees under the la$s or 'alid agreements% such e#ercise $ill be upheld. ,inally% contrary to petitionersQ contention% there is nothing on record to sho$ that the 5/0day notice o termination to the $orers $as disregarded and that the same substituted $ith separation pay by pri'ate respondents. As ound by public respondent% $ritten notices o separation $ere sent to the employees on 8anuary 1% 12. !he notices e#pressly stated that the termination o employment $as to tae eect one month rom receipt thereo. !hereore% the allegation that separation pay $as gi'en in lieu o the 5/0day notice reuired by la$ is baseless. etition dismissed.

)ait!% Wire%ess 8s. )!"(ess!r :<

2:4 S)RA

:. Pr!6e'ra% ReJ'ireme"t '"er Arti6%e 2<3 a. Se6ti!" 2 R'%e 23 B!! V &. T?i" N!ti6e ReJ'ireme"t

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,. ,isease Arti6%e 2<4 L)P Arti6%e 2<4. ,isease as r!'" (!r termi"ati!" . An employer may terminate the ser'ices o an employee $ho has been ound to be suering rom any disease and $hose continued employment is prohibited by la$ or is pre+udicial to his health as $ell as the health o his co0employees: ro'ided% !hat he is paid separation pay eui'alent to at least one month salary or to one0hal month salary or e'ery year o ser'ice% $hiche'er is greater% a raction o at least si# months being considered as one $hole year. W#at are t#e reJ'isites (!r t#e r!'" !( iseaseK !he ollo$ing reuisites must be complied $ith beore termination o employment due to disease may be +ustiied: 1. !he employee is suering rom a diseaseD 2. -is continued employment is either: a. prohibited by la$D or b. pre+udicial to his healthD or c. pre+udicial to the health o his co0employeesD 5. !here is a certiication by a competent public health authority that the disease is o such nature or at such stage that it cannot be cured $ithin a period o si# () months e'en $ith proper medical treatmentD (9ec. % 3ule &% Boo F&% o the 6mnibus 3ules &mplementing the Labor Code) . 7otice o termination based on this ground should be ser'ed to the employeeD and ;. 9eparation pay shall be paid to him in the amount eui'alent to at least one (1) month salary or to one0 hal (1P2) month salary or e'ery year o ser'ice% $hiche'er is greater% a raction o at least si# () months being considered as one (1) $hole year.

Is a mei6a% 6erti(i6ate iss'e &$ 6!ma"$ !6t!r a66eta&%eK A medical certiicate issued by a company. 3. 7o. ;5% Aug. 12% 1% 1;5 9C3A 5 J1K). W#at is mea"t &$ 6!mete"t '&%i6 #ea%t# a't#!rit$K ?Competent public health authority@ reers to a go'ernment doctor $hose medical speciali"ation pertains to the disease being suered by the employee. ,or instance% an employee $ho is sic o

tuberculosis should consult a go'ernment0employed pulmonologist $ho is competent to mae an opinion thereon. & the employee has cardiac symptoms% the competent physician in this case $ould be a cardiologist.

ei6a% 6erti(i6ate a" i"ise"sa&%e reJ'isite. &n the absence o the reuired certiication by a competent public health authority% the 9upreme Court has consistently ruled against the 'alidity o the employee. 3. 7o. 115% ,eb. % 2///). &n the 2//5 case o 9y 's. CA% J>. 3. 7o. 1225% ,ebruary 2% 2//5K% the -igh Court reiterated its earlier ruling in !riple *ight &ntegrated 9er'ices% &nc. 's. 7L3C% J2 9C3A /% 1 1K% that the reuirement or a medical certiicate under Article 2 cannot be dispensed $ithD other$ise% it $ould sanction the unilateral and arbitrary determination by the employer o the gra'ity or e#tent o the employee. 3. 7o. 11/20/5% August 2% 2//1K% the dismissal o the employee based on a inding that she $as suering rom asthma $as declared illegal because o the absence o a certiication by a competent public health authority that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# () months e'en $ith proper medical treatment% a reuirement under 9ection % 3ule &% Boo F&% o the 3ules to &mplement the Labor Code. -ere% the employee $as dismissed based only on the recommendation o its company doctors $ho concluded that she $as alicted $ith asthma. &t did not lie$ise sho$ proo that the employeeeneral !e#tile% &nc. 's. 7L3C% J>. 3. 7o. 1/2% April % 1;K% the termination o the employee due to !B sicness $as declared not +ustiied in the absence o medical certiicate issued by a competent public health authority that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# () months e'en $ith proper medical treatment. *mployee dismissalD diseaseD dereliction o duties. 4ith regard to disease as a ground or termination% Article 2 o the Labor Code pro'ides that an

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employer may terminate the ser'ices o an employee $ho has been ound to be suering rom any disease and $hose continued employment is prohibited by la$ or is pre+udicial to his health% as $ell as to the health o his co0employees. &n order to 'alidly terminate employment on this ground% 9ection % 3ule &% Boo F& o the 6mnibus 3ules &mplementing the Labor Code reuires that: (i) the employee be suering rom a disease and his continued employment is prohibited by la$ or pre+udicial to his health or to the health o his co0employees% and (ii) a certiication by a competent public health authority that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# () months e'en $ith proper medical treatment. & the disease or ailment can be cured $ithin the period% the employer shall not terminate the employee but shall as the employee to tae a lea'e. !he employer shall reinstate such employee to his ormer position immediately upon the restoration o his normal health. &n Triple Eight 0ntegrated )ervices" 0nc. v. N+,% 5/.,. 7o. 12;% ecember 5% 1 6" the Court held that the reuirement or a medical certiicate under Article 2 o the Labor Code cannot be dispensed $ithD other$ise% it $ould sanction the unilateral and arbitrary determination by the employer o the gra'ity or e#tent o the employee
ei6a% 6erti(i6ate as e8ie"6e !( i%%"ess Medical certiicates presented by an employee to pro'e (a) his illness% the nature and the duration o the procedures perormed by the dentist on himD and (b) the period during $hich he $as incapacitated to $or are admissible in e'idence and ha'e probati'e $eight e'en i not notari"ed. &t is suicient that the physician and the dentist $ho e#amined the employee% aside rom their respecti'e letterheads% had $ritten their respecti'e license numbers belo$ their names and signatures% hence% they bear all the earmars o regularity in their issuance and are entitled to ull probati'e $eight. Common sense dictates that an ordinary $orer does not need to ha'e these medical certiicates to be notari"ed or proper presentation to his company to pro'e his ailment. &t has been said that 'eriication o documents is not necessary in order that the said documents could be considered as substantial e'idence. (Hnion Motor Corporation 's. 7L3C% >. 3. 7o. 1;5% ec. % 2//). ei6a% 6erti(i6ate iss'e &$ La&!r Atta6#e a" i"istr$ !( P'&%i6 ea%t# !( +'?ait "!t s'((i6ie"t. &n the 2//1 case o A!C& 6'erseas Corporation 's. CA% J>. 3. 7o. 15% August % 2//1K% in'ol'ing t$o (2) o'erseas ,ilipino $orers $ho $ere recruited

by the Ministry o ublic -ealth o u$ait to $or as dental hygienists in that country or a period o 2 years but $ho $ere terminated ater $oring or only t$o months based on alleged tuberculosis and heart disease% the 9upreme Court% in declaring the termination as illegal% ruled that there is nothing in the records to sho$ that petitioner complied $ith 9ec. % 3ule &% Boo F& o the 3ules to &mplement the Labor Code beore pri'ate respondent0doctors $ere dismissed. &n the proceedings beore the 6*A% petitioner did not present any certiication $hatsoe'er. &t $as only $hen the case $as appealed to the 7L3C that petitioner belatedly introduced in e'idence a letter rom the Ministry stating that pri'ate respondents $ere ound to be positi'e or tuberculosis and heart disease. &n addition% petitioner presented a certiication issued by the hilippine labor attache attesting to the act that pri'ate respondents $ere sub+ected to a medical e#amination ater their arri'al in u$ait and $ere ound to be unit or employment due to lung deects. !he letter rom the Ministry and the certiication by the hilippine labor attache all short o the demands o the 6mnibus 3ules. ,irst o all% there is no inding that the disease allegedly alicting pri'ate respondents is o such nature or at such a stage that it cannot be cured $ithin a period o si# () months $ith proper medical treatment. 9econdly% e'en assuming that the letter rom the Ministry complied $ith the 6mnibus 3ules% petitioner has not pro'en that the same $as presented to pri'ate respondents prior to their termination. 3ather% the letter appears to ha'e been an aterthought% a belated% yet grossly unsuccessul attempt at compliance $ith hilippine la$s% produced by petitioner ater an ad'erse +udgment $as rendered against it by the 6*A. Clearly% 9ec. % 3ule &% Boo F&% o the 6mnibus 3ules $as not complied $ith% thus maing pri'ate respondents< dismissal illegal.

W#! s#!'% r!6're t#e 6erti(i6ateK &t de'ol'es upon the employer the obligation to obtain a certiicate rom a competent public authority that the employee. 3. 7o. 11/% April 1% 1% 21 9C3A 21D 9ee also hil. *mploy 9er'ices and 3esources% &nc. 's. aramio% >. 3. 7o. 1% April 1;% 2//D 9y 's. CA% supra).

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W#! #as t#e &'re" !( r!8i" t#e e5iste"6e !( a mei6a% 6erti(i6ateK !he burden o pro'ing the e#istence o such a medical certiicate reuired under the la$ is upon the employer% not the employee. (A!C& 6'erseas Corporation 's. CA% >. 3. 7o. 15% Aug. % 2//1D !an 's. 7L3C% 21 9C3A 21 J1KD Cebu 3oyal lant 's. eputy Minister o Labor% supra). Em%!$ee ismisse ?it#!'t t#e mei6a% 6erti(i6ate is e"tit%e t! m!ra% a" e5em%ar$ amaes. &n the same 2//1 case o Cathay aciic Air$ays JsupraK% because the employer summarily dismissed the employee rom the ser'ice based only on the recommendation o its medical oicers% in eect% ailing to obser'e the pro'ision o the Labor Code $hich reuires a certiication by a competent public health authority% it $as held that the a$ard o moral and e#emplary damages to the employee should be airmed. 7otably% the decision to dismiss the employee $as reached ater a single e#amination only. !he employer.3. 7o. 1;5%

7o'ember 1% 2//K% $here the 9upreme Court opined that i the dismissal is based on authori"ed causes under Articles 25 and 2% the employer must gi'e the employee and the epartment o Labor and *mployment $ritten notices thirty (5/) days prior to the eecti'ity o his separation. &s hearing reuired in case o termination due to disease= Being an authori"ed cause% as distinguished rom +ust cause% hearing is not necessary to be conducted by the employer prior to the termination o employment o the sic employee. 9eparation pay in case o la$ul dismissal based on disease. !he separation pay o an employee terminated on the ground o disease is eui'alent to at least one (1) month salary or to one0hal (_) month salary or e'ery year o ser'ice% $hiche'er is greater% a raction o at least si# () months being considered as one (1) $hole year. (Article 2% Labor CodeD Baby Bus% &nc. 's. Minister o Labor% >. 3. 7o. ;225% ,eb. 2% 1).

,isa&i%it$ isti"'is#e (r!m ,isease isability should not be conused $ith disease. isability itsel% e'en i permanent% is not a ground or termination. !he Magna Carta or isabled ersons prohibits the termination o a disabled employee based on disability alone. !his constitutes act o discrimination% a criminal oense or $hich ine andPor imprisonment may be imposed. (Magna Carta or isabled ersons) Ri#t t! rei"stateme"t i( isease is 6'ra&%e ?it# si5 m!"t#s & the disease or ailment can be cured $ithin si# months% the employer shall not terminate the employee but shall as the employee to tae a lea'e o absence. !he employee is entitled to be reinstated to his ormer position immediately upon the restoration o his normal health. (9ec. % 3ule &% Boo F&% o the 6mnibus 3ules &mplementing the Labor Code) )ase/ )r'* 8s. NLR) Fe& ; 2000 AT)I O8erseas )!r. 8s. )A A'. 2 2001 FA)TS/ A!C& and the Ministry o ublic -ealth o u$ait entered into an agreement. A!C& $ould recruit medical proessionals or the latter. 3espondents $ere hired or the Ministry. !hey

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under$ent physical and medical e#ams in a 6*A accredited clinic and $ere declared it. &n u$ait% they $ere sub+ected another e#amination and ater 2 months they $ere dismissed or being physically unit or their +obs and $ere repatriated so they iled a complaint in the 6*A or illegal dismissal alleging that they $eren
ISSUE/ 4P7 there $as illegal dismissal. EL,/ !he 9C ruled that there $as illegal dismissal. !here $as no proo that they $ere probationary. Being regular employees% the dismissal must meet the reuirements o Art 2 o the labor code. An employee may be terminated i ound to be suering rom a disease and the continued employment is prohibited by la$ or is pre+udicial to his health as $ell as to the health o his co0employees but the dismissal may not be summarily carried out. !he employer must meet certain prereuisites contained in 9ec.  3ule 1 Boo F& o the 6mnibus 3ules &mplementing the Labor Code. !here must be certiication by a competent public health authority that the disease is o such nature or at such a stage that cannot be cured $ithin the period o  months e'en $ith proper medical treatment. & the disease or ailment can be cured $ithin the period% the employees can
WUERT PILIPPINES IN). VS. RO,ANTE YNSON 9.R. N!. 1;>32 Fe&r'ar$ 1 2012 &n this case% Gnson should ha'e reported bac to $or or attended the in'estigations conducted by 4uerth hilippines% &nc. immediately upon being permitted to $or by his doctors% no$ing that his position remained 'acant or a considerable length o time. -o$e'er% he did not e'en sho$ any sincere eort to return to $or. Clearly% since there is no more hindrance or him to return to $or and attend the in'estigations set by 4uerth hilippines% &nc.% Gnson, ebruary F, E.

E. Retireme"t retireme"t Art. 2<; as ame"e &$ RA ;:41 Art. 2<;. Retireme"t. RAny employee may be retired upon reaching the retirement age established in the collecti'e bargaining agreement or other applicable employment contract. &n case o retirement% the employee shall be entitled to recei'e such retirement beneits as he may ha'e earned under e#isting la$s and any collecti'e bargaining agreement and other agreements: ro'ided% ho$e'er% !hat an employeeQs retirement beneits under any collecti'e bargaining and other

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agreements shall not be less than those pro'ided herein.

o$ned or controlled corporations% i they are co'ered by the Ci'il 9er'ice La$ and its regulations.

&n the absence o a retirement plan or agreement pro'iding or retirement beneits o employees in the establishment% an employee upon reaching the age o si#ty (/) years or more% but not beyond si#ty0i'e (;) years $hich is hereby declared the compulsory retirement age% $ho has ser'ed at least i'e (;) years in the said establishment% may retire and shall be entitled to retirement pay eui'alent to at least one0 hal (1P2) month salary or e'ery year o ser'ice% a raction o at least si# () months being considered as one $hole year.

2.2 omestic helpers and persons in the personal ser'ice o another. (Hnder the 7e$ .6. they are AL3*AG C6F*3*)

Hnless the parties pro'ide or broader inclusions% the term one0hal (1P2) month salary shall mean iteen (1;) days plus one0t$elth (1P12) o the 15th month pay and the cash eui'alent o not more than i'e (;) days o ser'ice incenti'e lea'es. 3etail% ser'ice and agricultural establishments or operations employing not more than (1/) employees or $orers are e#empted rom the co'erage o this pro'ision. Fiolation o this pro'ision is hereby declared unla$ul and sub+ect to the penal pro'isions pro'ided under Article 2 o this Code. 3HL* &&% B66 F& 6, !-* 3HL*9 &ML*M*7!&7> !-* LAB63 C6* (3*!&3*M*7! B*7*,&!9 ,63 *ML6G**9 &7 !-* 3&FA!* 9*C!63) ursuant to the pro'isions o Article 2 o the Labor Code as amended by 3epublic Act 7o. 1% in relation to Article ; o the same Code% 3ule && o Boo F& o the 3ules &mplementing the Labor Code is hereby issued% the ull te#t o $hich shall read as ollo$s: 3HL* && 3etirement Beneits 9*C!&67 1. >eneral 9tatement on Co'erage. R !his 3ule shall apply to all employees in the pri'ate sector% regardless o their position% designation% or status and irrespecti'e o the method by $hich their $ages are paid% e#cept to those speciically e#empted under 9ection 2 hereo. As used herein% the term IActI shall reer to 3epublic Act 7o. 1% $hich too eect on 8anuary % 15. 9*C!&67 2. *#emptions. R !his 3ule shall not apply to the ollo$ing employees: 2.1 *mployees o the 7ational >o'ernment and its political subdi'isions% including >o'ernment0

2.5 *mployees o retail% ser'ice and agricultural establishments or operations regularly employing not more than ten (1/) employees. As used in this sub0 section: (a) I3etail establishmentI is one principally engaged in the sale o goods to end0users or personal or household use. &t shall lose its retail character ualiied or e#emption i it is engaged in both retail and $holesale o goods. (b) I9er'ice establishmentI is one principally engaged in the sale o ser'ice to indi'iduals or their o$n or household use and is generally recogni"ed as such. cdt (c) IAgricultural establishmentPoperationI reers to an employer $hich is engaged in agriculture. !his term reers to all arming acti'ities in all its branches and includes% among others% the culti'ation and tillage o the soil% production% culti'ation% gro$ing and har'esting o any agricultural or horticultural commodities% dairying% raising o li'estoc or poultry% the culture o ish and other auatic products in arms or ponds% and any acti'ities perormed by a armer or on a arm as an incident to or in con+unction $ith such arming operations% but does not include the manuacture or processing o sugar% coconut% abaca% tobacco% pineapple% auatic or other arm products. 9*C!&67 5. 3etirement Hnder CBAPContract. R 5.1 Any employee may retire or be retired by his employer upon reaching the retirement age established in the collecti'e bargaining agreement or other applicable employment contract% sub+ect to the pro'isions o 9ection ; hereo on the payment o retirement beneits. cdt 5.2 &n case o retirement under this 9ection% the employee shall be entitled to recei'e such retirement beneits as he may ha'e earned under e#isting la$s and any collecti'e bargaining agreement and other agreementsD pro'ided% ho$e'er% that an employeeQs retirement beneits under any collecti'e bargaining and other agreements shall not be less than those pro'ided under this 3uleD and pro'ided urther that i such beneits are less% the employer shall pay the dierence bet$een the amount due the employee under this 3ule and that pro'ided under the collecti'e bargaining agreement or other applicable employment contract. 5.5 4here both the employer and the employee contribute to a retirement und in accordance $ith a collecti'e bargaining agreement or other applicable

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employment contract% the employerQs total contribution thereto shall not be less than the total retirement beneits to $hich the employee $ould ha'e been entitled had there been no such retirement und. &n case the employerQs contribution is less than the retirement beneits pro'ided under this 3ule% the employer shall pay the deiciency. 9*C!&67 . 6ptionalPCompulsory 3etirement. R .1 6ptional 3etirement R &n the absence o a retirement plan or other applicable agreement pro'iding or retirement beneits o employees in an establishment% an employee may retire upon reaching the age o si#ty (/) years or more i he has ser'ed or at least i'e (;) years in said establishment. .2 Compulsory 3etirement R 4here there is no such plan or agreement reerred to in the immediately preceding sub0section% an employee shall be retired upon reaching the age o si#ty0i'e (;) years. .5 Hpon retirement o an employee% $hether optional or compulsory% his ser'ices may be continued or e#tended on a case to case basis upon agreement o the employer and employee. . 9er'ice 3euirement R !he minimum length o ser'ice o at least i'e (;) years reuired or entitlement to retirement pay shall include authori"ed absences and 'acations% regular holidays% and mandatory ulillment o a military or ci'ic duty. 9*C!&67 ;. 3etirement Beneits. R ;.1 &n the absence o an applicable employment contract% an employee $ho retires pursuant to the Act shall be entitled to retirement pay eui'alent to at least one0hal (1P2) month salary or e'ery year o ser'ice% a raction o at least si# () months being considered as one $hole year. cdt ;.2 Components o 6ne0hal (1P2) Month 9alary. R ,or the purpose o determining the minimum retirement pay due an employee under this 3ule% the term Ione0hal month salaryI shall include all o the ollo$ing: (a) ,iteen (1;) days salary o the employee based on his latest salary rate. As used herein% the term IsalaryI includes all remunerations paid by an employer to his employees or ser'ices rendered during normal $oring days and hours% $hether such payments are i#ed or ascertained on a time% tas% piece or commission basis% or other method o calculating the same% and includes the air and reasonable 'alue% as determined by the 9ecretary o Labor and *mployment% o ood% lodging or other acilities customarily urnished by the employer to his employees. !he term does not include cost o li'ing allo$ances% proit0sharing payments and

other monetary beneits $hich are not considered as part o or integrated into the regular salary o the employeesD (b) !he cash eui'alent o i'e (;) days o ser'ice incenti'e lea'eD (c) 6ne0t$elth o the 15th month pay due the employeeD and (d) All other beneits that the employer and employee may agree upon that should be included in the computation o the employeeQs retirement pay. ;.5 6ne0hal Month 9alary o *mployees 4ho Are aid by 3esults. R ,or co'ered $orers $ho are paid by results and do not ha'e a i#ed monthly rate% the basis or determination o the salary or iteen days shall be their a'erage daily salary (A9)% sub+ect to the pro'isions o 3ule F&&0A% Boo &&& o the rules implementing the Labor Code on the payment o $ages o $orers $ho are paid by results. !he A9 is the a'erage salary or the last t$el'e (12) months reconed rom the date o their retirement% di'ided by the number o actual $oring days in that particular period. 9*C!&67 . *#emption rom !a#. R !he retirement pay pro'ided in the Act may be e#empted rom ta# i the reuirements set by the Bureau o &nternal 3e'enue under 9ec. 2 (b)% item (1) o 3e'enue 3egulations 7o. 120 dated August 1% 1 are met% to $it: Iensions% retirement and separation pay. R ensions% retirement and separation pay constitute compensation sub+ect to $ithholding ta#% e#cept the ollo$ing: (1) 3etirement beneit recei'ed by oicials and employees o pri'ate irms under a reasonable pri'ate beneit plan maintained by the employer% i the ollo$ing reuirements are met: (i) !he beneit plan must be appro'ed by the Bureau o &nternal 3e'enueD (ii) !he retiring oicial or employee must ha'e been in the ser'ice o the same employer or at least ten (1/) years and is not less than ity (;/) years o age at the time o retirementD and (iii) !he retiring oicial or employee shall not ha'e pre'iously a'ailed o the pri'ilege under the retirement beneit plan o the same or another employerI. 9*C!&67 . enal ro'ision. R &t shall be unla$ul or any person or entity to circum'ent or render ineecti'e the pro'isions o the Act. Fiolations thereo shall be sub+ect to the penal pro'isions pro'ided

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under Article 2 o the Labor Code o the hilippines. 9*C!&67 . 3elation to Agreements and 3egulations. R 7othing in this 3ule shall +ustiy an employer rom $ithdra$ing or reducing any beneits% supplements% or payments as pro'ided in e#isting la$s% indi'idual or collecti'e agreements% or employment practices or policies. All rules and regulations% policy issuances% or orders contrary to or inconsistent $ith these rules are hereby repealed or modiied accordingly. 9*C!&67 . *ecti'ity. R !his 3ule too eect on 8anuary % 15 $hen the Act $ent into orce. (9>.) MA. 7&*F*9 3. C67,*963 9ecretary \ 3etirement La$ could be gi'en retroacti'e eect: 1. !he claimant or retirement beneits $as still the employee o the employer at the time the statute too eectD and 2. !he claimant has complied $ith the reuirements or eligibility under the statute or such retirement beneits. \3etirement schemes under the labor code: 1. 6ptional 3etirement0 / years 2. Compulsory 3etirement0 ; years \Can compulsory retirement be lo$er than ; years= 0 Ges% i it is stipulated in the CBA or in the employment contract. \!he beneits to $hich the retiree may be entitled to could be higher i so pro'ided in the employment contract or CBA. & the beneits pro'ided are lesser than that pro'ided or b la$% the employer shall pay the dierence bet$een the amount due to the employee under this 3ule and that pro'ided in the CBA or in any other employment contract. \ &s an employee $ho is dismissed or +ust causes entitled to retirement pay% considering that at the time o dismissal the employee is already ualiied to recei'e retirement pay= 0 Ges% but only on a case0to0 case basis% since there is no pro'ision in the labor code or oreiture o retirement pay% then the liberal interpretation o the la$ in a'or o labor should be applied. \ -o$e'er% $ith the enactment o 3A 1 considering there is no pro'ision or oreiture o retirement pay% then an employee dismissed shall be entitled to retirement pay pro'ided that the legal reuisites are complied $ith.

)ases/ ,i8i"a L!e* 8s. NatQ% Stee% )!r. Fe&. 1: 2004 FA)TS/ !he 7ational 9teel Corporation% herein respondent% embared on t$o (2) massi'e pro+ects% the ,i'e0Gear *#pansion rogram (hase &&0B) and the &ntegrated 9teel Mill ro+ect. Conseuently% respondent employed and trained se'eral employees or the operation o the pro+ects. 6ne o them $as i'ina 9. Lope"% herein petitioner. 9he $as appointed researcher% she $as promoted as a senior researcher at respondent
ISSUE/ 4hether or not petitioner is entitled to retirement beneits. EL,/ 4hile it is a#iomatic that retirement la$s are liberally construed in a'or o the persons intended to be beneited% ho$e'er% such interpretation cannot be

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made in this case in light o the clear lac o consensual and statutory basis o the grant o retirement beneits to petitioner. &t bears stressing that as held by the Labor Arbiter% the 7L3C and the Court o Appeals% there is no pro'ision in the parties< CBA authori"ing the payment to petitioner retirement beneits in addition to her retrenchment payD and that there is no indication that she $as orced or ?duped@ by respondent to sign the 3elease and Uuitclaim. !he Court o Appeals also ruled that petitioner% not ha'ing reached the retirement age% is not entitled to retirement beneits under Article 2 o the Labor Code. !his Court has al$ays accorded respect and inality to the indings o act o the Court o Appeals% particularly i they coincide $ith those o the Labor Arbiter and the 7L3C $hen supported by substantial e'idence% as in this case. !he reason or this is that uasi0+udicial agencies% lie the Arbitration Board and the 7L3C% ha'e acuired a uniue e#pertise because their +urisdictions are conined to speciic matters.

R  E Tra"s!rt 8s. Lata Fe&. 13 2004 Fa6ts/ edro Latag $as a regular employee o La Mallorca !a#i since March 1% 11. 4hen La Mallorca ceased rom business operations% Latag transerred to 3 Z * !ransport% &nc. -e $as recei'ing an a'erage daily salary o i'e hundred pesos (;//.//) as a ta#i dri'er. Latag got sic in 8anuary 1; and $as orced to apply or partial disability $ith the 999% $hich $as granted. 4hen he reco'ered% he reported or $or in 9eptember 1 but $as no longer allo$ed to continue $oring on account o his old age. Latag thus ased ,eli# ,abros% the administrati'e oicer o JpetitionersK% or his retirement pay pursuant to 3epublic Act 1 but he $as ignored. !hus% on ecember 21% 1% Latagiled a case or payment o his retirement pay beore the 7L3C. Latag ho$e'er died on April 5/% 1. 9ubseuently% his $ie% A'elina Latag% substituted him. 6n 8anuary 1/% 2///% the Labor Arbiter rendered a decision in a'or o Latag.

Iss'e/ 4hether or not Latag is entitled to retirement beneits considering she signed a $ai'er o uitclaim. R'%i"/ !he respondent is entitled to retirement beneits despite o the $ai'er o uitclaims. !here is no dispute the act that the late edro M. Latag is entitled to retirement beneits. 3ather% the bone o contention is the number o years that he should be

credited $ith in computing those beneits. !he indings o the 7L3C that edro must be credited only $ith his ser'ice to 3 Z * !ransport% &nc.% because the e'idence sho$s that the aorementioned companies are t$o dierent entities. Ater a careul and painstaing re'ie$ o the e'idence on record% the court supports the 7L3CQs indings. As to the Uuitclaim and 4ai'er signed by 3espondent Latag% the CA committed no error $hen it ruled that the document $as in'alid and could not bar her rom demanding the beneits legally due her husband. !his is not say that all uitclaims are in'alid per se. Courts% ho$e'er% are $ary o schemes that rustrate $orersQ rights and beneits% and loo $ith disa'or upon uitclaims and $ai'ers that bargain these a$ay. Hndisputably% edro M. Latag $as credited $ith 1 years o ser'ice $ith 3 Z * !ransport% &nc. Article 2 o the Labor Code% as amended by 3epublic Act 7o. 1% 5/ pro'ides: 3etirement. R &n the absence o a retirement plan or agreement pro'iding or retirement beneits o employees in the establishment% an employee upon reaching the age o si#ty (/) years or more% but not beyond si#ty0i'e (;) years $hich is hereby declared the compulsory retirement age% $ho has ser'ed at least i'e (;) years in said establishment% may retire and shall be entitled to retirement pay eui'alent to at least one0hal (1P2) month salary or e'ery year o ser'ice% a raction o at least si# () months being considered as one $hole year. Hnless the parties pro'ide or broader inclusions% the term one hal0month salary shall mean iteen (1;) days plus one0t$elth (1P12) o the 15th month pay and the cash eui'alent o not more than i'e (;) days o ser'ice incenti'e lea'es !he rules implementing the 7e$ 3etirement La$ similarly pro'ide the abo'e0mentioned ormula or computing the one0hal month salary. 9ince edro $as paid according to the IboundaryI system% he is not entitled to the 15th month 52 and the ser'ice incenti'e payD hence% his retirement pay should be computed on the sole basis o his salary. &t is accepted that ta#i dri'ers do not recei'e i#ed $ages% but retain only those sums in e#cess o the IboundaryI or ee they pay to the o$ners or operators o their 'ehicles. !hus% the basis or computing their beneits should be the a'erage daily income. &n this case% the CA ound that edro $as earning an a'erage o i'e hundred pesos (;//) per day. 4e thus compute his retirement pay as ollo$s: ;// # 1; days # 1 years o ser'ice euals 1/;%///.

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EASTERN SIPPIN9 LINES IN). Vs. ANTONIO 9.R. N!. 1;1<; O6t 13 200> Fa6ts/ 3espondent $as hired by petitioner to $or as a seaman on board its 'arious 'essels. etitioner too the licensure e#amination or 2 nd *ngineer $hile petitioner
sub+ect to the e#clusi'e prerogati'e o the sole option o the petitioner. !he petition is granted.

+IBERLY-)LAR+ PILS IN). 8s. NORA ,IAYU9A et.a%. 9.R. N!. 1;;;0 Set 1< 200> FA)TS/ !he three respondents $ere resigned employees o the petitioner company. !hey entered such resignation prior to the company Ari% 22 200> Fa6ts/ 3i'era commenced employment $ith the Company as senior manuacturing pharmacist and later became irector o the Manuacturing i'ision. &n 1;% the Company adopted a comprehensi'e retirement plan. !he parties do not dispute that under the plan% a member is compulsorily retired upon

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reaching the normal retirement date $hich is the age / or has completed the ser'ice o 5/ years o ser'ice. &n 1% 3i'era completed 5/ years o ser'ice and the Company retired her pursuant to the terms o the plan eecti'e in ecember 1. At 3i'era
Iss'e/ 4hether CA erred in ruling that 3i'era
other employees retired later and under retirement plan terms that% by then and or 'arious reasons not attributable to any company $rongdoing% had been enhanced. Both in la$ and under the common concept o airness% there is ineuitable treatment only i persons under the same situation or circumstances are treated dierently. 3i'era $as not so treated by H7&LABD rather% she $as gi'en her +ust due under the speciic rules that applied to her. -ence% $e cannot lie$ise recogni"e the 'alidity o 3i'era
RO,OLFO 7. SERRANO VS. SEVERINO SANTOS TRANSIT a"@!r SEVERINO SANTOS 9.R. N!. 1<;:>< A''st > 2010 Retireme"t a$C a%i6a&i%it$ t! em%!$ees !" 6!mmissi!" &asis. *'en i the petitioner as bus conductor $as paid on commission basis% he alls $ithin the co'erage o 3.A. 1 and its implementing rules. !hus% his retirement pay should include the cash eui'alent o ;0days 9&L and 1P12 o 15th month pay. !he 7L3C
ASIN9 AN, SONS ,EVELOPENT )ORPORATION a" )RISPIN )AN versus 9RE9ORIO P. RO9ELIO 9.R. N!. 1:1;<; Ari% 2; 2011 F. Resi"ati!" Arti6%e 2< L)P Arti6%e 2<. Termination by employee. (a) An employee may terminate $ithout +ust cause the employee0employer relationship by ser'ing a $ritten notice on the employer at least one month in ad'ance. !he employer upon $hom no such notice $as ser'ed may hold the employee liable or damages. (b) An employee may put an end to the relationship $ithout ser'ing any notice on the employer or any o the ollo$ing +ust causes:

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(1) 9erious insult by the employer or his representati'e on the honor and person o the employeeD (2) &nhuman and unbearable treatment accorded the employee by the employer or his representati'eD (5) Commission o a crime or oense by the employer or his representati'e against the person o the employee or any o the immediate members o his amilyD andD () 6ther causes analogous to any o the oregoing. 3esignation is $ithdra$able e'en i the employee has called it ?irre'ocable.@ But ater it is accepted or appro'ed by the employer% its $ithdra$al needs the employerQs consent. !he employee must ser'e a $ritten notice on the employer at least 1 month in ad'ance. 6nce% accepted% cannot be $ithdra$n $ithout the consent o the employer (&ntertrod Maritime 's 7L3C) An employee $ho 'oluntarily resigns is not entitled to separation pay unless stipulated in an employment contract or CBA or sanctioned by established employer practice or policy. (Alaro 's CA% 55 9C3A ) !he burden o proo to sho$ that the resignation $as 'oluntarily tendered lies $ith the employer. !he acceptance by the employer o the employeeQs resignation is not necessary. !he signiicance o acceptance by the employer comes in only $hen the employee decides to $ithdra$ his tendered resignation.

)ase/ A%(ar! 8s. ).A. A'. 2< 2001 Foluntary 3esignation is deined as the act o an employee% $ho inds himsel in a situation in $hich he belie'es that personal reasons cannot be sacriiced in a'or o the e#igency o the ser'iceD thus% he has no other choice but to disassociate himsel rom his employment A*6!r a"'(a6t'ri" I"6. 8s. NLR) Fe&. 11 1>>> iercing the Feil o Corporate ,iction to pre'ent e'asion o obligations or conuse the legitimate issues Fa6ts/ Capulso iled $ith the Labor Arbiter a complaint or constructi'e illegal dismissal. -e alleged that he $ored or A"cor as ceramics $orer or more than 2 years. !hen% due to asthma% he iled a lea'e o absence. Hpon returning to $or% he $as

not permitted to do so. -e later on amended his complaint and impleaded ,ilipinas aso as additional respondent. 6n the other hand% A"cor contends that Capulso 'alidly resigned rom the company% as e'idenced by a letter o resignation% or $hich Capulso then sought employment rom ,ilipinas aso% rom $hich he also resigned. !he Labor Arbiter dismissed the case. 6n appeal to the 7L3C% it ad+udged in a'or o Capulso holding ,ilipinas aso and A"cor solidarily liable. -ence% this petition $ith the 9C. Iss'e/ 4hether or not ,ilipinas aso may be held +ointly and se'erally liable $ith A"cor or bac $ages o Capulso.

e%/ Ges. !he doctrine that a corporation is a legal entity or a person in la$ distinct rom the persons composing it is merely a legal iction or purposes o con'enience and to subser'e the ends o +ustice. !his iction cannot be e#tended to a point beyond its reason and policy. 4here% as in this case% the corporate iction $as used as a means to perpetrate a social in+ustice or as a 'ehicle to e'ade obligations or conuse the legitimate issues% it $ould be discarded and the 2 corporations $ould be merged as one% the irst being merely considered as the instrumentality% agency% conduit% or ad+unct o the other. &n the case at bar% there $as much conusion as to the identity o Capulso
!&i%e Pr!te6ti8e a" ,ete6ti8e Ae"6$ 8s. Oma a$ > 200 FA)TS/ ri'ate respondent% Alberto 6mpad% $as employed by the petitioner as a security guard in 1/. -e $as assigned to the 'arious clients o Mobile. &n 8une 1% respondent $as assigned as a security guard at Manila 9outh$oods $hen he inuired rom the pro+ect manager o 9outh$oods i they ha'e already paid their bac$ages to the security agency. 6mpad claims that $hen the Agency ound out about his uery% he $as relie'ed rom his post and ne'er gi'en another assignment.

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!he petitioner on the other hand claims that 6mpad $as assigned to another client% Falle Ferde Country Club rom August 2 to 6ctober 51% 1 ater he $as relie'ed rom his post at the Manila 9outh$oods. etitioner urther claims that one o the guards at Falle Ferde attested that 6mpad had told her that he $ould earn better i he +ust dri'es his tricycle ull time. 6n 6ctober 1;% 1% 6mpad reported or $or but he $as limping due to an accident he suered $hile dri'ing his tricycle. etitioner claims that he stopped reporting or $or ater that date. 6n 9eptember 25% 1% omingo Alon"o% operations manager o Mobile sa$ respondent and inuired as to $hether he $as still interested in reporting or $or. !he petitioner allegedly ans$ered in the negati'e and it $as at that time that Alon"o ad'ised him to resign. 6mpad% he claims% submitted his hand $ritten resignation $hich also $as a uit claim. etitioner contended that the letter o resignation $as orced on him in return or monies o$ed him. As he needed the money% he had no choice but to comply. -e ho$e'er $as only being gi'en esos ;%/// $hich he re+ected. -e iled this case the ollo$ing day. 6mpad alleged that he $as illegal terminated and claimed underpayment or non0payment o $ages% o'ertime pay% premium pay or holiday and rest day% separation pay% etc. Labor Arbiter dismissed the complaint or lac o merit. !he 7L3C re'ersed the decision. !he CA also dismissed the action or reconsideration% noting that there $as no 'oluntariness in the acts o 6mpad in submitting the resignation letters. -ence this action.

ISSUE/ 467 6mpad $as illegally dismissed EL,/ G*9 !he resignation letters o 6mpad are dubious as they $ere $ritten in a language ob'iously not his and ?lopsidedly $orded@ to ree the Agency rom liabilities. !he aida'its issued by the $itnesses o Mobile are suspect considering that these $itnesses $erePare in act employed by the petitioner. (easoning

All the documentary e'idence pro'es that respondent $as assigned to Falle Ferde rom 9eptember 2 to 6ctober 51% 1 and that he stopped reporting or $or on 6ctober 1% 1. Ater this period% respondent did not seem to ha'e be gi'en any urther assignment. !he 9C ruled that $hile it is true that security guards may be put on loating status the same should last or only si# months. &n the case at bar% there $as no sho$ing that Mobile laced engagements to $hich they can post their guards. Absent any dire e#igency +ustiying their ailure to gi'e respondent urther assignment% the only logical conclusion is that respondent $as constructi'ely dismissed.

*'en assuming that Mobile $as +ustiied in not immediately gi'ing 6mpad any assignment ater 6ctober% the length o time that he $as put on loating status is tantamount to constructi'e dismissal. &n an illegal dismissal case% the onus probandi is on the employer to pro'e that the dismissal $as in act or 'alid cause. &t $as in this case also the burden o Mobile to submit e'idence that the resignation $as 'oluntary on the part o 6mpad. Disposition etition dismissed.

V. )ONSEUEN)ES OF ILLE9AL ,ISISSAL Arti6%e 2;>. &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or a +ust cause or $hen authori"ed by this !itle. An employee $ho is un+ustly dismissed rom $or shall be entitled to reinstatement $ithout loss o seniority rights and other pri'ileges and to his ull bac$ages% inclusi'e o allo$ances% and to his other beneits to their monetary eui'alent computed rom the time his compensation $as $ithheld rom him up to the time o his actual reinstatement. Re%ie(s !( a" i%%ea%%$ ismisse em%!$ee/ rei"stateme"t &a6?aes  amaes Tit%e VIII N)) 1. Rei"stateme"t 0i no longer easible due to cessation o the oice or business or to strained relations% then separation pay in lieu thereo. W#e" e56'sa&%e/ a. 9trained relations 0 must be so compelling and so serious in character that the continued employment o the ** is so obno#ious to the personP business o the *3 and that the continuation o such employment has become inconsistent $ith peace an tranuility $hich is an ideal atmosphere in e'ery $orplace. b. $hen reinstatement has become impossible because o a super'ening e'ent. *#ample: abolition in good aith the position the $orer once occupied% absence o eui'alent position c. Closure o the establishment d. & the employee is already beyond retirement age 2. Ba6?aes 0 rom the time his compensation $as $ithheld rom him at the time o the dismissal to his actual reinstatement. !? 6!m'te/ a. i dismissal prior to eecti'ity o 3A 1; (March 21% 1) 0 Bac$ages up to 5 years $ithout deduction or ualiication

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b. i dismissal on or ater March 21% 1 0 ,ull bac$ages% inclusi'e o allo$ances and other beneits or their monetary eui'alent rom the time their actual compensation $as $ithheld rom them up to the time o their actual reinstatement.

0must be so compelling and so serious in character that the continued employment o the ** is so obno#ious to the personP business o the *3 and that the continuation o such employment has become inconsistent $ith peace an tranuility $hich is an ideal atmosphere in e'ery $orplace.

3. ,amaes 0 moral andPor e#emplary a. Moral amages A3!&CL* 222/. 4illul in+ury to property may be a legal ground or a$arding moral damages i the court should ind that% under the circumstances% such damages are +ustly due. !he same rule applies to breaches o contract $here the deendant acted raudulently or in bad aith. b. *#emplary amages A3!&CL* 222. *#emplary or correcti'e damages are imposed% by $ay o e#ample or correction or the public good% in addition to the moral% temperate% liuidated or compensatory damages. A3!&CL* 2252. &n contracts and uasi0contracts% the court may a$ard e#emplary damages i the deendant acted in a $anton% raudulent% recless% oppressi'e% or male'olent manner. A3!&CL* 2255. *#emplary damages cannot be reco'ered as a matter o rightD the court $ill decide $hether or not they should be ad+udicated.

b. $hen reinstatement has become impossible because o a super'ening e'ent. *#ample: abolition in good aith the position the $orer once occupied% absence o eui'alent position c. Closure o the establishment d. & the employee is already beyond retirement age

4. Att!r"e$Qs Fees A3!&CL* 22/. &n the absence o stipulation% attorneyQs ees and e#penses o litigation% other than +udicial costs% cannot be reco'ered% e#cept: (1) 4hen e#emplary damages are a$ardedD (2) 4hen the deendantQs act or omission has compelled the plainti to litigate $ith third persons or to incur e#penses to protect his interestD

+$ection L;b, (ule I, &ook JI, (ules to Implement the 1abor *ode@ "hiltread Tire O (ubber *orporation vs. Jicente, /. (. 2o. LKFC, 2ov. E, EEL-.

REINSTATEENT REN,ERE, OOT AN, A)A,EI) BY SUPERVENIN9 EVENTS 3einstatement should no longer be ordered $hen it is rendered moot and academic by reason o super'ening e'ents such as: 1. eclaration o insol'ency by the court. +%lectruck Asia, Inc. vs. 3eris, /. (. 2o. LKE>, Guly K, EEL-.

2. ,ire $hich gutted the hotel and resulted in its total destruction. 5 &agong &ayan *orporation vs. 4ple, /. (. 2o. K>>>L, Dec. B, CBH-.

5.

a. Rei"stateme"t Arti6%e 2;> 7rticle >? .0n cases of regular employment" the employer shall not terminate the services of an employee e$cept for a just cause or #hen authori@ed 'y this Title. 7n employee #ho is unjustly dismissed from #or! shall 'e entitled to reinstatement #ithout loss of seniority rights and other privileges and to his full 'ac!#ages" inclusive of allo#ances" and to his other 'enefits to their monetary e8uivalent computed from the time his compensation #as #ithheld from him up to the time of his actual reinstatement.

0i no longer easible due to cessation o the oice or business or to strained relations% then separation pay in lieu thereo.

Nat're W#e" e56'sa&%e/ a. 9trained relations

Closure o the business o the employer.

. 7on0e#istence o the employee, Gune B, CBB-.

;. !ae o'er o the business o the employer by another company and there is no agreement regarding assumption o liability by the acuiring company. +*allanta vs. *arnation "hilippines, /. (. 2o. KEHF, 4ct. B, CBH-.

)ases/ REYNAL,O 9. )ABI9TIN9 8s. SAN I9UEL FOO,S IN). 9.R. N!. 1:;;0: N!8em&er  200> &n conclusion% it bears to stress that it is human nature that some hostility $ill ine'itably arise bet$een parties as a result o litigation% but the same does not al$ays constitute strained relations in the absence o proo or e#planation that such indeed e#ists. (3*G7AL6 >. CAB&>!&7> '. 9A7 M&>H*L ,669% &7C% >.3. 7o. 1/% 7o'ember ;% 2//) FA)TS/ etitioner 3eynaldo >. Cabigting $as hired as a recei'erP issuer at the 9an Miguel Corporation%

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,eeds and Li'estoc i'ision (B0Meg) on ,ebruary 1% 1 and ater years o ser'ice% he $as promoted as in'entory controller. 6n 8une 2% 2///% respondent 9an Miguel ,oods% &nc.% through its resident% Mr. Arnaldo Arica% sent petitioner a letter inorming him that his position as sales oice coordinator under its logistic department has been declared redundant. 9imultaneously% respondent terminated the ser'ices o petitioner eecti'e 8uly 51% 2///% and oered him an early retirement pacage. !hereater% petitioner $as included in the list o retrenched employees (or reason o redundancy) submitted by respondent to the epartment o Labor and *mployment. etitioner $as surprised upon receipt o the letter because he $as not a sales oice coordinator% and yet he $as being terminated as such. Accordingly% petitioner reused to a'ail o the early retirement pacage. rior to petitioner
illegally dismissed employee held a managerial or ey position in the company% it $ould be more prudent to order payment o separation pay instead o reinstatement. &n >lobe0Macay Cable and 3adio Corporation '. 7ational Labor 3elations Commission% this Court discussed the limitations and ualiications or the application o the ?strained relations@ principle% in this $ise: # # # &% in the $isdom o the Court% there may be a ground or grounds or non0application o the abo'e0 cited pro'ision% this should be by $ay o e#ception% such as $hen the reinstatement may be inadmissible due to ensuing strained relations bet$een the employer and the employee. &n such cases% it should be pro'ed that the employee concerned occupies a position $here he en+oys the trust and conidence o his employerD and that it is liely that i reinstated% an atmosphere o antipathy and antagonism may be generated as to ad'ersely aect the eiciency and producti'ity o the employee concerned. &n order or the doctrine o strained relations to apply% it should be pro'ed that the employee concerned occupies a position $here he en+oys the trust and conidence o his employer and that it is liely that i reinstated% an atmosphere o antipathy and antagonism may be generated as to ad'ersely aect the eiciency and producti'ity o the employee concerned.

Iss'e/ 467 ?strained relations@ bar petitioner
Ater a perusal o the LA ecision% this Court inds that the LA had no hard acts upon $hich to base the application o the doctrine o strained relations% as the same $as not suarely discussed nor elaborated on. Also% it is o notice that said issue $as addressed by the LA in +ust one sentence $ithout indicating actual circumstances $hy strained relations e#ist. !he same is also true or the CA ecision $hich disposed o the issue in +ust one sentence $ithout any elaboration. Accordingly% this Court is o the opinion that both the LA and the CA based their conclusions on impression alone.

e%/ Hnder the la$ and pre'ailing +urisprudence% an illegally dismissed employee is entitled to reinstatement as a matter o right. -o$e'er% i reinstatement $ould only e#acerbate the tension and strained relations bet$een the parties% or $here the relationship bet$een the employer and the employee has been unduly strained by reason o their irreconcilable dierences% particularly $here the

,inally% it is noted that the position o $arehouseman and in'entory controller still e#ists up to date. !he nature o the contro'ersy $here the parties to this case $ere engaged is not o such nature that $ould spa$n a situation $here the relations are se'erely strained bet$een them as $ould bar the complainant to his continued employment. 7either may it be said that his position entails a constant communion $ith

dismissed by respondent. CA rendered a ecision partially granting respondent
11 E  a g e




the respondent such that hostilities may bar smooth interactions bet$een them. !here is no basis or an a$ard o separation pay in lieu o reinstatement. !he claim o respondent is not meritorious. !his Court shares petitioner
7UANITO A. 9AR)IA a" ALBERTO 7. ,UA9O 8s. PILIPPINE AIRLINES IN). 9.R. N!. 1:4<: 7a"'ar$ 20 200> FA)TS/ !he case stemmed rom the administrati'e charge iled by hilippine Airlines (AL) against its employees0herein petitioners ater they $ere allegedly caught in the act o sniing shabu $hen a team o company security personnel and la$ enorcers raided the AL !echnical Centerarnishment. 3espondent ele'ated the matter to the appellate court $hich issued the herein challenged ecision and 3esolution nulliying the 7L3C 3esolutions on t$o grounds% essentially espousing that: (1) a subseuent inding o a 'alid dismissal remo'es the basis or implementing the reinstatement aspect o a labor arbiter
(2) the impossibility to comply $ith the reinstatement order due to corporate rehabilitation pro'ides a reasonable +ustiication or the ailure to e#ercise the options under Article 225 o the Labor Code (the second ground). -*7C*% this etition.

RULIN9/ Ampliication o the ,irst >round: !he Court reairms the pre'ailing principle that e'en i the order o reinstatement o the Labor Arbiter is re'ersed on appeal% it is obligatory on the part o the employer to reinstate and pay the $ages o the dismissed employee during the period o appeal until re'ersal by the higher court. &t settles the 'ie$ that the Labor Arbiterround !he Court sustains the appellate courtarnishment are concerned% the Court inds no re'ersible error. 96 63*3*. \ 3einstatement Compliance 3eport !he ne$ 7L3C 3ules o rocedure% $hich too eect on 8anuary % 2//% no$ reuire the employer to submit a report o compliance $ithin 1/ calendar days rom receipt o the Labor Arbiter
12 E  a g e




issuance o the $rit o e#ecution since the Labor Arbiter shall thereater motu proprio issue the $rit. 4ith the ne$ rules in place% there is hardly any diiculty in determining the employerA3C&A and ALB*3!6 8. HMA>6 's. -&L&&7* A&3L&7*9% &7C.% >.3. 7o. 1;% 8anuary 2/% 2//)

PFI=ER IN). AN,@OR REY 9ERAR,O BA)ARRO AN,@OR FER,INAN,)ORTES AN,@OR ALFRE, A9ALLON AN,@OR ARISTOTLE AR)E 8s.9ERAL,INE VELAS)O9.R. N!. 1;;4:; ar6# > 2011 FA)TS/ ri'ate respondent >eraldine L. Felasco $as employed $ith petitioner,&O*3% &7C. as roessional -ealth Care 3epresentati'e since 12.9ometime in April 2//5% Felasco had a medical $or up or her high0rispregnancy and $as subseuently ad'ised bed rest $hich resulted in here#tending her lea'e o absence. 4hile Felasco $as still on lea'e% ,&O*3 through its Area 9ales Manager% herein petitioner ,erdinand Corte"% personally ser'ed Felasco a I9ho$0cause7oticeI. Aside rom mentioning about an in'estigation on her possible'iolations o company $or rules regarding Iunauthori"ed deals andPordiscounts in money or samples and unauthori"ed $ithdra$al andPor pull0 outo stocsI and instructing her to submit her e#planation on the matter $ithin  hours rom receipt o the same% the notice also ad'ised her that she $asbeing placed under Ipre'enti'e suspensionI or 5/ days and conseuentlyordered to surrender the ollo$ing IaccountabilitiesDI 1) Company Car% 2)9amples and romats% 5) C3,P*3PF*-&CL*P96AP69APM6A and otherrelated Company ,orms% ) Cash Card% ;) Calte# Card% and ) M6AP!6A3e'ol'ing !ra'el ,und. !he ollo$ing day% petitioner Corte" together $ith one*ren ariano retrie'ed the abo'e0mentioned IaccountabilitiesI romFelasco
issuedcellphone reerring to the printing o the said coupons. Again% Felasco $asgi'en  hours to submit her $ritten e#planation on the matter. Felasco senta letter to ,&O*3 asing or additional time to ans$er the second 9ho$0cause 7otice. !hat same day% Felasco iled a complaint or illegal suspension $ith moneyclaims beore the 3egional Arbitration Branch. !he ollo$ing day%% ,&O*3sent her a letter in'iting her to a disciplinary hearing. Felasco recei'ed itunder protest and inormed ,&O*3 'ia the recei'ing copy o the said letterthat she had lodged a complaint against the latter and that the issues thatmay be raised in the hearing Ican be tacled during the hearing o her caseIor at the preliminary conerence. 9he lie$ise opted to $ithhold ans$eringthe 9econd 9ho$0cause 7otice. !hereater% Felasco recei'ed a I!hird 9ho$0cause 7otice%I together $ith copies o the aida'its o t$o Branch Managerso Mercury rug% asing her or her comment $ithin  hours. ,inally% ,&O*3inormed Felasco o its IManagement ecisionI terminating her employment. !he Labor Arbiter rendered its decision declaring the dismissal o Felascoillegal% ordering her reinstatement $ith bac$ages and urther a$ardingmoral and e#emplary damages $ith attorney
ISSUE/ 4hether or not the Court o Appeals committed a serious butre'ersible error $hen it ordered i"er to pay Felasco $ages rom the date o the Labor Arbiter
15 E  a g e




,&O*3 did notimmediately admit respondent bac to $or $hich% according to the la$%should ha'e been done as soon as an order or a$ard o reinstatement ishanded do$n by the Labor Arbiter $ithout need or the issuance o a $rit o e#ecution. !hus% respondent $as entitled to the $ages paid to her under theaorementioned $rit o e#ecution. At most% ,&O*3
!he circumstance that respondent opted or separation pay inlieu o reinstatement as maniested in her counsel
I"sta"6es ?#e" rei"stateme"t is "!t !ssi&%e. )ases/ a"i%a ,iam!" !te% Em%!$ees U"i!" 8s. )A 9R N!. 1401< ,e6. 1: 2004 &n this case% the 9upreme Court e#plained the legislati'e intendment or purpose behind Article 25 (g) o the Labor Code% and reiterated the rule that payroll reinstatement in lieu o actual reinstatement is not sanctioned under the pro'ision o the said article. Fa6ts/ 6n 7o'ember 11% 1% the Hnion iled a petition or a certiication election so that it may be declared the e#clusi'e bargaining representati'e o the -otel
1 E  a g e




illegal and dismissed some employees or their participation in the allegedly illegal concerted acti'ity. !he Hnion% on the other hand% accused the -otel o illegally dismissing the $orers. A etition or Assumption o 8urisdiction under Article 25(g) o the Labor Code $as later iled by the Hnion beore the 9ecretary o Labor. !hereater% 9ecretary o Labor !ra+ano issued an 6rder directing the striing oicers and members o the Hnion to return to $or $ithin t$enty0our (2) hours and the -otel to accept them bac under the same terms and conditions pre'ailing prior to the strie. Ater recei'ing the abo'e order the members o the Hnion reported or $or% but the -otel reused to accept them and instead iled a Motion or 3econsideration o the 9ecretary
R'%i"/ !he 9upreme Court re'ersed the decision o the CA% and ruled that the 9ecretary o Labor committed gra'e abused o discretion in ordering payroll reinstatement in lieu o actual reinstatement. !he Court noted the dierence bet$een H9! case and the instant case. &n H9! case the teachers could not be gi'en bac their academic assignments since the order o the 9ecretary or them to return to $or $as gi'en in the middle o the irst semester o the academic year. !he 7L3C $as% thereore% aced $ith a situation $here the striing teachers $ere entitled to a return to $or order% but the uni'ersity could not immediately reinstate them since it $ould be impracticable and detrimental to the students to change teachers at that point in time. &n the present case% there is no similar compelling reason that called or payroll reinstatement as an alternati'e remedy. A strained relationship bet$een the striing employees and management is no reason or payroll reinstatement in lieu o actual reinstatement. Hnder Article 25(g)% all $orers must immediately return to $or and all employers must readmit all o them under the same terms and conditions pre'ailing beore the strie or locout. !he Court pointed out that the la$ uses the precise phrase o ?under the same terms and conditions%@ re'ealing that it contemplates only actual reinstatement. !his is in eeping $ith the rationale that any $or stoppage or slo$do$n in that particular industry can be inimical to the national economy. !he Court reiterates that Article 25(g) $as not $ritten to protect labor rom the e#cesses o management% nor $as it $ritten to ease management rom e#penses% $hich it normally incurs during a $or stoppage or slo$do$n. !his la$ $as $ritten as a means to be used by the 9tate to protect itsel rom an emergency or crisis. &t is not or labor% nor is it or management.

9OL,EN A)E BUIL,ERS a" ARNOL, U. A=UL 8s. 7OSE A. TAL,E 9.R. N!. 1<;200 a$  2010 FA)TS/ 3*967*7! 8ose !alde iled a complaint or illegal dismissal against petitioner >olden Ace Builders. !he Court o Appeals (CA) decided the case in a'or o !alde. >olden Ace assailed the CA
1; E  a g e


o dism dismis issa sall up to actu actual al rein reinst stat atem emen ent. t. id id the the contention ind merit= 3uling: 7o. &n the present case% the labor arbiter ound that actual anim animos ositityy e#is e#iste ted d bet$ bet$ee een n peti petitition oner er A"ul A"ul and and resp respon onde dent nt as a resu resultlt o the the ili iling ng o the the ille illega gall dism dismis issa sall case case.. 9uch 9uch ind indin ing% g% espe especi cial ally ly $hen $hen airmed by the appellate court as in the case at bar% is bind bindin ing g upon upon the the cour court% t% cons consis iste tent nt $ith ith the the pre'ailing rules that this court $ill not try acts ane$ and that indings o acts o uasi0+udicial bodies are accorded great respect% e'en inality. Clearly then% respondent is entitled to bac $ages and separation pay as his reinstatement has been rendered impossible due to strained relations. As correctly held by the appellate court% the bac $ages due to respondent must be be computed rom the time time he $as $as un+u un+ust stly ly dism dismis isse sed d unti untill his his actu actual al reinstatem reinstatement% ent% or rom ,ebruary ,ebruary 1 until 8une 5/% 2//; 2//;%% $hen $hen his his rein reinst stat atem emen entt $as rend render ered ed impossible $ithout ault on his part. !he Court Court%% ho$e'e ho$e'er% r% does does not ind ind the appellat appellate e court
&. Ba6 a6?aes 0 rom rom the time his compe compens nsat atiion $as $ithh ithhel eld d rom him at the time o the dismissal to his actual reinstatement. !? 6!m'te/ a. i dismi dismiss ssal al prior prior to ee eect cti' i'it ityy o 3A 1; 1; (March 21% 1) 0 Bac Bac$ $ages ages up to 5 year yearss $ith $ithou outt deduc deducti tion on or ualiication b. i dism dismiss issal al on or ate aterr March March 21% 21% 1 1 0 ,ull ,ull bac bac$ $ag ages es%% inclu inclusi si'e 'e o all allo$ o$an ance cess and other beneits or their monetary eui'alent rom the time their actual compensati compensation on $as $ithheld rom them up to the time o their actual reinstatement. )ases/

7e""$ Aa&!" 8s. NLR

/.(. /.(.

2o. 2o.

FBH FBHC> C>,,

2ov. K, EEL

&n the 2// landmar labor case o Agabon et al.% (>.3.7o. 1;5% 7o'ember 1% 2//). &n this case% the the 9upr 9uprem eme e Cour Courtt re'i re'isi site ted d 9err 9erran ano o and and re0 re0 e#amined the lac o statutory basis in the Labor Code Code or declar declaring ing as Iine Iineect ectual ual or deect deecti' i'eI eI a dismissal o an employee or a 'alid or authori"ed cause cause but $itho $ithout ut comply complying ing $ith $ith the employ employeeQ eeQss statutory right to due process. ,ollo$ing the 1 'intage case o 4enphil (1/ 9C3A  J1K)% the present rule no$ as laid do$n in Agabon et al. is to hold the dismissal as 'alid (no longer deecti'e or ine inee ect ctua ual) l) but but $ith $ith the the ual ualiiic icat atio ion% n% that that the the employ employer er $ill $ill ha'e ha'e to pay the I'ali I'alidly dlyII dismis dismissed sed employee the sum o 5/%/// as nominal damages or or non0 on0obser bser''anc ance by the empl employ oyer er o the the employeeQs right to due process. &n the mind o the -igh -igh Court Court%% 5/%// 5/%/// / $as $as conside considered red as aIsti aIstie erI rI sanction than the 1%/// $hich it originally a$arded in 4enp 4enphi hil. l. Bein Being g a land landma mar r deci decisi sion on by the the 9upreme Court en banc% Agabon et al.% is no$ the leadin leading g author authority ity used used by many many human human resour resource ce practitioners and management la$yers% citing it $ith distinction to o'erturn pre'ious decisions o the -igh Court based on 9errano (Caingat 's. 7L3C% >.3. 7o. 1;5/% March 1/% 2//;D Chua 's. 7L3C% >.3. 7o. 1/% March 11% 2//;D >la#o 4ellcome hils.% 's. 7agai 7agaisan sang g *mple *mpleyad yado o ng 4ellcom 4ellcome% e% >.3. >.3. 7o. 7o. 15% March 11% 2//;). 7otably ho$e'er% as $hat the 9upreme Court said in re'ersing 9errano% social +ustice is not based on rigid orm ormul ulas as set set in ston stone. e. A e$ e$ mont months hs ago ago ate aterr enunciating Agabon et al.% the cash eui'alent% so to spea% o the Ibelated due processI rule $as urther clariied by the 9upreme Court in the more recent en banc case o 8aa ,ood rocessing 's. acot et al.% (>.3. 7o. 1;15% March 2% 2//;). -ere% the Court ound the need to mae a material distinction as regards the gra'ity o the sanction $hich an employer should be meted in case it 'iolates the employeeQs right to due process. !hus in this recent case% the cash eui'alent may be ItemperedI or made IstierI% depend depending ing on the cause cause or termin terminati ation. on. &n other other $ords% the 5/%/// indemnity indemnity in Agabon% et al.% is not a uniorm amount o indemnity to be applied in all cases o termination or cause $hen there is non 0compliance $ith due process. Clearly then% the Court laid laid do$n do$n the the oll ollo$ o$in ing g para parame mete ters rs:: (1) (1) i the the dismissal is based on +ust cause under Article 22 but the employer ailed to comply $ith the notice reuirement% the sanction to be imposed upon him should be tempered because the dismissal $as% in eect initiated by an act imputable to the employeeD and (2) i the dismissal is based on authori"ed cause under Article 25 but the employer ailed to comply

1 E  a g e


$ith the notice reuirement% the sanction should be stier because the dismissal process $as initiated by the the empl employ oyer erQs Qs e#er e#erci cise se o his his mana manage geme ment nt prer prerog ogat ati' i'e. e. &n 8aa 8aa ,ood ,ood roc roces essi sing ng Corp Corp.% .% a ;/%/ ;/%/// // a$ard a$ard $as consid considere ered d by the 9uprem 9upreme e Court as a IstierI sanction.

)#r!"i6%e Se6'rities )!r. 8s. NLR) /( 2o. FKCEK, 2ov. F, EEL ull backwages, how computed when company has already ceased operations.

&n )#r!"i6%e )#r!"i6%e Se6'ritie Se6'rities s )!r!rati )!r!rati!" !" 8s. NLR)" J>. 3. 7o. 1;/% 7o'. 2;% 2//K% $here the empl employ oyer er 0 the the Mani Manila la Chro Chroni nicl cle e 0 had had alre alread adyy permanently ceased its operations% ull bac$ages shou should ld be comp comput uted ed only only up to the the date date o the the closure. !o allo$ the computation o the bac$ages to be based on a period beyond that $ould be an in+ustice to the employer. !his rule holds true e'en i the employer is ound guilty o unair labor practice in dismissing the employee. As held in the case o 1i@@a 0nn2%onsolidated (oods %orporation vs. N+,% % J>.3. 7o. L0;51% 2 8une 1% 12 9C3A 5K% an employ employer er ound ound guilt guiltyy o unai unairr labor labor practi practice ce in dismissing his employee may not be ordered so to pay pay bac bac$ $ages ages beyo beyond nd the the date date o clos closur ure e o business $here such closure $as due to legitimate busi busines nesss reas reason onss and and not not mere merely ly an atte attemp mptt to deeat the order o reinstatement.

P#i%. 7!'r"a%ist I"6. 8s. !sJ'ea /( 2o. LL>E, 3ay K, EEL

its'&is#i !t!rs P#i%s )!r 8s. )#r's%er P#i%s La&!r La&!r U"i!" U"i!"  Paras Paras /( 2o. LBK>B, Gune C, EEL

SIE ,ARBY PILIPINAS IN). et al. v . ALFRE,O AR9UI AR9UILLA LLA et al . 9.R. N!. 14342. A''st 2< 200: ,ANI ,ANIEL EL P. 7AVE 7AVELL LLA ANA NA 7R. 7R. 8s. 8s. ALBIN LBINO O BELEN BELEN a" ALBINO ALBINO BELEN BELEN 8s. ,ANIEL ,ANIEL P. 7AVE 7AVELLA LLANA NA 7R. 7R. a" a" 7AVE 7AVELLA LLANA NA FAR FARS S IN). /.(. 2o. BC>, 3arch F, EE FE LA ROSA ROSA et. A%. 8s. ABASSA, ABASSA,OR OR OTEL OTEL 9.R. N!. 1;;0> ar6# 13 200> BERNA BERNAR,IN R,INO O V. NAVAR NAVARRO RO 8s. P.V. P.V. PA7AR PA7ARILLO ILLO LINER IN). 9.R. N!. 1:4:<1 Ari% 24 200> 6. ,amaes 0 mor moral andP andPor or e#em e#empl plar aryy

a. 3oral oral Damage mages s

A3!&CL* 222/. 4illul in+ury to property may be a legal ground or a$arding moral damages i the court should should ind ind that% that% under under the circum circumsta stance nces% s% such such damages are +ustly due. !he same rule applies to breach breaches es o contra contract ct $here $here the deend deendant ant acted acted raudulently or in bad aith. b. %!em %!empl plar ary y Dama Damage ges s

A3!&CL* A3!&CL* 222. *#emplary *#emplary or correcti correcti'e 'e damages damages are imposed% by $ay o e#ample or correction or the publi publicc good% good% in addit addition ion to the moral% moral% temper temperate ate%% liuidated or compensatory damages. A3!&CL* 2252. &n contracts and uasi0contracts% the cour courtt may may a$ar a$ard d e#em e#empl plar aryy dama damag ges i the deendant acted in a $anton% raudulent% recless% oppressi'e% or male'olent manner. A3!& A3 !&CL CL* * 2255 2255.. *#em *#empl plar aryy dama damage gess canno cannott be reco'ered as a matter o rightD the court $ill decide $hether or not they they should be ad+udicated. ad+udicated.

)ase/ )!%ei! e Sa" 7'a" 8s. Vi%%as s'ra )r'* 8s. NLR) Fe&. ; 2000 a$!" a" !te% Resta'ra"t S'ra FA)TS/ 6n 'arious dates starting in 11% petitioner hotel and restaurant hired the 1 respondents. ue to the e#piration and non0rene$al o the lease contract or the rented space occupied by the said hotel and restaurant% operations o the business $ere suspen suspended ded.. !he operat operation ion o the restau restauran rantt $as $as continued in its ne$ location% $hile $aiting or the construction o a ne$ Mayon -otel Z 3estaurant. 6nly 6nly nine nine o the the si#t si#tee een n empl employ oyees ees cont contin inue ued d $oring in the Mayon Mayon 3estaurant at its ne$ site. 0 6n 'ari arious ous dates ates%% the 1 empl employ oyee eess il iled compla complain ints ts or underp underpaym ayment ent o $ages $ages and other other money claims against petitioners 0 !he !he Labor Labor Arbi Arbite terr a$ar a$arded ded subs substa tant ntia iallllyy all all o respondents< money claims and held that based on the the e'id e'iden ence ce pres presen ente ted% d% 8ose 8osea a o Lam Lam is the the o$nerPproprietor o Mayon -otel Z 3estaurant% and is the proper respondent in these cases. 0 7L3C 7L3C re'e re'ers rsed ed labo laborr arbi arbite ter< ruades% Macandog% Atra Atract cti' i'o% o% Llar Llaren ena a and and 7ice 7iceri rio o $ere $ere ille illega gallllyy dismissed 5. 467 respon responden dents ts are entitl entitled ed to their their money money claims

1 E  a g e


EL, 1. G*9 - !he records o the case belie petitioner 8osea o Lamreat$ >reat$all all alace alace 3estau 3estauran rantt $hich she and her husband 3oy o Lam pre'iously o$nedD it is 8osea to $hom the employees submit reports% dra$s money or payment o payables and or mareting% and attends to Labor &nspectors during ocular inspections. 2. G*9 0 !he records are uneui'ocal that since petitioner Mayo Mayon n -ote -otell Z 3est 3estau aura rant nt suspe suspend nded ed its its hote hotell operations and transerred its restaurant operations in *li"ondo 9treet% respondents Lo'eres% Macandog% Llar Llaren ena% a% >uad >uades es and and 7ice 7iceri rio o ha'e ha'e not not been been perm permititte ted d to $or $or or or peti petitition oner ers. s. 3esp 3espon onde dent nt Alamares% on the other hand% $as also laid0o $hen the *li"ondo 9treet operations closed% as $ere all the other respondent respondents. s. 9ince 9ince then% then% respondents respondents ha'e not been permitted to $or nor recalled% e'en ater the construction o the ne$ premises at eYaranda 9treet and the reopening o the hotel operations $ith the restaurant in this ne$ site. 0 Article 2 o the Labor Code is clear R there is terminat termination ion o employmen employmentt $hen an other$ise other$ise 'ona fide suspension o $or e#ceeds si# months. !he cessation o employment or more than si# months $as patent and the employer has the burden o pro' pro'in ing g that that the the term termin inat atio ion n $as $as or or a +ust +ust or authori"ed cause. 0 *'en ater si# months o $hat should ha'e been +ust a temporary lay0o% the same respondents $ere still not recalled to $or. More than three years years ater the supposed supposed ?temporar ?temporaryy lay0o% lay0o%@@ the employmen employmentt o all o the respon responden dents ts $ith $ith petit petition ioners ers had ceased% ceased% not$i not$iths thstan tandin ding g that that the ne$ premis premises es had been been completed and the same operated as a hotel $ith bar and restauran restaurant. t. !his !his is clearly clearly dismissal dismissal R or the permanent permanent se'erance se'erance or complete complete separation separation o the $orer rom the ser'ice on the initiati'e o the employer regardless o the reasons thereor.

0 4e ind ind subs substa tant ntia iall e'id e'iden ence ce that that peti petitition oner erss intended intended the termination termination to be permanent. permanent. ,irst% ,irst% respondents iled the complaint or illegal dismissal immediately ater the closure o the hotel operations in 3i"al 9treet% not$ithstanding the alleged temporary nature o the closure o the hotel operations% and petitioners< allegations that the employees assigned to the hotel operations ne$ about this beorehand. 9econd% in their position paper submitted to the Labor Arbiter% petitioners made no mention o any intent to recall these respondents to $or upon completion o the ne$ premises. premises. !hird% !hird% the 'arious pleadings pleadings on reco record rd sho$ sho$ that that peti petitition oner erss held held resp respon onde dent nts% s% particularly Lo'eres% as responsible or mismanagement o the establishment and or abuse o trus trustt and and con coniidenc dence. e. !he !he 'ehe 'eheme menc nce e o petitione petitioners< rs< accusation accusation o mismanagem mismanagement ent against against resp respon onde dent nts% s% espe especi cial ally ly agai agains nstt Lo'e Lo'ere res% s% is inconsistent $ith the desire to recall them to $or. ,ourt ,ourth% h% petiti petitione oners< rs< memor memorand andum um on appeal appeal also also a'erred that the case $as iled ?not because o the business being operated by them or that they $ere suppos supposedl edlyy not recei' recei'ing ing benei beneits ts rom rom the Labor Labor Code $hich is true% but because o the act that the source o their li'elihood% $hether legal or immoral% $as stopped on March 51% 1% 1 % $hen the o$ner o the building terminated the Lease Contract.@ ,ith% petitioners had inconsistencies in their pleadings in ree reerr rrin ing g to the the clos closur ure. e. 9i#t 9i#th% h% that that peti petiti tion oner erss ter termina minate ted d all all the the othe otherr resp respon onde dent nts% s% by not not employ employing ing them them $hen $hen the -otel -otel and 3estau 3estauran rantt trans transer erred red to its ne$ site site on eYara eYaranda nda 9treet 9treet.. &nde &ndeed ed%% in this this same same memo memora rand ndum um%% peti petitition oner erss reerred to all respondents as ?ormer employees o Mayon -otel Z 3estaurant.@ *'en *'en assumi assuming ng that that the cessat cessatio ion n o emplo employme yment nt $as merely temporary% it became dismissal by operation o la$ $hen petitioners ailed to reinstate respondents ater the lapse o si# months% pursuant to Article 2.

Seri Seri!' !'s s &'si &'si"e "ess ss %!ss %!sses es ! "!t "!t e56' e56'se se t#e t#e em%!$er (r!m 6!m%$i" ?it# t#e 6%eara"6e !r re!rt reJ'ire '"er Arti6%e 2<3 !( t#e La&!r )!e !e a" a" its im% m%eme" eme"tti" r'%es %es &e(!r e(!re e termi"ati" t#e em%!$me"t !( its ?!rers . &n the absence absence o +ustiying +ustiying circumstances% circumstances% the ailure ailure o petitioners to obser'e the procedural reuirements set out under Article 2% taints their actuations $ith bad aith% aith% especi especiall allyy since since they they claim claimed ed that that they they ha'e been e#periencing losses in the three years beore 1. *'en assuming that the closure $as due to a reason beyond the control o the employer% it still has to acco accord rd its its empl employ oyees ees some some reli relie e in the the orm orm o se'erance pay.

1 E  a g e




4hile $e recogni"e the right o the employer to terminate the ser'ices o an employee or a +ust or authori"ed cause% the dismissal o employees must be made $ithin the parameters o la$ and pursuant to the tenets o air play. And in termination disputes% the burden o proo is al$ays on the employer to pro'e that the dismissal $as or a +ust or authori"ed cause. 4here there is no sho$ing o a clear% 'alid and legal cause or termination o employment% the la$ considers the case a matter o illegal dismissal. Hnder these circumstances% the a$ard o damages $as proper. As a rule% moral damages are reco'erable $here the dismissal o the employee $as attended by bad aith or raud or constituted an act oppressi'e to labor% or $as done in a manner contrary to morals% good customs or public policy. 5. G*9% etitioners ailed to submit the pertinent employee iles% payrolls% records% remittances and other similar documents $hich $ould sho$ that respondents rendered $or entitling them to payment or o'ertime $or% night shit dierential% premium pay or $or on holidays and rest day% and payment o these as $ell as the C6LA and the 9&L. By choosing not to ully and completely disclose inormation and present the necessary documents to pro'e payment o labor standard beneits due to respondents% petitioners ailed to discharge the burden o proo. &ndeed% petitioners< ailure to submit the necessary documents $hich as employers are in their possession% inspite o orders to do so% gi'es rise to the presumption that their presentation is pre+udicial to its cause. 0 !he cost o meals and snacs purportedly pro'ided to respondents cannot be deducted as part o respondents< minimum $age. 3espondents $ere not inter'ie$ed by the 6L* as to the uality and uantity o ood appearing in the applications o petitioners or acility e'aluation prior to its appro'al to determine $hether or not respondents $ere indeed gi'en such ind and uantity o ood. Also% there $as no e'idence that the uality and uantity o ood in the 6rders $ere 'oluntarily accepted by respondents.

More important% ood or snacs or other con'enience pro'ided by the employers are deemed as supplements i they are granted or the con'enience o the employer. !he criterion in maing a distinction bet$een a supplement and a acility does not so much lie in the ind (ood% lodging) but the purpose. Considering% thereore% that hotel $orers are reuired to $or dierent shits and are e#pected to be a'ailable at 'arious odd hours% their ready a'ailability is a necessary matter in the operations o a small hotel% such as petitioners< business. !he deduction o the cost o meals rom respondents< $ages% thereore% should be remo'ed. !he ; o the gross income o the establishment cannot be considered as part o the respondents< $ages. Although called proit share% such is in the nature o share rom ser'ice charges charged by the hotel. etitioners themsel'es ha'e admitted that the establishment employs ?more or less si#teen employees%@ thereore they are estopped rom claiming that the applicable minimum $age should be or ser'ice establishments employing 1; employees or less. !he employer cannot e#empt himsel rom liability to pay minimum $ages because o poor inancial condition o the company. !he payment o minimum $ages is not dependent on the employer
P#i%. Em%!$ Ser8i6es a" Res!'r6es I"6. 8s. Parami! OFW )!"tra6t /( 24. LLKBH, April F, EEL

ARAN,O ,AVI, 8s. NATIONAL FE,ERATION OF LABOR UNION a" ARIVELES APPAREL )ORPORATION /.(. 2os. LBH> O LBKK, April , EEC

*'en granting that meals and snacs $ere pro'ided and indeed constituted acilities% such acilities could not be deducted $ithout compliance $ith certain legal reuirements. !he employer simply cannot deduct the 'alue rom the employeeQs $ages $ithout satisying the ollo$ing: (a) proo that such acilities are customarily urnished by the tradeD (b) the pro'ision o deductible acilities is 'oluntarily accepted in $riting by the employeeD and (c) the acilities are charged at air and reasonable 'alue.

VIR9ILIO SAPIO VS. UN,ALO) )ONSTRU)TION a"@!r EN9R. )IRILO N,ALO) /.(. 2o. FFE>L, 3ay , EEB

)ELEBES 7APAN FOO,S )ORPORATION 8s. SUSAN YERO et. A%. /.(. 2o. KFBFF, 4ctober , EEC

BERNAR,O B. 7OSE 7R. 8s. I)AELAR PILS. IN). a" I)AELAR

1 E  a g e




SIPPIN9 SERVI)ES IN).

9 .(. 2o.

reasonable time termination.

HCHEH, 2ovember K, EEC

9ENESIS TRANSPORT SERVI)E IN). a" RELY L. 7ALBUNA VS. UNYON N9 ALAYAN9 AN99A9AWA N9 9ENESIS TRANSPORT U9T a" 7UAN TAROY /.(. 2o. BL, April F, EE

ILTON EAVY EUIPENT )ORPORATION a" PETER LI 8s. ANANIAS P. ,Y /.(. 2o. HLBHE, ebruary , EE

SAN I9UEL PROPERTIES PILIPPINES IN). 8s. 9WEN,ELLYN ROSE S. 9U)ABAN 9.R. N!. 13><2 7'%$ 1< 2011 ORAL ,AA9ES ABOSTA SIPANA9EENT )ORPORATION 8s. NATIONAL LABOR RELATIONS )OISSION FIRST ,IVISION a" ARNULFO R. FLORES 9.R. N!. 1:322 7'%$ 2; 2011 . Searati!" Pa$ Searati!" a$0 $ill be gi'en 5/ days ater the ser'ice o notice o the termination. !his is so because it is only then that they are considered separated rom ser'ice. \ &n case o termination due to installation o labor0 sa'ing de'ices or redundancy% the $orer aected thereby shall be entitled to a separation pay eui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higher. \ &n case o retre"6#me"t t! re8e"t %!sses a" i" 6ases !( 6%!s're !r 6essati!" !( !erati!"s !( esta&%is#me"t !r '"ertai" "!t 'e t! seri!'s &'si"ess %!sses !r (i"a"6ia% re8erses% the separation pay shall be eui'alent to one month pay or at least _ month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least  months shall be considered one $hole year. &n cases o 6%!s're !r 6essati!" !( !erati!"s !( esta&%is#me"t 'e t! seri!'s &'si"ess %!sses or inancial re'erses% there shall be no separation pay. & the termination is brought about by the completion o the contract or phase thereo% no prior notice is reuired. & the termination is brought about by the ailure o an employee to meet the standards o the employer i" t#e 6ase !( r!&ati!"ar$ em%!$me"t% it shall be suicient that a $ritten notice is ser'ed to the employee $ithin

rom

eecti'e

date

o

our conte!ts of separation pay#

1.As employer
E56eti!"/ Searati!" a$ as a (i"a"6ia% assista"6e s#a%% &e a%%!?e as a meas're !( s!6ia% 'sti6e !"%$ i" t#!se i"sta"6es ?#ere t#e em%!$ee 8a%i%$ ismisse (!r 6a'ses !t#er t#a" seri!'s mis6!"'6t !r t#!se re(%e6ti" !" #is m!ra% 6#ara6ter. PL,T 8s. NLR)

1:4 S)RA :;1

P#i%. )!mmer6ia% I"tQ%. Ba" 8s. A&a 200

Fe&. 2<

,IVERSIFIE, SE). IN). VS. ALI)IA V. BAUTISTA 9.R. N!. 12234 Ari% 1 2010 SAR9ASSO )ONSTRU)TION a" ,EVELOPENT )ORPORATION 8s. NLR) a" 9OR9ONIO ON9)AL9.R. N!. 1:411< Fe&. > 2010 A9RI)ULTURAL AN, IN,USTRIAL SUPPLIES )ORPORATION et.a%.% 8s. 7UEBER P. SIA=AR a" NLR)  9.R. N!. 1;;>;0 A''st 2 2010 e.

Att!r"e$Qs Fees Arti6%e 111

1/ E  a g e




A3!&CL* 22/. &n the absence o stipulation% attorneyQs ees and e#penses o litigation% other than +udicial costs% cannot be reco'ered% e#cept: (1) 4hen e#emplary damages are a$ardedD (2) 4hen the deendantQs act or omission has compelled the plainti to litigate $ith third persons or to incur e#penses to protect his interestD

VI. WAIVER UIT)LAI AN, )OPROISE A9REEENTS a. Nat're &. Pres'mti!" 6. I"terretati!" a" e"(!r6ea&i%it$ )ase/ ARNAL,O 9. 9ABUNAS SR. 8s. S)ANAR ARITIE et.a%. 9.R. N!. 1<<:3;  ,e6em&er 1 2010 )AREER PILIPPINES SIP ANA9EENT IN). 8s. 9ERONIO A,7US 9.R. N!. 1<:1< N!8em&er 22 2010 VII. PRES)RIPTIVE PERIO, a. F!r I%%ea% ,ismissa% Art. 114: )i8i% )!e o action accrued.

%ase: )tandard %hartered Aan! Employees 9nion vs. %onfessor" FI )%,7 I>= 5<<;6

e.

C ,reedom o Association and rotection o the 3ight to 6rgani"e Con'ention% 1

2. Pre(erre !es !( ,is'te Sett%eme"t a. Se6ti!" 3 Art. III 1><; )!"stit'ti!" &. Arti6%e 211 a 6. Art. 20 e . Art. 21 e. Art. 2:0 2. La&!r Ora"i*ati!" a. R!%e !( Trae U"i!"ism a" U"i!"ism E"8isi!"e Arti6%es 211&  6 &. La&!r Ora"i*ati!" Arti6%es 212  6. Leitimate La&!r Ora"i*ati!" Arti6%es #X

-  years rom cause

PILIPPINE LON9 ,ISTAN)E TELEPONE )OPANY GPL,TH 8s. ROBERTO R. PIN9OL 9.R. N!. 1<2:22 Setem&er < 2010 0 1 year rom cause o action &. ULP accrued 6. !"e$ )%aims 0 5 years rom cause o action accrued

+ar Asia I"6. 8s. ari! )!r!"a et.a%. 9.R. 14><A' 24 2004

3. W!rersQ E"%i#te"me"t a. Arti6%e 211  &. Arti6%e 2;; a 6. Arti6%e 241 ! 4. ,is'te Sett%eme"t a6#i"er$ a. Arti6%e 211 e &. Arti6%e 213 6. Arti6%e 21; . Arti6%e 22: e. Arti6%e 12< (. Arti6%e 12> . I"'stria% Pea6e a. Arti6%e 211 (

Te5!" a"'(a6t'ri" et. a%. 8s. i%%e"a 9R N!. 1413<0 Ari% 14 2004

:. W!rersQ VIII.

RI9T TO SELF-OR9ANI=ATION/ PRIN)IPLES AN, LAWS 1. Ri#t t! Se%(-Ora"i*ati!" a. )!"stit'ti!" Arti6%e III Se6. 3 a" < b. Articles 25% 2% 2;% 211(a) and 211 (b)% 212 (g) %ase:

c.

9)T (aculty 9nion Aitonio 5Nov. =;" =???6

Parti6iati!" ,e6isi!" ai" Pr!6ess a. Art. III Se6. 3 1><; )!"stit'ti!" &. Arti6%e 211  6. Arti6%e 2

;. Triartism a. Arti6%e 2;

vs.

Hni'ersal eclaration o -uman 3ights (reamble% Arts. 2 and 25 () &nternational Co'enant on *conomic% 9ocial and Cultural 3ights (Arts. 2% % 22) d. &L6 Con'ention 7o.  Arts. 2 and 11

<. Limite La&!r I"'"6ti!" Arti6%e 24 a. E56eti!"s/ Arti6%e 21< a" 2:4 >. Em%!$ee )!8erae a. Arti6%e 243 &. Arti6%e 244 6. Arti6%e 24

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)ases/ Taa$ta$ i#%a"s 8s. TEU 3> S)RA :>> 2003 UST Fa6'%t$ U"i!" 8s. Bit!"i! N!8. 1: 1>>> Paer I"'stries 8s. Le'esmaAri% 12 2000 10.

S6!e !( Ora"i*ati!" a. Arti6%es 243 t! 24: &. Arti6%e 2;; 6

Ri#t

t!

Se%(-

etr!%a& I"'stries 8s. )!"(ess!r 24 S)RA 1<3 1>>: )ai"ta 8s. )ai"ta 4<> S)RA 4:< 200: Sams!" 8s. NLR) 330 S)RA 4:0 2000 Paer I"'stries )!r. !( t#e P#i%ii"es 8s. La'esma 9. R. N!. 101;3< Ari% 12 2000 )ARLITO PEARAN,A 8s. BA9AN9A PLYWOO, )ORPORATION a" U,SON )UA 9.R. N!. 1>;; a$ 3 200:

)ases/ (eyes vs. Trajano, EC $*(A LBL +CC"an American 7orld Airways Inc. vs. "an American %mployees Association , K $*(A E +CHC-

TUNAY NA PA9+A+AISA N9 AN99A9AWA SA ASIA BREWERY 8s. ASIA BREWERY IN). 9.R. N!. 1:202 A''st 3 2010

0nion of $upervisors +(&-2AT0 vs. $41%, EC $*(A >C +CB-

&.

*entral 2egros vs. $41%, E $*(A FBL +CC-

6.

Em%!$ees !( i"ter"ati!"a% !ra"i*ati!"s )!!erati8e em&ers )ases/

11. a.

U"%a?('% A6ts Arti6%es 24: 24< 24>

12.

W!rers ?it# Ri#t A%% Em%!$ees a.1 Arti6%e 243 &.2 Arti6%e 2;; 6  )ases/ %0Dr. 2icanor (eyes 3edical oundation, Inc vs. Trajano, F $*(A KF Jictoriano vs. %li:alde 7orkers 0nion, FC $*(A FL +CKLPapatiran sa 3eat and *anning Division vs. *alleja, H $*(A >HK +CBB-

2. S'er8is!rs a.1 Arti6%e 24 &.2 Arti6%e 212 m )ases/ ranklin &aker *o. vs. Trajano FK $*(A LH $anta (osa *oca *ola "lant %mployees 0nion vs. *oca *ola &ottler’s "hilippines, > $*(A L>K +EEK"e9aranda vs. &aganga "lywood corp., LBC $*(A CF +EEH-

3. 4. )ase/

A%ie"s Arti6%e 2:> ReJ'isites Se6'rit$ 'ars Art. 24 3%(A1*4 J$. $41% CK $*(A KF

+CC-

13. W!rers ?it#!'t Ri#t a. a"aeria% a" )!"(ie"tia% Em%!$ees )ase/

&enguet %lectric *ooperatives, Inc. vs. *alleja, BE $*(A KLE +CBC*entral 2egros %lectric *ooperative vs. D41%, E $*(A FBL +CC-

.

N!"-Em%!$ees 243

Art.

14. W!rers ?it# J'a%i(ie ri#ts i. Am&'%a"t i"termitte"t a" eti"era"t ?!rers Art. 243 ii.9!8er"me"t Em%!$ees Art. 244 a. E5te"t a" S6!e &. A&s!%'te ,isJ'a%i(i6ati!" LABOR OR9ANI=ATIONS 1. ,e(i"iti!" 1.a Arti6%e 212  # a" i 1.& Se6ti!" 1 66 R'%e 1 ,OLE ,.O. N!. 4003 Series !( 2003 1.6 P'r!se Art. 243 2.a ReJ'ireme"ts a" Pr!6e're ,OLE ,.O. N!. 40-03 Series !( 2003 )ases/ Tagaytay 8ighlands +supra1aguna Auto "arts vs. $41%, LFK $*(A K>E +EEF-

2.& )!"stit'ti!"a%it$ )ase / PAFLU 8s. SOLE 2; S)RA 40 2.6 !es !( Reistrati!" 3.& R'%es 14  1 ,OLE ,.O. N!. 40-03 Series !( 2003

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ELE)TROAT ANUFA)TURIN9 a" RE)OR,IN9 )ORPORATION 8s. ON. )IRIA)O LA9UN=A, et.a%.  9. R. N!. 1;2:>> 7'%$ 2; 2011 )ONSTITUTIONALITY 3.6. REPUBLI) A)T NO. >4<1 )ases/ *oastal $ubic , etc. vs. D41%, FEK $*(A >EE +EEH$3* 3andaue vs. 3andaine, etc., LHK $*(A EK +EEF-

2. E((e6t !( N!"-Reistrati!" )ase/ $ugbuanon (urual &ank, Inc. vs. 1aguesma, >L $*(A LF +EEE-

3. )a"6e%%ati!" !( )erti(i6ate !( Reistrati!" 3.a Arti6%e 23> 10: 241 %ast ar. )ases/ Dong $%ung Inc. vs. &1( et.al., /.(. 2o. H>FH, April L, EEB Air "hils *orp vs. &1(, LC $*(A L> +EEE1aguna Auto "arts vs. $41%, +supraTagaytay 8ighlands +supra-

TE ERITA9E OTEL ANILA a6ti" t#r!'# its !?"er 9RAN, PLA=A OTEL )ORPORATION 8s. NATIONAL UNION OF WOR+ERS IN TE OTEL RESTAURANT AN, ALLIE, IN,USTRIES-ERITA9E OTEL ANILA SUPERVISORS )APTER NUWRAIN-S) 9.R. N!. 1;<2>: 7a"'ar$ 12 2011 Facts: etitioner iled a etition or Cancellation o 3egistration o respondent% on the ground o the non0 submission o the said documents. 7e'ertheless% the certiication election pushed through and the respondent emerged as the $inner. etitioner iled a rotest $ith Motion to eer Certiication o *lection 3esults and 4inner% stating that the certiication election held on 8une 25% 2/// $as an e#ercise in utility because% once respondent
petition is already moot and academic% considering that the certiication election had already been held% and the members had maniested their $ill to be represented by respondent. !he Med0Arbiter dismissed the protest and certiied respondent as the sole and e#clusi'e bargaining agent o all super'isory employees.etitioner appealed to the 6L* 9ecretary $as dismissed. Motion or reconsideration $as also denied. &n the meantime% 3egional irector Ale# *. Maraan (3egional irector Maraan) o 6L*0 7C3 inally resol'ed the petition or cancellation o registration. 4hile inding that respondent had indeed ailed to ile inancial reports and the list o its members or se'eral years% he% nonetheless% denied the petition% ratiocinating that reedom o association and the employees< right to sel0organi"ation are more substanti'e considerations. -e too into account the act that respondent $on the certiication election and that it had already been certiied as the e#clusi'e bargaining agent o the super'isory employees. &n 'ie$ o the oregoing% 3egional irector MaraanR$hile emphasi"ing that the non0 compliance $ith the la$ is not 'ie$ed $ith a'orR considered the belated submission o the annual inancial reports and the list o members as suicient compliance thereo and considered them as ha'ing been submitted on time. etitioner appealed the decision to the BL3 but irector -ans Leo Cacdac inhibited himsel rom the case because he had been a ormer counsel o respondent. &n 'ie$ o irector Cacdac
Iss'es a" R'%i"/ 1. 4hether or not the Labor 9ecretary has no +urisdiction to re'ie$ the decision o the 3egional irector in a petition or cancellation since it is conerred by la$ to the Bureau o Legal 3elations. 8urisdiction to re'ie$ the decision o the 3egional irector lies $ith the Bureau o Legal 3elations (BL3). &n this case% the appeal $as iled by petitioner $ith the BL3% $hich% undisputedly% acuired +urisdiction o'er the case. 6nce +urisdiction is

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acuired by the court% it remains $ith it until the ull termination o the case. !hus% +urisdiction remained $ith the BL3 despite the BL3 irector
reuired documents is the duty o the oicers o the union. &t $ould be unreasonable or this 6ice to order the cancellation o the union and penali"e the entire union membership on the basis o the negligence o its oicers . !hese pro'isions gi'e the 3egional irector ample discretion in dealing $ith a petition or cancellation o a unionrounds or Cancellation o Hnion 3egistration.R!he ollo$ing may constitute grounds or cancellation o union registration: (a) Misrepresentation% alse statement or raud in connection $ith the adoption or ratiication o the constitution and by0la$s or amendments thereto% the minutes o ratiication% and the list o members $ho too part in the ratiicationD (b) Misrepresentation% alse statements or raud in connection $ith the election o oicers% minutes o the election o oicers% and the list o 'otersD (c) Foluntary dissolution by the members. 3.A. 7o. 1 also inserted in the Labor Code Article 220A% $hich pro'ides: ART. 242-A. Re!rt!ria% ReJ'ireme"ts.R!he ollo$ing are documents reuired to be submitted to the Bureau by the legitimate labor organi"ation concerned: (a) &ts constitution and by0la$s% or amendments thereto% the minutes o ratiication% and the list o members $ho too part in the ratiication o the constitution and by0la$s $ithin thirty (5/) days rom adoption or ratiication o the constitution and by0 la$s or amendments theretoD (b) &ts list o oicers% minutes o the election o oicers% and list o 'oters $ithin thirty (5/) days rom electionD (c) &ts annual inancial report $ithin thirty (5/) days ater the close o e'ery iscal yearD and (d) &ts list o members at least once a year or $hene'er reuired by the Bureau.

Fai%'re t! 6!m%$ ?it# t#e a&!8e reJ'ireme"ts s#a%% "!t &e a r!'" (!r 6a"6e%%ati!" !( '"i!"

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reistrati!" &'t s#a%% s'&e6t t#e erri" !((i6ers !r mem&ers t! s'se"si!" e5'%si!" (r!m mem&ers#i !r a"$ ar!riate e"a%t$. &L6 Con'ention e#pressed its opinion that the dissolution o a union% and cancellation o registration or that matter% in'ol'e serious conseuences or occupational representation. &t has% thereore% eeme it re(era&%e i( s'6# a6ti!"s ?ere t! &e tae" !"%$ as a %ast res!rt a" a(ter e5#a'sti" !t#er !ssi&i%ities ?it# %ess seri!'s e((e6ts !" t#e !ra"i*ati!".

4. Ri#ts a" )!"iti!"s !( em&ers#i Arti6%es 241 24> a  22: 4.a Fees a" )!%%e6ti!" Arts. 24< e 113 & 241 m" ! )ase/ Del "ilar Academy et.al. vs. Del "Ilar Academy %mployee’s 0nion, /.(. KE, April >E, EEB

4.& Fi"a"6ia% Re!rti" 4.6 E%e6ti!" O((i6ers a" 'a%i(i6ati!"s 4. et#! !( E%e6ti!" 4.e Amissi!" !( em&ers  Rete"ti!" !( em&ers#i 4.( ,is&'rseme"t !( U"i!" F'"s 4. )!me"sati!" !( O((i6ers 4.# Re!rti" 4.i Se6ia% Assessme"ts )ases/ A&$*&2 $upervisor’s %% 0nion vs. A&$ *&2 +3arch , CCC/abriel vs. $41% +3arch H, EEE-

. Ri#ts !( Leitimate La&!r Ora"i*ati!"s Arti6%es212 # 242 212  RA >4<1 .a Rerese"tati!" .& Barai"i" Ae"t .6 Fi"a"6ia% Stateme"ts . Pr!ert$ Ri#ts .e Pers!"a%it$ t! s'e a" &e s'e .( Ta5 E5emti!"s . Ot#er A6ti8ities )ases/ *ornista vs. 21(* , FEL $*(A HFC +EEH"hil. Diamond 8otel vs. 3anila Diamond 8otel %%$ 0nion, LCL $*(A CF +EEH-

:. F!rei" A6ti8ities Arti6%es 2:>-2;1 :.a A%ie" Pr!#i&iti!" :.& F!rei" Assista"6e ;. A((i%iati!" !( U"i!"s ;.a P'r!se Art. 211 6X ;.& Pr!6e're Se6. 2 RA >4<1

ELE)TROAT ANUFA)TURIN9 a" RE)OR,IN9 )ORPORATION 8s. ON. )IRIA)O LA9UN=A, et.a%.  9. R. N!. 1;2:>> 7'%$ 2; 2011 )ONSTITUTIONALITY ;.6 S'er8is!r-Ra"  Fi%e U"i!" A((i%iati!" Art. 24 243 234 a SAAAN9 AN99A9AWA SA )ARTER )EI)AL SOLI,ARITY OF UNIONS IN TE PILIPPINES FOR EPOWERENT AN, REFORS S))-SUPER =A)ARRIAS 7ERRY VI)TORIO VS. )ARTER )EI)AL AN, )OATIN9 )ORPORATION 9.R. N!. 1:>;1; ar6# 1: 2011 ;. L!6a% U"i!" ,isa((i%iati!" )ases/ ilipino "ipe vs. 21(*, >B $*(A HB +2ov. H, CCC"hil. $kylanders vs. 21(*,>K> $*(A >HC +Gan. >, EE Adamson Inc. vs. *I(, K $*(A HB +CCC3alayang $amahan ng 3ga 3anggagawa sa /reenfiled vs. (amos, >H $*(A LB +EEE-

APPROPRIATE BAR9AININ9 UNIT 1. Barai"i" U"it ,e(i"e 1.a Art. 2 1.& Se6ti!" > RA >4<1 2.

Fa6t!rs-U"it !( ,etermi"ati!" )ases/ 0.". vs. errer*alleja,  $*(A LF +CC$3* vs. 1aguesma, >H $*(A FCF +CCL&enguet *onsolidated Inc. vs. &obok 1umberjack Asso., E> "hil. FE +CFB"hil. Diamond 8otel vs. 3anila Diamond 8otel %%$ 0nion+supraDe la $alle 0niversity vs. D$0%A, >>E $*(A >H +EEE$3* etc. vs $3* etc. LHK$*(A EK +EEF-

)ERTIFI)ATION ELE)TION 1. P'r!se *ase# "ort 7orkers 0nion of the "hils. 1aguesma, EK $*(A >C +CC(eyes v. Trajano, EC $*(A LBL +C-

vs.

2. et#!s !( Esta&%is#i" a!rit$ Stat's

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2.a )erti(i6ati!" E%e6ti!" )!"se"t 8s. R'"O(( E%e6ti!" 2.& V!%'"tar$ Re6!"iti!" 2.6 Em%!$er )erti(i6ati!" R'%e VII ,.O. N! 40-03 2. N! ,ire6t )erti(i6ati!" *ases# *olgate "almolive "hils vs. 4ple, H> $*(A >> +CBB7arren 3anufacturing 7orkers 0nion v. &ureau of 1abor (elations, FC $*(A >BK +BB Algire v. De 3esa, >K $*(A HLK +CL$amahang 3anggagawa sa "reme! v $ecretary of 1abor BH $*(A HC +CB-

2.e S'&sta"tia% S'!rt *ase# $t Games $chool, v $t Games $chool, LKH $*(A  +EF-

2.( E((e6t Wit#ra?a% *ase# Tagaytay 8ighlands international /old *lub. Inc. v. Tagaytay 8ighlands %mployees 0nion, >CF $*(A HCC +EE>-

3. Petiti!" (!r )erti(i6ati!" E%e6ti!" 3.a R'%e VIII ,O N!. 40-03 3.& U"i!" as t#e Petiti!"er

4.e Aea% Arti6%e 2> 4.( A""'%me"t 9r!'"s 4. R'"-O(( E%e6ti!" 4.# )erti(i6ati!" !( ,esi"ate a!rit$ U"i!" ART. 2 2: 4.i S'se"si!" !( )erti(i6ati!" E%e6ti!" Art. 24< ar.  *ase# 0nited *3* Te!tile 7orkers’ 0nion vs. &1(, B $*(A >H +CBL-

4. E((e6t !( e"i" etiti!" 8sis-a-8is )a"6e%%ati!" !( Trae U"i!" Reistrati!" *ase# "rogressive Development *orporation vs. 1aguesma, K $*(A FC> +CCB-

4. )erti(i6ati!" !( ,esi"ate a!rit$ U"i!" Arts 2 a" 2: *ase# "hilippine Diamond 8otel and (esort Inc. vs. 3anila Diamond 8otel %mployees 0nion LCL $*(A CF +EEH-

. Bars t! )erti(i6ati!" E%e6ti!" .a O"e Year Bar R'%e .& ,ea%!6 Bar R'%e .6 )!"tra6t Bar R'%e . Free!m Peri! *ase# De 1a $alle 0niversity vs. D$10%0 +April , EEE-

*ase# $3* vs. $3* , LHK $*(A EK +EEF-

3.&.1 Ora"i*e Esta&%is#me"t Art. 2: Se6. 10 R.A. >4<1 a. F!rm !( Petiti!" &. S'&sta"tia% S'!rt ReJ'ireme"t 3.&.2 U"!ra"i*e Esta&%is#me"t Arti6%es 212 # 2; 242 & a. ReJ'ireme"ts &. a"at!r$ E%e6ti!" *ase# $ugbuanon (ural &ank, Inc. v. 1aguesma, >L $*(A LF +EEE-

3.6

Em%!$er as t#e Petiti!"er *ase# 2otre Dame of /reater 3anila vs. 1aguesma /( 2o. LCB>>, Gune C, EEL

4. E%e6ti!" R'%es a" Pr!6e're Arti6%e 2: 2; 2< 4.a P!sti" !( N!ti6e 4.& V!ti" List a" V!ters 4.6 Va%i V!tes )ast 4. Pr!test

)OLE)TIVE BAR9AININ9 1. ,e(i"iti!" )ase/ Dole "hils. Js. "awis 2g 3akabayang 4brero, >CF $*(A  0nited Pimberly*lark %mployees 0nion"hil Transport /en. 7orkers’ 4rgani:ation vs. Pimberly Q*lark "hils, Inc, +LBL$*(A BK(ivera vs. %spiritu, >KL $*(A >F +EE-

SUPREE STEEL )ORPORATION 8s. NA9+A+AISAN9 AN99A9AWA N9 SUPREE IN,EPEN,ENT UNION NS-IN,APL 9.R. N!. 1<: ar6# 2< 2011 2. Pr!6e're Arti6%es 20-21 233 2:; 2.a Pri8ate )!e a" )!"6i%iati!" Pr!6e're Art. 20 *ases# *ollegio de $an Guan Del letran vs. Assn of %mployees, >LE $*(A FBK +EEE2issan 3otors vs. $41%, LC $*(A HEF +EEH-

2.& N!ti6e 2.6 Sett%eme"t ,i((ere"6es 2. )!"6i%iati!"

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2.e Pr!#i&ite A6ti8ities 2.( ,OLE Assista"6e 3. ,'t$ t! Barai" Arti6%es 22-23 3.a Nat're *ase# *ollegio de $an Guan de 1etran v Assn. 4f %mployees >LE $*(A FBK+EEE0niversity of Immaculate *oncepcion vs. $41% +Gan. >, EE0nion of ilipino, et.al. vs. 2estle "hils., LCC $*(A F +EEH/eneral 3illing vs. *.A., L $*(A FL +EEL-

Alabang *ountry *lub vs. 21(* et.al. /( 2o. KEBK, eb. L, EEB. 3alayang $amahan ng 3ga 3anggagawa sa /reenfiled vs. (amos +supraTanduay Distillery 1abor 0nion vs. 21(*, LC $*(A LKE +CBK-

BAN+ OF TE PILIPPINE ISLAN,S 8s. BPI EPLOYEES UNION-,AVAO )APTERFE,ERATION OF UNIONS 9.R. N!. 1:4301 A''st 10 2010 PI)OP RESOUR)ES IN)ORPORATE, PRI 8s. ANA)LETO L. TAE)A et.a%. 9.R. N!. 1:0<2< A''st > 2010

4. Barai"a&%e Iss'es *ase# 0nited Pimberly vs. $*(A BK+EH-

Pimberly*lark. LBL

)OLLE)TIVE BAR9AININ9 A9REEENT 1. ,'rati!" !( Areeme"t Arti6%e 23-a )ase/ (ivera vs. %spiritu +Gan. >, EEE1.a Rerese"tati!" Iss'e 1.& E6!"!mi6 Iss'es )ase/ 2ew "acific Timber $upply *o. vs. 21(* +3ar. K, EEE-

1.6 Re!e"i" Peri! 1. E((e6t !( E5ir$ )ases/ 2ew "acific Timber $upply *o. vs. 21(* +3ar. K, EEE3anila %lectric *oop. vs. 'uisumbing >E $*(A K>+CCCaculty Assn of 3IT vs. *A, FL $*(A KEC +EEK.e. Interpretation

IN,ANAO

STEEL )ORPORATION INSTEEL FREE WOR+ERS OR9ANI=ATION INFREWO-NFL )A9AYAN ,E ORO respondent . G9.R. N!. 130:>3. ar6# 4 2004H

petitioner,

vs.

2. Reistrati!" 3. )!"tra6t Be"e(i6iaries *ase# 2ew "acific Timber and $upply *o. Inc vs. 21(*, >B $*(A LEL +EE3anlimos vs. 21(*, L $*(A LF +CCF-

4. U"i!" Se6'rit$ Arra"eme"ts Arti6%e 24< eX )ases/ Del 3onte "hil. Inc. vs. $aldivar, FEL $*(A C +EEH$TI Drivers’ Association vs. *.A. /.(. L>CH, 2ov. H, EE

. 9rie8a"6e a6#i"er$ .a 9rie8a"6e Pr!6e're i" )BA Arti6%es 2:0 212 "H .& 9rie8a"6e Iss'e *ases# "hil Airlines In*. vs. $antos, B $*(A LF +CC>*alte! (efinery %mployees Assn, v &rillantes, KC $*(A B+CK-

.6 V!%'"tar$ Ar&itrati!" . Ar&itrati!" Se%e6ti!" )ases/ *entral "angasinan 3acaraeg +>CF $*(A KEDiamonon vs. D41% EEE-

%lectric

*oop. +3arch

Js. K,

UNFAIR LABOR PRA)TI)E 1. )!"6et a" ,e(i"iti!" Arti6%es212  24; 2>0 24<-24> 2;;   # 2>0X 1.a ,e(i"iti!" Art. 212 C 24; *ase# /ala!ie $teel 7orkers 0nion vs. 21(*, FEL $*(A HF +EEH-

1.&.)!"str'6ti!" *ase# 8ongkong and $hanghai &ank *orp. %0 vs. 21(* B $*(A FEC +CCK-

1.6 )i8i% Remeies Art. 24; ar. 2 a" 3 Art. 233 2;> *ase# 2ueva %cija %lectric *oop. vs. 21(*, >> $*(A BH + EEE-

1. )rimi"a% Pr!se6'ti!" Art. 24; ar. 2 Art. 2<<-2>0 1.e Nat're !( Vi!%ati!" 1.e.1 Vi!%ati!" aai"st ri#t t! se%(!ra"i*ati!" *ase# Allied &anking *orp vs. *A, LH $*(A KH +EE>-

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1.e.2 Vi!%ati!" aai"st ri#t t! 6!%%e6ti8e &arai"i" )ase/

0nion vs. *oca*ola &ottles "hils Inc., F $*(A L>K +EEK-

*ollegio de $an Guan Del letran vs. Assn of %mployees +supra/eneral 3illing *orp. vs. *orp., L $*(A FL +EEL-

1.&.2 Pi6eti" a" Li&e% Art. 33 RP) 1.&.3 Restri6ti!"s I""!6e"t T#ir Part$ R'%e a" Lia&i%ities )ase/ 3$ Tire and (ubber Inc.vs.

1.( W#! 6a" 6!mmit ULPK Arti6%es 24< 24> 1. W#! are %ia&%e !( ULPK Arts. 24< 24> 2<<2>0 )ase/ 0nion of ilipino %mployees DAI0P30 vs. 2estle "hils. /.(. 2os. FBC>E> and FBCLLLF, 3arch >, EEB

1.# Em%!$er !ti8e a" T!ta%it$ !( )!"'6t R'%e *ase# 3c.$hurn *orp. vs. 3c$hurn 7orkers 0nion, LLB $*(A L +EEFInsular 1ife Assurance *o. 1td., %mployees vs. Insular 1ife Assurance *ompany *o. 1td., >K $*(A LL +CK-

1.i Se6i(i6 A6ts !( ULP &$ t#e Em%!$er Arti6%es 24> 212  212 e  ( *ase# $tandard *harter &ank %mployees 0nion vs. *onfessor /( 2o. LCKL, Gune H, EEL

1. )!mr!mise *ase# (eformists 0nion of (&. 1iner, Inc v 21(*, HH $*(A K> +CCK-

1. Pres6riti8e Peri! Art. 24; a" 2>0 )ON)ERTE, A)TIVITIES 1. Ri#t t! E"ae i" )!"6erte A6ti8ities Arti6%es 2:3& 2:4 a 212 !Jrs Arti6%e III Se6. 3 )!"stit'ti!" 1.a Strie SOLI,BAN+ )ORPORATION "!? "!?" as FIRST ETRO INVESTENT )ORPORATION 8s. ERNESTO U. 9AIER ELENA R. )ON,EVILLAAR 7ANI)E L. ARRIOLA a" OPELIA ). ,E 9U=AN 9.R. N!. 1>4:0  9.R. N!. 1>4:1 N!8em&er 1 2010 1.& Pi6eti" 1.&.1 Nat're a" P'r!se )ase/ $ta. (osa *oca *ola "lant

%mployees

*A, > $*(A KBL +CCC-

1.&.4 Pr!#i&ite A6ti8ities Art. 2:4 & 1.6 L!6!'t 1. A%%!?e Strie@L!6!'t 2:3&6C 2:3 2:4a 2: )ase/ $amahan 2g 3anggagawa sa 3olde! vs. 21(, +eb. , EEEilcon 3anufacturing *orp. vs. 1akas 3aggagawa 131*, /( 24. FEHH, Guly H, EEL

1.e Pr!#i&ite Stries@L!6!'t )ase/ Te%e('"e" Semi6!"'6t!rs 8s. )A ,e6. 1< 2000 I"ter#i% 8s. I"ter#i% S'ra Sta"(!r 8s. 7'%ia" et.a%. 9.R. N!. 144>: Fe&. 24 2004 R!se"! Pier! 8s. NLR) 9R NO. 14>:10 A'. 20 2004 AUTOOTIVE EN9INE REBUIL,ERS et.a. 8s. PRO9RESIBON9 UNYON N9 9A AN99A9AWA SA AER ARNOL, VILLOTA FELINO E. A9USTIN et.a%. 9.R. N!. 1:013< 7'%$ 13 2011 RO9RESIBON9 UNYON N9 9A AN99A9AWA SA AER ARNOL, VILLOTA et.a%. 8s. AUTOOTIVE EN9INE REBUIL,ERS IN). a" ANTONIO T. IN,U)IL 9.R. N!. 1:01>2 7'%$ 13 2011 NO ,ISISSAL ILLE9AL STRI+E 1.( N! Strie )%a'se 3alayang $amahan 2g mga )ase/ 3anggagawa sa /reenfield v. (amos, >H $ LB

1. Pr!6e'ra% R'%es *ase# "hil. Tel *orp. vs. "I1T%A, FF $*(A >H +EEK-

1..1 E((!rt Barai" - 2:4aC 20-22 1..2 Fi%i" !( N!ti6e I"te"ti!" - 2:36C C e 2:4a 1..3 O&ser8a"6e )!!%i"-O(( Peri! 2:36C e 1..4 V!te )!"'6t !(C a" Peri! !( Va%iit$ - 2:3(C 2:4aC *ase#

*apitol

3edical

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Compiled by: Clint M. Maratas –LLB *enter Inc. vs. 21(*, LFK $*(A >F +EEF-

1..

Basis a" E((e6t !( I%%ea%it$ !( Strie- Arts. 2:3 &  62:4a 2: )ases/

2issan 3otors v. $ec. D41%, LC $*(A HEF +EEH"hilcom %mployees 0nion v. "hilippine /lobal *ommunications, LCL $*(A L +EEH"hil. Diamond 8otel and (esort, Inc v. 3anila Diamond 8otel %mployees 0nion. LCL $*(A CF +EEH Arellano 0niv %mployees 0nion v. *A, FE $*(A C +EEH-

1..: Em%!$me"t !( Stries Breaers 2:46C 212r 1..; R'"-A?a$ S#! )ase/ *omple! %lectronics %mployees Assn. J. 21(*, >E $*(A LE> +CC-

1..<

B're" !( E6!"!mi6 L!ss )ase/ "hil. Diamond 8otel and (esort, inc. v. 3anila Diamond 8otel %mployees 0nion, +supra-

1..> Stries - 2:

Imr!8e

O((er

Ba%%!ti"

a"

1..10 Ass'mti!" !( 7'risi6ti!" )ase/ 0nlicensed *rews %mployees 0nion vs. *A, /( 2o. LFLB, Guly K, EEL

LABOR IN7UN)TION 1. ,e(i"iti!"  Nat're )ase/ "hilippine

Airlines,

Inc.

v.

21(*, BK $*(A HK +CCB-

2. 9e"era% R'%e  P!#i&iti!" - 24C 2121C 21<e 3. E56eti!"s D W#e" I"'"6ti!" A%%!?e - 24C 21<eC 2:4 )ase/ $an 3iguel *orp. v. 21(*, LE> $*(A LB +EE>Delta Jentures (esource Inc.vs. *abato, >K $*(A F +EE>(avago v. %astern 3arine, 1td, LF> $*(A >B +EEF-

)OPULSORY ARBITRATION

1. W#e" A%%!?e@E5er6iseK  Arti6%es 2:3  212 %C Se6. 22 R.A. <;>1 2. Ar&itrati!" Ae"6$ 3. ei6a% I"stit'ti!"s 4. Oti!" !( Parties V!%'"tar$ Ar&itrati!" . )!m'%s!r$ 8s. V!%'"tar$ Ar&itrati!" +>CF )ase/ 1udo *orp. vs. $abornido $*(A C-

7URIS,I)TION 1. 7'risi6ti!" !( La&!r Ar&iter 1.a S6!e 1.& R. A. <;>> Se6'rities Re'%ati!" A6t !( 2000 1.6 E56eti!"s )ases/ Atlas arms, Inc. vs. 21(*, ;/. (. 2o. LLL, 2ovember B, EE "erpetual 8elp *redit *ooperative, Inc. vs. aburada, ;/. (. 2o. CLB, 4ctober B, EE 2acpil vs. Intercontinental &roadcasting *orporation, ;/. (. 2o. LLKHK, 3arch , EE "rudential &ank and Trust *ompany vs. (eyes, ;/. (. 2o. LEC>, ebruary E, EE 1asco, et al. vs. 0nited 2ations (evolving und for 2atural (esources %!ploration ;02(2(%, et al., /. (. 2os. ECECFECEK, ebruary C, CCF@ 7orld 8ealth 4rgani:ation vs. A6uino, LB $*(A L ;CK 8agonoy 7ater District vs. 21(*, ;/. (. 2o. BLCE, August >, CBB. Tolosa vs. 21(*, ;/. (. 2o. LCFKB, April E, EE> "hilippine 2ational &ank vs. *abansag, ;/. (. 2o. FKEE, Gune , EEF

2. La&!r Ar&iter 8s. Rei!"a% Tria% )!'rt )ases/ T!%!sa 8s. NLR) 401 S)RA 2>1 N!8a 8s. 7'e Sa"6#! ar. 2< 2001 Ur&a"es 8s. SOLE 3>; S)RA :: AR) II AR+ETIN9 IN). a" LU)ILA V. 7OSON 8s. ALFRE,O . 7OSON 9.R. N!. 1;1>>3 ,e6em&er 12 2011 3. Nati!"a% La&!r Re%ati!"s )!mmissi!"s 3.a. !rii"a% 'risi6ti!" 3.&. e56%'si8e ae%%ate 'risi6ti!". 4. Se6retar$ !( ,OLE 4.a. Arti6%e 12< !( t#e La&!r )!e 4.&. Arti6%e 2:3 GH La&!r )!e Ass'mti!" !( 7'risi6ti!"

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Compiled by: Clint M. Maratas –LLB *ases# 3anila 8otel %mployees Assn. vs. 3anila 8otel *orp., FK $*(A >LC

BA9ON9 PA9+A+AISA N9 AN99A9AWA N9 TRIUP INTERNATIONAL rerese"te &$ SABINO F. 9RA9AN=A U"i!" Presie"t a" REYVILOSA TRINI,A, 8s. SE)RETARY OF TE ,EPARTENT OF LABOR AN, EPLOYENT a" TRIUP INTERNATIONAL PILS. IN). 9.R. N!. 1:;40; 7'%$  2010 )IRTE+ EPLOYEES LABOR UNIONFE,ERATION OF FREE WOR+ERS 8s. )IRTE+ ELE)TRONI)S IN). 9.R. N!. 1>01 N!8em&er 1 2010 ). AL)ANTARA  SONS IN). 8s. )!'rt !( Aea%s et.a%. 9.R. N!. 110> 9.R. N!. 113 9.R. N!. 1;>220 ar6# 14 2012 6!"s!%iate 6ases YSS EPLOYEES UNION D PILIPPINE TRANSPORT AN, 9ENERAL WOR+ERS OR9ANI=ATION 8s. YSS LABORATORIES IN). 9.R. N!. 112 ,e6em&er 4 200> 4.6. Ae%%ate 7'risi6ti!" (r!m Rei!"a% ,ire6t!r 4.. Ar&itra% A?ar )ases/ 3%*4 vs. 'uisumbing +eb. , EE Abbot 1aboratories vs. A1%0 +Gan. H, EEE13/ *hemicals vs. $41% +April K, EE-

. Nati!"a% )!"6i%iati!" a" eiati!" B!ar N)B Rea a"&!! a. F'"6ti!"s !( N)B &. Pre8e"ti8e eiati!" )ase/ INSULAR OTEL EPLOYEES UNION-NFL 8s. WATERFRONT INSULAR OTEL ,AVAO 9.R. N!s. 1;4040-41 Setem&er 22 2010 7UANITO TABI9UE et.a%. 8s. INTERNATIONAL )OPRA EPORT )ORPORATION INTER)O 9.R. N!. 1<333 ,e6em&er 23 200> :. 7'risi6ti!" !( VA Arti6%es 2:1 24< i 24> ( :.a Orii"a% a" E56%'si8e 7'risi6ti!" :.& Permissi8e )ases/ *elestino Jivero vs. *A et.al. /(. 24. >BC>B, 4ctober L, EEE.

AT1A$ arms, Inc. vs. 21(* +/.(. 24. LLL@ 2ov. B, EE-

:.6 Ar&itra&%e Iss'es :. Vi!%ati!" !( )BA :.e Ot#er Ar&itra&%e Iss'es Arts. 2:1-2:2 :.e.1 Areeme"t !( Parties Arti6%es 2:2 212 % :.( Pr!6e're@E"(!r6eme"t !( A?ar Arti6%es 2:2-a 224 *ase# *oca*ola vs. *oca*ola, LHL $*(A FEK +EEF-

:. Aea% *ase# 0nicraft Industries International *orp. vs *A, >FF $*(A >> +E-

TE)NOLO9I)AL INSTITUTE OF TE PILIPPINES TEA)ERS a" EPLOYEES OR9ANI=ATION TIPTEO a" its mem&er A9,ALENA T. SALON 8s. TE ON. )OURT OF APPEALS a" TE)NOLO9I)AL INSTITUTE OF TE PILIPPINES 9.R. N!. 1<;03 7'"e 2: 200> Fa6ts/ etitioner Magdalena !. 9alon ()alon) $as a College &nstructor 5 o the -umanities and 9ocial 9cience epartment (-))&) o respondent !echnological &nstitute o the hilippines ( T01) and a member o the !echnological &nstitute o the hilippines !eachers and *mployees 6rgani"ation (T01TEO). 9ometime in year 2///% the !& recei'ed complaints rom students claiming that 9alon $as collecting 1.;/ per page or the test paper used in the sub+ect she $as teaching at the time. 9he reportedly ased her students not to $rite on the test papersD these test papers $ere not returned to the students ater the test. &n addition% a complaint $as iled against her or anomalously changing the grade o a particular student $ho $as at the same time a son o a co0aculty member rom ;./ (ailed) to ./ (dropped). 9alon ans$ered that she only collected /.;/ per page to reimburse hersel rom personal e#penses. ,urther% she admitted o ha'ing changed the grade in order to 'indicate the student rom the $rath o his ather. 9alon belie'ed that a ?dropped@ grade is better than a ?ailed@ mar. !here $ere enumerated !& Memoranda in the case% geared to$ards a'oidance o unduly burdening the students rom unreasonable inances. But $hat is really determinati'e is !& Memorandum 7o. 0% $hich reuires a prior permission rom the proper school authority should the teacher directly sell hisPher e#amination papers to students% usually or reimbursement% pro'ided% the cost shall be $ithin the rate prescribed by the school. !he Foluntary Arbitrator ruled in a'or o 9alon. 6n appeal under

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3ule 5% said decision $as airmed by CA. -o$e'er% on motion or reconsideration% CA re'ersed itsel% ruling in a'or o !& and against 9alon% but granted separation pay. &ssue: 1. 4hether or not 9alon is guilty o 'iolating !&
papers by 9alon to her students $as $ithin the prescribed parameters o the school. -o$e'er% it cannot be denied that 9alon did not irst obtain the prior permission o the proper school authority% a condition precedent reuired by !& Memorandum no. 0. Clearly% she transgressed the school regulation. On grade tampering: &t is a 'iolation against the

Manual o 3egulation or ri'ate 9chools $hose 9ection  pro'ides: 9ec. . Basis or >rading. !he inal grade or rating gi'en to a pupil or student in a sub+ect should be based on his scholastic record. Any addition or diminution to the grade # # # shall not be allo$ed.

A,,&3M the amended decision o the Court o Appeals promulgated on May 22% 2//5% but *L*!* the a$ard o separation pay. Costs against the petitioners.

:.( )!st Fees Arti6%es 2:2-& 2;;(X ;. Aeara"6e !( La?$ers a" N!"-La?$ers i" La&!r )ases APPEALS 1. 9r!'"s (!r Aea% La&!r Ar&iterQs ,e6isi!" 2. Aea% ReJ'isites 3. Nat're !( Rei"stateme"t )ases/ "roducer’s &ank vs. *A $*(A HF(osario vs. Jictory (icemill B2acpil vs. I&* EE2D*/uthrie "lantations vs. 21(* LH2ippon "aint %mployees 0nion vs. FCEE, 2ov. C, EEL

+>C +>CK $*(A +3ar.

,

+H $*(A *A, /( 24.

4. Fi"a%it$ )ases/ Tag iber Inc. vs. 21(* et.al. +4ct. E, EEEIndustrial 3gt. Inte’l Dev’t vs. 21(* +3ay , EEE&ristol 3yers $6uibb vs. (ogelio Jiloria, /( 2o. LBFH, $ept. K, EEL

. Aea% B!" )ase/

!he present 'iolation in'ol'es elements o alsiication and dishonesty. no$ing ully $hat Manalo deser'ed% 9alon ga'e him a grade o ./ instead o a ailing grade. &n the process% she changed – in short% alsiied – her o$n records by changing the submitted record and the supporting documents. Fie$ed in any light% this is 9erious Misconduct under Article 22(a) o the Labor Code% and a +ust cause or termination o employment. On separation pay: CA erred on this matter. !he 'iolation constituted serious misconduct or a cause relating to the employee
*oral "oint Dev’t. *orp vs. 21(* EEE( O % Transport vs. 1atag EEL3ariano 4ng vs. *A, FLCL, $ept. , EEL 3etro Transit 4rg. Inc. KFLHE, April L, EEB (oos Industrial *orp. vs. 21(* KLEC, ebruary L, EEB

!hus% separation pay is not proper.

1agera vs. 21(* +3r. >, EEE$3* 'uarry  7orkers 0nion vs. Titan 3egabags Industrial *orporation

4-*3*,63*% premises considered% $e hereby *7G the petition or lac o merit. 4e hereby

+eb. B, +eb. >, /(

2o.

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2o.

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2o.

INTERTRAN= )ONTAINER LINES IN). a" 7OSEFINA F. TUIBAY 8s. A. TERESA I. BAUTISTA 9.R. N!. 1<;:>3 7'%$ 13 2010 :. !ti!" (!r Re6!"sierati!" )ases/

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LABOR RELATIONS Compiled by Clintmaratas v.4

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